The Importance of the AIA and Alice to Business Owners
Congress passed the America Invents Act (AIA) in 2011 because of serious concerns that low quality patents were placing a drag on innovation and eroding public confidence in the patent system. The AIA created the Inter Partes Review (IPR) program at the Patent and Trademark Office (PTO). IPR allows the public to ask the PTO to take a second look at questionable patents in a procedure that is faster and cheaper than litigation. Since its inception, IPR has proven to be a time- and cost-effective program for improving patent quality. It has allowed the targets of baseless litigation to fight back and made patent trolling a less lucrative business model.
To comply with Congress’s intent for IPR, and to prevent another surge in NPE litigation, the PTO’s procedures for implementing IPR must remain fair and robust. In the past year, the PTO has taken multiple steps to weaken IPR, and the number of cases that it agrees to hear has been dropping. Congress should protect this valuable tool from further erosion.
In 2014, in Alice v. CLS Bank, a unanimous Supreme Court restated what had long been the law: abstract ideas like business methods cannot be patented. The Court also confirmed that computer software inventions could be the proper subject of patents, but that simply running an abstract idea on a generic computer, without any improvements in technology or computer performance, should not be. Like IPR, Alice made the NPE business model of buying and suing on low quality patents less lucrative and decreased the attacks.
Since these changes, innovation and the economy has surged at every significant metric.
Summary of Patent Examining Activities (FY 2014–FY 2018)
source: United States Patent and Trademark Office Performance and Accountability Report FY2018
United States GDP Growth Rate
source: Seeking Alpha
source: National Venture Capital Association Venture Monitor