A Loss of Confidence in the Patent System

By Adam Ullman
January 29, 2017

Lost hopeIt is the one-year anniversary of a provisional patent application that I filed. Today is the last day that I can file my patent application and draw upon the priority filing date of my provisional patent application. Even though my patent application is complete and I am prepared to convert my provisional patent application into a full patent application, I have made the difficult and maddening decision not to do so, given the current landscape of the U.S. patent system.

I am an inventor and have commercialized every invention I have patented. This invention is something that would be very relevant to the emerging market of virtual reality (“VR”) which is up and coming, popular in the media, and receiving investments from angels to large corporations who are setting up funds to drive development. VR is also at its infancy and I believe my invention could have a significant transformative impact in developing and growing the overall ecosystem for VR. (For naysayers out there, I invented and commercialized a glove controller for video games in the 90’s – I know the gaming and VR space better than most.) Yet despite my belief that my invention would positively impact an industry, I have come to the dejected realization that our patent system does little to protect anyone who does not have millions in the bank to defend their invention.

Over the past several months, I have attended numerous patent conferences in the Bay Area. (I thank the local universities and institutions for hosting these educational and informative events.) At these meetings, there is an inherit belief that nothing significant is wrong with the system. The topics of subject matter eligibility, how the USPTO and inventors can work to develop stronger claim language, and charts showing that patent filings are up ignores the issue facing inventors that filing for a patent is no longer just a risk, but it could likely be a liability.

Previously, someone would file a patent and have a rough idea of what to expect for costs. Depending on filing fees, attorney costs, and how complicated the subject matter a patent would cost between $10K-$20K and if you were granted your patent you would have your prescribed maintenance fees. The bargained for exchange of disclosing your invention, at this cost, made sense – it was a reasonable risk/reward for an inventor. Step ahead to where we are now and look at how this has changed. Not only do you have the aforementioned costs, but now you also have the potential costs for an IPR if your patent is on point and valuable. Combine the potential costs of an IPR with the reduced likelihood of being awarded a patent (see Alice decisions, Gene Quinn’s article of an MRI machine being an abstract idea, and others) and you start to see a picture that: in applying for a patent you publicly disclose your invention; a patent is becoming harder to obtain with the arguments from the PTO becoming more arbitrary; and the costs to defend and enforce a patent, even if you do not pursue someone for patent infringement, are getting higher.

So why would someone now choose to publicly disclose their invention if the likelihood of being awarded a patent is decreasing and the potential costs are increasing? In this inventor’s eyes, they won’t and I won’t, at least not without a lot of money set aside as a defense fund. That is why my decision today is difficult and why I have chosen to write about this. I have believed in our patent system, as my father did and grandfather does, but I cannot overcome the concern that given the current landscape, I am better keeping my knowledge in my head rather than sharing it with the world.

Our system is no longer promoting the progress of science and useful arts as it is Constitutionally required to do. Inventions are not secure when knock-offs can free flow into our borders (a $300K

challenge at the ITC is not an option for individuals or small businesses) or when an invention, defined in the form of a U.S. Patent, can be stripped away because a 3rd party challenged the protections afforded by the U.S. government. The bargained for exchange is broken.

To any and all attorneys reading this, consider your legal obligations or duty to disclose to your clients that even if your client is awarded a patent, it can be challenged and that defending this challenge costs on average $300K. Long gone is the simple explanation “we don’t know if you will be awarded a patent.” How many small business would file for patent protection once they understand this? If this notice is given and small entity filings plummet, would we better understand how changes in our patent laws are no longer promoting?

What we are experiencing is not a blip or a trend. Our patent system has been gutted by those with deep enough pockets to lobby and steal (which is what efficient infringement really is). I maintain that there are significant and real Constitutional challenges as our system does not “secure” (a patent defines the scope of the invention). The system is no longer promoting the progress of science and useful art when defined machines are labeled as “abstract.” Exclusive rights are a myth when a court can award a reasonable royalty fee rather than enforcing an exclusive right to practice. The argument of disclosing an invention for the betterment of society has changed and it is incumbent on anyone reading this to speak up and protect what has driven the U.S. economy and the American Dream for generations.

The Author

Adam Ullman

Adam Ullman is a 3rd generation inventor and entrepreneur. He created his first invention after his freshman year of college, successfully developed The Glove, a wrist-motion based controller for video games, and brought it to retailers nationwide. Adam then worked at Razer and managed the final development, initial production, and market introduction of their first computer mice. Realizing a high need for legal advice in early stage businesses and wanting to better protect intellectual property assets, Adam earned his J.D. and an LL. M. in Intellectual Property, Commerce and Technology from the UNH School of Law. Adam is currently the CEO of Shoe Care Innovations Inc. where he developed and commercialized the first UV shoe sanitizer, SteriShoe®, and he also consults on IP strategy, product development, and IP commercialization through PDCIP, LLC. He is a named inventor on 10 U.S. patents and others internationally. Adam is also a passionate advocate for legislative reform to make it easier for all inventors to protect and secure their IP rights.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 23 Comments comments. Join the discussion.

  1. Kevin Prince January 29, 2017 1:07 pm

    Adam, myself and many of my clients feel your pain. However, from a practical standpoint, what’s the alternative? Are you suggesting that you’ll just keep your IP in your head indefinitely (until Sega or someone commercializes it independently), or are you going to commercialize the product without a patent, a year later effectively donating the IP to the public domain? Neither of those options seems better than taking a chance with our current patent system, despite it’s problems as you’ve outlined.

  2. Pro Se January 29, 2017 1:52 pm

    This is a good piece. I am also an independent Inventor that have a portfolio in a space where I was alone when I filed the patents, but now, the entire world of security is in.

    I’ve built and operate products using my patents. I, as a Pro Se prosecuted my own patents.

    To date, I’ve beaten 4 IPR attempts convincingly. I’ve had cases stayed over the 3rd party unrelated IPRs (Unified Patents). After beating the IPRs, I’ve had a stay be extended to wait for the 4th 2nd 3rd party IPR.

    Would you believe my biggest infringers who got the last 2 tiers of stays are conferring to now launch a “crowd IPR” strategy, this is where frivolous IPRs are filed to pile paperwork on the patent owner to force them to give up.

    Then there’s the district court validity theory that’s treated as totally separate from the PTAB results, but if the PTAB rule against you, the district court respects it.

    My defendants all have patents and patent applications that list my patents as references, clear junior patents in the state of the art which I lead. But yet, because they can, they keep drilling IPRs and invalidity theories that will invalidate their own patents listing mine for concealing prior art.

    I would tell any independent inventor today exactly what your feeling are in this article. It’s not worth it. Keep your ideas to yourself.

    If you’ve noticed, since 2010, innovation has hit a hard wall. There are no new ideas. When Samsung (a Korean company) was allowed to continue selling mobile devices in America over Apple’s (an American company) iPhone innovation, that was the biggest signal that the U.S. IP laws had become a slave to all other major countries.

    The IP business only focus on the big companies and their IP. My IP and coverage eclipses anything the pundits talk about so I am happy to see Gene post this very real perspective of the indie inventor in this new IP world.

    Today, Apple and YouTube starting in a garage, Google and Facebook starting on a college campus, are not possible. Because today, it’s efficient for Silicon Valley to just take ideas, the culture of Silicon Valley was built on theft (Apple to Xerox, Microsoft to Apple remember?) the same way America was built on slavery.

    Silicon Valley will always believe in their right to take ideas the same way a culture of America’s southern region that will always believe it’s their right to own other people.

    In the mix though there are a few winners, so the only benefit of attempting to obtain new patent rights these days is with the understanding the odds of winning are no different than just going out and playing the Lotto.

  3. Pro Se January 29, 2017 1:54 pm

    *forgive mobile typo/grammar^

  4. Paul Morinville January 29, 2017 3:59 pm

    My advice is not to file. If you cannot keep it a trade secret, go fishing. If you want to have your own company, buy a convince store or open a restaurant. The game is rigged and no longer are everyday Americans welcome to startup companies peddling new technologies.

  5. angry dude January 29, 2017 10:22 pm

    If you can commercialize it and still keep it (at least partially) trade secret for some time (e.g. couple years) then don’t file regular patent application to be published at 18 months – you will screw yourself

    If it can be completely reverse-engineered in short period of time and you can’t scale up very quickly (not enough $$$) then forget about the whole thing – go invent something else or just go fishing

    Most high-tech things are a combination: a “hardware” part that can be taken apart in a matter of days or even hours, and a “software”(algorithm) part that can be implemented in silicon hardware as an ASIC or at least in some form of embedded code on secure boot micro-controller – very difficult and expensive to reverse-engineer

    It’s your task then to figure out what is going to happen once your invention is out there…
    Will it be cheaper for those potential infringers to buy you outright or to rip you off ?

    if ripping you off will cost them more $$$ then they’ll try to buy you

    it’s all about $$$ nowadays…

  6. anonymous January 30, 2017 5:56 am

    “I have come to the dejected realization that our patent system does little to protect anyone who does not have millions in the bank to defend their invention.”

    But hasn’t this always been the case? I have represented small clients for a long time, and have frequently come up against the situation in which the big infringer is prepared to spend the little guy into the ground. As a result, I have to warn the client that this could be so, and whether some accommodation can be reached, rather than go to war. As a non-patent attorney of the first century said, “Will he not first sit down and consider whether he is able with ten thousand men to oppose the one coming against him with twenty thousand?” (Luke 14:31)

  7. angry dude January 30, 2017 10:08 am

    anonymous @6

    Who are you, infringer’s rep ?

    It is totally inappropriate to cite Bible in this context

    if you advocate return to Wild West principles then I can come to your house tomorrow with a big gun and take all that you have

    Are you gonna cite Bible then and say “it’s always been like this that big guy with a big gun takes whatever he can from a little dude” ?

    The patent situation drastically changed after Ebay and you should know it.
    The other thing you should know is that infringers don’t settle with little guys anymore, not without a threat of injunction or outsized triple damage award

  8. Stephen Curry January 30, 2017 1:09 pm

    Let’s pick up that American entrepreneurial fighting spirit and clean the swamp and do a reset of the american patent system.

    next time, if some woman or man comes along preaching patent reform and wanting to fix the patent system in the name of patent quality, do look into his or her background first.

    There will be a Google-Part-2 company that will always surface in Silicon Valley in future and have a pawn wanting to do more “patent reform”, so everyone watch out.

  9. Gary January 30, 2017 3:17 pm

    What we’ve started to do is make the initial filing a PCT filing and perhaps a national phase filing in the largest EU economy (Germany). This pushes back the entry date for the US national phase to where a non-track-one application will likely not get a first office action until after the end of Trump’s term. You can always change your mind and file early in the US if they put somebody pro-patent in charge of the USPTO. The US accounts for only a small fraction of the population of the globe, so looking only to the US system is probably an error.

    The other thing to bear in mind is that the US patent system has been cyclical since at least the software cases in the early 1970s. Those made patents harder to get. Then we had State Street, and they were easier to get. Then we had Alice, and they were harder to get. Now we will likely have a pro-private property supreme court and may see them become easier again.

    I’ve invented around 180 issued US patents, and I can tell you that patents are a really long process. I’ve abandoned some applications when the law changed, and in many cases where the guidance is really inadequate, I’ve actually worked with the examiner to identify the issues, clarify them for appeal, and take them up to the BPAI — buying several years of legal clarification (or obfuscation, depending on who is writing the opinion) and ultimately getting a court (sure, Article 1 but still) to clarify the USPTO’s muddy guidance to the benefit of me (as the inventor) and the examiner.

    The other shift that is happening is that I’m seeing the early stages of money becoming available for investment in patents. You should expect to give up a significant percentage of your ownership interest, but then you’re backed by investors who can put you on a slightly more even playing field (or at least ensure that you can afford to spend $300k to $500k defending an IPR).

  10. Pro Se January 30, 2017 6:45 pm

    Update: after beating 4 IPRs, today 6 more were filed.

    Signed:

    American innovation 2017.

  11. Adam Ullman January 30, 2017 11:05 pm

    I thank everyone for their comments and fully appreciate the viewpoint that what can be kept as a trade secret should be kept as a trade secret and that trade secrets can be maintained separate from the patents that they relate to. With that said, we have entered into a new era of things being “abstract.” This abstract standard has now been applied to machines. As such, the more that is disclosed, the greater the likelihood of not facing an “abstract” rejection, but this regrettably comes at the cost of preserving your trade secrets.

    I maintain the Constitutional purposes for our patent system of “promoting” and “securing” no longer exist and as such these current laws are unconstitutional. Happy to chat if anyone wants to take this challenge on with me.

    Cheers,
    Adam

  12. Eric Berend January 30, 2017 11:45 pm

    The current implementation of the U.S. patent system is little more than an expensive fraud upon the individual or small entity inventor’s genius, time, work, and aspirations; including societal participation for the public good.

    The current raft of systemic abuses against smaller entities will become more generally known, intimidating these formerly active participants into refraining from inclusion. This is also planned by the responsible entities (“now called “efficient infringers” – I prefer “invention thieves”), as an expected effect of these recent, wholesale radical and un-Constitutional changes.

    Without having to try to keep up with and account for so-called “creative destruction”* arising from the presence of unpredictable independent inventors, the way is cleared for a technocratic hegemony in which new developments are slowly and incrementally dolled out to a captive economy; think ISDN from the Bell companies, when it was made available in a tiny trickle to selective business customers over 20 years for an approximately 4x increase in transmission speeds (e.g., 64K versus 14.4K); or, the troika* of the automobile industry after WW II, when somehow an eight-cylinder internal combustion** engine couldn’t be improved in its efficiency to reach a mere 30 MPG – what, did brains get turned off for over 60 years?!

    These two widespread American examples, are what lies ahead for the “big tech” industry in the U.S. – a true goal, of these mendacious changes.

    * – so-called ‘B-school’ speak, for disruptive effects to so-called “change management” presented by those pesky “evil” inventors. That the little anointed masters-of-the-world darlings should have to actually THINK, once in a while – my God…how horrible.

  13. Eric Berend January 30, 2017 11:53 pm

    ^^^ corrections to above post:

    “…troika*[2]”
    “…combustion*[3]”

    *[2] – linguistically, I would prefer a more locally based term: “triopoly”
    *[3] – these were originally and more accurately called “explosion engines”. It was a deliberately induced canard of the explosion engine industry in the U.S. that exerted so-called ‘Public Relations’ to change the nomenclature to “motoring” and “internal combustion”. Motors are electric; yet another misnomer, for the sake of forcing acceptance of public and uncompensated private accommodations to their industrial impositions.

  14. Night Writer January 31, 2017 5:48 am

    @12: The latest reports from Google support what you are saying. No innovation after initial start of company. Lots of taking of others’ innovation.

    And, Lee was not only anti-patent, but was incompetent, which was part of the design so that she could not fix some of the current problems.

  15. Stephen Curry January 31, 2017 8:16 am

    @14
    Here is Allen Lo publicly saying that Michelle Lee was incompetent as google patent counsel. It is amazing that Google was not subject to a shareholder cause of action for this. But what happens, she gets placed as USPTO Director to confuse and piss off Patent Examiners even more.
    https://www.cnet.com/news/yes-google-needed-motorola-for-the-patents/

    Hey politicians and patent bar practitioners, did Allen Lo confess to the FBI that Google fired Michelle Lee as she was being considered as Director of USPTO SV Director and USPTO Director? David Kappos should read IP watchdog if he does not do so.

  16. step back February 1, 2017 2:18 pm

    Steph @15
    That article says nothing about Lee.
    If you’re going to cite something it should objectively back up your allegations.

    BTW How are you 3-pointers coming along? We need another 40+ night. If Klay can do it, so can you.

  17. Gene Quinn February 1, 2017 2:33 pm

    Stephen Curry @15

    The article you cite does not mention Michelle Lee at all and does not allege or even suggest she or anyone else is incompetent. Obviously you have great hatred for Michelle Lee, but your brand of commentary is beneath us here on IPWatchdog.com. Alleging without any evidence in another thread that Michelle Lee lied to the FBI and now blatantly misrepresenting what is said in that article is unacceptable. Last warning.

  18. Stephen Curry February 1, 2017 3:17 pm

    @16
    step back
    Since silicon valley high-tech startups can’t get lots of funding due to AIA and Alice, klay thompson needs to hit 65 to raise the spirits of folks in the Bay Area. go Klay go.

  19. Mark S February 2, 2017 8:43 pm

    Any chance Trump can issue an Executive order cancelling the AIA? Trump may not be aware of what has happened to patent law. This would be way faster than a new bill going through congress, senate, president.

  20. David French February 3, 2017 9:55 am

    At the end of the priority year a first provisional can be allowed to lapse and a fresh Provion can be filed establishing a fresh Priority date. Be sure to let the first Provisional to lapse before filing the new Provisional.

  21. Anon February 3, 2017 7:26 pm

    David,

    I certainly hope that your “fresh” take is following both the letter and the spirit of any oaths that may occur either at the filing of that “fresh” or any subsequent non-provisional filing – else, you are advocating fraud on the Office.

  22. Anon February 3, 2017 7:27 pm

    Sorry Mark S, but no to your “Any chance Trump can issue an Executive order cancelling the AIA?

    Basic civics still applies.

  23. David French February 3, 2017 8:38 pm

    Replying to Anon who said:

    David,

    I certainly hope that your “fresh” take is following both the letter and the spirit of any oaths that may occur either at the filing of that “fresh” or any subsequent non-provisional filing – else, you are advocating fraud on the Office.”

    I don’the get it. There is nothing nefarious in what I am proposing. The proceedure I propose was recognized in the 1934 London revision of the Paris Convention. I have done it several times. No fraud here.

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