Week 11 Blog #1: Industry Trends to Watch

In her lecture this past Monday, Efrat Kasznik went over a few industry trends to watch in the case of patent monetization in the coming months. Some of these trends to watch were quite encouraging in my opinion, but others were alarming in the sense that we need continued patent law reformation in this nation. Below, I will briefly go over each trend to watch and my opinion on this.

1. The Enforcement Business Model is Under Attack
As Ms. Kasznik went over earlier in her presentation, patent litigation has recently seen a decline for the first time in 5 years as enforcement entities are scaling down. In my opinion, this is a fantastic trend and really has shown that the AIA has been a positive first step in reducing the harm posed by patent trolls. In the video of John Oliver deriding patent trolls in a satirical, but entirely true manner, it was estimated that patent trolls have caused an estimated $1 trillion hit to the U.S. economy. And it was especially disturbing to find out in Ms. Kasznik's presentation that these trolls were targeting companies that generally could be considered small, as at least 66% of patent troll defendants were companies with less than $100 million in annual revenue and at least 55% of unique defendants in patent troll lawsuits make under $10 million per year. This small startups are the lifeblood behind the growth of the modern economy and without them, innovation and business domestically slows down. These trolls have long been harming the foundation of the American economy by primarily attacking these small startups and it is encouraging to find that the government has taken an initiative to combat this trend and the results so far have been positive.

2. Patent Transactions Slowing Down
On the other side of the spectrum, I was discouraged by the fact that patent transactions seem to have slowed down, especially in software patents, and buying has moved to China where mobile and IoT are hot right now. It is now surprising that patent transactions in software has slowed down due to the flexible nature of the software nature. When companies construct different forms of software and patent it, competitors can get around these patents by utilizing the same structure as the originally constructed software, but with a few separate variations that make the patent for this new software valid. The fact though that buying has moved to China is the truly worrisome part as this gives leverage to the large Chinese companies to bring legal pain to some of its competitors, many of whom are U.S. companies. This has the ability to lead to further patent wars such as the ones we saw emerge between Samsung and Apple and could truly confound the patent market further.

3. Focus Shifting to Validity
The enactment of the AIA led to the creation of the Patent Trial and Appeal Board, allowing for patents to be reexamined. This board has been called the "Patent Death Squad" as it has reversed the validity rulings on many patents. I believe there is both good and bad that arises from this situation. The good is the fact that there are now more opinions on whether a patent can truly be considered valid. I believe this strengthens the goals and mission of the USPTO in terms of truly validating patents. Where the negative lies is the fact that the trend has resulted in many patents being ruled invalid, as owners are being consistently challenged and having their patents overturned. Basically, those in the patent office that had originally ruled the validity of a patent are consistently having their opinion and patent decision invalidated by their peers. This rate of turnover is quite concerning and I truly believe it is a situation where the current model needs reform in terms of consistency when it comes to Board decisions.