Category Archive:new inventions

ByCarolyn Keane

A Counterfeiting Operation Ripped Off 2 Inventors. Then They Fought Back, and Won.

When a company copied their invention, Natasha and Fred Ruckel began investigating — and got an inside look into how products are ripped off.

On Valentine’s Day in 2015, Natasha Ruckel and her husband, Fred, were sitting in their living room in Gilboa, N.Y. Natasha was improvising on the piano, and Fred was listening while messing around with the couple’s cat, Yoda. Fred noticed a ripple in the living room rug, forming a half circle on one side. Again and again he tossed toys into the ripple and a delighted Yoda darted in and out. Natasha looked up from her playing. “That’s when we came up with the idea for the Ripple Rug,” she says.

The Ruckels, who had spent around 25 years earning their living in marketing and advertising for brands from PepsiCo to ESPN to Hasbro, were already in the midst of creating their first venture: an app that provided a way for amateur photographers to monetize online images. But they both agreed that the Ripple Rug was a better bet.

A couple of days later, Fred went to Home Depot and bought some cheap pieces of carpet, and they got to work on a prototype. When they had that, they launched a Kickstartercampaign in May 2015, pricing the American-made product at $39.95, to test the market. Within 30 days, they received $15,000 in backing. They had the products made in Georgia for $15 each, and filled the orders.

The Ruckels were weighing their next step when, that fall, the opportunity of a lifetime hit. QVC, in conjunction with the Today show, hosted an ongoing competition called the “Next Big Thing” for entrepreneurs with new retail products. Participants presented their offerings on the TV program, and the winning products received an order from QVC.

Following an arduous vetting process — including proof of a multi­million-dollar insurance policy, a guarantee of having 1,500 items available for sale and sample videos of the Ruckels in pitch mode — Ripple Rug made the cut. “We drove into New York City, and at every exit, we practiced the pitch,” Fred remembers. “We were there by 5 a.m. and hardly slept the night before.”

They sold a few hundred units immediately. QVC bought 1,500 more and Ripple Rug became a top seller. “It was pretty damned amazing,” says Fred. “We were profitable out of the gate, which is virtually unheard of. It felt like a great moment.”

It was, and it wasn’t. Over the next 14 months, the Ruckels learned that coming up with a truly original innovation attracts not only devoted customers but also the kind of highly organized, deep-­pocketed bootleggers who rip off products and systematically grind their inventors into the ground — both financially and emotionally. “It creates so much discord that you are willing to give up the dream of entrepreneurship and go back to your day job,” says Fred.

In the thick of battle, however, the Ruckels learned critical lessons: the importance of copyrighting assets before launching; the reality that people will steal everything from your marketing pitch to your product to your advertising photos; the need to continually patrol for ripoffs and take action. They also got a darkly fascinating glimpse of how ruthless, well-funded, deeply sophisticated bootlegging operations work — and how, with tenacity, vigilance, a good lawyer and the right strategy, they can be beaten.

To read how they won, here is the rest of the article:

Counterfeiting Operation Ripped off 2 Inventors. Then They Fought Back and Won

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ByCarolyn Keane

New Licensing Model Offers Free Patent Licenses to Startups and Small Businesses

Earlier today, iPEL, Inc., launched its new website and a brand-new model of patent monetization, which offers free and paid licensing options to operating companies.  iPEL has also defined a set of business practices that a Non-Practicing Entity can follow in order to call itself an Ethical NPETM.

iPEL was formed with $100 Million in initial capital, in May of 2017, by Brian Yates, a well-known patent monetizer, and Rasheed McWilliams, a respected patent trial attorney.  For the last year, iPEL has been actively building its worldwide patent portfolio, which currently includes more than 1,000 distinct patent families.

iPEL announced its Initial License Offering, available only through the end of 2018, which provides all companies an opportunity to secure a license to iPEL’s entire worldwide patent portfolio, through one of two licensing programs: (1) free licenses for small businesses and startups, and (2) paid licenses for larger businesses.

Both categories of licenses should be a welcomed change for operating companies, who historically learned of patents owned by one of Mr. Yates’ companies by being sued. Indeed, the dozens of NPEs that Mr. Yates has owned were often amongst the most active patent plaintiffs in the US and were responsible for more than 1,000 patent infringement lawsuits, against a majority of the companies on the Fortune 1000.

With iPEL, it seems clear Mr. Yates is intent on pursuing a very different monetization model. “It’s pretty funny,” said Mr. Yates. “Several people thought I retired or left the patent monetization business, because during the last year, I have not created dozens of new NPEs or filed hundreds of new patent lawsuits.  But, I just turned 43 years old, and I have no desire to retire anytime soon.  I love what I do and am incredibly proud of what we are doing with iPEL.  And, even though it has been fun keeping the details of iPEL a secret, it’s going to be a lot more fun watching iPEL impact the entire innovation ecosystem.”

Although Mr. Yates and Mr. McWilliams would not share the full scope of what iPEL has planned, it is clear that they want to change the NPE narrative.  Providing a defined list of best practices and clearly defined pre-litigation licensing options are definitely new talking points for NPEs.

Even the most vigilant anti-NPEs, however, will have a hard time criticizing iPEL’s offer to grant small businesses and startups a completely free, no strings license to its entire patent portfolio.

iPEL’s free license is available to any company whose gross annual revenues do not exceed $5 Million USD (or the equivalent in any other national currency) and is for a one-year term.  Although the license is renewable, it is not available to affiliates or subsidiaries of larger entities that do not meet the revenue restrictions.

“We know that small businesses and startups are the most likely to engage in paradigm-shifting innovation” said Mr. Yates, CEO of iPEL. “Those companies are not afraid to take risk, to ask big questions, or to dream. Unfortunately, in almost all instances, those same companies cannot afford to buy all of the patent licenses they need in order to implement their new technologies. iPEL wants to help these companies succeed, by giving them a large portfolio of patented technologies, upon which they can freely build.”

“There is no reason patent licensing cannot and should not be a celebrated exchange of innovation and technology between those with rights and those who need to leverage those rights in order to produce and distribute products,” said Mr. McWilliams, President of iPEL. “Patent and technology licensing has been a part of the fabric of American culture since the earliest days of our history as a nation.”

“Regrettably, patent licensing has become a maligned practice over the last decade in the United States,” said Mr. Yates. “This has allowed the many benefits of patent licensing to lay unrealized, and for innovation to stagnate. My hope is that by giving free, non-exclusive rights to iPEL’s valuable patent portfolio, startups and small businesses will create more jobs and create exciting new technologies.”

Of course, there is a self-serving piece to what iPEL is doing as well. If startups and small businesses do successfully build on the patents in iPEL’s portfolio, then they will at some point becoming paying licensees. “Sure, it just makes good business sense really,” said Mr. McWilliams. “These small companies don’t have the ability to pay for patent licenses, and a patent infringement lawsuit could cripple them before they even get started. We’d love for them to build on our valuable technologies without worry, and once they can afford it, purchase an ongoing license. It is a win-win for everyone.”

At the end of the day, iPEL hopes this new, startup-friendly model becomes an industry standard. “Despite the false narrative that has been spread by many willful infringers, NPEs are a vital part of innovation and the global economy.  And, at iPEL, we are holding ourselves to the highest professional standards, by giving all companies an opportunity to secure licenses on reasonable, pre-litigation terms.  And, small businesses and startups should never be afraid of an NPE jeopardizing their company.  For those reasons, we challenge the rest of the industry to follow our lead,” Mr. Yates said. “It is time for NPEs to stop allowing infringers to define us as a bunch of heartless monsters. Everyone should abide by the Ethical NPETM practices and support small businesses and startups. It’s simply the right thing to do.”

More information about iPEL’s Ethical NPETM criteria, its worldwide patent portfolio, and its free and paid licensing programs, is available at www.ipel.com.

New Licensing Model Offers Free Patent Licenses to Startups and Small Businesses

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ByCarolyn Keane

The Cade Prize rewards inventors and entrepreneurs…..

The Cade Prize rewards inventors and entrepreneurs who demonstrate
a creative approach to addressing problems ​in their field of expertise
​resulting in an innovative, not iterative, invention.

The Cade Prize is one of the largest cash prize competitions for innovation in the state of Florida. It is open only to Florida residents and Florida based companies. Since its launch in 2010, it has drawn hundreds of creative thinkers from Pensacola to Miami. Every year the applications are drawn from diverse sectors. Previous entries have included biomedical, healthcare, IT, tech, environmental, and agricultural ideas. The Cade Prize attracts cutting edge inventions that have a real possibility of making it to market.

The Cade Prize is in search of entrepreneurs, inventors, researchers, and early-stage companies planning to take their idea to market. $50,000 in cash prizes (provided by the Community Foundation of North Central Florida) along with in-kind incentives are awarded to the final top four finishers of the competition each year. The goals of the $50,000 prize are to provide seed capital and publicity for great ideas with market potential. For the first time, awards will be given to the top four entries. The award for first place is $25,000, $15,000 for second place, $7,500 for third place, and $2,500 for 4th place. Individuals and companies with inventions that will remain in Florida for at least one year after the Prize is awarded, are eligible to enter. “Outside investment” is defined as funding from investors; This does not include grants, personal funds, or loans from friends and family.

The Cade Museum for Creativity & Invention is excited to announce that the 2018 Cade Prize is now accepting applications from inventors and entrepreneurs in the state of Florida. For the first time, the Cade Prize will award the top four finalists! The application fee is waived until June 22nd at midnight. Beginning June 23rd, the application fee will be $55.

For more information, please visit www.cademuseum.org or email Ashley Bryant at abryant@cademuseum.org.

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ByCarolyn Keane

Another Inventor at Odds with Invention Promoter

Read the Fine Print before you sign.

 

Read the fine print before giving money to an invention help company

Read the fine print before giving money to an invention help company

It all sounds so good, and easy. You have spent hours and perhaps years creating your product. You have spent money making prototypes and patents. We know those are not cheap and can take years to get. You see an ad on TV and it sounds great! They can do it all! You meet with someone and they love your idea as much as you do, or so they say.

Here is the kicker. They are in it for the money. I am not saying they aren’t entitled to be paid for their work. The problem is, they rarely do work. Inventors do not ask enough questions or talk to enough people about the company they are choosing. It is based on pure emotion. They sign a contract to pay and they don’t know what they are getting in return.

Inventors are easy pickings for a lot of companies. They tell the inventor what they want to hear and the inventor jumps at the chance. Their credit card is out so fast, they forgot to read the fine print.

Here is another inventor who fell into the trap:

Oklahoma inventor at odds with invention promoter

Don’t be the next one to get burned. If you have questions, or need help, email us at info@inventingdaily.com

 

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ByCarolyn Keane

Are there any free tools for SEO?

https://www.quora.com/Are-there-any-free-tools-for-SEO

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ByCarolyn Keane

Families, Invent Away! Frito-Lay Announces Return of “Dreamvention” to Find the Next Best Invention Idea

Actress Cobie Smulders Teams Up with Frito-Lay Variety Packs to Inspire Families to “Dreamvent” Together for $250,000 Grand Prize

Frito-Lay Partners with STEM-Focused Museums to Offer Free Admission and Help Spark Creativity


PLANO, TexasDec. 13, 2017 /PRNewswire/ — Families that play together can invent together. Frito-Lay Variety Packs, one of the flagship brands from PepsiCo’s Frito-Lay division, is calling on families to dream big in the second year of its “Dreamvention” program and submit ideas to solve an everyday problem for a chance to win $250,000. Frito-Lay, which initially created Dreamvention after seeing so much ingenuity from families in their daily lives — from big inventions to daily life hacks — is bringing the program back after receiving thousands of creative ideas in its first campaign. After all, Frito-Lay Variety Packs believes that if you can dream, you can invent. Families can submit invention ideas and learn more about the program starting now at MyDreamvention.com.

Cobie Smulders, a mom of two young children who knows the importance of spending meaningful time with family and making each moment count, is helping Frito-Lay encourage families to brainstorm invention ideas together. Smulders, best known for roles such as Robin Scherbatsky from “How I Met Your Mother” and Maria Hill from the Marvel Cinematic Universe, has long had a passion for creativity and scientific endeavors — she was even an aspiring marine biologist in her youth before she pursued acting full time.

“As a mom of two kids, we’re always making really weird stuff together!” said Smulders. “It’s really cool to join them on these projects and help them with their imagination. That’s why I admire the Dreamvention program, because it gives families a platform to showcase their creativity, hard work and determination. I can’t think of a better way for families to spend time together than by encouraging each other to dream big.”

To spark creativity for Dreamvention, Smulders and Frito-Lay are partnering with four STEM-focused museums across the country to offer families free admission between December and February, with Smulders helping kick off the first event today at the New York Hall of Science. Families will get hands-on Dreamvention experiences to inspire their own invention ideas to submit online. To see the museum schedule, visit MyDreamvention.com.

About Dreamvention
Earlier this year, Frito-Lay Variety Packs announced the inaugural “Dreamvention” contest where thousands of creative inventions were submitted by aspiring entrepreneurs from coast to coast. These imaginative and practical inventions were narrowed down to five finalists and an eventual $250,000 grand prize winner, including:

  • Maria DeLong from Brownsburg, Ind., who submitted “Pleasant Awakening” (finalist)
  • Anna Kreager from Cedar Park, Texas, who submitted “Chalkers” (finalist)
  • Julia Luetje from Leawood, Kansas, who submitted “Storm Sleeper” (finalist)
  • Grace Murphy from Needham, Mass., who submitted “Shoe Purse” (finalist)
  • Andrew Young from Batavia, New York, who submitted “Toaster Shooter” (winner)

All of these ideas were brought to life for the finalists to experience, with the help of MAKO Designs + Invent, a full-service consumer product development firm, through official prototypes of their inventions. Families can see the prototypes at the museum stops between December and February.

“This year’s competition was fueled by the passion and creativity that aspiring entrepreneurs brought throughout the contest, proving that if you can dream, you can invent,” said Jeannie Cho, Vice President of Marketing, Frito-Lay North America. “We are pleased to announce next year’s competition to keep this celebration of innovation and family connection going.  And we’re looking forward to what families will ‘dreamvent’ together next as they work to bring their best ideas to life.”

About the Contest
Families can participate by thinking up a fun invention idea, creating a simple drawing and short explanation of it and uploading both1 to MyDreamvention.com starting now through February 26, 2018 for a chance to win. Five finalists will be announced in October 2018 at which point Frito-Lay will pass the baton to America to vote for its favorite Dreamvention. The winning invention, based on votes, will be announced in December 2018.

Here are a few tips for how families can get started:

  1. Have a brainstorm with family and friends.
  2. Look at everyday things and think of a way to make it better.
  3. Think of an everyday problem you have and dream up a way to fix it!

You can also “Dreamvent” on-the-go! Frito-Lay Variety Pack features pre-portioned, single servings that can be taken with you wherever you go. Variety Packs include everyone’s favorite Frito-Lay snacks, such as Cheetos cheese flavored snacks, Doritos tortilla chips, Fritos corn snacks, Funyun’s onion flavored rings, Lay’s potato chips, Rold Gold pretzels, Smartfood popcorn, and SunChips multigrain snacks. Variety Packs are available at retail stores nationwide for a suggested retail price of $2.69 – $13.99.

To submit an invention idea and to learn more about the contest and the official rules, please visit www.MyDreamvention.com.

For high-res images, broadcast-quality b-roll and other press materials about Dreamvention, please visit www.magicbulletmedia.com/MNR/DreamventionFamilies

https://www.prnewswire.com/news-releases/families-invent-away-frito-lay-announces-return-of-dreamvention-to-find-the-next-best-invention-idea-300570419.html

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ByCarolyn Keane

MIT’s Take on Entrepreneurship

ENTREPRENEURSHIP IS A CRAFT.
HONE IT.

Entrepreneurship and innovation are synonymous with MIT. Big thinkers from around the world come to MIT Sloan Executive Education to take advantage of our renowned faculty, research, and resources that can help turn their ideas into successful ventures or social impact.

We teamed up with Professor Bill Aulet of the Martin Trust Center for MIT Entrepreneurship to assemble a collection of resources to help you get your venture off the ground. The Entrepreneurship Toolkit includes links to articles, a webinar, a 15% discount code, and other sources of business-building wisdom.

We hope these resources help ignite your entrepreneurial spark and guide your next steps. Click below and get the Took Kit

why-mit-sloan-executive-education

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ByCarolyn Keane

Turning Your Patent into a Business: A Practical Guide to Equity Crowdfunding

By Irwin Stein & Adoram Shemesh
November 11, 2017

Once your patent has been awarded you may still need additional capital to turn that patent into a business. Fortunately it is not as difficult to find investors as you may think. Equity crowdfunding is on the path to surpass venture capital as the preferred way for start-ups and small businesses to raise capital.

In a nutshell, equity crowdfunding is the sale of equity (or debt) in your business directly to investors using an online platform instead of a stock brokerage firm.  It is also less expensive than hiring one. Although direct to investor funding over the internet has been around since the late 1990s, it came of age with the JOBS Act in 2012.

The JOBS Act provides for three regulations that govern distinct types of offerings. The offerings differ by how much money you can raise and from what type of investor you can raise it from.

Regulation A (Reg. A) permits offerings of up to $50 million dollars. This is a “registered” offering meaning that the company needs to file a registration statement and investor prospectus with the Securities and Exchange Commission (SEC). An audit of the company’s books for the two most recent years is also required unless the company has been in operation for a shorter period of time.

There are two main benefits to an offering under Reg. A. The first is that you can solicit and obtain funds from any member of the general public including younger millennial investors. This might be a benefit to a company whose product is targeted to this audience, like a video game company or a company whose technology might interest younger consumers as opposed to baby-boomers.

The second benefit is that once the offering is complete, the shares you have registered are freely tradable in the public market including the NASDAQ or New York Stock Exchange. There are specific listing requirements for these markets, but companies that go through this process then have access to mainstream capital markets. Also if the company does well, the shares are liquid and can be sold by the insiders.

The downside of Reg. A offerings is that they are time consuming and expensive.  It can take 6 months or more for lawyers to prepare the paperwork and for the SEC to review, comment and approve an offering.  Legal and accounting fees alone can easily reach 6 figures.  There is also an annual audit and given that you will likely have thousands of small investors; you will probably need at least one employee to deal with investor relations.

There is also the cost of finding those thousands of investors. There have been several successful Reg. A campaigns that have raised $10 million or more. The upfront marketing costs for an agency to design and execute a campaign to reach those investors can also be substantial. If you are using Reg. A to raise $10 million or more, a budget of $250,000 or more would  be appropriate.

On the lower end of the scale is Regulation Crowdfunding (Reg.CF) which allows companies to raise up to $1,070,000 per year directly from the general public. There is no need for an audit if the raise is less than $107,000 and above that only a CPA review, not a full audit of the last two years is required. There is no SEC review process, just a filing.

Anyone can invest although investors of lesser means are limited to a total investment of $2200 or 5% of the lesser of the investor’s income or net worth within each calendar year.  It is not unusual for a company raising $1 million to have thousands of shareholders who put up $100 each.  As with Reg. A the legal and marketing costs can add up.

A Reg. CF offering must be made on a crowdfunding portal (website) which in turn must be registered with the SEC. At this time there are about 30 portals that have registered and some are better than others in terms of their visibility and reputation. Several specialize and only host offerings for companies involved in green energy or companies owned by women or minorities, etc.  Selecting the right website or portal can be crucial to your offering’s success.

Most companies find that the most cost-effective way for them to raise funds is Regulation D. Reg. D is an exemption from the registration requirements of the federal securities laws. It has been around since 1982 and today is an active $1.7 trillion per year market.  That is much more than traditional public offerings or venture capital.

Traditionally these private placements were sold through stock brokerage firms and many still are.  The firms and issuers were always limited to making these offerings only to people with whom they had a prior business relationship.  The JOBS Act changed that to allow issuers to advertise and solicit investments from accredited investors, those whose income is over $200,000 a year or possess over $1 million in assets outside of their primary residence.

The vast bulk of the money raised through equity crowdfunding is raised using Reg. D. As a practical matter the cost of preparing the legal paperwork is usually less than with either Reg. A or Reg. CF.

Accredited investors are presumed to be more sophisticated and the amount of information that needs to be provided is usually less. At the same time, they often ask more thorough questions before they invest.  The company will have to designate a knowledgeable person to help investors who want to kick the tires.

Accredited investors are relatively easy to reach and because they are taking a larger slice of each offering (often a $10,000 -$25,000 minimum investment) issuers need to reach out and connect with a far smaller group of potential investors. This substantially reduces the upfront marketing costs.

In sum, a Reg.A offering raising $5 -$10 million can cost several hundred thousand dollars whereas a Reg. D offering, raising the same amount, may cost less than $50,000.  You can use Reg. D for a $1 million raise as well and unlike Reg. CF if you get a good response you can accept more than $1 million to provide your business with some extra cash.

Unlike venture capital or angel investors with equity crowdfunding the company seeking funds controls the process and the terms. The hard part is to present to investors a better deal that will make yours a more attractive investment than the other offers they receive.

There are multiple ways to structure a Reg. D offering that provides investors with a good return on their investment. For patent backed ventures; a licensing, royalty or revenue sharing structure is often possible. That allows the company to structure the financing “off the balance sheet” in a way that the owners of the company retain ownership of 100% of the equity.

There is no way to sugar-coat the fact that 90% of start-ups fail. A study published by MIT last year suggested that the likelihood of growth is 35 times higher for firms that apply for patents. That fact is not lost on investors, but you may want to remind them of this fact when you are seeking their investment.

That is one of the reasons that I am working with PatentAngels, an IP-centric investment platform that is focused on Reg D offerings for companies with registered patent rights.  The IP aspect increases the level of certainty for investors, especially when making investments online and they may not be able to meet the management team in person as traditional VC’s do. Think about it, if you made an online investment in a company with multiple unknowns, would you rather know they at least have their technology patented?

I advise any company that is getting ready to start raising funds to take the following actions:

  1. Get dressed. By that I mean get your corporate books and financial statements in order.  Have your Board of Directors in place and make certain that they are people who have some experience to the business that you are in.
  2. Have a detailed business plan that is well researched. Any investor will discount your financial projections but that does not mean that your projections should not be based in reality.  Know your market, your customers and your competitors.
  3. Hire the right people.  Having a patent is great, but investors expect execution. You are going to need marketing and sales executives and a CFO.  Hire them or at least identify them so that investors can evaluate their skills and experience.
  4. Know how much money you need and be prepared to describe how you will spend it. A line item that says “general overhead” does not tell investors what they want to know.  If you need office or manufacturing space, you should have a good idea of how much space, where it will be located and how much it will cost.  You should be able to estimate how much each executive salary and benefits will cost and how many other employees you will need.
  5. Be prepared to mount an aggressive and focused marketing campaign to drive investors to your company. There is a big difference between a presentation that says “look at this great widget I patented” and one that says “look at this great patented business I am building!”

Equity crowdfunding has created a new, intelligent and efficient way for small companies to access the capital markets. If you have taken the time and expense to obtain a patent for your product, it is certainly worthy of your consideration.

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ByCarolyn Keane

Angry inventors accuse patent office’s appeals board of favoring Big Tech

Fed up with what he perceived as bureaucracy run amok at the U.S. Patent and Trademark Office, Paul Morinville staged a striking protest this summer, with inventors marching on the agency’s Alexandria headquarters, holding signs and burning their patents.

He said too many patents approved by the agency had been revoked by administrative law judges at the Patent Trial and Appeal Board, which he said tends to side with major technology companies in disputes with independent inventors.

“If you like to steal other inventors’ stuff, then you must love PTAB,” said Mr. Morinville, managing director of U.S. Inventor Inc., an organization advocating for stronger patent protections for startups.

Since its creation by Congress in 2012, the board has angered the inventing community, which says the review process is biased.

One judge, for example, represented Apple Inc. in private practice and then ruled in favor of the tech giant 17 times after joining the court. Another judge represented AT&T Inc. as a private lawyer and later presided over a case involving the telecommunications company.

Mr. Morinville estimates that the review board has invalidated patents in 92 percent of the cases it has resolved.

Eyebrows were raised this summer when a lawyer representing the patent office in a federal court appeal of a board decision acknowledged that the agency had added extra judges to reviews in order to achieve the desired outcome. The patent office attorney said the move was necessary to “ensure the [director’s] policy positions are being enforced.”

The Supreme Court will take up the issue in a case that asks the justices to declare the appeals board process unconstitutional.

Oral arguments in the case, Oil States Energy Services v. Greene’s Energy Group, are scheduled for Nov. 27.

Congress created the Patent Trial and Appeal Board to address complaints that the patent office was approving too many applications that were vague or overly broad. The board was expected to be cheaper and more efficient than courts to resolve patent disputes.

It handles contested patent cases through administrative proceedings known as inter partes reviews. All cases are managed by panels of three to five administrative law judges.

Inventors say the rulings often seem arbitrary and are particularly irked by what they see as a pro-corporate bent among the administrative law judges. They say anyone can bring a challenge, and the judges can continue a case even if the complaint is withdrawn.

The appeals board is not subject to review by the regular court system, which the inventor community says leaves it with little recourse.

“There is no code of conduct for PTAB judges,” Mr. Morinville said. “There is no rule of law in the PTAB, and that is what really angers people in terms of the invalidation which should rely on the rule of law.”

The patent office’s chief information officer did not respond to multiple requests for comment.

The test case before the Supreme Court involves Houston-based Oil States, a company that provides equipment for the oil and gas industry. It received a patent for a tool that pumps fluid into an oil well without fluid making contact with the wellhead.

Greene’s Energy Group of Imperial, Pennsylvania, challenged that patent through a review, and the board invalidated it. Oil States asked the board if it could amend the patent, but that motion was denied. The company then filed an appeal with the U.S. Court of Appeals for the Federal Circuit.

Oil States said the review process is unconstitutional because a patent is a form of private property and the same agency that grants a property right can eliminate it without a jury trial in federal court.

The Federal Circuit rejected Oil States’ argument and affirmed the board’s decision. Oil States petitioned the Supreme Court, which agreed to hear the case.

The Supreme Court denied similar requests over the past few years to determine the constitutionality of the Patent Trial and Appeal Board’s reviews.

Some patent analysts said Justice Neil M. Gorsuch may be the reason the court chose to hear Oil States. Justice Gorsuch, who was confirmed to the court this year, has expressed concerns about administrative adjudication in judicial opinions.

“Clearly, the court took this on to not just leave things as status quo,” said Art Monk, vice president of patent transactions at TechInsights, a San Jose, California-based provider of patent data. “They could do something radical like invalidate the entire America Invents Act or do something more benign like provide guidance on how property rights need to he handled.”

If the Supreme Court decides the board’s reviews are unconstitutional, then the ruling could restrict other federal agencies’ uses of administrative tribunals to resolve disputes. The Federal Election Commission, Securities and Exchange Commission and Federal Communications Commission are among the agencies that rely on such systems, known as administrative adjudication.

“A ruling striking down PTAB would show the Supreme Court wants to tighten the constraints on administration adjudication and could lead to challenges over other well-established forms of adjudication,” said Greg Reilly, who teaches patent law at Chicago-Kent College of Law.

Small companies and independent inventors say patents are property rights and can be revoked only by a federal court. Several groups, including conservative organizations and a coalition of patent law professors, have filed briefs in support of Oil States.

“We have judicial opinions written over the past 150 years affirming patents as private property rights,” said Greg Dolin, a patent law professor at the University of Baltimore Law School who filed a brief in support of Oil States. “Court after court and justice after justice keep saying patents are private property rights that can only be adjudicated in courts.”

Large tech companies contend that patents are public property and the same government that recognizes them can regulate how they are adjudicated.

The Patent Trial and Appeal Board system gives challengers more leeway to invalidate a patent based on the portion of the technology used instead of the entire patent.

“The PTAB and its review process are constitutional,” Mr. Reilly said. “Patents are created by federal statute, which also gives Congress the right to specify administrative adjudication. Inter parties reviews are appealable to Federal Circuit which protects due process concerns.”

Even if the court finds the review process unconstitutional, it’s not clear what would happen to the patents the PTAB has already invalidated.

“I think we could have a situation in which changes to the law don’t apply retroactively. I think there is still a lot of uncertainty surrounding this case,” Mr. Reilly said.

The debate over the Patent Trial and Appeal Board has attracted attention on Capitol Hill. In June, Sen. Christopher A. Coons, Delaware Democrat, introduced legislation dubbed the Stronger Patents Act. Delaware is the nation’s busiest jurisdiction for patent disputes. More than 6,500 patent cases were filed in federal court in Delaware in 2014, according to the most recently available data from PwC, the brand name for PricewaterhouseCoopers.

Mr. Coons said the bill would bring more balance to the board’s reviews. If passed, the bill will attempt to bar patent challengers from seeking both a Patent Trial and Appeal Board review and a district court hearing, limit board reviews to one claim per patent, and ensure a challenger has a business or financial reason to attack a patent.

“The bill requires the PTAB to use the same standards that a district court applies when evaluating if a patent claims something truly new and nonobvious, standards that are fairer because they account for the fact that inventors have already had to prove to a patent examiner that they deserve a patent,” Mr. Coons said.

https://www.washingtontimes.com/news/2017/nov/9/inventors-patent-office-favors-big-tech/

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