My story of abuse and patent promises broken by the Patent Trial and Appeal Board (PTAB) usually falls on sympathetic ears. The fact that both Telebrands and the U.S. Patent and Trademark Office have teamed up to rob me of my patent rights is unjustifiable and outrageous. But I’m surviving. Even if the lawyers take 70 cents of every dollar I’ve earned, it leaves me with 30 cents. Not bad.
But surviving inventors are incredibly rare. I have met dozens of inventors with incredible discoveries whose naïve belief in the patent system have cost them way more than they have gained. They taught a big corporation their technology either directly or via the publication of their patent. The big corporations have made tens of millions of dollars using the inventor’s technology. The inventor paid lawyers hundreds of thousands of dollars in exchange for losing his patent rights. Many of these inventors are financially and/or psychologically devastated, and every one of them has a legitimate invention. One such legitimate inventor who has been railroaded by the U.S. patent system is Tom Waugh.
In the 1990s, Tom owned and ran a manufacturing company in Birmingham, AL, fabricating metal components for electrical distribution. This is the sort of hardware you see attached to utility poles.
But Tom was an inventor at heart and he started thinking bigger. He decided to reinvent the utility pole. Existing poles were made of wood or expensive formed and welded steel. After a decade of relentless trial and error, he perfected centrifugally cast metal utility poles. The process is ingenious and mesmerizing.
He teamed up with McWane, a plumbing pipe manufacturer which was also based in Birmingham, to commercialize his new technology. McWane was good at making cylindrical pipes. They did not know how to make tapered pipes/poles. Tapered poles are necessary so that they can be transported and assembled on site and to conserve material. Cylindrical cast poles had not been commercially feasible for McWane to sell.
The reason that no one knew how to make tapered centrifugally cast poles was because the molten metal would collect in the fat end of the pole due to centripetal force. Like a ball swinging from the end of a string, the force caused the molten metal to flow outward and it then it would creep down the mold toward the end with the larger diameter. Tom struggled with this problem. His early prototypes had a wall thickness of less than 1/8-inch at the tip and 1/2-inch at the base.
His eventual solution was to vary the rotational speed, infusion rate and other factors so that the metal would solidify in a perfectly uniform thickness along the entire length of the pole. His solution was a pole with a uniform thickness of 0.22-inch from tip to base. He had invented a commercially viable utility pole that was cheaper and stronger than those currently in use. In 2006 he applied for and was issued U.S. Patent No. 8567155, titled Centrifugally Cast Pole and Method.
McWane was very interested in Tom’s technology. Tom, believing that his invention was protected by the issue of the ‘155 patent, helped them adapt their cylindrical pipe equipment to produce the tapered utility poles. This would open up a huge new market worth hundreds of millions of dollars for McWane. But in the end, they decided not to license Tom’s technology. They decided to copy Tom’s patented tech and take it for free. McWane went into production and built a successful utility pole business using Tom’s invention.
Tom still had his business selling metal parts so he had enough money (he thought) to hire a lawyer to enforce his patent against McWane. In November 2013, he filed a complaint for patent infringement against McWane. McWane immediately filed a petition for Inter Partes Review (IPR) at the PTAB, and the district court case was put on hold.
This took place in 2014, the year of the PTAB death squad. Tom’s lawyer panicked. Rather than face certain patent death, he shot his client in the foot. He applied for a reissue patent. Filing for a reissue means giving up all the past patent rights and several years of rights while the reissue patent is pending. It is an admission that the original patent was a mistake and it requires an inventor to start all over again to obtain another patent. His reissue moved relatively quickly and issued in January 2015. But the reissue patent was very narrow. It did not cover all centrifugally cast tapered pipes with uniform wall thickness. Instead it focused on a secondary problem that Tom solved, the use of a “running ring” around the tip of the pole to help roll it through the factory.
I have seen this many times. The examiner and the attorney don’t know the law on obviousness or they don’t have confidence to properly apply it. They don’t appreciate that inventions are usually combinations of things that existed before. They think that the patent claim has to have something in it that has never existed before. Cylindrical pipes with uniform thickness existed. Tapered pipes with variable thickness existed. They don’t think it is good enough to invent a way to combine those. They want something more. So they added the “running ring” limitation to Tom’s invention.
This is not how the law works. The law requires a motivation to combine those references as well elimination of hindsight by considering objective evidence, such as commercial success. Everything is obvious after we know about it through a patent disclosure! What I have found is that the U.S. Supreme Court’s 2007 decision in KSR International v. Teleflex created this mess and weak-willed lazy lawyers and examiners have perpetuated it.
Rather than adding the almost irrelevant “running ring” limitation, Tom’s lawyer and the patent examiner should have fought for Tom’s right to his invention. Even if he wins with this new patent, McWane can design around the “running ring” limitation in a matter of weeks and there is nothing Tom can do about that.
Meanwhile Tom keeps paying his bills, trusting the experts, and believing that somehow, someday, McWane is going to have to pay him for his invention.
So Tom obtains a reissue patent, U.S. Patent No. RE45329, and he surrenders his first patent – the one that covered his actual invention. What about the IPR? Can you have an IPR on a non-existent patent? Tom’s lawyer shoots his client’s other foot, and gangrene takes both legs at the hip. He files a request for adverse judgment at the PTAB and says Tom didn’t invent centrifugally cast tapered poles with uniform wall thickness:
(iv) Patent Owner concedes the unpatentability of claims 1-9 of the ’155 patent under 37 C.F.R. § 42.73(b)(3);
(vi) Patent Owner agrees that the estoppel provisions of 37 C.F.R. §42.73(d)(3) shall apply with respect to claims 1-9 of the ’155 patent according to the adverse judgment entered by the PTAB;
“It’s okay Tom, we got you a real good patent now. Could you top off your retainer?” Sure enough, McWane is practicing the ’329 reissue patent’s “running ring” and all. Tom goes back to court. McWane files another IPR. The district court case is stayed. The touted faster and cheaper PTAB is not working out for Tom and it doesn’t work out for any inventors.
Tom’s lawyer explained to the PTAB how the “running ring” is different than a flange and so they shouldn’t cancel his patent. Again that is not the law on obviousness. It is perfectly legal and innovative to combine two things to make something new. The PTAB said the “running ring” is the same as a flange and flanges existed before so they issue a final written decision that Tom didn’t invent that either.
Tom throws good money after bad and hires an appellate attorney to take his case to the Court of Appeals for the Federal Circuit. In a few weeks, he will attempt to persuade the Federal Circuit that a “running ring” is different than a flange. But there is one thing which is made very clear by Tom’s story: No one but Tom cares about his invention. No one will help him defend it effectively. If he keeps trying to play the patent game of kings, he will become a pauper – a much worse position for having acted on the false promise of the modern American patent system.