David McCutchen was the founder of CDC Larue Industries. He started the Oklahoma-based company in 2003. He took his ambient air cleaner filtered vacuum system, the first self-cleaning air filtering technology, and applied for a patent on July 18, 2003. After three long years, with massive amounts of patent examination, David’s patent application was issued on August 1, 2006, and was assigned U.S. Patent No. 7,082,640 (the ‘640’).
Once issued, David placed this patent, and seven others that CDC Larue Industries created, into Christy, Inc., a patent holding company named after his daughter. He was hoping this would protect his property rights and his family.
Unfortunately, both father and son, Chris, found the holding company was not nearly enough as they experienced the tragedy of what has battered independent inventors and small business innovators and startups since the passage of the America Invents Act of 2011 (AIA) and the creation of the Patent Trial and Appeal Board (PTAB).
As has been the case with numerous inventors, CDC had entered into a business agreement another firm that decided to infringe their patent, instead of paying royalties or a license fee to the actual inventor. In 2008, they entered into an agreement with Black & Decker (B&D). After gaining access to the patent information B&D decided to steal the patent, developing and releasing a DeWalt trade name product based upon said patent in 2012.
In September 2014, Christy and CDC Larue Industries filed an infringement suit against B&D in United States district court. The multi-billion dollar manufacturing company responded by filing two petitions for Inter Partes Review (IPR-an attempt to invalidate) with the PTAB. In June 2016, the PTAB’s final written decisions invalidated all of the challenged patent claims citing they were either anticipated by prior art under 35 U.S.C. § 102(b) or obvious under 35 U.S.C. § 103.
Basically, B&D was granted theft of Christy’s property rights.
Christy and CDC then filed a class-action lawsuit against the United States (Christy, Inc. v. The United States, No. 18-657C) in Federal Court claiming that the invalidation of patents is a government “taking,” which violates the Takings Clause of the Fifth Amendment to our U.S. Constitution.
Part of the assertion was based on a Supreme Court (SCOTUS) decision in the Oil States Energy Services, LLC v. Greene’s Energy Group LLC (2018) case. As part of its written Oil States opinion SCOTUS says that the “constitutionality of inter partes review . . . should not be misconstrued as suggestion that patents are not property for purposes of the Due Process Clause or the Takings Clause.”
However, their case against B&D was dismissed for “failure to state a plausible claim,” by Chief Judge Sweeny.
Sweeny cited two previous cases to make his stand; a SCOTUS case, Schillinger v. United States (1894) and a Federal Circuit case, Zoltek Corp. v. United States (2006). Both cases basically stated that patent infringement claims that are filed against the U.S. could not be recast as a violation of the Fifth Amendment’s Takings clause.
Most worrisome, however, is that Sweeny does not believe that patents are “property,” but are, rather, “public franchises” – basically, a state-sponsored monopoly. He stated in his opinion, “Since patent rights derive wholly from federal law, Congress is free to define those rights . . . as it sees fit.”
Why worrisome? Because patent rights derive from Article I § 8 Clause 8 of our U.S. Constitution, which states, “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;”
It will be noted here that in our U.S. Constitution (not including Amendments added later) the word Right is used exactly once – as above for Authors and Inventors.
Despite the fact that laws relating to Patents have been changed over two-plus centuries from the original Patent Act of 1790, it remains clear that Patent rights derive directly from, and are guaranteed by, our Supreme Law of the Land. Patent rights do not come from federal law, which changes with the political whims of various congressional sessions, such as what occurred with the AIA and the creation of the PTAB’s Patent Death Squad.
What about Chris and his company? It has, indeed, been hard, but they are not folding or caving in. On their website it states, “Today Pulse-Bac is a readily available brand that offers innovative, high-quality products with 15 patents under our belt for the innovations found in our vacuums. The spirit of innovation instilled by our founder is alive and growing every day at Pulse-Bac.”
Inventors, such as David and thousands of others, should not be subject to an untrained PTAB administrative tribunal, which US Inventor believes to violate the “Appointments Clause” of our U.S. Constitution.
Instead, they should be protected as our Founders stated in our U.S. Constitution. Why? Because innovation is the backbone of the American economy and a huge part of the American Dream.
As US Inventor President Randy Landreneau 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.”