More than 120 corporate giants have just issued a joint letter putting themselves squarely on the side of patent infringers and against America’s smaller innovative companies.

They present their case in the appealing-sounding language of “disclosure” and “transparency.” But when smaller inventors are in court trying to enforce their lawful patent rights against infringement, the main effect of a sweeping new disclosure requirement would be lengthier proceedings, more expenses, and a big advantage for deep-pocketed infringers.

The letter’s proposal, now under consideration in Congress in draft legislation known as the Litigation Transparency Act, is aimed directly at the ability of such inventors to pay legal bills and other expenses they incur when they go to court to enforce their patents. The legislation would impose a strict disclosure requirement on sources of funding for their lawsuits.

Yet such funding has nothing to do with whether infringement has taken place and, if so, what damages are due. For the sake of smaller inventors who depend heavily on intellectual property rights, this legislation needs to go back to the drawing board.

The letter-writers and Rep. Darrell Issa, the legislation’s author, claim that withholding information about financing is “unfair” and “fundamentally alters the dynamics” of legal cases.

I disagree. Rather, imposing invasive disclosure requirements would reduce or eliminate funding, and therefore, access to justice.

America’s startups and small businesses are facing unprecedented attacks on their intellectual property. Rather than taking the proper steps to legally license patent rights on their product, some wealthy corporations are simply appropriating the patented technologies they want. When caught, they call on their vast financial resources to prolong lawsuits and make them as expensive as possible. In many cases, such tactics have forced startups to surrender or, at best, settle out of court for a fraction of their losses.

Though unfair, the practice is frequently effective. It’s known as “efficient” or “predatory” infringement.

Infringers simply treat any damages they end up paying as a cost of doing business. In fact, predatory infringement is so pervasive that CEOs are willing to boast about it publicly. //

Courts have demonstrated their ability to strike an appropriate balance between transparency and safeguarding privileged information. An invasive mandatory disclosure rule would place small businesses and startups at a disadvantage by revealing their legal strategies and financial resources. Infringers could exploit this information to prolong trials, inundate opponents with motions and challenges to court filings, and launch damaging harassment campaigns against third-party investors.

Cloudflare committed $100K in bounties to “hamstring” another patent troll. //

In a blog post, Cloudflare announced that its most recent victory—defeating a lawsuit filed by Sable IP and Sable Networks in 2021—was largely thanks to participants of Project Jengo. Launched in 2017, Cloudflare's program offers tens of thousands of dollars in awards to activate an army of bounty seekers and crowdsource submissions of evidence—known as "prior art"—that can be used to overcome frivolous patent claims or even invalidate patents that never should have been issued.

To find prior art, Project Jengo participants comb through academic papers, technical websites, and patent documents, helping Cloudflare explain in detailed petitions to the US Patent and Trademark Office (USPTO) why certain patents should be invalidated. //

In court, pointing to prior art and sharing a Cloudflare engineer's expertise, the Cloudflare legal team broke down for the jury "the many reasons why" Sable's patent "does not describe anything that Cloudflare actually does."

It took a jury two hours to decide that Cloudflare was right, not just dismissing Sable's claims but invalidating Sable's patent permanently because prior art showed that "Sable’s patent covered, at best, only technology that had already been described by inventors at Nortel Networks and Lucent Technologies—leading routing technology companies at the time."

So far, Cloudflare has awarded $70,000 to Project Jengo participants who helped the company defeat Sable. According to Cloudflare's blog, the company will announce the final $30,000 in awards after the "official conclusion of the case." //

Project Jengo's first success came in 2019 when Cloudflare defeated Blackbird Technologies. As a result of that victory, Blackbird "went out of business," effectively ending that company's meritless patent infringement claims, Cloudflare said. Now, Cloudflare has "invalidated significant parts of three Sable patents, hamstringing their ability to bring lawsuits against other companies," Cloudflare said.

Fighting patents