On Presidents Day, many will spend a moment or two remembering President George Washington, if only because his likeness is used this time of year in a never ending stream of commercial advertisements. But did you know that President George Washington was a champion of the U.S. patent system? Indeed, Washington, who presided over the Constitutional Convention in Philadelphia, helped ensure inclusion of the now famous patent clause into the Constitution.
Washington’s interest in a patent system did not cease with activities in Philadelphia. President George Washington devoted an unusual amount of time talking about patents in his inaugural address, and also again in the first ever State of the Union address. He implored Congress to take action on a Patent Act, the importance of which he believed to be rather self-evident. Furthermore, as a merchant and entrepreneur in Virginia, President Washington became the first licensee of an issued U.S. patent, licensing a patent from an inventor for his gristmill.
James Madison, the force behind patents in the Federalist Papers, the father of the Constitution, and later President of the United States, also believed the importance of Congressional authority to grant patents to be self-evident. Madison would correspond with Thomas Jefferson, who was initially skeptical of patents, eventually winning out and convincing Jefferson of the merits of a patent system for the fledgling America.
The vision of George Washington and James Madison for a U.S. patent system would take unexpected turns. It seems that, while Jefferson eventually acquiesced, he did not go quietly into the night.
From Examination to Registration
When Washington was President he gave the patent office to Jefferson, who was then Secretary of State, thereby making Jefferson one of the first U.S. patent examiners. Washington put Jefferson in charge of bringing peace to the heated competition between Jefferson and Alexander Hamilton, a very loyal protégé to Washington during the war. Hamilton, who became Secretary of Treasury for Washington, had a very different view of the role of the national government in finance than Jefferson. Hamilton wanted the patent office responsibilities, but Washington gave it to Jefferson because he was a tinkerer and inventor.
Given his large library, Jefferson was able to read about inventions from others from overseas before word got to the U.S., so he had a time advantage. Perhaps that is why Jefferson really hated examining applications and instead spent his first three years in office and the first three years of the patent system lobbying Congress relentlessly until they changed the system from examination to registration in 1793.
Jefferson’s move from an examination system to a registration system was unfortunate for at least several reasons. With a registration system, races favor those with resources who can afford to purchase and import books. Such a system was contrary to the purpose of the discoveries or patent clause, which was a trade between the inventor and the government so that she would share her secret with society earlier and diffuse innovation more broadly into what was an agrarian and illiterate community that had nothing but grit and rebellion. It should be noted that the Founders in Philadelphia specifically rejected the English patent system, which rewarded those with resources to manufacture an invention with winning the race to obtain a patent. Despite Jefferson not being present in Philadelphia, it seemed that he would get his way on patents.
Registration shunted Yankee ingenuity and entrenched elitism. So people worked around it by going overseas to copy looms and other early industrial age inventions and bought them back to the U.S. via financial syndicates.
The System Gets Rebooted
It was not until President Andrew Jackson brought his friends from the insurance industry from New York City to Washington, D.C. to design a new patent office that would be fireproof (the office with the patents and models had burned a few times) and a new patent statute that restored examination. On July 4, 1836, the U.S. patent laws were amended, this time to directly and specifically take into consideration the possibility that more than one inventor or inventive entity might apply for a patent on the same invention and that the patent should go to the first and true inventor. See The Patent Act of 1836.
Under President Jackson, in July 1836, America rebooted the patent system and started numbering patents from 01. The prior patents under the Jeffersonian registration system were re-designated with the letter X. U.S. Patent No. 1 issued on July 13, 1836, and covered a locomotive steam engine.
Are We Back at “Y”?
Since the American Invents Act (AIA) in 2011, we now have a Patent Trial and Appeal Board (PTAB) within the United States Patent and Trademark Office (USPTO). This PTAB has the authority to hold administrative trials for the purpose of stripping property rights from patent owners. By far the most common PTAB proceeding is inter partes review (IPR). Sold to the public as a cheaper, faster means for resolving district court validity disputes, PTAB proceedings have proven to be anything but cheap, costing upwards of $1 million for a patent owner. The Patent Office refuses to presume challenged patents to be valid, which on its face seems to directly conflict with 35 U.S.C. 282. In short, procedural safeguards for patent property right owners that are ensured in federal district court are simply not present at the PTAB.
Perhaps we should once again re-designate all issued patents, this time with the letter “Y” after they survive what is essentially a de novo redo by the USPTO. Why “Y”? “Y bother to patent anymore”? Or perhaps “Y bother to spend the time and money for a lengthy and onerous examination process that seems to mean nothing”?
It is time for us to ask an uncomfortable question: Has examination today just reverted to de facto registration? The answer for patent owners caught up in post grant proceedings at the PTAB is a resounding YES. We have a registration system, albeit it an extremely costly registration system. You simply cannot rely on the patent granted unless and until the PTAB ratifies the claims in a post grant challenge. Only PTAB super litigated patents are to be deemed legitimate and enforceable. No other patents are even entitled to the presumption of validity, not even by the agency that granted the right in the first place.
The sad reality is that, to obtain a commercially viable patent that is entitled to any kind of a presumption of validity, you will need to spend years in a byzantine examination process and tens of thousands of dollars. Then you will need to spend years in the post grant procedure and appeal process, and upward of $1 million. Such a ridiculously expensive sum puts the U.S. patent system out of reach of the average person and small business, which is precisely what Washington and Madison opposed. They did not want a patent system only for the elite, as was the case in Britain.
So on this Presidents Day, it may be time to start asking whether the United States has a “Y” patent system, that, like the British system from so long ago, only benefits the elite class.