The Big Story: Patent Quality Week examines impact, reach, importance of balanced patent system
Today we close out our second annual Patent Quality Week where we—alongside startup leaders, experts, and industries across the country—set out to demystify the complex patent system and highlight the important ways in which it impacts every person and business in the U.S. With a better understanding of how the system operates, and all the ways we encounter it, we can chart a path to ensure patent policy works for every entrepreneur, innovator, and individual. And we can make sure everyone has a voice in the system.
In 2021, we launched Patent Quality Week to highlight the big tent of stakeholders that depend on a balanced patent system built around the issuance and reasonable enforcement of high-quality patents (and in turn, a system that rejects invalid patents and abusive assertion). This week we zeroed in on the various ways everyone encounters the system—innovators, manufacturers, main street businesses, doctors and patients, and more—and how better policies can shape innovation, competition, and progress.
Throughout the week, we heard directly from startups on their experiences battling abusive patent assertion and determining how to navigate the challenges of bad actors and invalid patents standing in the way of their freedom and ability to innovate. And we learned about similar ways abusive practices frustrate small businesses, multiple industries, and public access to emerging tech. We also listened to experts unpack complex patent policy jargon and the context behind today’s policy debates. We heard about barriers to public engagement in the patent system, and why that is sorely needed. And throughout the week we talked about how improving patent quality ultimately improves innovation. In that vein, we also read about ways the patent system can work better and talked about what we can do to solve today’s problems. This includes restoring patent reform legislation, pursuing legislation that makes it harder to abuse patents, and more.
Importantly, again, we focused on demystifying the patent system and the ways it touches everyone’s lives—because we need patent policies that center the public (not just a few patent owners) and ensure great new innovations get out there. If you missed any of these sessions, or are interested in learning more about patent quality and how it can impact your own innovation or innovators in your community, visit patentqualityweek.engine.is for more information and resources.
Policy Roundup:
Change to FTC approach will impact acquisition activity. In an interview this week, Federal Trade Commission (FTC) chair Lina Khan stated that the agency will pursue litigation against companies looking to complete mergers it views as anticompetitive rather than negotiate settlements with companies. That approach will inject uncertainty and inefficiency in the acquisition process and lead to fewer transactions—which has been noted by academics, minority commissioners, and Engine alike. Acquisitions are a vital exit path for startups, and undermining them will reduce the flow of capital and talent in the ecosystem.
NY social media law to require new reporting mechanisms. A New York state bill signed into law this week—as part of a gun violence prevention package passed in the wake of the mass shooting in Buffalo last month—will require Internet companies to maintain a mechanism for users to report “hateful conduct” on their platforms. The bill defines “social media network” as an Internet platform “designed to enable users to share any content with other users or to make such content available to the public,” and it defines hateful conduct as “the use of a social media network to vilify, humiliate, or incite violence against” a group in a protected class, including on the basis of race, religion, and gender identity.
Antitrust debate heats up as bill authors push for summer vote. Backers of a bill aimed at large technology companies are pushing for a Senate floor vote as early as this month, while some in Congress, the tech industry, academia, and elsewhere are highlighting the potential for unintended consequences. The bill, S.2992, known as the American Innovation and Choice Online Act, is designed to prohibit large technology companies from preferencing their own products. But it also raises concerns that at least certain provisions could make those companies common carriers, lead to litigation over content moderation, and make it more difficult to address misinformation, terrorist content, and hate speech online. And according to an economic analysis, the bill could also lead to increased costs for services that startups rely on and that are currently offered for free or at low-cost.
Bipartisan bill seeks to create crypto regulatory consistency. On Tuesday, Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) introduced bipartisan cryptocurrency legislation with the aim of providing clarity by classifying many digital assets as commodities under the purview of the Commodity Futures Trading Commission, except in cases where digital assets confer certain benefits to investors, when they’d be treated as a security. The bill would create a less prescriptive regulatory framework than one governed by the Securities and Exchange Commission, which includes reporting requirements that could be onerous and privacy-invasive.
FTC to pursue restrictions on non-competes. This week, FTC Chair Khan announced the agency was considering adopting a regulation targeting non-compete clauses, aiming to restrict their use and improve worker mobility. Talent acquisition is one of the most significant hurdles a startup will face, and overly broad use of non-compete agreements stifle innovation and makes it more difficult for startups to hire the talent they need. Though they are often used under the guise of protecting intellectual property and sensitive information, several frameworks are already in place to protect businesses, and non-competes are largely unnecessary for that purpose. It is critical that policymakers keep startups in mind when undertaking efforts to address talent mobility, particularly as much of the country grapples with significant talent shortages.
Biden administration launches new trade framework. This week at the Summit of the Americas, President Biden announced the Americas Partnership for Economic Prosperity, a new regional agreement that will cover regional investment, supply chains, clean energy, anti-corruption, and trade. The partnership follows a similar structure to the Indo-Pacific Economic Framework (IPEF) the administration launched late last month. Like with IPEF, details of the new agreement will be worked out among partners in the coming months, but could include digital trade issues important to startups.
Startup Roundup:
#StartupsEverywhere: Portland, Oregon. Lithic Tech builds software for startups, non-profits, and other teams, and assists clients in launching new products with a strong foundation. We talked to Co-Founder Rob Galankis about his programming background, the importance of business incubators in smaller tech hubs, and how policymakers can craft reasonable patent laws and financial programs that enable innovators from all backgrounds to have the flexibility they need to take risks and grow.
