The Bum Rap Against Patents


Joseph Schuman
March 4, 2013
Capitol Hill

The political sclerosis gripping Congress these days may be playing havoc with the nation’s finances, but it hasn’t stopped some members of the House from launching what appears to be a new assault on patents.

Two congressmen this week introduced what they’re calling the SHIELD ACT, which is nominally aimed at stopping frivolous patent lawsuits. Meanwhile, the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet plans a hearing next week on so-called patent trolls.

It seems like patents are the latest target of political opportunity in Washington, where legislative bids to deal with an overhyped and historically small number of lawsuits could weaken a system that has spurred innovation and economic growth throughout U.S. history. (See this recent Brookings Institution study that demonstrates how “inventions, embodied in patents, are a major driver of long-term regional economic performance,” and this follow-up Brookings post that explains how patents have boosted economic growth.)

But one of the top jurists actually working in the trenches of patent law doesn’t share the patent critics’ views.

Randall Rader, chief judge of the U.S. Court of Appeals for the Federal Circuit, told a gathering in Texas this week that he was invited to a hearing in the house – possibly the Judiciary subcommittee session mentioned above. And while he might not be able to attend, here’s what he would say:

“There’s nothing wrong with the patent system.”

That’s according to notes taken by Gene Quinn, a patent attorney and founder of the blog IPWatchdog, and who attended the annual meeting of the Association of University Technology Managers, where Judge Rader spoke.

Rader said a handful of malicious litigants have indeed tried to blackmail companies with threats to file infringement suits, but argued they have given the patent system what Quinn calls “an unjustified bad name.”

“The patent system has a narrow focus,” Rader said. “It is not a consumer affairs program. It is not a manufacturer’s guarantee compliance program. It’s not a competition program.  It has one objective, summarized well by the Constitution: promote the progress of science and the useful arts. It’s there to create more investment and more incentive for innovation and invention. The things that the patent system is criticized for is not its job.”

The patent system, Rader added, isn’t the cause of the abuse but rather the victim of litigation abuse that takes place across the legal spectrum.

Rader also took a swing at the overused term “patent troll,” suggesting it has been used so widely that it carries little meaning but casts a shadow over all patent holders seeking to protect their intellectual property.

“A patent troll is anybody who asserts a patent far beyond the value of its contribution to the art. That means that any institution can be a troll,” the judge said. “We all understand that there are entities that are created solely for the purpose of litigating patents, which is not intrinsically bad. Again, if they are properly valuing and properly using the system to vindicate the incentives in investment and opportunities on behalf of the Patent Act, there is no problem in that."