Monthly Archives: May 2014

We Won This Round! 5/22/14

Hello Friends,

Time to celebrate! Senator Patrick Leahy announced yesterday that patent reform was being tabled due to lack of consensus and that it is being removed from the Judiciary Committee calendar. This is what we were going for, and I thank all of you for your  help in achieving this. It is still possible in America to win a David vs. Goliath battle.

Longer term, we need to all be very aware that the large vested interests that almost got this legislation through are not going away. They have invested huge amounts of money in this fight, and real innovators backed by a strong patent system will always be a threat to them.

We won this key battle, but the war is ongoing. We must be vigilant and ready for the next fight. Vigilance and the willingness to fight for inventor rights was what won this battle, and what will be needed for the battles that will come.

The next serious threat to us is the unprecedented invalidation of patents by the new “post issuance procedures” created by the America Invents Act (which passed in 2011). More on this soon.

Best,

Randy Landreneau, Founder
Independent Inventors of America

The Battle To Save Inventor Rights – Update 5/13/14

Hello Friends,

The fight is still on. The Senate Judiciary Committee again postponed the meeting to finalize the wording of the fatal patent legislation. This time, it was not re-set for the following Thursday, so the soonest it could occur would be Thursday, May 22nd.

There have been a number of bills, all bad for us, but they are trying to put everything into the Patent Transparency and Improvements Act, S. 1720. Senator Patrick Leahy (VT) introduced this bill and the co-sponsors are Sen.s Lee (UT), Whitehouse (RI), and Klobuchar (MN). Other bills that are being merged into S. 1720 include those of Sen. Schumer (NY), Sen. Cornyn (TX), and  Sen. Hatch (UT).

What it all boils down to is what our online petition describes PLUS the additional fatal provision of bonding – requiring a patent holder who intends to sue an infringer to either prove that he can pay the legal costs of the infringer if the patent holder does not prevail or post a bond to cover the liability. Since the legal costs could be $1,000,000 or more, such a bond could easily cost a patent holder over $100,000. Orrin Hatch (UT) is responsible for this one. With this provision, very few independent inventors could defend a patent, but the other provisions are fatal as well. Every single thing being proposed hurts independent inventors and innovators, with some of the proposals simply being more fatal than others.

A good description of the fatal provisions can be seen in our petition at
http://www.independentinventorsofamerica.org/readsign-the-petiton/, and you should read and sign it, but here’s the short version:

“Loser Pays” – If you sue for patent infringement and do not prevail, you will have to pay the infringer’s legal costs. This could be over $1,000,000. This will eliminate the ability of the average independent inventor to defend a patent.

“Fee Shifting Joinder” – Any interested parties, like investors, will be personally liable for the “Loser Pays” amount. This will add significant risk to earl-stage investors, making such investment much harder to obtain.

“Bonding” – See description above.

“Demand Letter Requirements, Enhanced Pleadings and Limited Discovery” – Excessive requirements for demand letters will cause many patent holder to have to sue rather than first try to work out a licensing agreement. But the patent holder suing for infringement will be forced to provide much more detail on how he intends to proceed (Enhanced Pleadings) but with much less information than he needs to do so (Limited Discovery). All of this weighs very heavily against the patent holder.

There’s more, but I’ll just end with this one – the expansion of Post Grant Review. Bear with me, because this is as much of a killer as anything else. The America Invents Act (AIA) created brand-new ways to invalidate an issued patent called “post issuance procedures.” Post Grant Review is one of these procedures. The wording in the AIA makes it so one bringing a Post Grant Review cannot, at a later time, bring another Post Grant Review on an issue that could have been included in the earlier Post Grant Review. In other words, you can bring one good Post Grant Review, and that’s it. You can’t bring one after another in an effort to wipe out the funds of an independent inventor and render him unable to defend his patent any further. Well, the current legislation eliminates this language, allowing multiple Post Grant Reviews. This is referred to as “Elimination of Post Grant Review Estoppel.”

This is particularly bad considering the brand-new information on how many patents are being wiped out by these “post issuance procedures.” New information shows that about 80% of patents that get challenged with these new procedures are taken up, and then 95% of these are invalidated!

So, it is becoming the common procedure that a corporation being sued for patent infringement will automatically put the patent into a Post Grant Review or other “post issuance procedure” to get rid of it. Federal Circuit Chief Justice Randall Rader has referred to this as “death squads killing property rights.” The current legislation actually includes the expansion of two of the three “death squad” post issuance procedures.

For any rational person not trying to destroy the American Patent System, the only way forward is to stop the current effort to pass patent legislation and take a long, hard look at the damage that is being done by the America Invents Act, which passed in 2011. Such a study was called for by the AIA, but never done.

Considering all of this, you might be thinking that surely our politicians will do the right thing, right? The problem is that the large corporations pushing this legislation have put in a huge amount of money and effort and they are not giving up. Estimates are that tens of millions of dollars have been spent just in the last few months by our opponents. Paul Morinville and I have done a lot to personally get the truth out on our numerous trips to DC, as have others who have jumped into the fight on our side. We have a potent weapon with the truth, but our opposition is massive, and they are pushing very hard right now.

An example is The Main Street Patent Coalition, which includes trade groups of retailers, financial institutions, restaurants and other companies, who sent a strong message to the Senate this week: “On behalf of the millions of businesses we represent, we call on the U.S. Senate Judiciary Committee to approve meaningful patent reform now.” Their “meaningful patent reform” will eliminate you and me.

But we are in this fight, and we certainly have turned a few heads. This is why they have not been able to easily come to an agreement on the language of the bill – the meeting to do so has been delayed 4 or 5 times, when it could have been completed, the bill brought to the floor, voted on, and enacted already. Our work, and that includes everyone reading this, has created some allies in the Senate and created some concern about what further harm patent “reform” could cause.

Our opponents are massive, but the truth we few are bringing is piercing a lot of armor. We need to keep bringing it. The most dangerous time in a war is when it looks like you’re winning. Remember Pearl Harbor. So much has been spent by our opposition that they will not just go away. They could take away most of the proposals and still pass something that is fatal to us. We all need to keep fighting.

Email and call your Senators again. It only takes a few minutes. Do it daily if you can. Tell them that all of the different provisions that are being discussed as part of patent reform are fatal to independent inventors and American innovation. Tell them that these proposals turn the American Patent System into a tool for large corporations to crush independent inventors. Tell them that breaking information shows that the AIA created “post issuance procedures” are wiping out patents at an alarming rate, and that now is the time to stop everything and study the negative effects of the AIA before creating any further harm. Tell them that this legislation will destroy future American innovation. Do this, and get this information out far and wide, and we can make it through this current battle.

Best,

Randy Landreneau, Founder
Independent Inventors of America

Patent Legislation Threat – 5/7/14

Hello Friends,

The Judiciary Committee again postponed the meeting to finalize the language for the patent legislation to Thursday this week, May 8th. But with numerous significant reasons to scrap the effort mounting, there are still Senators pushing to pass this terrible legislation!

First of all, for anyone that believes the propaganda that there is a frivolous patent litigation problem, the Supreme Court decision last week should take care of it. In the past, judges very rarely awarded legal expenses to the prevailing side because the situation had to be “exceptional.” The Supreme Court decision defines “exceptional” very broadly, giving judges great leeway here. A patent holder bringing a frivolous case will face significant risk. But there are still Senators pushing for fatal “Loser Pays.”

Secondly, it is now becoming known that the new “post issuance procedures” created by the America Invents Act (AIA) are invalidating an extremely high percentage of patents. These are the new methods of invalidating an issued patent – post grant review, inter partes review, and covered business method (CBM) review. Approximately 80% of patents challenged with these procedures are taken up, and once in the system, 95% of them end up invalidated.

Based on these numbers, a company infringing a patent and being sued for it now has about a 76% chance of invalidating the patent. This is way beyond what makes sense. The Patent Trial and Appeal Board (PTAB), which the AIA created for these procedures, has been called “death squads killing property rights” by Federal Circuit Chief Justice Randall Rader.

Knowing how these post issuance procedures are destroying patent rights, how could a rational person want to expand them? The only rational thing to do is stop the current patent legislation effort and take a hard look at the damage the America Invents Act has caused to see if it can be undone. But no, part of the new patent legislation is the expansion of these “death squad” post issuance procedures!

And then the combination of extreme requirements for demand letters, enhanced pleading requirements and limited discovery will put a patent holder in the situation that 1) he has to sue rather than start a dialogue to resolve the situation, and 2) he will have to plead in greater detail than the information he has will allow – putting him at a great disadvantage to the infringer.

This patent legislation is fatal for inventors. It will eliminate your ability to defend your patents. It turns the American Patent System into a tool used by large corporations to crush independent inventors.

Once and for all, let’s put an end to it. If you haven’t already read and signed the online petition, please do so (http://www.independentinventorsofamerica.org/readsign-the-petiton/). Even if you have emailed and called your Senators many times, do it again. Tell them that the Supreme Court Decision on fee shifting eliminates the need to enact any further “Loser Pays.” Tell them that breaking information shows that the new “post issuance procedures” are invalidating 76% of patents, and that the only rational thing to do is stop everything and study the damage. Tell them that the pending legislation enables corporations to crush independent inventors.

The future of American invention depends on us stopping this legislation. Please help in this effort. We can win this.

Best,

Randy Landreneau, Founder
Independent Inventors of America