Our Founding Fathers had the foresight to include in the Constitution a clause granting inventors the “exclusive right” to their inventions. This clause, embodied in our patent system, has created a powerful incentive for risk-taking among American inventors and those who fund them. By adding the “fuel of interest to the fire of genius,” to quote Abraham Lincoln, patents have been one of the most important factors driving innovation and economic strength throughout our nation’s history.
Unfortunately, that incentive structure is being undermined by a little-known government body, the quasi-judicial Patent Trial and Appeal Board (PTAB), within the U.S. Patent Office. The PTAB, which was created by Congress as part of the 2011 America Invents Act, consists of a panel of unelected “judges”—read “bureaucrats”—who hear cases challenging the validity of patents in dispute.
Although the PTAB was intended to provide a low-cost alternative to district court litigation for resolving patent cases, it has instead become a tool for large companies, including many Big Tech giants, to attack the patents of smaller innovators, so they can use their inventions without paying licensing fees. Since the PTAB’s inception, these big companies have filed thousands of petitions challenging the patents of upstart rivals.
It is clear why these big companies love using the PTAB. According to one analysis, 84 percent of patents challenged at the body were partially or wholly invalidated, compared with 30 percent of patents challenged in federal court. These statistics led a former federal circuit chief judge to describe the Board as a “death squad killing property rights.”
The large difference in outcomes between the PTAB and courts is the result of a PTAB process tilted heavily in favor of the patent challenger (typically a Big Tech infringer), including lower standards of evidence and the ability of infringers to repeatedly challenge the same patent until it gets a favorable result. Instead of using the PTAB strictly as an alternative to expensive court litigation, as intended by Congress, big companies seek to invalidate the same patents in both venues—that is, the “patent court” and the federal courts. This strategy forces inventors to defend their IP on multiple fronts.
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In 2020, the Patent Office sought to rein in this abuse, establishing a so-called “Fintiv” rule. This allows PTAB judges to refuse to hear cases when a court is likely soon to rule on the validity of the same patent. But last year, the Patent Office reversed course, issuing new guidance severely limiting the discretion of PTAB judges to make such decisions. Not surprisingly, this reversal has led to a notable increase in PTAB cases. Meanwhile, Big Tech companies have been lobbying Congress for legislation that would permanently repeal the Fintiv rule.
Fortunately, there are still at least a few members of Congress who see this Big Tech lobbying for what it is—a blatant effort to further weaken patent rights so they can continue stealing the technology of smaller competitors and maintain their market advantage.
These members, led by Senators Chris Coons (D-Del.) and Thom Tillis (R-N.C.) and Representatives Ken Buck (R-Colo.) and Deborah Ross (D-N.C.), have responded with a bipartisan legislative proposal of their own, the PREVAIL Act, which they introduced in June. Their bill would restore fairness at the PTAB by limiting the ability of infringers to launch repetitive and harassing challenges against inventors. And it would harmonize the standards between the PTAB and district courts so infringers can’t pick a path of least resistance for their patent challenges.
Congress should stand up for smaller innovators and put an end to abuse at the PTAB by passing the PREVAIL Act now. That would be a small but significant step toward ensuring our patent system continues to serve as an engine for American innovation and economic growth.
Steve Forbes is Chairman and Editor in Chief of Forbes Media.
The views expressed in this article are the writer’s own.