Large tech companies feed off PTAB, leaving small businesses gutted

Thus the implementation of the AIA has made it easy to invalidate bad patents but has not provided a means for securing good patents. In particular, no provision has been made for the disproportionate harm caused to inventors who rely on patents to develop and commercialize their inventions.

Large corporations and patent assertion entities can absorb the expense and risk of PTAB trials as a cost of doing business. They have access to billions of dollars in capital and portfolios of hundreds or thousands of patents. They need only factor in the cost and risk of PTAB invalidation in their budget and business plans.

Small practicing entities on the other hand, rely on a single patent or a small portfolio to survive - it is often the only means of protecting a fledgling startup from a huge predator that copies its invention. Where an examiner, supervisor, district judge and/or jury would uphold the validity of a small practicing entity's core patent(s), the PTAB usually will not. These are not glaring mistakes, but close calls that could go either way under the AIA statutory provisions.

Who Benefits From the PTAB?

A common misconception is that the PTAB is necessary for small businesses to fend off so-called patent trolls.[2] To the contrary, of the more than 12,000 petitions that have been filed between Sept. 16, 2012, and Nov. 30, 2020, less than 2% comprise small and medium-sized entities against nonpracticing entities, or NPEs. The vast majority of petitions are filed by large operating companies, usually against a smaller competitor.[3]

Of particular concern are the 40.1% of petitions by large operating companies against other operating companies. While Unified Patents - the curator of this dataset - does not fully partition the roles and company sizes, my observation is that the petitioner is usually multibillion or trillion-dollar corporation challenging a much smaller competitor.

The top petitioners include Apple Inc. with 673 petitions, Samsung Electronics Co. Ltd. with 549 petitions, Google Inc. with 354 petitions, and Microsoft Corp. with 227 petitions.[4] These trillion-dollar corporations can easily afford to litigate their invalidity challenges in district court where a small business might obtain contingency representation and an opportunity to plead their case to a jury.

It is rare that a small business will avail itself of the PTAB to fend off a meritless patent assertion. Conversely, it is common for a large corporation to weaponize the PTAB to crush a smaller competitor with superior technology.