President Donald Trump Should Investigate the Corrupt Patent System and Passage of the AIA

By Emil Malak
May 17, 2019

“Courts should never be tasked with dealing with the complexities of patent validity because they lack the necessary technical expertise.”

https://depositphotos.com/10088061/stock-photo-opinions-talking-comments-and-feedback.htmlI am Emil Malak, CEO of VoIP-Pal.com Inc., and a named inventor on two U.S. patents–Mobile Gateway: US 8,630,234 & Electrostatic Desalinization and Water Purification: US 8,016,993. To date, our company owns 22 issued and or allowed patents, which we developed over the past 15 years. Against all odds, we have been 100% successful in defending eight Inter Partes Reviews (IPRs): four from Apple, three from AT&T, and one from Unified Patents. We are presently in litigation against Apple, Verizon, AT&T, Twitter and Amazon.

My experience with Voip-Pal has made it painfully clear that the deck has been stacked against companies who own IP being used without license by large tech companies. The America Invents Act (AIA), orchestrated by Silicon Valley, was designed to destroy the very ladder they climbed to ascend to their lofty perch, and make certain that they could not be challenged.

Tipping the Scales of Justice

Owning a patent used to be the dream of every small inventor in America. For more than 200 years, the intellectual property rights of American inventors—both big and small—were protected by patent laws that encouraged innovation and risk-taking for the promise of reaping financial rewards for their inventions. That all changed in 2011 with the passage of the Leahy-Smith America Invents Act (AIA), which has since caused irreparable harm to the United States’ patent system and has stacked the deck against the little guy in favor of the Silicon Valley and other giants. Post grant reviews of issued patents existed prior to the AIA, but the AIA, through the creation of the Patent Trial and Appeal Board (PTAB) and the Inter Partes Review (IPR) created a post grant review process hostile towards patent owners. The lack of oversight, appointment of judges with apparent conflicts of interest, and allowing unlimited challenges to a single patent regardless of standing are just a few of the changes that placed a heavy hand on the scales of justice weighing in favor of Silicon Valley.

At the time, members of Congress said they were enacting legislation that would strengthen and streamline patent protection law, passing it by overwhelming majorities of 71% in the House and 95% in the Senate. However, eight years after its passage, the evidence clearly shows they have crippled the patent system.

This was never about streamlining the patent system—in fact, it has had the opposite effect. Instead of going into court to adjudicate an infringement case based upon the merits of the granted claims, the process is all about stalling, obfuscating, and forcing small companies to burn through their capital fighting a system that has been paid for by Silicon Valley. The AIA provided the legal mechanism for the Silicon Valley and others to destroy small companies and inventors, drain their limited resources and drive them out of business.

Small patent owners often engage in the futile effort of attempting to license their patents. Discussions with big tech companies are mostly fruitless and usually prove to be nothing more than a delay tactic by the infringer. The inventor is then forced to turn to the courts for enforcement and sues the unlicensed user of the technology. A lawsuit by the patent owner will usually trigger the IPR process. More often than not, the infringer will succeed in revoking all or part of the asserted patent. Even if the infringer fails in their efforts to cancel the patent, they will have succeeded in stalling as much as 18 months, costing the inventor precious capital, and knocking many out of business.

Leave Patents to the USPTO

Courts should never be tasked with dealing with the complexities of patent validity because they lack the necessary technical expertise. Patent validity issues such as sections 101, 102, 103, indefiniteness, and all other technical matters should be decided prior to a patent being issued by technically qualified examiners at the USPTO, not by the court. Once issued, a patent should only be challengeable at the USPTO, and only for a predetermined period, i.e. six months. The courts should only decide matters of infringement and damages.

No aspects of patent law should ever be subjective. Congress can fix the inconsistencies between the USPTO and the courts and put them on the same page by passing laws that clearly define patent validity guidelines, i.e. what is abstract. Life in the 21st century is dependent on computers. Consequently, many software-centric patents adding new inventive steps are being developed, only to be labeled abstract by the courts and invalidated. The lack of uniformity is responsible for nullifying valuable patents and strengthening the chokehold the Silicon Valley has on the necks of small inventors. Courts should only deal with infringement and damages based solely on clearly these defined guidelines.

Director Iancu has a very tough job ahead. He inherited a broken system, heavily biased against the little guy. Since taking the reins he has made positive changes and has shown his commitment to leveling the playing field for all inventors. He recently published revised 101 guidelines for his department that he hopes will lead to changes in how the Federal Circuit views eligibility under 101. To date, the courts have refused to apply the USPTO’s guidelines.

The current rigged system is killing innovation in the United States. In this time of special prosecutors, it is appropriate for one to be appointed to investigate exactly how we got here. There are many questions that need to be answered:

  • What role did political contributions by Silicon Valley play in the passage of the AIA?
  • How did Google get unprecedented influence over policymaking during Barack Obama’s administration? Why did Google and its affiliates, led by former Executive Eric Schmidt, log 437 official White House visits during the first 7 years of Barack Obama’s presidency?
  • Did Google’s unfettered access to the Obama White House play a role in the subsequent dismissal of pending Antitrust litigation by the Federal Trade Commission (FTC) against Google?M

After spending the last 15 years dealing with patent issues, my advice to inventors and small companies is to not waste their time and money spinning their wheels in the current patent system. It takes too many years and often millions of dollars to secure a patent, only to have it taken away by a hostile IPR process. The USPTO has the most technically competent examiners in the world. These highly qualified experts in their field work diligently to issue quality patents, only to have their work erased by the PTAB and the courts. Despite their efforts, the value of the patents they carefully issue is often worth less than toilet paper. The AIA has reduced once valuable patent ownership into a fraudulent representation of what it used to signify.

Silicon Valley’s Lack of Vision

While the Silicon Valley conspires to steal intellectual property and stifle innovation, supported by the PTAB and the court system, China’s Shenzhen is emerging as a technical powerhouse; with plans to install 7,000 new 5G base stations this year alone. If the Silicon Valley continues their suppression of technological innovation, they will be displaced by Shenzhen as the hi-tech leaders of the world.

Overhauling the Current System

If the United States is to lead the world again in patent protection and innovation, the AIA must first be repealed and replaced with a set of laws that protect innovators and offers them the opportunity to profit from their inventions. The patent issuance process should be streamlined. It currently takes many years to issue a single patent, often followed by several years and potentially millions of dollars in post-grant defense costs. Reduce the issue time to one year and allow a six-month post-issue period for any challenges, which should all be handled by technical experts at the USPTO. The USPTO can fund these changes by increasing patent filing and issue fees. It is preferable for an inventor to spend $30,000 in fees for a patent’s issue within a reasonable amount of time than to get stuck in a process that takes years for issuance followed by more years and millions of dollars to defend.

The Important Question of Antitrust

Is Silicon Valley attempting to turn us into a corporatocracy through massive political contributions and their influence over policy making? Have they become too big and too controlling?  Does the AIA rise to the level of fostering antitrust and anti-competitive practices described in the Sherman Anti-Trust Act (1890)? Did its passage by Congress and its eventual implementation violate any antitrust or anti-competitive laws? Was the AIA a collaboration between paid politicians, the Silicon Valley and the USPTO to stifle competition? Only a special prosecutor can answer these questions.

Some have made the case that the AIA has all the ingredients of antitrust. It has undoubtedly given the upper hand to the infringers and makes it nearly impossible for the small inventor to monetize their inventions and intellectual property. One thing is certain; if the AIA had been in place 40 years ago, the world would never have known Bill Gates, Steve Jobs, Michael Dell or Mark Zuckerberg. The tech giants of the time, IBM and Texas Instruments, would have used the PTAB to eliminate them in the same way Apple and Google do today.

It’s time to take a serious look at breaking up monopolistic corporations like Facebook, Google and Amazon. Facebook and Google, especially, control the flow of information in the United States and worldwide. They are restricting the free flow of ideas, news and opinions, and manipulate search engine and newsfeed results for their own purposes. With some obvious exceptions like child pornography, sex trafficking, drugs and harmful scams, they should not be the arbiters that decide which information people receive. They have to cease in being a political platform. Information should flow freely without going through a corporation’s biased filters.

Recently, Facebook co-founder Chris Hughes and Silicon Valley investor and former mentor to Mark Zuckerberg, Roger McNamee, have publicly called for the breakup of Facebook. In addition to Facebook, McNamee is also calling for the breakup of Google and Amazon, which he says have all undermined democracy, violated user privacy and gained monopoly power. The transformation of the U.S. patent system over the past decade is evidence of the harm caused when companies like these are allowed to monopolize their industries. These powerful providers of information have become “governments in waiting.” Capitalism only thrives when the rules encourage innovation and competition.

I am not making accusations. I am only hoping that we can dig deep and get to the bottom of what happened that caused the radical transformation of American patent law and injured so many inventors and stakeholders. We need the appointment of a special prosecutor to investigate these matters. Every day I wake up and work diligently to move Voip-Pal forward towards monetization. We are no stranger to the landmines which have been laid by the AIA, but we will keep battling until we succeed. As long as I am breathing, I will continue to fight for each of the more than 4,600 shareholders I represent.  America will always be the greatest country for freedom and justice in the world. 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Voip-Pal.com Inc.

 

Image Source: Deposit Photos
Photo by iqoncept
ID: 10088061

The Author

Emil Malak

Emil Malak is the largest single shareholder of Voip-Pal.com, Inc., a publicly traded company where he serves as a Director and Chief Executive Officer. He has spent the last 16 years overseeing the development of the company’s intellectual property comprised of more than twenty telecommunications patents in the United States and several international patents in Europe, India, Canada and Indonesia. In addition to his work as Voip-Pal’s CEO, Mr. Malak has spent the last 7 years involved with a medical research team of doctors, serving as the chairman of the board of Thorne BioMed Ltd. They are currently conducting cancer research in Germany where they are committed to pursuing a possible reduction to cancer metastasis.

For more information or to contact Emil, please visit his company profile page.

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 20 Comments comments.

  1. Pro Say May 17, 2019 6:28 pm

    Thanks the excellent post / article Emil.

    Best wishes for success against the infringers.

  2. David Hoyle May 17, 2019 7:36 pm

    An excellent and factual article, written about the current status of U.S. intellectual property. Whether one is involved in patents or not, this is too important, too critical to the future of the USA, to ignore! Where is the outrage? Until we all “collectively” rise up and say enough!! This weakening of innovation in the USA will continue.

  3. Holly Mary May 17, 2019 8:05 pm

    Silicon Valley donates hundreds of millions to elect Democrats and Republicans to the house and senate, no chance Trump, Andrei Iancu, Sen. Tillis and Sen. Coons will stand a fighting chance, patents are dead in America, Silicon Valley do not like paying for Patent licenses and theft is a lot more cheaper. Thanks to 101, EBay, Alice, Mayo, TC Heartland, Oils. Case… game set match, Silicon Valley wins.

  4. Right May 17, 2019 10:18 pm

    Reason patents are dead in America is because Silicon Valley killed patents so they do not need to pay for patent licenses. Law s like 101 EBay Alice Mayo TC Heartland Oil case all helped to kill off patent rights. It’s not hard to know how they killed off patents but how do you STOP special interest groups from buying out the Republican and Democrats from doing the right thing when Silicon Valley donates hundreds of millions to Keep patent law weak.

  5. David Hoyle May 17, 2019 11:02 pm

    This is a David vs. Goliath battle. Yes! We have them right where we want them.

  6. Patatt May 18, 2019 6:32 am

    So if publish a paper disclosing my invention in a little known publication, and you file an application for the same invention, and the Examiner doesn’t find my paper in the 4 hours he has been allotted to perform the search, and I am unaware of your hypothetical protest period… That’s it? Now you have a patent on my invention? Who is the little guy here, because anyone trying to enforce or license an invalid patent is the bully. If you have a valid patent, then IPRs shouldn’t frighten you.

  7. Ramy S. Shenouda May 18, 2019 9:19 am

    Emil, your article expresses the frustration all small inventors have. We too have inventions being infringed on by large corrupt corporations who raped the U.S Patent System by buying unethical politicians in Congress.
    We must all stand together and file a class action against evil corporations and their corrupt puppets in Congress whose blind greed is destroying American Innovation.

  8. A Patent Is Property May 18, 2019 11:00 am

    A patent is property. The law clearly says it. Senator Coons said it in committee. Congress intended it and continues to intend it. The Supreme Court got it wrong in Oil States saying otherwise and ignored 35 USC § 261 which already states “patents shall have the attributes of personal property”.

    Second, Article 1, Section 8 clearly recognizes a constitutional right of an individual to invent. The exercise of that right does not, and cannot, be conditioned on waiver of other constitutional rights. Congress can never legislate away your right to trial by jury. There is no other constitutional right that, when exercised, extinguishes another constitutional right.

    The AIA is clearly wrong in this regard. There should be no IPR available for any patent owner who demands a jury trial.

    The “A Patent Is Property Act” makes this clear. Please support it by sending a copy to Senator Tillis and Senator Coons.
    https://drive.google.com/open?id=1oJI-kR72T2nYWQoJFGFrBMNjOAKdDUZq

  9. Pro Say May 18, 2019 12:38 pm

    Patatt: ” If you have a valid patent, then IPRs shouldn’t frighten you.”

    Says the guy who’s never had to reach in to his own pocket to pay for one.

    Or even far worse; had to reach in to his own pocket to pay for IPR after IPR after IPR after IPR after IPR … on the same patent.

  10. David Hoyle May 18, 2019 1:02 pm

    Patatt
    Then you don’t understand what is going on. In my case, we had three judges. Two with 100% cancellation rates and the third with a 97% cancellation rate. Averaging the three, we had a less than 1% chance of success before the trial even began. That’s not justice. And anyone who is not afraid of those kind of odds is a fool for believing that any form of justice exists at the PTAB.

  11. JC May 18, 2019 2:50 pm

    An excellent article. It is clearly written, well supported and places the responsibility for the US losing out to offshore innovators squarely where it belongs. I believe the Obama administration and the Obama era Congress was willfully complicit and blinded by millions of dollars in campaign contributions from big data and I believe it is perhaps one of the biggest and most widespread bribery schemes of modern history. President Trump should investigate this Corruption.

  12. PTO-Indentured May 18, 2019 3:40 pm

    Google Tricks US Congress into Handing IP Lead Over to China (Forever?)

    In the realm of global IP mastery, China must love Google. Because IP-wise, it sure looks like Google made the U.S. Congress China’s ‘BFF’ (best friend forever). How? Congress, thanks to big-elite-tech money influenced AIA rule-making, and dubious-at-best AIA implementation, sent the PTO into a nosedive, which essentially and (no coincidence) wittingly annihilated a once long-honored American Invention profession, unaware that a patent Tsunami, swelling up in China was about to swiftly follow, U.S. bound.

    Think about it, in a way Congress has never been able (or willing) to see: which country now benefits the most by an intentionally-weakened U.S. patent system? / by making it impossible for American Inventors to survive (let alone prosper)? While the U.S. patent system severely degraded by a hoodwinked Congress, plummeted in global stature, China’s move to dominance in IP filings and patent defensibility continually improved (as will their improvement in the quality of patents filed). Don’t think so? Take a look at how China-made handeld devices are now eating the lunch of Apple and Samsung ones priced 3X as much.

    What Congress also does not get, is that the Asian leader–known for centuries to see and plan strategies in the long-run (not a U.S. IP strong suit)–having reached an impressive stature as the number one filer of patents internationally, has already stated that their number of such filings will be tripled in no more than a couple of years. In contrast, what did we–the Made in America / IP community get? Arguably a darkest era in the history of the U.S. patent system, wrought by a congress, executive branch, and courts at all levels just flat out ‘not getting it’, oblivious to the economics at play and to how the U.S. patent system was ‘bought and sold out’ under their watch, if not facilitated by continuing under-informed lock-step, anti-patent thrashings. Who wins whenU.S. patents lose? China. Why? Because Congress was tricked, again and again into handing IP global leadership (and momentum) over to China.

    Congress, it’s your move.

    Don’t make ‘Congress’ and ‘leadership’ an oxymoron IP-wise. Don’t be fooled yet again. Be ‘IP-wise’.

  13. Ternary May 20, 2019 12:14 am

    There is this returning and unsubstantiated belief in society that only large institutions (companies and universities) can and will do the major inventions, developments and innovations for the future. It is (again) believed that the time for “independent inventors” has come and gone. Many people now believe that inventions by independent inventors are marginal at best and in general not relevant to future innovations. In that sense it is often accepted that protection of interest in IP of large companies is more important than IP protection for independent inventors.

    This conviction that “institutions” are more important for innovation and more important to technological development has occurred in waves during our history. And this short-sighted opinion (despite our recorded history of the enormous economic significance of independent inventors) is often supported by our politicians.

    Politicians pay lip-service to the gigantic influence of independent inventors, out of political convenience, but in fact vote against the interest of independent inventors (AIA). I understand it somewhat that it is extremely difficult not to be impressed and convinced by the tales spun by companies, on why their interests should be considered first and why they should be supported over independent inventors. I would almost believe them, if history did not show exactly the opposite. Clearly, it is hard for politicians to believe in their own message on the strength of the American spirit.

    Empirical experience shows over and over and over again that institutional R&D eventually runs out of steam and that truly novel economically innovative developments will often come from independent inventors. Sometimes it is once in a life-time discovery. But often it is a series of related inventions done by independent inventors.

    A simple and relatively inexpensive way to stimulate independent inventors is to protect their inventions with meaningful, reliable and affordable patents. This is a message on a broken record, that has to be played for every new generation. An expensive lesson we have to relearn during economic malaise and that is easy to remedy. Why wait until the next malaise or in this case until China has demolished our technology base?

    Just in case you don’t believe me on the downfall of established companies, here is a current event to remind us: on May 19 2019 they blew up a 21-story building in Bethlehem Pennsylvania, former HQ of Bethlehem Steel, one-time employer of over 100,000 people, going bankrupt in 2001 and dissolved in 2003, never to be revived again.

  14. jacek May 20, 2019 2:02 pm

    I completely agree with the article published above.
    But from practical point of view what should I do with my work?
    I am going apply for a patent in jurisdictions where there is real patent law (EU) In US I am going apply only because of the public disclosure time limits after I apply in EU. In US i am going play long waiting game in hopes the USPTO issued patents will regain its value if the Congress decide to act. Actually the long 5 years wait for USPTO to touch my application is very helpful plus I can add the12 months of provisional application. So it is going be 6+ years of wait before anything is going be eventually issued in US. But seriously for now my focus is on EU.

  15. Benny May 20, 2019 2:31 pm

    Jacek,
    You would be surprised. Three of my recent applications received first action before publication. A couple of competitors applications received notice pf allowance before publication.

  16. anonymous May 21, 2019 8:38 am

    Ternary @13, great post.

    Individual inventors need to coalesce around a word or phrase, perhaps “the constitutional right to invent” or the “individual right to invent.” We often forget the Constitution provides congress authority “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” It is this individual right to invent that all patents must secure. Large companies merely convince individual inventors to assign the fruits of this individual right, in exchange for a salary. Obviously, the “right to invent” does not need to be exchanged for a salary. An individual can profit directly from his or her own invention.

    The term “patent troll” gained traction only because an entire industry repeated it often, controlling a false narrative. The term “efficient infringer” accurately describes big tech, but the term hasn’t really caught on.

    Big tech is stealing the “independent, constitutional right to invent.” Congress (for now) has attempted via the AIA to place the “right to invent” in conflict with a right to trial by jury. A constitutional “right to invent” can never require waiver of a jury trial.

    So, repeat it often – an individual inventor has a constitutional right to invent. Infringement by big tech is stealing an inventor’s right to invent.

  17. Anon May 21, 2019 11:58 am

    anonymous,

    I predict that your view here will NOT catch on so easily.

    First, the “Efficient Infringer” tag is both far easier to say and far easier to comprehend. It that easier catchphrase is struggling, then your more difficult position appears to face a more uncertain acceptance.

    Second, your view is not entirely accurate. You both overstate and understate just what the Constitutional clause means.

    On the “overstate” side, you need to recognize that the Constitutional power is a “which branch has the authority” type of power. Along with this, it would help you immensely to recognize and understand the nature of an inchoate right, and what that means specifically towards inventorship.

    On the “understate” side, it may help to realize that THAT Constiutional grant is directly tide to the REAL PERSON of an inventor (see Stanford v Roche). We very much do have a current political/legal problem of living in a time of “Corporatacrazies” (exacerbated by the likes of Citizens United), and we have an unhealthy shift in power towards NONREAL PERSONS (juristic persons).

    Also on the understated side is that the delegation of power is directly to SECURE. There is NO POWER provided to de-secure once a grant has been made. THAT grant is a very real point in time of actual LEGAL property creation, turning the inchoate right into a full legal right.

  18. Ternary May 21, 2019 1:11 pm

    anonymous. Denial of software patents is actually more devious and more deliberate than we think. The great advantage of being a large organization is having a substantial cash flow. That allows you to develop,and proto-type a new device. It is an advantage that independent inventors generally do not have. (try to have a proto-type developed. That is a very costly undertaking).

    However, and that is a large HOWEVER, software inventions are generally cheap in materials to develop. They may take a lot of time, insight and “transpiration” but not a lot of money investment. If you need to prototype, as in cryptography, error-correcting coding, image and signal processing, you may need only a computer with some dedicated software.

    This makes independent inventors as an economic threat to incumbent companies very real when they are protected by patents. This was demonstrated in RIM v. NTP. This gave the industry an impetus to promote weakening of software patents. In final assessment it was decided that “trolls” like NTP had with enforceable patents an asset that was just too powerful. The calculation was made that these large companies could not effectively (by doing their own inventions) protect themselves from independent inventors (now called “trolls”). The reason is and was that in software there is so much independent talent out there (including inventors fed-up with corporate America) with new an brilliant ideas that, once articulated, could easily and cheaply be developed into extremely powerful patents. Rather than considering this an advantage of our patent system, it was considered a threat that had to be ended. The whole troll narrative was deliberately hyped in the run-up to the AIA.

    The seed for anti-patent sentiment was planted earlier and expressed in a report of the National Academy of Sciences, which ironically was partially instigated by the great number of new bio-tech inventions that were patentable and a direct threat to big pharma.

    People shamelessly told us why software patents should not be allowed, it is just too easy (and powerful, but they do not say that publicly).

  19. box7003 May 28, 2019 1:53 pm

    I sent this article to Rush Limbaugh who plays golf with President Trump. Its a great summary of whats been happening. I hope it is passed on.

  20. Ronald J. Prohm June 3, 2019 12:04 pm

    KEEP THE PRESSURE ON EMIL. AS A SHAREHOLDER I BELIEVE THAT YOU WILL COME OUT ON TOP.