Proposed reforms now being considered by Congress would remove damaging uncertainties and strengthen US patents at a time of major technological change 

As the operator of patent pools related to 5G, Wi-Fi, IoT and video, Sisvel has a front-row seat to the creation and implementation of the technology standards that power growth and connectivity. Patent licensing plays a decisive role in determining how the economic benefits of these advances are distributed. Royalty flows are shaped by patent law and policy across the world’s major economies. 

Today, most of the influential legal decisions in this fast-developing area are being made by judges in the EU, the UK, India and China. That’s partly because over the last 20 years the United States has walked away from its traditional role as a champion of strong patent rights. Other jurisdictions have stepped in to fill the void, so it is their courts that are now writing the rules of the road for the technologies of the future. 

Three bipartisan bills pending in Congress would help to change this. By removing uncertainties and pitfalls unique to the US patent system, they would give innovators the confidence to once again make US patents central to their commercial and legal strategies: 

• The RESTORE Act - introduced in the Senate by Sen. Chris Coons (D-DE) and Sen. Tom Cotton (R-AR), and in the House of Representatives by Rep. Nathaniel Moran (R-TX)  Rep. Chip Roy (R-TX), Rep. Deborah Ross (D-NC), Rep. Henry C. Johnson (D-GA), Rep. Madeleine Dean (D-PA) and Rep. Scott H. Peters (D-CA) - would give patent owners the tools they need to stop infringement through the courts.  

• The Patent Eligibility Restoration Act (PERA) - introduced in the Senate by Sen. Chris Coons (D-DE) and Sen. Thom Tillis (R-NC), and in the House of Representatives by Rep. Kevin Kiley (R-CA) and Rep. Scott Peters (D-CA) - would provide much-needed clarity on what kinds of inventions are eligible for patent protection.  

• The PREVAIL Act - introduced in the Senate by Sen. Chris Coons (D-DE), Sen. Thom Tillis (R-NC), Sen. Dick Durbin (R-IL) and Sen. Mazie K. Hirono (D-HI), and in the House of Representatives by Rep. Ken Buck (R-CO) and Rep. Deborah Ross (D-NC), Rep. Nathanial Moran (R-TX) and Rep. Bill Posey (R-FL)- would place sensible limits on third-party attacks against granted patent rights. 

Sisvel is a global business. The patent owners we work with come from every corner of the world. We support these commonsense, bipartisan bills because they will restore the strength to US patents they traditionally enjoyed.  

RESTORE: Giving US patent owners tools to halt infringement 

The core of the patent bargain is the disclosure of an invention in exchange for the time-limited right to exclude others from practising it. For most of US history, that meant patent owners that proved infringement were presumptively entitled to an injunction: a court order forcing the infringer to stop. 

The 2006 eBay decision of the US Supreme Court did away with this presumption, replacing it with a four-factor test. In practice, this has drastically reduced the number of injunctions awarded to patent owners that have undertaken the difficult and expensive process of proving their claims in court. 

Without the realistic prospect of injunctive relief, US patent holders have little leverage in negotiations with large companies that are using their inventions without permission, and which can hold out for years and years while reaping huge sums from the sale of infringing products. 

Injunctions are much more readily obtained in other jurisdictions. This is one of the major reasons why so many important global patent cases are currently being decided outside the United States. 

The RESTORE Act would effectively override the eBay decision, amending the patent statute with one simple, crucial paragraph: 

If, in a case under this title, the court enters a final judgment finding infringement of a right secured by the patent, the patent owner shall be entitled to a rebuttable presumption that the court should grant a permanent injunction with respect to that infringing conduct. 

Sisvel supports this bill which reinforces the private property rights inherent in the grant of a US patent and would restore to US courts a much more prominent role in global patent jurisprudence. We commend Senators Coons and Cotton, and Representatives Moran, Roy, Ross, Johnson, Dean and Peters for their initiative.  

PERA: Providing clarity on what’s patentable 

PERA is an important step towards restoring predictability to the US patent system. 

Over the past decade, the lack of clear guidance on patent eligibility has created significant uncertainty, particularly for cutting-edge technologies. A confusing and inconsistent body of judge-made law has proceeded from the Supreme Court’s Alice (2012) and Mayo (2014) decisions, drawing criticism even from judges as they struggle to apply it. 

PERA would sweep away the tangle of “judicial exceptions” to eligibility and instead re-affirm the plain language of 35 U.S. Code § 101 by clarifying that: 

Any invention or discovery that can be claimed as a useful process, machine, manufacture, or composition of matter, or any useful improvement thereof, is eligible for patent protection. 

However, the bill also sets out a list of bright-line, commonsense exceptions, excluding from patent eligibility: 

1. A mathematical formula not part of a useful process, machine, manufacture, or composition of matter; 

2. A mental process performed solely in the mind of a human being; 

3. An unmodified gene, as that gene exists in the human body; 

4. An unmodified natural material as that material exists in nature; and 

5. A process that is substantially economic, financial, business, social, cultural, or artistic  

Sisvel welcomes this clearer, simpler approach to subject matter eligibility, which will empower innovators to focus on creating transformative technologies without fear of arbitrary exclusions. We commend Senators Coons and Tillis, and Representatives Kiley and Peters for their initiative.  

PREVAIL: Limiting third-party attacks on granted US patents 

Another unique hazard for US patent holders is the Patent Trial and Appeals Board (PTAB), an administrative tribunal at the US Patent and Trademark Office (USPTO) established in 2012. Any party can use the PTAB to attack granted US patents while enjoying procedural advantages that would not be available in a court of law. 

The PREVAIL Act would level the playing field by: 

1. Requiring PTAB patent challengers to have standing; 

2. Limiting serial petitions and duplicated arguments against the same patent; 

3. Harmonising the PTAB’s standards for claim interpretation and burden of proof with those of federal district courts; and 

4. Streamlining disputes by forcing challengers to choose between challenging validity in the PTAB or in district court. 

These measures strike an appropriate balance between maintaining stable and reliable patent rights while providing adequate opportunity to contest validity. 

Sisvel supports this legislation, which would eliminate wasteful, duplicative disputes and curb opportunistic and abusive attacks on US patent rights. We commend Senators Coons, Tillis, Durbin and Hirono, and Representatives Buck, Ross, Moran and Posey for their initiative.  

Further reading:  

Congress Can Fix America’s Broken Patent System with One Reform, by Andrei Iancu and David Kappos  

Congress can fix America's broken patent system with one reform 

Image by Phillip Roulain from Pixabay