Defend Open Source from Trolls: Oppose Patent Rule Changes
The U.S. Patent and Trademark Office is inviting public comments on a highly controversial rule change it is trying to rush through without Congressional approval. These proposed changes eliminate the ability for third parties to help clean bad patents out of the system — patents that are often used against open source. The USPTO deadline for comments is very close, June 20.
We have partnered with the Electronic Frontier Foundation, Eclipse Foundation, Mozilla Foundation, Open Invention Network, Open Source Initiative and Unified Patents to get the word out and help developers and users of open source understand the risk these proposed changes carry. We invite you to a webinar on June 7 to discuss this critical issue further. If you can’t or don’t want to join a webinar, we have provided instructions and templates you can use to comment here.
The patent system was designed to reward sharing new innovations in exchange for safeguarding the inventor’s investment with intellectual property rights. As stated in the U.S. Constitution, Congress was empowered “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”
Unfortunately, the patent system is flooded with applications of low quality that do not improve science or useful arts, and many get through to registration. If a poor-quality patent is granted, then the owner of that patent has the exclusive right to prevent others from exercising the patent claims. This exclusive right has become a tactical tool for so-called nonpracticing entities (NPEs, aka “patent trolls”), posing a significant threat to open source innovation.
Patent trolls rarely target an open source project directly, though a few have. Some may recall Gnome Foundation, which was sued by RPI, an LLC with an office address, but no employees, no products and no business of any kind other than using bad patents to shake down companies. Luckily, we had experts in the patent system who have helped to defend Gnome Foundation.
Ultimately McCoy Smith, of LexPan Law, initiated a patent reexamination, and all claims in the patent asserted against Gnome Foundation were canceled, meaning there was no protectable innovation in the patent when it was granted; it was a bad patent in the first place and should not have been granted.
NPEs rarely target open source foundations directly. They don’t sell products by which they can attach a royalty to a revenue stream and extract large rewards in court. Instead, NPEs target downstream commercial adopters and end users who decide to use an open source project in a product or service they build. The end user could be a large technology company, a bank, or a startup. The NPE typically aims to settle fast, take the money and run. The companies settle because litigation is very expensive and jury trials are unpredictable.
The calculus is usually that it’s cheaper to pay the NPE than go to court. Often the NPE will reinvest their rewards to buy other bad patents in the system, such as from a failed startup. Armed with another patent that gives them exclusive rights, the NPE will assert the new patent(s) they’ve acquired against a new batch of companies, and the cycle continues.
The America Invents Act in 2011 put a number of provisions in place to improve the patent system. The AIA changed rules governing patent lawsuit parties’ joining, but trolls adapted their tactics to continue exploiting the system. Further legislative attempts to curb their actions have seen mixed success, underscoring the ongoing issue of patent trolls. The system is still challenging for operating companies, and recent analysis indicates the NPE problem has not abated, as entities have adapted.
For decades the Linux ecosystem and other open source projects have benefitted from the Open Invention Network (OIN), which has provided a neutral zone of competition around open source without the risk of patent litigation for users of the projects covered by the OIN cross license. OIN helps protect everyone in open source from operating companies, but it does not solve the NPE problem, where no operating business exists.
The Linux Foundation, OIN, and their mutual members helped found and launch an Open Source Zone under Unified Patents in 2019, which aims to protect open source projects and their users from NPEs. Unified Patents has successfully defended dozens of open source projects from bad patents, employing patent experts who leverage the Patent Trial and Appeal Board (PTAB) and the U.S. Patent and Trademark Office (USPTO) processes and rules to thwart the efforts of NPEs targeting users of open source software. Their efforts have been successful, much to the chagrin of NPEs.
At their urging, the USPTO is now proposing changes that will favor these NPEs by raising the bar for disputing invalid patents and intensifying patent litigation costs. These rules changes are designed to “feed the trolls,” expanding opportunities for them to send more frequent and frivolous demand letters to startups, foundations and enterprises alike, which we know never ends well.
The USPTO’s recent Advanced Notice of Proposed Rulemaking (ANPRM) proposes rules that could prevent meritorious reviews of patents that shouldn’t have been granted. The proposed changes exceed the USPTO’s lawful authority, contradict the America Invents Act (AIA) and threaten to impose a burden of hundreds of millions of dollars on the U.S. economy, particularly on small and medium enterprises. In short, it will make it harder for the Unified Patents and the McCoy Smiths of the world to challenge bad patents.
Unified Patents, an entity filing less than 2% of all challenges annually, is being unjustifiably targeted in the ANPRM, apparently for carefully following the rules. This comes despite Unified’s decade-long success in seeking reviews of invalid patents, in line with Congress’ explicit language and intent. Unified Patents assists the USPTO in highlighting and invalidating patents that should never have been granted — the primary objective Congress had when creating the Patent Trial and Appeal Board (PTAB). This has drawn complaints from those with vested interests in asserting patents shown to be objectively invalid. They don’t particularly like having their extortionate business model disrupted.
In open source, we often talk about the valuable contributions — beyond just code — contributors make to testing, documentation, evangelism and more. In the patent system around open source, entities like the Electronic Frontier Foundation and Unified Patents contribute IPRs (“Inter Partes Review”) instead of PRs (“pull requests” in GitHub’s vernacular). Unified Patents leverages a system designed to clear out bad patents. The goal is to ensure exclusive rights are given to true innovations. If a patent is of poor quality, we should allow any person or entity to petition for a review.
Unified often challenges patents that no one else has the will or the resources to challenge, serving small and medium businesses that lack the resources or expertise to navigate patent complexities. It never pays NPEs, and NPEs never pay it, so it can’t be bought off or sold out. Most of its challenges result in the USPTO invalidating the challenged claims, thus serving as an important check on patent validity.
The patents that Unified challenges are often invalid, but nonetheless widely asserted by the worst abusers of the patent system. Unified’s decade of successful work in identifying invalid patents that should not have been issued shows its ability to serve the public good and bolster the patent system, small businesses and the economy at large.
In light of the proposed USPTO rule changes, open source foundations are calling on our collective communities to express their concerns — loudly and voluminously. It’s not often we have the opportunity to band together across the open source ecosystem, but this is one where we’re likely all aligned.
Thank you for standing up for open source.