An intellectual property case before the U.S. Supreme Court involving two Houston businesses could make challenging a patent significantly more expensive.
Oil States Energy Services filed a lawsuit in 2012 against Green’s Energy Goup, LLC for infringing a hydraulic fracturing technology patent (U.S. Patent No. 6,179,053, also referred as ‘053 patent). In its brief, Oil States argued that patents are private property rights that can only be revoked by a federal court under Article III of the U.S. Constitution, not by an executive branch agency like the Patent Trial and Appeal Board. (PTAB)
Greene’s Energy has filed a petition to the PTAB, asserting that the patent was invalid because it was not different from other similar technologies. The PTAB agreed, and the patent was nullified. Oil States then appealed to the Federal Circuit arguing that proceedings violated Article III and the Seventh Amendment. Greene Energy Group then countered that Oil States misconstrued the Seventh Amendment protections. The U.S. Patent and Trademark Office also claimed that patents are public rights derived from a federal regulatory system, and no constitutional reason exists to the board invalidating patents.
Oil States lost that appeal and appealed to the U.S. Supreme Court last year. Oral arguments begin Nov. 27.
U.S. Inventor President Paul Morinville, whose offices are in Washington D.C. and Indiana, sees the case as a chance to reverse a key aspect of the Leahy–Smith America Invents Act (AIA), enacted under the Obama administration.
“[Congress] created with AIA. . .an administrative tribunal where you have employees,” he said. “They don’t have any code of conduct, they don’t have any rules, they don’t have to follow due process, there is no jury and the Patent Trial and Appeal Board has been invalidating or neutering patents at a rate of over 90 percent.”
He said if current law persists, “…we can’t get investors to invest in our companies, if patents are our core asset.”
Josh Malone, the inventor of Bunch O Balloons and a U.S. Inventor fellow, agrees. He said that AIA “has utterly destroyed the patent system” and led to serial patent challenges.
“I was an aspiring inventor like hundreds of thousands of Americans are. I was fortunate enough to succeed with the Bunch O Balloons invention,” he said. “It was knocked-off, and I had to file suit. The courts held the patent valid all the way up to the Federal Circuit.”
But after three years in court and $18 million in legal bills, Malone said the PTAB continues to pick away at his patents and revoke them. He believes patents are personal property and that only a court should be able to take that right away.
John Austermann, inventor of Power Over Ethernet technology and president & CEO of ChriMar Systems in Michigan, who has defended patents for the past 16 years, said “the system has never been worse.” The “…administrative agency that was put in place in AIA has now been abused by the infringers to no end,” he said.
Malone said in any PTAB proceeding everything is turned upside down and the ultimate goal is to expand the patent’s claims so broadly that the inventor becomes a straw man.
“So they manipulate the language of the claims to say. ‘Oh, you’re saying that you invented the wheel.’ And then the infringer again comes in and said, ‘See, he’s saying that he invented the other thing,'” he said. “And the whole time the inventor is denying that that’s what he claimed; his words don’t mean that, but the tribunal misconstrues the language of the claims and then essentially accuses the inventor of trying to claim more than he actually invented.”
He said then the “obvious analysis” begins and they are saying, “‘Oh, it’s so obvious that that already existed.’”
Morinville has lobbied patent reform in Washington for four years, according to a GoFundMe page setup for U.S. Inventor earlier this year:
“In 2013, when a series of bad laws and court decisions rendered Morinville’s patents worthless, he hopped in his truck and drove to Washington, D.C. Congressional staffers asked him which lobby he was with, and when he explained that he was simply an inventor they were baffled and sent him away.”
Only after he created the U.S. Inventor organization and named himself it’s president did members of Congress and their staffs listen. So far in 2017, Morinville has met with more than 20 Congressional offices, several of which would like to support a bill his organization will help write.