The PTAB has failed to solve the patent troll problem created by large operating companies

By Gene Quinn
February 22, 2017

Patent trollYesterday we published an article authored by Karl Fazio, who is Chief Patent Counsel for Pearson. In the article Mr. Fazio begins by interchangeably using the terms patent troll, non-practicing entity and patent assertion entity. While there is certainly a contingent within the industry that view virtually all patent owners as bad actors when they choose a licensing business model, and then sue for infringement when licenses are refused, I do not find that type of rhetoric particularly useful.

I am not alone. The FTC recently acknowledged the term “patent troll,” which has widely been used to vilify all patent owners and not just those committing abuses of the patent litigation system, isn’t helpful. “In the Commission’s view, a label like ‘patent troll’ is unhelpful because it invites pre-judgment about the societal impact of patent assertion activity without an understanding of the underlying business model that fuels such activity,” the report reads. The FTC’s officially position against the use of the term “patent troll” hasn’t filtered down into the debate, unfortunately.

I do not agree that those who engage in patent assertion activity are bad actors or patent trolls simply because they choose to exercise the exclusive rights granted by the federal government. Of course, it would be naïve to pretend that there are not bad actors that are properly characterized as patent trolls who continue to use extortion-like tactics in search of nuisance settlements. These bad actors do exist, and are unfortunately allowed to exist due to inefficiencies in the judicial system and poor business decisions on the part of their targets.

It is true that the number of patent infringement lawsuits are up significantly compared to the 1980s, as Fazio mentioned in the article. It is also true, however, that the increase in patent infringement lawsuits that come after passage of the America Invents Act (AIA) was deemed desirable by Congress. Indeed, let us not forget that Congress specifically wanted more patent infringement cases (i.e., a higher volume) because they made the conscious choice to make it difficult (if not impossible) for patent owners to sue large numbers of infringers in the same lawsuit. Thus, the spike in cases that came after 2011 was an intentional feature of the AIA. Even that being the case, quarter after quarter we see patent litigation declining. See herehere and here, for example.

None of these disagreements, however, should detract from serious consideration of the major premise of Fazio’s article, which is the industry has the power to clear the underbrush and deprive patent trolls of the patents they use to assert against large operating companies. Indeed, Fazio raises three very important points.

First, Fazio says: “More than 80 percent of patents litigated by PAEs are acquired from operating companies.” There can be little doubt that Fazio is exactly right on point. The patent troll problem (to whatever extent it actually exists) has always been a creation of large operating companies. These large operating companies obtained dubious, highly questionable patents that in many cases should never have been issued (as we have all come to see thanks to PTAB and Federal Circuit decisions). These low quality, overbroad patents that are lamented by large operating companies were obtained by these same large operating companies and then sold to other entities so they could specifically and intentionally be used to sue other large operating companies. AT&T and Cisco have been linked to schemes to sell patents to those who would harass their competition. So while we likely disagree on the extent there is a patent troll problem, I absolutely agree the problem is a creation of those large operating companies who, ironically, are the ones complaining about the problem they created.

The second important message that comes from Fazio’s article is that companies should consider joining the LOT Network. Fazio goes on to explain:

By joining LOT, members agree that if one of their patents falls into the hands of a PAE, all other LOT members have their conditional license to that patent activated, granting them immunity.

In other words, if large operating companies want to do something about the patent troll problem they can. Joining LOT would seem to me to make all the sense in the world. Like so many other times throughout the history of law, private actions are far better at solving a problem (or insulating from a problem) than crammed down legislative or a judicial solution. Frankly, it would seem entirely inappropriate for Congress to step in to address the abusive litigation issues large operating companies complain of when they created the patent troll problem in the first place and there is a private sector solution available. Market forces can fix 80% of the problem, so until such time as those complaining about the problem have addressed the 80% that they can themselves address it would seem foolish for Congress to act.

Finally, and perhaps most importantly, the Fazio article demonstrates how and why the Patent Trial and Appeal Board (PTAB) has fundamentally failed its purpose. Fazio writes:

These broad, vague patents have become glaring targets for trolls, who are eagerly buying them up and asserting them wherever they can. As a result, companies are being sued for patent infringement for things that aren’t directly related to their end products and services.

Rather than wasting time, energy, and money litigating such cases, many companies simply settle their troll cases, further depleting their IP budget.

Post grant challenges were created in the AIA for the express purpose of getting rid of these low quality patents. The large operating companies that so desperately lobbied for new procedures to challenge these low quality patents instead continue to pay extortion-like settlements to patent trolls who apparently continue to sue alleging infringement of low quality patents. Of course, these low quality patents were supposed to be challenged at the PTAB, invalidated and the patent troll problem was supposed to eventually go away because trolls would learn there was no money to make. Instead, as Fazio explains, large operating companies sued on low quality patents choose to settle those cases. In a mind-boggling twist, however, these same large operating companies fight to the death against high quality patents where there is ubiquitous infringement of highly valuable commercial technologies.

The entire purpose of the PTAB and the post grant challenges was to rid the system of low quality, dubious patents, which in many cases were ironically obtained by large operating companies. But those being sued on those low quality patents make what they believe to be a smart business decision to settle. The decision to settle is not a smart business decision and only ensures further bogus lawsuits; after all once you demonstrate a willingness to pay extortion why would the next troll do anything other than sue? See Patent Trolls: A Conspiratorial Symbiosis.

Regardless of whether you think it is a good or bad business decision, the fact that large operating companies continue to settle when sued on low quality patents rather than use the PTAB demonstrates that the PTAB is simply not achieving its purpose.

Then Secretary of Commerce Gary Locke, explained post grant proceedings were intended to “provide a check on patent examination, ultimately resulting in higher quality patents.” See page 87 of the House Judiciary Committee Report on HR 1249. Furthermore, the legislative history is replete with mention that the PTAB and post grant proceedings were intended to provide a lower cost alternative that would enable challenges to low quality patents. Obviously, if operating companies continue to pay extortion-like settlements on low quality patents, both post grant challenges and the PTAB itself have miserably failed to achieve these laudable goals. In short, the PTAB and the three new post grant challenges have been an abysmal failure.

How much longer must we suffer the indignity of the PTAB when the PTAB is failing to do anything about the patent troll problem or get rid of what we are told are so many low quality patents that continue to harass large operating companies?

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

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 101 Comments comments. Join the discussion.

  1. Molly (JD Candidate) February 22, 2017 10:21 am

    The problem of patents/trolls is particularly interesting because of the cross-section between intersectionality and IP law. The patent and copyright system was born out of an era that was intensely patriarchal, and as we shift as a society towards the future, we are unshackling the injustices of the patriarchy in most areas of the law.

  2. Night Writer February 22, 2017 10:51 am

    I noticed that the stock price of InterDigital one of the “patent trolls” in the wireless space is shooting through the roof along with revenue. IMHO, maybe the legislators should stop listening to Google and try to listen to patent professionals.

  3. Night Writer February 22, 2017 10:52 am

    I said long ago that the more complex you make the patent laws, the more it favors large entities that can afford to be more patient and invest more money (and to develop the expertise to deal with all the complexity.)

    Just remember each time you create some new cause of action, you make everything more expensive.

  4. Gary February 22, 2017 11:49 am

    I’m a named inventor on a over 180 issued US patents. The article leaves out a powerful way that large companies — together with the America Invents Act — have created the “patent troll” problem. These large companies generally will not engage in any kind of licensing talks with independent inventors. At best, they don’t respond to licensing inquiries. At worst, they put a patent into IPR. Either way, there is no pathway for an independent inventor to make a living inventing without working with the NPE world.

    Using my personal experience as an example, I have a patent family that is being infringed by a large company (I’m not going to identify the patent family or the company since I don’t have the cash to defend an IPR and don’t want to have to sell this one to an NPE). I approached the person in charge of the infringing product or service without even identifying the patent. I simply said that I am an inventor, I have a significant improvement to the technology (which I do — their implementation would be significantly improved if they used some of the tech described in the specification), I would be willing to consult with them on the tech, and the consulting agreement would include a license to the patents I hold potentially covering it. I invited them to discuss it and indicated that I would sign a document saying the discussions could not be used to prove willful infringement of any patent.

    In other words, I tried to make it as safe as possible for them to explore working with me. Because of the collateral benefits of working with that company — I’m convinced that once I invented with them, they would want to continue to work with me and I could invent on demand for them — I would have done that deal for substantially less than an NPE would seek if they held the patent family.

    The company’s response was complete silence. I was later told that they have a flat rule prohibiting them from responding to inventor inquiries (although there was only a single source for that information, so I take the rule with a grain of salt).

    As a result, I am now considering selling that patent family to an NPE, or partnering with an enforcement entity. To be clear — I wanted this to be win-win. I would help them improve their technology, I would get paid for consulting on the improvements, I would get a shot at a long term relationship with them, and they would get to not worry about a potentially expensive patent infringement judgment.

    Most independent inventors would take far less than the fair market value of their patents — we love inventing, and because we are individuals, we can make the decision to charge enough to have a good living and to enable us to remain independent inventors without having to answer to a Board of Directors as to why we sold a patent for perhaps 10% of what we could have received if we handed it to an NPE. Another part of this is that serious inventors want to be responsible about their patents — for example, not punching down by going after small customers — because we know that irresponsible enforcement will only accelerate the demise of the US patent system.

    At this point, what are my options? I can directly write the company’s lawyers and describe the infringement. That will result in an IPR filing (probably by a third party to avoid estoppel) — I have no idea what they would cite in such a filing, but they would make it because the mere cost of defending it might force me to license it cheaply or even give up. Even if the PTAB reaches the correct conclusion (that the patent is valid), I then need to move to litigation. Most independent inventors aren’t sitting on a giant pile of money for these things — nor do we value a giant pile of money more than a system where we can make our living inventing.

    Instead, the more plausible pathway after having a reasonable offer ignored is to partner with an NPE for enforcement of the patent. This takes the ability to set a below-market price away from me, and the NPE will seek a huge license fee or judgment. Maybe patent enforcement has become a game to be played only by giants, but inventors actually want to make a difference, not play games.

    Put simply, the irrational fear of patents held by many large companies has prevented independent inventors from entering into partnerships with those companies. When I say partnership, I mean an intellectual one. Inventors love their inventions, and it is painful to see it implemented, by an infringer no less, in a clunky way. We have a natural desire to work with a licensee/purchaser to improve the implementation. Fear of patents has prevented big companies from benefiting, at a relatively low cost, from the work of independent inventors (other than by infringing it).

    As an aside, #3 is right in that additional complexity disfavors those without patent experience. But I’d take it one step further: If the patent system was as complex when I started inventing as it is now, I doubt I would have ever considered inventing as a career. To modify Jay Walker’s take on the subject, if I cannot figure out how to benefit from inventing the solution, why should I solve the problem?

  5. Night Writer February 22, 2017 12:11 pm

    @4 Gary.

    That sounds about right. The corporate guys ( I used to be a product manager for a big corporation) just play as they have to according to the rules. We have no choice.

  6. angry dude February 22, 2017 1:18 pm

    Molly (JD Candidate) @1

    “…as we shift as a society towards the future…”

    :):):):):)

    That was a good laugh…

    Are you sure we are moving towards the future and not towards middle ages ?

    Re. Patent vs Trade Secrets we are already in Middle Ages Guilds keeping their trade secrets until death do us part (unless of course you want your precious know-how to be taken by large multinationals)

  7. Curious February 22, 2017 1:52 pm

    In other words, if large operating companies want to do something about the patent troll problem they can.
    Of course they can — they can take many of these so-called “overbroad” (aka foundational) patents and purchase them — oftentimes for pennies on the dollar if that is the approach they wanted to take. However, this leads us back to the buzzword of the last couple of years in the patent business — “efficient infringement.” It is even more cost-effective for operating companies to simply ignore patent rights of small entities altogether — knowing that the system has been set up that it is nearly impossible to successfully assert patents. Most small entities don’t have upwards of $1M dollars floating around doing nothing to pay for attorneys to assert their patent rights so they are forced to work with NPEs. However, before litigation even begins in earnest, these small-time patent owners are thrown into IPRs to face the PTAB patent death panels that will cost inventors anywhere between $500K-$1M just to defend their patent.

    The only people with enough money and savvy to endure this kind of fight is large operating companies and professional patent trolls.

  8. Edward Heller February 22, 2017 2:22 pm

    Gene, I think Fazio was complaining about patents that have broad and vague claims, not necessarily patents that read on the prior art. I do not know how IPRs and the like can properly address indefiniteness. Only courts of law can hold a patent invalid for indefiniteness.

    But the PTO needs to do a better job requiring clear and definite claims. I think it would be highly desirable that the claims actually particularly point out and distinctly claim the invention without the need of construction.

  9. Night Writer February 22, 2017 2:35 pm

    @8 Ed the Ned: So, there are claims that are “broad and vague”, but that under broadest reasonable interpretation cannot be invalidated using 103. But, somehow they are bad claims.

    Let’s see some of these magical claims. Vague leads to BRI getting its way. Broad leads to lots of prior art. If you have a broad claim and cannot invalidate it with prior art and it reads on your tech, then probably the claim is good.

  10. Molly (JD Candidate) February 22, 2017 2:45 pm

    Mr. Angry Dude,

    I’m just exploring the intersection between intersectional feminist philosophy and the law of intellectual property. Historically, many struggles can be analyzed within the framework of masculine power over feminine victims. I invite you to read/skim the following article:

    https://cjgl.cdrs.columbia.edu/article/situating-feminism-patent-law-and-the-public-domain/

    It discusses the plight of the Khomani San women in South Africa. From the article:

    “Khomani San women in the northern Cape express concerns over the patenting of biological and genetic materials derived from their indigenous traditional knowledge. Maintaining control over their knowledge and resources is important for feeding their families and safeguarding their intellectual histories and heritage as female plant gatherers.”

    I want our society to recognize the marginalized groups and in many cases Western, patriarchal, and often times repressive notions of property needlessly subjugate these groups.

  11. respoding February 22, 2017 3:07 pm

    To Night Writer @3:

    Yes, like all other regulations, more regulations always favors the current players, who can afford to adjust to the new regulations, and disfavors new entrants. This is especially egregious in the patent arena where kind of the whole idea is to incentivize new players.

  12. Night Writer February 22, 2017 4:01 pm

    >>“Khomani San women in the northern Cape express concerns over the patenting of biological and genetic materials derived from their indigenous traditional knowledge. Maintaining control over their knowledge and resources is important for feeding their families and safeguarding their intellectual histories and heritage as female plant gatherers.”

    OK. Sure. As if this is relevant at all. New patents aren’t going to be able to stop them from what they are already doing.

  13. Gene Quinn February 22, 2017 4:12 pm

    Molly-

    You say: “repressive notions of property”

    Are you serious? You do realize that countries without property rights are third world countries destined to remain third world countries without any prospect of economic opportunity, hope or advancement, right?

    -Gene

  14. Molly (JD Candidate) February 22, 2017 4:35 pm

    Gene,

    Calling them third-world countries instead of the more correct term “developing nations” only confirms notions of xenophobia I believe. To the issue of why they are still developing, it is the vestiges of colonialism and its attendant oppression that leaves them locked in their current state. Had Western nations not imposed their views and then left them for dead when they withdrew, the situation would have been much different. Take the Native Americans for example, they had different notions of property than the colonialists. Had they been able to continue without oppression, they would still have their lands and perhaps they would have advanced. No analysis of those countries as being “third world” would be complete without acknowledging the colonial aspect. This is why studying intersectional feminism can help us here. To think otherwise would be xenophobic, colonial, and misogynistic.

  15. Molly (JD Candidate) February 22, 2017 4:38 pm

    The common law notion of coverture was a patriarchial property right in all but name only. Would it not be similar to assert that certain notions of intellectual property fall under the same ambit? We have since evolved from that patriarchal notion (except for Trump and his misogynistic ways). The feminine mindset (over half the population) has always been one of community and sharing instead of an individual’s autonomy over another, whether that be repressive marriage laws throughout history or colonialist attitudes. All that I’m trying to propose is a new way of analyzing our current IP situation using intersectional feminism as a heuristic.

  16. H2H February 22, 2017 4:41 pm

    @Gary:

    As someone who worked as a lawyer in a (high) technology company and managed a patent portfolio and IP licensing, maybe I can provide a few guideposts for you without rambling… too much.

    Soon after declaratory judgments became pretty easy to request, I started receiving big binders in the mail. They were always white. They were always full of patents. They always included a cover letter. The cover letters told a sad story about an inventor’s life work and how he or she just wanted to find one company (just one!) that believed in the work enough to commercialize it in exchange for a royalty. All the letters ended with a request that we read the patents to understand what the inventor is all about and then contact him/her to set up a meeting to discuss tech transfer/consulting/royalties, etc.

    Everyone had the same script.

    The dilemmas we faced should be apparent.

    If the inventor’s idea is interesting, we discussed it with him, and then didn’t proceed, we had a huge target on our back. Our products and services are subject to scrutiny and a claim, even if it is very different than the inventor’s approach. Plus, the complaint will undoubtedly tell a sob story about the big company that ripped off the solo inventor that just wanted to help children walk again.

    If we talked to the inventor and he was an NPE doing his due diligence for a willful infringement claim, then the company is also in a tough spot. If during discussions the NPE made a credible threat of a claim I would be faced with the possibility that the company had to accrue a liability. Since we were public that could effect EPS. Accountants err to the worst possible outcome, so I might have to pay outside counsel to write opinions about the validity/non-infringement of 10 or 20 patents. Savvy NPEs understand that gives them leverage over company’s and exploit it.

    If we don’t talk to the inventor and he’s on the up and up, who knows what will happen in the future. Maybe he will find someone to buy his technology and then we are just in the same situation we are in with all our competitors. Maybe he is the face of an NPE or sells to an NPE. At least we put off the expense a few years.

    Given these considerations, we typically treated everyone who sent these packages like an NPE from the outset. We reviewed the patents for relevancy. If they were very relevant we initiated discussions for a license. If we couldn’t negotiate commercially reasonable terms (or the other party demanded a one-way non-aggression agreement) we moved to invalidate the patents. If the patents weren’t relevant, we sent a short response to the effect that the patents weren’t relevant to our business, goodbye.

    I know what you are saying, “But H2H, what about the scenario where you talk to the inventor, it’s a great a idea, the company buys the technology on reasonable commercial terms, and everyone makes a TON of money?” “H2H you are so pessimistic!”

    As a practical matter, well managed technology companies set their technology road maps, inorganic/organic pipelines, and budgets several years in advance. Especially companies that have regulatory issues/approvals and supply chain obligations that really lock them in to a specific approach. The analogy to the Titanic isn’t necessarily hyperbole. So, new and better approaches may take years to incorporate, and, frankly, due to company politics, the outsider’s “better” approach may not be welcome if it reflects badly on engineering or management. So there may be a lot of inertia and some time-consuming management of political downside that makes it a non-starter.

    My personal opinion, inventors that are serious about commercializing their ideas would be better off going to the start-up route, developing a prototype, and then approaching the big company about buying their start-up. Companies will still have inertia, but for reasons that are not clear to me inventors seem to have more success with this route.

    Ramble finished.

  17. Gene Quinn February 22, 2017 4:59 pm

    Molly-

    Your comments about feminism and a new heuristic, as well as the nonsense you write about developing nations and your vapid attempts to call me misogynistic, are way off topic. I’m not going to allow you to further hijack this comment thread. Stay on topic or your comments will be deleted.

    -Gene

  18. Gary February 22, 2017 5:02 pm

    @H2H —

    Thank you for your thoughts from the other side of the table. I am truly grateful, since I’ve been trying to understand the rationale.

    In a strange way, both inventors and operating companies have a version of the same problem: It would be better for both to have an open dialogue, but the risks associated with it are too big should the other party turn out to be at all disingenuous.

    Your suggestion about going the start-up route is something I include in almost all of the talks I give. Normally I say “If you have one great invention in your lifetime, you are an entrepreneur, and you will ride that idea to success or failure. If you have one great invention every year or two, you are a serial entrepreneur and you will need partners. If you have a great invention every month and a couple of minor ones every month, you are a high velocity inventor and you have to make a choice: Invent full time and make your money licensing, or ignore the majority of your inventions in order to commercialize one every year or two, because entrepreneurs are too busy, and often too resource constrained, to also be high velocity inventors.” I then identify the rare exceptions, like Steve Jobs, but of course he had a team of patent lawyers at his disposal 24/7.

    I’ve been approaching the conclusion that the current environment is no longer one that favors full time inventors, and picking the serial entrepreneur route (and ignoring the other inventions you don’t have time for) is more likely to succeed.

    Again, thank you for your really thoughtful post.

    I wonder if

  19. IPdude February 22, 2017 5:08 pm

    Gene,

    Inventor Woes has returned as Molly to troll us.

    Molly,

    If you are a real person, go see a shrink. To take a feminist stance on patents is laughable. To make IP rights about gender rights is a bridge too far. You are doing a disservice to legitimate feminist issues. WTF is going on here???

    IPdude

  20. Night Writer February 22, 2017 5:13 pm

    @18 Gary and H2H

    You know in a large company product development is a bit of science with all the features laid out and compared to competitors and with costs of each feature as well as the probably value to the consumer.

    Most companies plow through development cycles. They evaluate anything that could be added, but anything that doesn’t fit in the development cycle is put back into the R&D department because you cannot miss deadlines.

  21. H2H February 22, 2017 5:15 pm

    @Gary

    Your way of characterizing inventing in the three buckets is a good one I haven’t heard. It occurred to me that some inventors send their minor inventions they don’t want to exploit into the public domain. For example, IEEE publications are a great tool to release inventions to the public. Not being a serial inventor it’s easy for me to to tell people to give away their ideas!

  22. H2H February 22, 2017 5:29 pm

    @Night Writer

    You make a good point. At least where I worked R&D was seen by some as the engineers playground and area of a lot of waste. R&D spend was locked in well in advance and only a big opportunity could get on the road map.

    I have heard Gary’s question from a lot of inventors and small businesses that think they could add really cool features or better features to a company’s products. They are shocked when the big company’s don’t respond or say they have no interest. I think I described some of the perceived downside risk, above, and maybe there are ways to ameliorate that. I think you described how hard it is to find the “right moment” to discuss it.

  23. Cliff February 22, 2017 5:51 pm

    “Historically, many struggles can be analyzed within the framework of masculine power over feminine victims.”

    Sorry, not this one.

  24. jbavis February 22, 2017 6:05 pm

    The article makes a very compelling case – PTAB was created specifically to address low quality patents yet are instead being used against high quality patents. Evidence that large corporations lobbied, swindled, and bamboozled the elected representatives in order to benefit themselves. Fortunately there is a simple answer – repeal AIA.

  25. Night Writer February 22, 2017 6:18 pm

    @22H2H: Good points. Product development at large corporations is a complex beast.

  26. Molly (JD Candidate) February 22, 2017 6:49 pm

    Gentlemen,

    I’m not sure what I did to offend you. If I did I apologize. I am simply exploring a research topic of mine that was part of discussions in my former patent law class. My professor was very open to new ideas and she encouraged me to do further research. I invite you to check out the article titled “Feminism and Dualism in Intellectual Property” by Dan L. Burk (google it and it will show up as a search result). I just wanted to get a general feel for a different approach to patent law.

    Back to the topic of the PTAB, I think instituting some rules on allowing amendments as a right instead of discretionary would be a good start. At least due process would be conserved. I also think that legislation aimed at shifting attorney fees to NPE’s in the case of losing a lawsuit could do much to curb frivolous litigation.

  27. Molly (JD Candidate) February 22, 2017 6:57 pm

    Quick correction: I want a general feel in terms of responses from those in the field.

  28. Curious February 22, 2017 10:34 pm

    But the PTO needs to do a better job requiring clear and definite claims.
    What do you mean by “better job”? Also, the PTO doesn’t require clear and definite claims — isn’t that requirement derived from 35 USC 112?

    Just my like my comments to you, your comments are a red herring. I’ve seen litigation where the defendant alleged that nearly every single term in the claim was clear and indefinite — even terms that had long-standing meanings to those both of ordinary skill in the art and those unskilled in the art.

    Those who continue to whine about “unclear” claims are the type that throw dirt up in the air and then remark about how unkempt the place looks.

  29. Molly (JD Candidate) February 22, 2017 10:50 pm

    Mr./Ms. Curious,

    It is possible for a term to be clear, yet indefinite.

    Consider the term “sheep.” It is clear insofar as it denotes a certain kind of animal, yet it is indefinite because it can be singular or plural.

    Another interesting one is “How can a person go eight days without sleep?” Answer: Sleeping through the night. Here the word “day” meant when the sun was up, not a full 24 hour day.

    Just a few examples of how even innocuous looking claims can be complex.

  30. Molly (JD Candidate) February 22, 2017 11:07 pm

    IPDude,

    I’m not entirely sure what you’re talking about? As to the notion that feminism in patents is laughable, I invite you to check out (in addition to the article I cited in comment 26 by a law professor at Minnesota) an article from a Yale law journal: http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=1304&context=yjlf

    As Mr. Quinn doesn’t want me to derail the topic, I’ll leave it at that. But please don’t denigrate the legitimate study of feminism within intellectual property. I wish to see more women in the field and rhetoric like that will only scare them away.

  31. Curious February 22, 2017 11:20 pm

    The feminine mindset (over half the population) has always been one of community and sharing instead of an individual’s autonomy over another
    That is an interesting take on the issue. Unfortunately, it has proved to be an awful economic system. As you may be aware, “community” and “commune” share the same root and so does “communism.”

    On a philosophical level, communism sounds great. Everybody shares in the fruits of everybody else’s labor. There are no rich or poor because everybody is equal. However, the reality is that communism causes a race to the bottom. Why be exceptional when the fruits of being exceptional are spread throughout the community? For that matter, why be even average when you’ll get pretty much the same benefit no matter how much you work. In fact, in communism, one maximizes their benefit/cost ratio by doing the least amount of work. You may be too young to remember the Communist states of the late 20th century but they were abject economic failures that couldn’t produce the idealistic society they were supposed to create.

    When it comes to intellectual property, there have been some anti-patent writers talking about technology should belong to the commune. I recall discussions when some of them a few years ago on this blog. The problem with this idea is that while there will always be some people that will invent and share their inventions for no compensation whatsoever (perhaps the feminine mindset?), a much greater number don’t want to share their inventions without compensation. Without this compensation, the impetus to invent is substantially reduced.

    The grand bargain regarding patents enshrined in our Constitution is a mix of your so-called matriarchal concept (of sharing) with the patriarchal concept (of ownership derived from exceptionalism). Specifically, the inventors share their invention (by disclosure) in return for time-limited rights associated with this invention. This grand bargain promotes innovation (by rewarding the inventors) but society wins as well.

    Your fascination with the “feminine mindset” fails to appreciate that society, as a whole, works best when there is balance between the feminine and the masculine mindsets. A feminine mindset suppresses exceptionalism because it is inconsistent with the idea that everybody should be equal. However, exceptionalism is what is needed to pull society to greater heights. The problem with the pure masculine mindset is that if you leave too many people behind (i.e., the gulf between the richest and the vast middle class becomes too great), then society will forcibly cause those at the greatest heights to tumble. As such, what is needed is balance. We need the paternal side to push those capable to great heights, and then the maternal side to eventually pull everybody else up to those same great heights. This is the optimum result.

    I invite you to check out the article titled “Feminism and Dualism in Intellectual Property” by Dan L. Burk (google it and it will show up as a search result). I just wanted to get a general feel for a different approach to patent law.
    I did — frankly, it was awful. Let me rephrase — it was a meandering mess that suggested insights could be gleaned using feminism and dualism but delivered none.

  32. Molly (JD Candidate) February 22, 2017 11:36 pm

    Curious,

    I appreciate your feedback very much!! I agree with you that there needs to be a balance between the masculine and feminine mindsets. Continuing with your train of thought, I do sometimes feel that the masculine concept of ownership is susceptible to “patent troll” behavior. It’s almost like a weird form of toxic masculinity that throws the balance out of whack.

    I would go further but I don’t want to upset Mr. Gene Quinn by derailing the topic. You responded so I felt obligated to give you a response. Sorry Gene XOXO!

  33. Paul Morinville February 22, 2017 11:37 pm

    Molly (JD Candidate) @1. The Patent Act of 1790 granted patents to “he, she, or they” at a cost that even a pauper could afford. At a time when women and blacks could not own property, both could own patents… and both did. In 1809, Mary Kies became the first woman patentee for her invention related to weaving straw hats. In 1821, Thomas L. Jennings became the first black patentee by inventing a method of dry scouring clothes. During the 1800’s, some 3,300 women invented and patented 4,196 inventions and many made their full living by licensing their inventions. The U.S. patent system leveled the field for all regardless of race, gender or economic status.

    Hardly patriarchal. May even be considered the first affirmative action law.

  34. Molly (JD Candidate) February 22, 2017 11:51 pm

    Mr. Morinville,

    Wow that’s amazing! I didn’t know that there was gender and race equality with respect to patents from the very beginning! By chance did you source this information from a particular collection or treatise or did you research it independently? I would love to get the source as it would be great for my research!

    Reading what you wrote does create a new question for me. If women and African-Americans could get patents but not own real property, would that place patents in a different category than the standard bundle of rights concomitant with property law? I’m taking a federal courts class right now and we just started learning about the concept of public rights. I’m wondering if the fact that there was a clear distinction between real property (that women and people of color couldn’t own) and patent rights back during the passage of the Patent Act of 1970 shows a legislative intent to treat patents as different from real or personal property. What do you and other experts in IP think? Seems somewhat similar to the principle Expressio Unius Est Exclusio Alterius (the inclusion of one is the exclusion of another).

  35. step back February 23, 2017 2:56 am

    @34 IIRC, the statute says that patents shall have the attributes of personal property.

    Despite that, Clarence the Clown and at least one other SCOTeti recently wrote a dissenting opinion (with respect to claim interpretation) arguing that patents are public rights (in the nature of a statute). I forget which case that was. Too busy tumbling down the hole with Alice.

  36. Night Writer February 23, 2017 5:16 am

    @34 Molly:

    My frank assessment of what you are saying is that it is garbage. The fact is that we live in a complex society and there needs to be structure. Women seem to enjoy the same type of incentives as men. I have worked at a start-up that was founded by one man and one woman. She definitely liked to create a well-oiled machine to earn money.

    You know, what society is a set of compromises to try to make things work. I used to live in Europe where the workers had far more rights. I like that environment much better. But, at the same time, I don’t think this is masculine vs. feminine, but rather educated cultured society vs. the wild west.

  37. Benny February 23, 2017 5:32 am

    Molly @26,
    It is not unknown on the comments section for some of the posters to stray from the path of politeness, and even make personal remarks concerning intelligence and education. My advice is to shrug it off. Alternatively, choose a profession in engineering, where you will likely encounter less of this attitude.

  38. EG February 23, 2017 6:54 am

    “So while we likely disagree on the extent there is a patent troll problem, I absolutely agree the problem is a creation of those large operating companies who, ironically, are the ones complaining about the problem they created.”

    Hey Gene,

    A poignant statement. In other words, those Goliath multi-nationals have been playing both sides of the fence, and snowing Congress with this “patent troll” bilge. How disingenuous and duplicitous are they!

  39. Nancy Kramer February 23, 2017 8:00 am

    Molly (JD Candidate) @34
    Did you know that the paper bag was also invented and patented by a woman and that a man and a woman working together invented and patented the basic technology that makes cell phones work during World War II. They never made a dime off their patent because they gave it to the United States government to use in the war effort. By the way the woman was Hedy Lamarr the movie actress. You might find the following site about famous woman inventors interesting http://www.women-inventors.com/

  40. Chris Gallagher February 23, 2017 8:35 am

    Gary and HRH
    Thanks for your quiet candor and for talking TO each other instead of PAST each other. Your dialogue was both instructive and refreshing… please do it more often .

  41. Tim February 23, 2017 8:51 am

    What you must remember is that the “Googles” of the world will bleed small companies to death, as they naw at them and even beat them in court: Vringo vs IP Internet. Even with the Patent Office pulling the patent several times, and Vringo having the patent along with the inventor, “Andrew Lang” an employee of Vringo. Vringo won the case “hands down” with a 12-man jury on all counts: 14-0. But money donations to the 0bama government, and to the right people have ways of paying off! They took it to the US Appeals Ct where 2 judges of 3 tossed the case and said, “they didn’t see it”. Judge Chen (former head of the USPTO) was the only qualified of the 3 judges with a computer engineering degree: Mayer & Wallach were stooges. Mayer had been an Army JAG lawyer. Judge Chen “highly dissented”. Vringo later took the case to the US Supreme Ct.. But for some unknown reason, the court wouldn’t see the case? Now the head of the patent office is Michelle Lee. Obama put former Google Employees in the government as fast as he put Muslims in! And Vringo went to pennies, and stayed on the NASDAQ because of a reverse split that put it over $4.00 a share, and now after re-inventing the company: File Holdings, symbol: FH, is now just above $2.00 a share. Meanwhile, Google went from $400.00 to $800.00 a share. We have become a very corrupt country! I hope President Trump can “drain the swamp”.

  42. Gary February 23, 2017 9:50 am

    I’ll keep it short because the female/male issue raised is largely off-topic: I frequently give talks about invention. After one of those talks, I was approached by a psychologist who asked whether I thought the reason there were more male CEOs of startups than females had anything to do with gender differences in the development of the prefrontal cortex, in particular risk evaluation. It turns out that males, particularly those in their late teens/early-mid 20s (so the demographic for startups) are far worse at evaluating and appreciating risk than females of the same age and older males. As a result, they are more likely to take the enormous risk of failure associated with a startup. To the extent that these startups patent things, there may be more young male than female (or older male) inventors named as a result. The gender difference seems to largely disappear as we age. I’m not a psychologist so I have no idea if this is just an interesting theory or a correct one. From my experience consulting with startups, it does subjectively feel like there is some truth to it but with gigantic exceptions to the “rule”.

  43. Gene Quinn February 23, 2017 10:12 am

    Molly-

    Congratulations. You have successfully hijacked the comments on a very important article.

    It won’t happen again. Enjoy your success here and celebrate.

    -Gene

  44. Gene Quinn February 23, 2017 10:16 am

    Everyone-

    I have to concur with IPdude @19. Molly is here to troll us. I’d like to suggest that moving forward we not take the bait and go off on obvious red herrings intended to do nothing other than obfuscate.

    -Gene

  45. jbavis February 23, 2017 11:21 am

    H2H @ 16:

    Thank you for your perspective.

    Your 2nd last paragraph:


    “My personal opinion, inventors that are serious about commercializing their ideas would be better off going to the start-up route, developing a prototype, and then approaching the big company about buying their start-up. Companies will still have inertia, but for reasons that are not clear to me inventors seem to have more success with this route.”

    This is pretty much what inventors try to do. Nothing says a startup cannot be 1 or 2 person entity. Crude prototypes are created and can be shown/demonstrated to potential acquirer – yet all the “patent reform” has done has only made this much harder (even impossible) for the small startup.

    In your personal opinion, were any of the inventions that you received in big white binders legitimate? And secondly, how were your business decisions influenced by actual legitimate inventions vs how the whole patent system rules were setup (meaning that you were better off to do something because of legal concerns not doing what’s right)?

  46. Paul F. Morgan February 23, 2017 11:22 am

    Gene, I appreciate your presentation here that a major source of “troll” patent suits is the large numbers of patents sold by large companies to PAEs for PAE’s to sue on [typically with no prior art investigation by either]. However, current statistics and personal observations do not support saying that IPRs have not helped reduce PAE suits. [This is not to deny that IPRs have also impacted non-PAE patent suits as well.]

  47. Gary February 23, 2017 11:34 am

    @Paul F. Morgan —

    An interesting observation I’ve made is that the same patent in the hands of a big operating entity is typically valued at a much higher number than in the hands of an individual. So while there are definitely political reasons that drive large companies to sell to PAEs, it would be interesting to see a breakdown of patent source by PAE size. I suspect that big companies are only interested in selling to big PAEs (to reduce the loss of patent value on sale) while individual inventors and small companies are far less discriminating. I can tell you that the threat of IPR has kept me from approaching companies to license patents I have every reason to believe are valid — but I wonder if the same issue worries larger companies thinking about licensing or asserting patents. This is purely anecdotal (but from somebody who has licensed around 100 patents), but I think a formal analysis would make a fantastic academic paper.

    The biggest drag on innovation at this point (again my opinion as an inventor only) is the uncertainty as to patentable subject matter, which is, ironically, one of the things that isn’t part of the IPR process. I’ve had more than a couple of examiner interviews where we realize that neither of us want to have the examiner determine that a patent is eligible, but barely eligible, under 101. In those situations, it benefits the inventor (who wants to have a more solid basis for believing the patent will survive a 101 challenge) and the examiner (who would love to have guidance they can understand and use) to have the PTAB make the 101 determination. Injecting an approximately 4 year appeal delay isn’t exactly going to encourage innovation, but without clear judicial guidance there is a lot of reason to seek PTAB sign-off. Of course, at the same time the PTAB will look at any other issues, such as 102 or 103, reducing the risk of future IPR as well.

  48. Molly (JD Candidate) February 23, 2017 11:36 am

    Mr. Quinn,

    I’m not sure what you are talking about? I have contributed to this article with relevant information, including scholarly literature references. I’m afraid that it is certain notions of “boys clubs” that keeps women from participating in these kinds of discussions. I would hate for this blog to become one of those places.

    Benny, thank you for the kind words.

    Gary, that is some controversial research! If it’s true then the old adage that men are as immature as boys would be true too ; ).

  49. jbavis February 23, 2017 11:44 am

    ack submit button pushed accidentally!

    H2H @ 16:

    Thank you for your perspective.

    Your 2nd last paragraph:


    “My personal opinion, inventors that are serious about commercializing their ideas would be better off going to the start-up route, developing a prototype, and then approaching the big company about buying their start-up. Companies will still have inertia, but for reasons that are not clear to me inventors seem to have more success with this route.”

    This is pretty much what inventors try to do. Nothing says a startup cannot be 1 or 2 person entity. Crude prototypes are created and can be shown/demonstrated to potential acquirer – yet thanks to the recent “patent reform”, there has been a disincentive for large corporations to partner with legitimate smaller innovative entities. The larger entities now have more cost efficient means to “obtain” the IP. Things like AIA and eBay have only made things much much harder (even impossible) for the small startup with a prototype.

    On an article here on ipwatchdog that I can’t locate at the moment, Apple explained it plain and simple by telling inventors they can’t talk to them until they bring an infringement trial. Yet infringement trials cost $1m+. So I’m interested in your opinion how would a startup “be better off going to the start-up route, developing a prototype, and then approaching the big company about buying their start-up”?

    To try to find some common ground, in your personal opinion, were any of the inventions that you received in big white binders legitimate? And secondly, how were your business decisions influenced by actual legitimate inventions vs how the whole patent system rules were setup (meaning that you were better off to do something because of legal concerns not doing what’s right)?

  50. angry dude February 23, 2017 12:09 pm

    Gary @47

    Dude, what you describe here is an complete unworkable mess

    It’s also criminally unlawful – they can’t apply those “laws” they made backwards to all patents issued years ago … ah, well, they just do it… because they can

    Mine issued in 2006 and although there is absolutely nothing abstract about it, some of the main independent claims are method (software) claims and are sort of “abstract” – in accordance with best teachings of claim writing as practiced by all good patent attorneys 10 years ago…

    “The doc said ‘to the morgue’, to the morgue it is!” – that’s all I can say
    i’m done with patents

  51. Gene Quinn February 23, 2017 12:24 pm

    Paul F. Morgan-

    “current statistics and personal observations do not support saying that IPRs have not helped reduce PAE suits.”

    I don’t know Paul. The infringer lobby keeps telling us that year after year they continue to experience an ever increasing patent troll problem that never goes away. They admit to settling frivolous lawsuits brought by patent trolls asserting low quality patents. I think maybe it is time to take the infringer lobby at their word and come to the unfortunate realization that the PTAB experiment has failed. I know I’ve begrudgingly come around to their way of thinking and completely agree that the PTAB and post grant proceedings have done absolutely nothing to make the situation any better. They are continually harassed by patent trolls that they created. So it seems the only logical step to take would be to throw away the current system and declare it a complete failure and see if we can find something else instead.

  52. Gene Quinn February 23, 2017 12:32 pm

    Molly @48-

    This article has nothing to do with feminism and your attempts to bring a completely unrelated topic into the thread for the purpose of hijacking the conversation is not allowed. It has nothing to do with this being an old boys network. Your attempts to make yourself into a martyr are comical, and calling me misogynistic is laughable.

    Your comments will not go live until they are approved. If you cannot stay on topic they will not be approved. If you continue to want to discuss things wholly irrelevant you will be banned. This has nothing to do with you allegedly being a woman (after all how would I know who you really are) and everything to do with the fact that your comments are off topic. Such off topic commentary that hijacks a thread has never been allowed and never will be allowed. You were given far more latitude than most because you identified yourself as a student. But that ended with your condescending swipes at me and game playing. Newsflash… in the real world not everyone who disagrees with your rather uninformed opinions is xenophobic and/or misogynistic.

    -Gene

  53. jbavis February 23, 2017 12:57 pm

    Gene @ 51:

    “So it seems the only logical step to take would be to throw away the current system and declare it a complete failure and see if we can find something else instead.”

    Throw away PTAB for a start, but no harm in repealing much of AIA. You’ve shown how and why PTAB in particular isn’t working for anyone so why keep it?

    Here’s an idea – allow and encourage entities to specialize – small entities to innovate, large entities to operate and produce. Large operating entities operate more efficiently by reducing their costly R&D spending and endlessly re-inventing the wheel and instead license relevant technology from smaller innovative entities. The AIA hasn’t encouraged or incentivized that in the slightest. If AIA was to increase innovation and it clearly has not, then why keep it?

  54. H2H February 23, 2017 1:01 pm

    @jbavis

    “On an article here on ipwatchdog that I can’t locate at the moment, Apple explained it plain and simple by telling inventors they can’t talk to them until they bring an infringement trial. Yet infringement trials cost $1m+. So I’m interested in your opinion how would a startup “be better off going to the start-up route, developing a prototype, and then approaching the big company about buying their start-up”?”

    Apple, Microsoft, Google, IBM, GE, DOW, Medtronic (the list goes on) all buy a lot of companies each year. Many of them small companies in transactions you and I never hear about because they aren’t material. Many of the start-ups don’t make any money, they just have a product or technology. I can’t say for certain, but in some of the deal material I’ve seen in the past a few company’s were buying over 100 small startups a year, and I’m sure many other companies were buying more. It happens all the time. It’s part of corporate development. Why some are more successful at the pitch than others, I don’t know, but my opinion is that the start-ups that understand product development cycles and value proposition and can explain it clearly in MBA type charts have more success. The guys who invent something awesome but can only explain it to other engineers may struggle.

    “In your personal opinion, were any of the inventions that you received in big white binders legitimate? And secondly, how were your business decisions influenced by actual legitimate inventions vs how the whole patent system rules were setup (meaning that you were better off to do something because of legal concerns not doing what’s right)?”

    I don’t think we contacted most of the inventors who sent those “pitches” because we thought the patents weren’t relevant, and the interest in the tech didn’t overcome perceived downside risk if: (1) it goes south and we look like the bad guy; or (2) it turn out to be an NPE. I can’t think of one situation where the engineers actually pushed to take it to the next stage. Engineers are busy people, and increasingly well trained on value proposition, and fighting the inertia I described wasn’t appealing to them either.

    In a public company your primary concern is how to contribute and drive improvement in the company’s performance (usually as evaluated by public accountants). I rarely if ever thought about the rules at the PTO. What I ,Gary and Night Writer describe, above, (to me at least) is a dysfunctional ecosystem. Company’s are very risk adverse and it can create a fortress mentality and even outward hostility. Inventors are afraid to bring ideas to those companies because overreaction can cost them a lot of money in PGR and IPR cost, and possibly their patents. Inventors give up and sell patents to NPEs, which reinforces the fortress mentality at companies.

    Different rules might help, but we’re worried about two different arenas: inventors are worried about the cost to defend their patents (PTAB). Companies are worried about defending a law suit or paying royalties without getting anything in return (litigation).

    If you will allow me to get up on my soap-box for a moment: because of how business cycles work in the (high) technology industry, every cycle has winners and losers. The losers often try to recoup costs by taking some license royalties from the winners, and they use that money to fund the R&D for the next cycle. That’s pretty accepted and you never hear about it because it’s B2B and rarely goes to litigation. I think many of the NPEs that upset company’s, with few exceptions, offer nothing in return: they don’t provide technology, they don’t invest in R&D, and they don’t police the market for infringers.

  55. Gary February 23, 2017 1:14 pm

    @h2h — You nailed it in your last sentence. Most independent inventors would happily provide extra help for free or almost free to help their inventions be a success for the licensor. NPEs are driven by costs and revenues, but are missing the incentive to help that personal pride in the invention provides. The point about policing the market for infringers is key too. Inventors have a small list of inventions and can easily recognize infringers in the course of just going through their day (I have 180+ issued patents and I still think of it as small enough to do this).

    It may be worth it to have a group of independent inventors, small companies and big companies put together a task force to figure out how to make this work on both sides. Maybe it is something IP Watchdog would organize. If we put enough inventors and corporate IP people in a room, we should all be ashamed and have to give up our inventor credentials if we can’t figure out a workable solution. I don’t see Congress or the courts fixing this, but I can see coming up with a standard contractual framework that makes it safe all around.

  56. Chris Gallagher February 23, 2017 1:58 pm

    Gary@55
    It certainly would be worth it if it can be done. This excellent dialogue proves it and ought to ,but has never happened on Capitol Hill. In its “study” referenced in Gene’s original post, the FTC suggests that the term ” NPE” be replaced by the narrower term, “PAE”. Universities who must commercialize promising discoveries emanating from federally-funded basic research are NPE’s of necessity, but completely share the concerns so eloquently expressed by you, H2H and other participants in today’s discussion.

  57. angry dude February 23, 2017 2:00 pm

    Gary @55

    “Inventors have a small list of inventions and can easily recognize infringers in the course of just going through their day”

    This is only true for simple inventions like kitchen or garden utensils, toys, maybe some simple electrical circuits made of common components (not custom made asics)

    For anything more or less complex implemented in e.g. embedded software it is exceedingly difficult if possible at all to catch infringers and to prove to the court that they infringe

    Even if you reverse-engineer infringer’s code yourself and have a clear flowchart and map it to your patent claims – this is simply not legally enough to escape Rule 11 Sanctions
    You are supposed to get an “opinion” from a “qualified” attorney, and because a qualified attorney is not qualified to read your code he will refer you to another qualified “expert” maybe couple of them (you pay for everything – 100K at least)
    So after spending 100K and a year on pre-filing due diligence to satisfy patent lawsuit filing regs they’ll throw your patent case out on summary judgement or something else because … they can…
    (for whatever reason – 101, 102, 103 , latches, troll appearance … you name it)
    Thanks but no thanks

  58. Gary February 23, 2017 2:11 pm

    @angry dude: You’re right. There have been many times when I identified a “probably infringing” technology. Many of my inventions are in areas where this problem arises, and it is no end of frustration. Part of the trick to avoiding those issues is to write claims that don’t need reverse engineering to prove infringement, but that also means your claims are necessarily more abstract or higher level, increasing the 101/102/103 challenge opportunities. Plus it is pretty tough to say no when an examiner calls with a proposed examiner’s amendment that puts the claims in an allowable state, but means that more reverse engineering is required to prove infringement. There really must be a better way to do this.

  59. angry dude February 23, 2017 2:15 pm

    H2H @54

    “NPEs … don’t police the market for infringers”

    Why would they ? It’s your job as a patent holder to bring them a solid patent infringement case like a piece of cake, complete with proof of infringement and accurate damages figures… or they don’t want it
    But at least they’ll go through proper motions to satisfy Rule 11 due diligence regs so you don’t have to pay 100K out of your own pocket
    Who else will do it for you ? Rich uncle ?

  60. angry dude February 23, 2017 2:24 pm

    Gary @58

    “There really must be a better way to do this”

    Yes, there is – to restore injunctions
    they can infringe all they want, BUT if and when someone finds out and proves infringement, especially willful infringement, then they should risk losing their entire product line (if invention is essential to it)
    Right now they put the hard part of finding and proving infringement on you, the inventor, and easy part (paying small royalties after caught and judged) on willfull infringers

  61. Gary February 23, 2017 2:37 pm

    @angry dude —

    Ebay was likely one of the initial indicators that this problem was coming. Bear in mind that Ebay left the system open to being gamed. If I want an injunction, I can try to stop the goods at the border with an ITC action — kind of an injunction. Alternatively, I can start to manufacture competing goods and open the pathway for a possible injunction. So Ebay just added another layer of work/gaming/complexity. Every layer of complexity makes another inventor throw up their hands and give up on inventing as a career. I’m lucky in that I started out as an attorney, so I can weather more complexity than most, but even I’m nearing the point where complexity (or avoidance of complexity) is as big a factor in filing for a patent as utility, value, novelty, or obviousness.

  62. angry dude February 23, 2017 2:49 pm

    Gary @61

    Ebay was a horrible decision in that they used a business method patent on something no one cares about to thoroughly screw the rest of us – technical guys with technical inventions solving difficult technical problems
    And no,you can’t manufacture competing goods if competing goods is a smart phone – unless you have 500m in the bank and a small army of engineers
    The most you can do is provide some small part of essential functionality and hope that large corps will pay you something for that and not just take it for free (as in beer)
    Sad

  63. H2H February 23, 2017 2:50 pm

    angrydude @ angrydude

    “Why would they ? It’s your job as a patent holder to bring them a solid patent infringement case like a piece of cake, complete with proof of infringement and accurate damages figures… or they don’t want it”

    As the patent owner and licensor an NPE can provide some value to their licensees by policing the market for infringers. I know of a couple NPEs that actually do police the market and go after infringers for the benefit of their licensees.

  64. jbavis February 23, 2017 2:55 pm

    H2H @ 54:

    “I think many of the NPEs that upset company’s, with few exceptions, offer nothing in return: they don’t provide technology, they don’t invest in R&D, and they don’t police the market for infringers.”

    This is insightful. What I think you are saying is that operating companies would be more inclined (even in today’s environment) to do business with small inventors IF they could provide more than just a patent license. So something more than just a crude prototype but further along or that could be readily re-purposed or folded into their business. Would offering something like that IN ADDITION TO patent license/sale help small entities get the ear of larger corporations?

  65. gary February 23, 2017 2:55 pm

    @angry dude — I’m laughing because otherwise I’d be crying. I agree with you on this. There are some patents I have where I can make the product (one in particular related to data storage devices and before I sold it, I came very close to releasing a device that did it myself), but for the most part it is swimming upstream just to make a product for the sole purpose of ebay.

    True to your handle, I think you’re angrier about it than I am. But it is worth being angry about. Over the past decade, all three branches of government did things that together broke the patent system. Maybe I should be furious. On the bright side, there are plenty of other countries with stable, functioning patent systems. Until the US patent system settles down, I’m filing PCT, which delays entry of US national phase for new inventions.

  66. Gary February 23, 2017 2:57 pm

    @jbavis —

    I’ve offered exactly that and didn’t get very far. In fact, I’ve started to insist that licensing/assignment deals include a free 40 or so hours of consulting because sale of a naked patent is so much less positive for my reputation and for the patent system than sale of a patent plus expertise. I’ve yet to be taken up on the offer.

  67. angry dude February 23, 2017 3:03 pm

    H2H @63

    What kind of NPEs are you talking about ?

    If you mean PAE NPEs – those don’t licence your patent cause they don’t manufacture anything (although they may have partial ownership in your patent) – they enforce it on contingency basis
    If you mean some big patent agglomerations like Rockstar – they own their patents and do some policing to make RoI look better (which is abysmal regardless as you might guess) BUT they don’t want your patent – those are corps for corps plays

  68. H2H February 23, 2017 3:06 pm

    jbavis @ 64

    “Would offering something like that IN ADDITION TO patent license/sale help small entities get the ear of larger corporations?”

    Company’s think in terms of “businesses” and they want technology to become “businesses” for them or differentiate their products so they don’t become commoditized. The more it looks like what an inventor is offering is a business opportunity, the less risky it seems. Gary mentioned he offers technical documentation and engineering consulting time when he talks to companies. I think that’s the right approach.

    Honestly, there’s not a lot of rhyme or reason to why company’s ignore/distrust three inventors offering patents and consulting time, but will gobble them up if they form a business entity, assign everything to the business entity, and have business cards.

  69. angry dude February 23, 2017 3:07 pm

    Gary @66

    Please stop worrying about reputation of the US Patent system

    seriously, dude 🙂

  70. Gene Quinn February 23, 2017 3:09 pm

    jbavis @53-

    I am certainly no fan of much of what the AIA did and if I had been a Member of Congress I would have voted against it. I am not going to defend the AIA. It did absolutely nothing to address any of the real problems of the patent system, and as we know made many things far worse. So if the AIA were to be repealed I would not shed a tear. Having said that, I don’t think it is politically feasible to repeal the AIA. I do think, however, it may be politically feasible to do something about the PTAB and the post grant review proceedings. At an absolute minimum they must be made fair, which is almost certainly an impossible task. Absent making them fair and even handed, recognizing that a patent is presumed valid, then the PTAB and the post grant challenges should be abolished.

    To paraphrase President Reagan, I’m interested in getting the half of loaf that we may be able to get. Once we get that then we can circle back and see what else we can accomplish.

    -Gene

  71. angry dude February 23, 2017 3:14 pm

    Gary @65

    “Until the US patent system settles down, I’m filing PCT, which delays entry of US national phase for new inventions”

    But how do you delay publication of your patent application ?
    Because that’s what matters.

  72. H2H February 23, 2017 3:20 pm

    angry dude @ 67

    Semantics might be tough to navigate on a message board, so I wouldn’t be surprised if we understand things differently. There are NPEs that own and buy patents and they enforce them. Do you bring up manufacturing because of injuctions? At least at the ITC, I think some NPEs have successfully received injunctions by arguing that they have exclusive licensees in the US and they are obligated to police the market on behalf of their licensees. I don’t name names since some of these companies are extremely sensitive…

    “f you mean PAE NPEs – those don’t licence your patent cause they don’t manufacture anything (although they may have partial ownership in your patent) – they enforce it on contingency basis”

    This is interesting. If there is one entity enforcing a patent, or an entity and an inventor enforcing a patent, I’m not sure how different those arrangements are, practically. If the inventor is an operating company or has one – I can sue anybody I want on my patents so I don’t see how the arrangement protects them.

  73. Gary February 23, 2017 3:21 pm

    @69 – looks like we do disagree on something. The worse the reputation of the patent system, the more likely Congress or the courts will fix things that aren’t broken (and probably break them in the process). That is why I find it incredibly frustrating when inventors and PAEs go after mom and pop shops instead of the suppliers of the infringing items. It just takes one really abusive piece of litigation or enforcement effort to create a narrative that leads people who should know better (I’m thinking Justice Bryer) to start using terms like “Patent Troll” and acting out. So I do think that the narrative matters.

    @71 — you don’t delay publication. And yes, that sucks. But you can also enter into the national phase in Germany, the UK, China (if you’re so inclined), etc. prior to the deadline and wait until the deadline for the US.

  74. angry dude February 23, 2017 3:35 pm

    Gary @73

    “That is why I find it incredibly frustrating when inventors and PAEs go after mom and pop shops instead of the suppliers of the infringing items”

    It’s no more frustrating than manufacturers browsing USPTO database like a free (as in beer) library and deciding which patents they can steal without any consequences…

    Just the other side of the coin

  75. jbavis February 23, 2017 3:36 pm

    Gene @ 70:

    Yes but to get that half loaf we need to be organized. If pharma couldn’t do it with their resources, how can we? And Google has $billions sitting cash.

  76. angry dude February 23, 2017 3:42 pm

    H2H @72

    “If the inventor is an operating company or has one – I can sue anybody I want on my patents”

    You certainly can… IF you have enough spare cash … like 2m
    However before you sue, be prepared to conduct pre-filing due diligence investigation (100K very conservatively) – otherwise they’ll file for Rule 11 Sanctions and you might need another 2m to cover their legal expenses too…

  77. Edward Heller February 23, 2017 3:56 pm

    Night@9, So, there are claims that are “broad and vague”, but that under broadest reasonable interpretation cannot be invalidated using 103. But, somehow they are bad claims.

    Let’s see some of these magical claims. Vague leads to BRI getting its way. Broad leads to lots of prior art. If you have a broad claim and cannot invalidate it with prior art and it reads on your tech, then probably the claim is good.

    We hear complaints all the time from people trying to review patents in order to avoid infringement that the claims are far too vague. I believe this is the result of a system that allows the claims to be vague and to allow them to be construed into definiteness by the courts. The system of saving the claims from vagueness and overbreadth has developed over a very long time and was reaffirmed recently by the Supreme Court in Nautilus. But I believe we can do better and should do better.

    I would think that the test of definiteness should take place using the claims as they are written and without reference to the prosecution history or to the specification. They should stand alone and provide proper notice to the public as to what has been patented. It is my understanding that this is the way it is done throughout Europe. The claims themselves are the measure of the invention, and the prosecution history is not limiting.

    This is not an issue about prior art and I do not believe that IPRs can ever address this issue.

  78. Edward Heller February 23, 2017 4:21 pm

    I think the colloquy between H2H and Gary is instructive. The bottom line is that any inventor is best advised to develop his invention by starting up a business that makes and sells an actual product or service. If he hits a homerun, his business will flourish and will soon be acquired by a large company making him or her very rich. If the company fails, as is most often the case, there are still the patents that may eventually be infringed by companies that adopt the inventions of the failed startup.

    Simply patenting inventions and hoping that big companies will listen to you and adopt your inventions has long been a nonstarter for all the reason stated by H2H. I was inside at big companies and I personally know this to be true. It is not a new phenomenon. It has probably been always the case for all of the reasons stated by H2H.

  79. You Know Who I Am February 23, 2017 4:24 pm

    Oh that’s funny- a “feminist” spoiling for conflict finds some. I’ve seen that script before. Any engagement whatsoever is a total waste of time.

    As to “efficient infringement” it’s more or less the same as “efficient breach” in the context of contracts- ably demonstrated by our current chief executive over his entire previous career.

    The legal system is extraordinary expensive (essentially inaccessible) to many business entities and thus useless as a remedy for smaller contract abuses.

    Why should anyone expect patent enforcement to be any different? However, the killer difference on the other side of the coin is that a victim need not be in privity with an aggressor who is holding ANY (presumed valid of course) US Patent.

    Since my first encounters with the patent system, I have become far more sympathetic to patentees in general and concerned about the well being of the system, but the lack of concern about actual victims is always glaring to me in certain circles. I’m pleased to see some balance working into this blog.

    Baby-steps.

    Go ahead anon, play your tune now.

  80. You Know Who I Am February 23, 2017 4:28 pm

    Angry Dude @ 76 you gotta be kidding. Rule 11? Yea, that’s gonna happen. 285 requires that you prevail, and whose got the spare million to even take that less than 50/50 shot?

    Truth is you can file at will with the barest of the barest remote theory and you are gonna be fine. Show me otherwise.

  81. Anon February 23, 2017 8:04 pm

    angry dude at 71:

    Have you looked at whether or not a non-US market is really that important to you?

    If you are – or would be – satisfied with only a US market (and possible US patent to protect against imports), you can simply request non-publication at the time of your application submission, and you will not be published at all** until you are warded an allowance.

    ** there are some wrinkles to this – having to do with continuations and such, but the general point remains true.

  82. Anon February 23, 2017 8:37 pm

    Why should anyone expect patent enforcement to be any different?

    After you get done pseudo-complaining about efficient breach in other quarters, you appear to WANT that for patents…

    What kind of tune did you want me to play?

  83. angry dude February 24, 2017 9:39 am

    You Know Who I Am @80

    Yeah, I know who you are – a patent ignorant troll advocating for willfull infringers

    The truth is no NPE will touch any patent case where they are not sufficiently sure BEFORE going into discovery mode that they can present convincing infringement proof to the judge and jury.
    Otherwise you are setting yourself for punishment – possibly a big one bankrupting you.
    Some years ago when I sued some SV corp they immediately threatened to file for Rule 11 sanctions against me (they quoted “hundreds of thousands of $$$” in their legal expenses) if the case gets thrown out on summary judgement or whatever else.
    At that time there was a “safe harbor” provision.
    Since then that provision I believe was removed meaning that the moment you file your court papers you are liable under Rule 11 should they find any deficiencies in your pre-filing due diligence later on (e.g. you didn’t spend enough $$$ to get all those “qualified opinions” cause your opinion as a patent inventor doesn’t matter at all)

    You are infringer’s advocate, dude. Period.

  84. angry dude February 24, 2017 9:52 am

    Anon @81

    I wish I could turn the clock back and NOT file any patent applications at all – just kept everything in my head

    I might or might not be successful in monetizing that know-how but it would be my own fault so I wouldn’t be complaining here

    But once some know-how is published then anyone in the world can use it for their purposes and there is nothing you can do about it

    No one can put genie back in the bottle
    I wish I could. Sigh…

  85. angry dude February 24, 2017 10:15 am

    Edward Heller @78

    “Simply patenting inventions and hoping that big companies will listen to you and adopt your inventions”

    Dude, you are clueless

    Yes, they will listen and read anything coming from you but will not respond in any way (until you actually sue them)
    And they will adopt your invention in their products without much thinking if it makes their products better
    AND they won’t pay you a dime

    This has been experimentally confirmed by me

    But you can ask other (tech) inventors out there – I’m sure they will concur

  86. Gary February 24, 2017 11:22 am

    @85 absolutely, big companies will take your invention for free if you let them. So count me as concurring.

  87. American Cowboy February 24, 2017 11:47 am

    There is an apocryphal story of a small company’s patent being infringed by a mega-corp. The parties meet to discuss the situation, and counsel for the mega-corp pulls out a stack of mega-corp patents and says ‘”Well, if our product infringes your patent and you sue us, expect a counterclaim that your patent infringes ones of this stack. So if you don’t want to face that, back off.”

    Who is the patent troll in that situation?

    In fact, for all of the name calling, what really bugs mega-corps about NPE’s is that since NPE’s don’t have a patent these bullying tactics don’t work.

  88. American Cowboy February 24, 2017 11:48 am

    Gene, I think you should let Molly have her say. It’s like Watters World right here in IPwatchdogland! What a hoot!

  89. angry dude February 24, 2017 12:29 pm

    Gary @86

    If you don’t want your invention to be stolen by large corps then don’t file for patent. Period.
    Otherwise it will be stolen with 100% certainty if it has any utility to them.

    What follows after that is far less certain but most likely the majority of infringers will just get away with stealing without ever paying a dime for willful deliberate infringement

  90. American Cowboy February 24, 2017 12:39 pm

    Back to Molly.. she cites an article from Yale Journal of Law & Feminism. It’s title is Women’s Work, Women’s Knowing: Intellectual Property and the Recognition of Women’s Traditional Knowledge”

    I fail to see any relevance of Traditional knowledge to patent law. Patent law protects what is new and non-obvious. If the knowledge is traditional it ain’t patentable.

    Or, Molly is your thesis that since women have been held back for all of these years, women, but not men, should be allowed to patent the prior art? Won’t the mega-corps like that!

    I guess it would be a form of affirmative action for women, giving them a leg up on the lesser gender in employment possibilities.

  91. angry dude February 24, 2017 12:50 pm

    American Cowboy @90

    “affirmative action for women” ? :):):)

    maybe right now is not the best time for that

    wait a little longer – when michelle obama gets in the WH that time will come

    then i’ll put my wife as an inventor on all patents and sue those big corps for gender discrimination and win !!!

    but right now the only card we can play is foreign allegiance of mega-corps

  92. Anon February 24, 2017 12:52 pm

    I would amend the view of “”let Molly have her way” with maintaining a no-derailing position, and inviting Molly to publish an article all her own dealing with her topic of interest.

  93. You Know Who I Am February 24, 2017 1:12 pm

    Angry @ 83 on this very blog there is an item about the many Rule 36’s coming out of the CAFC, and nobody is paying a dime in fees, let alone Rule 11 sanctions.

    Instead of blowing BS out your keyboard, how about some cites. Please link some Rule 11 cases where defendants prevailed in the normal course. But of course you can’t, because any halfway sentient lawyer can come up with a colorable reasonableness argument to avoid sanctions. Even 285’s have barely notched up since Octane Fitness…

    Attack the messenger not the message- because you are a weakling. As a matter of fact, I want a strong functional patent system and wish the AIA were repealed root and branch. With some other slight modifications to 100(b) we would be back in business.

  94. angry dude February 24, 2017 1:48 pm

    You Know Who I Am @93

    “any halfway sentient lawyer can come up with a colorable reasonableness argument to avoid sanctions”

    You know this is complete BS and still write it..

    If this were the case we would have many more patent lawsuits – because coming up with “colorable reasonableness argument” doesn’t cost much (3-5K ?) compared to pre-filing due diligence involving any hi-tech product (>100K)
    the latter one assuming costs of some reverse-engineering and getting qualified opinion(s) from patent attorney(s) with complete claim mappings etc etc (and now in SV with accurate damage figures) – all of this BEFORE filing initial complaint – otherwise you are screwed , even in patent-friendly jurisdiction
    if you don’t believe me – try it yourself (I can loan you the piece 🙂

  95. Edward Heller February 24, 2017 3:24 pm

    Angry Dude@85, you and I are in fundamental agreement here. I was only saying that if it is almost impossible to get a major corporation or business to pay attention to you, the individual inventor who only has a patent and not a developed business, it would be best to consider this before one adopts the path of inventing and trying to make money proactively licensing big companies.

    There are only two possible approaches to making money for the individual inventor that makes sense:

    The first is to actually develop a business based upon one’s invention in which case there is a strong possibility that the big company will acquire your business thereby making you rich.

    The second is wait for big companies to develop products or services covered by your patent and then give them notice of infringement/suing them.

  96. Anon February 24, 2017 7:55 pm

    With some other slight modifications to 100(b) we would be back in business.

    That very much depends on what “in business” you mean, Mr. Snyder.

  97. Night Writer February 25, 2017 6:08 am

    @77 Ed the Ned: Please try not to lecture me. Again, vague does expand the scope of the claims and broad expands the scope of the claims.

    So, you have these claims with a giant scope that read on your product, and yet you cannot find a 103 argument. But, they are bad, bad claims. Not believable.

    And sure, 112 needs to enforced. But, the contention being made about vague, broad claims (that are bad, bad claims) with no prior art, but the claims read on your product is not very credible.

  98. Caesar Salazar February 25, 2017 4:00 pm

    EDITORIAL NOTE: Comment deleted because it was an irrelevant comment relating to slavery.

  99. Caesar Salazar February 25, 2017 5:50 pm

    If my comment was deleted, then Molly’s, IPDude’s, American Cowboy’s, Curious’, and other comments would have to be deleted as well. Otherwise it would be seen as selective editing, which belies an agenda.

  100. Anon February 25, 2017 6:04 pm

    Caeser,

    Please stop your whining. Comments can rightfully be selectively edited when you have provided yourself ZERO leeway by posting without any regard to law, the topic at hand, or facts regarding either.

    The blog here has been under steady bombardment by pretenders with the sole goal of disrupting genuine discussions on patent law.

    Stick to the topic until you have earned yourself a little leeway – it’s not that difficult.

  101. Night Writer February 25, 2017 11:22 pm

    Just reading some of Caesar’s comments makes it clear that he is a troll. Lots of cheap shots that seem to be calculated to derail real conversations.

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