Opinions and Editorials

Nov. 20, 2020

RealClearPolicy: Big Tech is Overwhelming Our Political System by Judge Paul Michel

Giant tech companies have come under a great deal of well-deserved criticism from across the political spectrum on a variety of concerns over their actions. On market power, privacy, political bias and disinformation, they are under a microscope. One area where their actions deserve even more scrutiny — and opposition — is their war on the patent rights of inventors and startups.

These powerful tech companies have long relied on a strategy of deliberate infringement because enforcement litigation is too expensive for younger smaller competitors. Last month, a Federal judge in Norfolk found San Jose-based Cisco Systems, a Goliath, had willfully infringed patents of cyber security startup Centripetal Networks Inc., a David. The judge found Cisco’s conduct “egregious” and without “any objectively reasonable defenses” and ordered them to pay $1.9 billion in damages. This is typical of what is called “efficient infringement,” essentially meaning “violating another’s rights is profitable.”

While a welcome development for Centripetal, it is unfortunately not the typical result as few small companies have the financial resources to pursue such action and as the big companies have used their influence to chip away at patent rights. As a result, they can kill off small competitors or buy them up at fire-sale prices to maintain their market dominance.

Deploying their vast cash reserves, larger than many nations’ budgets, giant tech companies overwhelmed our political system with lobbyists, PR firms and allied “think tanks.” As a result, they’ve been able to bend policy to suit their wishes. Small emerging companies, if they have any hope of competing with tech giants, need enhanced patent protections to lure investors.

For too long, giant tech companies’ strategy has been to depress the value of startups and small emerging companies to scare off potential investors, like venture-capital firms, whose funding supports survival and then growth.

As the former chief Judge of the U.S. patent court, I saw the results of declining patent protections firsthand and I know that Congress must take action to enhance patent protections for startups and inventors.