Patently Strategic - Patent Strategy for Startups
Patently Strategic - Patent Strategy for Startups
American Inventor Horror Story: Ten Years of AIA and the PTAB
Listen in as we discuss the impact of the AIA and the PTAB with inventors gathered as part of the "Decade of Stolen Dreams" rallies, happening in front of regional USPTO offices all across the country, marking the 10 year anniversary of the passage of the America Invents Act – an event described by advocacy groups as the worst event in U.S. patent history.
The inventors and entrepreneurs at the rally we attended, all from diverse backgrounds with very different stories, have one thing in common and that is their shared belief that the AIA and the PTAB – with its eye-popping 84% invalidation rate – have crippled innovators and created a Decade of Stolen Dreams, ruining the lives of countless inventors and shutting down numerous start-ups, in favor of Big Tech and multinational corporations.
In this episode, we break down the AIA and PTAB through a wide array of personal perspectives from inventors, patent practitioners, and even a former USPTO patent examiner. We explore its origins, core problems, and proposed solutions. We also provide some very practical tips that inventors should consider now to help future-proof their patents, should they ever find themselves on the receiving end of an IPR.
Inventors are not only the real engine of our economy, but they’re also the reason we do what we do here at Aurora. This is a complex issue, with high stakes, involving the people who matter most to our business and what the world will look like for our kids, so we can’t think of a better use of a podcast episode than to lend a voice and hopefully shine a light on the key issues and some potential solutions.
I am joined today by an exceptional group of industry experts, founders, and inventors including:
* Ashley Sloat: President & Director of Patent Strategy at Aurora Consulting
* Dan Brown: Professor at Northwestern, owner of 40 utility patents, elected to the National Academy of Inventors, and serves as the inventor rep on the Patent Public Advisory Committee.
* Bob Schmidt: Founder, Chairman and CEO of 5 companies including Great Lakes NeuroTechnologies and Cleveland Medical Devices, Co-Chair of the Small Business Technology Council, and has 40 patents to his name
* Louis Carbonneau: Founder & CEO of Tangible IP, one of the largest patent brokers in the world
* Kip Azzoni Doyle: Inventor of the CardShark WalletSkin and the author of the upcoming book, “Blood in the Water, America’s Assault on Innovation”
* Tariq Najee-ullah: 10 year patent examiner, former NASA engineer, and current Principal at Patent Insider
***
Learn more: https://www.aurorapatents.com/blog/new-podcast-american-inventor-horror-story
** Follow Aurora Consulting **
* Home: https://www.aurorapatents.com/
* Twitter: https://twitter.com/AuroraPatents
* LinkedIn: https://www.linkedin.com/company/aurora-cg/
* Facebook: https://www.facebook.com/aurorapatents/
* Instagram: https://www.instagram.com/aurorapatents/
And as always, thanks
WEBVTT
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Good day and welcome to the Patently Strategic Podcast, where we discuss all
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things at the intersection of business, technology and patents. This podcast
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is a monthly discussion amongst experts in the field of patenting. It is
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for inventors, founders and IP professionals alike,
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established or aspiring. And in this month's episode, we depart from
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our normal format into a deep dive style investigative documentary into
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why these good folks gathered
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to demonstrate in front of regional USPTO offices all across the country
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on the ten year anniversary of the passage of the America invents act. The voices
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you heard are those of inventors who, unfortunately found themselves on the receiving
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end of the unintended consequences of the America invents act and its
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most unfortunate progeny, the PTAB or Patent Trial and Appeal
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Board. It's eerily fitting that we're covering this topic in our Halloween episode.
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The PTAB has another name among the inventor community and is far
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less affectionately referred to as is a patent death squad. The mere
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mention of it will send chills down the spines of most inventors.
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It should come accompanied by a compulsory maniacal laugh backed
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by an ominous thunderclap with
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an estimated patent and validation rate of 84%. This group
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delivers far more tricks than treats for unsuspecting inventors. You heard
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that right? No need to rewind. According to US inventor,
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84% of granted patents, patents that once went
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through a rigorous process of examination that come up for challenge
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in front of the PTAB are invalidated invalidated by
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the sibling division of the same patent office that previously issued the
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patent. The inventors and entrepreneurs at the rally we attended and countless
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others like them in cities all across the country, all from diverse backgrounds
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with different stories, all have one thing in common, and that is their shared
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belief that the AIA has crippled innovators and created a decade
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of stolen dreams, ruining the lives of countless inventors and shutting
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down numerous startups in favor of big tech and multinational corporations.
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Inventors are not only the real engine of our economy, but they are also the
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reason why we do what we do here at Aurora. This is a complex issue
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with high stakes involving the people who matter most to our business and what the
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world will look like for our kids. So we can't think of a better use
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of a podcast episode than to lend a voice and hopefully shine a
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light on the key issues and some potential solutions. We're going to break this
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down and look at it through a wide array of personal perspectives from inventors,
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patent practitioners, and even a former USPTO patent examiner.
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In researching this topic and talking with so many impacted individuals,
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it became clear that there's a very big picture missing from all of its coverage,
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and that picture only comes into focus when you bring these perspectives together.
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In addition to perspective, we first need some context before we
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dig more into the PTAB in these rallies, it's important to Zoom out, travel back
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in time to 2011. Take a moment to first understand broadly what
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the AIA introduced. Perhaps for better and for worse for
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that, I sat down with Ashley Sloat, President and director of patent strategy here at
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Aurora. So, Ashley, I know this could be a huge topic of its own,
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but could you, at a high level lightning around fashion, explain what the AIA is,
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what its goal was, and how it changed patent Law On September 16,
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2011, the Lahesmith America and Vents Act, also known
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as AA, or the Patent Reform Act of 2011,
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was signed into law with the stated goal of modernizing America's
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patent laws and harmonizing the US with the rest of the world. It's certainly one
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of the biggest changes to US patent law in the past half century.
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So the biggest change, probably, I guess, in the minds of many listeners,
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is that the AIA switched the US patent system from a first to
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invent system to a first inventor to file system, which largely
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aligns United States with the rest of the world. Under this new system,
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the date the patent application is filed with the patent office instead of
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the actual date of invention in your notebook determines who wins the race
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to patent the invention. This means that the practice of mailing your invention,
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which I know many of you did to yourself, so it has a postmark date
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to prove invention date. This practice no longer applies as
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a result of AIA becoming the law of the land. We heavily encourage vendors
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to file early, and often you can do a provisional patent application, which only
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pens for one year, and that application can then later be converted
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to a full US Patent Application or International Patent application.
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Another item that changed was Prior Art Types Forum, Public Uses,
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or Sales. The AIA also redefined the types of activities that may
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be used to reject a patent application. For example, under pre
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AIA law, a public user sale of a claimed invention prior
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to patent application filing was only considered problematic
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activity if it occurred in the United States, and then this activity could
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be used to reject your patent application. However, under the AIA,
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public use or sale anywhere in the world, not just the US could
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prevent later patenting. Another provision that changed with AIA was assignee
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filing. Under pre AIA, only inventors could apply
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for a patent under the AIA. An applicant,
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for example, a company as the owner or assignee of an invention may
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file a patent application on behalf of the inventors. During the
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patent application process, an inventor is still required to execute a declaration indicating
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that she indeed was an inventor, but this can be bypassed by
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the applicant in various situations. Furthermore, regional patent
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offices are now open as a result of AIA. These regional offices
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include places such as Dallas, Denver, Detroit, and San Jose.
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Prioritized examination was also made available as a result of AIA prioritized
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examination, also known as Track one, allows inventors
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to accelerate the examination of selected patent applications
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through payment of an extra fee to the Patent Office. Another change that
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was brought about by AIA was that the PTO is now
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in charge of its revenue, so the AIA gave
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the PTO the ability to set its own fees and create an operating reserve.
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We should all breathe a big sigh of relief since the USPTO is finally able
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to invest in much needed information technology upgrades, hire more
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examiners, and provide additional examiner training. And lastly,
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and of course, a significant subject of discussion for
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this podcast is that it also brought about the PTAB and
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IPRs, which enables granted patents to be challenged
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by members of the public. This gave birth to the Patent Trial and
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Appeal Board, or the P Tab, to oversee all postgrant proceedings,
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replacing its predecessor, the Board of Patent Appeals and Interferences.
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Okay, so definitely some positives and need to change them there.
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But PTAB there's that word again,
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the PTAB was created with the goals of providing a faster and less costly
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alternative to court based patent infringement suits, weeding out patents that shouldn't have
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been issued in the first place and reducing the amount of patent litigation brought on
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by patent troll syndrome. This was to be accomplished via an AIA introduced process
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called Inter Parties Review, or IPR, in which granted patents
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can be challenged by any member of the public, most likely coming from a patent
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owner's competitor or defensively by someone being sued for infringement. In theory,
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this all sounds constructive, but as they say, the difference between in practice
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and in theory is often far greater in practice than in theory.
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So why do inventor advocacy groups refer to the passage of the AIA is
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the worst event in history for American inventors? According to Josh
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Malone, policy director at US Inventor, the organ that sponsors these
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rallies, quote, the PTAB was sold to Congress as an easier,
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faster and fair alternative to litigation for patent disputes. However, what it
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became instead was a powerful tool that a large infringer could use to challenge
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the validity of any small inventor's patent in order to use the inventor's
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technology royaltyfree or to prevent the inventor's disruptive technology from
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competing in the marketplace. We spoke with Dan Brown about this at the rally in
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Detroit. Every space shuttle that's ever gone up his use of technology process he created.
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Dan is the owner of 40 utility patents, including the Bionic wrench,
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was elected to the National Academy of Inventors and is serving as the inventor rep
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on the Patent Public Advisory Council, working with the Patent Office,
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suffice it to say Dan has some skin in the game. I think fundamentally,
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the AIA had a number of things in there harmonizing the 20 years,
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there were a lot of things that the Patent Office put into place. But the
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biggest problem is the PTAB and the lack of due process. With the PTAB and
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the David Goliath situation, we have in this predatory infringement
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process where the PTAB was supposedly supposed to make it easier
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and less costly to litigate. For small inventors. It gave the
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infringers more arrows in their quiver to go after them. And so it's
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totally unintended consequences. And people recognize that now. So Congress
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has to stop this infringement business model.
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This is all happening with great lethal efficiency. According to
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US inventor. As of June 24 this year, the PTAB
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has invalidated 84% of the 3105 challenged
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patents that it has received. The PTAB has become a powerful anticompetitive
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tool for large companies. The same companies that is small,
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innovative startups use the patent system to change the world.
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Companies like Apple, Google and Microsoft topped the list of
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PTAB challengers. These companies have massive political
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clout, and whether intended or not, AIA is being wielded with the
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effect of a deeply a protectionist law. We spoke with Bob Schmidt about
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this. Bob is the cochair of the Small Business Technology Council.
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He's built five companies and has 40 patents to his name.
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This is very simple. These are the lessons that one learns in
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elementary school. The reason you build your clubhouse up
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in a tree is you can have the rope ladder that you can pull it
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up so the little kids and the girls can't come up. And that's
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what the America Invents Act is all about. It's big tech that went through this
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themselves protected themselves with the patent, but now
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they want to make sure nobody else comes along and boots them out.
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The net effect is a clear path to endorse piracy by
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using the patent office against inventors. We have this cannibalistic system that
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as soon as a competitive advantage arises from one of our designs,
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the pirate sweep in and steal
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your pattern and put you into a meat grinder that requires
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a tremendous amount of money because it's a David and Goliath battle, and it's
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just not fair at all. There's no justice in the justice system. So what
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about the stated legislative goal of weeding out bad patents that shouldn't have been
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issued in the first place? The reality is we have this concept of
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obviousness that kills patents. And I believe right
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now the obviousness at the patent office to get a patent,
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which is tough. It's not easy to get a patent. I've been going back and
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forth for years, and those examiners are tough that
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same process to get it once you get it is a different one that's
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being used when they take them away. Now, that doesn't make
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any sense to me. We have this hypocrisy or this schizophrenic
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organization that's giving patents and taking them away. Now the PTAB was created
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to get out away from patents that were bad patents. And I'll tell you,
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there are some bad patents out there. We would be foolish not to acknowledge it,
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but the system has been gained so that they're using
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that same system to take good caps away for
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me to get in the weeds on intellectual property. Grain factors
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are secondary considerations for obviousness you get a product in the
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market and it has success, I think, by definition, that was not
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obvious because it would have been in the marketplace before. But now
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at the PTAB, they're creating these obvious objections by
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going back and finding other art. And it's called hindsight reconstruction
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bias. Making these arguments that you should lose it, even though these products have
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gone in the market and competed and won makes no sense
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to me, and we need to reconcile it. We'll tackle the difficulty of getting
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a patent in just a bit, but it's worth underscoring that in practice,
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hurt thinning is not what's happening. Instead, IPRs in the PTAB
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are being used to invalidate some of the best US patents. The answer of why
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this is happening is simple economics. The cost to file and prosecute an
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IPR is averaging around a half million dollars. What company could possibly afford
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or justify that cost for anything but against a significant competitive
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threat. Data published on Professor Dennis Crouch's patent Leo shows
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that most patents tangled up in IPRs are also involved in litigation
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or licensing. Patents involved in litigation or licensing are considered top tier patents
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and make up only a very small percentage of granted patents back
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to our inventors. While in Detroit, we also learned that the power
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and leverage of the PTAB extends well beyond just the decisions of its
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judges more on them. In a bit, the mere threat of being IPRR and
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the crushing costs that come with it are enough to extinguish the licensing
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dreams and patent assertion rights of many inventors. Because,
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like Bob says, Why pay for it? You can just steal it. And so that's
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what they do when you attempt to stop a large Corporation from infringing your
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patent or attempt to license it to them. They often instead try to use the
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PTAP to invalidate the patent. We also had the pleasure of speaking with Kip.
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Izzoni Doyle at the Detroit rally. Kip is the inventor of the card shark wallet,
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skin and the author of the upcoming book Blood in the Water. America's Assault on
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Innovation. Listen in as Kip shares her chilling experience.
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So for me, I was on the sideline watching
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my own parade go by. All these infringers have been infringing blatantly
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or efficiently my patent. So every
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single time I find an infringer, I have to alert my team,
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and then we have to do a very delicate dance of cease
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and desist so that we don't get IPRED because the minute that happens,
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it's over. And so it's
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affected me terribly. I've left hundreds of thousands,
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if not millions, on the table because I've been told if you pursue
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me, if you pursue our company, we'll IPR you because we'll never spend the money
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on a license from you little inventor.
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We'll spend the money on the IPR so that you're out of the game.
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Do you have any direct experience with the PTAB, or has
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it been largely trying to avoid it? For me, it's been largely trying to avoid
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it. However, I've had every form of threat you can imagine.
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I was threatened with an IPR by a very powerful
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guy who was his wife owned the company.
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He is a big head of a studio out in La,
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and he just has all the money in the world. And he just said,
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oh, no. He came over and ripped my Pat and said, I will IPR
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you before I spend a day on.
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Let's talk for a second about the financial impact of being on the receiving end
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of an IPR. According to the American Institute of Patent Law Association,
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a patent defense at the PTAB will cost from 4000 $800,000.
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This is still less expensive than the district courtbased journey, but unfortunately,
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a single patent can have many IPR styled against it, each costing that
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amount. We mentioned Josh Malone earlier before helping to lead the charge at
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US inventor. He invented a bunch of balloons. His Kickstarter campaign
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went viral and made him a large target for infringement. Not long after becoming
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a summer toy hit, Josh found out his invention was being ripped off and sold
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by a serial infringer. After obtaining multiple injunctions against the infringer,
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the infringer changed course and decided to file an IPR against Josh. With the PTAB
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without due process, Josh's patents were revoked. His patent rights were
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invalidated at the hands of the company, stealing and profiting from his idea.
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Fortunately for Josh, he filed suit one, and his rights were restored.
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But along the way, he spent millions in legal fees having to raise
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and spend $75,000 every week hiring six different law
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firms, three different technical experts, and 29 different attorneys.
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In fully understanding the scope of the problem, it's important to take a closer look
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at the PTAB itself, much like we'll do with the examination process in a bit,
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we want to Peel the curtain back on the PTAB, discuss its composition and how
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it differs with traditional court base litigation. The PTAB tribunal
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consists of a panel of administrative petant judges or APJs.
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Once an IPR is granted, the judges are required to submit an opinion and validity
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within one year. This requirement aims to fulfill AIA's promise of an expedited
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alternative to the courts. Prior to AIA. Patent validity issues within the
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context of infringement, suits were settled exclusively by Article three federal courts.
16:16.370 --> 16:19.720
It's now possible to have disputes flow through either or both. That said,
16:19.970 --> 16:23.860
the PTAB is now seen as a more favorable venue to challenging patents for
16:23.930 --> 16:27.530
a handful of reasons. First, there's probability there's a widely held
16:27.650 --> 16:31.240
belief backed up by an everincreasing data set that PTAB judges are
16:31.430 --> 16:35.450
far more likely to invalidate patents than juries. Second, there's a significantly
16:35.630 --> 16:39.470
reduced burden of proof in district courts. Patents are assumed valid, and challengers
16:39.590 --> 16:43.610
must prove that each claim is Invalid using clear and convincing evidence.
16:43.910 --> 16:47.620
This requires the challenger to present the highest possible burden of proof in
16:47.750 --> 16:50.920
civil litigation. This presumption of validity does not exist in the
16:50.990 --> 16:55.060
PTAB, and challengers must only establish that it is more likely than not that
16:55.190 --> 16:58.480
the claims are unpatinable. Third, PTAB claim construction is
16:58.610 --> 17:02.260
broader. This allows PTAB cases to sweep in more prior art, leading to
17:02.330 --> 17:06.160
increased invalidation decisions based on obviousness. Fourth, standing is
17:06.290 --> 17:10.000
not required to file an IPR. In Article three district courts. A party must
17:10.130 --> 17:13.660
have sufficient standing to bring about a suit with the PTAB. Any member of
17:13.730 --> 17:16.600
the public may initiate an IPR, and then there are the judges themselves.
17:17.210 --> 17:21.230
For the most part, the APJs are attorneys with legal backgrounds, often lacking
17:21.470 --> 17:25.250
education and experience around the scientific and technical matters they're ruling
17:25.370 --> 17:28.720
on. According to US, inventor, 60% of APJs have zero
17:29.150 --> 17:32.440
technical experience, and 76% have less than three years
17:32.570 --> 17:36.220
of technical experience. Despite having tremendous power and authority. They are also
17:36.590 --> 17:40.070
far less experienced, on average, than their federal surrogate counterparts.
17:40.370 --> 17:43.250
Based on a study conducted by Jean Quinn of IP Watchdog,
17:43.610 --> 17:47.140
for example, the study found that many judges were appointed to the PTAB at
17:47.210 --> 17:50.270
a time when they were still associates or even junior associates,
17:50.570 --> 17:53.740
and that there were zero federal district court judges appointed with ten years
17:53.990 --> 17:57.460
or less experience, while 47% of PTAB judges were
17:57.590 --> 18:01.670
appointed with ten years experience or less. So there you have it. Inexperienced lawyers
18:02.030 --> 18:05.260
with little technical background or returning patents that may have gone through
18:05.450 --> 18:08.810
years of rigorous examination by individuals with relevant backgrounds.
18:09.050 --> 18:12.530
How could this possibly go wrong? The first step is always admitting
18:12.710 --> 18:16.120
you have a problem. That box has been firmly checked. But before we
18:16.190 --> 18:19.840
pivot into possible solutions, it's important to consider the cost of
18:19.970 --> 18:23.380
doing nothing for this. We return to some of our inventor friends in
18:23.450 --> 18:26.750
Detroit. Unfortunately, it's been a decade, and that's plenty
18:26.870 --> 18:30.280
of time to see measurable effect. What matters? Well,
18:30.590 --> 18:33.950
what matters is, since the American Events Act passed,
18:34.430 --> 18:37.900
we went from number one in innovation to number eleven in innovation in
18:38.030 --> 18:41.200
the world. So America is just plummeted and
18:41.450 --> 18:44.920
keeps falling. And this, of course, creates ripple effects throughout the entire
18:45.290 --> 18:48.350
economy. I do this because I believe inventors
18:48.590 --> 18:51.940
create jobs, and I believe the best social system is a good job.
18:52.910 --> 18:56.330
And from that perspective, that we don't have a patent
18:56.510 --> 19:00.050
system where people can count on the value of their patents and they can raise
19:00.290 --> 19:04.300
money, bring products to market. No one's going to bring products out to States because
19:04.550 --> 19:08.320
you end up just getting slain. And there's no
19:09.050 --> 19:13.010
government program that saves you after you've lost all the money you invested.
19:13.790 --> 19:17.500
And how about the impact on the value of patents? So I just
19:18.230 --> 19:22.010
came up with this idea, kept quiet and managed to get some patents
19:22.310 --> 19:25.610
around it. But I stepped into this world right when the AIA,
19:26.030 --> 19:28.480
the American Men's Act became a thing.
19:29.330 --> 19:32.500
And so it stripped the value of the
19:32.630 --> 19:35.800
patents. I had these patents, and I was all excited to go out. And first
19:35.930 --> 19:39.160
of all, spend every penny I had to get the patents thinking, okay,
19:39.350 --> 19:43.240
now I can either sell my portfolio. I had three, which is very
19:43.430 --> 19:46.660
small, but there were three patents in a specific space. So I
19:46.790 --> 19:49.610
thought, Well, I'm going to go sell it to a company that can really knock
19:49.850 --> 19:53.980
this out of the park. But unfortunately, it was at the time when these
19:54.230 --> 19:58.310
changes were occurring, so nobody was interested in buying patents.
19:58.970 --> 20:01.960
Nobody was interested in even licensing them,
20:02.870 --> 20:06.410
which, of course, has a measured effect of its own for the Chicago
20:06.530 --> 20:10.070
ones. Here how many of you have heard of Ocean Tomo? Anybody from Chicago?
20:10.850 --> 20:14.320
A couple of these. So these are the big
20:14.510 --> 20:18.040
name guys that do the reports on what patents are worth.
20:18.290 --> 20:22.190
And they've shown the American invent sac cut the value of a patent
20:22.370 --> 20:26.300
by two thirds. So ten
20:26.430 --> 20:29.780
years ago, a patent, typically the rule of thumb, stick up their thumb. It's worth
20:29.970 --> 20:33.560
a million Bucks. That could be off by an order of magnitude either way,
20:34.950 --> 20:38.960
but roughly a million Bucks. And so now it's a
20:39.030 --> 20:42.800
third of that. And in case you missed it, Louis Carbonate weighed in on
20:42.870 --> 20:46.410
this from a patent brokerage perspective. In last month's episode on Monetization.
20:47.430 --> 20:50.120
If you look back about 1012 years ago,
20:51.690 --> 20:55.170
you had a lot of demand for patents. It was considered
20:55.230 --> 20:58.940
to be the next kind of commercial weapon that was kind of the Golden Age
20:59.250 --> 21:03.150
or gold era of patent monetization. And unfortunately,
21:03.390 --> 21:06.920
that's when I started. So I missed the
21:07.110 --> 21:10.890
five years before. That had been great for anyone who was buying or selling patents.
21:11.610 --> 21:15.090
Then after 2012, it came to a screeching
21:15.330 --> 21:18.680
halt. Essentially, I think people realized that they
21:18.750 --> 21:22.160
were overpaying for assets that were sometimes not
21:22.410 --> 21:26.120
that clear in terms of what they meant or what
21:26.250 --> 21:29.780
the income passed. And then the case law
21:29.970 --> 21:33.090
changed. We had Bilski,
21:33.450 --> 21:36.800
and we had Alice. We're still living with the
21:36.930 --> 21:40.520
aftermath of Alice, and it's progeny we
21:40.650 --> 21:40.700
have,
21:45.510 --> 21:49.110
which really threw monkey Ranch
21:49.230 --> 21:52.830
and the gears because suddenly people discover
21:53.190 --> 21:57.390
that IPRs were the new way to invalidate
21:57.690 --> 22:00.500
patents, and it kind of took on the life of its own.
22:01.770 --> 22:05.120
So all these things contributed to a very
22:05.310 --> 22:08.960
different marketplace today than what we had 7810
22:09.150 --> 22:12.620
years ago. Analysis of patent transaction data shows
22:12.990 --> 22:16.410
that the combined effect of this devaluation comes at over a trillion
22:16.650 --> 22:20.000
dollar cost to the overall US economy. The ultimate cost,
22:20.250 --> 22:24.090
however, is far greater than purely financial. A country's greatest assets
22:24.330 --> 22:27.560
are its people and their ideas. When the accepted consensus is that you
22:27.630 --> 22:31.050
can no longer protect your ideas and investments from theft, then who's
22:31.170 --> 22:34.230
going to innovate the best you can hope for at this point is a copycat
22:34.410 --> 22:37.940
race to the bottom. This is a fundamental question about property rights, and as many
22:38.070 --> 22:41.420
inventors will tell you, those rights are among the oldest and most important.
22:42.090 --> 22:45.560
One of the things that we want to talk about is
22:45.750 --> 22:48.560
the Article One, section eight, clause eight,
22:49.830 --> 22:52.770
giving rights to authors and adventures.
22:53.550 --> 22:57.930
How many times is the word right used in the Constitution? Who knows there's
22:58.050 --> 23:01.530
an answer that's right once, and it's capitalized.
23:03.450 --> 23:07.280
And the only time the word right is used is with regard to
23:07.770 --> 23:11.610
inventors and authors predated
23:13.770 --> 23:17.480
guns, religion, freedom to assemble all of the
23:17.550 --> 23:20.900
other rights in the Bill of Rights by three years.
23:21.810 --> 23:26.070
So what exactly is Article One, section eight? The notion of intellectual property rights
23:26.190 --> 23:29.600
in America is as old as well America. Those rights are
23:29.670 --> 23:32.970
spelled out in Article One, section Eight, clause Eight, of the US Constitution,
23:33.510 --> 23:36.990
ratified on September 17, 1787. This clause
23:37.290 --> 23:40.640
grants Congress the power to promote the progress of science and
23:40.770 --> 23:44.490
useful arts by securing for a limited time to authors and inventors
23:44.910 --> 23:48.210
the exclusive right to their respective writings and discoveries.
23:48.630 --> 23:51.810
The Framers believed in the importance of protecting intellectual property rights.
23:52.110 --> 23:55.580
And for a couple hundred years the US has led the world an innovation in
23:55.710 --> 23:59.480
large part due to the protections provided to inventors and their investments through
23:59.610 --> 24:03.620
our patent system. The integrity of the system and the fulfillment of its promise are
24:03.690 --> 24:07.100
essential ingredients to the American dream. An IPR is basically a
24:07.170 --> 24:10.350
request for the Patent Office to admit they made a mistake in issuing a patent.
24:10.770 --> 24:13.890
A property right based on faith in the initial decision and perceived
24:14.070 --> 24:17.480
ownership of that property. The inventor since relied on that original decision to
24:17.550 --> 24:20.790
build a business, take investment, and initiate licensing discussions.
24:21.150 --> 24:24.750
The inventor paid for that property up front and continued to pay maintenance fees
24:24.930 --> 24:28.760
to retain ownership. And then the decision is reversed by the PTAB and the
24:28.950 --> 24:33.270
property right upon which everything else was built. Poof vanishes
24:33.570 --> 24:37.280
from underneath. The way we currently deal with intellectual property rights has become so
24:37.410 --> 24:40.830
far disconnected from how we think about other property rights. Louis Carbono
24:41.070 --> 24:43.700
really drove this point home in last month's episode as well.
24:44.610 --> 24:48.020
It's as basic as that is that try to
24:48.150 --> 24:51.980
buy some land. If you're not sure that you actually have the right to
24:52.170 --> 24:56.120
build something on it, and the city can tell
24:56.190 --> 24:59.420
you, they'll say, well, build something and we'll tell you if we can issue a
24:59.490 --> 25:03.380
permit, but you have to build first. That's a little bit the kind of
25:03.510 --> 25:08.000
irony we have with patents. You have to get them first pay.
25:08.850 --> 25:12.560
I don't know. The average, I think, is 50 $60,000, according to
25:12.690 --> 25:16.410
the latest surveys I've seen for a single patent overall,
25:16.650 --> 25:20.060
including maintenance fees and all this just to get
25:20.190 --> 25:23.370
a patent. And then you have to pay another quarter million dollars for the PTA
25:23.550 --> 25:26.900
to tell you whether it was crap from day one or it was
25:27.090 --> 25:30.740
actually valid, which if you think about it and
25:30.810 --> 25:34.100
you stop for a second. What industry could survive with a
25:34.170 --> 25:37.400
business model like this where you have to buy the thing and then you have
25:37.470 --> 25:41.360
to pay five times more than you paid for the first time, just to
25:41.490 --> 25:44.540
be told whether you can use it or not. Okay, so now what can we
25:44.670 --> 25:48.870
do about it? The default instinct around legislative problems tends to be more legislation.
25:49.230 --> 25:53.190
The stronger Patents Act seems to get dusted off every few years. US inventor
25:53.370 --> 25:56.850
helped introduce the Inventor Rights Act of 2019, and there's a new legislative
25:57.090 --> 26:01.170
proposal on US inventor. Right now. Senators Leahy and Cornyn recently introduced
26:01.410 --> 26:04.520
the Restoring the America Invents Act patently. Oh,
26:04.650 --> 26:08.490
describes as a quote, wish list for patent killers seeking to cancel
26:08.730 --> 26:11.960
patent rights via inter parties review. That's clearly not the answer.
26:12.330 --> 26:14.720
But what would meaningful reform truly look like?
26:15.750 --> 26:19.040
Sure. Throw out American Events Act. Throw out all of the cases from the
26:19.170 --> 26:22.820
Supreme Court and go back to where we were 20 years
26:23.010 --> 26:26.300
ago. That's what true meaningful reform would be.
26:26.370 --> 26:31.640
And that's what built America. We had all of these 226
26:31.890 --> 26:35.600
years or whatever it is now of
26:35.850 --> 26:39.740
using the Constitution and building
26:40.050 --> 26:43.820
on patents and creating innovation in America. And now
26:43.890 --> 26:47.850
all of a sudden we don't because we're just not protecting
26:47.970 --> 26:51.510
or helping inventors. Yeah. So just even repealing AIA
26:51.870 --> 26:55.400
would be a really good start. That would be a good start. But that's not
26:55.530 --> 26:58.580
going to happen. This is big tech, big money,
26:59.370 --> 27:02.900
and it's not going to happen. So it's got to be in tiny little
27:03.090 --> 27:06.860
bits of just a small step here
27:07.170 --> 27:10.170
a small step there over a decade.
27:11.550 --> 27:15.030
That's what we're going to see. What would be the one to three most meaningful
27:15.630 --> 27:19.770
steps. Well, I think Director Ianku did wonderful
27:20.070 --> 27:23.970
work at the patent office, and so the Biden
27:24.690 --> 27:27.020
choice of who's going to be the patent director is going to be huge.
27:28.050 --> 27:32.720
Is he going to get a Michelle Lee or Andre Ayanku to
27:32.790 --> 27:36.150
be the next leader? And Michelle
27:36.270 --> 27:40.290
did everything she could to make sure that little companies can't
27:40.530 --> 27:43.890
survive or don't survive, whereas was really helping
27:44.070 --> 27:48.080
us. And so be able to do
27:48.330 --> 27:52.400
that to be able to limit the scope of the PTAB of
27:52.890 --> 27:57.030
how do you make sure they don't initiate programs unless
27:57.270 --> 28:01.100
it's really needed, and then to make sure that
28:01.230 --> 28:04.520
it's validated with what they do to take away the
28:04.710 --> 28:08.600
bonuses for people and the incentives for PTAP judges to
28:08.730 --> 28:12.150
be able to throw all these cases out. I mean, that's just horrible.
28:13.710 --> 28:18.270
And I think we're mostly beyond what Michelle
28:18.390 --> 28:23.910
Lee was doing of stacking
28:24.030 --> 28:27.390
the court, if you will. First, there were three, and she didn't like the decision.
28:27.750 --> 28:31.400
So she added several others and then others and others until finally she got
28:31.530 --> 28:35.310
a decision she wanted, and that's
28:35.430 --> 28:38.600
not American. So we got to
28:38.730 --> 28:42.380
improve that. Now. One thing I hear
28:42.570 --> 28:45.980
floating around a lot. It doesn't seem like it's getting a lot of traction and
28:45.990 --> 28:50.000
it seems like there have been end versions of these things that kind
28:50.070 --> 28:53.610
of pop up and dive pop up and dive is the stronger pattern.
28:56.490 --> 29:00.740
What's the high level synopsis on that? Do we believe that's a good thing in
29:00.930 --> 29:04.820
whatever most recent flavor is? Well, it hasn't changed a
29:04.830 --> 29:08.960
lot for the last four years, and it's just for right
29:09.150 --> 29:13.040
now, it's nonexistent because there is no stronger Patents Act.
29:13.890 --> 29:17.420
We lost divers who took it up in the House a couple
29:17.550 --> 29:20.720
of years ago, and he decided to get out of the House and
29:20.850 --> 29:23.610
go run the Chamber of Commerce in Ohio.
29:25.110 --> 29:28.350
So there's nobody there that's picked it up in the House. And I think Koons
29:28.530 --> 29:32.250
has looked at this, and he's been our hero. Senator Coons
29:32.550 --> 29:35.790
and Senator Herrono have just been wonderful
29:36.930 --> 29:40.940
for us, but there just wasn't enough boats to
29:41.070 --> 29:44.550
be able to get it on. And now, with Darrellisa
29:44.670 --> 29:48.320
coming back in the House, that's not helping, because he
29:48.390 --> 29:52.410
was one of the major proponents of the American Events Act. So he's
29:52.590 --> 29:56.060
not been helpful until we can
29:56.190 --> 29:59.960
change those people's minds of the fact that this has been a
30:00.090 --> 30:04.280
disaster. And eventually big tech will understand that
30:04.470 --> 30:08.000
this is not in their best interest. It's in their short term interest
30:08.730 --> 30:12.080
for protecting their bonus for a number of years. But what
30:12.210 --> 30:16.040
happens when America can't compete anymore? And the
30:16.230 --> 30:20.240
Americans aren't using the Googles and the apples of
30:20.310 --> 30:25.340
the world? But we're going on and using the Chinese products instead because
30:26.190 --> 30:29.960
Americans don't have the money to do it now. We're still
30:30.630 --> 30:34.100
more than a decade, probably two decades or more away from
30:34.290 --> 30:37.640
that happening. But eventually it will happen. But the problem is,
30:38.250 --> 30:41.660
how do they turn it around at that point? Despite all the talk around
30:41.910 --> 30:45.210
legislative fixes for the AIA, there was one stat I just couldn't
30:45.450 --> 30:49.280
shake. Even district courts invalidate patents at a rate of about 40%
30:49.890 --> 30:53.850
that's not near the fatality rate dealt by the PTAB, but it's still a surprisingly
30:54.090 --> 30:57.330
large number. Put another way, when challenged at a district court,
30:57.690 --> 31:01.110
a little less than half of what comes out of the PTO is later reversed.
31:01.410 --> 31:05.130
Many of the proposed legislative solutions don't appear to hit the problem at its root,
31:05.430 --> 31:08.720
which is ultimately invalidation. Any reform related to
31:08.790 --> 31:12.380
postgrant proceedings is missing the bigger issue. Postgrant proceedings could
31:12.450 --> 31:16.230
be incredibly rare in a world where PTO examiner decisions were more binding
31:16.350 --> 31:20.000
than they presently are. In a more ideal world, it seems like we should
31:20.070 --> 31:23.180
get to a point where the determination made by the examiner was closer to something
31:23.490 --> 31:27.560
binding, with invalidations being an extreme exception versus 40% in
31:27.690 --> 31:32.130
district courts and 84% in the P tab. Any other system essentially leaves
31:32.190 --> 31:36.860
you with a patent pending indefinitely until expired or tested by courts at
31:37.050 --> 31:40.400
some level of scale. Are patents getting through the patent office? That shouldn't be?
31:40.710 --> 31:44.010
Or is there some other disconnect in the Schizophrenic system that is both granting
31:44.250 --> 31:48.210
and later taking away. One theory often stated is that examiners simply
31:48.330 --> 31:51.680
aren't granted enough time to adequately search prior art or understand the
31:51.750 --> 31:55.280
domain of the depth required to get an inside the PTO perspective on
31:55.350 --> 31:59.780
this theory. We sat down with former examiner and current practitioner Tariq Najilla during
31:59.970 --> 32:03.500
his ten years as a patent examiner at the USPTO. Tariq specialized in
32:03.690 --> 32:07.590
electrical engineering technologies, including telecommunications, digital communications,
32:08.130 --> 32:11.250
computer networking, cryptography and storage area networks.
32:12.390 --> 32:16.170
Okay, trick. So first question from the outside. The examination
32:16.410 --> 32:20.180
process feels like a bit of a black box. So at
32:20.250 --> 32:23.730
a very high level, could you walk me through the process of examination?
32:24.450 --> 32:27.870
Once an application leaves an inventor's hands and gets submitted to the PTO,
32:29.430 --> 32:32.010
if you're looking at 30,000 foot level patent examination,
32:33.450 --> 32:37.650
it follows the manual patent examining procedure
32:38.970 --> 32:42.030
100%. So application is submitted,
32:42.630 --> 32:46.100
it goes to the receiving office or to the application
32:46.590 --> 32:50.060
processing unit, where all the let's say the
32:50.190 --> 32:53.060
formalities of submissions are checked over.
32:53.670 --> 32:57.980
If you've ever gotten a notice of incomplete application
32:58.650 --> 33:01.770
or missing parts that's not done by an examiner
33:01.890 --> 33:05.250
that's done by the application receiving officer processing unit,
33:05.910 --> 33:09.030
they're going to check over the formalities. Once you meet the formalities, then it's docketed.
33:09.990 --> 33:13.050
It'll go to a master docket to be assigned,
33:13.410 --> 33:16.590
usually through some type of algorithm to a art unit
33:16.830 --> 33:19.230
or technology center, then an art unit,
33:20.670 --> 33:25.530
and then at some point in the future, if it's prioritized
33:25.710 --> 33:28.530
examination is almost instant, you get assigned an examiner.
33:29.250 --> 33:33.750
If it's not prioritized and you're looking at whenever
33:34.110 --> 33:36.870
it comes up from the time of its entry,
33:37.650 --> 33:41.070
you'll get a sign an examiner. Once you're signed an examiner,
33:41.970 --> 33:45.510
it goes in the examiner's docket examiner docket.
33:46.170 --> 33:48.620
And when it comes up for time,
33:49.650 --> 33:53.180
they will search the they'll read
33:53.310 --> 33:55.650
the disclosure again, as per the MPE,
33:56.550 --> 33:59.960
the manual pattern procedure, they will read the disclosure, read the
34:00.030 --> 34:04.100
claims, understand the invention. Once they have an understanding of the invention and
34:04.230 --> 34:07.460
they can kind of diagram the claims to understand how
34:07.530 --> 34:11.420
the claims relate to the invention, they will
34:12.210 --> 34:14.960
do a prior art search. If they need help with their search, they reach out
34:15.090 --> 34:17.420
to additional resources in the patent office to get help.
34:18.810 --> 34:22.590
Then once they have done an exhaustive
34:22.770 --> 34:26.670
search, they'll draft the office action.
34:29.070 --> 34:33.210
If they're a junior examiner, they'll submit their office action to be reviewed
34:33.390 --> 34:37.110
by their primary or supervisor patent examiner
34:41.070 --> 34:46.760
approved. If they're not a junior examiner, they just sign it and send
34:46.890 --> 34:51.090
it out to go on the mail. You receive an office action or allowance,
34:51.390 --> 34:54.090
whatever it's rendered.
34:54.570 --> 34:58.700
So the first thing is to do the prior search and then apply
34:58.890 --> 35:02.610
the statutes as well. While they're doing the reading of the claims and reading
35:02.790 --> 35:06.800
of the disclosure, they're applying the statutes at
35:06.990 --> 35:11.360
minimum, one on one, one, 1112, one on two, one on three at
35:11.490 --> 35:15.260
a minimum, but usually as many more statutes in that they have
35:15.330 --> 35:17.180
to apply. But they go through that entire process,
35:19.110 --> 35:22.820
examine the application and then render the office action. And that
35:23.010 --> 35:26.840
continues to process until the prosecution go back
35:26.910 --> 35:30.270
and forth to arrive at some kind of outcome. With this allowance,
35:30.570 --> 35:33.920
abandonment, appeal, whatever the outcome is,
35:34.170 --> 35:37.460
petition any type of outcome, that's what happens.
35:38.670 --> 35:42.020
So it can take two years or more to get a
35:42.450 --> 35:46.640
granted patent. But from the time that the patent application hits your
35:46.770 --> 35:50.780
desk as an examiner to the point of being issued or a
35:50.850 --> 35:53.850
final rejection, on average,
35:54.930 --> 35:58.520
how many hours is the application actually your focus
35:59.370 --> 36:02.840
just really want to try to give folks a sense of I hear a lot
36:02.970 --> 36:06.380
about, oh, they had my patent application for
36:06.870 --> 36:11.670
two years. Well, no, it's sad file
36:12.810 --> 36:16.340
like digital or otherwise for two years. But that's not how long it was
36:16.470 --> 36:20.070
actually looked at. There's queue time and there's actual examination
36:20.370 --> 36:23.660
time. What's the actual examination time?
36:24.450 --> 36:28.230
So there's queue time and that's waiting.
36:28.650 --> 36:31.770
The average queue time is 24 months, according to the Patent Office statistics,
36:32.790 --> 36:35.550
the average time for patent.
36:37.050 --> 36:40.530
Once you come up in the queue, it's usually about twelve to 18
36:40.770 --> 36:44.240
months. So once you actually start working on it now,
36:44.490 --> 36:47.900
most of that time, too, is back and forth. So when
36:48.030 --> 36:50.960
they pull you up, they examine it and give you the office action or get
36:51.030 --> 36:52.230
a restriction. Whatever you get in the beginning,
36:54.510 --> 36:58.105
let's say they're spending whatever allotted time is, say four to 20
36:58.115 --> 37:01.580
hours, something like that, depending on what type of art it is
37:02.070 --> 37:04.880
because they're experts and they see the same type of applications every day.
37:05.430 --> 37:08.960
They're just looking for the nuances. Is this novel or not? Is this
37:09.150 --> 37:13.220
obvious or not? Trustive examiner is looking at the same. They're looking at 100
37:13.410 --> 37:16.100
applications a year, and they're all in the same technology.
37:17.310 --> 37:19.700
They can look at your application and say, okay, let me read this. Okay.
37:19.830 --> 37:23.610
I got it. I've seen this before because I just did this last week yesterday,
37:24.210 --> 37:27.380
so they don't have to spend 40 hours on
37:27.390 --> 37:30.500
your application to understand it, because they're doing the same thing over and over again.
37:31.350 --> 37:34.590
So they are experts of the process and hopefully
37:34.890 --> 37:38.420
experts of your technology area in terms of what's patentable they
37:38.490 --> 37:41.670
may not be experts in the system expert as an inventor,
37:42.510 --> 37:44.490
but in terms of processing what's novel?
37:52.270 --> 37:55.630
Let's say between four and 30 hours on an office action.
37:55.990 --> 37:59.620
Right. That all
37:59.750 --> 38:03.160
section goes out. You have three months to respond. You can extend it up
38:03.230 --> 38:06.400
to three months. So that process, that waiting time can be
38:06.530 --> 38:10.120
three to six months. If you shorten that waiting time to
38:10.670 --> 38:14.740
one month, then we're at a different kind of you
38:14.870 --> 38:18.230
can compact the time. It's called compact prosecutions make no much faster.
38:19.250 --> 38:22.300
So that happens.
38:22.970 --> 38:26.380
Let's say two rounds. So they send the
38:26.510 --> 38:29.860
office. Actually, you have three to six months you
38:29.990 --> 38:33.700
send back to them. They have three to six months. Pretty much
38:34.610 --> 38:38.380
it goes round Robin back and forth until you get to either
38:39.410 --> 38:43.000
disposition or RC or whatever it is that you're looking for. So if
38:43.130 --> 38:47.780
we did compress out all
38:47.850 --> 38:51.380
the back and forth time and instead looked at just the amount of
38:51.510 --> 38:55.350
time you spent working on a particular invention,
38:55.710 --> 38:59.840
a particular application over the course of the time from hit
39:00.030 --> 39:03.320
your desk until final issues to rejection. And I know that's going to be
39:03.630 --> 39:07.460
highly situationally dependent, any broad sense of a range of
39:07.530 --> 39:10.290
the amount of time you might spend with any given invention.
39:12.850 --> 39:16.260
Also, that varies by examiner. Like in my art
39:16.390 --> 39:19.140
unit, I had 20 plus hours to work on an application.
39:20.050 --> 39:24.180
I spent 20 plus hours on every application every time. So if
39:24.370 --> 39:30.700
we did four rounds of prosecution, that's two
39:30.830 --> 39:34.780
office actions, RCE, another two
39:34.970 --> 39:38.810
office actions, interviews in between. There that's more time. So let's
39:38.870 --> 39:44.020
say it's 25. Maybe they filed after final on
39:44.150 --> 39:48.530
each one. And I call for an examiner's amendment that's
39:48.710 --> 39:51.700
easily 100 hours, plus that I spent on an application.
39:56.010 --> 39:59.120
That's me. I know other examiners that were very
39:59.310 --> 40:03.020
efficient and had different ways. They did things that they
40:03.270 --> 40:06.380
really spent that much time on the application. But it doesn't mean that they were
40:06.570 --> 40:09.800
spending. It was less quality. They could have been better than me. They could have
40:09.870 --> 40:13.170
been getting more allowances, and it could have been faster. So what I'm
40:13.290 --> 40:16.530
dealing with is you're dealing with aptitude.
40:16.710 --> 40:19.770
You're dealing with comprehension,
40:20.370 --> 40:24.930
speed of comprehensive, complex information processing,
40:26.010 --> 40:28.710
doing comparisons and analysis.
40:30.750 --> 40:33.680
There's no one metric that I could give that would say, this is how much
40:33.810 --> 40:36.740
time is given, even given that kind of metric is not fair.
40:37.890 --> 40:41.540
I would just say that know that you have had
40:43.050 --> 40:47.060
very focused, dedicated amounts of time given
40:47.310 --> 40:49.760
to your application at each and every stage of the process.
40:50.550 --> 40:53.900
That's all I could say. I couldn't say what the number is. I don't know.
40:54.270 --> 40:57.320
But, I mean, if you spend 100 hours total on one,
40:57.870 --> 41:01.460
nobody's breathing down your neck and saying, you got to move these along.
41:02.490 --> 41:06.090
No, it never happened. There was never hurry
41:06.330 --> 41:09.620
along just to get it done because
41:09.810 --> 41:14.360
it always comes back to you. You never escape. It like you
41:14.430 --> 41:18.260
can't do an application. Office action is trash, and it all comes back
41:18.390 --> 41:20.300
to you. It's going to come back to you in a write up. It's going
41:20.310 --> 41:23.430
to come back to you in extra trainings
41:23.550 --> 41:27.570
because you have errors, warnings for messing
41:27.750 --> 41:31.580
up. You're not applying statutes, they come back in complaints, then have
41:31.650 --> 41:34.110
the inventors or call the director.
41:35.010 --> 41:37.760
I understand that these are all things that examiners experience and happen.
41:41.050 --> 41:43.080
Just say, just go ahead and hurry up along. We just need to get these
41:43.330 --> 41:47.340
out. That's not part of it. No talking
41:47.530 --> 41:50.640
a little bit about prior art. What percentage of your time
41:50.770 --> 41:53.170
would you say was spent on prior art searches?
41:55.630 --> 41:59.880
Majority majority. Was there ever any
42:00.070 --> 42:03.240
pressure to spend less or more time on prior search.
42:05.410 --> 42:05.460
No,
42:09.050 --> 42:11.860
I think that's really what the job of the examiner is. Like. I said,
42:11.930 --> 42:15.880
we're preserving looking at the law to
42:16.010 --> 42:19.130
preserve useful arts.
42:19.430 --> 42:22.540
You do that by making sure that this is something that's novel and non obvious.
42:23.750 --> 42:27.050
That's the practical way. The statues. That's where the statues are applying.
42:27.530 --> 42:30.400
I mean, the formal statues of one on one. Let the course litigate that we
42:30.470 --> 42:34.010
don't really care. We follow the checklist. You say it's statutory.
42:34.190 --> 42:37.240
We say, okay, we follow the checklist if it says yes and yes,
42:37.790 --> 42:40.490
it says no, we say no. We put the boilerplate language in there. We don't
42:40.550 --> 42:43.480
really have any decision on that. We just apply what the law says.
42:44.210 --> 42:47.740
112 is a very specific. We apply those based on
42:48.410 --> 42:51.700
what the law says. Those are checklists and things we have to go through if
42:51.770 --> 42:55.720
we go through them and they result in a rejection. That's because this
42:55.910 --> 42:59.450
language is here. It says, taste this rejection. What we're
42:59.510 --> 43:03.160
really there to interpret what we really need to understand is understand
43:03.410 --> 43:06.640
the invention and apply one or two or one or
43:06.710 --> 43:10.120
three. That's really where the meat of it. Is that's what you care about?
43:11.990 --> 43:15.280
Are you infringing somebody or is somebody infringing you? That's what you
43:15.410 --> 43:19.310
want to know. That's what the search. That's why the primary job examination
43:19.550 --> 43:23.080
search. At least when
43:23.150 --> 43:25.120
I was there for the ten years I was there, that was a fundamental focus
43:25.310 --> 43:29.550
of what we did. I've heard claims
43:29.790 --> 43:33.080
that the search tools that are available within
43:33.270 --> 43:36.740
the PTO are heavily US specific and
43:36.930 --> 43:39.750
might not necessarily include access to academic journals.
43:41.070 --> 43:44.130
True, false urban Legends, false false urban Legends.
43:45.150 --> 43:48.750
Okay, there's multiple tools
43:49.470 --> 43:53.240
now, the tools that we use in Patent Office you can't use that
43:53.430 --> 43:56.660
is true. When I was at Patent Office,
43:56.970 --> 43:59.850
I can search unpublished patents.
44:00.810 --> 44:05.070
So I have access to unexamined
44:06.150 --> 44:09.020
things that are in the queue. But I can search them.
44:09.330 --> 44:12.740
They're part of my search. They're not part of your search because I
44:12.810 --> 44:15.330
can search provisions. You can't search provisions.
44:18.670 --> 44:22.080
So I have more swathes of data. And within
44:22.450 --> 44:24.310
there those databases include foreign patents.
44:26.710 --> 44:30.550
Plus, we have other software that focus specifically on foreign patents.
44:33.370 --> 44:37.930
There's patent search software. There's also academic
44:38.110 --> 44:40.140
search software with their patent office has its own.
44:42.250 --> 44:45.010
I was in computing, so we had AAA.
44:47.770 --> 44:51.120
I can't think of all of them right now. We have tons of databases of
44:51.310 --> 44:54.660
all the engineering and science journals, and we had to search all this stuff.
44:55.930 --> 44:58.680
You can't just search the patents. You have to search everything.
45:05.570 --> 45:08.860
You can have a bad examiner that they probably get fired. They don't search
45:09.470 --> 45:12.820
outside of patents, but, yeah,
45:16.430 --> 45:19.720
there's no real truth to that. All right. District courts are
45:19.970 --> 45:22.300
invalidating patents at about a rate of 40%.
45:23.210 --> 45:26.990
There's clearly some disconnect between issuance and ultimate
45:27.110 --> 45:31.250
validity. In the eyes of the court mentioned earlier
45:31.430 --> 45:34.910
that one theory around this was that examiners simply weren't granted
45:35.330 --> 45:38.560
enough time to adequately search prior art
45:39.170 --> 45:43.250
or fully get their heads wrapped around the domain. I'm not necessarily
45:43.550 --> 45:47.140
hearing that you think that's the case based on
45:47.870 --> 45:51.760
your experience. So if not, then why
45:52.970 --> 45:57.170
this big disconnect between Issuance and ultimate
45:57.650 --> 46:01.240
validity? What's driving that?
46:01.790 --> 46:05.920
Most judges have never been examiners. Most judges are
46:06.110 --> 46:09.220
not engineers. They're judges. They went to law school.
46:10.430 --> 46:14.270
They know how to deal with arguments. I think patent
46:14.450 --> 46:18.590
law is very unique in the sense that it's
46:18.890 --> 46:22.780
unlike criminal law or business law, where you
46:22.850 --> 46:25.850
can look at a lot of the case law because that's one thing. As examiners,
46:26.570 --> 46:30.460
we had to read case law all the time. As I
46:30.530 --> 46:33.710
got some more seniors and examiner, we were required.
46:33.950 --> 46:37.600
We were given hours of time to read case law, which let
46:37.670 --> 46:41.980
me read all these cases. And sometimes
46:42.890 --> 46:46.600
when I would read the case law, I would see over simplification of
46:47.090 --> 46:51.170
the technology. They're making associations
46:51.470 --> 46:54.590
that we're not allowed to make an example because of the statues.
46:56.630 --> 47:00.350
We can't make those associations, but they're making associations because they're not governed
47:00.410 --> 47:04.250
by the same standard. When they're doing these cases,
47:04.370 --> 47:08.140
they're not looking at one on 1121 or 3112.
47:08.750 --> 47:12.290
They are not governed by the manuals of Patent examining procedure. They're governed
47:12.410 --> 47:14.560
by federal law.
47:17.970 --> 47:23.220
Ptab is different. Ptab is within part
47:23.350 --> 47:27.610
of PTAB is within the manuals patent examination procedure, so it's following
47:27.970 --> 47:31.620
a certain standard. That's what makes PTAP so atrocious in terms of how it
47:32.530 --> 47:36.420
has been used. The legal system itself bears some responsibility in the
47:36.490 --> 47:39.840
arena of solutions as well. Listen in as Louis shares some insights on
47:40.030 --> 47:43.440
conflict of interest and honest conversations that should be happening between
47:43.750 --> 47:47.100
inventors and their practitioners. If the answer is,
47:48.370 --> 47:50.710
you don't have an invention, you're right. It already exists.
47:52.690 --> 47:56.040
That's the issue. This is not a good business model for you guys
47:56.290 --> 47:59.590
to tell the client this is crap. You don't need to file a petlman
47:59.770 --> 48:03.480
that already exists. So nobody wants to say that. But frankly, that would
48:03.550 --> 48:06.610
be the honest answer. In many cases, when you look at a part that don't
48:06.790 --> 48:10.980
spend your money on this, it already exists or it's so
48:11.710 --> 48:15.420
incremental that it's not worth it. And the day people do
48:15.670 --> 48:18.780
that, you're going to have a lot less patents that are invalidated because
48:20.050 --> 48:23.580
essentially, they weren't valid in the first place. I see
48:23.710 --> 48:27.300
a lot of those. I'm not joking. We see so much volume. I can tell
48:27.430 --> 48:31.570
you it's not just bad patent attorneys.
48:31.750 --> 48:35.350
It's just the business incentives are misaligned.
48:35.770 --> 48:39.360
And that's what's creating a lot of these patterns to be issued because
48:39.670 --> 48:42.840
your metric is not the same as the client, but the client doesn't know it.
48:43.930 --> 48:48.180
The client thinks that you have the same metric and the same goal. And you
48:48.310 --> 48:51.960
don't actually, because we will do some
48:52.150 --> 48:55.140
prior search and we'll find something and we'll tell the client, look,
48:55.270 --> 48:59.460
we can't take this on the brokerage because you didn't invent anything you
48:59.590 --> 49:02.340
should have done a prior search prior to filing, and you would have saved yourself,
49:03.130 --> 49:06.360
especially when there's portfolio with five to ten patents. You would have saved yourself
49:06.730 --> 49:10.560
half a million dollars, probably in cheese if you have
49:10.690 --> 49:14.350
only spent $2,000 in reach and search originally.
49:14.890 --> 49:18.640
So I'm part
49:18.770 --> 49:22.790
of the patent part, but I just don't like the fact that the business incentives
49:23.390 --> 49:26.920
are not properly aligned with what the client needs to get a
49:27.050 --> 49:30.880
meaningful pattern at the end, because it reflects in the marketplace today
49:31.550 --> 49:34.720
because we can see all the bad things
49:34.850 --> 49:38.200
we want to say about the PTAB about it being biased and all this.
49:38.390 --> 49:40.550
But the reality is, in a lot of cases,
49:42.050 --> 49:45.230
there was some relevant priority that made some of these patterns
49:45.410 --> 49:48.520
and valid the way they were drafted outside of the present state
49:49.130 --> 49:52.420
of all of this ever changing in a meaningful way. And we assume that the
49:52.490 --> 49:55.480
AIA and Pete have, as we know them today, remain the law of the land.
49:55.850 --> 49:59.620
In addition to having hard and honest conversations with practitioners, what can
49:59.750 --> 50:03.160
inventors do now to increase their odds of success? Should they end
50:03.290 --> 50:06.760
up facing an IPR some time down the road for an answer to this question,
50:07.010 --> 50:10.360
I once again sat down with Ashley, so I think the best way to future
50:10.670 --> 50:14.380
proof yourself is a few different things. One would be to make
50:14.450 --> 50:18.460
sure you're doing priorit searching don't rely on the patent office
50:18.710 --> 50:22.120
to do to find all the relevant are they do have limited time, and so
50:22.190 --> 50:25.780
I would definitely engage with a practice such as Aurora or
50:25.910 --> 50:29.630
another practice to do prior art searching before you file
50:29.690 --> 50:32.740
your pen application, or at least before you convert it to a full utility application.
50:33.710 --> 50:36.950
I would also ensure or try to ensure that your claims capture
50:37.250 --> 50:40.370
one infringer trying to avoid divided infringement,
50:40.550 --> 50:44.810
and your practitioner shouldn't know what this means, but from your practical
50:45.110 --> 50:48.940
viewpoint, making sure that one entity would be doing all
50:49.010 --> 50:52.300
the steps of your claim. So if you can possibly think that two entities would
50:52.430 --> 50:55.960
have to work together to do your claim to
50:56.090 --> 50:59.450
process or to make your device, then the claim should be rewarded
50:59.630 --> 51:03.580
to make it. So it's just one party. I would also recommend that you
51:03.890 --> 51:07.060
always file continuation pet applications. What this means in
51:07.250 --> 51:11.020
practice in the United States is that when you are about to get
51:11.090 --> 51:14.390
an issue patent or any time during your patent application pendancy,
51:14.990 --> 51:18.460
you can file additional claim sets that are based on
51:18.530 --> 51:21.590
the original patent application disclosure, the original specification.
51:22.190 --> 51:25.250
But these claim sets can pursue other types
51:25.370 --> 51:29.990
of inventions in your application. It can pursue broader or more narrow views
51:30.290 --> 51:33.820
of your invention, and by doing that, it allows you to always
51:34.070 --> 51:38.440
have a pending and open patent application family. So if
51:38.630 --> 51:42.460
one issued patent is challenged and your patent application is still pending, you can
51:42.590 --> 51:46.000
now still pursue additional claim sets that would hopefully avoid any prior art
51:46.250 --> 51:49.910
that was brought about in the IPR proceeding in the challenge proceeding.
51:50.330 --> 51:54.230
And so I think these three things are very critical. And then lastly,
51:54.890 --> 51:58.370
think about how potential competitors are going to overcome
51:58.670 --> 52:01.790
your claims. What are the design around? And not that this is going to prevent
52:02.510 --> 52:06.340
any kind of IPR challenge, but it could help with an infringement proceeding where
52:06.830 --> 52:10.070
somehow somebody avoids your claims by doing some minor modifications.
52:10.250 --> 52:13.550
And so prior art searching, ensuring the claims capture
52:13.790 --> 52:16.730
one infringer always have continuation applications pending,
52:17.270 --> 52:20.560
and then trying to think about how competitors may design around
52:20.690 --> 52:25.060
your claims. I think those are four critical areas to
52:25.190 --> 52:29.080
just consider as you're working with practitioners and making sure you really own
52:29.210 --> 52:33.170
those decisions in your patent portfolio strategy. Thank Ashley.
52:33.350 --> 52:36.410
That's a wrap. For now. We hope this has been one part illuminating
52:36.770 --> 52:39.650
and at least two parts motivational. As we said at the opening,
52:40.010 --> 52:43.310
this is a very complex, highstakes issue with many perspectives,
52:43.670 --> 52:46.420
and it's only with the benefit of a wide angle lens that we can hope
52:46.550 --> 52:50.570
to start chipping away at the problem with the most impactful solutions. And hopefully
52:50.810 --> 52:53.750
this motivates you to take some action. Call your congressional reps.
52:53.930 --> 52:57.100
Join an adventure advocacy group. Have the tough conversations with your
52:57.230 --> 53:01.000
practitioner. Draft more robust patents. Spend the time to search prior art,
53:01.310 --> 53:04.780
and most importantly, do what you can to lend a voice to the issues that
53:04.850 --> 53:08.090
will define the innovation landscape for the next generation of inventors.
53:08.750 --> 53:11.750
All right, thanks for listening. And remember to check us out at aurorapattens.
53:12.110 --> 53:16.250
Com for more great podcasts, blogs and videos covering all things patent strategy.
53:16.730 --> 53:18.940
And if you're an agent or attorney and would like to be part of the
53:19.070 --> 53:22.780
discussion or an inventor with a topic you'd like to hear discussed, email us at
53:22.970 --> 53:26.680
podcast at aurorapatins. Com. Do remember that this podcast does
53:26.750 --> 53:30.220
not constitute legal advice, and until next time, keep calm and patent on.
53:39.330 --> 53:42.740
So do you suppose you took the whole evil laugh and thunderclap thing a little
53:42.930 --> 53:45.560
too far? No, not at all.
53:46.110 --> 53:48.750
He's supposed to PTAB out loud. Is anything like Candyman?
53:49.410 --> 53:51.450
Or if you stay in the mirror five times you lose a patent.
