HomeHow Google patents and Big Tech Killed the U.S. Patent System

How Google patents and Big Tech Killed the U.S. Patent System

This is the tale about patents, however, more importantly, it’s a tale about how America has grown to be a current day model of the Banana Republic.  The time period “Banana Republic” became coined with the aid of American writer O. Henry in 1904 in connection with Honduras which got here below super have an impact on with the aid of using multinational American fruit groups.

Banana Republics are societies characterized with the aid of using their starkly stratified social lessons and a ruling-magnificence plutocracy composed of the business, political and army elites.  The Elites rule over a servile authority that abets and helps, for kickbacks and bribes, the exploitation of the relaxation of society. Instead of Dole and United Fruit controlling Honduras, we’ve Apple, Microsoft, Amazon, Google patents and different tech giants controlling Congress and the Executive Branch via limitless lobbying with the aid of using agencies just like the Internet Association[1], High Tech Inventors Alliance[2], the Software Alliance[3], Unified Patents[4] and via direct political donations.  As tested below, the most effective distinction among Honduras in 1904 and America these days is that the brand new bananas are smartphones and the software program they contain.

What Are Patents?

A patent is a voluntary disclosure of new, novel and beneficial technical statistics to the arena.[5] In essence, patents tell the arena of something it has in no way visible earlier than that may be used to clear up a technical problem. For a patent to problem, the statistics disclosed should be enough to allow someone acquainted with the technological area[6] to make the discovery without undue extra experimentation.[7] The reason of the patent gadget is to inspire the disclosure of new, modern generation so the bottom of know-how upon which different inventors paintings advances.[8] Technology advances quicker and the arena advantages from the ones advances whilst new generation is disclosed and constructed upon in place of hidden from different innovators withinside the area who, in the event that they knew approximately the brand new generation, ought to similarly strengthen it.

In trade for the technical disclosures in patents to competition and cap potential competition, the patentee must be covered from unfastened-riders and thieves who contributed not anything to the disclosed technical advancement, however might replicate it for his or her personal profit.  So for disclosing her invention for others to strengthen going forward, the authentic inventor/patentee is granted a patent. The patent is a distinctive property to make cash off her invention for a restricted duration of time. A patent is basically a property to exclude others from the use of your invention without compensating you. A license from the patent proprietor to an enterprise that desires to use the patented generation is a compensated, or bargained waiver of that proper to exclude.

A sturdy patent gadget method an inventor can rely on the energy of his patent to honestly get hold of the gain of the general public disclosure of his invention. This reliance on a sturdy patent gadget is referred to as the “presumption of validity”[9].  In order to draw investments, justify studies and improvement efforts and broaden new markets for brand spanking new merchandise, a patentee should be assured that its duly-issued (and paid for) United States patent could be enforced with the aid of using the issuing authorities and consequently reputable with the aid of using competition, each present and cap potential.  In different words, if the patent gadget is regarded as susceptible as to enforcement of patent rights, inventors get hold of not anything for disclosing their innovations. The unfastened riders, copiers and thieves can genuinely take the unfastened statistics without reimbursement to the inventor. If inventors see the patent gadget as susceptible, they’ll now no longer expose their innovations, however conceal them as change secrets. This stifles innovation due to the fact new innovations that if disclosed may be stepped forward upon are left unavailable. Most innovations these days are upgrades on earlier, disclosed innovations, so a susceptible patent structure that daunts patenting slows the advances of generation and the advantages the ones advances might have introduced are behind schedule or now no longer found out at all. Patents count numbers.

The beneficiaries of a susceptible patent gadget are big multinationals who already dominate their markets with economic electricity and marketplace percentage like Google google patents, Facebook, Apple and Amazon. The Elites now no longer want patents. As the advantage of dominance of their markets, innovation isn’t as essential as marketplace percentage, income and keeping their dominance. The “peasants” (read: small agencies and inventors who should innovate to compete) want sturdy patents to compete with, and possibly someday be a part of the Elites. Patents allow the American Dream.

What Google Wants, Google Gets

Google patents is in essence a software program enterprise constructed upon a hard and fast algorithm to allow the green seek of net content. Google no longer invented the net (nor did Al Gore). The net became invented with the aid of using america authorities and studies establishments supported with the aid of using your tax bucks.[10]  Google simply created a genuinely worthwhile manner to allow the general public to efficiently use the net.

As a business, Google may be very vulnerable to opposition. If a set of programmers of their storage ought to provide you with a brand new set of algorithms that searched greater accurately, quicker or maybe in a manner that makes use of much less energy, Google may be replaced, or at the least have its marketplace dominance threatened. But this type of chance most effectively exists if the brand new marketplace player is covered with the aid of using patents. Without patent safety, Google can genuinely replicate the brand new techniques or use its masses of billions in offshore coins to shop for the brand new marketplace entrant for much less than its complete fee. Google understood its precarious role as to new and rising technologies, so it did what any Banana Republic Elite might do–it got down to smash what it perceived because of the actual chance: america patent gadget.

Google became one of the 3 biggest bundlers of marketing campaign contributions to President Obama.[11] The 12 months after the America Invents Act (“AIA”) became passed, Google personnel and their spouses’ direct contributions to Congressmen had been nearly $1 million, unfold frivolously among Republicans and Democrats.[12] Google spent $18 million on lobbyists the 12 months the AIA became passed.[13] Google’s aid of “assume tanks” and lobbying agencies became even greater, and became performed in cooperation with different Silicon Valley tech giants.

What did Google get for its cash? A new, weaker patent gadget that lets in demanding situations to patents outside of court, without a jury, with none presumption of validity and the use of a low widespread of evidence. In essence, Google and its Elite pals killed any presumption of validity, the presumption that makes patents treasured with the aid of using defensive the expectancies of patent proprietors that their rights might be enforceable in neutral, independent courts towards infringers. The patent proprietors who paid for the studies and improvement in their innovations, paid lawyers to prosecute the patents consistent with the policies on the time, paid submitting charges to the PTO, paid issuance charges to the PTO, paid renovation charges to the PTO, then created markets for his or her patented merchandise with investments in factories, distribution structures, marketing–all primarily based totally at the presumption that those investments might be covered from copiers, unfastened riders and thieves with the aid of using a sturdy U.S. patent enforcement gadget now possessed patents that had been now no longer presumed to be legitimate below the brand new AIA tactics, a truth that has prompted gigantic financial harm to inventors and small agencies that relied on their patents for safety from infringing Elites.[14] The Elites paid their manner to the destruction of the very matters that made U.S. patents treasured–their presumption of validity and independent courts to implement them towards infringers.

Google desired a susceptible patent gadget as it already ruled the hunt and net marketing and marketing marketplace in 2012, the 12 months the AIA went into effect, with a 67% marketplace percentage.[15] Today with a weaker patent gadget firmly in area and no worry of any innovating opposition covered with the aid of using patents, Google’s marketplace percentage has elevated to nearly 80%.[16]

Killing the U.S. Patent System Required the Hiring of Executioners, in This Case, Administrative Patent Judges (APJs)

Now that Google and different Elites had destroyed the presumption of validity and eliminated independent judges from the selection-making procedure through the AIA, they wished a hard and fast of executioners.  To end the process of killing the United States patent gadget, the executive judges appointed to pay attention to the instances needed to be insulated from significant felony assessment and recognize that their process became to kill patents. Enter head banana, Michele Lee, the political appointee who headed the PTO’s implementation of the AIA below bundler recipient President Obama.[17]

Lee is a former Google patent legal professional who became in price of patent approach for Google.[18] After passage of the AIA and $36 million in lobbying with the aid of using Google the earlier years, Ms. Lee became magically promoted to Director of the PTO from her role as head of the PTO’s Silicon Valley local office.[19] The fox became now no longer most effective installed price of the henhouse, it became a fox paid for with the aid of using the wolves.

The Executioners Ms. Lee selected had been a brand new AIA introduction, Administrative Patent Judges, or APJs. They aren’t judges withinside the experience that time period is thought with the aid of using Americans. They aren’t independent:

APJs paintings for the PTO Director, a political appointee.

The PTO Director can rent and hearthplace APJs who make choices they do now no longer like. There isn’t any tenured independence for APJs.

  • The PTO Director comes to a decision about what to pay APJs and might trade their pay for any reason.
  • If an APJ panel asserts its independence and reaches a selection the PTO Director does now no longer like, the Director might also additionally convene an accelerated panel to re-determine a case till the PTO Director and his/her political boss is glad with a panel’s selection.[20]
  • The PTO Director might also additionally assign the APJs for every panel, so the selection on who hears the case is a political selection.
  • APJs aren’t certain with the aid of using the Code of Conduct for United States Judges or another ethics code.
  • APJs can determine instances related to former clients.[21]
  • APJs are allowed to determine instances then visit paintings for the equal agencies that sought to invalidate patents.
  • APJs are exempt from process overall performance evaluations.

Judges which might be selected with the aid of using politicians who determine instances introduced with the aid of using political donors to the politicians aren’t genuinely judges at all.  They are banana people who select out the bananas the donors need picked.

And despite the fact that the APJs had been independent, which they’re now no longer, the tactics designed with the aid of Michele Lee governing the APJs behavior had been installed to kill patents. Neither the AIA nor PTO policies restrict the variety of instances a patent may be subjected to inter partes assessment. Let that sink in. The Elites can preserve attacking a patent they no longer like, immediately or via surrogates, till they discover a panel on the way to kill it. No count how typically a patent proprietor wins on the PTAB, its patents are in no way safe.

Since the introduction of IPRs, patents were robotically reviewed on a couple of occasions, a few patent households having greater than one hundred twenty five separate petitions filed. Because a selection of 1 PTAB panel does now no longer bind some other one, surviving one assessment affords no armor towards next demanding situations. Thus, a PTO Director (or for that count number a President of america) rationale on invalidating a selected patent for a chief donor or supporter can hold ordering increasingly more inter partes evaluations till the favored final results is achieved.  Pass the bananas.

The Effect of PTAB Invalidating Patents Via IPRs

On September 26, 2016, the U.S. Commerce Department launched a complete record, “Intellectual Property and the U.S. Economy: 2016 Update,” which located that IP-in depth industries aid at the least forty five million U.S. jobs and make a contribution greater than $6 trillion bucks to, or 38.2 percentage of, U.S. gross home product. The record, a joint manufactured from the Commerce Department’s United States Patent and Trademark Office and Economics and Statistics Administration serves as an replace to the Intellectual Property and the U.S. Economy: Industries in Focus record launched March 2012.[22]  A disaster is growing on this area of the U.S. economic system, however, as new AIA tactics permitting assaults at the validity of U.S. patents have made those treasured belongings some distance much less treasured and consequently incapable of assisting the equal degree of funding in new industries and technologies. Jobs are being lost, tens of thousands and thousands of excessive paying, excessive tech jobs. Some economists are estimating the decline withinside the fee of U.S. patents to be withinside the trillions of bucks.[23] That is lots of bananas.

Why the drop in fee? Remember, patents are most effective treasured in the event that they may be enforced, so any “reform” efforts that make imposing a patent greater high-priced and much less sure as to final results harms the patent proprietor and undermines the cap potential of the U.S. economic system to shield inventors’ rights. The evidence is withinside the fee of bananas. The common rate in keeping patents over the 312 months duration 2012 to 2014 dropped 61% from $422,286 in keeping with patents to $164,232.  In that timeframe, the variety of patents offered with the aid of using inventors dropped from simply below 7000 to 2800, displaying a lower in liquidity withinside the patent marketplace.  The usual income dropped from $three billion to below one-1/2 of a billion in patent income in 12 months, or with the aid of 84%. The fashion elevated after 2014.[24] If an inventor can’t promote his or her invention at a rate that helps their time and effort, they’ll prevent it. When they prevent inventing, innovation stops.

Why did this precipitous drop withinside the fee of United States patents occur? IPRs.

Federal District Court with the conventional protections to patent proprietors invalidates 28.76% of patents as of 2015. The PTAB invalidates 76.61% in IPRs, and due to the fact there’s no restriction on the variety of IPRs that may be filed towards a patent, the infringers and unfastened riders can preserve submitting IPRs till they win. The powerful kill price is probably near 90%, and in a few industries even better.[25]  If the IPRs had been genuinely supposed to prevent horrific patents from being enforced at exquisite fee, then the consequences in IPRs and district courts must be the equal, or very similar. But the kill price for patents in IPRs is sort of 3 instances better. Unless you accept as true that the americaA Patent Office is incorrect in its efforts to problem patents 2 of three instances it acts, there’s something else occurring in IPRs. The IPR records show that the gadget became now no longer designed to get to the equal consequences quicker and cheaper, however to get to a one-of-a-kind result – the destruction of america patent gadget.

Since passage of the AIA, america has fallen from 1st to twelfth withinside the rating of the energy of its highbrow belongings gadget, now tied with Italy and in the back of all different notably advanced economies.[26] As the U.S. weakens its patent gadget, different nations are strengthening theirs. China especially is beefing up its patent infringement treatments like injunctions and permitting ever better damages awards.[27] So the middle of the highbrow belongings universe will flow to China. That can most effectively be horrific for U.S. inventors and agencies. China designs its IP guidelines to shield Chinese entities.

The United States Congress has successfully redesigned our highbrow belongings guidelines to shield political contributors, lots of which can be multinational groups that haven’t any loyalty to America due to the fact a majority in their sales is sourced (and saved past the attainment of US taxes) distant places. Anti-patent, marketplace dominating multinational Elites like Google are dependable on income and their cap potential to dominate markets.

A Banana Republic most effectively maintains to exist so long as it could deliver the bananas. Today, the Elites want the U.S. much less and much less. They preserve trillions of bucks in distant places to keep away from taxes, they construct their merchandise in Asia and their biggest markets are fast turning into Asian as properly. We are promoting our democracy to the very best bidder at the same time as the ones equal bidders are planting all their new banana timber elsewhere. Go ask the humans of Honduras what United Fruit and Dole are doing for them now.


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