Two Bipartisan Bills Can Revitalize American Innovation
By Lamar Smith
There may be some good news on the horizon for small business owners, courtesy of Congress.
A bipartisan group of lawmakers recently introduced a pair of bills that could make it easier for entrepreneurs to patent certain lifesaving inventions and fend off thieves looking to steal their technology.
The first bill, the PREVAIL Act, would make some much-needed reforms to a 2011 law that I co-authored.
That 2011 law, known as the Leahy-Smith America Invents Act (AIA), created the Patent Trial and Appeal Board (PTAB) as a quasi-judicial venue for people and companies to challenge the validity of patents they felt were overly broad or vague. The PTAB was intended to provide a lower-cost alternative forum, compared to federal courts, in which to challenge wrongly granted patents.
But I was fully aware that patent owners need undisputed control over their intellectual property to attract continued investment, so I warned against the PTAB being used as a tool for litigation gamesmanship rather than a meaningful and less expensive alternative to litigation.
Unfortunately, that is exactly what has happened. A few Big Tech firms are using the PTAB not as an alternative to litigation, but as a multiplier to it. They respond to patent infringement suits brought by their smaller rivals by filing multiple, serial PTAB challenges against their smaller rivals' patents, thus forcing cash-strapped entrepreneurs to fight legal battles on two fronts at once. Almost one-fourth of all PTAB challenges now come from just ten petitioners.
The PREVAIL Act seeks to bring PTAB practice more in line with our intention for it to be a quicker and less expensive alternative to litigation by prohibiting repeat or duplicative PTAB petitions. This and other provisions of the PREVAIL Act could help ensure that small businesses and startups get a fair chance to enforce their patents.
The second bill, the Patent Eligibility Restoration Act introduced by Senators Thom Tillis and Chris Coons, could help put American entrepreneurs in high-tech industries on a more even playing field with their rivals in Europe and Asia by clarifying confusing decisions made by the courts.
In Bilski v. Kappos in 2010, the Supreme Court cast doubt on entrepreneurs' ability to patent novel processes implemented in software. Two years later, the Court ruled most diagnostic tests ineligible for patents in Mayo Collaborative Services v. Prometheus Laboratories. One year later, the justices prevented researchers from patenting many gene-related inventions in Association for Molecular Pathology v. Myriad Genetics. Finally, in 2014, the Court in Alice Corp. v. CLS Bank International cast a further cloud over the patenting of inventions implemented in software.
The Tillis and Coons bills seek to clarify that medical diagnostic tests, along with inventions integral to cutting-edge sectors like artificial intelligence, are eligible for patent protection just as they are in most other advanced countries. This clarity will make a huge difference for entrepreneurs seeking to raise money from investors, who have been understandably leery of funding technologies that are potentially ineligible for patent protection.
Both of these bills are well-intentioned efforts to make the patent system more fair and more predictable. Congress should focus on efforts like these to ensure the patent system continues to serve its historic role incentivizing inventors and helping drive the U.S. economy.
Lamar Smith represented the 21st Congressional District of Texas in the U.S. House from 1987 to 2019. This piece originally ran in The Dallas Morning News.
