At least $17 million. That is what my Bunch O Balloons patent has cost so far. It could grow to $50 million. Yes, we are talking about water balloons, not smartphones.
How can this be? Because the patent grant issued by the U.S. Patent and Trademark Office means nothing to infringers like Telebrands and Walmart. They simply ignore the patent and rush to take over the market with their knock-offs (Balloon Bonanza in 2015, Battle Balloons in 2016, and Easy Einstein Balloons in 2017). Then they use those revenues to hire attorneys and experts to say the patent is invalid. If the patent owner lacks deep pockets or good lawyers, his patent will not survive. If he does have access to infinite funds, he has about a 5 percent chance of survival thanks to the America Invents Act (AIA) and the USPTO’s implementation of the Patent Trial and Appeal Board (PTAB).
Fortunately, sales of the original Bunch O Balloons have been sufficient to maintain the legal fight. Zuru, the exclusive licensee of my patents, has done an outstanding job producing, marketing and distributing the original Bunch O Balloons. They have cooperated in defending the challenges to the patents brought by the infringers. We have mountains of objective indicia of non-obviousness, including recognition as best selling toy and an admission of copying by the infringer: “[t]his is only the first proto so assume this will have 37 filler rods and balloons…exactly like the original ‘Bunch of Balloons.’” Every fact is in our favor. It is the most cut and dry patent infringement case imaginable. But the outcome is uncertain due to the deteriorated condition of our patent system.
While the District Court for the Eastern District of Texas (my home district) has provided some relief in the form of preliminary injunctions against the infringing products, it is expensive and untimely. For example, one of the preliminary injunctions cost $1 million in legal fees, $4 million for bond, and took 9 months to obtain. Each year, Telebrands reboots with a minor change to the design – rinse and repeat. We won our third preliminary injunction back in May of 2017, but today Walmart is still selling pallet loads of the Easy Einstein knock-offs.
The $17 million investment would have secured my patents by now, except for the PTAB. The PTAB division of the USPTO hears inter partes review (IPR) and post grant review (PGR) challenges to issued patents. These procedures were created under the 2011 America Invents Act, ostensibly to efficiently remove defective patents that were mistakenly issued.
Instead, the PTAB simply encourages infringers like Telebrands to double down on the expense of litigation, rather than acquiescing to the adjudication by the District Court. Here, there is no service to the public by reviewing and expunging defective patents. It is nothing more than a cheap “get out of jail free” card for the infringer, a big second bite at the apple.
The USPTO has issued six patents for my invention. The primary examiner considered over 150 references of prior art, over 100 which he found with his own search. Multiple officials took part in the examination including two different primary examiners, three different supervisor examiners, one or more training quality assurance specialists, and a Technology Center Director. The patents were entirely prosecuted under the AIA and in light of the Enhanced Quality Initiatives of former USPTO Director Michelle Lee. The USPTO was aware of, and considered the validity challenges of, the earlier patents that were ongoing during examination of the later patents. Bottom line, these patents were rigorously and thoroughly examined by competent officials of the USPTO – they were not mistakenly issued!
But that does not matter to the administrative patent judges (APJs) of the PTAB. They determined that all claims of my first patent were “unpatentable.” Contrary to the applicant, examiners, the district court, the Court of Appeals for the Federal Circuit, and every child in America, the PTAB held that one of ordinary skill could not understand the phrase “substantially filled with water.” In the PTAB, it matters not whether the actual infringer understood the term or whether they copied the original invention without any regard for the patent. As a result of this aberrant ruling by the PTAB, the first trial against Telebrands and their Balloon Bonanza copycat has been postponed indefinitely. If the PTAB is upheld on appeal, the infringers will avoid liability for all their 2015 sales – tens of millions of dollars worth.
Recently the PTAB declared the claims of the second and third patents to be more likely than not obvious in light of a combination of Saggio and Donaldson. These are two of the references the examiner considered, as well as the District Court. The PTAB denied my motion to reconsider institution which, in part, asked if it is obvious, then why has nobody done it before? Why were water balloons filled one at time and tied with a knot for 63 years prior to my patent? Since the panel refused my rehearing request, I have to come up with another half-million dollars to re-prove that my invention warrants a patent. I have to endlessly prove over and over again that that I have an invention – there is no end in sight.
I am very thankful that my invention has been such a success. I am thankful for our historic patent system that gave me confidence to try. I am thankful that I am still in the fight, and even have hope to one day actually secure a patent that effectively protects my invention. But the risk is too great. I would not do it again, and would not recommend it to other inventors. What can I tell someone who has an invention and is preparing to scrape together $5,000 to $10,000 to file a patent application? Or quit his day job to launch a business around an innovative product? We can deal with the design risks, the marketing risks, the financial risks, and all the other challenges that set inventors apart – but that sealed and signed patent cannot be another gamble. We are crazy, but we are not stupid. If a patent’s costs are in excess of $17 million, and it still is not secure, how can we innovate?
US Inventor Rally/Protest on August 11 at USPTO Headquarters
Please join me and US Inventor on August 11 at the USPTO in Alexandria, Virginia. We will be supporting the work of the USPTO by presenting the first annual A1:8 Examiner Awards. Examiners will be honored for their contributions to “securing to inventors the exclusive right to their discoveries” according to Article 1, Section 8 of the United States Constitution.
Award categories will include:
- Best rejections
- Best interviews
- Best amendments
- Best prior art search
- Best notice of allowance
- Best all around examination
Patent owners/applicants are encouraged to submit nominations here.
Following the award ceremony there will be a peaceful protest demanding an end to the PTAB. Details and registration for the event are at http://usinventor.org/rally.
Join the Discussion
35 comments so far.
PatentExaminerAJuly 24, 2017 07:44 pm
How are you all enjoying your Jarndyce v Jarndyce Bleak House? You all thought it was a good idea to let patent office management squeeze patent examiners for more “productivity”. Solution: just give examiners the right incentives and time to do the job properly in the first place. Do the job right. Or just stop examining patents at all. Stop the pretence. An illusion of validity followed by grant of dubious patents is good for business in a bleak house. All they need to do is game the USPTO into driving down the quality of examination. This is a classic case of regulatory capture.
And the consequence of squeezing examiners is setting-up-to-fail the 35USC282 Presumption of Validity that Congress gave to patentees. District Court Judges are hit in the cross fire by shots fired during fights in the void between the authority of Congress and the capability of the USPTO. See e.g. page 104 of AMP v USPTO (Myriad patent) No. 09-cv-4515, 94 USPQ2d 1683 (S.D.N.Y. March 29, 2010).
Lawrence S. CohenJuly 24, 2017 02:25 pm
Josh, your story is enraging. But it reflects a continuing swing of a patent favor-disfavor pendulum. I have been doing it (patent attorney) since 1968. In the 60-80s the patent system became crippled because all the different Circuit courts of appeal were developing different rules and mostly disfavoring patents. Then in the ’90s came the energy to re-favor the patent system, and that led to the Federal Circuit Court of Appeals whose members were largely pro-patent judges. They wanted a vigorous and valuable patent system. And, they understood the need for a clear and easily worked set of rules for getting patents from the USPTO and the need to get courts to enforce those rules. But, as time has gone by the pendulum has shifted patents out of favor. SCOTUS gave it a big hit when they took away the automatic injunction against infringement. The Congress could fix that but they haven’t touched it. So even if you win in court that doesn’t mean the infringer has to stop; now what kind of nonsense does that mean for the so-called exclusive rights granted in a patent. Then SCOTUS cut the throat of the clear rules for administrating the USPTO processing of patent applications; they made the rules so arbitrary that every examiner can use his own rules. Now the inter-parties judges use another tool to destroy the system; its called “claim interpretation” or “claim construction”. It just gives every person in the judicial chain the right to interpret the claim wording so as to kill the patent, even though the PTO examiner thought it was OK. Claim interpretation is now widely used to either kill the patent altogether or to find non-infringement. At every level the goal is to destroy the patent system’s effectiveness. Needless to say, the AIA was a huge blow to the strength of the US patent system, and the congress knew that when they passed it. The question is, when if ever, will there grow a reversal of that pendulum to reinstate a sense to have a powerful patent system so that the patent itself is the investment of value.
Kevin GeorgeJuly 20, 2017 03:56 pm
So sad. I remember reading a book in the early 1990s written by an inventor who found a way to package seeds in tablets. His conclusion after fighting the system was to not patent; just be the first, be the best, and hit the market with all you’ve got so you end up with as much of the market share as you can.
After reading his story I decided to do the same. I have not patented my products, and I don’t sell to China. So far, my strategy has worked good enough.
Tesia ThomasJuly 19, 2017 02:42 pm
I also wonder is Walmart or any infringer trying to sell Josh’s product outside of the US?
Wal-Mart is multinational but I’d hope the counties without a PTAB/IPR process like the US will uphold the patents and make Wal-Mart pay.
Tesia ThomasJuly 17, 2017 03:12 pm
We need an inventor boat town with strong IP laws.
But no trading with non-boat nations.
angry dudeJuly 17, 2017 02:38 pm
You are talking about luxury yachts not boats 🙂
Unlike patents used boats are practical – lots of people in states like Florida live on boats
One day I’ll buy a used sailboat (on credit) and sail away from all this madness
The land of opportunities such as USA used to be is no more
JoeJuly 17, 2017 02:14 pm
Thanks for sharing your story. I just bought three Bunch O Balloons from Amazon to support you. Looks like a great toy and I’m sure my kids will have fun with it.
Geleez DaveJuly 17, 2017 01:40 pm
Sorry, to read this kind of story…. again. I originally bought “Bunch of Balloons” from your kickstarter campaign, because it is a simple and easy solution. I knew it would get knocked off. Because, I had the same experience with my invention the Geleez gel filled wristrest. I fought for 15 years until after the second inter partes review, the PTAB cancelled all the claims. After the patent was cancelled, several of the infringers bought licenses to the patent for $0.001cents/unit to cover their ass-ets. Tens of Millions of products were sold worldwide, but I lost money covering legal fees.
It’s the movie Flash of Genius all over again, year after year it happens to inventors. I agree with you, to tell inventors, don’t bother to invent, it is NOT WORTH IT, patent enforcement will ruin your: finances, job, and probably your marriage – like Flash of Genius Robert Kearns. A really smart, Ph D. guy would couldn’t beat the system. RIP.
Corporations always win.
Sad but true.
CuriousJuly 17, 2017 12:34 pm
This is a sad story and emblematic of the decay of the United States patent system.
This reminds me of the old line that “a boat is a whole in the water that you throw money into.” Patents today are little more than worthless pieces of paper that cost tens of thousands if not hundreds of thousands (if not more) to maintain. At least with a boat, you get to take out out every so often. With patents, you soon realize that the statement in the US Constitution that “[inventors] securing for limited times … the exclusive rights to their … discoveries” is an illusion unless you can afford a lobbyist on K Street in DC.
Paul MorinvilleJuly 17, 2017 11:51 am
August 11 and 12 is the USPTO Inventor Convention. We thought this the most appropriate venue to burn patents and protest the PTAB.
Silicon Valley InventorJuly 17, 2017 11:21 am
Josh, thank you so much for this article. I will share it and hope it is disseminated far and wide. The saddest part is that a licensing deal worth less than all the legal expenses may have honored your invention and avoided all the wasted time and money in court. But your fight is much appreciated because clearly only through courtroom victories and precedent in landmark decisions can we begin to erode the horrible policies and practices that have become the norm.
And yes @Tesia, @angry @Eric and @Paul, I will participate in burning my patents (preferably at the Silicon Valley USPTO office — which itself is a tremendous waste of taxpayer dollars — as I don’t know when I’ll be able to get to DC). The press needs to know the real trolls are our elected representatives and the corporate goliaths who infringe and hire armies of IP attorneys to lobby and erode patent protections.
Tesia ThomasJuly 17, 2017 10:07 am
We should go with the White House.
I’ll bring my worthless patent app and some of these water balloons so the fires don’t get out of hand.
Richard CatalinaJuly 17, 2017 10:05 am
Wow, my condolences, Josh. As a practitioner, I have had my own battles on behalf of clients, but nothing like what you have experience (and at that cost). Clearly this is a very broken system.
angry dudeJuly 17, 2017 09:54 am
Paul Morinville @13
PTO is just a branch of US government, not even a department
Maybe on the steps of US Capitol or in front of Scotus or White House ??
And if some pissed off inventor gets arrested then its even better – more publicity
I was thinking about publicly burning my US patent for a while, but we need publicity so some media outlet needs to be there when the action happens…
Paul F. MorganJuly 17, 2017 09:33 am
District court legal costs and delays against blatant infringers can indeed be oppressive even if attorney fee sanctions can be obtained – much later.
But I fear an even larger problem here may be in convincing some Fed. Cir. judges to duly respect an invention for enabling enhanced water balloon fights. Patent suits on toys and games have historically not as done well as other technologies.
Steve MooreJuly 17, 2017 09:09 am
The system is clearly stacked in favor of the infringer with big pockets. Since the AIA I and my colleagues have for the most part dissuaded independent inventors from filing patent applications, as we see the system so stacked against them. A patent can cost a fortune, as challenge after challenge is filed – as you well know.
Tesia ThomasJuly 17, 2017 08:43 am
So if we just need a pizza then why isn’t our currency pizza?!
I’m sure companies and research labs will too.
Minnesotta TruthJuly 17, 2017 08:40 am
Josh, thanks for fighting the good fight! We need similar protections as copyright. It is clear that your original invention was copied. So then why all the hoops?
Night WriterJuly 17, 2017 07:56 am
@15: I think your best point is that this is likely not going to be fixed easily. There is a huge shift in people’s view that has occurred. People now believe that anything they invent will have to be brought to market or hidden to make money. And, that most things aren’t worth inventing. No money in it.
Of course, we have the vile CJ Posner who said that inventors just naturally do these things and all they need is a pizza. What an arrogant piece of **** this man is.
Eric BerendJuly 17, 2017 06:00 am
@ 13., Paul:
Excellent. That is the kind of dramatic demonstration which just might gain some news coverage. There needs to be a ‘Boston Tea Party’ for U.S. Inventors, at this point.
Thanks for reaching out, some months ago. I’m not sure what my participation can add, not yet having suffered through the fraud upon the Constitution and U.S. inventors that the U.S. patent prosecution process has become.
The above narrative reveals a horror show, that is now not only all too typical, it is standard operating procedure for the institutions charged with Constitutional responsibilities directly opposite such practices. I dare not disclose under such toxic circumstances.
My own creations tend toward physical apparatus, so there is at least some chance for practice as a trade secret, with some of these. For the inventors of more intangible products in process, control, and programming, I feel terrible there is now, not even this pallid echo of the former patent system to practice within; and as a U.S. citizen, I am beyond outraged at the rampant betrayal of the nation’s public interest (e.g., “welfare”); and, for mere influence peddling no better than so-called ‘Banana Republics’.
Inventors in general, now on a much more widespread basis, have lost faith in the system: this is exactly the “enormous harm” I warned about, over a year ago. All the other “stakeholders” in the U.S. patent system and its domain overall, have forgotten the very raison d’etre for their governmental and professional existence: the products of inventors’ genius works. Their gigantic egos have decreed that control and distribution elements are all that matters: inventors are reduced to ciphers – to the point where these obsessively virulent plundering pirates have nearly 100% control over what soon will be: a lot of nothing.
The corrupt attorneys, flacks and legislators think any damage to the domain can be readily repaired through fiat; much as the wholesale rip-and-replace of the AIA upset the entire industry virtually overnight. This ruthless ‘masters of the universe’ outlook, is morally and intellectually blind to the actual suffering and loss to genuine inventors. Ready to run to courts for relief from defamation, at the drop of a hat (or dollars of a client); yet, actually create a canard of supposed evil to tar inventors with, to such an extent, that contempt for us has become social sport – there can be little doubt about the existence of substantial reasons why attorneys draw some inventors’ ire, here.
The metaphor of a fist closing too tightly about a handful of sand, comes to mind. Truly, these pirates have gained this whole world, only to kill its soul.
Chris SmithJuly 17, 2017 06:00 am
I take your point about cost of enforcing – apportionment of costs in favour of victor still unusual in US.
But, if an alleged infringer with deep pockets can get your patent revoked for invalidity then you can’t really complain – it wasn’t something you were ever entitled to in the first place.
EPAJuly 17, 2017 05:14 am
Why does a PTAB trial have to cost multiple millions? An opposition at the EPO costs you 10-20 k. Make that 100k if it’s a very important and complex patent. Even with unlimited resources, I would have no idea how to spend 1 million, let alone 17 or 50.
Paul MorinvilleJuly 16, 2017 11:43 pm
I’m burning my patents on the front steps of the USPTO. Come join us. Bring yours to burn too.
JPMJuly 16, 2017 10:04 pm
Excellent article. It clearly explains the scam that is the PTAB and how the AIA is killing small innovative businesses by allowing large corporations to cheaply and quickly kill patents.
Let’s all hope that the SCOTUS rules the IPR process as unconstitutional and that the Trump administration puts a director in place at the PTO who will strengthen patents through policies that help inventors and not large corporate infringers.
patent leatherJuly 16, 2017 09:53 pm
Josh, thank you for sharing your story. My kids love your product and I will make sure from now on that we only buy your original product.
Whenever I represent a new client on the inventor/patent owner side, I always tell them that the current system is stacked against inventors and patent owners. Whenever I represent a new defendant that has been sued for infringement (or at least has received a cease and desist letter), I tell them the good news (for them) is that the patent system is stacked against patent owners and they probably don’t have much to worry about (legally that is, morally is another question). It is rare when the CAFC actually affirms a patent infringement judgment these days.
Things were different 12 years ago. Then, if you sent a cease and desist letter (and there was no blatant error with the patent), the infringer would always entertain a discussion which usually ended up in a license deal (or an outright purchase of the patent).
The culprit is simple – Inter Partes Review (and PGR/CBM). While the PTAB is somewhat at fault, I do believe they are not anti-patent and are just trying to enforce the law as best they can. Inter Partes Reexamination gave the patent owner a fair chance to rebut (and amend claims). Currently, the system is a train wreck for patent owners.
Legislation needs to be passed revising the IPR rules to even the playing field. But of course Big Red (who knows nothing about patents) and Congress are too distracted with other things right now.
Tesia ThomasJuly 16, 2017 09:18 pm
Yeah. Not to mention deferring taxes.
And, it’s like they’re stocking up on cash to kill small inventors with.
Where are the trust busters? Oh, only in Europe.
“Already, patent filings from US corporations are down. My guess is that it will drop 25% in the next three years from US corporations.”
I agree and that will wreck the USPTO.
We already are Communist. At least in part.
The only thing our country seems to really care about is Communist DoD.
You are what you buy.
The military is the only aspect of this country that gets nearly exactly what it wants.
They have sovereign immunity, control the prices of goods and who gets to make the goods, exploit the masses, and are full of corruption and fraud, waste, and abuse.
I think this country is, at best, half Communist (MIC) and half wanna-be republic/democracy of some type.
And both parts want to screw over inventors.
Night WriterJuly 16, 2017 08:38 pm
@5 Tesia: What is odd to me is that the vast profits of Apple, etc., are not seen as a sign there is a problem. They aren’t spending that money on research or lowering their prices. It shows there is a problem in the market.
Already, patent filings from US corporations are down. My guess is that it will drop 25% in the next three years from US corporations.
Pretty sad when China has the right idea and we don’t. What next? We become communist and they become a democracy?
Night WriterJuly 16, 2017 08:30 pm
I think we are reaching a tipping point. Pretty sad.
Tesia ThomasJuly 16, 2017 07:48 pm
“show us, we will steal it…… the better it is, the worse we get”
Yep. I agree, Larry. I’m sorry for what happened to you too.
Innovation is becoming small player world charity.
We’re volunteers of our mental and physical labor to give greatness to the world.
Larry GlaserJuly 16, 2017 07:12 pm
US 7462485 Worth about 1 trillion. They step in and just steal it. Double patent it. Lie lie lie and will not even quote their own prior art or mine, to sneak the patent through. Why should an inventor step forward and show their best stuff when the market CLEARLY decries “show us, we will steal it…… the better it is, the worse we get” This is perhaps the deepest part of “THE SWAMP”. Pantsuit Pinocchio kissed their rings and they think they own existence.
The Time Is Now To ActJuly 16, 2017 04:57 pm
Is there a Facebook event link and page for the protest? Is so, please share as an adjunct to the link shares so the community can share it and em ed in social get more people there.
Jonathan SzarzynskiJuly 16, 2017 03:54 pm
Great article, thank you for writing it.
angry dudeJuly 16, 2017 03:17 pm
This is insane
No more patents for me
Fool me once – shame on you,
Fool me twice – shame on me
BemusedJuly 16, 2017 02:48 pm
Josh, I’ve had the pleasure of meeting you at various functions and political events over the past few years and you are truly a credit to American innovation and a wonderful example of an inventor who decided (at great personal expense) to fight the good fight against the AIA and efficient infringement.
It is truly a travesty that the various Congressional committees who hold hearings on patents haven’t called on you to testify.
This article should be picked up by the mainstream media to tell the inventor’s side of the story.
Tesia ThomasJuly 16, 2017 01:01 pm
I’m so sorry Josh. Yes, I see your future as my own.
I’m crazy but not stupid.