We the People - Restoring the America Invents Act is wrong

Our Founders knew that inventors would be key to economic and sustainable growth and success in America. So much so, that what is sometimes referred to as the ‘Intellectual Properties Clause’ is the only place in our U.S. Constitution where the word Right appears.

They, of course, knew about the system in Great Britain. However, the way it was set up over there allowed only the richest to file for patents due to the cost of patent fees. Our Founders would alleviate that problem by making it so virtually anyone could file for a patent.

And, when James Madison, the “Father of our Constitution,” drafted what would be our Supreme Law of the Land, responsibility for providing protection was entrusted to Congress.

As well, he and George Washington, our first president and a staunch supporter of patent rights, crafted the following words together to achieve their purpose, “for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

Article I Section 8 Powers of Congress, Clause 8, states, in full: “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.”

The Patent Act of 1790 was enacted on April 10, 1790, granting “he, she, or they,” the applicant, “the sole and exclusive right and liberty of making, constructing, using and vending to others to be used, the said invention or discovery.”

Having this particular Right in our Constitution proper did exactly what Washington, Madison and other Founders had hoped and, later, what President Abraham Lincoln described, when he said, “The Patent System added the fuel of interest to the fire of genius.”

With the addition of the Bill of Rights, ratified on December 15, 1791, our Founders spelled out numerous other rights for Citizens of the United States.

Among those other rights, our Fifth Amendment states: “nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” This covers Due Process as well as what is referred to as the “Takings Clause.”

And, our Seventh Amendment states: “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law.”

To give an idea of how important Intellectual Property (IP) was to our young nation, consider that the first board members, aka the “Commissioners for the Promotion of Useful Arts,” included three of President Washington’s cabinet; Secretary of State Thomas Jefferson, Secretary of War Henry Knox, and Attorney General Edmund Randolph.

Madison, wrote, “A Government is instituted to protect property of every sort…This being the end of government, that alone is a just government, which impartially secures to every man, whatever is his own.”

That IP Clause is a significant and powerful part of the American Dream, allowing people from all walks of life who have a bright and useful idea to capitalize on their innovations and creations.

ABOUT THE AMERICA INVENTS ACT OF 2011

There are those who will tell you that one of the primary reasons for the America Invents Act of 2011 (AIA) was to put an end to frivolous lawsuits by patent trolls, non-producing entities (NPEs) and to protect small entities from abusive patent litigation.

Those same people who disseminate that falsehood will cite a couple of great examples to “prove” that their words are true. Yes, admittedly, those types of frivolous lawsuits do exist. Unfortunately, frivolous lawsuits abound everywhere within our society.

However, if the purpose of the AIA was designed to stop NPEs from ripping companies off, why is it then, as of January 29, 2021, of all the petitions that have been filed with the Patent Trial and Appeal Board (PTAB), approximately 41% comprise large, medium and small size entities filing claims against NPEs, while over 40% are filed by large operating companies (multibillion or trillion dollar operations) against other, much smaller OPERATING companies (NOT NPEs), such as independent inventors and innovative startups and small businesses, while another 11% are made by small and medium size entities against other operating companies.

Thus, while 40% of the challenges are against NPEs, the majority, over 51%, are not, but are, instead, targeted at the independent inventor and small business and startup innovators.

Supporters of the AIA – including Big Tech and multi-national conglomerates along with their legal and political cronies – will claim that the PTAB Administrative Patent Judges (APJs) are highly experienced and quite qualified to question and overturn the decision of the USPTO Patent Examiners who originally granted and issued PTAB-challenged patents. This claim is interesting because, as of November 23, 2019, of the 221 APJs regularly overturning patents, 60% possessed ZERO technical experience.

The AIA created the ultimate two-headed beast.

From the beginning, it has been the duty of the USPTO to issue patents that provide exclusive rights to inventors. However, since the establishment of the PTAB, it is now also the duty of the USPTO to destroy those property rights, the very rights guaranteed in our U.S. Constitution.

Early on, in 2013, Former Federal Circuit Judge Randall Rader pointed out, “There’s a tension throughout the system … you’ve got an agency with 7,000 people giving birth to property rights, and then you’ve got, in the same agency, 300 or so people on the back end … acting as death squads, kind of killing property rights.”

Two years later, the Wall Street Journal noted, “The Patent Trial and Appeal Board was supposed to make the system better. It hasn’t.” Shortly after, Popular Mechanics stated, “IPR (Inter Partes review) tribunals make it easier for sophisticated defendants to kill patents held by legitimate inventors.”

Chief Judge, US Court of Appeals for the Federal Circuit (ret.), Paul Michel very astutely said, “The internet giants campaigned to depress the value of patents by decreasing their reliability and making them easier to invalidate. They got their way with Congress in 2011 with a statute creating an administrative tribunal, where it would be easier to kill patents when they could not do so in the courts.” (emphasis added.)

Recently, however, in 2018, the ultimate act of sheer and utter lunacy was made when the Supreme Court – following an argument made by the U.S. Dept of Justice (DOJ) – wrote that patents are “public franchises, not private property,” thus “patent rights are not cognizable property interests for Takings Clause purposes.” (Pages 37-38 of the DOJ Brief states: “Patents have always been understood as privileges or franchises.”)

The burning question one should query both the DOJ and SCOTUS would be: how have patents “always been understood to be privileges or franchises” when the “exclusive Right” to an “invention or discovery” was guaranteed at the founding of our great nation, in our U.S. Constitution?

There was one Supreme Court Justice who got it right, Neil Gorsuch, who penned, “For most of the Nation’s history, an issued patent was considered a vested property right that could be taken from an individual only through a lawful process before a court.”

REAL LIFE PTAB EXAMPLES

Patent invalidated

There are numerous cases involving an independent inventor or small business startup with the next “best mousetrap” whose invention was stolen by a Big Tech or a multi-national corporation.

What the larger company could not develop in their highly funded Research & Development labs, they simply took from the small inventor because it was valuable and because the PTAB allows them to do so.

In many cases, the PTAB not only allowed but certainly appeared to help.

Following are just a few tragic stories of the thousands of independent inventors and startups that have been virtually destroyed by the PTAB procedure.

David Furry invented a leak detection system providing a highly effective way to detect and view otherwise invisible toxic gas emissions. A large corporation stole his idea and petitioned the PTAB to invalidate his patent. The APJs did just that. Even though David’s invention detects near invisible gas leaks that produce a near zero temperature signal, the PTAB stated that his technology was equivalent to a thermal imaging device that detects visible jet engine exhaust at over 1,000 degrees, thus declaring David’s leak detection technology obvious.

Apple refused to pay inventor Mark Kilbourne for his remote-control deadbolt, and then petitioned the PTAB to revoke his patent. The APJs invalidated Mark’s patent ruling that it “would have been obvious” to combine an old-style deadbolt with a Swiss army knife to create the remote-control deadbolt.

Emmy award-winning inventors Glenn Sanders and Howard Stark are pioneers of digital wireless microphones and built their company Zaxcom in reliance on their U.S. patents. Their competitors have infringed their technology and the PTAB is helping the patent thieves by declaring the Zaxcom invention obvious 14 years after the fact.

The evidence presented to the APJs at the PTAB that accomplished this was by comparing the combining of a backpack with thousands of pounds of equipment and batteries to a small device the size of a Zippo lighter, hidden on an actor’s person, thus claiming it as obvious and therefore unpatentable.

Emmy - Zaxcom TRX900 - Glenn Sanders

Dr. Steve LeBeouf is a prolific inventor with over 200 issued and pending patents. His firm, Valencell, attempted to work with Apple to incorporate their patent protected biometric sensors into the Apple Watch. They even provided a prototype of the proprietary watch, including a back-facing heart-rate sensor, upon receiving requests from Apple to license the technology. Instead, Apple, joined by Fitbit, filed a hailstorm of petitions with the PTAB to invalidate Steve’s patents. Although highly trained USPTO Patent Examiners could find no invalidating prior art to Steve’s inventions prior to issuing patents, the PTAB allowed numerous attacks on not only the patent in question but also on a number of patents unrelated to the case. He was able to settle with Apple, but the fight with Fitbit continues.

Aaron Greenspan’s small software company, Think Computer Corporation, sued Square, Inc. for violating Aaron’s patent claims. Square went to the PTAB where it relied on a Carnegie Mellon University professor who received an enormous retainer for his expert testimony. Under oath this expert, who had last ventured into the payments space more than a decade prior, admitted that he had not written 90% of his declaration, despite previously claiming under penalty of perjury that he had written it all. Square’s lawyers were the actual authors and they deliberately glossed over key technical distinctions that made all the difference in the case. Due to Square’s false expert testimony — as well as the fact that the chief PTAB APJ on the panel was formerly a lawyer in the same law firm representing Square – the PTAB invalidated Aaron’s patent for a lack of novelty.

Rainboots - Firebugs

Trae Smith is the inventor of the patented internally illuminated Firebug shoe line, the first real creative innovation in lighted shoes in three decades. The Firebug line of shoes was immediately successful, with several major shoe companies entering licensing agreements. Unfortunately, a Berkshire Hathaway-owned company and competitor stole the technology. Trae sued for patent infringement, and the infringer petitioned the PTAB to invalidate his patent. The PTAB incorporated definitions not even similar to what is claimed in his patent, finding the invention obvious and therefore unpatentable. This, of course, was after the same prior inventions were examined by a Patent Examiner who is an expert in the technology of the invention and had already found that Trae’s invention was not obvious in light of these prior inventions, and therefore granted the patent.

Patrick Buckley is the inventor of several patented smartphone accessories including a virtual reality (VR) viewer that was manufactured by his company DODOCase in their San Francisco factory. They were put out of the VR viewer business by infringing Chinese importers, one who filed IPRs on each of the three patents for the invention. Lacking funds to defend the IPRs, DODOCase was forced to assign the patents to their attorney in exchange for representation at the PTAB and federal court. The delays and cost added by the PTAB proceedings eventually forced the attorney-assignee to settle the infringement case. But for the PTAB, Patrick would have profited from his invention, invented and launched more products, and created more American jobs.

The list goes on.

However, the above examples bring to light numerous constitutional, legal and ethical questions regarding the proceedings and decisions of the PTAB APJs.

CONCLUSION

The unintended consequence of the AIA has been the devastation introduced to our unique American patent system and the near collapse of the American Dream.

As Randy Landreneau, President of US Inventor, has said, “In a world run by aristocracies, where the common man was considered of little value, America said anyone, from any walk of life, could own inventions he or she created and patented. That concept and practice was destroyed with the Patent Trial and Appeal Board.”

Unlike real courts, the PTAB, created by the AIA, does not presume a patent is valid. To the PTAB, it does not matter how long the patent has been in effect, how successful the invention has been, how many companies have licensed the patent, or how many times the patent has been validated in actual courts.

Most patents challenged at the PTAB are inevitably declared unpatentable – almost by default.

Randy Landreneau - US Inventor

IPR and Post Grant Review (PGR) proceedings at the PTAB have resulted in, as of June 24, 2021, 2,612 of 3,105 (84%) of instituted patents with a PTAB Final Written Decision being invalidated in whole or in part.

The PTAB administrative tribunal has caused untold devastation to independent inventors and small business startups who have been able to build the better a mousetrap only to have their constitutionally protected property right(s) yanked away through perjury, conflict of interest, misleading and uniformed definitions (aka word games), lack of due process, ad nauseam, in, what really is, an unconstitutional hearing.

So, yes, there is legislation required.

However, the Restoring the America Invents Act is NOT what is needed.

Rather, H.R. 5478, the “Inventor Rights Act,” bi-partisan legislation introduced by Mr. Danny K. Davis of Illinois and Mr. Paul A. Gosar of Arizona during the 116th Congress, is the right legislation to correct the horrific results of the AIA and the PTAB.

Josh Malone - Bunch O Balloons Inventor

Our Patent System must be restored to its former glory.

The way our Founders intended.

As Josh Malone, US Inventor Volunteer and Policy Director stated at the main office of the USPTO on the 10th Anniversary of the signing of the AIA, “If we are going to be competitive in technological progress the only way is to accelerate the pace of innovation. That’s our edge. … If you want us to compete, I have an idea. Let’s consider promoting progress in the useful arts by securing to inventors the exclusive right to their discoveries. That’s my plan. That was the plan then. It worked fantastically. We have the case study for it.”

At that same rally, National Security Specialist Dr. Rob Spalding, Brig Gen, USAF (Ret), stated, “The way the Chinese influence our policy process is through our corporations. … The America Invents Act is a great way for the Chinese Communist Party to get technology without having to pay for it.”

He has also said, “If you’re an innovator and you can’t protect your ideas, this destroys the fabric of our society.”

For the sake of our country, we must return to the system our Founders established and expected us to keep intact when they placed the word Right only once in our U.S. Constitution.

Dr Rob Spalding

US Inventor Inc., a 501(c)(4) non-profit corporation, was founded to support the innovation efforts of the “little guy” inventors, small businesses and startups. We are proponents of “securing for limited times to … inventors the exclusive right to their … discoveries” in order to “promote the progress of Science and Useful arts.” (U.S. Constitution Article I, § 8, Clause 8.) Our broad experience with the patent system, new technologies, and creating companies, gives us a unique perspective.