Posts Tagged: "independent inventor"

The U.S. Patent and Trademark Office (USPTO) announced yesterday a major initiative to “build a more diverse and inclusive innovation ecosystem by encouraging participation demographically, geographically, and economically.” Dubbed the National Council for Expanding American Innovation (NCEAI), the project includes 29 representatives from industry, academia, and government, and was conceived based on recommendations made in the USPTO’s 2018 SUCCESS Act study and congressional report transmitted to Congress in December 2019.

I recently had the opportunity to conduct an interview with Andrei Iancu, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, via WebEx. The focus of our conversation was the COVID-19 pandemic: USPTO efforts to work with stakeholders, the role of intellectual property in finding cures and treatments, and general thoughts relating to what the Office is observing. Our conversation also veered into Bayh-Dole and the the letter just sent by three-dozen state Attorneys General asking the federal government to use march-in rights against Remdesivir.

On August 3, inventor advocacy group US Inventor filed an amicus brief with the U.S. Court of Appeals for the Federal Circuit in support of a due process argument raised in an appeal from the Patent Trial and Appeal Board (PTAB) by New Vision Gaming & Development. US Inventor’s brief raises two major points in support of New Vision’s contention that the financial incentive structure for administrative patent judges (APJs) destroys due process at the PTAB. First, the brief details data that proves the existence of an “October Effect,” which leads to inflated rates of petitioner-friendly PTAB trial institutions in response to the APJ performance review cycle at the USPTO. Second, the brief argues that APJ performance review criteria are inherently subjective in a way that incentivizes APJs to make pro-petitioner decisions to please supervisors who have budgetary responsibilities. Taken together, US Inventor contends that these factors would lead a reasonable person to question “whether the PTAB invalidates patents so frequently because its constituent APJs try to please their budget-minded bosses through revenue-enhancing decision making.”

This month, the United States Patent and Trademark Office (USPTO) released a report titled “Progress and Potential: 2020 update on U.S. women inventor- patentees” (the Report). The Report updated a study published last year that outlined trends in women inventors named on U.S. patents from 1976 to 2016. These reports are a result of the Study of Underrepresented Classes Chasing Engineering and Science Success (SUCCESS) Act of 2018, which directed the USPTO to study and report to Congress on the number of patents applied for and obtained: (1) by women, minorities, and veterans; and (2) by small businesses owned by women, minorities, and veterans. As evidenced by the USPTO reports, women are under-represented as inventors of record on USPTO patents, which is least partially due to a general lack of funding available to women inventors. 

Much has been written on women’s disproportionate numbers as scientists trained in science, technology, engineering and mathematics (STEM), as well the under-representation of women as inventors of record on USPTO patents. These statistics relate to women’s role in scientific development and inventorship, or in other words: in the creation of intellectual property (IP). Having said that, the reasons why women don’t get funded have little to do with IP, and much to do with the institutional structure of the venture capital (VC) ecosystem, as well as the corporate representation (or lack thereof) of women in senior management and board positions.

A flash of genius hits like lightning. It shocks you into a superior state of understanding and your entire body buzzes. My flash struck in the summer of 2000, while I was asleep. Then, a New York Times article came out in October 2006 with a picture of the 20-something wunderkind who apparently “experienced an epiphany…an idea that would be worth billions and billions of dollars.”  Standing next to him was my former boss who thought my invention was “brilliant.”

From the time my patent was granted to the time it expires, a company that stole my invention from my hands will have generated over $1 trillion dollars using it. When faced with a patent infringement lawsuit, they weaponized the America Invents Act (AIA), which they lobbied into law, and the Patent Trial and Appeal Board (PTAB) validated their theft.

Outlined below is the story of how the America Invents Act (AIA) of 2011 made a novel 2002 invention obvious in 2018. I’m the first named inventor of the 7058524 patent, which was filed on October 25, 2002. The title of the patent is “Electrical Power Metering System”. Unfortunately, I was never able to produce, let alone market the meter. There were many barriers to entry for my essentially hardware-based invention. I was working full time and had a growing family to be concerned with. Following retirement in 2013, I decided to attempt to license the ‘524’ technology. In early fall 2014, I partnered with a Non-Practicing Entity (NPE). I received an up-front sum and had an agreement with the NPE to share (fairly in my view) in any ‘back-end’ licensing revenue. After extensive investigation and attempts at licensing, in 2016 the NPE asserted against Duke Energy in Delaware. We believed Duke’s new smart meters, particularly those using Itron’s OpenWay Riva technology, were infringing the ‘524 patent. Ultimately, we were Rule 36ed by the Federal Circuit. In my opinion, the key broken piece in the system is the way the AIA removed the probability of a jury trial from the patent holder by creating a post-grant system that allows for abuse and delay of other proceedings.

If you are an inventor new to inventing, you undoubtedly believe you’ve come up with an idea, or two or three, that could really be successful. That eternal optimism and belief in one’s self is precisely what every inventor needs to succeed. Now, if you are like the so many others who have walked in your footsteps before you, you’ve probably started researching how to patent an idea but have quickly become bombarded with information from a variety of sources.  “I have no clue where to start, and I have only a limited budget,” is a typical new inventor question. “What should be my first step?” The patent process can be complex and knowing where to begin and how to approach the process in a cost-responsible manner is not always easy, particularly for first time inventors. Of course, before proceeding it is worth first asking why it is you want a patent? The road to invention riches may, or may not, include obtaining a patent, although at least filing a provisional patent application can be and usually is a wise first step for a variety of reasons.

Ask ten professionals for their attitude on the current state of patents in 2019, and you’ll receive ten distinctly different opinions ranging anywhere from the incredibly negative patents-are-dying attitude to the overly optimistic everything-is-fine-here outlook. The consternation of it all is that each of those ten professionals would be absolutely right in their estimations, and entirely wrong as well. And that’s the patent world in which we’ve found ourselves during the entirety of 2019—everyone is wrong, and everyone is right, because no one actually knows which way is up anymore. We have officially entered the upside down.

During this turbulent era in the history of the U.S. patent system, many enterprises have pursued new models for IP strategy and execution. Others have taken a wait-and-see, business-as-usual tack. Change certainly is no stranger to patent systems around the world. Yet, some principles remain timeless and unassailable no matter how winds may shift. For example, we all can agree that patent filing and maintenance decisions should be sound, protecting the right technologies in the right places for the right reasons. Technology companies face patent-related decision points around seemingly every corner. The consequences of suboptimal decision-making are troubling, including wasteful expenditures, missed strategic opportunities, and diminished shareholder value. Therefore, enterprises should not hesitate to continually reflect on the quality of their patent filing and maintenance decisions, and on the framework that supports them. Cognitive bias—defined as “the collection of faulty ways of thinking … hardwired into the human brain”—can hijack patent decision processes just as it does every other area of human endeavor. As such, it can lead to suboptimal outcomes despite IP stakeholders’ sincere, dedicated participation.

On November 13, the United States Patent and Trademark Office (USPTO) requested the U.S. Court of Appeals for the Federal Circuit suspend all consideration of an appeal from the Patent Trial and Appeal Board (PTAB) that would raise the same issues addressed in Arthrex, Inc. v. Smith and Nephew, Inc., because the Office will seek rehearing en banc in Arthrex. See Stuben Foods, Inc. v. Nestle USA, Inc., No. 20-1082, -1083. As a reminder, on October 31, the Federal Circuit issued an important constitutional decision in Arthrex, which found that the hiring of Administrative Patent Judges (APJs) violated the Appointments Clause of the U.S. Constitution. The Federal Circuit did, however, attempt to provide a gift to the Office by rewriting the section of the statute they found to create the problem, which created the PTAB and the appointment of APJs, and by so doing turned APJs into inferior officers. The solution: APJs were judicially decreed to be employees-at-will in order to save the statute. So, why hasn’t Director Iancu cleaned house at the PTAB? It would seem to be because the USPTO believes Arthrex was wrongly decided.  

My company, Chestnut Hill Sound Inc. (ChillSound), has been victimized by a U.S. patent system that for nearly a decade has been in a sorry state. Changes wrought by the America Invents Act (AIA) in 2011 and other recent developments cost my company, its investors and inventors millions of dollars. These changes have allowed a large company to reap great profits at our expense. Even more unfortunately, our story is too typical of many other inventors and small companies. Small businesses are the backbone of our economy and need to be cultivated, as they are the most dynamic source of new jobs and competitive products and technologies. There have always been reports of large corporations stealing inventions from small businesses, but it used to be possible via the courts to vindicate the patent rights of owners and obtain ultimate redress.  The AIA—sold by the “efficient infringers” lobby as a measure to protect big business from the expense and nuisance of so-called “patent trolls”—has turned into a weapon of deep-pocketed big businesses that enables them to steal with impunity inventions from small businesses and independent inventors. The AIA brought with it the Patent Trial and Appeal Board (PTAB) and Inter Partes Review (IPRs), a post-grant adversarial proceeding at the United States Patent and Trademark Office (USPTO). As has been amply discussed here on IPWatchdog, the Court of Appeals for the Federal Circuit (CAFC) recently opined that the so-called Administrative Patent Judges (APJs) were unconstitutionally appointed from the beginning. Yet these unconstitutionally appointed APJs continue to kill patents, especially when the patent owner is a small company that has sued a large company for infringement, as was the case with ChillSound.

Since inventors are rarely allowed to participate in patent discussions in Congress, I would like to submit my testimony here. In Arthrex, the Federal Circuit in effect decided that our rights are subordinate to the government, so the government has the authority to giveth them to us or taketh them away. I would like to remind the Federal Circuit, the Supreme Court, and Congress that you are tasked with the honor, privilege and duty to defend our rights. That is the very basis on which you are employed, and you have no function other than that. Our rights preexist you, supersede you, and come from sources that are above your pay grade. They exist as a matter of our birth. You have no legitimate authority to take those rights just because it is inconvenient for the huge multinational corporations that have to now deal with the illegitimate position of owning our rights because so-called judges unconstitutionally took them from us and gave them to those huge corporations.   

Since the issuance by the United States Supreme Court of its opinion in Alice Corporation Pty Ltd. v. CLS Bank International, 573 U.S. 208, 134 S. Ct. 2347 (2014), the United States Patent and Trademark Office (USPTO) has increased its focus on patent eligibility. As a consequence, patent applicants now receive more claim rejections under 35 U.S.C. § 101, leading to protracted prosecution. While rejections under 35 U.S.C. § 101 are likely unavoidable, patent attorneys and agents can take steps during application preparation and prosecution to minimize the likelihood of such rejections and to successfully rebut such rejections when they do arise.