Recalibrating Patent Venue

For most of patent law’s 200-plus year history, patent holders could sue only in the district inhabited by the defendant. In 1990, the United States Court of Appeals for the Federal Circuit decided that the scope of permissible venue extended to all districts with personal jurisdiction over the defendant. In recent years, patentees have flocked to certain districts, fueling the widespread perception that patentees, particularly those that do not practice their patents, called non-practicing entities (“NPEs”), are abusing forum. Responsive to these concerns, Congress and the courts have moved to reinstate a more restrictive rule, culminating in the Supreme Court’s 2017 TC Heartland LLC v. Kraft Foods Group Brands LLC decision to limit venue to locations of the defendant. Yet, incredibly, to date there has been no measure of the overall pervasiveness of forum shopping and whether TC Heartland or any other venue reform will change this phenomenon. We address this gap by estimating the differential impacts of reform on filing patterns. We find, based on an analysis of approximately 1500 patent and non-patent cases filed in 2015 that about 86% of patent cases—a striking share—were brought outside of the defendant’s home district. This practice is not limited to non-practicing entities, however; corporations, universities, and individuals all filed outside of defendant districts. Things would have been different if venue were reformed, but much depends on how reform is implemented. If the Supreme Court’s decision to restrict venue to where the defendant resides or has an established place of business were already in effect, an estimated 58% of 2015 cases would have had to have been filed in a different venue. If the Congressional proposal to change venue to include home districts with research or manufacturing connections to the case had been in effect, about half the NPE cases in our sample would have needed to be refiled in another district, but only 14% of the operating company cases would. Cases would have become less concentrated in a single district, with the top district, Delaware, capturing 20–24% of cases, but the top three districts, the District of Delaware, the Eastern District of Texas, and the Northern District of California, would still have the majority of cases. Regardless of the reform, we expect smaller defendants to get more from venue relief than larger defendants because of their relatively smaller footprints. Among NPEs, universities, individuals, and small companies should be impacted to a lesser extent than patent assertion entities (“PAEs”), considerably so if the VENUE Act were enacted

The Minnesota Second Chance Expungement Gap

Minnesota Statute Sections 609A, 243.166, and 609.02 define conditions under which individuals with criminal records can expunge their records. Ascertaining, then applying the law to a sample of 581,478 criminal histories of people with convictions records, and then extrapolating to the estimated population of 1.1M individuals in the state with criminal records , 2 we estimate the share and number of people who are eligible for relief but have not received it and therefore fall into the “second chance gap,” the difference between eligibility for and receipt of records relief. Importantly, we assumed that all who met the threshold criteria for receiving 3 expungement were eligible, and did not take into account the balancing test under 603A.03 Subdivision 5.e did not model legal financial obligations or other out of record criteria). We also estimate the aggregate earnings loss associated with people eligible for relief from convictions that have not yet received it.

Patent Assertion and Startup Innovation

This report, supported by funding from the New America Foundation, details the experiences of startups with patent assertion based on surveys of about 300 venture capitalists and venture-backed startups conducted in 2013. According to survey responses, patents for novel inventions play a generally positive and at times crucial role for startups. They help to transfer technology, enable investment, and improve exits, particularly in bio/pharma industries. But patent assertions by NPEs, which at times hit startups when they are least able to fight them — on the eve of a funding or acquisition event, or, 40% of the time, in the context of the startups’ customers — can have significant and at times devastating impacts on companies. Though partnering with NPEs to monetize patents can be beneficial to companies as well, the benefits do not appear to offset the harms, according to survey responses and VC interviewees whose companies had been sold to and been sued by NPEs. Furthermore, many survey respondents do not find these to be socially productive assertions — but rather on the basis of patents that, though they may be valid, are viewed as frivolous or overbroad.Though the risks associated with patent assertions were described as feeling “unbounded,” startups are routinely expected to absorb these risks in their dealings with acquirers, investors, and customers. Overall, these assertions have added friction to technology transactions, reduced the value of pursued startups, and triggered large indemnities, according to study subjects. Specifically, the report finds: Finding 1: Based on survey responses, 75% of surveyed venture capitalists (VCs) and 20% of venture-backed startups with patent experience have been impacted by an NPE demand; nearly 90% of all tech VCs have been impacted. The demand was based on the startup’s adoption of another’s technology 40% of the time. Low quality and sofware patents were identified as problematic. Finding 2: Although NPE assertions are perceived as motivated primarily by money, respondents reported routinely experiencing non-financial consequences including delays in hiring, meeting milestones, and business line pivots and exits. Finding 3: Most VC respondents believe patents are important for innovation. An estimated 5% of startups have sold their patents to NPEs, experiencing positive benefits from doing so. However, 84% surveyed VCs, many whose companies had sold to NPEs, still believed that NPEs were harmful for innovation. Finding 4: Startup concerns with patent enforcement go beyond NPEs and extend to the disadvantages startups suffer relative to larger incumbents as a result of poor patent quality, high costs, and delays associated with the patent system, survey respondents told us. The inability of startups to defend their own patents and suits brought by “patent predators,” larger companies that sue with anti-competitive motives, also presented specific concerns.To ameliorate the harms of patent assertion on small companies, the report recommends several interventions, keeping in mind the special needs of startups, who, with their fewer resources, less time, and greater focus on building the business, are at a relative disadvantage when patent processes are expensive, slow, or require deep patent expertise (or “patent game”-playing skills). These include: Recommendation 1: Fully fund the PTO and its quality initiatives including tightening functional claiming and expand low-cost access to the PTO’s transitional program and other forms of post-grant review by reducing fees for small and micro entities and supporting and prioritizing collaborative challenges to patents asserted against large numbers of defendants, particularly by downstream users and small entities. Recommendation 2: Make patent cases about the merits, not about who can outlast or outspend the other side, by permitting more discretion in awarding fees and costs for non-core discovery and promoting uniformity and early dispositive rulings, for example by requiring the Patent Pilot Program to implement and measure the impact of best practices. Recommendation 3: Make patent risks more manageable for startups by requiring demand letters and complaints to disclose the real-party in interest, claim charts, related litigations and reviews, and licenses that could cover the target. Recommendation 4: Make startups less attractive targets by limiting the liability of downstream users and the precedential value of the settlements signed by small companies

The Inequalities of Innovation

Over the last few decades, the United States has become more innovative, but the gains have been distributed unequally. In 2020, over 50% of new U.S. patents went to the top 1% of patentees and more than 50% of all patents of U.S. origin were generated by just five states, all coastal. Less than 13% of inventors were women. The economic, geographic, and demographic concentration of innovation highlight how the intersections between two traditionally discrete topics—innovation and inequality—have become increasingly relevant. But rather than any single inequality, this Article argues, multiple inequalities - of income, opportunity, and access – have relevance to innovation. Examining the inequalities of innovation, separately and together, exposes the tensions, at times surprising, between notions of equity. When mapped onto patent law, an inequalities framework also reveals how the patent law can exacerbate inequality – by providing enhanced returns to “invention capital” – the role models, trust, know-how, and network of people that “you know and can call upon” – required to take advantage of inventing. But an inequalities framework also shows how patented innovation can improve conditions for the worst off, by providing paths to prosperity and hastening the creation and diffusion of innovation, even as it makes the rich richer. Building on the “inequalities” framework described above, this Article offers a set of legal and administrative proposals grounded in patent law for addressing inequality concerns. To ensure equal opportunities to participate, this Article proposes the creation of an Independent Office of the Small Inventor Advocate, akin to the National Taxpayer Advocate, that would have responsibility for increasing invention capital and know-how among first-time inventors, and leveling-up the inventing playing field, for example through universally accessible patent-quality technology. To expand access to innovation, through partnerships and expand public understanding and oversight of the patent system, for example, by other agencies, this Article proposes the introduction of an independent Office of Public Interest and Partnerships in Innovation. Finally, introducing and centering equity metrics, like the number of first-time innovators, and patent granting gaps, can support equitable growth in innovation

Harmony and Disharmony in International Patent Law

One of the purposes of the Trans‐Pacific Partnership (TPP) is to harmonize standards and create a uniform climate for trade and investment. As lawmakers deliberate the terms of the deal, they must consider what the long‐term impact of agreeing to its sweeping provisions will be. As they do so, they should keep in mind that the gaps between the agreed‐upon principles and local implementation, and the differences between local implementation – some of them by design – are often quite great. Drawing upon the existing literature, this short essay provides a survey of the extent of harmony and disharmony in the 20 years that have passed since ratification of the TRIPS agreement, with a focus on its patent provisions. After considering the framework for harmonization that the TPP and TRIPS share, I discuss and provide examples of three types of differences: differences between the minimum standards that are negotiated and compliance with them, differences between the substantive principles agreed to and the actual laws that implement them (and the procedural contexts in which they operate), and differences between the laws as enacted and the laws that are applied

Patent Amicus Briefs: What the Courts’ Friends Can Teach us about the Patent System

Over the last two decades, more than a thousand amici, representing hundreds of organizations, companies, and individuals, have signed onto amicus briefs in over a hundred patent cases, many of them landmark decisions. This paper turns the spotlight on these “behind-the-scenes” actors in the patent system, combining theoretical insights with an empirical study of amicus briefs filed in patent cases over the last 20 years in an examination of patent interest groups, the positions they have advocated, and the effectiveness of their advocacy. Amicus filers appear to have been instrumental in shaping the courts’ agenda; the Supreme Court was seven times more ikely to grant cert, and the Federal Circuit eight times likely grant a petition for en banc rehearing, if urged to by an amicus. Thus, consistent with the affected groups theory, the courts seem to listen to, or at least agree with, their friends about which cases are important. It was harder to assess the influence of briefs on the merits. This study failed to find evidence that the courts were more likely to rule for the side supported by the greatest number of amici, but did not address or rule out other forms of influence that are harder to measure. Among individual amici, the briefs of the United States stood out as being exceptionally prescient. Over the 20 years studied, every single amicus brief authored by the United States in a Supreme Court patent case except one predicted the case outcome. That is to say, in almost all cases, the Court sided with the party the Government told it to, and in one case, dismissed cert as improvidently granted when the Government recommended doing so. In terms of who files briefs and their agenda, the results are somewhat surprising. Although debates about the patent system are usually cast as a fight between the pharmaceutical and hi-tech industries, patent lawyers, on their own and represented by professional associations, filed the most briefs of any single group. In addition, among companies, what seems largely to determine how amici advocate is their business model – non-practicing entities, for example, nearly always weighed in for the patentee and public companies, often against the patentee. These and other results have implications for those seeking to understand the patent system and those seeking to influence it

Beyond Eureka: What Creators Want (Freedom, Credit, and Audiences) and How Intellectual Property Can Better Give It to Them (By Supporting, Sharing, Licensing, and Attribution)

In the theater of the courtroom or the rough and tumble arena of intellectual property policymaking, the day-to-day lives of creators are rarely presented. We often instead see one-dimensional vignettes, for example, “the new artist or band that has just released their [sic] first single and will not be paid for its success,” described on Taylor Swift’s Tumblr last summer when she initially withdrew from Apple’s music streaming service. While instructive, this description leaves out that Swift and other artists have long relied on “free play” mediums like radio and, more recently, YouTube to develop, not cannibalize, their audiences and followers. Such accounts ignore both context and the complex relationship between what creators want and need and what intellectual property provides. These are a few of the reasons that Jessica Silbey’s book, The Eureka Myth, is both refreshing and important. In it, she draws from over fifty interviews, completed over half a decade, with an array of creative professionals, including filmmakers, photographers, sculptors, journalists, novelists, musicians, composers, hardware and software engineers, biologists, publishers, computer scientists, and business executives. Silbey asked them about their work, the challenges they faced, why and how they overcame professional obstacles, joys they experienced, and what was important to them. And at the end of each interview, she asked them what they thought about intellectual property

The Texas Second Chance Non-Disclosure/Sealing Gap

Texas Gov. Code Chap. 411 allows individuals whose criminal records meet certain conditions to non-disclose or seal their records. Ascertaining, then applying the law to the criminal profiles of Texans with convictions or deferred adjudications, as reflected in the Texas Computerized Criminal History System database (CCH) obtained from the Texas Department of Public Safety (described in Appendix B), as well as a sample of 2,362 criminal histories, and then 4 extrapolating to the estimated population of 4.8M individuals in the state with conviction records and estimated population of 7M individuals in the state with any record we estimate the share 5 and number of people who are eligible for relief but have not received it and therefore fall into the “second chance gap,” the difference between eligibility for and receipt of records relief. We also estimate the aggregate earnings loss associated with people eligible for relief from convictions that have not yet received this relief. We did not model legal financial obligations or 6 other out-of-record criteria. Racial disparities are significant in the Texas population of people with a criminal record, with an estimated 42.8% of Black Texans but 22.8% of White Texans having a conviction record based on state criminal history data and Census data (2021)