Congressman Rohrabacher Introduces the Inventor Protection Act to Protect Inventor-Owned Patents

By Steve Brachmann
August 9, 2018

On July 26th, Congressman Dana Rohrabacher (R-CA) introduced H.R. 6557, the Inventor Protection Act, into the House of Representatives. This bill is the latest proposed piece of legislation to help undo some of the more damaging effects of recent federal government actions on patent law which have negatively impacted the ability of patent owners to enforce their patent rights against infringers.

Provisions of the Inventor Protection Act have been specifically designed to counteract aspects of a pair of decisions made by the U.S. Supreme Court which have limited both the legal remedy available to patent owners proving infringement as well as the option of district courts for filing patent infringement cases. As the proposed bill notes, the right to exclude others from practicing a patent technology through an injunction was stripped by the Supreme Court’s 2006 decision in eBay v. MercExchange. Likewise, patent owners are no longer able to file infringement suits in their home jurisdiction thanks to SCOTUS’ 2017 decision in TC Heartland v. Kraft Foods Group Brands.

Before anyone gets too excited, however, one of the aspects of this bill that needs to be pointed out early is that the legislation would create a definition for “inventor-owned patent” referring to patents which are held entirely by the inventor of the claimed invention; the provisions of this bill are limited to such inventor-owned patent. Thus it appears that companies acquiring patents from inventors will not benefit from the protections this legislation would afford to inventors owning their own patents. There also could be some question as to whether holding companies set up by an inventor to hold the patents for licensing operations would find this bill advantageous.

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To counteract the effects of TC Heartland, the Inventor Protection Act would give an inventor the right to bring a civil action for patent infringement where the defendant is subject to the court’s jurisdiction or where the defendant has committed an act of infringement. An inventor asserting an inventor-owned patent would not be limited to those jurisdictions where a defendant has a regular and established place of business. On the flip side, anyone seeking a declaratory judgment against a patent owned by an inventor can only do so within the district where the inventor is domiciled or where the inventor consents to have the action brought. Further, if the inventor is a party in an action involving an inventor-owned patent, the case can only be transferred to another venue if the inventor consents to the transfer.

The bill also rolls back the effects of eBay v. MercExchange by restoring the court’s presumption of irreparable harm to an inventor upon a finding of infringement. The proposed legislation would also create a series of simplified damages available to an inventor proving infringement of his or her patent. These damages include the total profits attributable to the infringing party’s use of the patented invention or 25 percent of the sales attributable to the infringing use. The bill retains the language enabling an inventor to request trebled damages for willful infringement while also including a presumption that the infringement is willful if the infringing party is an expert in the field of the invention.

The Inventor Protection Act would also give inventors some much appreciated ability to remove themselves from patent validity trials conducted by the Patent Trial and Appeal Board (PTAB). First, the bill prevents any executive agency other than the U.S. Patent and Trademark Office from making a determination about the validity of a patent within the executive branch. Further, the bill would prevent the USPTO from reexamining, reviewing or otherwise making a determination about the validity of an inventor-owned patent unless the inventor voluntarily agrees to that determination process. The Restoring American Leadership in Innovation Act, which is co-sponsored by Congressman Rohrabacher, goes much further in eliminating the PTAB entirely, but inventors would at least see some benefit from being able to preclude the patents they own from validity trials at the PTAB.

Randy Landreneau, the President of inventor advocacy group US Inventor, offered the following statement on the introduction of the Inventor Protection Act:

“A new day is dawning for American innovation as legislators are realizing that inventors have been effectively shut out of our patent system without any realistic path to enforcing their hard-earned patents. Passing this bill will restore confidence in patent rights and draw capital investment back to small disruptive businesses built on the ingenuity of American inventors.”

The office of Dana Rohrabacher has been contacted for a comment as to why this bill has been introduced after the Congressman co-sponsored the Restoring American Leadership in Innovation Act. His office has forwarded the following official statement:

“Innovation is the engine for America’s future prosperity. The continued efforts of inventors enable our country to maintain leadership in the global economy. The United States Constitution specifically secures for inventors the exclusive right to their discoveries, but, unfortunately, legal protections for those rights are on the decline. Too often we see multinational corporations stealing the property of those who do not have the resources to defend themselves, then tying up inventors in endless reviews and litigation. Worse, the system is now structured to make it economically worthwhile for those corporations to pursue this strategy. The founders of this nation rightly understood that property rights, including to one’s writings and discoveries, are essential to liberty and economic prosperity. That is why they were written into the Constitution.”

 

Images Source: Deposit Photos.

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

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 57 Comments comments.

  1. Independent Inventor August 9, 2018 9:58 am

    As an independent inventor, I no longer trust the names our government officials come up with to publicize their proposed Acts that at first seem to be pro-patent, but later proves to be otherwise. As patent owners, we must analyze each line of the Act before taking any stance or providing our support. Given what we have gone through in the past several years, it is all right for us to be suspicious of the intent behind any Acts unless the otherwise is proven. However, the good news is that Congressman Dana Rohrabacher was one of the original representatives who was against the AIA to begin with (here is the link: https://www.patentspostgrant.com/patent-reform-percolating/#more-113).

  2. Gene Quinn August 9, 2018 10:00 am

    Independent Inventor-

    You are right not to trust the names of bills, they can be extremely misleading.

    Notwithstanding, it is worth noting that Congressman Rohrabacher has been an extremely longtime friend to inventors of all sizes, and particularly to independent inventors. His resume on the issue is unimpeachable as far as I know.

  3. Anon August 9, 2018 10:41 am

    To me, this: “the provisions of this bill are limited to such inventor-owned patent.” is a show-stopper.

    No matter how well intentioned any of the provisions are, this introduction of changing a hard-core basic premise of fully alienable property is a lid to a Pandora’s Box that I would refuse to open.

    Sorry, but that alone is enough for me to reject this attempted change.

  4. SVI August 9, 2018 12:12 pm

    The point is interesting about companies acquiring patents from inventors not benefitting from the protections this legislation would afford to inventors. I wouldn’t have thought to make such a point because the bill entitles the inventor to enforce patent rights and command licensing fees, which is what ultimately gives patents their value. The tech goliaths don’t seem to care about these rights, so let them play in the morass they created for themselves. I rather like the dynamic. But first this bill has to become a law and I am skeptical that will ever happen.

  5. David Stein August 9, 2018 12:37 pm

    The “held entirely by the inventors” limitation is a can of worms.

    Does that mean: no assignments recorded? Fine. Employers simply won’t record an assignment; they’ll have employees execute assignments and then hold them privately.

    Does that mean: not assigned to the employer (whether or not recorded?) Fine. Employers will not actually have their employees assign the patents. They’ll just use employment agreements to obligate employees (a) not to assign to anyone else, (b) to hire and assist specific patent counsel to prosecute US/foreign applications, and (c) to agree to be named as the lead plaintiff in patent infringement lawsuits. The inventors’ obligations are purely nominal – the employer calls all the shots, pays all the expenses, and reaps all the rewards.

    Does that mean: not assigned to *anyone* else, including as part of a deal? Fine, employers will require the inventor to retain the rights but execute an exclusive license to a prospective purchaser.

    In all three cases, the “inventor-owned patents” qualification is meaningless. The legal obligations haven’t substantively changed – they’ve just been relabeled to take advantage of the law. We end up with functionally the same system we have today – and two side-effects:

    (1) The public is less informed about about who actually owns what. Patent ownership and rights are obscured through complex legal constructs.

    (2) Since every patent application remains owned by the inventors, nearly every application is subject to small-entity or even microentity fees. The PTO’s revenue plummets, and it has to compensate by doubling its rates (thus penalizing *actual* small entities and microentities who were legitimately entitled to, and in some cases depend on, the fee discounts).

  6. Independent Inventor August 9, 2018 12:39 pm

    Generally, any Acts proposed should at a minimum include 1) Patents are property rights and 2) Overrules SCOTUS’ decision that Patents are a Government Franchise. These are fundamental attributes in strengthening the patent system in America. Supporting a proposed Act that lacks these fundamental attributes would be dangerous. I have yet to read the Act proposed by Congressman Dana Rohrabacher to determine if these two fundamental attributes are mentioned or not.

  7. Josh Malone August 9, 2018 1:29 pm

    Anon, Pandora’s box was blown to smithereens with the April Oil States decision.

  8. Anon August 9, 2018 2:11 pm

    SVI @ 4,

    You miss an important point: for those that are serial inventors and invent, patent and then profit from the proceeds of selling the patent itself (as property), this bill removes the value of the property FOR THE individual inventor.

  9. Josh Malone August 9, 2018 3:48 pm

    Anon, this bill removes nothing. If you want to sell your patent you can sell it. If you want to keep your patent you can keep it.

  10. SVI August 9, 2018 4:11 pm

    @Anon #8 Forgive me if I’m misunderstanding your point, but I think I factored that in. The property (or government-ok’ed franchise according to SCOTUS Oil States) is only valuable insofar as it can be enforced and command licensing fees. Thus, the patent retains value assuming this law does as advertised and restores patent protections to the inventor. The tech goliath would want to acquire the patent defensively: to avoid licensing fees and cross licensing with other goliaths, and that’s what gives it value, even if it isn’t the same property rights to them as it is to me.

    At this point, we can’t hope for a real fix that would make the whole patent system look good. It’s the proverbial bad haircut game, where the system cut way too much away against the small business/inventor. If we’re now proposing to cut too much on the other side instead of make it all even, I think that’s the best we can hope for and frankly there are a lot of wigs, rogaine and other materials the other side owns to compensate–forgive the extended metaphor (pendulum works fine too). The goliaths have tons of money and IP attorneys on staff, and they shouldn’t have been mucking around with constitutional rights in the first place. If it comes back to bite them, great. But I remain skeptical.

  11. angry dude August 9, 2018 4:25 pm

    So I have an inventor-owned patent…

    Should I start jumping in exhilaration ?

    Don’t think so..

  12. Anon August 9, 2018 4:58 pm

    Josh and SVI,

    Both are still missing the angle that the object property and its innate value changes with this bill.

    “Who owns” as a value proposition in comparison to “What is owned” is an overall loser for the small entity – especially as I pointed out, the small entity who is a serial inventor and has no interest in the business aspects of whatever may be made BY or TO the patent.

    For those small inventors who only invent once (or only invent that which they use), this penalty of the bill is opaque.

    But it is a penalty nonetheless.

    See also David Stein’s post for other secondary penalty effects.

    Sorry, but no – it is a proven value for property to be fully alienable, which means that there can be NO strings of value tied to “who owns.”

  13. Josh Malone August 9, 2018 6:48 pm

    Anon, patents were changed with Hatch-Waxman, First to File, Ebay, AIA, and finally Oil States. This bill changes nothing more. You and I and most the readers here wish that patents were property rights. But they are not. Liberals do not think they are property. Conservatives do not believe they are property. Millennials do not believe they are property. Professors of law do not believe they are property. The Supreme Court does not believe they are property. Congress does not believe they are property. The PTO and the DOJ do not believe they are property.

    Patents were property. Now they are not. This bill had nothing to do with that.

  14. Anon August 9, 2018 7:55 pm

    Josh, as Greg DeLassus would remind you: Public Franchise Rights are still a form of property.

    As to the other groups that you mention and the overall disdain for innovation protection that is patents, I am not ready to quit and surrender.

  15. angry dude August 10, 2018 9:48 am

    David Stein @5
    “They’ll just use employment agreements to obligate employees (a) not to assign to anyone else, (b) to hire and assist specific patent counsel to prosecute US/foreign applications, and (c) to agree to be named as the lead plaintiff in patent infringement lawsuits.”

    That’s a little too much to ask for from inventors for the crappy salary they pay…
    I don’t think employment agreement can obligate anyone to initiate lawsuit
    Also good luck forcing unwilling inventor to assist corporate patent counsel:
    assistance will be purely nominal – like italian strike
    So they’d better pay very very well

    This said, I don’t think this bill has any chance of passing

    Patent policy agenda has been written and continues to be written in SV corporate boardrooms, not in Dana Rohrabacher’s office.. with all due respect

  16. Night Writer August 10, 2018 10:01 am

    Without a lobbying group with a lot of money to counteract Google et al. there is no way any bill to strengthen patents has any chance whatsoever. None.

    We are entering a post patent world for most of technology.

    Reality–what is happening is that corporations are catching up to what is going on. They are lowering budgets for patents.

  17. Anon August 10, 2018 10:37 am

    Night Writer,

    I reflect that the gist of much of what you have warned about has transpired, but do you have any actual data on the patent budget lowerings?

    I am simply not seeing that as of yet.

  18. Randy Landreneau August 10, 2018 12:03 pm

    Night Writer,

    A huge amount of money was behind the Innovation Act, a bill that had passed the House 325-91. It never got to the floor in the Senate, and then in the next Congress, it didn’t even get to the floor in the House. What stopped it was not money, it was dedicated, hard work communicating the fatal effects of that bill by a small group of people. With a little support, we can get this bill passed.

  19. angry dude August 10, 2018 1:51 pm

    Randy Landreneau @18

    “The bill also rolls back the effects of eBay v. MercExchange by restoring the court’s presumption of irreparable harm to an inventor upon a finding of infringement.”

    Randy,

    Don’t be naive
    Guys like myself won’t be allowed to come out of woods and sue Apple for all the patented tech it willfully stole from us (guess why Apple’s valuation is over 1 trillion ? – that’s precisely why)
    This bill has zero chance of passing as it is
    Money talks and money rules this country
    ONE TRILLION DOLLARS, dude, just imagine that

  20. Eric Berend August 10, 2018 2:31 pm

    @ 14., and 18.:

    Kudos to ‘Anon’ and Randy. Whatever differences I seem to have with their respective positions on certain aspects of this issue, this is NO time to “give up the ship”.

    Presently, inventors who wish to continue their practice likely should prepare for invention prosecution as a trade secret, if at all possible, and press for improvements in the severely damaged protections provided in U.S. patent practice. Some restoration may actually be viable; it is meet to consider the reversals of public opinion regarding surveillance based companies such as Facebook, lately.

    If enough gullibly deluded members of the public realize they were swindled into ganging up on such an underdog as U.S. inventors by the technoristocrats, then most of the perceived “patent troll” trend favoring the IP pirates to lawmakers and judges, will abate.

    Further, if the inventor community also improves its PR and issue outreach, particularly featuring younger inventors whose prospects harmed by the recent changes such as Tesia, then a much larger swath of the general population can personalize the story and have a much greater chance to achieve a more accurate understanding.

  21. Fellow Penniless Inventor August 10, 2018 3:30 pm

    Here’s the bottom line:

    Is this bill an everything loaf of bread I wish it was? No; it is not.

    It is, however, a very nice, greatly appreciated at least half-loaf to 95%+ of my fellow untold 1,000’s of penniless, if not buried in debt, independent inventors.

    A half-loaf looks like a whole loaf to the starving man.

    I’ll gratefully, graciously accept that half-loaf.

  22. SVI August 10, 2018 5:08 pm

    @Fellow #21 “I’ll gratefully, graciously accept that half-loaf.”

    Despite some of the replies above, it is a whole loaf and more. Nothing is being given up other than acknowledgement that the cat is out of the property bag. And this is a bad thing that patents have fewer privileges in the hands of big businesses? I understand that theory, but the real world is a long way from theory. I am saddened if attorneys and inventors alike can’t support this legislation as a much needed fix, and are actually willing to argue about it and wait for the patent fairy to come down from the sky and fix the system.

  23. Mike August 10, 2018 5:25 pm

    I appreciate Rohrabacher’s efforts and intentions, but he’s going about trying to solve the problem in the wrong manner.

    “‘Who owns’ as a value proposition in comparison to ‘What is owned’ is an overall loser for the small entity.” — Anon

    I agree with Anon here. In argumentation, the person making an argument should not have any effect on its merits; likewise, the entity who holds a patent should have no bearing on its merits. Patent attributes of being personal property should not be contingent upon who owns it.

    I do think, however, Rohrabacher et al should propose legislation to amend patent venue to at least allow actions in judicial districts where an inventor who is listed on the patent performed research.

    Rohrabacher’s limiting legislation to only inventor-owned patents greatly reduces the value of patents, as patents then become LESS valuable if desired to be sold by an inventor. Again, it shouldn’t matter who owns a patent. It should stand alone on its merits, and value should be independent of who currently owns it.

    I have patents all inventor-owned. So what happens if I want to create an inventor-only-owned LLC and assign my patents to this LLC? Would these patents still be inventor-owned?

  24. angry dude August 10, 2018 11:02 pm

    Dudes,
    Why are you so naive to believe that after more than a decade of worryless willfull infringement of thousandths of fundamental tech patents by the biggest US corporations, the US government will do anything to undermine those multi-billion (trillion dollar corps in case of Apple) corps ???
    Get down to Earth!
    To the morgue

  25. Greg August 11, 2018 9:35 am

    What will happen to these USA based giant efficient tinfringers whose lobbyist money bought them power to crush the independent inventor will be they’ll find the same new IP will drain to foreign nations who will protect IP rigjts– they’ll get defeated from another geographic vantage point from the same inventors…they will discover that they cannot and will not crush the independent spirit of innovation, from whence.all their OWN begginings hailed….didn’t Bill Gates buy rights to MSDOS for a few thousand bucks? You think China wouldn’t buy anotjer disruptive equivalent.for a few– just a few– :).bucks more? And they can gut the USA patent system with their hoards of money,, but another genuinely protective patent system somewhere else.will.SUPERCEDE the USPTO to be the next gen national wealth creators.

  26. Jianqing Wu August 11, 2018 9:58 am

    I really appreciate her effort, I hope that she will read my comment on the root problems of the patent system. My message may help her in dealing with a large number of contrary patent policy recommendations by so-called experts.

    The root problem is the common law enforcement model. The model once worked well for a very simple society, run by a ruler’s few wise men, and for a few things like torts and common law crimes. When society has become several magnitudes more complex than it was, the enforcement model has an inherent force to destroy it.

    Now, inventors can get no reward. The patent system has evolved in a zigzag course that is guided by inconsistent and conflicting court decisions, anti-patent decisions of past leaders in the PTO, and bad legislature. Without using a systematic approach, such a huge system cannot be maintained by updates, patches, fixes….

    The lawmakers, judges, and controlling examiners in the PTO have jointly destroyed the innovation culture and created a worst INFRINGING CULTURE. This culture is much worse than those in other nations. I have long found a pattern of using patented methods in the U.S.: when an invention is published, one or more companies will imitate the patented invention in about two years. Their design around efforts are changing terminologies, looks and feels. If an inventor has multiple inventions, the she or he will find same pattern for each invention. With so many systematic problems in patent law, corporations have absolutely no incentive (0.00) to even talk about licensing. When an inventor contacts them, what they normally do is returning no mail, ignoring invitation, or avoiding phone calls. The patent system now is only an instrumentality for extracting money from inventors and patent owners. It is in a coma state, but all serious problems are hidden by junk-science based performance data. PTO most quality controlling methods are based upon junk science. They have turned examiners to enter arbitrary rejections requiring high-school knowledge (matching one to two words, plus using the magic word of “rejection”).

    I believe that the category approach (where exception is created as exceptions to yet another exception) is the main reason for making the patent system a failed system. Thousands of rules, doctrines, and opinions directed to millions of uncertain areas in a huge number of technological areas create great confusion and a large number of conflicts. Patches and fixes will NOT work well for such complex system. It will most likely fail to achieve what is intended or create new problems that will against force the Congress/court/PTO to destroy a reviving patent system. After the system has reached a threshold point, fixes and patches will not work in long run. They should be used only as emergency relief to avoid further damages to the nation.

    My suggestion to Congress is that it takes a serious systematic approach to ending this infringing culture. This culture will ruin national prosperity. The Congress should study court doctrines, PTO rules and leader roles, and all prior legislatures in light of patent roles in the changed world. It must consider using a systematic approach (not by patches and fixes). In overhauling the patent system, the Congress must learn to reject the massive number of junk-science based policy guidelines in patent policies. The vast number of patent policy publications are based on abstract concepts, ratios of abstract concepts, comparison of abstract concepts, frequencies of abstract concepts, statistical analysis using poorly defined abstract concepts, and using cherry-picked variables…. One example of junk policy articles is A Patent System for the 21 Century by National Academy of Sciences (https://www.nap.edu/catalog/10976/a-patent-system-for-the-21st-century). The title sounds authoritative, but it is full of junk sciences produced by a team of people, most of whom are not trained in process, probability, statistics, group theory, optimization, or any subjective sciences. Most of them (with a few exceptions) had never invented anything or dealt with any invention.

    Junk-science based enforcement model naturally creates huge tension between corporations and inventors/patent owners. Then, corporations took advantage of junk-science-based patent policies to persuade courts, the PTO, and Congress to destroy the patent system. That is how we get into this everyone-loses situation. A nation cannot repeat the same. If Congress wants to look into the problems of those junk studies, I offer my help preferably at my own time schedule. I will prove in great detail the massive junk sciences in each of known authoritative patent police publications.

    As long as junk science is not recognized and rejected, a revived patent system will soon be condemned, again by manipulating junk science in patent policy research.

  27. Randy Landreneau August 11, 2018 11:33 am

    Angry Dude,
    I hear you. Believe me, I hear you. But consider that the Innovation Act passed the House 325-91. Anybody who knew anything said it would be impossible to stop it the second time it was in the House. Too many Members would have to change their votes and be labelled as flip-floppers. A very knowledgeable person told me that no bill in this position has ever, in the history of America, been stopped. But a very small, determined group presented the facts to 350 offices, and got some help from a few allies. The bill didn’t get to the floor. Angry Dude, it CAN be done, and your only hope is if it is done. So you need to help us. We have been doing all of this on very limited funds and with a very small group of individuals. I have personally gone broke fighting this fight. Help us and get others to do so as well. You and everyone else here need to join this effort.

  28. JPM August 11, 2018 1:16 pm

    As an independent inventor, in my opinion, this is a great bill. The folks at US inventor (Paul, Josh and Randy) put a lot of work into this, and I hope that it passes.

    It will give patents invented and owned by independent inventor’s teeth again – a patent with teeth has value, both enforcement value and sale value.

    It looks like this bill will help inventors circumvent the current system today that has been created over the years to thwart “patent trolls” It also looks like the folks in Congress (ie Issa, Lofgren etc) who cry patent troll, will have a hard time calling an inventor named on the patent a patent troll.

    I don’t agree at all with the term patent troll, it’s stupid, no one has defined what a patent troll is for many years. Are independent inventors patent trolls? I doubt that Congress thinks that independent inventors are trolls. We can all laugh here at that term, but the term is obviously very convincing to folks in Congress because that’s all they talk about when you say the word patent. You talk to a layperson on the street these days and you say the word patent and they think of patent trolls, which is very bad.

    But it is most likely agreeable amongst everyone that a patent troll is not an inventor named on the patent. This bill looks like a good compromise; Congress gets to protect the public from “patent trolls” whoever that may be in their mind, while also not killing independent inventors.

    In 2013, President Obama defined patent trolls as “folks who don’t produce anything themselves, they’re just essentially trying to leverage and hijack somebody else’s idea to extort some money from them”

    https://youtu.be/VQ4Zo0XyNsw?t=50

    He clearly was not talking about independent inventors and entrepreneurs. Folks in Congress who review this bill may feel the same way – that independent inventors are not patent trolls and therefore should not be subjected to the tools put in place to thwart “patent trolls”

    If this bill passes, inventors would have two roads to monetization a) enforcement in court or b) sale of the patent to a large corporation who is infringing. Today the doors on both of these routes are shut for most inventors simply because it is extremely difficult to enforce a patent due to the system that was put in place to thwart patent trolls.

  29. Software Inventor August 11, 2018 3:00 pm

    I hope we all can rally around the best of this proposed bill, and maybe HR6462, as the amendment process will refine the final product?

    Where is the chamber of commerce on this and patent reform lobby efforts?

    At a minimum, individually, for starters we can contact our representatives and request their support for the proposed bills. (Yes, I have done so.)

    Randy, Gene: What are next steps?

    Thank you for your efforts!

  30. Randy Landreneau August 11, 2018 3:00 pm

    A very critical issue now is that contingency representation for independent inventors is disappearing because of the difficulty and cost of winning a case. Without contingency representation, the majority of independent inventors have no patent rights, no patent system, and no reason to invent.

    This is not the America that became the innovator of the world. This must change. But it is harder to get a good bill passed than to stop a bad bill. The “usual suspects” can’t do this alone. Those who care about this issue need to step up. If nothing else, donate to USInventor.org to help us bring it.

  31. angry dude August 11, 2018 11:02 pm

    I remember that back in the beginning of 2012, before AIA became effective, I was writing letters to a handful of big tech corps with proposal to sue their fiercest competitor (e.g. with whom they had multiple ongoing patent lawsuits and other nasty disputes) for my patent’s infringement IF they take exclusive license to my patent .. for nothing… just to cover my legal expenses and a little extra something to help me pay for my kids college tuition
    Guess what ?
    I got now replies at all
    Those giant tech corps are in bed with each other even those they (CEOs) hate each other and sue each other all the time
    BUT if an independent inventor or small company surfaces with such a proposal they unite to crash a poor creature into oblivion

    At least I’m still here and paying for my kids college with whatever is left after wasting tens of thousands on patent fiasco

    Sorry .. but no more patents for me
    Show me the carrot first

    P.S. The bill is not gonna work even if it passes.. for the reasons I described above… not in high-tech at least

  32. angry dude August 11, 2018 11:37 pm

    There is good reason why most serious independent inventors who sued large companies for patent infringement did it as a shell corporation or an LLC
    The reason is to shield inventor’s own assets (bank accounts, house, cars etc etc) in case patent lawsuit is lost and judge orders plaintiff to pay for defendant’s legal expenses
    Patent lawsuits are never black or white – there are all shades of grey so even with a rock solid case there is at least 10-20 % probability of losing the case

    And for that reason alone the bill is not gonna work even if it passes .. which is very unlikely

  33. JPM August 12, 2018 10:46 am

    @32 angry dude, I don’t see how this bill disincentivizes an independent inventor from assigning her or his patents to an LLC that she or he owns 100% of and sues an infringer through that LLC.

  34. Anon August 12, 2018 12:09 pm

    JPM,

    The question was asked (but not answered) that is directly on point to your reply.

    Take – for argument’s sake – the following answer:

    ONLY the original inventor (and thus, NO transfer of any kind, not even to a juristic person controlled by the original inventor) is the only person protected by the benefits of the proposed law.

    Juristic persons – no matter how owned – are simply not legally the person of the inventor. So, transferring to the juristic person removes the benefits of the proposed legislation.

  35. JPM August 12, 2018 10:38 pm

    @34

    Anon, I’ve learned that nothing in life is perfect. If what you say is the answer to the question, then I still think that this is good legislation. Even it only protects an inventor if he sues directly in his own name and not via an inventor-owned LLC.

    Assuming that an investor-owned LLC does not benefit from the proposed legislation, there are most likely other ways that an individual inventor can protect their assets before filing a lawsuit. There are attorneys that specialize in asset protection (ie https://www.lodmell.com/), inventors could seek advice from those folks first to set up an appropriate asset protection structure to protect their assets (ie house, cars, cash etc) before suing any infringers. Asset protection structures are most likely costly but would be better than nothing.

  36. Mike August 12, 2018 10:49 pm

    “Juristic persons – no matter how owned – are simply not legally the person of the inventor. So, transferring to the juristic person removes the benefits of the proposed legislation.” — Anon

    Indeed, this, aside from the fallacy of property being treated differently based on who owns the property, is where the question lies for this proposed legislation.

    Suppose there is a patent with two independent co-inventors, and the inventors create an LLC and are the only legal owners of the LLC, and then they assign the patent to the LLC. Is the patent still “inventor-owned” in this instance, being that the only owners of the LLC are the inventors?

    I’ve yet to assign my patents to anyone, but if this becomes law, and if assigning to an LLC as above will not forfeit any of the inventor-owned provisions, then I might create an LLC and assign them to it. Otherwise, this legislation will be worthless, let alone its issue with “property discrimination”.

  37. Josh Malone August 12, 2018 11:45 pm

    This bill offers an alternate path. It is not obligatory. Inventors can assign their patents and suffer the public franchise gauntlet. Or they can keep their patent in their own name (or perhaps a wholly owned LLC) and enjoy the benefits. 99% of inventors are already risking everything they own and would gladly accept personal liability for the level playing field offered by this bill.

    The question of whether an assignment to an inventor-owned LLC would qualify can be addressed in the Judiciary Committee. Ya think they will give us a hearing?

  38. Mike August 13, 2018 5:40 am

    @Josh:

    I read over the discussion draft for this bill, and (k) should read:

    “The term ‘inventor-owned patent’ means a patent held entirely by the inventor(s) of the claimed invention.”

    Note “inventor” should be modified to be singular or plural. Reason: Most all patents/inventions have co-inventors, and these co-inventors, like a single inventor, do not fall under the so-called ‘patent troll’ narrative.

    Accordingly, if an LLC or Corporation that a) owns a patent and b) whose ownership is comprised entirely of the inventor(s) of said patent, it would seem that such a patent would still be “inventor-owned”. This is because the patent would still be “held entirely by the inventor(s) of the claimed invention”, being that the ownership of the LLC or Corporation is synonymous with the inventor(s) of the patent.

    Now, am I reading this right in that this legislation would bar IPRs from being instituted on inventor-owned patents?

    I do think such a bar should be legislated for pre-AIA patents (retroactive applications of IPRs not constitutional), but this bill would at least be a step.

  39. Josh Malone August 13, 2018 9:26 am

    35 U.S.C. §100 (f) The term “inventor” means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.

  40. Anon August 13, 2018 9:41 am

    Continued calls for “at least it is a step” and attempts to broaden the exclusion of “inventor-owned” to include non-(real person)-juristic persons continue to miss the point that the larger NET effect for all individual inventors is a step BACKWARD.

    By forcing the tie (of value) to be – and remain to be – locked with the personal inventor, the worth OVERALL of inventor owned patents take a serious hit.

    Alienability of property – and by that it is to be understood full alienability so as to protect all of the value of the property – is a US led experiment bedrock position.

    Messing with that position for the purported benefits adhering to a mere subset of a small group is simply blinding oneself to the overall set-back that such a move makes.

    Mike@ 38, (and to a degree @36), your move simply attempts to change the meaning of the juristic person by adding a new layer – or types – to juristic personhood.

    That’s not what the juristic person legal vehicle was meant to accomplish.

    Further, all of these contortions are being geared solely to a subset of individual inventors – those that invent and then hold on to their property. But this is the very thing wrong with the legislation vis a vis alienability of property. Mr. Malone provides that this is not an obligatory step, but the effect IS obligatory. The fact that certain members may choose to not sell does NOT divorce the real impact to those that choose TO sell. And that choice may come at varying times (end of life asset sales for an individual inventor ARE greatly impacted). This ends up being a “shiny” “I’ve got mine so screw the rest” moment, and very much plays into the Efficient Infringer meme of “Divide and Conquer.”

    JPM @ 35,

    Be careful with your “nothing is perfect” reasoning and stopping short of a full critical reasoning of the bigger picture. As I have noted, the NET takeaway here is a step backwards – especially when the full picture is evaluated.

    As to your “other ways” – why not then simply focus on those other ways NOW? Your answer of “there are other ways” need not be limited as being attempted. If those other ways are acceptable, why the legislation? If not acceptable, why the offer as an alternative?

    Again, the statement of “better than nothing” – without more – is really not a compelling one. Many times, steps are NOT “better than nothing.” Especially those that in the larger picture are actually steps backward.

  41. Anon August 13, 2018 9:45 am

    Josh @ 39,

    Thank you for the reminder. To pair that reminder, may I offer Stanford v. Roche and the emphasis there on the difference between a real life person and a mere juristic person.

    Attempts to change the meaning of juristic persons will not – and cannot – be as “straightforward” as those desiring to “save” this step want them to be.

    Sorry but no. The only avenue I see here for “saving” is to not attempt to put value on property tied to who the owner of the property is, thus constraining the full alienability of property (for all). That bedrock position must yet serve as a foundation of US patent law.

  42. JPM August 13, 2018 10:51 am

    @41

    Anon,

    I am sure that the folks at US inventor will run into the patent troll narrative in Congress as soon as they start to talk about protecting ALL patent holders and not just inventors. The bill is actually pretty simple, it protects inventors, which is great.

    Congress cannot admit that an inventor named on a patent is a patent troll, so it makes sense that inventors should not be subjected to the tools that Congress put in place to thwart patent trolls. I think it would be hard for Congress to justify calling an inventor named on the patent a patent troll, so this bill may actually pass. Patent trolls and inventors should not be lumped into the same bucket.

    Maybe the patent trolls, whoever they are, can go spend their own money and time figuring out how to convince Congress how to restore rights to ALL patent holders. In the meantime, this bill restores value for inventors, which is a significant improvement from the environment inventors are living in today.

    At least if this bill passes patent values will be restored for inventors. With value restored, two monetization routes will improve for inventors a) enforcement in court and b) sale for cash to an infringer who wants to avoid being sued.

  43. Anon August 13, 2018 12:08 pm

    JPM,

    The point at the risk of being rude is that it is NOT great to take a step back while thinking that at least a small step forward is being made.

    I do not mind legislation that might “thwart patent trolls” as long as that legislation does not impact a fundamental foundation – and one that WILL harm inventors. This bill does not FULLY do as you think it does and carries with it real harm because of the “must own” aspect. There is NO “at least” if you are not willing to see what must – of necessity – also come along with the foundational change. You are exhibiting the epitome of short term thinking. I do not say that to be mean, but the reasons why this is short term have already been shared. The “restoration of value” to a select few carries with just too much a decrease of value (and a decrease that affects the same select few – for reasons already given!).

    You have not fully thought through the impacts of a “must own” limitation on the property.

  44. Randy Landreneau August 13, 2018 1:39 pm

    Anon,
    Even with Gorsich, we lost Oil States 7-2. Inventors who don’t have a portfolio of patents can no longer get contingency representation (like they used to). Inventors who are not rich (the vast majority) have NOTHING. The source of virtually every game-changing disruption has been a few individuals with very little money. Are we to hope that somehow, someday a majority of our elected representatives will do the right thing when faced with an opposition that has more money and ability to influence than any group has ever had? American independent inventors who come up with something significant have no patent system. This cannot stand.

  45. angry dude August 13, 2018 2:50 pm

    Dudes,

    You just don’t understand the difference between suing large deep-pocketed SV company as an LLC and as you personally
    Just what kind of guts (or ignorance) it takes from an inventor to do it “pro se”
    I did this once and will never ever do it again…
    It almost cost me my marriage
    Immediately the attorneys from big national lawfirm representing their SV client threatened me with sanctions under Rule 11 covering their legal fees… in hundreds of thousands of dollars… if I screw up or just make a little misstep
    (Meaning I could lose my house and all other possessions and still be in debt for the rest of my life… garnishing my paychecks and stuff like that)
    The contingency lawyers I was talking to described the situation like this:
    “You caught a tiger by his tail. Now the tiger will do anything to get rid of you but you just can’t let the tiger go or he will turn around and eat you alive”
    Yeah… just like that
    They would only take me as a client if I managed to draw some blood from the tiger first… like not letting my case to be thrown out on DJ and proceeding to full discovery mode..
    I consider myself to be extremely lucky to be able to walk away *almost* unscathed (as opposed to be complete financial and personal ruin)

    For those of you who still believe an inventor can just go and sue large corp as a matter of doing normal business I suggest you watch the movie “Flash of Genius”

    And Bob Kearns was a hell of a determined sob, mind you

  46. Mike August 13, 2018 3:41 pm

    Anon:

    “[Y]our move simply attempts to change the meaning of the juristic person by adding a new layer – or types – to juristic personhood.”

    What move? I’m not attempting to change the meaning of juristic person. But if this bill, once law, does change the meaning by adding a new layer/type, why not use the law as written? Do not big businesses use IPRs to their advantage?

    Regarding alienability of property, patents as property became an alien concept with the AIA.

    I’m with you, and I don’t agree with having the value of a patent depend on who owns it. That seems illogical to me.

    But anyone who is shrewd will take advantage of laws written in their favor. Just like silicon valley currently does.

    If this ends up being a “shiny” according to some, well, there are those who are idealistic, and there are those who are realistic. Right now, the reality is that this is nothing, and the efficient infringers are leaning on their poker chips.

  47. JPM August 13, 2018 5:12 pm

    @44 Randy, I agree 100%. Keep fighting to get this bill passed. It will help a lot of folks.

  48. angry dude August 13, 2018 5:12 pm

    Mike @46

    Dude,

    Do you like playing poker game against the house (conglomerate of big industrial infringers)?

    Guess what ? The house always wins at the end

  49. Anon August 13, 2018 6:56 pm

    Randy @44,

    I fully agree with you. That changes nothing in concern with a step back being misconstrued as “at least a small step forward.” A step back is still a step back.

    Mike @ 46

    But if this bill, once law, does change the meaning by adding a new layer/type, why not use the law as written?

    First, the comment is geared to the mere supposition and suggestion TO change the law in a certain way (that the law at point does NOT cover).

    Second, the supposition and suggestion is called out as an example of convolution. In order to reach the supposition, the straight forward and ordinary purpose of juristic persons would need to be changed. As currently in place, it is quite simple that a juristic person is a separate legal entity than the individual real person. In order to preserve a (questionable – see my other points) desired end point, not only patent law is being asked to be tweaked (and the questionable part comes from the foundational aspect BEING tweaked), but additional non-patent law as well is being convoluted.

    The bottom line then is two fold, and it doubles down against the desired change.

    Hey, I am all for the independent inventor and for strong patents. Please make no mistake about that (and any review of my posts here would easily confirm that).

    I am simply not for THIS piece of legislation – for the ample reasons provided.

    As I have postulated – what merely appears to be “at least a small step” that is IN FACT (when the entire picture is understood) actually a step backward is simply not a good step to take.

    To move me, I am going to have to see BOTH that you understand the larger picture items that I have provided AND some cogent reasoning beyond that which I have seen for the mere subset of small inventors that would not be (immediately) impacted by some type of “must own”” condition. As I have provided, even those same non-immediate impacted inventors WILL BE impacted in the long run and at the larger scale events. “Must Own” is simply a step backward – for everyone.

  50. Wayne Borean August 15, 2018 3:16 pm

    The major problem with this bill is that Dana Rohrabacher will be in jail before it clears the House. Sad, but true.

    I have argued in the past that patents should be limited to ownership by living creatures, in other words non-transferable, with patent licenses limited to three years with no automatic renewals. We need to give power back to the inventors.

  51. Anon August 15, 2018 9:41 pm

    Mr. Borean,

    For reasons already provided, your “must own” idea is horrendous and would NOT “give power back to the inventors.”

  52. Wayne Borean August 16, 2018 1:09 am

    ANON,

    It depends on how the bill was written. I’ve been War gaming for fifty years. We say that people who would do that are playing the rules, and not the game.

    Sadly I’m one of the biggest rule lawyers out there.

  53. Disenfranchised Patent Owner August 16, 2018 9:05 am

    OK… so for tax and liability avoidance reasons, I/we assigned my/our patents to an LLC which I, as the first named inventor on all patents, control by virtue of having retained majority voting rights in the LLC. Minority interests were sold to outside investors to pay product development and patent prosecution costs and also kick start our licensing campaign. Do I still own my patents?

  54. Disenfranchised Patent Owner August 16, 2018 9:09 am

    “There also could be some question as to whether holding companies set up by an inventor to hold the patents for licensing operations would find this bill advantageous.”

    That statement is what caused me to raise the question… There was no “sale” involved, simply an assignment to an inventor controlled limited liability company.

  55. Anon August 16, 2018 10:17 am

    It depends on how the bill was written.

    I agree completely.

    Of course, this agreement simply means that if my points are properly reflected in “how the bill is written,” then I can support it, at the same time that if my points are not properly reflected in “how the bill is written,” then I cannot support it.

    This still leaves the underlying discussion as to why the points I provided NEED to be properly reflected.

    Disenfranchised Patent Owner @ 53,

    Your question is not (quite) the right question. Technically, yes, you still own the patents. Legally, it is not you that own the patents, but instead it is the juristic person of the LLC.

    Typically**, juristic persons do not separate their (substantive**) impacts as to any type of “the owner was the original inventor.”

    As I have pointed out – this is just not something that is even desirable (when the full picture is understood).

    Further, and as the response to Mr. Borean indicates, depending on how the bill is written (meaning, are the concerns properly addressed), if attribution to the owner can be effected WITHOUT impacting the core principle of full alienability, then I too would be all for it.

  56. Pro Se August 16, 2018 11:11 am

    For other inventors looking for some ideas for their letter/s, I’ll offer mine:

    VIA FAX, E-MAIL, AND PRIORITY MAIL

    The Honorable Ms. xxxxxx
    (address)
    (Phone)
    (Fax)
    (e-mail)

    6:47pm Wednesday evening

    Dear Ms. xxxxxxxx,

    I’m asking if you would be willing to help my fellow untold 1,000’s of current and future independent inventors throughout the country by joining your colleagues in co-sponsoring and supporting H.R. 6557, The Inventor Protection Act (attached).

    Since the startling eBay vs MerkExchange Supreme Court 2006 decision, our nation’s independent inventors have been subjected to repeated beat-downs by the courts and the patent office; to the point that it has become virtually impossible to earn a living from our inventions.

    It’s not right. It’s not fair. It’s not American.

    We’re not, “patent trolls” (whatever that derogatory, discriminatory, undefined term means). We don’t buy up the patents of others for the purpose of suing operating companies.

    We are the inventors.

    Throughout our country’s 200+ year history, our inventors have played a critically important role in our intellectual and world economic leadership (even our great Abraham Lincoln was an inventor). We used to be the world’s patent leader.

    But no longer.

    As the U.S. Chamber of Commerce reports, the U.S. Patent System has fallen to 12th Place in the Chamber Global IP Index for 2018.

    That’s how bad things have gotten.

    As Mr. Rohrabacher’s official statement concerning H.R. 6557 makes clear:

    “Innovation is the engine for America’s future prosperity. The continued efforts of inventors enable our country to maintain leadership in the global economy. The United States Constitution specifically secures for inventors the exclusive right to their discoveries, but, unfortunately, legal protections for those rights are on the decline. Too often we see multinational corporations stealing the property of those who do not have the resources to defend themselves, then tying up inventors in endless reviews and litigation. Worse, the system is now structured to make it economically worthwhile for those corporations to pursue this strategy. The founders of this nation rightly understood that property rights, including to one’s writings and discoveries, are essential to liberty and economic prosperity. That is why they were written into the Constitution.”

    As the rest of the world moves forward with patent protections, our country continues to move backwards. Year after year after year. China is eating our lunch.

    H.R. 6557 would restore confidence in patent rights and draw capital investment back to small disruptive businesses built on the ingenuity of independent American inventors.

    Which would generate many 1,000’s of new, high-paying American jobs / year. Including here in our own state of xxxxx.

    Please give me a call if you would like to discuss this further; or if you’d like to set up an appointment for us to meet. I live here in xxxxxxxx.

    Protecting our current – and future – 1,000’s of independent inventors is of the greatest importance.

    What would Abraham Lincoln do?

    Thank you for considering supporting this critically important bill.

    We sure need you and your colleagues’ help.

    Sincerely,
    // xxxxxxxxxx//
    xxxxxxxxxx
    Independent Inventor
    (address)
    (phone)
    (e-mail)

  57. jacek November 7, 2018 5:08 am

    Looking at the present mess I think my only option to have real patent is to fill abroad. For incenpended (read peniless) inventor the starting point I think should be “utility Model” patent existing in many countries. I think best protection (actual protection offers German Utility model where simple priority right registration for cost of 30 euros gives me 10 years of real patent rights. The first filling I can make in english and I have 3 months to deliver german translation which is not very expensive.The Hague agreement gives me design patent protection for up to 100 designs with 1 application and up to 25 years for the cost of filling patent rights in all 27 countries of EU for about $1000 with real protection coming in to effect instantly since again I am registering my priority rights. US is now part of Hague agreement but USPTO acknovleging property rights for foreign filled applications same time is forcing it own approach dividing my original 100 design international application in to 100 indyvidual applications for cost about $1000 each (Total cost of $100,000) and torturing me with 1.5 years wait before they even thake a look at it. Next year is coming in to effect “unitarian patent” allowing me to have protection with 1 application in all countries of EU. As inventor I look forward to moving completly out to EU and not to be worry about crappy and obsolete US patent system, How many inventors you think is going follow same route? They already are.

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