Inventing thrives despite blows to patents
The U.S. inventing landscape is replete with festering land mines:
- Major patent rulings that can border on the patently absurd, often enabling infringers and leading to endless litigation for the independent innovator;
- A 2011 America Invents Act that many claim has done more harm than good, including the creation of a Patent Trial and Appeal Board that has arguably harassed patent owners;
- The landmark 2014 Alice Corp. v. CLS Bank International case that significantly hindered patents for computer-related inventions, particularly software, by creating a rigid new subject matter eligibility test;
- Last year, patent examiners’ integrity and their bosses’ oversight came into question via the disclosure that hundreds of them appeared to have cheated on their time cards but were still rated as above-average employees, with some even given bonuses by the U.S. Patent and Trademark Office.The U.S. inventing landscape is replete with festering land mines.
The damage done by recent court rulings, legislation and government agencies is subjective. But America’s plummeting ranking in patent system strength is a point of fact: The 2017 U.S. Chamber of Commerce Global IP Index marked the first time America has not ranked first in patent system strength. It is now ranked 10th.
China, which in 2015 passed the United States in patents granted per year, is emerging as a preferred venue for patent owners seeking to resolve matters of alleged infringement. Little wonder that Paul Michel, retired chief judge of the United States Court of Appeals for the Federal Circuit, said during a March keynote address: “Today, we are facing a crisis.”
Countering these body blows to inventors is a force of comparable or greater strength—a dynamic dynamic that is the spirit of American innovation. The compelling creative and entrepreneurial aspects of inventing have seldom, if ever, been more in the public eye, producing a powerful draw for millions.
In the past decade, television shows from “Everyday Edisons” to current ratings blockbuster “Shark Tank” have shone a spotlight on innovation processes, as well as the business aspects of inventing and its potential riches. The reality show format of “Shark Tank” has attracted younger people, furthering the infusion of youth into the invention culture.
With the help of technology, options for bringing products to market have never been so varied, often in a more affordable way than in the past. And as technological gains increase the possibility of inventions with widespread appeal and utility, companies are becoming more open to accepting outside licensing submissions.
Even the latest developments in the courts show signs of hope. Outside of the USPTO’s e-commerce art units, which show almost 100 percent rejections under Section 101 of the Patent Act, patent applications largely have reasonable to strong chances for approval. And three 2016 rulings could prove a turning point for software patents.
Lawrence J. Udell, executive director of both the California Invention Center and Intellectual Property International, Ltd., says inventors’ possibilities are greater than ever—and ever expanding.
“The internet has created untold opportunities for creativity without discrimination. Young people from teenagers on up are creating apps that are making them rich and famous. There is no need to adapt to a company’s policy, with outside creativity and potential value.
We have seen new and brilliant technology being created in every facet of industry—from computers to autonomous vehicles, from medical diagnostics to general wellness and from cell phones to virtual reality. This does not even take in solar and gene therapy.”
Courts: Uncertainty, hope
Certain rulings by the Supreme Court and the federal circuit predictably elicit “anti-patent” cries from patent attorneys and the inventing community in general. But few actions have been so roundly criticized as a recent PTAB ruling that declared an MRI machine an abstract idea—and therefore patent ineligible under the Alice/Mayo framework.
These kinds of decisions spark more than outrage; they promote a sense of uncertainty. “Right now is a great time to be an inventor,” says Louis Foreman, a prolific inventor who is founder and chief executive of Enventys Partners, an integrated product design and engineering firm in Charlotte, North Carolina. He is also CEO of Edison Nation and Edison Nation Medical. “But I think the fact that there’s so much uncertainty and a high level of concern over what’s going to happen to patents in general has people a little bit concerned.
“Patents still are the greatest way to protect an invention. It’s the only real way to protect an invention. In many respects, a patent is an incentive that an inventor is counting on to go out and risk putting up their capital, investing their time, borrowing money from friends and family to pursue their invention idea. I still have a great deal of hope that lawmakers won’t mess with the system too much to eliminate or reduce that incentive. But the volatility that we see in the market is definitely a problem.”
Part of the uncertainty involves fuzzy boundaries that accompanied the Alice verdict. When the Supreme Court declared that abstract ideas implemented using a computer are not patent eligible under the Patent Act, it raised the question: What is an abstract idea? The PTAB ruling on the MRI machine further muddied the waters.
But three verdicts within a six-month span last year—Enfish LLC v. Microsoft, McRO v. Bandai Namco Games America, and Amdocs v. Openet Telecom—offered renewed hope after federal circuit judges ruled that software patents were wrongly invalidated. An attorney at Fish & Richardson, the nation’s largest IP law firm, wrote that the Enfish decision was “like a ray of light at the end of a long, dark tunnel.”
The America Invents Act triggered myriad revolutionary changes to U.S. patent law, most notably switching the system from “first to invent” to “first to file.” That move was widely criticized—but perhaps the AIA’s most impactful stipulations were post-grant review processes that allow any entity to ask that the USPTO initiate a review of a valid, issued U.S. patent. The goal was to eliminate low-quality patents and create a stronger environment for American inventors.
The result was a deluge of invalidated patents—led by the newly formed PTAB—and prompting criticism that the AIA had done the opposite of what it intended. Two years ago, Richard Baker, president of New England Intellectual Property, LLC, estimated that the AIA cost the U.S. economy more than $1 trillion.
AIA supporters such as thehill.com wrote that “While no one was looking, the AIA’s programs have been steadily cleaning up America’s patent system, getting rid of low-quality patents and fueling innovation and growth across the U.S. The AIA is creating a better environment for American inventors—one less threatened by patent trolls.”
While not commenting specifically on the AIA, Mark Plager, founder of law office Plager Shack LLP in Huntington Beach, California, says: “The buzz that small inventors cannot obtain patent protection for their innovations is greatly exaggerated.
“While the disclosed and claimed technology for the award of a patent has advanced, the standards for patentability remain the same as they have for the last decade, with the exception of evolving case law defining patentable subject matter in the realm of computers and computer driven apparatuses. To obtain a patent, the invention must comprise patentable subject matter, be novel, useful, and nonobvious.”
Charlie Sauer, who works on Capitol Hill as an economist and policy specialist, told Inventors Digest in January that the AIA “is the worst piece of legislation that they could have passed.” He said it was counterintuitive that the act was designed to harmonize U.S. innovation systems with the rest of the world: “So you take the most innovative economy in the world and you pull it back to the least innovative economies in the world. The idea of that doesn’t make sense on a barroom napkin; it shouldn’t have made sense in Congress.”
Media fans the flames
The halls of Congress and the frustration of courtroom dealings are a long way from reality TV, where invention is glowing in the spotlight.
“Because of, perhaps, the publicity of shows like ‘Shark Tank,’ more and more individual inventors appear to be taking on the patenting process,” says attorney Kara Verryt of Plager Shack LLP. “While there are certainly risks involved in starting this process, there’s also the possibility of great success.
“What the shows do not always make clear is that obtaining a patent is more than just coming up with a good product or method. It’s also prudent to ensure that a patent application directed to the invention captures the essence of the invention and explains what truly sets the invention apart from the prior art.”
No one better understands the impact of invention TV than Foreman of Enventys Partners, who created the Emmy Award-winning “Everyday Edisons” on PBS. He says these shows help bring “a high degree of awareness of invention, innovation.”
As a result, “everybody’s looking to launch the next great product, the next great app. … Platforms like Kickstarter and Indiegogo are making it easier for people to fund their ideas, while sites like Edison Nation are providing great outlets for inventors who have the next great idea but don’t want to start companies.
“So when you take a look at the overall ecosystem—the different platforms to market an idea whether it be Kickstarter if you want to do it yourself or Edison Nation if you want to license it, the media and shows about innovation, and just the general customer appetite for new and improved, it’s a great time to be an inventor.”
Youth, humanity served
The widespread appeal of “Shark Tank” is routinely on display when the show conducts auditions in various U.S. locations. Young people are prominent in the crowds.
Youth is no longer a fringe player in the inventing process. Last year, India’s Prime Minister Narendra Modi invited youths to research and invent solutions through technology to address the country’s many problems. Young people aren’t just complementing the push for worldwide innovation; in many instances, they are driving it.
Consider the ages of these people when they founded some of the world’s most well-known companies: Steve Jobs, Apple, 21; Bill Gates, Microsoft, 20; Mark Zuckerberg, Facebook, 19. Zuckerberg began writing software in middle school.
As inventing’s appeal to the young continues to explode, innovation labs and makerspaces have become commonplace in schools around the world. Derrick Willard, assistant head of school for academic affairs at Providence Day School in Charlotte, North Carolina, says that since the school opened its makerspace three years ago, “I’ve seen our students create some incredible things.
“If you have not seen one, a makerspace is like a high-tech garage—a place where students can investigate the latest technologies like 3D printers, laser cutters and Raspberry Pi devices, and use them to create unique things (virtual or physical). Makerspaces are also typically stocked with old-school tools, too, like hammers, saws, screwdrivers, sewing machines, tape and fabric. Spaces like this are important in cultivating a maker or hacker culture that fosters invention and innovation.”
The escalating tech cycle
The growing interest in inventing by youths and their growing clout in innovation circles have helped change the way some companies think. “Young, growing companies are seeking the technologies of tomorrow and their creators,” says Lawrence J. Udell. “University students are being romanced to join companies, especially if they are coming out of the engineering schools that have courses on creativity and inventing.”
Technology’s rampant gains and an expanding pool of inventors have had effects on licensing. Companies’ once-intractable stance on accepting outside submissions has begun to soften, with many now soliciting outside ideas and inventions in their best interests.
There is an almost poetic symmetry to technology’s role in inventing. Technology is the creation of inventors, who then benefit from technology’s role in fostering more innovation. Foreman recalls that when his company bought its first 3D printer 10 or 15 years ago, it cost about $40,000. “Today, a machine with the same capabilities will probably cost $1,000. Overall, there are more resources available today at a lower cost.”
But technology is not innovative by itself. It is only innovative when it provides real or perceived value for its customer or audience.
“Technology has made it less expensive to build a proof of concept or a minimally viable product,” Foreman says. “It has also made it easier to share your idea with others, whether it be uploading a video or social media. It has made it easier to do business, whether that be in researching patents, whether it be doing market research to determine demand, from the standpoint of development of prototypes to promoting a product.
“Technology is making the innovation process go faster and faster. We’re no longer satisfied with what we bought yesterday.”
Udell reminds that despite the massive technological and cultural changes of the past 100 years and beyond, there is still no secret to being a successful inventor.
The best chance for success, he says, is through commitment—“but needing to know when to stop, reconsider and find a new pathway. You can strive yourself right into bankruptcy if you do not carefully plan, surround yourself with the strength of others that balance your weaknesses and recognize that just maybe, your new idea or invention will never be successful.
“However, if you create one invention, you can go on to create more. Being human is being creative. History has proven this time and time again.”