The US Manufacturers Association for Development and Enterprise (US-MADE) is specifically focused on protecting US manufacturers from abusive patent litigation. Job-creating manufacturers are sued or shaken down for hefty, often-undeserved royalty payments by plaintiffs wielding vague, low-quality patents, many of which should have never been granted by the US Patent and Trademark Office (USPTO).
American manufacturers face a host of difficult challenges. As nearly everyone knows, for instance, labor costs are lower in many other countries, which has led to many manufacturing jobs moving overseas.
Perhaps less well known is that America’s manufacturers are one of the most common targets of abusive patent litigation. Shell companies which produce no products or services frequently bring lawsuits against American manufacturers, large and small. The types of patents supposedly being infringed by the manufacturers in these lawsuits are nearly always of questionable merit. Often, they are vague, low quality patents that the USPTO should have never issued.
Unfortunately, the USPTO receives hundreds of thousands of patent applications every year, and has only 8,500 patent examiners to evaluate them all, leaving each examiner under 20 hours total to decide if a patent application is valid or not.
One of the best ways to improve the quality of our nation’s patent system is by weeding out these bad patents. Coincidentally, the best tool for doing so is also the best way for manufacturers to defend themselves against abusive patent litigation. It’s called the inter partes review.
The inter partes review, or IPR, was created by Congress a part of the bipartisan America Invents Act. The IPR is an administrative tribunal held at the USPTO to review questionable patents. Other than before the USPTO, the validity of a patent can only be challenged before a federal court in front of a judge and jury who generally know little or nothing about patents, technology or the complexities of manufacturing. These trials often take five-to-seven years and cost $5 million or more.
An inter partes review is an administrative process that looks a lot like a trial, but it is only judging one thing – whether a certain patent should have been ever issued by the USPTO in the first place. Unlike a trial in federal court, the “judges” are actually highly experienced patent examiners and subject matter experts. These experts only “take the case” and review patents they believe may be questionable. The whole process lasts under 18 months. And the cost – while hardly cheap at $300,000 to $1 million on average – is far less expensive than a trial in federal court.
Though only a very tiny percentage of patents – far less than 1% – are ever challenged in an IPR proceeding, and an even smaller number are invalidated as a result, a disproportionately large number of those invalidations are upheld on appeal. That means the process is clearly working, and eliminating only bad patents.
US-MADE and its members will shine a light on efforts to harm manufacturers and it will advocate to protect and preserve the existing legal tools to help manufacturers defend themselves against abusive patent litigation.