Posted on 06/22/2016 6:37:22 AM PDT by Pelham
Once a haven for innovation, over the last two decades the U.S. Patent and Trademark Office has been rocked by the velocity of technological change and roiled by "patent trolls." Could it be that the biggest impediment that innovators now face is the very system that was created to protect them?
Starting in the early 2000s, the rights and protections conferred by a U.S. patent have eroded to the point that they are weaker today than at any time since the Great Depression. A series of Supreme Court decisions and then the most important patent-reform legislation in sixty years, signed into law in 2011, have made it so. The stated purpose of the reform has been to exterminate so-called patent trolls—those entities that own patents (sometimes many thousands of them) and engage in no business other than suing companies for patent infringement. The reforms have had their desired effect. It has become harder for trolls to sue. But they've made it harder for people with legitimate cases, people like Norred, to sue, too.
According to many inventors, entrepreneurs, legal scholars, judges, and former and current USPTO officials, the altered patent system harms the independent, entrepreneurial, garage-and-basement inventors, who loom as large in our national mythology as the pilgrim and the pioneer. In the words of Greg Raleigh, a Stanford-educated engineer who came up with some of the key standards that make 4G networks possible, "It has become questionable whether a small company or startup can protect an invention, especially if the invention turns out to be important." Some call it collateral damage. Others maintain it was the express purpose of the large corporations to harm inventors.
But, in the end, the result is the same. The Davids have been handicapped in favor of the Goliaths. Those who believe that
(Excerpt) Read more at popularmechanics.com ...
The real damage has been done by the Patent Office accepting just about any claim, and letting the courts work it out, when they should have been rejecting obvious prior art.
Well they now have the PTAB and IPRs... you can have your patents challenged seemingly endlessly after they have been granted. The big boys like Apple will bleed a small company to death trying to enforce their patents and get paid. In the meantime other potential licensees will sit on the sidelines and wait and so the inventing company isn’t getting paid.
I’ve been down the patenting road and spent a lot of money.
I think for the little guy, the answer is a provisional patent only and try to sell it before it passes into public domain a year out.
There’s a lot of incentive for a buyer with deep pockets to buy it while it’s provisional.
Bingo - the USPTO did move to implement a regional patent office system, which theoretically makes them more efficient in terms of research and reviews. But we’re talking about a bureaucracy here so you get what you budget for.
The problem with the court system is the ability to cherry pick venues by the plaintiffs in rocket docket jurisdictions such as East Texas or Delaware. I feel bad for this doctor in the article but the issue of NPEs is real.
Lemelson has turned the USPTO into a shakedown racket that puts Jesse And Rev. Al to shame.
Step 1: The Courts decided that Section 101 of the statute had more substantive effect than intended. Section 101, if read properly, says that a broad range of things are patentable (it is written as inclusive), SUBJECT TO THE PROVISIONS OF THE STATUTE said provisions following Section 101. The Courts then took it upon themselves to declare a wide range of things as being off limits as if Section 101 was non-inclusive rather than inclusive. But still, to this day, they failed to articulate a test for telling us when things are off limits. Why? Because they cannot.
Step 2: The PTO read the results of Step 1 and refused to consider patent applications of a certain type. Many of those patents were directed to software (”high tech”), a new creature (more on that later). As a result, the PTO accumulated zip, zero, nadda written prior art (the only thing they can rely on, really, to reject a claim).
Step 3: The Courts (State Street Bank) changed course. Suddenly everything was patentable. The problem was that without prior art, literally every ridiculous idea bombarding the PTO was patentable. There was no basis for rejection.
Step 4: “High Tech” patents and the age of the internet corresponded with the courts change of direction. Many of these patents are so damn vague as to read on anything and everything. I have a colleague defending his client’s computer monitor against a patent covering an LED flashlight. Software, high tech, whatever you want to call it perplexes the Courts and PTO. Is it copyright, patent, or abstract. Hint, hint Congress, perhaps it is time to give software its own type of patent (like plants have patents, there are design patents, why not one for software with specific rights?)
Step 5: Send in the trolls. As Microsoft and the rest of the big guns killed the little guys or little guys simply couldn’t make it, what happened to their patent portfolios? Some enterprising people figured out what to do with them and hence was born the troll or NPE. Poor Microsoft, in many cases its long forgotten conquests came back home to roost. Problem is that the NPE’s took advantage of what I outlined in No. 4 above and went to town.
Step 6: What a powerful lobby that High Tech is. They went to Congress professing the evils of the patent system. The abuses!!! They demanded “reform” and a “get out of jail free” card. Really, they demanded the end to the patent system. But for other industries tempering that lobby, High Tech would have gotten their way.
Step 7: Back to the Courts and their voodoo. They were much maligned by the High Tech lobby and decided to head off the Congress at the pass rather than being embarrassed. Hence, they not only reversed the broadening of Section 101 but went so far as to de facto amend it killing entire legitimate industries (Prometheus) having nadda to do with High Tech. Try developing a treatment or drug, for example, without the diagnostics behind it.
Step 8: The America Invents Act, or as we like to call it, the America No Longer Invents Act passed. So many gems in this Act, for example, if you pay a ton of money to the PTO to get your patent through prosecution, you can count on paying a ton more to defend it in front of a new part of said PTO just to likely see it invalidated (at an 80% clip) under the new post grant procedures of the AIA.
Conclusion: I look at it this way. In the hurry to get to the devil (the patent Trolls) they cut down the laws that made us an innovative juggernaut. But the devil wears many faces(foreign knock-offs, for example). Now that the devil is turning around on us and the laws are cut down, how is that “reform” feeling. I have had two foreign knock-off companies contact me to ask if I can help them “enter” the U.S. market by destroying patents.
Congress could have amended the statute to specifically target trolls. Instead, Congress did what it always does. They played crony capitalism and took a slege hammer out where a scapel was needed.
Quote: “Lemelson has turned the USPTO into a shakedown racket that puts Jesse And Rev. Al to shame.”
They put an end to that years ago. But yes, that guy and his estate were a real shakedown.
Quote: “The problem with the court system is the ability to cherry pick venues by the plaintiffs in rocket docket jurisdictions such as East Texas or Delaware. I feel bad for this doctor in the article but the issue of NPEs is real.”
It is very real.
There are many things Congress could have done to stop trolls. First, which is on the table now, is to reform the venue statute for patent cases and treat them like every other case.
Second, amend the damages and fees section of the Act. If the Court finds a plaintiff or DJ defendant is an NPE (they do it anyway when deciding on injunctive relief under eBay), then said plaintiff/DJ defendant: 1) is not eligible for lost profits or a reasonable royalty; 2)instead is only eligible for some statutory damages (as in copyright); 3) is not eligible to obtain injunctive relief and 4) must pay fees and costs if the patent is held non-infringed or invalid.
(Caveat, the Plaintiff’s bar would fight this tooth and nail. This is probably why the sledge hammer was taken to the patent act instead of the scalpel.)
“There’s a lot of incentive for a buyer with deep pockets to buy it while it’s provisional.”
Yes and the provisional patent can be renewed annually if I’m not mistaken. Also you don’t have to be a patent agent or patent attorney to write one, I believe.
The big issue is granting of patents - not the ability to exercise the patent rights. So many patents are granted for things that ARE obvious to those skilled in the art, or have prior art. I’ve consulted on a dozen patent litigation actions in the last 4 years, and in each case quickly pointed to known prior art that invalidated the patent.
The problem is patents are granted when they do not deserve to be granted. Stop that - and the whole issue of “patent trolls” goes away.
How do you go about distinguishing an inventor with a patent who cannot afford to manufacture his invention, from a troll?
Are not both NPEs, non practicing entities?
Wouldn’t the small inventor be deprived of collecting a license fee simply because he doesn’t have the capital to produce his invention?
Thanks for posting this treatise on the law of unintended consequences.
“Yes and the provisional patent can be renewed annually if I’m not mistaken.”
You are mistaken. You have a year to apply for a patent and if you do not do so, it passes into public domain. So a company who is interested in it has a year to buy it or they lose the exclusive rights to it.
I’d intended to ping you but forgot to do so. Glad you found it.
“The real damage has been done by the Patent Office accepting just about any claim, and letting the courts work it out, when they should have been rejecting obvious prior art.”
Totally agree.
Not picking on anyone here, but Apple got a patent for “rounded rectangles”. Honeywell got a paten on a color green for use in their products.
I am an inventor of the zoom with details capabilities. As a computer zooms in on a map, there are more details. Yes, that is a patent. Dumb as it is, Boeing paid me well for filing that one and many others.
Patents have gotten out of control.
Apple once sued Samsung over rounded corners.
BS. Examiners are highly sensitive about such matters, and the examining corpse as well, making it even more difficult to gain meaningful claim scope.
You are correct, Flip. Some companies caved without suing and others sued and won. The problem is the legal expense, so it becomes a business decision.
No, cannot be renewed. You have one year to file the non-provisional off the provisional.
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