Inventors Are Being Screwed By Silicon Valley’s Intellectual Property Thefts

By Randy Landreneau
Innovation is the cornerstone of the American Dream. Everyone can build the next best mousetrap. US Inventor’s vision is to help teach people that process as well as defending that ability on Capitol Hill.

US Inventor brings together the best and brightest innovators of today to help the best and brightest innovators of tomorrow. We teach, promote, and defend the invention process and business methods involved in developing an idea, making a profit, and changing lives.

For those new to the issue of inventors having lost the ability to stop large corporations from just taking valuable, patented technologies, here’s a quick rundown:

1. Patent Trial and Appeal Board (PTAB): The America Invents Act of 2011 (AIA) created an easier way to invalidate (revoke) an issued patent. The PTAB is an administrative court with no jury and much less due process than a real court. Rather than a lifetime-appointed judge, a PTAB trial typically has three attorneys who are called Administrative Patent Judges (APJs). Since inception, 84% of the patents that go through a PTAB process get fully or partially invalidated (partially usually means the parts of the patent that matter).

When you attempt to stop a large corporation from infringing your patent, they will try to use the PTAB to invalidate your patent. If you win one PTAB attack, you can still be pulled into additional ones by the same or other infringers. According to the AIPLA (American Institute of Patent Law Association), a reasonable PTAB defense costs $400,000 to $800,000. Historically, the typical inventor would hire an attorney on a contingency basis to fight an infringer (where the inventor doesn’t pay much up front and the attorney gets a percentage of the verdict award or settlement amount). Today, it is extremely rare for an attorney to take any PTAB case on contingency.

2. Injunctive Relief (the ability to stop an infringer after you have won your case): The U.S. Supreme Court decided that it was in the “public interest” for a proven infringer to continue infringing because it could serve the market better than a startup (Ebay, 2006). As a result, even if you win your case, you will have to pass a “public interest” test before an injunction can be issued to stop the infringer. A startup vs an entrenched corporation will typically fail this test, so you can’t stop the infringer. You end up with a court-ordered royalty that you cannot negotiate, and the infringer keeps your invention and the market. This is often an impossible barrier for what would have been, until recently, the next great American disruptive startup.

3. Abstract Idea: The U.S. Supreme Court’s Alice decision (2014), put into law that an “abstract idea” cannot be patented, but did not define this term. The result is that a sharp attorney can often convince a judge, who may have little tech experience, that a patent should have not been issued. This argument is most often used for software related or medical diagnostics patents. The patents of many important, future technologies that are invalidated on this issue in America are valid and defendable in China and Europe, so that is where startup funding is going.

A U.S. Patent is supposed to provide the inventor with the exclusive right to his or her invention (U.S. Constitution Article I, § 8, Clause 8). You should be able to legally stop any infringer, no matter how powerful. You should be able to create a disruptive startup, or license your invention at a market rate. This is what created the incentive to invent that enabled America to lead the world in innovation for over 200 years and has been a major part of the American Dream.

This is what US Inventor is fighting to restore.

Help this vital effort by signing our Inventor Rights Resolution and getting your U.S. Representatives and Senators behind this effort.

In his first speech to the joint session of Congress he recognized there were “new and useful inventions” found abroad. He then admonished, “I cannot forbear intimating to you the expediency of giving effectual encouragement […] to the exertions of skill and genius in producing them at home.”

Congress answered less than 4 months later with the Patent Act of 1790. George Washington personally signed the first 156 issued patents.

So, how effectual is the US patent system? That depends on who you ask — and, unfortunately, what year you are asking.

It’s fruitless to argue that the rate of innovation didn’t accelerate after the signing of our Constitution. The last 234 years have produced an unprecedented time of discovery in the history of humankind.

The Constitution was signed with a feather (the writing technology of the time). I’m writing this article while sitting in the passenger seat of a motorized vehicle, on a laptop, connected to the internet, through a wireless connection of a mobile phone.
High Tech Connection

Another important word, “Secure” (“to make fast, save, protect, ensure,” Webster, 1806) is only in the Constitution twice.

First, expressing the need to, “secure the blessings of liberty to ourselves and our posterity.” Second, the pointed direction that Congress is accountable for “securing for limited times the exclusive right to authors and inventors.”

Congress seemed to understand their responsibility to secure exclusive rights to inventors back in 1904 when the bicycle shop tinkerers Wilbur and Orville Wright received their first patent.

Argue all you want about the Wright brothers patents and their effect on the “heavier than air” aviation industry. Just remember that that industry didn’t effectively exist before their painstaking efforts that led to the groundbreaking discoveries of these two brothers. Wilbur Wright aptly pointed out, “Those who tried to study the science of aerodynamics knew not what to believe and what not to believe.”

Fast-forward to 2011 when Congress passed the America Invents Act (AIA). The name of the Act harkens back to George Washington’s admonition to motivate exertions of skill and genius at home. Unfortunately, the Act did exactly the opposite.

The AIA created the Patent Trial and Appeal Board (PTAB). Just two years after its implementation the chief judge of the U.S. Court of Appeals observed the devastating impact this Act had on patents, describing it as “death squads killing property rights.”

This new process of invalidating patents, lobbied heavily for by the established technology companies, has been killing off patents at an extraordinary rate – with the PTAB revoking 84% of the 3,000+ patents they have reviewed.

Instead of following their Constitutional mandate to secure exclusive rights to inventors, our elected officials were securing the ability for established multi-national companies to crush independent innovation; innovation which occurred outside the well-funded research and development departments of the conglomerates.

It’s a far cry from the year 1921 when a 14-year-old farm boy thought up the idea of “electronic television” while plowing the horizontal lines out in a field. This boy, Philo Farnsworth, conceptualized the idea that an electronic image could be built up line by line. His young-adult life was spent painstakingly proving out that theory in the Green Street labs in San Francisco.

When it came time to protect Philo from the massive companies of the time (manufacturers of radios who had been out-innovated by Philo) the courts and the law protected Philo through the rights granted by his patents.


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