Policies for PTAB reform are popular

Senator Coons opened the hearing, laying out his views on the need for patent reform. He argued that the current system allows large corporations to “weaponize” the PTAB to invalidate patents held by small inventors and startups.

The witnesses were Lamar Smith, former House Judiciary Chair and namesake of the Leahy-Smith America Invents Act (now at Akin Gump); Joe Matal, former interim PTO Director (and until recently at Haynes & Boone), Joe Kiani, Founder and CEO of the medical device company Masimo, and Michelle Armond, partner at Armond Wilson.

Smith and Kiani testified strongly in favor of the PREVAIL Act while Matal and Armond provided support for IPRs largely in their current iteration, although allowing for limited changes.

Any legislation needs a good personal compelling story. Joe Kiani provided that here. Kiani testified that his pulse oximetry technology was copied and patents challenged once he proved that the technology worked. Masimo spent over $13 million defending patents at the PTAB that withstood pre-AIA scrutiny. Kiani argued the AIA’s intent was an efficient second look at patents, not reflexive, duplicative challenges by “opportunistic” big companies to invalidate smaller entities’ rights. Predictable property rights drive investment and innovation, and Kiani endorsed PREVAIL’s reforms for providing more certainty and reducing PTAB abuse. He concluded with a statement that action is needed, otherwise “the United States will continue to cede technological supremacy to China.”

Mr. Smith testified that the PTAB has strayed from its original purpose as an alternative to litigation. He said it has become a tool for infringers to undermine valid patents. He endorsed the PREVAIL Act’s reforms as preserving strong patent rights while still allowing for challenges to bad patents.

Smith similarly testified that IPR proceedings have strayed from their original purposes and have now become an additional tool for “litigation gamesmanship.” Smith endorsed the proposed legislation as supporting smaller companies and individuals against “well-resourced corporations.” “[I]f we lose sight of creating a system that truly rewards investment in innovation, we are really hurting ourselves.”