America’s economy was built on great inventions. That system only works if inventors can effectively and affordably patent their creations, so they can benefit from the hard work. It’s hard to imagine Edison enduring 1,000 unsuccessful attempts at inventing the light bulb if he knew that in the end, a large corporation could have easily violated his patent with impunity because he couldn’t afford the legal fees to challenge it. If we want more Edisons, we need to fix America’s broken patent system.
“I see it all the time. Inventors I work with are forced to watch as large corporations steal their ideas and then strangle them in the courts,” says Morejon, the president of product development firm, Enventys Partners. According to the president, this is not only harmful to those inventors whose ideas, and fortunes, are stolen. It hurts everyone, by stifling American innovation and he goes on to elaborate that, “We need to modernise and streamline our outdated and opaque patenting laws.”
The original idea behind a patent is a simple one; the government grants an inventor a monopoly on an invention for a limited time, usually a couple of decades. This gives them enough time to develop the product, and profit from it, without it being stolen by a competitor.
The reality isn’t so simple. Our current patent laws have created a system that’s rigged against regular inventors and small start-up, because a patent is worthless if you don’t have the legal resources to protect it in court.
The America Invents Act of 2011 saw the establishment of Patent Trial and Appeal Board (PTAB), a tribunal court which oversees legal challenges against new patents. It was supposed to fuel innovation by stopping vague patents from being certified. If fuelling innovation was the aim, it has viciously backfired.
In 2014, the Supreme Court’s Alice decision ruled that an ‘abstract idea’ cannot be patented. However, an ‘abstract idea’ has not been adequately defined. Because of this, any (expensive) attorney can convince a judge that a patent should have never been issued because it’s an ‘abstract idea’. This is especially true if the judge has little to no technical knowledge of the product in question.
Enventys Partners was set up to avoid such scenarios by arming their clients with important information and necessary knowledge on how to go about protecting their ideas. Working hand in hand with a professional firm that is experienced in handling prototyping all the way to production offers insurance that creators will not be taken advantage of and are paid what is due.
Here’s how this plays out for the average solo inventor or small start-up. They create an innovative new product and then a Big Tech or large multinational company copies it. The inventor can challenge the company on patent infringement, and may with their court case. But, the infringer can go to the PTAB. As it stands, 84% of past patents are invalidated by the PTAB which means that the infringer can continue to use the stolen invention with impunity.
Let’s take a real world example. Josh Malone quit his corporate job in 2006 to invent his wildly popular ‘Bunch o balloons’ toy, a product that allowed up to 35 water balloons to be filled at one time. His invention was (from his perspective) stolen, and the infringer was able to convince the PTAB courts to invalidate his patent, something only made possible by the 2011 America Invents Act.
After a long crusade and costly legal battle, he won a $31 million award and the restoration of his patent. Most modern inventors aren’t so lucky because they don’t have the financial, or even the emotional, resources to take on the big guys.
This does not just affect inventors, but investors too. Investors know just how easily patents can be invalidated, making it harder than ever to get supporters for a new product.
America is losing out. China has historically been the imitator and America the innovator. Some reports estimate that Chinese intellectual property thefts cost America between $225 billion and $600 billion each year.
This paradigm has now shifted. America’s innovative ecosystem is slowing down while China’s is accelerating. The Chinese government is all too aware of this, and is tightening up their patenting court laws in the process. In the near future, many American inventors who want to have the best chance at patenting a product may pursue a Chinese patent.
This is a constitutional crisis unfolding in plain sight. Article 1, Section 8 of the Constitution protects “securing for limited times to inventors the exclusive right to their discoveries.” That right is being violated.
Congress must pass the Inventor Rights Act that prevents PTAB from invalidating inventor’s patents without good reason. Courts must also be compelled by law to prohibit the use of patented inventions, and infringers must not be able to profit through the use of a patented invention without permission.
The integrity of our constitution and the resurgence of our innovative economy hangs in the balance. By allowing multi-national companies to profit off the back of other’s ideas, we are removing the incentive to innovate, and opening the door for China to become the world’s technological leader.
Josh Malone is a success story, but thousands of American inventors have not been so fortunate - or resilient.
Roy Morejon is President of product developing and crowdfunding firm Enventys Partners
Original Source of the original story >> Roy Morejon on the Importance of Patents in 2021
