A Look at the Inventor Rights Act: Restoring Injunctive Relief and Immunizing Inventors Against the PTAB

By Steve Brachmann
February 3, 2020

“We think that there are members who are open-minded to this, although there’s probably a lot of work left to be done before it’s going to become law… It seems clear that there’s an impetus to do something about these issues and we’ll be looking at how to shape the bill to give it the very best chance at passing into law.” – Spokesperson for Congressman Davis

Congressman Danny Davis (center) with inventors Randy Landreneau (left) and Josh Malone (right) and family members at the introduction of the Inventor Rights Act.

In mid-December 2019, Congressmen Danny Davis (D-IL) and Paul Gosar (R-AZ) introduced the Inventor Rights Act of 2019 into the House of Representatives. If passed, the bill would do much to reestablish strong patent protection rights for inventors who own their own patents, giving them an opportunity to opt out of validity trials at the Patent Trial and Appeal Board (PTAB) while also undoing many of the harmful effects of U.S. Supreme Court decisions such as TC Heartland and eBay.

A Potential Win for Individual Inventors

While the Inventor Rights Act is directed at a subset of patent owners feeling the brunt of changes to the patent system wrought by Congress and the federal judiciary over more than a decade, the bill does go a long way in correcting the situation for those individual inventors who are likely to have the fewest resources to enforce their patent rights. Anyone who has despaired at the response of D.C. lawmakers to the decline of the U.S. patent system will likely be encouraged by the bill’s acknowledgment that the promises of the Constitution’s Intellectual Property Clause are “no longer attainable” for inventors. After years of patent troll rhetoric wrecking the U.S. patent system, it’s refreshing to see a piece of legislation reference both the legal struggles of legitimate inventors as well as the “efficient infringement” business model “whereby large corporations infringe patent rights held by inventors without concern for any legal consequences.”

The bill begins amending the Patent Act by including a definition for “inventor-owned patent” into Section 100. An “inventor-owned patent” would encompass any patent which either the inventor or an entity created by the inventor is the patentee and holds all substantial rights to the patent.

Any inventor-owned patents would become subject to inventor protections that would be outlined by new Section 330, which the bill would add to the Patent Act. The first part of this new section would insulate inventor-owned patents from some of the more deleterious effects of the America Invents Act of 2011 by preventing the U.S. Patent and Trademark Office to hold validity trials on such patents, including reexaminations, without the consent of the patentee to engage in such trials.

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Undoing the Harmful Effects of TC Heartland and eBay

The bill would also directly address issues that individual inventors and small entities have faced in enforcing their patents in district court which stem from the Supreme Court’s TC Heartland LLC v. Kraft Foods Group Brands LLC decision in 2017. New Section 330 would also include a choice of venue clause that allows infringement and declaratory actions involving inventor-owned patents to be brought in a judicial district in accordance with 28 U.S.C. § 1400(b), where the defendant has consented to be sued, where the inventor conducted research and development on the patent, or in accordance with 28 U.S.C. § 1391(c)(3) in the case of a foreign defendant that doesn’t meet the requirements of Section 1400(b). The choice of venue clause also gives the inventor the ability to bring a suit in a district where a party has both operated a regular and established physical facility for purposes other than creating venue and one of the following: engaged in R&D prior to the patent’s effective filing date; manufactured a tangible good that embodies an invention; or implemented a manufacturing process that embodies an invention.

Another clause in the Inventor Rights Act seeks to restore the presumption in favor of awarding injunctive relief to inventors proving infringement, a remedy that was in large part eradicated by the Supreme Court’s 2006 decision in eBay v. MercExchange, L.L.C. This section of new Section 330 would order a court, upon a finding that an inventor-owned patent is infringed and neither invalid or unenforceable, to presume that further infringement would cause irreparable injury and that available remedies at law would be inadequate to remedy that injury. The bill allows an infringing party to overcome this presumption if that party shows clear and convincing evidence that further infringement wouldn’t irreparably harm the patentee. Such evidence could include unreasonable delay in bringing an infringement suit after the patentee discovered or reasonably could have known about the infringement.

Finally, the Inventor Rights Act also includes strong provisions on damages recovery for inventors proving infringement of their patents, including a fee-shifting provision that seems designed to encourage individual inventors to seek the vindication of their patent rights in court despite lacking financial resources for obtaining legal representation. If a court finds that an inventor-owned patent has been infringed under various subsections of 35 U.S.C. § 271, including direct, induced, contributory or overseas infringement, the court shall award to the inventor both the infringer’s revenues from the infringement, minus any costs or deductions proven by the infringer, as well as costs under 28 U.S.C. § 1920. Upon a finding of willful infringement, the court may also award damages up to three times the amount of the profits award. If the inventor’s attorneys fees exceed 10 percent of the profits and damages award entered by the court, then the court shall award attorneys fees to the inventor so that those fees won’t exceed 10 percent of the damages award.

Support from Inventor Groups and Feedback From Capitol Hill

Understandably, this bill has been receiving support from those who understand the challenges faced by individual inventors in the current incarnation of the U.S. patent system. Randy Landreneau, President of US Inventor, offered the following comments on the Inventor Rights Act:

Recent legislation and court decisions have rendered American inventors defenseless against corporations intent on taking patented inventions. This has destroyed the incentive to invent that made America the world leader in innovation for 200 years. The future of American innovation depends on the restoration of inventors’ rights as granted in the U.S. Constitution, and that is the purpose of The Inventor Rights Act, H.R. 5478. Our effort now is to get enough support in the House to cause the Committee to take it up. Readers who want this bill to succeed should ask their U.S. Representatives to become co-sponsors.

IPWatchdog also received comments from a spokesperson in the office of Congressman Davis who informed us that the Inventor Rights Act has been accepted by the House Intellectual Property Subcommittee. It’s not likely that the bill will move towards a vote this year due to the election cycle, but Congressman Davis is very likely to reintroduce the bill next year. While changes in the reintroduced bill may well result from suggestions and comments coming from a variety of sources, the spokesperson indicated that there has been positive feedback on the bill, including from an unidentified member of the House of Representatives who indicated an interest in co-sponsoring the bill at a town hall event. “We think that there are members who are open-minded to this, although there’s probably a lot of work left to be done before it’s going to become law,” the spokesperson said. Although Congressman Davis’ office has an idea about which provisions of the bill will be most controversial, it’s currently too early to determine how to resolve those issues.

“We want to see where the inventor community and members of Congress come down on this bill,” the spokesperson said. “It seems clear that there’s an impetus to do something about these issues and we’ll be looking at how to shape the bill to give it the very best chance at passing into law.”

Image Source: US Inventor

The Author

Steve Brachmann

Steve Brachmann is a freelance journalist located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He writes about technology and innovation. 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 and is available for research projects and freelance work.

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 18 Comments comments. Join the discussion.

  1. Anon February 3, 2020 9:33 am

    Why limit such corrective measures to only a subset of patent owners (thereby impugning the original intent of having the patent property be fully alienable?

    This is yet another “gift horse” that must be looked at in the mouth — my previous reasoning still applies.

  2. Richard Klar February 3, 2020 11:36 am

    I wholeheartedly support this legislation
    I wrote about the eBay de idiom when it was first granted cert.
    It’s about time we put the teeth back in patent injunctions and give the exclusive right of patents actual
    meaning.
    Outta shouldn’t be free to dole out mandatory licenses to i from infringers.

    .

    It’s

  3. Paul Morinville February 3, 2020 12:04 pm

    Anon @1. After looking the “gift horse” in the mouth, it is clear that it is far too long in the tooth and that the long teeth are causing too much pain for the horse to eat. To save the horse, we have to file its teeth so it can eat again. If we don’t, it will surely starve.

    And that is all this legislation does. The current system was bought and paid for by rich corporations on both sides of the patent system. Totally excluded from any of the debates were inventors – it is not surprising that we got screwed.

    All this bill does is carve the small from the damage created by rich corporations to benefit themselves. These rich corporations can either continue to play in the sand box they crapped in, or they can clean the sewage from the sandbox by redirecting the hundreds of millions of dollars they dump on the swamp to fix it. But today, there is no way to influence these rich corporation to do anything except keep the status quo. Right now they get to eat what they kill and pay nothing.

    It may be that by excluding the small from the damage, the big fix it for all.

  4. angry dude February 3, 2020 12:36 pm

    Pipe dream
    I applaud the efforts but sv looters stand united and Pecunia non olet
    Not going to happen the way it’s introduced (or they’ll insert some provisions making the whole thing a sham)

  5. Pro Se February 3, 2020 1:07 pm

    This would benefit me today, 3 years ago… by the time this has any chance of actually passing, I’m the collateral damage of the worst era in patent history for independent inventors.

    The peak of all of the best possible new ideas was happening between 2010 and 2020… now we are at an innovation ceiling because the garage inventors, the people with the new ideas, all know there’s no way to really protect yourself today.

    The only patents these days that get any press are from the large companies.. so now, even the media has condition themselves to only look at what big companies do as so-called “innovation”.

    We are in a culture of sitting back and waiting for a big name company to file patents… there’s still a few independent inventors out there but what are they going to do when the Judges hearing their case are loyalist to the products accused for infringement?

    Maybe this this bill one day possibly becoming a law would rescue America’s slip from the long time reputation as a land of opportunity.

    China companies give me agreements for business, American companies give me lawyers and legal bills.

  6. Benny February 3, 2020 3:39 pm

    How many commercially valuable inventor-owned patents are there on the books? In my field I’ve seen very few, and those I did see were held by non-US inventors. Not sure if they benefit equally in this scenario. No, these inventors were not toiling away in their garage, they were founders of privately held companies. (Practicing entities).

  7. angry dude February 3, 2020 3:42 pm

    Paul Morinville@3

    Paul,

    I think it is very naive to expect injunctions back after unrestricted looting of small patent holder’s IP by BIG TECH for well over a decade..
    And without injunctions patents have no teeth at all – see VirnetX patent saga
    Not gonna happen
    Pecunia non olet

  8. Anon February 3, 2020 4:27 pm

    Paul.

    I disagree as to just where the carving is.

    The carving is a subset of the small inventor (only those that turn and put their inventions into practice). Excluded are the small inventors who would rather keep on inventing and let others develop their inventions.

    As I said – the original design was for FULL property alienability. By attaching substantive rights to the notion of “owner,” you render damage to a fundamental concept.

  9. Paul Morinville February 3, 2020 4:59 pm

    Anon @8:

    “The term ‘inventor-owned patent’ means a patent with respect to which the inventor of the invention claimed by the patent or an entity controlled by that inventor— (1) is the patentee; and (2) holds all substantial rights.’’

    How does this mean a product is required?

  10. angry dude February 3, 2020 5:18 pm

    Benny @6

    So inventor toiling away in his/her garage is non-practicing entity ?
    Unless by “toiling away” you mean only filing papers with USPTO – but then you don’t need a garage, do you ?
    The distance between toiling away in my garage and being a Founder/CEO of a for profit private tech company is very short – it only takes REAL patent protection and some outside investment which in many technical fields (like robotics in general unless we are talking firmware) is CONTINGENT upon availability of strong parent protection.. No ?

    Is that hard to understand, dude ???

  11. angry dude February 3, 2020 5:52 pm

    Anon @8

    Dude, are you a patent attorney or what ???

    To get a valid and enforceable US patent you HAVE TO reduce your invention to practice. Period.

    Did Tesla reduce his inventions to practice ? absolutely YES !
    Did Tesla commercially develop his inventions ? NO, he did not, others did it for him
    Was Tesla a practicing entity or non-practicing “patent troll” ?
    Was Edison a practicing entity running his invention factory and not commercially exploiting any of his inventions other than via a patent route ?
    Were Wright brothers practicing entity after they reduced their invention to practice by performing first controlled flight ?

    Is Apple a practicing entity if each and every iphone is 100% made in China by Foxconn and other contractors ?

    If Apple is allowed to call non-manufacturing “garage inventor” whose patented design they stole and used in their iphone manufacturing blueprints a non-practicing patent troll then Foxconn can call Apple the same name

    Benny is a patent troll too – all of his robotics sh1t is made in China (except firmware which is “abstract” … you know )

    I can’t believe we are having these discussions in 2020

    Screw US patent system and corrupt wash dc critters !

  12. Pro Se February 3, 2020 7:14 pm

    @Benny #6 – My portfolio all prosecuted and won by myself covers the largest group of valuable products in U.S. history.

    My patent portfolio right now, even after close to 100 licenses (a who’s who in U.S. tech), covers forward infringements in enforcement now with a paper value worth more than $10bln over the next 10 years of rights left.

    When the right time comes, I’ll write a book about it.. but for now, not being a IP celebrity ensure my licensees can deal with me with the faith that no one will ever know about it, because I don’t do press releases or create media noise.

    As much as I want to cry, at the same time, the power I have left in my patents are still enough to provide a suitable living for me and my family.

    I should have a company employing over 2000 people by now… maybe the next superstar inventor will have this law in place to protect the full value of their innovation.

  13. Anon February 4, 2020 9:38 am

    Paul,

    You are correct in that i misstated the subset as reflecting only those that attempt to create products. I had intended the distinction to reflect those who choose not to alienate their patent property.

    angry dude, yet again you rant and get things wrong. Have you ever heard of “constructive reduction to practice?” I suggest that you (again) take a step back from your emotions and use (just a little) reason and reflect what it means that a patent is a negative right and NOT a positive right to actually make any product.

    You only continue to lower your ability to be taken seriously when you clamor against those that obviously know more than you.

    As to Benny, the term “troll” is not appropriate. Terms like “shill” and “Efficient Infringer mouthpiece” are more accurate.

  14. C D Croan February 4, 2020 10:42 am

    I’m sure we can count on Congress to act Constitutionally and without self-dealing or self-interest for the benefit of the Nation and not empower an entitled few. Just like they always do. They’ll do the right thing.

    Sure, yeah, I believe, really, really I do.

  15. angry dude February 4, 2020 1:02 pm

    Anon @13

    I know what negative right means, dude

    It means that inventor of a better mousetrap (e.g. me) is not legally allowed to manufacture his better mousetrap until patents on basic mousetrap (held by incumbent manufacturers) run out or some kind of licensing/cross-licensing agreement is achieved
    But I still have to build it and try it in the first place to convince mice (and the PTO) that it actually works
    If PTO issues a patent on a better mousetrap which was never built and tried on real mice then either PTO screwed up or (much less likely) patent applicant is an absolute super-human genius who can get inside mouse’s brain and deserves a patent regardless

    P.S. You can’t possibly know more than I know about how BIG TECH rips off small patent holders

  16. Anon February 4, 2020 4:17 pm

    You missed acknowledging that you understand what constructive reduction to practice means.

    Less emotion. At least some reason.
    Please.

  17. G February 7, 2020 2:18 pm

    @angry dude. As Anon is saying, filing is constructive reduction to practice and enablement under 112 is all the PTO really looks at, they don’t ask for a product or anything of the sort or proof of actual reduction to practice. Hell, most of the time they won’t even bother looking that thoroughly at enablement and will only look for 102 or 103 based invalidity arguments. Tbh reduction to practice is a fairly empty condition. Just look at Theranos and all of their patents. They clearly didn’t actually reduce anything to practice and yet all their patents still exist.

    You are right that on paper it is a requirement and in spirit it should be, but in reality it doesn’t matter all that much. The truth of the matter is that invalidity arguments almost never work in federal court because of non-technical deference to the PTO. Arguments based on patentability will likely work well only in PTAB, but the issue there is that 101 and 112 arguments are allowed only in PGRs (which have to be filed within 9 months of patent issuance). The vast majority of PTAB litigation is in IPRs, which happen after 9 months and only allow 102 and 103 arguments. As a result, the only way to invalidate based on failure to reduce to practice is to catch something within 9 months and file a PGR.

    I think that this bill is ripe for abuse by NPEs if passed. It would make things considerably worse by allowing NPEs to use a loophole to avoid PTAB litigation. As a result, anyone enforcing against NPEs with somewhat questionable patents would have to fight the invalidity battle in federal court, where almost no one wins because of deference to the PTO. It would also cost 8x the amount of money to do it because PTAB litigation is much cheaper. It is very easy to have yourself named as an inventor on a patent application, all you have to do is contribute one possible element to one claim of the entire invention, there is so much room for manipulation. The only people this would benefit is NPEs and patent litigation firms (more BS NPE cases and more time in federal court over PTAB).

  18. Anon February 7, 2020 4:09 pm

    G,

    You tip your hat with the notion of “ripe for abuse by NPEs.”

    1) the “tr011” argument has been thoroughly debunked.
    2) substantive patent rights do not — nor should they — depend on the characteristics of the owner.
    3) patent rights are a negative right, and it is only fallacy to attempt to insert some aspect of a positive right in regards to patent law.

    Whether or not the PTAB is cheaper is NOT at point, and only serves to proceed along a morally bankrupt “Ends justify the Means” approach.

    While here you are one that at least recognizes some valid points, your overall thrust appears NOT to be valid.

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