PTAB court standards small innovators broadly through high litigation costs. Link applies to both advantages.

The America Invents Act of 2011 and its effect on Small Business Inventors In October 2013, when the first reports of the effects of the America Invents Act (AIA) became available, Federal Circuit Chief Judge Rader described the AIA's Patent Trial and Appeal Board ("PTAB") as "death squads killing property rights". By March 2014, more numbers emerged showing the effectiveness of the PTAB post issuance procedures. n33 More than 80% of the patent claims challenged are instituted for trial. Once instituted for trial, the PTAB is canceling 95.2% of all claims. n34 This means the vast majority of asserted patents now face getting invalidated. In light of the March PTAB numbers, Rader noted that his "death squad" comments may be more accurate than originally thought. n35 So, for inventors, after having paid about $75,000 for a patent, they now are in the position of a homeowner who finds that their house title is worthless. After spending years inventing, testing, and obtaining their patent, the inventor is now told all of their efforts were in vain. Most significantly, these property rights are being extinguished by a non-Article III court. To invalidate a patent in a court requires a showing of clear and convincing evidence with the burden of proof on the challenger. n36, n37 The PTAB procedures require only the lowest evidentiary standards n38 to open the door to a PTAB procedure. Then the burden of proof is switched to the patent holder, and the procedure is structured to require validation of the patentability tests a second time, like re-applying as if the first grant was moot and in dramatic contrast to the settled judicial procedure previously required to invalidate the patent. Some argue that in the end it is still fair because the patent holder can appeal to the Federal Circuit. However, the Federal Circuit is not a trial court and therefore does not control evidence, witnesses or other submissions, it is not the finder of fact, and the burden of proof again is on the patent holder. The cost of a PTAB review to the patent holder can exceed $250,000 and burn a year and a half of the patents already limited term. In sum, the patent holder has little recourse as the fight is almost always over when the PTAB invalidates. Statutory law applies the settled, 200 year old precedent demanding the presumption of validity which was defined by the Supreme Court to require clear and convincing evidence with the burden of proof on the challenger in a process structured to invalidate the patent. This result was blocked in the back rooms of the United States Patent and Trademark Office by implementing the new PTAB procedures. The effects of the AIA are just now coming to light and those effects are proving themselves to be devastating to small patent-based businesses and independent inventors. It is not surprising that during the first two months of 2014 the number of new patent cases dropped 25% over 2013. n39 The number is likely to fall even further as more and more inventors realize the risk. The consequences will spread across our economy causing grave damage to investment in patents. In 2010, America's most IP-intensive industries accounted for $5.06 trillion in value, or 34.8 percent of U.S. gross domestic product and IP-intensive industries generated 27.7 percent of all jobs in the U.S. economy. n40 The AmiCOUR IP Group's brief of Amicus Curiae in the high profile case Microsoft v i4i heard by the United States Supreme Court analyzed similar effects of a proposed lowering of the bar to invalidate a patent. AmiCOUR wrote, "Publicly held corporations will have to report any material devaluation to shareholders and the Securities and Exchange Commission (SEC), resulting in a devastating impact on patent centric companies. Hardest hit will be the high tech and biotech firms, which contribute significantly to U.S. economic growth, particularly through job creation and whose innovations are primarily responsible for the United States' edge over global competitors." This drop in IP value is in large part due to the ease at which a patent can be invalidated, and in part due to current legislative efforts to further diminish the value of granted patents. As noted previously, 80% of patents are admitted into a PTAB procedure and 95% of those admitted are invalidated. Using simple math, a patent has a 76% chance of invalidation. This high likelihood of invalidation is substantially decreasing the values of patent assets across the board. Aside from the chilling effects on innovation as there is no certainty that capital invested can ever be recovered, Sarbanes-Oxley require that this substantial change in patent asset values be written down on the books of thousands of companies. In the United States, patent assets are valued at $5.06 trillion so this write down could conceivably be as large at $3.84 trillion. Also under Sarbanes-Oxley, failure to do so is criminal and could land the CEO and CFO in jail. A write down this large would no doubt cascade negatively across our economy and will likely cause severe disruption in capital markets. The simple economics of lower business valuation in response to the measurably diminished ability to exclude competition would, in fact, be very real. The patent system is dead for all except large corporations thanks to the AIA. While the write-down may be unavoidable at this point, if we pass the current patent reform legislation thus expanding PTAB procedures, we will bury the patent system altogether along with the economic future of our nation. Instead, we need to go the other direction and strengthen patent rights. We can still save what is left of the patent system and avert economic disaster. To do this, we must first reject the current round of patent reform altogether and assess the full degree of damage caused by the AIA. This is extremely important to SBIR firms as they have received about 100,000 patents. This devaluation of patents is hurting the small high-tech, job-creating SBIR businesses, and thus the economy.