The abuse of the patent system by big tech companies must end – believe me, I have been fighting with Google over intellectual property for years.
Big tech companies are stealing technology from small businesses. Congress must stop them.
As founder and CEO of Netlist, a small company developing advanced semiconductor technologies, I believed that patenting our inventions would protect our discoveries from the larger companies in our field and help us compete with them. For a while, that’s exactly what happened.
Starting in the mid-2000s, we were granted more than 100 patents on cutting-edge memory technologies, some of which are now used in artificial intelligence. It wasn’t long before Netlist’s memory modules became critical components of the world’s most advanced computer systems. We became a major supplier of high-performance memory systems for Dell, IBM, HP, and Google.
Patent theft
But then the patent theft began. Not by Dell, IBM or HP – all technology companies that respect intellectual property rights (IP).
Rather, it was Google, a brash upstart that was known for breaking rules at the time. Google used our patented memory modules to increase the speed of its cloud servers and search engine. But when Google got tired of paying us for our proprietary technology, it started building copycat products and shut us out as a supplier. When we tried to initiate licensing negotiations, Google preemptively sued us and repeatedly seized our patents. (Editor’s note: See Google’s response below.)
When its own challenges failed, Google hired its suppliers like Samsung to harass us with endless patent challenges, creating an ordeal that has now lasted for 14 years in the United States Patent and Trademark Office (USPTO) and in federal courts.
Instead of investing in R&D and developing as many new products as possible, Netlist is now forced to spend tens of millions of dollars on lengthy legal proceedings to protect our past inventions. We are up against Samsung, Micron and Google – technology giants who use their influence and resources to manipulate the legal and political landscape to their advantage. Their goal: to use our intellectual property for free while our patents expire.
Patent challenges again and again
The framers of our Constitution recognized the essential role of innovation in a dynamic economy and knew that intellectual property protection is the foundation of innovation. They gave Congress the authority to create a patent system. They recognized that small businesses and individual inventors, the key players in the innovation process, needed protection from larger companies that could steal and copy their inventions.
Unfortunately, the system that worked for over 200 years as the Founding Fathers envisioned was distorted by the America Invents Act (AIA). Enacted in 2011 following lobbying by major technology companies, the AIA invalidates patents by allowing unlimited challenges to the validity of an issued patent that has already been carefully reviewed.
In particular, the AIA created the Patent Trial and Appeal Board (PTAB) within the USPTO with a mandate to invalidate “bad patents.” The board is charged a fee to hear patent challenges and thus has a perverse incentive to review and invalidate patents. To the PTAB judges, most patents are “bad patents” that their fellow examiners should never have granted in the first place.
I have experienced the PTAB’s bias firsthand. Netlist’s groundbreaking ‘912 patent on memory module technology has been found valid by the USPTO four times in 14 years under five directors in cases brought by Google and its allies. It has also been upheld by the federal appeals court. A U.S. district court recently found the patent valid and infringed.
Yet, after all that, the PTAB recently re-examined the ‘912 patent and somehow invalidated it, ignoring 14 years of precedent from its own parent agency as well as the federal courts. The result flies in the face of common sense and the basic principles of our legal system, such as respecting historical decisions and avoiding double jeopardy—in this case, the ‘912 patent was subjected to quintuple jeopardy.
Regulation of large technology companies
The erosion of patent rights since the AIA is alarming. It is as if the government issued a deed of transfer for a piece of land and then re-examined that deed every time someone questions its legality – and eventually revoked it altogether. Corrupt governments are known for arbitrarily taking away rightful property. That is exactly what is happening to patent holders in our country under the AIA.
Fortunately, Congress is recognizing the unintended consequences of the AIA and is working to redress the balance. One important step is to ensure that courts issue injunctions in patent infringement cases—court orders that prevent stolen technology from reaching the market. Last week, a bipartisan group of lawmakers introduced the RESTORE Patent Rights Act, which would reinstate injunctions as the standard remedy for patent infringement. Fines and damages alone do not stop big tech companies from using unlicensed technology. Yet in the EU and most Asian countries, injunctions have proven to be effective tools.
Another bipartisan bill, the PREVAIL Act, would help American inventors by reforming PTAB practices. It would give PTAB challengers a chance to prevail and limit repeated challenges to the same patent. It would also end duplicate challenges by forcing a party to choose between challenging in the PTAB or in district court, not both. Netlist could have avoided 14 years of costly and unnecessary litigation if such a law had been enacted decades ago.
Congress has shown interest in regulating Big Tech on antitrust, privacy, misinformation, and child protection issues. It should add patent infringement to that list, too. For too long, Big Tech has used the AIA to bully inventors and small businesses. It’s time for lawmakers to put a stop to this abuse.
Editor’s note: A Google spokesperson sent Assets the following answer:
“These claims are false. We don’t even make the same products as Netlist. During our discussions with them, they have attempted to weaponize the legal system rather than compete on the merits of their products. We have a long-standing commitment to respecting patent rights, and we have robust processes in place to ensure our products are independently developed.”
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