If you’re concerned about the effect patents have on access to medicine, economic opportunities or healthy food, the newly launched Council for Innovation Promotion (C4IP) tells you to ignore the man behind the curtain.
According to C4IP, low-quality, overly broad patents deserve protection — not people with diabetes, small businesses or farmers. That may sound absurd, but C4IP claims its views are reasonable and “authoritative.”
C4IP’s board members have impressive resumes: two are former U.S. Patent & Trademark Office directors — Andrei Iancu and David Kappos — and two are retired federal judges — Kathleen O’Malley and Paul Michel.
But, Iancu, Kappos and O’Malley did not stay in the public sector or enter academia: they joined (or rejoined) corporate law firms that represent some of the world’s most powerful corporations and most prolific patent assertion entities — “patent trolls.”
Iancu and O’Malley are now partners at Irell & Manella, while Kappos landed at Cravath, Swaine and Moore.
Irell’s client list includes notorious patent trolls such as Intellectual Ventures and big pharmaceutical companies such as Eli Lilly. Cravath has some of the same big pharma clients, and one of Kappos’ biggest clients is Qualcomm, a company that government agencies worldwide have sued for anticompetitive practices.
Because these clients depend on patent portfolios to generate profits, they have an interest in ensuring patent offices keep handing out weak patents and preventing anyone from challenging their enforcement. Unsurprisingly, Kappos and Iancu have complained loudly about waiving IP protections to enhance access to COVID vaccines.
Iancu’s law firm, Irell, and its clients benefitted enormously from his tenure as USPTO director. Despite resigning from Irell, Iancu prioritized the interests of the firm’s clients and companies like them. His extreme policy changes are too numerous to list but include nearly doubling fees for challenging invalid patents and re-writing agency guidance to prevent rejections of invalid patent applications. These changes led to more low-quality patents and a resurgence in patent troll lawsuits.
Perhaps the most egregious Iancu policy was the so-called Fintiv rule, which directed USPTO judges to refuse to review invalid patents whenever they were involved in ongoing court cases.
The Fintiv rule turned the patent review system on its head. Years before, Congress created that system to help people challenge weak patents at the USPTO instead of through expensive and protracted court proceedings. This would ensure more resources went to innovation and that only worthy disputes went to trial.
The Fintiv rule was a blatant attempt to prevent that from happening and thwart Congress’ intent.
We now know that Iancu influenced the outcome of patent reviews behind closed doors. In a Government Accountability Office report, 75 percent of USPTO judges said the agency’s leadership “affected their independence.” Judges also reported that information was withheld and misrepresented to hide the leadership’s influence. For example, when “judges that did not agree with a decision or had decided not to follow agency policy, statutes, or case law” were replaced with more obedient judges, the USPTO told “the parties in the proceedings … that the reason for the panel change was because the judge was unavailable.”
We also know that Irell and its clients benefited enormously from the rules Iancu imposed.
One example is striking. The same day the Fintiv rule restricting patent reviews became effective, USPTO judges applied it to deny a review of a patent owned by Irell client VLSI Technology without even considering the review petition’s merits. Instead, it denied the petition solely because of a court case where Irell’s lawyers represented VLSI. After the denial, VLSI went to trial and won more than $2 billion in damages.
We don’t know if Irell got a cut of that award, but it has a policy of taking technology cases on a contingency basis — meaning attorneys get a share of damages instead of hourly fees. Now that Iancu rejoined Irell’s partnership, he’s entitled to a share of the firm’s profits.
Under the new director, Kathi Vidal, the USPTO granted petitions challenging VLSI’s patents based on the same evidence presented before, and we will soon learn whether those patents should have gone to trial. But VLSI and its lawyers will already have reaped the benefits.
C4IP boasts about bipartisanship, but its views are extreme for patent politics. It also perfectly aligns with the interests of C4IP’s board members and their clients. Former officials are free to express views of their choosing, but it is concerning when they use their government titles to advocate for wealthy clients at the expense of people worldwide who seek to contribute to and access scientific advances.
