Patent Reform Effectively Ends Multi-Party Suits, Says Expert

Filing Costs Will Rise; Post-Grant Reviews Will Impede

Dear Bruce,

A new provision I just became aware of in an article by Morrison & Foerster regarding the Joinder and Consolidation provisions of the new American Invents Act absolutely kills a patent owner’s right to sue multiple defendants in a single suit. (AIPLA Lexology Sept. 15, 2011).

In addition, there are ambiguities making it unclear whether a patent owner can sue an infringer and component suppliers of that infringer in a single suit.  Even if you file 20 separate suits in the same court, the court is likely to transfer most of the cases out to defendants’ home jurisdictions based on forum non conveniens.

Sorting it Out

This new patent law is a total disaster on almost all provisions and will take years to sort out.  It is perfect for the big-company infringers who do not want to pay others for infringing upon their patents.  They can throw their patent worries out the window. 

When a client asks a patent attorney how much it will cost to obtain my patent, they have no idea how to answer.  It could run in the hundreds of thousands of dollars just to get past the Post Grant Reviews.  For example, a patent issues and 20 companies each file separate Post Grant Review Petitions, each citing different prior art.  It will be a nightmare for the PTO and cost the patent applicant a fortune in fees.

More Obstacles; Dangerous Consequences

I believe that the number of patents that get through all the obstacles now in place at the PTO and the rising backlog of applications requiring examination will dramatically decrease the number of actual patents sought and enforced by applicants.  Both big and small companies alike may decide it no longer makes economic sense to pursue patents.  That result insures that U.S. companies and other infringers from all over the world will have a free ticket to flood theU.S.with cheap infringing products to further emasculate the U.S .economy.  The supporters of this new law may wish they had never sought it.  The potential unintended consequences have been ignored in the rush to satisfy the special interests currently running the U.S.

This new law throws the USPTO under a train, burdening it with enormous new tasks and no additional funds to run an already overburdened and overworked entity charged with managing the flow of patentable innovation into our economy. According to former Chief Judge of the CAFC, Paul Michel, the PTO has been shown to have the worst IT system of any federal agency.  Worse, this new law assures that jobs in this country will continue to be destroyed and investment in innovation decreased.

Economic Impact

We are back to the days of Standard Oil in the early 1900s, when Teddy Roosevelt took on the trusts and busted some of them.  Who will now step up to do that job again?  In the last 100 years those old trusts have been replicated in the current IT, financial and other oligopolistic industries that are crushing our economy and destroying the U.S. middle class.

A suggested motto for the new patent law: “Bottle Up Patents in the PTO and If They Ever Get Past the PTO, Patent Owners Can Only Sue a Single Infringer in an Infringement Suit.”

Irving S. Rappaport, Esq., CLP
Palo Alto,CA

Image source: urbanchristiannews.com

VIDEO:

Judge Paul Michel, Chief Judge, United States Court of Appeals for the Federal Circuit, 1988-2010 analyzes the Patent Reform Bill at the USBIC (U.S. Business & Industry Council) Senate briefing, September 6, 2011


Pat Choate, economist and author of Hot Property, comments as a member of the USBIC panel before the Senate briefing.

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