Main Street businesses are the backbone of our communities and the foundation for local economies and employment. While recovering from the challenges posed by COVID-19, these essential businesses have continued to face the threat of abusive patent litigation simply for using off-the-shelf technology to run their operations. Often filed by non-practicing entities (NPEs), whose only business is to make a quick buck from shakedown settlements, these lawsuits drain resources from businesses and stifle the innovation that our communities need. But, Congress can take action by strengthening the U.S. Patent and Trademark Office’s (PTO) program for reviewing the validity of a patent. This program, called Inter Partes Review (IPR), was created by the America Invents Act in 2011 and gives businesses an efficient and cost-effective tool to ask the PTO to check its work and have its expert judges review whether the initial grant of a patent was made in error.
Before IPR, many businesses were forced to settle abusive patent lawsuits just to avoid the burdensome cost of litigation. Thanks to the IPR program, businesses could have the PTO assess whether that patent should have been granted. This process is not a threat to valid patents: only about 0.2 percent of active patents are reviewed. But IPR knocks out those invalid patents that otherwise would be erroneously allowed to target even more American businesses. And while Main Street businesses do not typically initiate an IPR themselves, they often benefit from IPRs initiated by their suppliers and service providers challenging patents that could – and often are – asserted directly against Main Street businesses. Thus, the review process benefits all businesses by addressing invalid patents so that they can no longer be used to threaten operating companies and take resources away from their work.
The facts show that after the IPR program was put into place, abusive patent litigation filings declined as fewer invalid patents were asserted in litigation. But unfortunately, due to a number of steps taken to weaken the IPR program and create loopholes that shield invalid patents from review, patent litigation numbers are once again on the rise. It doesn’t have to be this way. Congress should work to strengthen the IPR process to #StandwithMainStreet and #StopBadPatents.
Read below examples of how businesses benefit when IPR is used to correct PTO errors and fight abusive patent litigation:
Retailers, grocers and coffee shops targeted for their use of electronic gift cards. An NPE sued several businesses, including national grocery company Albertsons, and Missouri-headquartered outdoor gear retailer Bass Pro Shops, claiming they infringed on its patent related to the use of electronic gift cards. Fortunately, an Atlanta-based financial services company who was also sued by the NPE petitioned the PTO to review the patent through its IPR program – and won. The patent was invalidated, and the Main Street businesses could once again allow their customers to give and use electronic gift cards.
Family-owned print shops targeted for use of tech that allows them to print over a network. An NPE sued 74 businesses located in 23 states - including Alabama, Colorado, Kentucky, Michigan, Ohio, and Texas - for using technology that allowed them to print over a network. Many of those targeted were small, family-owned commercial printing shops, like the fourth-generation business in Nashville, Tennessee that was targeted. Luckily, several commercial printer companies used the IPR process to have the PTO review the invalid patent in question and got the patent overturned, helping to save many small businesses from having to pay a shakedown settlement or hefty litigation costs.
Thousands of small businesses threatened over scan-to-email technology. Technology that allows businesses to scan documents directly to an email recipient saves countless hours. Thousands of businesses throughout the country rely on this technology daily, but all were threatened when a NPE attempted to use a bad patent to collect usage fees. The scanner manufacturers acted quickly to use the IPR process to invalidate the bad patent and restore their customers' access to their technology free of fear.
Retail stores targeted for website design templates. An NPE targeted more than 40 companies, including popular retailers and pharmacies, for their use of a common website design template that made it easier for customers to navigate and shop online. Fortunately, a web services provider filed a petition against the patent in question through the IPR system. The PTO corrected its error in granting the patent and invalidated it, protecting customer access to information through reliable websites.