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Into the Dark: Patent Trend Post America Invents Act and <i>Alice</i>

By Kean J. DeCarlo
January 31, 2016

Ah, the good old days. When the America Invents Act (AIA; http://1.usa.gov/19AoMZ2) was being pushed through Congress in 2011, proponents of the proposed changes expounded on the virtues of a system that mirrored the patent practices of the majority of the industrialized world. The switch to a “first to file” system, the introduction of more robust U.S. Patent and Trademark Office (USPTO) methodologies for challenging the validity of issued patents, and the changes to the fundamental statues governing novelty and obviousness were all supposed to provide an enhanced degree of certainty for businesses in their patent portfolio. Instead, the unforeseen consequences of both the AIA and the seminal 2014 Supreme Court decision in Alice v. CLS Bank (Alice), 573 U.S. ___, 134 S. Ct. 2347 (2014), have created a hostile environment for patent portfolios, which has negative implications for investment in innovation and startups.

It is axiomatic in commerce that money will follow opportunity, which is evidenced by the expanding use of the inter partes review process that was introduced in the AIA. Originally, the IPR process under the AIA was introduced to establish a faster and less expensive way to confirm the validity of a patent. It was anticipated that IPRs would be used to help eliminate weak patents that were being asserted by patent challengers, including the much maligned non-practicing entities (“patent trolls”). Those who challenge on the basis of a patent of uncertain scope would rather assume the risk of losing in a timely and efficient USPTO administrative proceeding, than to face losing in a federal court after spending a small fortune.

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