Countless innovations, beyond wildest imagination, have been discovered and perfected in our county. However, this track record is being severely interrupted by a broken patent system that now makes it virtually impossible for individual inventors – the tinkerers working in their basements, attics, and garages, to obtain, retain and defend their patents. 

Not only have our patent laws and regulations been stacked against them, but most inventors are simply over-matched by companies and corporations with deep pockets, desperate to avoid paying up if and when they are found to be infringing. 

Between 1868 and 1933, Thomas Edison was granted 1,093 U.S. patents¹. Today, as an individual, not as The Edison Lamp Works, he would have to come up with thousands of dollars to get a single patent approved by today’s United States Patent and Trademark Office (USPTO) … only to have to face the prospect of having to find millions to fight even more costly legal battles in Federal Court to hold on to his intellectual property rights.

The increasingly hostile environment for solo inventors has all but invalidated our claim as the world’s leading innovator.

In point of fact, individual inventors received just 6 percent of the patents issued by the USPTO in 2022. That figure was 12 percent in 2002, and 22 percent in 1980.

 It is clear that reversing this trend must be addressed before our solo  inventors become as obsolete as Eli Whitney’s cotton gin. Even more troubling are today’s company employment agreements which, in most cases, require employees to waive their rights to whatever they conjure, discover, invent, or create, on and off the job, even if that it is completely unrelated to the employee’s job and/or work responsibilities!

Broken Patent System

Understanding the U.S. broken patent system requires basic knowledge of how to obtain a patent and how to navigate the patent application process. Article I, Section 8 references the Patent and Copyright Clause in our Constitution³ which empowers Congress “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”  Regrettably, over the years, that mandate and its effectuation have become muddled and muddied. 

The Patent Act of 1952 further muddied the waters by specifying that inventions must be not just “new and useful” to be patent-eligible but must also be “non-obvious.” Further problematic changes were made in 1999 when Congress allowed challenges to patents –   called Re-examinations – to be waged in federal court.⁴ This provision resulted in a deluge of challenges, severely clogging our judicial system. 

In 2011, Congress enacted the Leahy-Smith America Invents Act⁵. The AIA was a well-intentioned effort to expedite patent challenges. It was designed to move challenges out of the court system and into a new administrative entity – the Patent Trial and Appeal Board (PTAB) within the USPTO. The PTAB has had mixed effectiveness and has been the subject of considerable debate.

In its 2018 report, The Chamber of Commerce’s Global Innovation Policy Center⁶ said that “the ease of challenging patents” in the United States has created a system that “provides a channel for bad faith actors and injects a great deal of cost and uncertainty for patent owners.”

In 2023, Congress passed The Patent Eligibility Restoration Act (PERA).⁷ A companion piece of legislation, The Promoting and Respecting Economically Vital American Innovation Leadership Act (PREVAIL)⁸ is under serious consideration and is likely to be adopted. Unfortunately, both PERA and PREVAIL present challenges and disadvantages for individual inventors that are not apparently obvious. In fairness, these bills were written, in part, to assist small companies and/or individual inventors but, both continue to provide significant advantages and protections to large corporations.

PERA introduces additional requirements that disproportionately burden individual inventors with more detailed documentation, more complex technical specifications, higher standards for proving novelty and non-obviousness, and increased administrative burdens. These requirements, plus additional legal expenses for drafting complex patent applications, filing and ongoing maintenance fees make the patent application and maintenance process daunting for an individual inventor. These burdensome prerequisites are just the beginning. Once granted a patent, the holders can expect to face potentially massive litigation costs to defend and/or protect their IP in court.

PREVAIL establishes evaluation criteria that implicitly favor established research networks because of the requirement for scaled production and extensive market research. These new requirements put unrealistic demands on the financial and resource capabilities of almost any individual inventor.

 In sum, intentionally or unintentionally, both pieces of legislation have created competitive disadvantages which tend to give preferential treatment to corporations with research and development capabilities and extensive administrative support functions and financial resources. 

There is no such thing as a perfect solution. Often, sincere efforts to “fix” a serious problem has unintended consequences. Regrettably, our patent system continues to hamper our solo inventors. It is crucial that we find an equitable system that supports and rewards our imaginers, tinkerers, and inventors, who, working largely on their own, have helped make the United States one of the most innovative, dynamic nations in the world. 

Today, more than ever, our vital “Innovation Engine” must be nourished, encouraged, and protected against predatory corporate actors. If we don’t, we will have to quit beating our chests about our superiority and stop waving our “Innovation Banners.” Yes, and also come to the realization that the Golden Innovation Goose does not lay her eggs for nothing.  

To repeat, more than ever, we need to find a sensible, fair minded, and reasonable way to nurture, encourage, motivate, and reward the next generation of Wizards of Menlo Park. 

Sources:

1. https://edison.rutgers.edu/patents.htm#
2. https://www.uschamber.com/report/us-chamber-international-ip-index
3. United states Constitution – Article I Section 8 [The Congress shall have power] “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”
4. https://www.ipmall.info/sites/default/files/hosted_resources/lipa/patents/Patent_Act_of_17 93.pdf
5. https://www.uspto.gov/sites/default/files/aia_implementation/20110916-pub-l112-29.pdf
6. https://ipwatchdog.com/2018/02/08/u-s-patent-system-falls-12th-place-chamber-global-ip-index-2018/id=93494/
7. https://www.congress.gov/bill/118th-congress/senate-bill/2140
8. https://www.congress.gov/bill/118th-congress/senate-bill/2220

Lewis M. Rambo, Ph.D. is an executive coach, consults with and advises Not-for-Profits, young entrepreneurs,  and tech start-ups. He was Dean of an international business school and has taught Corporate Social Responsibility, Ethics, and Organization Behavior to MBA candidates all over the globe. Dr. Rambo presently resides in the Twin Cities.

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In virtually every industry segment, companies, large and small, are being forced to move faster, be more nimble, become more efficient, and identify fresh sources of differentiation. Today, more than ever, success means exceeding, not simply achieving, even ambitious goals and targets. 

Boards of Directors and Leader/Managers are looking for answers:

1. “How do we ensure that results from change efforts are delivered to the bottom line?”

2. “What are the main risk factors to bed actively managed in our change efforts?”

3. “When, where and which one of us should personally intervene to guarantee success?”

4. “What is the best way to encourage our Leadership and Management Team and all our employees to take responsibility for and demonstrate real accountability for change?”

Lewis M. Rambo, Ph.D. knows just how to provide suggestions, guidance, and wise counsel to his clients as they roll out and manage their change initiatives. He understands what it takes to ensure that the resulting Transformational Process delivers measurable results directly to the bottom line.

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Lewis M. Rambo, Ph.D. understands the major factors that influence the development of excellence in leadership and the management of talent. He regularly works with clients on critical areas such as adapting strategy and operating models that will generate realistic pipelines for identifying potential leaders/managers and key individual contributors, better positioning their organizations for growth and success in the twenty-first century.

• Those who want to achieve inspired leadership and excellence from everyone on the payroll must answer these and many other critical questions:
• What are the implications of our strategy for the types and locations of individuals who are prepared to lead effectively in the new century?
• What are the optimal operating models for identifying and developing high-performing, adaptive global leadership teams?
• Which forecasting, succession planning, career development, and capability acceleration programs produce robust leadership and talent pipelines to match the specific growth agenda in the necessary time frames?
• What mix of employer branding, diversity and inclusion profiles, and innovative social-media and advocacy marketing campaigns will help us become a “talent magnet?”
• In what ways can we mold the systems, processes, and infrastructure necessary to support our ongoing talent advantage while achieving a measurable return on our investments in these key areas?

Rambo will offer innovative, practical solutions that enable client organizations to achieve sustainable leadership, success, and profitability which, in turn, are important deciding factors in attracting, hiring, and retaining outstanding talent.

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For every business, creating a competitive advantage in this rapidly changing environment means recognizing the reality that…no matter the products or services that it offers, it must also become a “technology company.” There must be recognition that digital technologies bring threats and challenges as well as opportunities.  These technological components demand the creation of new boxes rather than just thinking outside of older, safer ones.

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