USPTO Getting Paupers To Hand Over Thousands On The Dream Of Patent Wealth
from the here-we-go... dept
Patently-O has the somewhat horrifying story of the USPTO cashing the maintenance check for a patent holder, but then letting the patent expire because the check was $10 short. The guy apparently owed $1,040, but sent a check that was only $1,030 (and he used the wrong form and sent it to the wrong dept., but...) and the USPTO still cashed it, but declared the patent abandoned for not having paid the full maintenance fee. The guy only discovered this a few years later when he called the USPTO to get ready to send in his next maintenance check. Anyway, the article notes that CAFC smacked down the USPTO for this practice.You can read all the gory details at the link above, but what struck me about this was two things. First, the guy paid the $1,030 to maintain this patent (and it doesn't appear he did much with the patent during that time) and then was ready to dump another chunk of change into maintaining it, but when he found out that the USPTO (yes, arbitrarily and somewhat dickishly) had declared the patent abandoned, suddenly said that it should be reinstated because he was:
"not an attorney but a pauper disabled living on a fixed income (SSI) who cannot pay $200 to petition your office."This is the real shame here. This myth that all you need is a patent to be a success leads a pauper living on social security to spend thousands of dollars on a patent, which the USPTO gladly soaks up. What a scam. The US government is taking in folks like this guy, convincing him that all he needs to live out his dreams is to get a patent, knowing quite well that a patent by itself is pretty meaningless.
But the guy believes in the dream, as seen from the fact that he sued the USPTO for $1 billion, claiming that was the value of his patent "in the U.S. and world market." So here we have a guy, who is living off of a tiny Social Security check, throwing away thousands of dollars on a patent that he's not doing anything with, believing that it's somehow worth $1 billion. Doesn't that seem highly problematic to people?
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Maybe a bit of both.
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The fact that the patent is being re-instated is completely irrelevant to the fundamental point to this article. In fact, it shows that the CAFC is indifferent to the practice of the USPTO being a lottery mechanism.
People pay tons of money for an idea they scribbled out, and then hope it becomes something used by others so they can collect fees (or sue).
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$2 * 0.00000 probability of winning = $0.0000 expected return.
Oh, sorry, did you want me to put in more significant digits so that the right-hand side shows *some* expected return? I'd be adding a few more zeros...
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If you want "grasping at straws," try Mike's post with the USPTO "convincing" people that having a patent will make them money. The USPTO is a government entity that does not advertise. Neither do they represent that gaining a patent will give anything to anyone (i.e., Mike made that up). Further, there are statements on the USPTO web site about the scope and limitations of patents that should serve to dissuade many would-be inventors from pursuing a patent.
Of course, even had this guy not pursued a patent, it is unlikely his invention would have been any more commercially successful. Without the patent the invention would likely have been copied without royalties, if someone thought the invention was worth copying, and the guy would have been no better off financially, except for the few thousand dollars he spent on the patent and maintaining it.
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And, the reality is, that this is Way More Often the case. One entity comes up with an idea and patents it. Another entity comes up with a similar solution (quite often not identical), but the first entity goes to court in the hopes of taking a cut of revenue from the second entity. Notice that the second entity has often gained NOTHING from the patent of the first.
This happens all the time in the high tech and bio tech industries. There are EXTREMELY few cases where a second entity literally takes the ideas of the first entity's patent and applies them to their own product.
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- simultaneous invention
- independent invention
- obviousness
- prior art
Do you have any links to the counter-argument: that most lawsuits are for willful violation of patents?[ link to this | view in chronology ]
Re: Re: Re: Re: Re: Re: Re: Re:
Your first link to "simultaneous invention" is an interesting opinion piece stating that independent invention should be allowed as a defense, but no where in the post is a single statistic showing that simultaneous invention occurs 1%, 5% or 20% of the time.
Your second link to "independent invention" also included a short opinion piece saying that independent invention should be an allowed defense, but no evidence as to how often it occurs (other than a vague assertion that it would solve a lot of problems - unproven).
Your third and fourth link seem to go to the same place, and neither addresses the issue of how often simultaneous or independent invention occur.
How difficult is this question to answer? If I have 100 randomly chosen patented inventions, how often were those 100 inventions independently invented by someone else? Evidence? Anything? At this point, I will take tea leaves or a good tarot card reader, if scientific evidence is unavailable, but periodic "opinion pieces" do not substitute for actual data.
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The percentage argument is uninteresting. As they currently exist, patents vary too widely to have such a percentage mean anything. If one patent exists that blocks anyone at all from doing something, say space travel, then the fact that it is one patent out of 10,000,000 (0.00001 %) does not in any way show how damaging the system is.
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The person who will have the strongest position in this debate is the one that can quantify the disadvantages and the advantages of the system and show which outweighs the other.
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Last sentence of the first paragraph: "Anyway, the article notes that CAFC smacked down the USPTO for this practice."
Either way, that wasn't the point of the post. I'll note that you chose not to respond to the actual point.
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Ahhh, I get it now
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Re: Ahhh, I get it now
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Re: Ahhh, I get it now - But Wrong
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Re: Re: Re: Ahhh, I get it now - But Wrong
http://www.uspto.gov/web/offices/ac/qs/ope/fee2009january01_2009may01.htm
The USPTO gets a $980 maintenance at 3.5 years (large entity), and $2,480 at 7.5 years. If the USPTO instead final rejects an application, more than likely (fairly typical if you dig through USPTO files) the applicant will file a Notice of Appeal and an RCE, $540 plus $810. Soon an appeal brief will be due for $540.
Thus, if the USPTO final rejects an application, it will get $1,890 almost immediately as opposed to having to wait for 3.5 years to get $980. Also, many entities taking these steps routinely request extensions of time, which cost more money, up to $2,350. Now, the potential near-term fees can be up to $4,240.
Further, statistics from a number of sources show that about 30% of all patents are abandoned to the public at 3.5 years, and more than 60% of all patents are abandoned to the public at 7.5 years, so the probability that the USPTO will get the 7.5 year fee is not good. So, would you rather have a 30 to 40% chance at gaining $2,480 in 7.5 years or a much more certain opportunity of gaining up to $4,240 in the near term? Which would you choose?
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Re: Re: Re: Re: Ahhh, I get it now - But Wrong
Let's assume, reasonably, that it would drop. What would, then, be the expected impact on medium and long-term USPTO revenues? The reasonable expectation is that they would also drop.
So, the best course of action for the USPTO to maximize revenue (over anything longer than the short-term) is to issue many patents.
Therefore, the assertions of the AC who posted above who said, "there is more incentive for the USPTO to reject applications" are incorrect.
AC would only be correct if the USPTO were run by complete idiots only worried about short-term revenue, and willing to sacrifice long-term revenue, long-term job stability, long-term growth, long-term relevance, and long-term power.
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Re: Re: Re: Re: Re: Ahhh, I get it now - But Wrong
As for your "short-term" vs. "long-term" revenue, the USPTO actually cares little to nothing about revenue, because the maximum amount they may use per year is fixed by law, independent of the fees they take in. Furthermore, their budget is set on a yearly versus multi-year basis, even more incentive to have little concern with respect to long-term revenue.
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Re: Re: Re: Re: Re: Re: Ahhh, I get it now - But Wrong
Wasn't it you, just 2 post above at 6:35
AM, who argued that the USPTO would prefer to reject patents in order to maximize their revenue?? Now you argue that they don't care about revenue. Make up your mind.
And I never said they were motivated just by revenue. Read the comment. I made it clear that I think the USPTO's motivation is also about "long-term job stability, long-term growth, long-term relevance, and long-term power"? Nice that you conveniently ignored those motivators.
Your overall argument is that the total number of applications increased even though there were some "well-publicized invalidations". You conveniently picked a boom time, when numbers may be expected to increase, and the time frame considered is hardly a test of my hypothesis. I said if the USPTO rejects a higher %, then that would have a negative effect on applications. There is no evidence that the USPTO rejected a higher % of patents during that time, so my hypothesis wasn't put to the test.
Further, there are more factors at play than just the rejection rate. My point is about the effect of a higher rejection rate *ceteris peribus*, but if this were done at the same time as an extension of patent life, who could say what the net outcome would be. A point you made yourself when you observed that the recession had an effect that went against your line of argument.
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Re: Re: Re: Re: Re: Re: Re: Ahhh, I get it now - But Wrong
Are you being deliberately obtuse? The USPTO does not care about long-term revenue. Why should they when their budget is controlled by Congress? Also, look at how examiners are rated. They get points for office actions. Yes, they get points for an allowance, but once you have rejected an application, it is much less work to reject the same application twice. Use your brain for something other than a place to put your hat.
Now, you said that the USPTO was motivated by "long-term job stability, long-term growth, long-term relevance, and long-term power." Question: How can they be? The employment level is fixed by Congress's budget, which has notoriously been stable, meaning that the USPTO has tried to grow, but Congress has generally prevented that. I challenge you to provide a single piece of evidence to support your "think" that the USPTO is motivated by long-term anything.
As for your comments regarding rejections, lets look at an article in law.com that makes two huge points. First, note that appeals are up MASSIVELY, which is directly related to the number of rejections. Second, note the comment in the article, "Craig Opperman, an intellectual property group partner in Reed Smith's Palo Alto, Calif., office, said that he and his colleagues are filing appeals to combat "a tremendous increase" in rejections stemming from patent examiners' "extreme positions" on patent filings..." Hmmm...
http://www.law.com/jsp/article.jsp?id=1202432011964
Note also in data from 2002 to 2005, a period of transition from recession to boom, that allowances were MASSIVELY down. Hmmm...
http://works.bepress.com/cgi/viewcontent.cgi?article=1056&context=rkatznelson
Both these references seem to indicate that the USPTO in fact is not focused on long-term growth.
Now, you also threw in something about increase in patent life. What was that all about, since patent life has not increased?
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In the first, we have an article that says that applications are way down at the USPTO right now, and that the rejection rate is also higher. Let me think. Hmm, wasn't I the one who had a hypothesis that said that if the rejection rate is higher, there would be fewer applications. Thanks for posting an article to support my thesis, but actually I don't accept it, since as I said, there are many factors at play, and clearly the recession is a huge factor.
In the second, you link to a pdf with some data in charts. I welcome anyone to click on it and see for themselves if allowances are "massively down" as you say. In fact, they also show final rejections as down on the first to actions. Anyways, it's irrelevant. This does show that the USPTO is asking more question, but it doesn't show the acceptance or rejection rate as a portion of initial applications. The point of discussion is the % of patents rejected among original applications, not the number of first allowances, actions, etc.
But the discussion is moot. Do you even know what Ceteris Paribus means? It means "all other things being unchanged". Therefore, this discussion can only be theoretical, because there are too many other factors in the real world interfering with the outcome to say the results are the effect of a single variable.
Now, you haven't addressed the things I pointed out where you were wrong.
- you argued how they would maximize revenue, then subsequently argue that they don't care about revenue. Which is it?
- You are still arguing that a greater likelihood of rejection has no effect on the number of patent applications? Doesn't that intuitively seem wrong to you?
- You've said that the USPTO is not motivated by revenue, job stability, power, etc. Basically you challenge me to provide a single piece of evidence the USPTO is "motivated by long-term anything". What? You are now arguing that this body, these people have no motivations, no desires, no preferences on their fate? How about this for one piece of evidence: they show up for work each day. If they didn't care about security or money, they would not. People are motivated by incentives. Greed, power and security are fairly powerful ones. Have you never worked in a company where people try to grow their departments just so their fiefdom gets a little bigger? But you're sure it's not like that in government?
Clarification: When you said, "Now, you also threw in something about increase in patent life. What was that all about, since patent life has not increased?" It was conditional. Perhaps you're not familiar with the subjunctive. I said, "but if this WERE done at the same time as an extension of patent life" which is the correct expression of a conditional that is not fact. I could have been more clear if I had written "hypothetically speaking...". My point in that sentence was to explain how it is impossible to isolate a higher rejection rate as the cause of an outcome, since many other factors are at play, such as the recession.
"Am I being deliberately obtuse?" What, anyone who doesn't agree with you is obtuse? Then, yes.
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Re: Re: Re: Re: Re: Re: Re: Re: Re: Ahhh, I get it now - But Wrong
I love where you start out completely ignoring the heart of the information, that allowances are way down in comparison to the number of applications filed. However, if you wish to ignore data I am unable to help you further.
you argued how they would maximize revenue, then subsequently argue that they don't care about revenue. Which is it?
Wrong, wrong, wrong, wrong, wrong. I have said you were wrong before, and I will say it again.
What I said was the the USPTO does not care about long-term revenue. Further, they do not care about long-term anything. I challenged you to provide information that they did, and you did not. Instead you just said , , and You are still arguing that a greater likelihood of rejection has no effect on the number of patent applications? Doesn't that intuitively seem wrong to you?
Let's see, the number of rejections went up after KSR v. Teleflex, and yet the number of applications in 2007 and the first half of 2008 went up. Now, regardless of intuition, rejections went up, applications went up. You figure it out.
You've said that the USPTO is not motivated by revenue, job stability, power, etc. Basically you challenge me to provide a single piece of evidence the USPTO is "motivated by long-term anything". What? You are now arguing that this body, these people have no motivations, no desires, no preferences on their fate? How about this for one piece of evidence: they show up for work each day. If they didn't care about security or money, they would not. People are motivated by incentives. Greed, power and security are fairly powerful ones. Have you never worked in a company where people try to grow their departments just so their fiefdom gets a little bigger? But you're sure it's not like that in government?
Sigh. How you miss the forest for the trees. Of course they show up each day. Congress has shown that they are quite happy to keep the number of examiners the same. In fact, Congress has shown long-term support to keep the USPTO at one size. Second, examiner turnover has been quite high. Conclusion: As long as you show up each day, it is extremely unlikely you will ever lose your job. What does this mean? No reason to go above and beyond. No real reason to worry about the future. Every disincentive to be concerned about long-term that you can imagine.
Now, does this mean that people in the USPTO would not like to see their "fiefdom," as you call it, get bigger? Of course not. The director of the USPTO lobbies for more people and less fee diversion every year. Rarely are increases authorized, but the director continues the battle. Knowing that such growth is rare, people act accordingly.
Clarification: When you said, "Now, you also threw in something about increase in patent life. What was that all about, since patent life has not increased?" It was conditional. Perhaps you're not familiar with the subjunctive. I said, "but if this WERE done at the same time as an extension of patent life" which is the correct expression of a conditional that is not fact. I could have been more clear if I had written "hypothetically speaking...". My point in that sentence was to explain how it is impossible to isolate a higher rejection rate as the cause of an outcome, since many other factors are at play, such as the recession.
So, does this mean that you believe the higher rejection rate may not have anything to do with a decrease in the numbers of applications?
"Am I being deliberately obtuse?" What, anyone who doesn't agree with you is obtuse? Then, yes.
I do not care whether you agree or disagree. All I care is that you come armed with your own facts, not disparage, ignore or misinterpret mine.
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Sigh. No. It means that I could never claim that the outcome is singly driven by this cause, because there are too many factors at play. I think I said this four times, four different ways.
Begin accusing me of not misinterpreting your jargonesque stats after gaining a grasp of logic (philosophical debate) and language.
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Re claiming singly. Okay, I buy that comment. Correlation does not equal causation - though it could turn out to be causation.
"Jargonesque" stats? lol...Nice insult, dude. I have always found insult to be a good substitute for a substantive response. In fact, insults frequently seem to substitute for lack of logic and a poor grasp of language. Surprised that you would stoop so low so quickly.
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Re: Ahhh, I get it now
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executive level nonsense
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He's an inventor! And disabled! He deserves to be paid! Think of the children!
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Re: what?
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Here's a pointer: "think of the children" is almost always used as a form of sarcastic hyperbole. When you read it, try to interpret how the writer is joshing you.
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??
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1040?
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Re: 1040?
Here's the (very long) page of fees.
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What if the patent office does reject him because he has no product from his invention?
You might say "great, then others can benefit from it."
I don't believe this is a good mentality to have, even for lazy patent moochers. If it was the way you are implying(which I am assuming), The USPTO has to inspect that the patent is being used. So what are the guidelines?
I believe that even though this couch potato has (assumingly) done nothing with his patent, he still came up with the idea. Even though he isn't acting on the idea, so what? Maybe there is a good reason for it. Maybe he isn't trying to try to milk royalty checks. I don't like the idea, if I come up with a great invention then now I must create a fortune five hundred company or give up (exaggerating). Sometimes the type of people who come up with good ideas are not the type of people to have initiative to start a business. Do you have to have both qualities to have a piece of the pie you baked? My opinion is no.
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and also my last sentence would better read,
Do you have to have both qualities to have a piece of the pie you made ingredience for.
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I'm not saying that it is nice, or that it was "right", or that I would not have excused his late payment, but the rules are in place to keep the system going correctly and smoothly. We have a lot of apps to deal with and the rules are there to make sure everything gets done properly.
Besides that fact, the man is complaining so that he can SPEND 4 thousand dollars. He's hardly a "pauper".
Finally, it is no scam. Nobody is making you submit a patent app, or even telling you to. It is something you might want to look into, if you have plans for your invention. And, it is all very very complicated.
PS He could have had the money he paid refunded if he hadn't waited FOUR YEARS.
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The fact that the individual managed to collect enough money (or go into debt) does not detract from the fact that they are on SSI and likely of little means.
So, what precisely is this individual getting for the money they have scraped together to hand over to a government body?
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You ask a question that we have no possible way to answer. Your question was:
"So, what precisely is this individual getting for the money they have scraped together to hand over to a government body?"
How can we know? It might be self-esteem. It might be recognition. I can think of tons of reasons to have a patent, none of which would be possible to divine without asking the inventor.
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Show me some evidence that allowing someone to hand over $1000 will progress the sciences.
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I am surprised you should even bring this point up, given that you are a frequent contributor to this web site. Systems and goods are often created with a purpose or intent. That does not mean that all the people using the system are motivated by the initial intent of the system. In fact, I would say that it may be just as likely that people using systems of any type may have other motivations for the system about as often as they have the original motivation for the system.
So, do I need to show you that allowing someone to hand over $1,000 will progress the sciences? No, because it should be self-evident that if someone reveals information or an invention previously unknown to mankind that there is value in that to mankind, especially if the information does not immediately end up in a product.
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The problem I see with your line of reasoning is that you view that things "should be self-evident". They aren't as many articles in this site have pointed out. I very much back the idea of getting *some* type of evidence that this system works, and works better than having no system at all.
See, with no system at all, the information still gets out. The patent system stops others from making use of that information. That, in my opinion, is not "working" towards the initial intentions.
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I am looking for evidence that the system does not work, in balance. It is easy to find anecdotes that all systems have failures (planes crash, people die in the operation room, cars crash, vaccines can kill - but the benefit outweighs the disadvantages in every single case), but where is the objective data that shows the pro's and con's?
I completely disagree with your last system that "with no system at all, the information still gets out." In fact, the opposite has been proven to be true, here, on againstmonopoly.org, and other places. There is an axiom that the anti-IP people have shown (not me!) that decrease in use of patents leads to an increase in trade secrets, meaning LESS information gets out.
As I have pointed out, a huge chunk of patents are never commercialized during the life of the patent. Since a MASSIVE number of the patents that are never commercialized are never presented in papers or articles, even LESS information is revealed to the world, meaning even less for innovation to build upon.
While the gurus on this site love to quote anecdotal evidence that people do not refer to patents, they fail to point out that many "innovations" are built upon patented work, which means you do not have to read a patent to know what is in one, you just use a patented invention as the basis for your device. It amounts to the same thing.
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Paupers
Second for individual inventors including small groups up to 9 people and under 100k annual income per person (the latter is 99.9% of all disruptive start-ups like the next Fairchild or Intel) there should be no maintenance fees at all until the invention is licensed by a small or large entity.
What I am proposing is a new class of entity called the Individual Entity (IE). Further the fees of the IE should be 1/5 the fees of the small entity.
Finally everyone needs to understand that the lawyer fees to get a patent are many times larger then the USPTO costs but perhaps like this gentleman one can obtain the patent and things can go south so that when the time comes around for the first maintenance fee money is very tight indeed. You can find yourself disabled or your company in bankruptcy or worse. Rich in the spring of 2008, but by Christmas you are in the poor house because someone Madoff with your money.
20 years of patent life is a long time and disruptive or early visions can take most of that time to bear fruit.
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