Josh Malone quit his corporate job in 2006 to take his shot at the Inventor’s Dream. Eight years later, savings depleted and kids college unfunded, he took one last swing before trudging back to the corporate world. And hit a homerun with Bunch O Balloons. His solution to the 63 year old problem of filling and sealing water balloons instantly became the number one selling summer toy. His invention was stolen by a notorious infringer who convinced the USPTO to revoke his patent under a controversial procedure of the 2011 America Invents Act. A brutal and costly legal battle combined with a anti-corruption crusade ultimately resulted in a $31 million award and restoration of his patent rights. He is now a full time volunteer with the inventor advocacy organization, US Inventor.
In the late 1990s, prolific inventor David Petite invented a foundational technology for the Internet of Things. His invention drove proliferation of wirelessly networked machines and met with huge commercial success. But last month, the U.S. Court of Appeals for the Federal Circuit upheld the revocation of his patent through a byzantine and controversial administrative proceeding. This patent was subjected to a Covered Business Method Review (CBM) at the Patent Trial and Appeal Board (PTAB). The PTAB is a division of the U.S. Patent and Trademark Office (USPTO) created by the 2011 America Invents Act that has invalided a whopping 84% of the 3,000 patents they have reviewed. Coming too late to save Petite’s patent, the “transitional” CBM program expired September 16 of this year (two other types of PTAB proceedings remain in effect). CBM was not used nearly as much as the other PTAB proceedings, which have no restrictions on subject matter. Yet, corporate interests are still trying to revive CBM, and there’s buzz that attempts are being made to reinstate the program via the fiscal 2021 spending bill this week. There’s no logical basis to do so.
Recently, the U.S. Patent and Trademark Office (USPTO) published a Request for Comments on Discretion To Institute Trials Before the Patent Trial and Appeal Board (PTAB), seeking “focused public comments, on appropriate considerations for instituting America Invents Act (AIA) trials.” Comments are due on November 19. US Inventor provides a streamlined tool for submitting comments here. This is a big deal for inventors. We desperately need help. We simply cannot participate in the patent system until the PTAB is regulated to provide predictability with respect to the validity of our issued patents. Director Iancu has made a valiant effort to restore balance, but it has failed thus far. As it stands, we cannot use our issued patents because it is utterly impossible to predict whether or not they survive the PTAB – no matter how carefully we follow the existing laws and procedures.
Recently, the USPTO published a Notice of Proposed Rulemaking (NPRM) to change the “Trial Practice at the Patent Trial and Appeal Board,” which is contained in Part 42 of Title 37 of the Code of Federal Regulations. This is the fifth rule change since the Patent Trial and Appeal Board (PTAB) was created and the second of Director Iancu’s tenure. The first rules were issued on September 16, 2012, the one year anniversary of the America Invents Act. David Kappos was Director at the time. The first rules were controversial and heavily biased against inventors.
Despite rumors that changes have been made at the USPTO to bring balance to the Patent Trial and Appeal Board (PTAB), a hard look at the data shows that it is business as usual. Astounding numbers of patents continue to be invalidated, despite many superficial changes over the past few years. Several hundred institution decisions have been issued under these changes, establishing a statistically significant sample size for evaluation. Detailed analysis of the data proves that nothing has changed at the PTAB which continues to permit abuse and invalidate an astoundingly high percentage of patents. The “death squad for patents” is as lethal as ever.