Plan isn’t enough – PTAB and EBAY undermine implementation even if they expand patents initially

The United States: IP Is in the Crosshairs at a Critical Time

In contrast to China’s gradual strengthening of IP protections, the United States has seen the robustness of its IP system steadily erode.

Much of this erosion comes from three changes to the U.S. patent system made over the last two decades. First, in the 2006 case eBay v. MercExchange, the Supreme Court weakened patent owners’ ability to receive legal injunctions blocking the sale of their patented technology by an infringer. While injunctions are still available, they are now sought and granted significantly less often. The decreased threat of an injunction may create perverse incentives that cash-rich firms can exploit, such as “efficient infringement,” where the benefits of patent infringement outweigh the costs of defending against and even losing a lawsuit.

Second, in 2011 Congress passed the Leahy-Smith America Invents Act, which created the Patent Trial and Appeal Board (PTAB) as a faster and cheaper alternative to district courts for retrospectively adjudicating patent validity. However, according to bill co-sponsor Lamar Smith, lawmakers unintentionally included several design flaws that are exploited to harass start-ups, small businesses, and individual inventors. For instance, the PTAB has a lower standard of proof for invalidating patents than district courts, which contributes to the PTAB invalidating over 80 percent of patents it agrees to review. Indeed, former federal circuit chief judge Randall Rader referred to the PTAB as a “death squad” killing property rights.