Thanks to President Biden’s leadership, Oregon’s economy is strong. Unemployment sits at 4%. Wages are strong. Inflation is falling. The future here in the Beaver State is bright.
That’s why it’s so perplexing, however, that the U.S. Patent and Trademark Office, headed by Director Kathi Vidal, who was nominated by President Biden, is now proposing a series of sweeping rules changes that could hurt small businesses, stifle job growth, and hurt the middle class. All this comes just at a time when it feels like the pandemic is behind us.
At issue is the way the USPTO is proposing to limit the resources that companies of all sizes have when they are targeted by “patent trolls” – shell companies that buy up old, low-quality patents solely so they can sue small businesses and innovators that are actually making new products and bringing goods to the marketplace.
It’s even happening here in Oregon. David Stelzer, an organic farmer in Dufur, decided to grow his business by selling groceries online. Then one day, he found himself the defendant in a lawsuit for violating a patent covering “automated financial transactions” that was issued in 2001. Despite the fact that nearly every company doing business online today uses similar technology, Stelzer’s business was targeted.
A decade ago, Congress passed the America Invents Act to give victims of patent trolls the tools and resources they need to fight back against abusive litigation. The bill established the Patent Trial and Appeal Board, a panel that assesses whether the underlying patent being asserted is valid without wasting money on costly cases in district court.
Unfortunately, the USPTO is now proposing a series of new rules that would undermine these reforms in a way that violates the America Invents Act. Most importantly, the rules that the USPTO has proposed would limit repeated petitions to strike down a patent as invalid.
This, despite the fact that patents exclude everyone except the patent holder from making, using, or selling the claimed invention without the patent holder’s permission, meaning every American should be able to challenge an underlying petition if they feel it is invalid.
Limiting the number of challenges that can be brought against a bad patent will mean more bad patents stay on the books, and more abusive lawsuits will be filed against productive Oregon companies.
The purpose of review is for the USPTO to remedy errors that are brought to its attention. It shouldn’t matter how many times those errors are brought to the USPTO’s attention, since there is no valid legal or public policy reason for invalid patents to remain in force.
Oregonians deserve better. The USPTO should withdraw these ill-considered new rules and go back to the drawing board so our patent system benefits the innovators and entrepreneurs who are actually driving our economy forward here in Oregon.
Peter DeFazio served as the U.S. representative for Oregon's 4th congressional district from 1987 to 2023.
