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10.10.17

US Congress Will Likely Stop Native American Tribes From Helping Patent Trolls by Misusing Sovereign Immunity

Posted in America, Patents at 8:57 am by Dr. Roy Schestowitz

Claire McCaskill (D-Mo.)

Summary: The US political system, in spite of its many flaws, steps in to defend the Patent Trial and Appeals Board (PTAB) from the “scam” which is passage of patents to tribes that have nothing to do with these patents (for the sake of immunity/protection from scrutiny)

IT HAS been just over a month since sites — including ours [1, 2, 3] — bemoaned this. Well, that trick or loophole didn’t last long, did it?

A patent trolls expert, Mr. Mullin, who was following this whole affair pretty closely since the very start (although Patently-O had beaten him to it), says that Senator McCaskill called it “[o]ne of the most brazen and absurd loopholes I’ve ever seen.”

Weeks after many of us protested Native Americans’ help to patent trolls it certainly looks like the loophole will be closed. To quote:

Allergan’s move to stop its patents from being reviewed by handing them off to a Native American tribe is winning support from few people outside the drug company. Now one lawmaker is seeking to ban it.

Sen. Claire McCaskill (D-Mo.) has introduced a bill (PDF) that would head off Allergan’s strategy without waiting to see whether the judges at the Patent Trial and Appeals Board will even approve it.

Mullin’s article does give the impression that there’s momentum and the “scam” (as some sites called it) is on borrowed time.

In the meantime, CCIA writes about “A Bridge To Sovereign Patent Funds”. Yesterday it explained how PTAB helps stop patent trolls/aggression and how the aggressors retreat to the above loophole not just in the US but also in Japan:

Patent trolls are a familiar concept at this point, but a “sovereign patent fund” (SPF) might not be. This isn’t the kind of sovereign I wrote about recently in regard to sovereign immunity. In essence, an SPF is simply a patent assertion entity (PAE) with backing from a national government.

While government-funded companies that create patent portfolios have been around for quite some time, such as South Korea’s ETRI, they typically functioned as operating companies and research institutions first, obtaining patents from their own research, and only secondarily as patent litigators. It’s only over the past few years that the first generation of sovereign patent funds has arisen, acquiring patents from external sources. These SPFs are formed for various reasons, but they all generally have a protectionist bent, focused on protecting local industry and keeping IP in local hands. IP Bridge, a Japanese SPF, openly states that one goal is to “aggregate [patents] and use them, for example, to support domestic1 SMEs [small and medium enterprises].”

So what can you do if a company backed by the resources of an entire foreign government targets you with a patent infringement lawsuit?

You can file a petition for inter partes review.

We wrote about IP Bridge many times before. Their main proponents are sites which favour patent trolls. We last wrote about it less than a week ago and many times earlier this year.

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