The House Subcommittee on Courts, Intellectual Property and the Internet held a hearing on “The Impact of Bad Patents on American Businesses”, particularly focused on software industry and patent trolls. Testimonies by Mr. Thomas Lee (Mapbox), Judge Paul R. Michel, Mr. Sean Reilly (The Clearing House Payments Company L.L.C.) and Ms. Julie Samuels (Engine) were heard.
In our opinion, although we agree with few of their opinions, especially on the negative impact of patent trolls for economic growth of innovative companies, the underlying meanings of the statements by Mr. Lee, Mr. Reilly and Ms. Samuels are all questionable. Also, the significance of their statements is doubtful when considering the “biased” and consequently limited experiences from which they come: Mapbox is an open source company that owns no patent, The Clearing House Payments Company L.L.C. is a company that owns only few patents all relating to business models, and Engine is an organization supported by hundreds of startups across the US that voices loud for an open Internet and substantially against IP (e.g. see Ms. Samuels’ article “Hacking the Patent System“).
We deem that the wide and uncontrolled oscillations of the “pendulum” of the US patent system concerning software and business model inventions, that in the last decades unpredictably lurched between acknowledgement and denial of eligibility and patentability, will be difficult to mitigate by listening to radical opposite views.
This is not the case of the sharp and balanced testimony by Judge Michel, former Chief Judge of the US Court of Appeals for the Federal Circuit, with whom we agree. In particular, he stated that “Eligibility law under the Alice/Mayo regime has become highly uncertain and unpredictable. And results have been as inconsistent as unpredictable”. In this regard, Judge Michel’s opinion is that, in Alice, Supreme Court decision holding that “if a claim “is directed to” an abstract idea (whatever that means) it is ineligible despite claiming a “machine”, as Congress explicitly allows, seems highly inappropriate as an apparent invasion of the Constitutional prerogatives of the Legislative Branch” (during the oral hearing, Judge Michel solicited an intervention by the Congress to clarify the issue of eligibility and to foster technical training of judges). Also, he significantly stated that the effort to root out invalid patents caused the efficacy of patent system to be diminished or destroyed for the majority of owners who are responsible actors: “abusers can be punished and deterred by surgical means and weakening the entire system is surely unnecessary and unwise”. Judge Michel’s went on by saying that the myths that most asserted patents are “bad”, that most suits are frivolous, and that the courts are unwilling or unable to deal with the limited number of actual abusers of the patent system are false. He wisely concluded that “if in the interest of further combatting the relatively few system abusers, we further dismantle the system itself, our country will be committing economic suicide”.
