I've written before on the sad state of patent quality in our country. Today I'm writing about a beacon of hope. Earlier this week, the Supreme Court agreed to hear a case that could greatly expand the right of the public to defend itself from bogus patents.
Remember, the granting of a patent is an intrusive act of government telling you, me and every other American we cannot do something. Jefferson called them "embarrasments", and he was right, they are, especially when they are completely undeserved, as a great many of the 4,500 patents issued every week are.
Unfortunately, as unbelievable as it may sound, there is absolutely nothing you, me or any other American can do to stop the government from taking our freedom away willy nilly by granting meritless patents in the first place. In fact, the government makes a lot of money doing so (it makes ten times as much money when it grants a patent as when it denies one; which would you prefer if you were a fat cat bureaucrat?). This is why it is so important to have ways to take our freedom back after the government has stolen it from us. As of now, that's very hard to do, because the government knows it has to make it as hard as possible for us Americans to take back our freedom in order to "protect the value of IP" (that's how the Director of the Patent Office spins the situation), else the Patent Office won't make as much money giving our freedom away.
In the Supreme Court case accepted this week, Nike (yes, that Nike, the famous sportswear company) sued a much smaller shoe company called Already, which does business under the name YUMS, for allegedly infringing one of its trademarks relating to the design of a shoe. Already looked at the trademark and quite quickly realized that it was completely invalid. (If you want to know how it's possible for our government to give out invalid trademarks and patents, see my talk on the Patent Pollution Problem. The same government agency, the United States Patent and Trademark Office, grants both)
Knowing it was going to lose, Nike decided to quit and walk off the field before time expired. In legal terms, what that means is Nike promised never to sue Already again for infringing that trademark "for similar shoes." After making the "promise" and giving up on its dead loser of a case, Nike asked the court to dismiss Already's request that the trademark be declared invalid. In other words, Nike picked a fight with a much smaller competitor, realized it was going to get its butt kicked once the little guy decided to defend itself, became a total chicken, and tried to run the other way, all the while retaining its trademark to assert against the same little guy again in the future (because surely Nike will argue new shoes by Already are not "similar" and therefore fall outside the "promise" they made).
Nike is not alone in using this hit-and-run tactic. There are numerous examples of overly aggressive patent owners doing exactly the same thing, threatening innocent people with completely false claims of infringement, suing them in court hoping the burden of defense alone will make them crumble, but then seeking to drop the entire case by making a meaningless promise not to sue once they realize the jig is up because their patent is completely bogus and the defendant is seeking to have it invalidated by the court. These patent bullies want to concede the case in order to avoid permanently losing the right to threaten and sue again in the future for infringing the same worthless patent. It's absolutely disgusting and the people who do this should be ashamed of themselves. If you want to start a fight, that's your prerogative, but you better be ready for the other guy to finish it. You can't just call time out when you're on the brink of losing so you can start over later on when you've got your chutzpah back. No sir, that's not how we roll here in America.
Not surprisingly, innocently accused parties are as outraged as I am at this ploy. They don't want to get sued at all, much less for infringing invalid trademarks and patents that would get shredded if they ever truly had their day in court. Already fought Nike in both the district court and the court of appeals for its right to have Nike's trademark declared invalid, but both courts let Nike off the hook. So, Already appealed to the Supreme Court, which, as I say above, on Monday decided to hear the case. Thank heavens. At least someone in our judicial system has some sense and backbone.
There are at least two huge reasons to celebrate the fact that the Supreme Court may direct lower courts to permit challenges to trademarks and patents being used to hit-and-run the American people.
First, as previously mentioned, American patent quality is poor, so poor, the Patent Office should be even more "embarrassed" than Jefferson was back when he was in charge of deciding what applications should be granted or denied. The American people desperately need ways to challenge and eliminate worthless patents that take away their freedom. Allowing accused infringers to maintain challenges against patent holders who sue for infringement will not only help fix the patent pollution problem, it will also make patent holders think twice about the true strength of their patents before even asserting them against others. It will thus greatly reduce anti-competitive over-litigious and just plain cowardly behavior.
Second, allowing validity challenges is consistent with general American principles relating to protecting freedom from improper government restraint. Like criminal statutes, patents are government-issued ways of taking away rights of the American people to do something, and the Supreme Court has repeatedly allowed parties to challenge criminal statutes even when there was no threat of those statutes ever being enforced, much less when they had been used to hit-and-run. And in the last Supreme Court case on the right of parties to challenge patents, the Supreme Court relied on those other cases challenging criminal statutes to find that the patent challenge could proceed even though the potential infringers were not even likely to be sued by the patent holder. It's only logical that a party that has been previously accused of infringing a patent should be able to challenge it. Further still, the right to bring a challenge should stem from the fact that the existence of the bogus patent is a threat to freedom in and of itself, especially when the patent holder has been brandishing it in an aggressive and threatening way.
We'll now have to wait several months before we get a decision from the Supreme Court in the case, but it would be strange indeed for them to have taken it merely to uphold the lower courts' decisions to dismiss the challenges. Hopefully, the Already v Nike case will open up new doors for the American people to take back their freedom by challenging invalid patents. I'm going to go buy some YUMS products right now to show my support. One of my favorite little cousins is heading to college this fall and could use some new kicks.
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