The Big Story: White House tees up AI, 5G work. The White House will take steps in the coming weeks to boost the U.S.’s competitiveness in the fields of artificial intelligence and 5G, the next generation wireless network, according to reports out this week. Those specific tech policy areas are ones where policymakers have expressed concerns about losing out to other countries, including China.
New year, new Congress, same issues. The new year and the new Congress kicked off this week, but many of the policy debates that concerned startups in 2018 will continue on. As the Democrats take control of the House and the gavels of key committees, expect vigorous oversight of the Trump administration across the board, which is likely to impact several of the policy areas startups care most about, including trade, net neutrality at the Federal Communications Commission, and more.
As 2018 comes to a close, one key policy area that is sure to take center-stage in 2019 is the passage of the updated North American Free Trade Agreement (NAFTA), renamed the United States-Mexico-Canada Agreement (USMCA). While the USMCA is a big win for startups in several areas, Congress should continue to push the Administration in two areas to ensure that entrepreneurs will flourish under the new agreement. Overall, the USMCA sets a high standard for future free trade agreements and will positively impact the growth of American startups.
A flood of perspectives on privacy. Late last week, the federal government got dozens of comments from companies, trade groups, non-profits and more on how to approach consumer privacy online. As part of the response to a request for comments on a broad framework for consumer privacy, Engine submitted comments to the Commerce Department’s National Telecommunications and Information Administration, outlining the ways in which various privacy proposals and laws affect startups.
Engine has released a new booklet that outlines why the strength of the patent system is so important for startups.
Last week, United States Patent and Trademark Office Director Andrei Iancu gave a speech to the Eastern District of Texas Bar Association, where he implied that patent trolls were not a real problem faced by innovators, but instead just a “narrative” made up to scare away innovators. Not only is this factually inaccurate, but it is troubling that Director Iancu would ignore the overwhelming data showing that low-quality patents have led to a rash of abusive patent litigation directed towards small companies and entrepreneurs over the past decade.
The panel discussion, “Design Patents and Defining the Article of Manufacture – One Year Later,” was moderated by Julie Samuels, President of the Board at Engine Advocacy and Executive Director at Tech:NYC. The expert panel also featured Charles Duan, Senior Fellow and Associate Director of Tech and Innovation Policy at R Street Institute; G. Nagesh Rao, a 2016 USA Eisenhower Fellow and former Patent Examiner and Senior Policy Advisor at the USPTO; and Matthew Levy, former Patent Counsel at the Computer and Communications Industry Association (CCIA).
While patent trolls remain a problem, in 2017, startups started to see some relief from nefarious patent litigation. The decrease in patent litigation abuse stems largely from meaningful Supreme Court rulings and the continued implementation of the Leahy-Smith America Invents Act (AIA) at the United States Patent and Trademark Office (USPTO).
Engine looks forward to working with President Trump’s for nominee Andrei Iancu for the position of the Director of the United States Patent and Trademark Office (USPTO). As a non-profit advocacy and research organization that supports startups, we understand what an important position the Director of the USPTO is to protecting the innovation ecosystem.
President Trump hosted “Tech Week” this week at the White House. Events held earlier in the week included a meeting with tech company CEOs to discuss a number of policy issues including cybersecurity, tax reform, and updating the government’s technology. CEOs from 18 leading tech companies attended including Apple, Amazon, Google, Microsoft, IBM, Oracle, and Intel. Later in the week, the White House held meetings with investors and executives to discuss emerging technologies like drones, 5G wireless expansion, and artificial intelligence.
Today, the Supreme Court delivered a blow to patent trolls by unanimously reversing the Federal Circuit’s decision in TC Heartland v. Kraft Foods Group Brands LLC. The high court ruled that defendants in patent cases can only be sued where they are incorporated or have a regular and established place of business. The decision will make it significantly harder for patent trolls to file lawsuits in jurisdictions that patent-friendly but otherwise unrelated to the claims at issue—most notably the Eastern District of Texas, where almost forty percent of patent cases were filed last year.
Today, Engine hosted Austin Meyer, the director of the new documentary “The Patent Scam,” at the Capitol Hill Visitor Center. The screening and subsequent discussion with real victims of patent litigation abuse demonstrated the extent that the U.S. patent system is failing to protect small businesses and startups from patent trolls.
After almost five years of legal volleying, the U.S. Supreme Court finally issued a decision in the highly anticipated Apple v. Samsung design patent case late last year. On Tuesday, Dec. 5, the court delivered a unanimous decision in favor of Samsung, finding that damages for design patent infringement may be limited to revenues attributable to a component of an article of manufacture rather than profits from the entire article. While this is an important victory for startups and innovators—from global corporations to inventors toiling in garages—courts must still work to provide the guidance and clarity necessary to prevent bad actors from abusing the patent system to the detriment of innovation. And they have a new opportunity to do so: On Feb. 7, the U.S. Court of Appeals for the Federal Circuit took a significant step in that direction by remanding the Apple v. Samsung case to the Northern District of California court.
Under Director Michelle Lee, the Patent Office has made real strides toward fixing patent quality. While much work in that area remains to be done, we are encouraged by the steps she and her team have taken and are pleased that she will remain in her role in the incoming Administration so that this important work can continue. Startups in particular rely on a well-functioning patent system, and under Director Lee's leadership, the Patent Office has welcomed the startup community to play a role in that debate. We look forward to continuing working with her to ensure that that the patent system promotes rather than hinders innovation.
The Supreme Court’s December 2016 decision in Apple vs. Samsung reversed a dangerous lower court decision that would have allowed patent plaintiffs to claim the total value of a product containing an allegedly infringing design feature, even if that design feature only provides a small amount of the product’s value. While total profits awards may arguably have been more plausible in an age when devices were less complicated and the design of the object constituted a significant portion of its value, the complexity of modern devices renders total profits awards for design patent infringement particularly illogical.
The patent system was established by our founding fathers as a tool to promote innovation and invention. But too often, America’s most creative, forward-thinking startups find themselves interacting with the patent system in a less-than-ideal way: on the receiving end of an infringement suit or a letter threatening as much. Bad actors that have amassed hundreds and thousands of overbroad, low-quality patents (colloquially known as “patent trolls”) target businesses, using these patents as proverbial weapons with the goal of forcing companies into costly settlements.