Inventorship uniquely enables patent trolls through “patent thicket generators”

[Haochen, Professor of Law, University of Hong Kong Faculty of Law. Artificial intelligence inventions. Florida State University Law Review, 50(1), 61-122. ] GDI-MAM

Patent Thicket Generators and Patent Trolls

Some blocking strategies are employed not to protect an invention or secure opportunities for innovation but rather to block competing products and innovations. 317 Complex technologies often result in multiple patent applications for a single invention, and such patents provide a strong negotiating position for cross-licensing. However, collections of interrelated patents can also be used to block production and impede further technological developments. 3 " In some cases, companies develop a "thicket" of overlapping patents with the specific intention of making it harder to invent around the protected technology. 319 Following the DABUS decision in Australia, there is already concern that large corporations may be incentivized to use AL systems as "patent thicket generators."" 0 As is the case with portfolios of defensive patents, patent thickets are most severe in technologically complex and dynamic industries. 2 1 For instance, a recent study of the patenting practices of law firms found that, in fields of increasing technological complexity, the existence of patent thickets significantly hampers entry.322 This conclusion was supported by the discovery that technological complexity itself has a weak impact on entry, suggesting that it is the potential for hold-ups rather than the difficulty of inventing that leads firms to avoid an industry.323 The study also found that in industries with greater technological opportunity-referring to dynamic sectors with opportunities for invention based on the recombination of conventional or atypical knowledge-entry is similarly reduced by the presence of patent thickets.324 As Al systems such as Iprova innovate through the recombination of knowledge, they are likely to be present in and contribute to thicket development in industries susceptible to hold-up. The invalidation of individual patents in technological fields where innovation is held up by patent thickets has been found to have the same effect as in fields held up by cross-licensing bargaining failures. The bundle of patents jointly protecting a single technology means that the freedom of competitors to operate remains limited even in such circumstances. 325 Patent invalidation leads to an average increase of just thirty percent in forward citation, making it clear that patent thickets and other constraints on freedom to operate restrict cumulative innovation and limit the intended role of patents in the innovative process. 326 Moreover, after comparing discrete technology fields and complex technology fields with a high prevalence of patent thickets, a recent study found that the increase in follow-on citation was more substantial following invalidation in the former category. 3 7 If the removal of individual patents in a thicket does not produce a substantial increase in follow-on innovation, in light of the potential increase in output caused by Al, there is a strong case to be made for inventions generated by autonomous Al systems falling into the public domain. Thickets are already hindering smooth market entry and innovative performance, resulting in reluctance to enter certain technological areas and market barriers for companies of all sizes. 328 In contrast, a vital public domain enables innovation and prosperity.329 Al has the potential to dramatically alter the nature of innovation. By ensuring that the inventions generated by such systems are used to bolster the public domain instead of increasing patent thickets, it is possible to ensure that such change is positive. A formal public domain for inventions generated by autonomous AI systems may therefore be an optimal way to promote vibrant innovation. Such a domain would also ensure that inventive AI systems are not used for abusive patenting practices. Extortive litigation by nonpracticing entities (NPEs), or "patent trolls," is one such practice that should not be enabled by the protection of AI-generated inventions. NPEs acquire patents without any intention to produce and market inventions. Instead, they seek revenue by extracting licensing fees from the companies attempting to do so. Although this practice has the potential to serve a valuable social function by helping inventors with insufficient resources extract value from their patents, some argue that, in reality, patent trolls have been buying up vaguely worded patents with the intention of opportunistically extracting revenue from real innovators, 3 0 and the practice appears to be on the rise. For instance, one study found that between 2000 and 2015, in contrast to a decrease in patent litigation by practicing entities, litigation by NPEs increased, with an estimated eighty percent of software litigation identified as NPE litigation.33 1 Patent trolls have the potential to significantly harm innovation if left unchecked. It has been argued that NPEs represent the most significant and destabilizing change to the management of IP rights, as their presence is inconsistent with the public policy objectives and foundation of the patent system.332 As investors' expectations of future profits are notoriously volatile, the potential loss of wealth caused by NPE litigation can provide a disincentive to invest in research and important innovation-harming society as a whole. Moreover, such litigation can also provide the wrong kind of incentive to smaller inventors who make use of NPEs: instead of being encouraged to pursue disruptive technologies, they may be directed toward mainstream technologies, which offer the best opportunities for license fee extraction from big incumbents. 33 One significant financial and tactical advantage that NPEs have over other patent owners is that, because they are not developing their own products, they will not be discouraged by threats of the counterassertion of defensive patents by their litigation targets.3 4 This advantage could become a huge problem in the context of inventive Al. For instance, if inventive AI were to lead to a major breakout of patent litigation between firms, any company using an Al system for the purpose of patent trolling could, without fear of reprisal, undermine the mutually assured destruction equilibrium between Al developers using the system for actual production.335 One commentator has already expressed fear that the recent patent approval for the DABUSgenerated invention in South Africa could lead to the use of inventive Al for the purpose of patent trolling.336