How to improve IPRs without tossing the baby out with the bath water

By Russell Slifer
April 11, 2017

As reported here by Gene Quinn, I resigned as Deputy Director of the United States Patent and Trademark Office (USPTO) effective January 20, 2017. Although I no longer have the privilege of working for the USPTO, I remain impressed by the all employees who have dedicated their careers to improving the Agency to better serve our country, and the world.

I had the opportunity to get to know many of the judges serving on the PTAB. In fact, I had the pleasure of serving on a panel of an IPR. I know first-hand that all of the judges are very hard working and faithfully execute the responsibilities bestowed upon them. Notwithstanding their hard work and the USPTO’s initial efforts to establish a fair IPR system, the IPR process can (and should) be further improved.

In the Leahy-Smith America Invents Act (AIA), Section 6, Chapter 31, § 316(a) Congress specifically granted the Director the responsibility to prescribe regulations “(2) setting forth the standards for the showing of sufficient grounds to institute a review under § 314(a)” and “(4) establishing and governing inter partes review under this chapter and the relationship of such review to other proceedings under this title”. Congress instructed the Director, in § 316(b), to “consider the effect of any such regulation on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings instituted under this chapter.”

In addition to providing for higher institution thresholds (§§ 314(a) and 324(a)), the AIA specifies that the Director should “take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office” (§ 325(d)), and should ensure that patent owners be protected from any “improper use of the proceeding” (§§ 316(a)(6) and 326(a)(6)). The Director is further given authority under § 315(d) where another proceeding or matter involving the patent is before the Office “to determine the manner in which the inter partes review or other proceeding or matter may proceed, including providing for stay, transfer, consolidation, or termination.”

It is clear that the current regulations are almost exclusively focused § 316(b)’s “the ability of the Office to timely complete proceedings” and not the other language of § 316(b): “the effect of any such regulation on the economy”, “the efficient administration of the Office” or “the integrity of the patent system.” Changes can be made to improve the IPR process without throwing the baby out with the bath water. Invalid patents can still be addressed at the USPTO while returning some of the lost integrity of the patent system.

With several years of experience and thousands of petitions, the IPR proceedings have proven to be a useful tool for addressing patents that are invalid based on printed publications. IPR’s are also subject to the abuses warned about during debate of the AIA. We are all well aware of the different policy positions between industries. One group is tired of fighting patent infringement litigations while the other needs certainty in their patent assets to protect substantial R&D investments. Although consensus is not possible, I present seven suggestions on ways the USPTO can improve the IPR process with all of § 316(b) in mind. I appreciate that suggestion II will be viewed as pandering to a specific industry and that suggestion V may not be easily accomplished. Nevertheless, I set forth all seven suggestions for discussion.
 

  1. The patent owner should be allowed to petition the Director for a reconsideration of Institution, or in the Preliminary response, for the following reasons that specifically address Congress’ concerns:
    1. The petition is based on the same or substantially the same art considered in prosecution. (the integrity of the patent system)
    2. Financial hardship of patent owner, including where the patent owner lacks the financial ability to fairly defend against an IPR/PGR, where the patent owner is a university or not-for-profit organization whose operations would be impaired if required to defend an IPR, where mounting such a defense would impair the patent owner’s ability to develop, manufacture and/or market his/her invention, or where the patent owner is a small business or entity. (effect on the economy)
    3. An IPR would not resolve all outstanding issues of art-based validity where there is a district court action pending. (the integrity of the patent system)
    4. There are extensive discovery issues that cannot fairly be performed in the time frame allowed under the statute or which would require determination of expert credibility. (efficient administration of the Office)
    5. There is a demonstrated abuse of the IPR/PGR process by the petitioner. (the integrity of the patent system)
    6. Where institution of an IPR would likely disrupt the nascent or ongoing business of the patent owner, or the ability of that business to raise needed capital to further development, manufacture or marketing of the claimed invention. (effect on the economy)
  2.  

  3. It is clear that there is a peculiar public interest in making sure that the patent system foster the creation of FDA approved drugs. To address the effect on this critical area of the economy, the Director should personally decide the institution of an IPR for patents covering drug or therapeutic biologic products that are undergoing FDA-required clinical testing, regulatory review and/or approval. This would include those patents that may be listed in the FDA’s “Orange Book” pursuant to the Hatch-Waxman Act or identified under the “patent dance” provisions of the BPCIA (the biosimilars act).
  4.  

  5. For the integrity of the patent system, establish a rebuttable presumption that the art is the same or substantially the same if the IPR invalidity contention as to a claim is based in whole or in part on a reference that was applied during the original examination to reject that claim, and to defer to earlier PTO determinations based on the same or similar prior art or arguments unless the determination is shown to be clearly wrong.
  6.  

  7. For both the integrity of the patent system and the efficient administration of the Office, require the petitioner, as part of the original petition, to fully disclose all objective evidence of non-obviousness known to it weighing in favor of patentability, or that refutes or tends to refute any factual contention being advanced in the petition, including without limitation:
    1. Copying
    2. Inability to or ineffectiveness of design arounds
    3. Commercial success
    4. Contrary evidence reflected in petitioner’s internal documents or public statements, including tributes to the claimed invention
  8.  

  9. For the integrity of the patent system, explore the options of having the PTAB coordinate with the district court where the challenged patent is the subject of pending litigation to determine if granting a petition will resolve all issues of 102 and 103 based on prior patents and printed publications, and to otherwise determine whether institution of an IPR would expedite the resolution of the litigation.
  10.  

  11. For both the integrity of the patent system and the efficient administration of the Office, the USPTO should construe the “raised or reasonably could have been raised” provisions of the America Invents Act (AIA) to preclude the filing of a subsequent IPR by a petitioner, or its privies, that raises any issue that was or could reasonably have been raised in the earlier petition or in a concluded district court proceeding. Such a rule would minimize harassment of patent owners while still preserving the opportunity for aggrieved parties to have their challenges fully and fairly heard – but heard once.
  12.  

  13. To preserve the integrity of the patent system, the Board should extending the duration of any IPR for up to 18 months where such an extension would serve the interests of justice and/or due process (including where additional discovery is needed in order to allow a patent owner to fairly defend against the petition).  The statute already allows the USPTO to go beyond the 12-month time limit and up to 18 months, when appropriate, but so far there has been no case that has used the available additional six months.

 

By adopting these improvements to the IPR process the system will become fairer, afford patent owners more due process, and protect patent owners from harassment and hardship while still fulfilling the statutory mandate to provide an alternative forum for administrative resolution of validity challenges.

 

The Author

Russell Slifer

Russell Slifer

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 61 Comments comments. Join the discussion.

  1. Night Writer April 11, 2017 10:49 am

    >> “take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office” (§ 325(d))

    This is huge. I looked at a case where eight CBM were filed with essentially the same prior art. Harassment.

    I think Russ Slifer would be a great director. He would not come in playing policy games like Dudas or Lee, but would apply the law as intended by Congress. I think that is all a director should do.

  2. angry dude April 11, 2017 11:05 am

    Too little too late

    The doc said ‘to the morgue’, to the morgue it is!

  3. Edward Heller April 11, 2017 11:23 am

    Russ, there is obvious tension between the congressional objective of providing a low cost alternative to litigation and the use of broadest reasonable interpretation in combination with a preponderance of evidence.

    Until IPRs genuinely provide a bona fide, fair, level playing field, there is no way that we should even attempt to provide cosmetic changes. Rather we should attempt a repeal.

    The effort here seems more like an attempt to save IPRs in the face of overwhelming hostility. I hope the effort of the PTO here is shown to be what it is.

  4. Night Writer April 11, 2017 11:47 am

    @3 Ed the Ned, sure you are right. But, a director of the USPTO shouldn’t be doing that. I think this article is more what a good director should do without being a Dudas.

  5. Paul Morinville April 11, 2017 12:47 pm

    “Changes can be made to improve the IPR process without throwing the baby out with the bath water. Invalid patents can still be addressed at the USPTO while returning some of the lost integrity of the patent system”

    Unfortunately that is a really bad idea. The PTAB was set up and managed to kill patents even by its own admission. Now we have a new administration and the rules can be changed as Russ explains. But could the rules be changed back when the next administration takes office? Well…. yes they could. And they will be changed. The strength of a patent will always vary depending on who is in charge of the rules. It is an unconstitutional consolidation of power and a recipe for corruption.

    Patents will never have quiet title. We will never have stable law governing a property right. Big biz will always influence the strength of patents with every new technology explosion as we have seen with the GAFA mafia over the last few years. It will always be a disaster and America will fall far behind the rest of the world in technology.

    The PTAB puts too much power in the hands on one person. It is a dictatorial power over the most important property right in America. This is the property right that drives our economic growth and has for over 200 years kept us ahead of the world in technology. Now that lead is transferring to China primarily due to the PTAB.

    It is just plain foolish not to throw out the baby with the bathwater. The baby is the problem. We must kill the baby.

  6. Night Writer April 11, 2017 1:07 pm

    @5 I agree Paul.

    But, let’s keep in mind the limited role of the director.

  7. Paul Morinville April 11, 2017 1:25 pm

    Night, I read this article as a long list of excuses to keep the PTAB. There is no credible argument to do that that I can see. The best thing that the director can do is apply the RIF exclusively to the PTAB. Fire them all. I cannot agree with Russ that all (or even most) of the PTAB judges are upstanding citizens. It is absolutely proven by the results of the PTAB that a large percentage of them are not just and upright. It is time to fire the PTAB. Kill the baby.

  8. Russ Slifer April 11, 2017 2:16 pm

    Ed,

    Thank you for the comment. It is up to Congress to repeal the AIA, if that is what they want. Until then the USPTO can improve IPR’s/PGR’s through the regulations. I am merely trying to present some suggestions to begin the discussion.

    Russ

  9. Invention Rights April 11, 2017 2:50 pm

    I am relatively new to the PTAB debacle, and Paul seems correct. It seems to me PTAB is 100% superfluous. Truly bad patents can be invalidated on a motion for summary judgment. Just as efficiently as PTAB. And with fee shifting, much cheaper.

    The only reason for PTAB is to reduce the burden and standard of proof so that patents that are not truly bad can also be invalidated.

    Final Written Decision: All claims that the PTAB has utility are found invalid. The motion to amend is denied.

  10. JPM April 11, 2017 8:58 pm

    Russ,

    It seems you have not spoken with actual individual inventors other small patent owners who have tried to enforce their infringed patents since the AIA.

    As an inventor who has enforced his own patents since the AIA, I can say with past experience that the PTAB has destroyed the value of patents. Large infringers do not see the need in purchasing a license at a fair price when they can simply kill your patent with an 80% rate at the PTAB.

    The PTAB needs to be shut down, plain and simple. It is an unfair venue that was created with the sole purpose of killing patents, it cannot be fixed.

    The right thing to do is to shut the PTAB down entirely. If you can’t shut it down, and if you want to help inventors while also satisfying big corporate tech donors then at least exclude inventors who are named inventors on the patents from PTAB proceedings whenever they bring a lawsuit against an infringer and are a majority beneficiary of any proceeds.

  11. Patent Guy April 11, 2017 10:16 pm

    Russ,
    Thank you for the thought provoking discussion, but with respect, your suggestions are misplaced. Many of your suggestions are premised on the “integrity of the patent system.” I agree this is a very important consideration as it helps instill confidence that patents have value and it is worth it to disclose your idea to the public in exchange for the limited monopoly. The problem is what is the “integrity” are we worried about? Is it that prior PTO activities in allowing claims during original prosecution should be given deference? If so, then the real question is, objectively, are examiners doing the kind of work that is entitled to deference or presumptions that they are doing their jobs in a competent manner? I believe they are not.

    (For the sake of full disclosure, I have also done enough prosecution on behalf of large corporate inventors seeking patent protection to have seen numerous of cases prosecute from first filing to issuance and have also had the unfortunate experience of being part of numerous petitions — all as petitioner.)

    Although not likely to be admitted publicly, anyone who has done patent prosecution for enough time knows that there are claims in patents that should not have been allowed by the USPTO during original prosecution. It could be that the examiner just did not appreciate how broad the language really is or it could be that a reference that is submitted in a voluminous IDS would kill the claim. Nevertheless, claims do issue that have no place issuing in the first place and the integrity of the patent system would be best served by ensuring that these claims never issue in the first place. Maybe the solution is hiring (or at least trying to retain) more Einstein-type examiners with the technical aptitude and English language skills to meaningfully examine all the claims. Maybe this means the USPTO objecting when voluminous IDS forms are submitted (MPEP §2004 already provides for relief, but I have not seen it consistently enforced). Maybe this means the OED begins to crack down on practitioners who have taken part in prosecuting overly broad claims in the first place (like after they are later adjudicated as invalid by the court or USPTO, but I have not seen this happen.)

    With IPRs practice we have effectively converted our system to a registration system, where substantive examination actually occurs when there is enough money at stake to litigate validity. For the sake of integrity patents, I think we as a patent bar need to effectively decide whether to take all the time, money, and effort that is currently going into IPRs and devote that to perfecting original examination or wholeheartedly adopt the registration system that IPRs have created and publish that is the way our system now works.

  12. EG April 12, 2017 6:43 am

    I agree completely with Paul M.-IPRs must go, a bad idea and an unconstitutional one at that.

  13. Night Writer April 12, 2017 6:53 am

    I agree the PTAB should go, but I don’t think that is going to happen. So, at least getting a director that makes some accommodations and who implements the laws of Congress is a good idea. One of Russ’s ideas of not instituting IPR/CBMs where the art is substantially the same is a good idea. I see cases where there are 5+ IPR/CBMs and clearly the point is to harass or take multiple bites from the apple.

    That is one thing that perhaps people have not focused enough on. The concept that you are supposed to do your best in one law suit and not get another bite from the apple. But, IPRs/CBMs give people all the bites they want. The reality is that companies gang up on patents.

  14. Night Writer April 12, 2017 6:56 am

    That’s the whole problem with the IPRs. If you have a patent that you believe is widely infringed, then all those companies are each going to get at least one shot at you at the PTAB. And, they can use substantially the same arguments and hope for a different panel.

    I think that one way to lessen the effects of the PTAB is to ask that it be more like a fed. dist. ct. proceeding. If the PTAB were merely the invalidity arm of a patent lawsuit and it was about like it would be at the fed. dist. ct. level, then perhaps it wouldn’t be all that bad.

  15. Paul F. Morgan April 12, 2017 8:46 am

    Russell, as you can see, most of the folks who file comments on patent blogs [as opposed to some broader surveys] are not going to face the reality that the AIA, having been enacted by a huge bi-partisan majority, and having already survived several cert petitions of alleged Constitutionality, etc. over several years, is not simply going to just somehow easily go away. [Regardless of the intensity of it’s dislike among various patent attorneys and agents with limited Congressional influence.] Hence, refusal to make any specific rulemaking improvement suggestions.

  16. Anon April 12, 2017 9:01 am

    Mr. Morgan, what is this “broader survey” that you allude to?

  17. Night Writer April 12, 2017 9:15 am

    @14 Paul. I don’t think IPRs are going away. And, anyway, we want a director that will try to improve them no matter. That is what a director should be doing.

    Lee is a travesty. Lee has made no attempt to improve them.

  18. Paul Morinville April 12, 2017 10:57 am

    Night. I hear you argument. And Paul F. Morgan I hear you as well.

    I completely disagree that the PTAB cannot be eliminated. I keep hearing people tell me “Well, it’s Washington. They won’t change it,” I think that is BS from people who feel defeated and now won’t fight.

    We will eliminate the PTAB altogether. It will get done. There is just no way this American Dream killer will be left standing. It might take a while and a few key politicians will be ousted, but it will get done. This is fight for the very soul of American. America will win.

  19. EG April 12, 2017 11:09 am

    Paul Morgan,

    Saying that the AIA has “survived several cert petitions of alleged Constitutionality” is an overstatement, at least with respect to those petitions relating to IPRs which have simply been denied cert so far-the actual test of the constitutionality of IPRs (and they are an unconstitutional violation of the 5th Amendment for “taking property without due process”) has yet to occur. In other words, this so-called “dislike among various patent attorneys and agents” who are alleged by you to have “limited Congressional influence” doesn’t make our appropriate challenge of the constitutionality of IPRs any less correct.

  20. Benny April 12, 2017 12:02 pm

    Patent Guy @11,
    You speak well. As for the IDS prank, the worst offender I’ve seen filed 1055 references. It was iRobot. They pull that stunt all the time. Anyone seen that record beaten ?

  21. Night Writer April 12, 2017 12:38 pm

    @20 I filed an IDS with more references than that. But, it wasn’t my fault. It was a continuation of claims that were in some real heavy litigation. The D’s had asserted thousands of references were material. I had no choice.

  22. Anon April 12, 2017 1:16 pm

    Mr. Morgan’s views on the Constituionality angle are extremely self-serving and perhaps even duplicitous, given that he has refused to even discuss Constitutionality arguments that have been presented to him in various blogs.

    Attempting to draw such an “end” conclusion from the current failed attempts is at best an overstatement E.G.

    More likely than not, since it is known that Mr. Morgan’s effforts to quiet criticism of the IPR infirmities lack any counter points from him on discussion points out on the table for discussion, his efforts are merely a smokescreen.

  23. Paul F. Morgan April 12, 2017 1:32 pm

    EG et al, of course you-all are entitled to any personal desires or feelings about the AIA you care to worship, but that is not the point. The point is that UNTIL someone, in spite of several prior failures, convinces the Supreme Court to take cert AND to hold IPRs, PGRs, CBMs and Reexaminations statutes unconstitutional, or obtains rreversal of a widespread view in Congress that the troll problem of suits on invalid patents is more important, you are misleading lay readers and your clients that they are just going to fade away and thus that there is no need to fight for RULE improvements, as this author is suggesting.

  24. angry dude April 12, 2017 2:17 pm

    Paul F. Morgan @23

    Well, we now have new Scotus composition, don’t we ?

    “Unconstitutional” is to put it very mildly..

    I call it a robbery: sell some goodies (“property rights”), then take them back (but never return the money)

    just try to run your store like this and it will be burned down next day

  25. EG April 12, 2017 2:44 pm

    Paul Morgan,

    I STRONGLY resent and caution you against saying I am “misleading lay readers and [my] clients that [IPRs] are just going to fade away.” I’m doing no such thing, no matter what you might believe. Instead, I’m just pointing out the constitutional infirmity of IPRs, an opinion I’m also not alone in believing is correct. Also, fighting for rule improvements in IPRs simply treats the “symptoms” of the problem with IPRs, but does not address the proper “solution” to that problem, namely, leave validity judgments for issued patents to the courts, the proper Article III tribunal, rather than PTAB which is no such tribunal.

  26. Tiburon April 12, 2017 3:23 pm

    Face it folks, IPR’s are here to stay. Google has invested too much money lobbying for AIA and IPR’s. They’ve got $80Billion (with a ‘B’), $0 debt, and making $50m more every day. That’s more than all of Pharma combined. They can continue this fight for decades more. Google is the prototypical computer science corporation that has brought so much prosperity and jobs to America in the past 20 years. Sure some inventors may have been hurt in the crossfire – but if you could see the large amount of pain inflicted on not just Google but other established computer science corporations then you too would recognize why Congress has this “widespread view that the troll problem of suits on invalid patents”.

  27. Night Writer April 12, 2017 3:27 pm

    @26 Tiburon:
    pain inflicted on not just Google but other established computer science corporations

    What?

  28. Night Writer April 12, 2017 3:54 pm

    @@ All you guys should chill.

  29. Paul Morinville April 12, 2017 4:21 pm

    Tiburon, “Google is the prototypical computer science corporation that has brought so much prosperity and jobs to America in the past 20 years.”

    Google brought nothing. Their entire scheme is built on the back of others. What invention did Google contribute to the technology mountain we all live on? The search algorithm? Someone else invented it. Android? Invented by others. Self driving cars? Also invented by others.

    Google brings nothing but damage to those who invent the things they commercialize. Google is truly evil company.

  30. Night Writer April 12, 2017 7:17 pm

    @29 Paul.

    Google has also been highly criticized in business publications for their inability to innovate after their initial search engine.

    There is a lot of evidence of what Paul is saying is true. That Google relies on market power and capital and not innovation. And, this is similar to what they do with their search engine. I appreciate all the things I can read on Google for free, but I wonder if it is sustainable.

    Also, Google still makes 90 percent of their revenue from search.

  31. angry dude April 12, 2017 9:57 pm

    Google’s glasses is a living (oops.. now dead) testament to google’s lack of vision etc etc etc
    more examples ???
    dozens

  32. JPM April 13, 2017 8:04 am

    If the PTAB is here to stay and cannot be shut down, then a compromise would be to exclude named inventors who are asserting their own patents from PTAB proceedings.

    How that could would work is if a named inventor asserts his/her patent against an infringer, and the infringer files an IPR, the PTAB should deny the IPR request immediately after the named inventor shows documentation to the PTAB that he/she is the majority owner of the patent being asserted and that he/she will receive a majority share of any proceeds generated with the patent.

    The PTAB was built to stop “patent trolls” and was never intended to stop named inventors from enforcing their infringed patents. Obama defined a patent troll in 2013 as “folks that don’t actually produce anything themselves, they are just trying to leverage and hijack somebody else’s idea and extort some money out of them” (video of Obama saying this is here: https://www.youtube.com/watch?v=oBaNLOZTz4o)

    It is clear that Obama is not defining named inventors as “patent trolls” so named inventors enforcing their own patents should not be subjected to the PTAB proceedings.

    In my opinion, it seems that Obama is defining “patent trolls” as middle men who provide resources to inventors who want to assert their patents when inventors cannot find contingency counsel. He is most likely talking about companies like Acacia, Marathon Patent etc. Personally, I don’t agree with calling these companies patent trolls, but that is what Obama seems to be hinting at here.

  33. Anon April 13, 2017 8:59 am

    The “named inventor” route is down right horrible and not sustainable in view of the original intent of the patent system and the full alienability of this thing called property.

    Further, the downside would be to shackle the “named inventor” with an asset that they could not transfer to anyone else (at any reasonable value). At best, the idea is a p00r and I’ll-thought out knee jerk reaction.

  34. Paul Morinville April 13, 2017 9:20 am

    JPM @32. Grassley tried to carve out inventors in his version of the Innovation Act. I’ll tell you the same thing I told him.

    Carving out inventors helps no one. It makes people think they are doing the right thing passing a bad law and that is all. Very few inventors defend their own patent. This is because most collateralize the patent to fund the company they are starting based on the patent. After all, who pays for a patent if they cannot get a return? If the company fails, investors take control of the patent.

    If you do not allow investors to defend or sell the patent, nobody will invest. You kill the baby.

    I’d rather kill Russ’s baby than my baby. But one must be killed.

  35. angry dude April 13, 2017 9:41 am

    JPM @32

    “The PTAB was built to stop “patent trolls” and was never intended to stop named inventors from enforcing their infringed patents”

    That’s a bunch of nonsense from completely ignorant and naive person

    The true and only purpose of all those machinations (AIA, PTAB, IPR etc etc) is to prevent American inventors from reaping any benefits from their patented inventions.
    Basically to kill the baby which is the US patent system as it used to be for over 200 years
    Now that baby is dead and cold
    Time to bury it

  36. JPM April 13, 2017 10:05 am

    Paul,

    I agree. When you look at it from that perspective it does create a lot of issues for investors investing in a startup who are relying on patents to have enough value to recoup some of their investment in the event a company fails.

    If a named inventor is excluded from PTAB proceedings it de-risks the litigation process a little bit. So if a named inventor has an infringed patent, this rule may allow him or her to raise capital to finance litigation to unlock value for startup investors that way. Right now anything is better than what is going on today. The secondary market for patents is severely depressed and liquidity is almost non-existent.

    Russ’s baby needs to be killed. Let’s all hope that happens.

  37. Night Writer April 13, 2017 11:09 am

    @36 I agree JPM, but if Russ could drown it a bit while it still lives that would help.

  38. Paul Morinville April 13, 2017 11:38 am

    Night. Yep. One baby needs to die. Both cannot live. We are at a place where we must decide which baby to kill.

    Kill the PTAB, or kill the patent system, our economic growth, our job creation and our national security.

    Which will it be Russ?

  39. Edward Heller April 13, 2017 3:07 pm

    Obama defined a patent troll in 2013 as “folks that don’t actually produce anything themselves, they are just trying to leverage and hijack somebody else’s idea and extort some money out of them”

    Someone’s else’s idea?

  40. Anon April 13, 2017 3:16 pm

    The so-called “Obama idea” is merely the propaganda of the “Tr011” rhetoric pushed by Big Corp (and notably, albeit apparently unsuccessfully, championed by Ron Katznelson, and his push to de-propagandize the “White House ‘Tr011’ Paper.”

  41. Gene Quinn April 13, 2017 3:45 pm

    Edward-

    Based on Obama’s definition companies like Apple are patent trolls. Of course, he didn’t really understand what he was saying. Perhaps President Trump will given that he seems to want companies to make things in America. But Apple doesn’t make anything themselves. Other people produce Apple products.

    -Gene

  42. Benny April 13, 2017 4:05 pm

    Gene,
    True, US companies often don’t manufacture their goods in the US. Sub-contracting manufacturing to low-labor-cost countries is a simple exercise in economics. It reduces cost the consumer, and maintains competition. There just arn’t enough consumers in the US willing to pay a premium price for the label “proudly made in the USA” to make onshoring worthwhile. (Even then, subassemblies ae usually outsourced)This doesn’t actually hold true for automated assembly.

  43. Gene Quinn April 13, 2017 4:18 pm

    Benny-

    You are not correct about manufacturing. Manufacturing could be brought back to the United States and at a very competitive price. Our leaders simply do not want manufacturing jobs and are unwilling to do what is required to bring those jobs back to America. It is really that simple.

    See:
    http://www.ipwatchdog.com/2016/11/15/trump-american-manufacturing-great/id=74669/

  44. Benny April 13, 2017 4:33 pm

    Gene,
    The minimum wage in Shenzen is 327 USD/month. Where I live it is slightly over 1000 USD/month, more or less on par with your home town. But these figures, it seems, mean nothing. That said, if you do have a trick for equalizing production costs despite the 3.5x labour cost, our CFO would appreciate a call.

  45. Edward Heller April 13, 2017 6:28 pm

    Benny, we could impose leveling tariffs on imports designed to level the playing field across the board, from wage rates, to environmental and to safety. Each country could be treated differently, with the balancing tariffs determined according to law.

    But that is only simple economics that should occur to anyone who truly wanted to keep high paying jobs here. But, since the tariffs do not work for the American worker that way, one just has to wonder about the people who have been running our government for such a long time as to just what it is that they are trying to accomplish. For example, we tend to negotiate multi-state global deals like the TPP where the interests of the American worker or inventor are shunted to one side. How else can one justify stripping the United States of the advantages we had for inventing in America the gave up in GATT-TRIPS, NAFTA (amendments to 104) and in the AIA (first to file, no grace period, universal prior art)?

    Hopefully, with a new sheriff in town, things will change. Hopefully.

  46. Edward Heller April 13, 2017 6:49 pm

    Gene, thanks for that. But I still do not understand the point Obama was making or attempting to make about “somebody else’s idea,” as in “hijack somebody else’s idea — and then extorting some money out of them.”

    Now, is it not the whole point of the patent system to protect the original idea of the inventor. The hijacking party is not the troll, but the pirate, the people who are being sued, the likes of Apple when they take and use the patented idea of an inventor.

    The Obama definition is only good if one assumes the USPTO is routinely granting patents to “alleged” inventors on “someone else’s ideas” so that the patentee can then sue the very people who came up with those ideas in the first place.

    Now to be sure, the person asking Obama the question was talking specifically about software patents and startups that were being harassed. Is there a special problem with software patents and bad prosecution, and perhaps that is what Obama was talking about, and not trolls in general?

  47. Gene Quinn April 13, 2017 6:52 pm

    Edward-

    I see your point. Yes. There is much in Obama’s understanding of patents that is wanting. It feeds the myth that the USPTO issues patents to applicants on other people’s ideas. As if an idea is patentable anyway!

    -Gene

  48. Russ Slifer April 13, 2017 9:39 pm

    Paul @ 38,

    As I said, Congress decides if they want the PTAB gone. My suggestions are intended to improve the system that they created and the USPTO implemented. You can place all your chips on repeal, but hedging the bet until that time may be smart.

    Russ

  49. angry dude April 13, 2017 9:57 pm

    The first IPhone (4) I bought had this on its back:

    “Proudly designed in California
    Manufactured in China”

    Have no idea and couldn’t’ care less about what they have now on the back of their phones – I have switched to Android .. but for a completely different reason (VR)

    Apple is loosing competition… big time…

  50. Paul Morinville April 13, 2017 9:59 pm

    Russ, I understand your point. I disagree that it is helpful to amend the rules. I think that will only leave us with a perpetually weak patent system. The only way to fix this mess is to eliminate the PTAB. I don’t necessarily disagree with what you are saying. I just disagree with the foundation of that line of thinking.

    But that said, thank you for the article. It stimulates good discussion.

  51. Benny April 14, 2017 2:33 am

    Edward @45,
    I think you meant to say, “we could raise prices for everyone”

  52. Night Writer April 14, 2017 7:06 am

    @47: Benson helped with that whole idea thing.

    All of this was focused and started with Richard Stern and Benson. Benson is the heart of all evil in patent law. Just read the opinion and you can see each of the specious arguments in Benson.

  53. Anon April 14, 2017 7:47 am

    Night Writer @ 52 – after reading the scrivening of the Royal Nine in the Benson case, then read what patent expert Chisum has to say about that case.

    Those wishing to hush the child telling the Emperor that he has no clothes, continue to do so. And then have the umbrage to claim that by not wanting to discuss bandaids for a gushing wound, that the attorneys so doing, are somehow “misleading” lay readers and clients.

    Anyone with a legal degree (and willing to engage in critical thinking) should readily see exactly who is doing the misleading with such cheerleading and desire to inoculate the IPR system against its own infirmities.

  54. Night Writer April 14, 2017 9:13 am

    @53 definitely Anon. That article by Chisum is must reading for any patent attorney.

  55. Night Writer April 14, 2017 10:12 am

    @48 Russ: Exactly. And, that is all a director should be doing anyway. Maybe making policy recommendations, but implementing the laws of Congress and the laws of the courts is the director’s job.

  56. Anon April 14, 2017 12:48 pm

    Benny,

    Your comment is a good example of a “lie by half truth.”

    The implication is that “raising prices” must necessarily be “bad,” while omitting the rationale that the raised prices are an effort to not let certain players get away with externalizing costs that other players must pay (because of other social legislation).

    While there surely are nuances involved (for example, respecting what other Soveriegns have and have not done), the suggestion by Mr. Heller is a way of enforcing social legislation for this market.

  57. Paul Morinville April 14, 2017 1:26 pm

    Night @55. The director has control of organizational structure. Since Trump wants to reorganize agencies to cut headcount and improve efficiency, the director will be the one primarily responsible for the plan in the PTO.

    This plan should include massive cuts in the PTAB. Cuts deep enough that the PTAB can still manage the far too many appeals from bad examination rejections, but cannot take even a fraction of the cases they currently take in IPR, CBM and PGR. This would allow compliance with the AIA, but would contain the damage of the AIA by limiting the cases they take to only the most egregious.

    It would also help the PTO operationally, politically and in internal morale because fees paid for examination are currently being transferred to the PTAB, thus cutting examination resources and shifting those resources to invalidating the same patents the PTO just issued, thus insulting examiners and their leadership. Cutting headcount in the PTAB would cut costs and raise revenue as more maintenance fees would come in because people would have a renewed faith in the patent system.

    It would raise tax revenue as more jobs are created and it would improve national security as more companies will earn capital here and startup as opposed to going to China which is what is happening now.

    Just changing the rules within the PTAB is a fools errand. It needs to be eliminated, but cutting it back to a shadow of itself would help in many ways.

  58. Night Writer April 14, 2017 2:04 pm

    @57 Paul. Nothing would make me happier. But, the odds are almost zero of that happening.

  59. Paul Morinville April 14, 2017 2:17 pm

    Night @57. I am surprised that you sound so defeated. It will happen. Keep your quote handy and then watch and see. Or if you would like, you can join us and help us make it happen. Either way, it will happen.

    No American will stand by and let big multinational corporations buy Congress and steal the American Dream, not this American Dream anyway. The more folks who understand what is happening, the more people who take action. We put Issa into a recount and he only won by 1600 votes. Our protests were discussed nationally and we will continue with more in the next election on an expanded list of political targets. Any politician who supported the AIA and still supports further legislation is a target. Any Washington bureaucrat who does any further damage or does not attempt to fix the patent system is also a target. These people will need to find new jobs. Goodbye Michelle Lee.

  60. Anon April 14, 2017 2:58 pm

    Change really does begin with the man in the mirror.

    Or, to use a different analogy, it takes but a small child to tell the Emperor that he has no clothes.

    Kudos Mr. Morinville for not being deterred.

  61. Night Writer April 14, 2017 4:27 pm

    @59 Paul

    I do feel defeated. What I see is the patent system continue to weaken as trade secrets strengthen. I see the CAFC stacked with Google appointments. A director (Lee) of the PTO that does the bidding of Google. Her face shows what she is. I see academics freely lying and acting unethically (Mark Lemley, e.g.).

    I think we are going to get to a tipping point soon where a big corporation is going to announce they are going to primarily rely on trade secrets and not patents going forward. That will be the death knell of patents in the USA.

    (I continue to be amazed that no one seems to get the relationship between trade secrets and patents and labor costs. Just unbelievable ignorance.)

    I think we are going down. I am just not sure how long it will take.

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