The American Inventor’s Protection Act of 1999 (AIPA) requires the USPTO to publish patent applications 18 months after the inventor files the application. An inventor can ask that the patent application not be published if no corresponding foreign applications will be filed. Some do, but the vast majority of patent applications are published by the USPTO on their searchable public website. Anyone with a web browser can search for and find the inventions, with full detail disclosed, regardless of whether a patent ever issues.
The AIPA creates a tough decision for inventors. Publishing how an invention works obviously means that it can never be protected as a trade secret. The loss of trade secret protection should theoretically be overcome when the patent issues because it becomes an “exclusive Right”, a property right, and infringers can be enjoined. Of course that theory only works if the government enables the exclusivity and provides a reasonable and affordable way to enforce it. Based on trust that the government will uphold its end of the bargain (a very poor assumption in 2017) most inventors allow their invention to be published and forego trade secret protections. That is becoming an increasingly bad choice.
The problem is that once published by the USPTO anyone can simply search the USPTO website to find inventions that apply to their business, pick off the good ones, and commercialize them long before the inventor has patent protection. A case called eBay v. MercExchange effectively eliminated injunctive relief by requiring an impossibly difficult public interest test before a court can grant injunctive relief. So if a big corporation steals an invention made by an independent inventor, or even an invention by a small technology company or start-up, odds are they get to keep on trampling the allegedly exclusive rights even if they are found to be infringing after having lost at trial.
When the inventor finally gets the patent granted (normally years after USPTO publication, and sometimes decades after publication), it is practically impossible to attract investment to commercialize an invention if big corporations have saturated the market with infringing products. Investors will uniformly explain to inventors that the odds of competing with these big corporations in a saturated market post-eBay is effectively zero, so they won’t invest. I was told by several venture capitalists that I didn’t need an investor – I needed a lawyer.
It is difficult to argue with the perspective of these investors. How can an individual, start-up or even a small technology company compete when a big corporation has stolen an invention and saturated the marketplace? Once upon a time strong patents equalized the playing field, but those days are long gone, at least in America.
Of course, if an inventor has a couple of million dollars stuffed in the mattress, they can hire a lawyer and sue infringers. But what can realistically be achieved? Because of eBay, it is nearly impossible to satisfy the public interest test without a product on the market and the means to manufacture it at a scale that can replace the large corporate infringer’s products. A tall order indeed. The remaining option is a compulsory license at an arbitrary value decided by a judge and then re-decided by Federal Circuit, which in recent years only ever seems to vacate or reduce damages awarded to innovators regardless of the fact that infringers who are stealing innovations are making many billions of dollars, sometimes many tens of billions of dollars.
The reality created by eBay in light of the AIPA is simple: If you scrape an invention off the USPTO website and massively commercialize it, you get to keep it. Ubiquity has become a defense. How odd that ubiquity caused by your own initial theft becomes an impenetrable shield in patent infringement litigation.
It is humorous when big corporations say they would never scrape the USPTO for inventions to steal. Apparently we are to believe they are just too honorable to stoop to such a low level. We should all just trust them. But the job of a big corporation is to commercialize technology, to maximize profits, and to protect their business and profits. Scraping the USPTO website aids in all of these business goals. If they aren’t doing that given the current climate in the U.S. and one-sided laws in favor of infringers they are not acting in the best interests of the company and shareholders and shareholder lawyers should demand to know why. Scraping grants access to new technologies that they would not otherwise have access to – and at virtually no cost. And since eBay makes it impossible for most inventors to stop the big corporation from infringing, their business and profits are protected. Only Pollyanna would believe that huge corporations do not scrape the USPTO for inventions.
What’s never talked about is that virtually all big corporations claim they are the leading edge of technology – the experts in the market of that particular technology. They want us to believe that they are the ones who invent the next generation of products and that is the reason we should buy their products over a competitor’s products. The claim of being the leading company necessarily means that they know what technology is coming down the pike. But being the expert is more than a marketing slogan and an inducement to buy their products. They have to be the expert. If they fail, they risk their business. Think of buggy whips, cassette tapes, cathode ray tubes, and wired phones, to name but a few.
There are a lot of ways that big corporations learn what technology is coming. They go where the technology is born. They reverse engineer competitor products, attend trade shows, hire employees from competitors, talk to vendors, enter into acquisition discussions, and they review competitor websites, white papers and technical documents. And they search the USPTO website. It is the one place on earth where those technologies are openly published and enabled so that folks skilled in the art can build it, after all that is one of the basic requirements of an adequate disclosure.
It is not believable when a big corporation denies knowledge of a patent they infringe. That knowledge is freely available on the USPTO website and if they do not know the technologies coming, their business could be substantially damaged, and possibly fatally damaged. Finding those inventions means too much to the continued success of their company and it is disingenuous to say that they did not look and do not know. And if that is true, shareholders and their lawyers should once again start to ask some very serious questions about gross incompetence and substantial mismanagement. Either these companies know what they are doing, or they should know what they are doing. That means their actions are either intentional or reckless, and either should qualify as being characterized as willful patent infringement.
Big corporations argue that it is impossible to know all of the inventions published at the USPTO and therefore they never infringe willfully. With thousands of employees and tens of millions of dollars in revenue, these big corporations have plenty of resources to find inventions on the USPTO website. While there are a lot of patents overall, the number that would apply to any given field is a much smaller number. It is unreasonable to argue that there are just too many patents. Furthermore, these same big corporations regularly search trademark databases maintained by the same USPTO to make sure no trademarks are being requested that come to close to any in their trademark portfolio. So why can’t they do the same for patents? The truth is they just don’t want to have that burden because it is easier to fake ignorance and steal technology rather than respect patents in an era where patent rights are historically weak.
But when a big corporation wants to invalidate an inventor’s patent, they expect the inventor to know not only everything on the USPTO website, but even documents written in different languages and stored on paper in places like Belarus or Zimbabwe. With their vast resources, big corporations on one hand argue they cannot possible know what is in the USPTO because they do not have the resources to do it, and then on the other hand demand that inventors with minimal or no resources at all are required know all that and more. How ridiculous! Requiring inventors to have knowledge of everything in every language ever spoken but not to require infringers to have knowledge of what is carefully indexed, in English and published and searchable for free? Talk about a double standard.
Of course, not all infringers should be liable for willful patent infringement. Some infringers are not the experts in the field. Some are users of technology produced by the experts. If you are a small coffee shop and you purchase a router, you are not an expert and you are not willfully infringing. You just bought a product that some infringer sold you and you reasonably believed could be lawfully purchased and used. But if you are the company producing that router, it must be assumed that you are willfully infringing.
We need to reverse eBay to restore injunctive relief, and we need to make willful patent infringement the rebuttable default for infringing a patent.
Join the Discussion
34 comments so far.
Joachim MartilloNovember 23, 2017 04:52 pm
PAIR and the USPTO Patent or Application databases are not the best databases to search for pending IP. Google’s patent and application databases covers far more Intellectual Property.
AnonNovember 5, 2017 01:24 pm
Your question is a decent one, but one that (unfortunately) has a rather unsatisfactory answer due to the current realities that the Supreme Court has brow beaten a particular lower court that WAS created to be responsible for being that very “specialized tribunal.”
There is a colorful psychological thought experiment that rather well illustrates what has happened: the firehosing of monkeys in a cage whenever they reach for a bunch of bananas suspended from the middle of the cage.
Confused PharmacistNovember 5, 2017 04:36 am
Isn’t an article III court dealing with a patent case analogous to a family practice doctor dealing with complex brain surgery? Is there not a case for a specialized tribunal that enjoys greater discretion due to this specialized knowledge?
Paul MorinvilleNovember 2, 2017 08:11 pm
“The USPTO can by error grant an invalid patent,” That is not possible. A patent is by law presumed valid. They can only grant a valid patent. A court or the PTAB can invalidate it, but there is no such thing as a bad patent or an invalid patent.
Patents with a likelihood of being invalidated are for the most part not asserted except by big corporations. Patent holders need to put a lot of money into litigation and they risk to lose 100% of it and more if they assert a patent that will likely be invalidated. Asserting a patent that will likely be invalidated is just not a good business model if your goal is to make money.
What is a bad patent? I read the other day that one example of a bad patent is the patent for painting with a baby’s butt. OK. It is a stupid patent. Silly and idiotic also come to mind. But it is not a bad patent. If it were a bad patent the implication is that it would do some sort of harm to someone. How could anyone ever assert a patent for painting with a baby’s butt? Even if it is infringed, how could that activity ever bring in enough profit to justify the millions of dollars it takes to litigate a patent?
This is another myth created by the GAFAM mafia.
Joachim MartilloNovember 2, 2017 06:12 pm
BTW, I have read Michelle Lee’s comments. She referred to illegitimate patents. I don’t know what they are. The USPTO can by error grant an invalid patent, but that should be so rare that there should be need for a post-grant tribunal because Article III courts should be able to deal with the case of rare erroneously granted patents.
Anti-patent people try to delegitimize certain patent-holders by calling them patent trolls, but when I read the definitions of patent troll, they invariably would encompass Edison or Tesla.
We should avoid characterizing patents and patent-holders as legitimate or illegitimate.
Joachim MartilloNovember 2, 2017 06:03 pm
The Time Is Now To [email protected]. Okay. I will use the language of the statute (35 U.S. Code § 102 – Conditions for patentability; novelty).
The Time Is Now To ActNovember 2, 2017 03:01 pm
@13 – “the vast majority of corporations cannot employ persons with the necessary legal and engineering expertise to sit and read patent documents”
Please come stand up in a room of tenured industry ip professionals and make that statement. Please.
The Time Is Now To ActNovember 2, 2017 02:48 pm
Joachim @25 – I enjoy much of what you say but @25 gives me pause. Sadly, the rhetoric is not isolated to your comment. In conversation after conversation with ip managers people who should know better, the same ‘ deserves’ rhetoric you pose keeps coming up like a bad cold.
If you believe in a strong patent system and diligence in application specific prosecution of 102 and 103, then you should not banter about which inventor deserves what based based on your enthusiasm for their product or other whimsical folly. How you *feel* about Josh’s (or anyone else’s patented invention) is simply irrelevant.
To meander in the ‘deserves it or not’ land of the lost is to add fuel efficient infringement lobby as opposed to stamp it out. The ‘deserves it or not’ rhetoric is thrown about like candy in the Gov’t brief in Oil States so wondering why you post along those lines while concurrently speaking of reparations.
Joachim MartilloNovember 2, 2017 01:40 pm
If IPR is unconstitutional, ex parte reexamination is also almost certainly unconstitutional. Because ex parte reexamination has been available since July 1, 1981, its unconstitutionality might occasion much more reparations.
Joachim MartilloNovember 2, 2017 01:20 pm
Water balloon lovers tell me that Josh Malone also deserves his time-limited monopoly.
PTO-IndenturedNovember 2, 2017 01:18 pm
In the Event of PTAB being Deemed Unconstitutional – Reasonable Reparations?
Not wanting to count any chickens before being hatched (SCOTUS/PTAB-wise), but noting the comment made @12, Joachim raises a salient justice-issue, i.e., a fitting compensation (or reparation) e.g., of a type tied specifically to damage done, or (currently) irreversible harm) by the PTAB to a patentee and his or her patent(s).
One example of a form of reparation I suggest would be fair (with a hearty welcome to others to chime in too) would be grant the patentee a Patent Term Adjustment at least equal to (a.) all time consumed by the PTAB (and/or respective IPRs) relating the patent(s) at issue, and (b.) preferably taking into account any other proceedings thereafter, associated with an unconstitutional-PTAB ruling, which clearly burned up even more of the patent-life of the patentee’s patent(s).*
*Granted, the above ‘consideration’ is imagined, based on a best-case, good or nominal SCOTUS outcome, rendering some semblence of justice RE an unconstitutional PTAB, but maybe some proactive thinking on this, could prove fruitful.
Joachim MartilloNovember 2, 2017 01:16 pm
BTW, COPPER CHEF products are so wonderful that I have absolutely no problem that Tristar Products, Inc. has a time-limited monopoly.
Joachim MartilloNovember 2, 2017 01:14 pm
I have to admit that I am unenthusiastic about a device that fills hordes of water-balloons rapidly even if the phrase “substantially full” is pellucid to me. (A barely English-speaking patent examiner and the PTAB have given me grief over the phrase “one or more separate”.)
The manufacturer of my favorite COPPER CHEF cookware in suing Telebrands for infringing on design patents with RED COPPER products.
AnonNovember 2, 2017 12:10 pm
In your case, the adjective chosen is correct.
(nice strawman though, as NO ONE has said that “different” and “tainted” are synonyms).
BennyNovember 2, 2017 10:45 am
“Tainted” is not a synonym for “different”.
BennyNovember 2, 2017 10:44 am
Not double standard. Different standards for different things. A patent application is held up to known prior art – not just to prevent double patenting, but to prevent removing innovation from the public domain. The infringer is measured only against the patent being infringed.
My take is that the responsibility to determine whether a product is infringing a patent lies primarily on the patent holder, who has the easy job – the potential infringer has to check the product against hundreds of patents – and this includes cases which turn up zilch.
AnonNovember 2, 2017 10:17 am
Benny’s views have long been known as tainted – and very much mirror the Efficient Infringer’s philosophies.
ANY of his comments should be treated accordingly.
Paul MorinvilleNovember 2, 2017 09:55 am
Benny, the point is that if inventors don’t know all of the prior art including obscure written documents held in locations over seas, they will lose their patent. Ok. That’s how it is. But you argue that infringers, the experts in the field, do no even need to know what is online at the USPTO written in English. And you seem to think that’s OK. That there is nothing wrong with the double standard.
BemusedNovember 2, 2017 09:16 am
I believe there are two points that this article is making:
The first point is that the asymetrical burden imposed upon small inventors vs large infringing entities to prove willful infringement is simply not fair. Why is the small inventor with limited resources required to prove willful infringement (i.e. bear the burden) when large corporations have the resources to do a freedom to operate search before engaging in infringing behavior? Given the disparity in resources, wouldn’t it be more equitable to balance things out by imposing a rebuttable presumption upon the larger infringer to prove that it didn’t knowingly and willfully infringe a valid patent?
The second point is the behavior that the current willful infringement regime is encouraging. If the default standard is to simply pay licensing fees with little concern about having to pay enhance damages for willful infringement why wouldn’t large infringers be willfully ignorant or plead ignorance (regardless of whether its true or not) of an infringed patent to avoid any punitive repercussions for their bad behavior.
As regards Josh Malone: His problem isn’t the importers bringing in infringing knock-offs. The problem is an American-based company called Telebrands which is run by a clown (and I’m being polite here) who has been sued multiple times for stealing inventors’ patented inventions. Telebrands’ business model is pretty much based on finding successful consumer products and then using cheap, foreign-made knock-offs to steal market share. With very little fear of getting dinged for punitive willful infringement damages under the current system, even if Telebrands has to pay licensing fees (because they run into a tenacious inventor like Josh Malone who won’t give up), its still an effective/profitable business model.
BennyNovember 2, 2017 07:50 am
What is your point? The inventor isn’t the infringer. The inventor’s biggest problem is keeping track of who, knowingly or unknowingly, is infringing. The biggest loss to inventors like Josh Malone is to importers who don’t employ patent experts or engineers.
Paul MorinvilleNovember 2, 2017 07:33 am
Benny, “the vast majority of corporations cannot employ persons with the necessary legal and engineering expertise to sit and read patent documents” But you would require the party with the least resources, the inventor, to know all that and much more?
BennyNovember 2, 2017 07:00 am
“Big corporations argue that it is impossible to know all of the inventions published at the USPTO and therefore they never infringe willfully. With thousands of employees and tens of millions of dollars in revenue, these big corporations have plenty of resources to find inventions on the USPTO website”
Probably holds true for the giants like IBM who can afford whole departments of legal counsel, but the vast majority of corporations cannot employ persons with the necessary legal and engineering expertise to sit and read patent documents all day long (and lets face it, these are legal documents which most engineers find difficult to read and understand, partly because some are deliberately written to obfuscate).
How many patents would you have to examine to determine that your latest IOT gimcrack doesn’t infringe anything? My guess is in the mid hundreds,
The USPTO website? Seriously? There are better places to search for patent documents. Even the file wrappers can be found elsewhere.
Joachim MartilloNovember 1, 2017 11:04 pm
IP rights have value. If IPR is found unconstitutional, can the invalidated patent owner use the concept of unjust enrichment to sue all those that have benefited from unconstitutional patent invalidation.
If the patent rights are restored, during the period of unconstitutional invalidation, could users have established valid FTO?
If the patent rights are restored, during the period of unconstitutional invalidation, was infringement willful or unwillful?
TernaryNovember 1, 2017 10:35 pm
The IEEE’s brief in Oil States says it as many inventors experience this:
“IPRs adjudicate cancellation of patent claims, voiding a private right to exclude others, and conferring onto petitioner the private right to freely exploit the invention.”
Bait and switch. That is: inventors are baited into perfecting and disclosing an invention under the solemn promise of protection. But with the result not only that effective protection is not provided, but the right to freely exploit the work of the inventor is bestowed upon infringers. It is a stunning transfer of IP rights from patent owners to infringers with little or no recourse.
Josh MaloneNovember 1, 2017 05:36 pm
Paul, your analysis provokes another insidious attack on the quid pro quo. Suppose an inventor elects not to publish his pending application because he is does not wish to share his secret without obtaining exclusive rights in return.
Once the PTO has issued a Notice of Allowance, he has a predicament. If he pays the issue fee to get his patent, his secret will publish simultaneously with issuance of the patent.
His secret is out. But all he has in return is a fraudulent promise of exclusivity signed by the Director of the PTO. I have six of those. But the Director of the PTO immediately flips sides after issuance and attacks the very same patents via the PTAB.
The secret is out, and exclusive rights are vaporized.
How can this happen in America? How much longer can inventors be bled?
BenNovember 1, 2017 04:58 pm
Paul, how about this standard is applied to the BigCorps both after AND before prosecution. Overclaiming an invention becomes willful fraud against the Office. “You should have known better, your corporation is an expert! There’s no such thing as unintentional overclaiming!”
Paul MorinvilleNovember 1, 2017 02:20 pm
Making willful infringement the default upon a finding of infringement provides incentives that would have the effect of the customer stay provision of the thankfully dead Innovation Act. An inventor has incentive to sue the company providing the infringing product. It also provides incentive for would be infringers to buy or license before infringing.
I think any bill should have this provision.
Judge Rich’s GhostNovember 1, 2017 01:20 pm
Judge Michel and Matthew Dowd have written about this legal errors of the eBay decision. https://www.criterioninnovation.com/articles/understanding-the-errors-of-ebay.pdf. Others have as well, and of course Judge Michel’s speech at AIPLA highlighted the eBay problem.
Joachim MartilloNovember 1, 2017 12:08 pm
SAWS and similar programs create an even larger window for claim jumping, or by preventing grant of the patent, those programs enable the government to steal IP and make it public.
Thus the patent system becomes not a means of inclusion and thwarting wealth concentration but instead becomes a means of exclusion and of enhancing wealth concentration.
See The US Patent System, la Serrata of Venice, and Schumpeter.
Night WriterNovember 1, 2017 11:42 am
The attacks are three fold: 1) CAFC appointments are goons found by Google; 2) PTAB is a death squad where attorneys were hired to kill off patents and the rules are unfair; and, 3) Alice which is unconstitutional and is slowly eating away at all patents with each new 101 decision by the CAFC (people don’t seem to realize that slowly they are making it harder and harder to get over 101.)
Night WriterNovember 1, 2017 11:32 am
eBay is just part of the dismantling of the patent system by the SCOTUS and Congress. Look what the SCOTUS did to anti-trust law. We went in the 1950’s to a 7 percent market may be too much to two companies owning a market is fine.
We now have monopolies in almost every major market in the US. There are usually 1, 2, or 3 companies and when there are more than 1, they usually cooperate in pricing (which wouldn’t be hard to prove.)
They are doing the same thing to patent law.
EGNovember 1, 2017 10:32 am
You correctly point out the problem with eBay-the presumption should be that a permanent injunction will be GRANTED unless the infringer establishes “clear and convincingly” why it should not. Otherwise and with MedImunne allowing any prospective licensee to run to court if they “feel” the least bit threatened during a negotiation, the small patent owner has no real bargaining leverage against the Goliath multi-national corporate infringers.
Richard BrunnerNovember 1, 2017 10:09 am
The Founders had a very simple and clear intention by creating Patent Rights, to create a 20 Year Exclusive Right to produce, free of infringement in any WAY, SHAPE, or FORM, which creates jobs and benefits our society. This defines the inherent benefits of our Public Right to our System of Commerce based on innovation.
PTABs and Knock-Offs give us worthless patents that banks won’t lend on. Guess who that helps! Our politicians are SUPPOSED to be tuning up our system and “setting the conditions for prosperity”.
angry dudeNovember 1, 2017 09:58 am
Big tech corps like Google and Apple lie all the time and they try to hide their lying in the most primitive and unsophisticated way like everyone else is an idiot
When I put up my website with the software demo for my algo years ago I had 5 thousand downloads in a few months, at least several hundred of those coming from IP anonymizing proxy servers
Why would any honest dude use that sh1t for downloading some research (not final product) quality Matlab demo source code ???