GA SENATOR PERDUE INSERTS PATENT INVALIDATION PROGRAM INTO $1.4T SPENDING BILL

—EMBARGOED PENDING FINAL HOUSE NEGOTIATIONS—

Perdue payback to his banking supporters helps big tech and callously harms Georgia inventors

The 2011 American Invents Act caused great harm to the rights of inventors in the U.S. The worst part was the creation of the Patent Trial and Appeal Board (PTAB).

• The PTAB is a division of the USPTO that invalidates patents.
• The PTAB has invalidated 84% of the patents they have reviewed (2,421 out of 2,872).
• There is no right to a jury trial at the PTAB.
• Compared to a regular court, the PTAB limits evidence, testimony, due process, and procedural safeguards.
• Compared to a regular court, the PTAB has a lower burden of proof for invalidation (preponderance rather than clear and convincing).
• Most PTAB administrative patent judges have no technical experience and minimal legal experience.
• PTAB administrative judges often overrule examiners and federal judges who previously held a patent to be valid.
• The PTAB is benefits mostly large corporations – top patent challengers include Apple (650 petitions), Samsung (540 petitions), Google (337 petitions), and Microsoft (224 petitions).
• It costs an average of $450,000 to defend a patent at the PTAB.
• PTAB typically adds 2 to 5 years to the duration of a lawsuit.

The bottom line is that the PTAB was set up to benefit the largest corporations in the world by preventing small companies from enforcing our patents. This had the effect of stifling competition and development of new technologies, causing the U.S. to lose its place as world leader in innovation.

The PTAB originally contained 3 components:

• Inter Partes Review (IPR) – allows challenges for the life of the patent, but only on §102 (novelty) and §103 (non-obviousness)
• Post Grant Review (PGR) – allows challenges in the first 9 months of a patent on any ground – §101 (eligibility), §102 (novelty), §103 (non-obviousness), or §112 (written description & enablement)
• Covered Business Method (CBM) – allows challenges for the life of the patent on any ground, but only for patents that cover “business methods”

Senator Perdue Leads Attack on Inventors, Resurrects Controversial Patent Invalidation Program

The CBM proceeding expired on September 16 of this year. That provided some progress for our movement to restore justice for inventors. At the urging of the banking industry and their million dollar ad campaign for his election, Senator Perdue convinced the GOP-controlled Senate to reinstate the CBM patent invalidation program . From a policy standpoint, it makes no sense at all. The PTAB has virtually destroyed our patent system which once was the envy of the world. At US Inventor we have been educating lawmakers to reform, limit, or abolish the PTAB in order to get our nation back on track. The expiration of CBM was a step forward. Perdue’s pernicious maneuver circumvented the regular legislative process and prevented fair and open debate which would have taken into account the negative impact on inventors and society.

Numerous Georgia inventors have suffered PTAB injustice.

David Chadwick from Alpharetta, Georgia is the inventor of a patented automated creel for supplying yarn to a carpet loom, making it safer and more efficient. His company Automated Creel designed and built the prototype which he then shared with a customer in the carpet manufacturing business. The customer implemented the design and filed two PTAB challenges against his patent to avoid paying him for a license. The PTAB dispute ran almost 4 years during which the infringement case in the regular court was delayed, ending with most of his patent invalidated. Automated Creel was forced to lay off employees and close down business due to the uncertainty, delays, and expense introduced by the PTAB.

During the very early days of the Internet, father and son team Danny and Del Ross of Dunwoody and Alpharetta, Georgia made a discovery that would forever change commerce: Commerce Syndication. They founded Nexchange Corporation to practice their patented invention. Nexchange achieved significant success, having a presence on over 54% of the websites at the time, representing over 40 national retailers, and employing a staff of over 100. Thereafter, a host of multi-billion-dollar enterprises declined their offer of a reasonable licensing fee and chose instead to haul them into the PTAB, alleging the invention was obvious, despite as many as five prior reviews by the patent examiners AND the federal courts. The Danny and Del Ross’s story shows how nearly impossible it is for small, innovative companies and inventors to assert their Constitutionally granted rights in the USA system. Their twenty-year patent journey has been difficult, emotionally draining, and extremely expensive. Now Senator Perdue has unleashed yet another weapon for giant corporations to attack his constituent inventors.

In the late 1990s, prolific inventor David Petite of Canton, Georgia invented a foundational technology for the Internet of Things. His invention drove proliferation of wirelessly networked machines and met with huge commercial success. A Native American member of the Chippewa tribe, Petite has worked for two and a half decades in wireless technology, been awarded more than 50 patents, and founded several companies to commercialize those inventions. But the PTAB declared his PTAB declared his multi-functional transceiver to be a “covered business method”. This outrageous decision was ruled improper, but the Supreme Court then ruled that such decisions by the PTAB cannot be appealed. The take away here is that not only do big banks benefit from Senator Perdue’s gift, multi-billion dollar corporations of all stripes abuse CBM it to block competition from inventors like Petite.

Many other Georgia inventors have suffered injustice at the PTAB along with thousands of inventors nationwide. More importantly. Senator Perdue’s effort to prop up the PTAB slams the door on tens of thousands of inventors who stand willing and able to serve our country by applying our ingenuity to solve the myriad of technological problems that confront the world. In exchange for support for his campaign by the established banking industry, Senator Perdue has robbed the USA of one of its greatest hopes for the future – inventors.

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Contact Josh Malone at josh@usinventor.org for more information or to arrange interviews with inventors affected by this legislation.