R Street Signs onto Coalition Letter Expressing Serious Concerns about the STRONGER Patents Act of 2019
The Honorable Thom Tillis The Honorable Chris Coons
United States Senate United States Senate
185 Dirksen Senate Office Building 218 Russell Senate Office Building Washington, DC 20510
Washington, DC 20510 Washington, DC 20510
The Honorable Lindsey Graham The Honorable Dianne Feinstein United States Senate
United States Senate United States Senate
290 Russell Senate Office Building 331 Hart Senate Office Building Washington, DC 20510
Washington, DC 20510 Washington, DC 20510
Dear Chair Tillis, Ranking Member Coons, Chair Graham, and Ranking Member Feinstein:
The undersigned write this letter to express serious concerns about the STRONGER Patents Act of 2019, which will not only undermine vital congressional reforms that American businesses have relied on to fight back against frivolous, abusive patent litigation, but also embolden litigation abusers and significantly worsen the ability of American companies of all sizes to grow, innovate, and create jobs.
Congress overwhelmingly passed the America Invents Act (AIA) of 2011 after years of careful bipartisan consideration, debate and negotiation. Among the most significant advancements made possible by the AIA was the creation of new post-grant review procedures, including the Inter Partes Review (IPR) program at the Patent and Trademark Office (PTO). The intent of Congress in creating IPR was to improve patent quality by allowing the PTO to take another look at patents of questionable validity, which erode public confidence in the patent system and are the primary fuel of patent litigation abuse.
Since its inception, IPR has proven to be a fair and successful program that improves the patent system. For example, through the IPR program the PTO has reconsidered and invalidated patents on basic processes like sending an email when a new real estate listing is posted, scanning a document and sending it to email, and posting a podcast. Each of these invalid patents fueled abusive litigation against American companies, many of which were small businesses and startups that could not afford to fight in court. The STRONGER Patents Act would dismantle this beneficial program, allowing licensing demands and litigation on poor quality patents that would continue to drain precious resources away from job creation and the development of new products and services.
Among the many destructive proposed changes, the bill would create a bright-line rule that only one IPR petition can be filed against a patent regardless of how many businesses a patent owner sues. This unnecessary restriction is based on unfounded complaints of “multiple petitions” being used to harass patent holders–claims that the PTO’s own study has debunked. Instead of preventing abuse, this change would do the opposite, promoting gamesmanship by patent owners protecting invalid patents from careful review.
The actions of the PTO over the past year have already significantly weakened IPR, contrary to Congress’s intent for the program. Through new regulations, precedential decisions, and guidance to its judges, the PTO has made it harder to invalidate low quality patents. Through regular use of its unfettered discretion to deny IPRs, the PTO has turned away challenges to invalid patents for procedural reasons, forcing businesses to choose between fighting expensive district court litigation or settling. The non-practicing entities have noticed, and the frequency of abusive patent litigation is rising as a direct result. We urge Congress to defend IPR, not destroy it through the STRONGER Patents Act.
Beyond dismantling IPR, the STRONGER Patents Act would overturn the Supreme Court’s unanimous 2006 eBay decision, a case that clarified and brought balance to the patent landscape. This change would usher in the return of automatic injunctions at district courts, allowing the non-practicing entities who make no competing products and only want licensing payments to halt the availability of complex products covered by thousands of patents based on infringement of one patent by a trivial feature. Additionally, it would once again provide the non- practicing entities with, as Justice Kennedy noted in his concurring opinion in the eBay case, a “bargaining tool to charge exorbitant fees” because of the threat of an injunction.
The STRONGER Patents Act would significantly weaken the U.S. patent system to the detriment of American businesses. Congress should instead be evaluating how to defend IPR, improve patent quality and decrease abusive patent litigation that drains the resources of U.S. businesses.
Sincerely,
Acushnet
Adobe Systems
Alliance of Automobile Manufacturers
Amazon
American Apparel & Footwear Association
American Association of Advertising Agencies: 4A’s
American Gaming Association
American Hotel & Lodging Association
American Public Power Association
American Society of Travel Agents
American Trucking Associations
Apps Alliance
Association for Accessible Medicines
AT&T
Best Buy
BrandsMart U.S.A.
Capstone Photography
CEDIA
Cisco Systems
Coalition for Patent Fairness
Competitive Carriers Association
Computer & Communications Industry Association
Consumer Electronics Association
Culver’s
Demand Progress
Dillard’s
Direct Marketing Association
Dropbox
Electronic Transaction Association
Engine Advocacy
Food Marketing Institute
General Motors
Google Inc.
HTC America, Inc.
Internet Association
Internet Infrastructure Coalition
iZi Survey LLC
JCPenney
Johnson Controls
Kickstarter
Motorola Solutions
MPA – The Association of Magazine Media
Mylan
National Apartment Association
National Association of Convenience Stores
National Association of Home Builders
National Association of Realtors
National Council of Chain Restaurants
National Grocers Association
National Multifamily Housing Council
National Restaurant Association
National Retail Federation
Newspaper Association of America
Overstock.com
Printing Industries of America
QVC, Inc.
R Street Institute
Rackspace
Red Hat
Retail Industry Leaders Association
Salesforce.com Inc.
Samsung Electronics
Seagate Inc.
Security Industry Association
Software and Information Industry Association
Southeastern Employment Services
Sprint
Toyota
tZERO Group, Inc.
US*MADE
U.S. Travel Association
Verizon Communications Inc.
Vizio
Yum! Brands, Inc.
cc: The Honorable Members of the Senate Committee on the Judiciary The Honorable Jerry Nadler, Chair, House Committee on the Judiciary
The Honorable Doug Collins, Ranking Member, House Committee on the Judiciary
The Honorable Hank Johnson, Chair, House Committee on the Judiciary Subcommittee on Courts, Intellectual Property, and the Internet
The Honorable Martha Roby, Ranking Member, House Committee on the Judiciary Subcommittee on Courts, Intellectual Property, and the Internet
