Imagine founding a startup and working for years to research and develop a groundbreaking new product, only to have your invention stolen by another company just before your invention reaches the market. It happens all the time.
Patents are supposed to prevent this kind of theft, of course. In recent years, some companies have become increasingly adept at gaming the legal system to violate competitors’ patent rights, often start-ups or emerging companies.
Using a quasi-judicial body known as the Patent Trial and Appeal Board, or PTAB, powerful actors are bombarding new firms with patent challenges in the hopes that these smaller companies will eventually run out of resources to defend their patents.
This blatant abuse of the legal system is more than just unfair. It’s a serious threat to the integrity of the patent system that makes innovation — in industries ranging from biotech to semiconductors — possible. It places America’s status as a global technological leader and our national security in real jeopardy.
Thankfully, U.S. Patent and Trademark Office Director John Squires seems poised to close the PTAB loopholes that enable such IP theft. Those reforms can’t come soon enough.
Patents grant inventors a limited window of exclusivity for their creation — typically 20 years — during which they can recoup the costs of research and development, though much less for certain products such as pharmaceuticals, which have an average patent life of 13.5 years. Without such protections, it would be nearly impossible to raise the capital needed to bring a product into the world because investors would have no assurance that the invention they’re backing won’t be stolen by a competing firm.
That’s why recent PTAB abuses are so dangerous.
When Congress created the PTAB in 2011, lawmakers were trying to provide firms with a streamlined alternative to
In practice, the PTAB has become a weapon used by deep-pocketed corporations to attack the patent rights of start-ups and inventors. To
In the end, small firms often must spend years and millions of dollars defending their inventions in multiple forums at once.
Squires’ proposed reforms would make such abuse far less common. Under his framework, firms can challenge a patent either in court or before the PTAB — but not both. His policies would also ensure that PTAB no longer reviews patents that have already been upheld by another body such as a District Court.
By preventing the same patent from being challenged in different forums, the rule would provide some much-needed certainty for inventors and investors.
This is good news for smaller firms. According to a 2019 MIT study, startups holding patents are 87 times more likely to grow.
The positive ripple effects of Squires’ reforms will be felt throughout the economy. IP-intensive industries generate 41 percent of America’s GDP and support nearly 50 million jobs. The prosperity and opportunity these industries supply depend on a strong, enforceable patent system.
Squires is also taking steps to clarify what counts as an invention under the law.
For more than a decade, court rulings have left inventors unsure of whether their discoveries are too “abstract” or “natural” to warrant patent protection. This ambiguity has made the United States less hospitable to innovation — and driven investment and research and development in fields such as medical diagnostics and artificial intelligence overseas.
In recent testimony before the Senate Judiciary Subcommittee on Intellectual Property, Squires highlighted this problem. He reminded lawmakers that Congress intended the patent system to cover “anything under the sun made by man” that is deemed innovative and that patent law should encourage practical advances, whether in AI models or next-generation computing, not exclude them.
He also recalled how, in the wake of 9/11, patent-protected inventions in data tracking and analytics became essential to national security — proof that protecting ideas can also help protect the nation.
Today, innovation, economic prosperity and national security remain inextricably linked. By seeking to restore both procedural fairness at PTAB and clarity in which inventions are patent eligible, Squires is sending a powerful signal: America is a welcome home to innovative companies.
Finalizing PTAB reforms — and codifying their principles of clarity and reliability through bipartisan measures such as the Patent Eligibility Restoration Act and the PREVAIL Act — would show that America remains serious about protecting its inventors.