Opinions and Editorials

Jun. 22, 2020

IP Watchdog: Big Tech’s Opposition to Section 101 Reform: Policy Rhetoric versus Economic Reality by Adam Mossoff

A year ago, the Senate held three days of hearings with 45 witnesses on a legislative proposal that would have brought much-needed reform of 35 U.S.C. § 101. These extensive hearings on patent reform were unprecedented in recent times. They were a strong signal of a commitment by policymakers to abrogate the disastrous and destructive Alice-Mayo inquiry. Senators Thom Tillis (R-NC) and Christopher Coons (D-DE) promised quick action with a bill formally introduced by mid to late summer. A year later, there is no bill and the reform effort has stalled.

Silence is Consent

What happened? Notably, Big Tech refused to participate in the hearings. Senator Tillis explained in the second day of hearings that “we invited some of the large, high-tech companies to be present and they decided not to as individual companies and instead be represented by … the High Tech Inventors Alliance, and that’s okay, but … silence is consent. What we want here is people working out of the shadows collaboratively with the bill.” In his opening remarks on the third day of hearings, Senator Tillis stated again that “we did invite Google, Apple, Dell, Microsoft, and Oracle to testify,” and again noted that these companies declined to do so in lieu of a single witness from the High Tech Innovators Alliance (HTIA).

At the hearings, HTIA and other opponents of reform from policy organizations closely linked with HTIA members invoked the tread-worn narrative of abusive patent litigation by patent trolls. They argued they needed the Alice-Mayo inquiry to quickly and efficiently dismiss these patent troll lawsuits to avoid incurring unnecessary litigation expenses.

The patent troll narrative in the patent policy discussions in D.C. has worked well for Big Tech for more than a decade. The patent system has been substantially weakened over the past 15 years with a slew of court decisions, regulatory actions, and legislation that have mostly restricted or eliminated many patent rights. By itself, the Alice-Mayo inquiry has wrought legal uncertainty and unprecedented invalidations of patents or rejections of patent applications. The data confirms a loss of the longstanding competitive advantage of the gold-standard U.S. patent system in promoting innovation relative to Europe and China.

The Real Strategy

The simple fact, though, is that Big Tech is not truly concerned about patent litigation. Yes, there are some bad actors in the patent system, such as the notorious scammer MPHJ, just as there are in any field of law or other human endeavor. But rhetorical epithets and junk science statistics do not prove the patent system is “broken” or that patents impose a “tax” on innovation.

Big Tech’s goal is more strategic: a weakened patent system makes it possible for these companies to engage in what lawyers and policy wonks call “efficient infringement.” Everyone else calls it piracy. Invention theft has become more common because it’s now an easier and cheaper method for large, well-capitalized companies to simply take someone else’s technology than to invest the time, money, and resources in creating it themselves.

Piercing the veil of Big Tech’s self-serving policy rhetoric, the data confirms that they are not suffering from widespread “abusive litigation” by “patent trolls.” Big Tech companies are not now—nor were they ever—the victims of a massive wave of patent lawsuits, either before or after the Alice-Mayo inquiry was created by the Supreme Court. This is a policy canard.