New group founded by IP VIPs promises to protect inventors’ right to access capital

On Thursday, September 19, a new inventors’ rights group was launched with the goal of “helping startups, small businesses, and entrepreneurs defend their intellectual property rights and access capital.”

Inventors Defense Alliance includes Professor Kristen Osenga, professor at the University of Richmond School of Law, as Chief Policy Advisor, and its Board of Directors includes the Hon. Paul R. Michel, former Chief Judge of the United States Court of Appeals for the Federal Circuit (CAFC); Russell Slifer, former Deputy Director of the United States Patent and Trademark Office (USPTO); Alan Heinrich, attorney and adjunct faculty member at UCLA School of Law; and Earl “Eb” Bright, president and general counsel of ExploraMed Development.

As stated on the IDA website, its goals are:

• “Be a voice for America’s inventors as they seek access to capital through a range of advocacy programs and educational initiatives.
• Build public support for inventors’ rights by emphasizing the value of intellectual property and the role that protecting intellectual property rights plays in sustaining economies and enabling entrepreneurs to create and accumulate wealth, compete in the marketplace, and realize the American Dream.
• Support lawmakers and government representatives who understand the importance of strong intellectual property rights and equality under the law.
• Let’s build a broad coalition of pro-innovation stakeholders to fight for inventors’ rights.”

IDA is a 501c(4) nonprofit organization, which allows it to lobby for certain causes, but it cannot accept tax-deductible donations.

“These giant companies believe their smaller rivals cannot afford the lengthy, expensive litigation required to enforce these patents,” Osenga said in a statement. “And unfortunately, they are often right.”

Judge Michel, who is also a board member of the Council for the Promotion of Innovation (C4IP), said in a press release today that the IDA will focus on protecting the right of inventors to work with litigation funders so that they “are able to afford the high legal bills associated with defending and enforcing their patents.”

An editorial published on the IDA website in March 2023 by Michel for RealClear Policy criticized recent efforts by Judge Colm Connolly of the U.S. District Court for the District of Delaware to impose disclosure requirements that Michel said would negatively impact smaller companies that use outside financing in litigation.

Judge Connolly’s 2022 standing orders tightened reporting requirements on the identities of beneficial parties and third-party funders in litigation and have stirred up some controversy over the disclosure of confidential corporate information. Michel said in his column that “the new requirements will make it even easier for Big Tech companies to pursue an ‘effective infringement’ strategy—intentionally stealing technology from smaller rivals, then amassing armies of lawyers to drag out lawsuits until cash-strapped startups start crying foul and settling out of court for pennies.”

An explanatory article posted on the IDA website this week called the litigation funding partnerships “completely ethical” and “no different than an individual finding a lawyer to work on a contingency basis in a medical malpractice or wrongful termination case.”

“Our education and advocacy efforts will help ensure that inventors have the policy environment and financial resources they need to thrive and drive economic growth,” said Heinrich, an IDA board member.

The IDA website also includes a link to an International Legal Finance Association (IFLA) article criticizing witnesses who testified at a House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet hearing titled “The US Intellectual Property System and the Impact of Litigation Financed by Third-Party Investors and Foreign Entities” earlier this year. The article referenced an article published on IPWatchdog by Gautham Bodepudi of IP Edge that alleged that the hearing and some of the witnesses mischaracterized the economic realities of the patent market.

The launch of IDA came on the same day that three key pro-patent bills were scheduled for approval by the Senate Judiciary Committee. However, the bills, which would have introduced major reforms in the areas of patent eligibility, Patent Trial and Appeal Board (PTAB) procedures, and innovation information collection processes, were postponed because Senator Thom Tillis (R-NC), the lead sponsor, was unable to attend the hearing.

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