Promote the Progress

This quote, from Hans Sauer - Associate General Counsel for the Biotechnology Industry Organization - perfectly positions the hi-tech/life-tech divide on patent reform legislation:

"Will I, 30 years from now, pay $10 less for an iPod and have a 10 percent less chance that Alzheimer's medicine will be available?" (source)

The source article reports that life-tech lobbying efforts have stalled the Senate reform bill, and hints at what might be hi-tech's next political move on the patent reform issue - an attack on the unitary nature of our patent system (a concept that has been lurking in the background for some time now).

"You have a group of companies that are happy with the status quo, and are saying, 'Don't change it; it's not broken,'" [Bruce Sewel, Intel executive Vice President and General Counsel] said. "That's fine, but it's broken for a lot of other people." (emphasis added)

Posted by J Matthew Buchanan at 09:50 AM | Permalink

Our patent system has two primary purposes -

1. To encourage disclosure of inventions, and

2. To encourage development of new ideas by fostering design around efforts

Seems to me our great, world-leading patent system is now failing to achieve these purposes in at least two regards...with a third complication on the horizon:

1. - The Old. The "bury your head in the sand and don't read patents" effect of our duty to disclose provisions is legendary around the globe, basically encouraging our best and brightest to avoid reading patents (and other technical references) in fear of having knowledge that they later forget to disclose in an application that might bear only a marginal relationship to the subject matter of the ignored patents. Combine this with the guarantee of an inequitable conduct charge - well-founded or not - should the resulting patent ever be litigated, and you can understand why some technical folks shudder at the sight of patents. Poof! So much for sparking new ideas.

2. - The Now. That which is disclosed in a patent application and not claimed is, of course, dedicated to the public. Our shiny new Patent Office rules now place arbitrary limits on the number of claims that can be obtained for a disclosed invention, which has our brightest inventors telling their patent attorneys "naw...let's not disclose that embodiment right now...I'm afraid I won't be able to claim it. " After carefully considering the best mode requirement, many inventors are, I suspect, sending many wonderful alternative embodiments straight to the cutting room floor. So much for encouraging disclosure.

3. - The Future. Combine #2 with an elimination of the best mode requirement - which has been the subject of patent reform bills for the last several years - and you'll get a glimpse of our system of the future. Rubber stamped, narrow protection that fails to encourage much of anything. Ouch.

How's that for promoting progress?

Posted by J Matthew Buchanan at 02:36 PM | Permalink

I note the following from today's floor debate of H.R. 1908, The Patent Reform Act of 2007:

1. Patent trolls and "bad patents" continue to be the rallying cry of the reformers. Amazing, then, that no mention was made of eBay v. MercExchange, KSR v. Teleflex, or the PTO rules limiting the ability to file continuation applications. Not one mention.

2. Patent reform has been fully politicized. The reformers have deftly called on the majority's ability to control the rules of debate. A dissenting Democratic voice, Marcy Kaptur (from my hometown of Toledo, OH) stated it best (paraphrasing):

"Our time should not be squashed on this important issue" (speaking in an elevated voice over the speaker telling her that her time has expired)

Let the games begin.

Posted by J Matthew Buchanan at 01:23 PM | Permalink | Comments (1)

A group of five Republican Senators has asked that the Senate Judiciary Committee to hold more hearings on patent reform before approving the Patent Reform Act in its Thursday hearing.

The Senators questioned the substance of the apportionment of damages and post-grant review provisions of the bill:

These changes "need to be more carefully examined to ensure that they do not undermine innovation, increase frivolous litigation, or undermine property rights," the letter said.

Surprisingly, the Senators did not question the appropriateness of the bill in the wake of KSR v. Teleflex. Many proponents of patent reform have cited the low obviousness hurdle as one of the driving needs for patent reform..and the Supreme Court clearly addressed that issue in its recent KSR decision. It seems that, in the wake of KSR, any patent reform motivated by concerns over obviousness should be put on hold until the legacy of that case becomes clear.

Posted by J Matthew Buchanan at 01:22 PM | Permalink

I've done a lot of thinking about the potential policy implications of the Supreme Court's recent decision in KSR v. Teleflex. Needless to say, I think the decision puts us at a pivot point (pun intended) in the continuing development of our patent law.

Here's my list of the top ten policy implications of the case, presented in no particular order. I'll address each of these topics over the coming weeks here on Promote the Progress. The alternate title listed for each topic should give you an idea of where I'm going...

1. Patent protection is no longer available for incremental - or ordinary - inventions (or "Death - and the potential for rebirth - in Detroit")

2. Legislation and regulations directed at patent reform should immediately be placed on hold (or "now's not the time for silly games")

3. The Patent Office responds (or "383 U.S. 1: Learn it, know it, live it")

4. Patent lawyers respond (or "You've got to know when to hold 'em, know when to fold 'em, know when to walk away and know when to run")

5. In-house counsel and business folks reformulate the file/don't file calculus (or "Did you do something extraordinary today?")

6. Premiums paid for key - read 'extraordinary' - inventive personnel will increase (or "did you hear? Company X is hiring...")

7. Look for industry specific caselaw pronouncements of technologies that constitute mere 'ordinary innovation' (or "Silly rabbit, these tricks are for kids")

8. Patent maintenance fees increase dramatically as grant and maintenance rates drop just as dramatically (or "Hey buddy, can you spare a couple grand?")

9. The backlog disappears (or "Hey...wait just a minute here")

10. The Federal Circuit gets a chance to restablish itself as the court that brings uniformity to our patent laws (or "Let's get going")

Posted by J Matthew Buchanan at 09:58 AM | Permalink

So we've officially got a patent reform bill in the 110th Congress (both Crouch and Zura have excellent summaries). Hearings are even underway. So now we've all got to watch Congress like a pot of water on the stove, right?

I say no. Right now, Congress is last in line in the patent reform debate, in my eyes.

Why's that, you ask? It's simple, really. The question we wanted to have answered by the first reform bill in the 110th Congress is this: How much progress has been made to overcome the giant chasm that separates the stakeholders?

The Patent Reform Act of 2007 certainly fulfilled its purpose. It certainly provided the answer to that burning question - a resounding 'zero'. Yesterday's hearing showed us that the 110th, is, necessarily, starting at the beginning....again. We haven't moved a bit.

Does that mean reform is a dead issue right now? Again, I say no. It's ironic, really. As legislative reform spins its wheels in Congress, both the courts and the Patent and Trademark Office are working to ensure that significant reform is made.

And they're doing it now.

Want examples? Try these on for size. Think about KSR (I know you were already). Think about the Federal Circuit's continued 'reminders' [example 1][example 2][example 3] of the flexibility of the TSM test as we wait for KSR. Think about the Amgen denial and the potential Supreme Court review of the Cybor de novo standard for claim construction review. Think about the rules package that is apparently making its way down the pike. Think about MedImmune and its progeny (there's your reform right there). Think about the continued development of injunctive relief law in light of eBay (settlement tables continue to wobble as we speak). And, as my sleeper pick, think about Eon-Net and its potential effect on egregious troll-like litigation 'strategies'.

Don't get me wrong...Congress clearly still wants in on the reform business. It's just going to be a little late to the party.

Posted by J Matthew Buchanan at 10:24 AM | Permalink

For those convinced that the so-called patent-trolls are here to stay and that an Act of Congress is required to make them go away, I encourage you to take a "hmmmm...that's interesting" look at Eon-Net v. Flagstar Bancorp.

In that case, the Federal Circuit recently refused to stay a sanctions judgment entered against a patentee and its counsel for various "troll-like" practices that occurred during the underlying patent litigation (which resulted in summary judgment of noninfringement). The district court entered a sanctions judgment against the attorney and his firm in the amount of $141,984.70 for failure to conduct an adequate prefiling investigation and for filing a baseless claim (F.R.C.P. 11).

While the Federal Circuit was only considering the stay and not the merits of the sanctions judgment (that will come later), the motions panel cleverly detailed various findings made by the district court regarding the troll-like practices of the patentee while it omitted any significant discussion of the movant's arguments in favor of the stay. The non-precedential order reads like an instruction booklet for patent troll litigation strategies:

"Eon-Net's complaint was virtually identical to numerous other complaints filed against parties with greatly disparate business operations;"

"Eon-Net followed service of the complaint with a cheap offer of settlement;"

"After Flagstar showed Eon-Net that its software was from a licensee to Eon-Net's patent, and after Flagstar moved for summary judgment of noninfringement, Eon-Net identified other allegedly infringing software that was not identified in its complaint;"

"Eon-Net based its infringement allegation on an investigation of Flagstar's website but that counsel did not obtain copies of the allegedly infringing software, was unable to determine how the web page worked, and did not evaluate the code;"

"Eon-Net presented no evidence or argument to support its [new infringement] position;"

"not only did Eon-Net fail to obtain or inspect copies of the software, it failed to even identify the software;"

"Eon-Net did not explain how it concluded that the '697 Patent could be construed to cover web-based forms;"

"indicia of extortion are present in this case;"

"Eon-Net offers a nuisance settlement at the outset to avoid a hard look at the merits of its infringement claims."

(internal quotations omitted)

Why is this non-precedential opinion so significant? Simple....it will likely have significant impact on the willingness of law firms to engage in these common 'troll-like litigation practices'. The true trolls, if there are such beasts, might just find themselves without representation.

It's also important to note that the Court seemed to assign little, if any, weight to counsel's argument that "his relatively small law firm will endure significant financial hardships if the imposition of monetary sanctions is not stayed pending appeal." Why is this important? Anecdotally, most infringement suits that follow the 'strategies' employed in this case are brought by smaller law firms that, presumably, don't have deep pockets.

Stay tuned...the Court's consideration of the merits of the sanctions judgment might be even more interesting.

For a detailed review, read the FedCirc.us analysis of the Eon-Net v. Flagstar Bancorp opinion.

Posted by J Matthew Buchanan at 02:26 PM | Permalink | Comments (3)

One of the "poster boys" of the software/high-tech side of the patent reform debate is setting up camp in D.C. Micron has apparently opened a "governmental affairs" office in the area and, according to Business Week, has charged it with the task of leading the company's lobbying efforts on patent reform, among other issues.

The timing of this development is rather interesting. Rumor has it, Jon Dudas recently characterized the PTO's proposed rules that would limit continuation filings as "dead as a door nail." Perhaps this reform failure has Mircon realizing the extent of the distance between Idaho and D.C.

Posted by J Matthew Buchanan at 05:41 PM | Permalink | Comments (1)

Members of the 110th Congress:

Congratulations and welcome.  The patent community is extremely pleased you're here and hopes you're already preparing to roll up your sleeves and get to work on patent reform.

But, before you jump the gun and do something drastic, I thought I'd give you a quick glimpse at the status quo.

There's no hiding it....you're inheriting a mess.  Over the last several years, we've seen several comprehensive patent reform bills proposed, including the disastrous Patent Act of 2005.  Each and every one of these bills has suffered the same fate - no movement whatsoever in Congress.  None.

But, that doesn't mean we haven't learned something.  Each of the ill-fated patent reform bills have shown us, time and again, that there is a great divide between at least two factions in the patent world - pharma/biotech on one side and computers/software on the other.  Each side claims to want an improved patent system.  Congressional patent reform efforts to date have done nothing but show the world that "the improvements" cannot be agreed upon.

So what can you do in this environment?  I'm glad you asked.  Here's a brief list.

1.  Take a moment to thank your favorite Member of the 109th Congress as it did a wonderful job of building the record.  Plenty of interesting and relevant information has been collected, and the various viewpoints on several controversial issues have been thoroughly documented.

Thanks to the 109th, we know where everybody stands on the hottest patent reform issues, including switching to a first-to-file system, post grant review and the controversial second window, and apportionment of damages, among others.

You shouldn't waste precious time rebuilding the record.  Go ahead and move straight to #2.

2.  Assuming you decide that legislative reform is needed, you'll need to roll up your sleeves and be prepared to do some hard and ugly work.  You need to boil away the contentious issues and provide a patent reform package that all patent stakeholders view as an improvement to the system.  You might be surprised to learn that consensus or near consensus exists on a few of the tough issues.  Abandon the comprehensive approach and focus on the core improvements.  Who knows, you might even be able to move a bill that takes this approach.

3.  Take a look at the Patent and Trademark Office.  PTO Administration adopted a very aggressive approach to cleaning its own house last year.  Luckily, non of the drastic, and arguably illegal, proposed changes have been implemented, yet.  The community learned a valuable lesson from PTO's actions last year - the current Administration seems willing to take drastic action to fix perceived problems.  And the proposed rules are just the beginning...take a gander at the Draft Strategic Plan the Office is working on.  It seems the Administration has its own view of patent reform; you probably should look into it.  A clear indication of the authority (or lack thereof) of the Office to take such actions - including placing limits on legal continuation practice - would be very much appreciated, no doubt by the patent community as a whole as well as by PTO Administration.

4.  Step up and take control of the checkbook.  Give the Office its money.  All of it.  Had your predecessors put this issue to rest once and for all, you probably wouldn't have to worry about the previous point.  Be kind to the 111th and put a permanent end to fee diversion, no matter how great the temptation.

5.  Pick up the gauntlet and at least look at it.  The Supreme Court threw a gauntlet squarely at your feet last year in eBay v. MercExchange.  You need to ask the fundamental question:  What do we intend to grant patentees with the right to exclude?   You may, in fact, decide that your views are consistent with those of the Supreme Court.  If so, that's fine.  But, you have to at least ask the question of whether that decision is consistent with your intentions.  Ignoring this significant gauntlet that stands to have dramatic and lasting effects on our patent system is, simply put, irresponsible. 

6.  Don't lose hope.  Take a look around.  There are several good, reform-type things going on in the patent world.  Check out PatentFizz, the web site that allows anyone - anyone - to submit any comment on an issued United States Patent.  How's that for post grant review?  Take a look at Google's simple and effective patent search...it's an amazing tool that is providing improved access to prior art.  Certainly that's an improvement everyone can agree on.

It's a pretty short list, actually.  I'm sure it amounts to more than two years work, so I won't keep you.  Get'r done.

Posted by J Matthew Buchanan at 10:58 AM | Permalink | Comments (2)

As the 110th readies itself for the show, I'm sure patent reform is the top priority for all incoming Members. Fee diversion, post-grant review, and first to file, oh my! Boy, I sure hope they're able to put their minds at rest over the holidays...

In all seriousness, we have seen a few hints about the direction in which patent reform will move once the 110th Congress signs its name to the growing log of the issue. Senator Leahy, the incoming chair of the Judiciary Committee, recently gave indications that the patent reform agenda will include efforts "to increase access to essential medicines throughout the world."

According to Leahy:

"We can help struggling families in developing nations, while improving US relations with large segments of the world's population...The current global health crisis is one of the great callings of our time. Whether it is the Avian Flu, AIDS, SARS, West Nile Virus, or the approaching menace of multi-drug resistant bacteria, we need to recognize that the health of those half-way around the world now influences our security and affects our lives here in the United States....I want the work of the Judiciary Committee to be a catalyst to help make life-saving medicines more readily available around the world."

He leaves no doubt that he views patent reform as part of his agenda on "access to essential medicines," stating that he intends "to redouble efforts to re-examine our patent laws in the hope that by making thoughtful and practical changes we can greatly increase access to essential medicines throughout the world."

Certainly, that's a whole new direction for patent reform in the United States. It sounds a lot like the debates that occurred in India as that country struggled to become fully TRIPs-compliant.

Read the full article on Leahy's comments at Intellectual Property Watch.

Posted by J Matthew Buchanan at 08:04 AM | Permalink

The lame duck Congress continues to consider patent issues, and the possibility of some legislative action in the waning days continues to loom.  The bill with the greatest chance of survival as law appears to be Representative Issa's pilot program that's designed to encourage enhancement of expertise in patent cases among district court judges (HR 5418).

The bill has passed the House and a companion bill (S. 3923), which was introduced by Senator Hatch, currently sits with the Senate Judiciary Committee awaiting markup.

Can the bill get onto the Committee's undoubtedly busy December schedule?

 

Posted by J Matthew Buchanan at 07:37 AM | Permalink

Here’s an interesting resource – a timeline of the patent reform efforts of Jeff Bezos (Amazon) and Tim O’Reilly (O’Reilly).  The creator styles it “A web 2.0 look at Jeff and Tim’s Excellent Patent Reform Adventure…”

Thanks to Scripting News for the lead.

Posted by J Matthew Buchanan at 09:33 AM | Permalink

In Dystar Textilfarben v. C.H. Patrick, the Court of Appeals for the Federal Circuit recently issued a sternly worded defense of its motivation/suggestion to combine test for determining when references can properly be combined to render a claimed invention obvious. The Court, clearly speaking to the Supremes as they prepare to consider the propriety of the motivation/suggestion test in KSR v. Teleflex, highlighted the flexibility of the test and explained the relationship between the test and the Graham factors.

In defending the test, the Court clearly expressed its frustration with the prevailing belief that the prior art must include an express motivation to combine in order for obviousness to be found. The Court specifically referenced the Federal Trade Commission and National Academies of Sciences reports as examples of inaccurate interpretations of the Court's decisions that have created "much confusion about the law." These reports, you'll remember, are considered to be two of the primary catalysts underlying the patent reform movement.

The Court repeatedly stressed the flexibility of the test, noting that an express suggestion to combine is not required and that the motivation/suggestion to combine can come from several sources, including the prior art references, general knowledge, and the nature of the problem to be solved.

While the Court didn't change the test in any way, its restatement of sorts might just change obviousness law for evermore.

View the PatentFizz display of United States Patent No. 5,586,992.

For more detail on the decision, read Crouch's review of the case.

Posted by J Matthew Buchanan at 07:02 AM | Permalink

Last week, I wrote about the changing scope of 'patent reform.' Following the release of the Draft 2007-2012 Strategic Plan by the Patent and Trademark Office, it is clear that 'patent reform' is beginning to take on an entirely new, much broader scope than it has in the past.  The Draft Plan hints at a desire to fundamentally alter our unitary patent system in favor of a new system that offers several different 'patent products' and examination alternatives.

The concepts mentioned in the draft document have certainly been hinted at before (see the 'themes' from the 2005 National Academies/AIPLA Conference on Patent Reform, and the interesting smoke signals we've seen from the Senate that contemplate different treatment for different industries).  Nevertheless, the Draft Plan represents the first official signal that a shift away from a unitary patent system is being considered.

Based on the significance of this shift in scope and the Office's current aggressive approach to implementing change via its regulatory authority, it is critical that a proper agenda for the 'new patent reform' be established early...and followed.

With that in mind, here's a proposal:

First, Congress should conduct oversight hearings to evaluate the current proposed rule placing limitations on continuation and RCE practice.  The hearings should focus on defining 'continuation abuse,' the stated purpose behind the proposed rule, and determining whether such 'abuse' exists at such a level to warrant an arbitrary limit on the ability to claim inventions properly disclosed under the statute.

These hearing should also address the significant question that exists as to the authority of the Office to implement the proposed changes.  A thorough inquiry on this point is critical because reversing and/or temporarily halting a final rule, if put in place, would place heavy time and expense burdens on patent applicants and the Office alike.  Furthermore, it is clear that making the proposed continuation/RCE rule final without a higher lever of review will create a great deal of frustration amongst the patent bar and patent system stakeholders.  From the Office's point of view, this may make it more difficult to implement significant regulatory change in the future.  If the Office truly wants to put this rule in place, it should welcome a serious inquiry into its ability to do so.

Considering the Office's apparently short timetable for making the proposed rule final, these oversight hearings should be conducted immediately, preferably by the 109th Congress.

Second, Congress should conduct an oversight hearing evaluating the current unitary patent system and its ability to fulfil the Constitutional requirement that the system "promote the progress."  Is the current system working for us?  Is it the best possible system?  Could we improve the current system?  Could we build a better one?

Third, if it is determined that the system needs change to fulfill the Constitutional requirement, oversight hearings should be conducted to determine what types of changes to the patent system would best move us toward fulfilling the Constitutional requirement.  Do we need only to 'tweak' the current unitary system?  Is the problem simply one of administrative issues within the Office?  Would proper funding levels fix the problems?  Or, are we missing the Constitutional requirement so badly that we need to build an entirely new system?  If so, would alternative patent products, such as registrations, and examination alternatives, such as requests for examination, move us closer to fulfilling that requirement?

We need to ask these questions to ensure that we don't automatically move toward the changes being contemplated by the Office.  If indeed change is needed, and if indeed those are the best options for change, then by all means let's move ahead.  But, we must first ask these questions to ensure that we don't implement unnecessary and/or ineffective changes.

These hearings should be conducted by the 110th Congress.  The 109th thoroughly examined 'patent reform' as we knew it over the last few years.  The 110th needs to take the inquiry up a notch to examine the issue at the societal and Constitutional level.  The scope of the 'new patent reform' mandates this.

Fourth, the Patent and Trademark Office must provide details on the changes that it hints at in the Draft Strategic Plan.  It is clear the Office is debating significant change that extends beyond its regulatory realm.  To fully appreciate the scope of these changes and to have open and frank dialogue on the issues they present, patent system stakeholders need details on the "plan."  The details should be provided through an official channel in which public comments can be received and catalogued.  Ideally, these details would be made available prior to Congressional oversight hearings directed at determining the effectiveness of examination alternatives and alternative patent products.

Thoughts?

Posted by J Matthew Buchanan at 11:05 AM | Permalink | Comments (3)

Remember when 'patent reform' was about moving to a first-inventor-to-file system? About adopting a post-grant review procedure and making it easier for third parties to submit art for examiner consideration? Heck, remember when it was about changing the injunctive relief standard?

Well, those days are gone. Looong gone.

With the release of the Patent and Trademark Office's draft Strategic Plan for 2007-2012, we now know that 'patent reform' is, now, a much broader concept. If you haven't read the draft yet, I encourage you to do so. If you're pressed for time, just read the press release regarding the release of the draft, the Introduction (3 pages), and the 'Goal 1: Optimize Patent Quality and Timeliness' section (9 pages).

Really pressed for time? Read the last paragraph on page 14 and the first paragraph on page 15.

With the release of the draft plan, the Patent and Trademark Office has single-handedly changed the scope of 'patent reform.' It's now clear that some believe the term should refer to a deconstruction of our unitary patent system. The draft plan, while short on details, talks of "early determination of rights," "accept[ance] of more limited property rights in exchange for lower costs and faster processing times," and "some combination of examination processes and patent products that will better allow applicants to choose what determinations and results they need."

the draft PTO strategic plan represents the beginning of a new chapter in the patent reform movementThe draft plan, with it's focus on these new fundamental changes, represents the beginning of a new chapter in the patent reform movement. Seems to me we're now talking about requests for examination, alternative 'registration'-type systems, and other enormous changes.

How's that for a 'strategic plan'?

Remember the good ole' days when we liked to debate the pros and cons of post-grant review? Ah, man, to have those back again.....

Posted by J Matthew Buchanan at 07:09 AM | Permalink | Comments (1)

I think he'd tell the Office to focus on its core business...patentability.

Everyone knows that the Patent and Trademark Office is readying its proposed continuation rule for final.  It appears that, soon, we'll be living in a world that is very different than the one we know today.

At first glance, the rule seems like an aggressive attempt by the PTO to address its suffocating backlog.  Remember, though, that John Whealan, Solicitor and USPTO General Counsel for Intellectual Property, has indicated that the rule is not specifically designed to deal with the backlog.  Rather, it's designed to address the problem of 'continuation abuse.'

While we don't know exactly what constitutes 'continuation abuse' yet, I think most people would agree that it relates to repeated use of continuation filings to obtain relatively broad claims long-after the filing date. The practice allows patentees to wait for a technology to be developed by others and then draft claims that cover the commercial embodiments. In essence, the patentee gets the benefit of seeing the commercially developed embodiments and ensuring that his later-filed claims cover the technology.

If it is determined that 'continuation abuse' is a problem that must be dealt with, is the Patent and Trademark Office the proper body to deal with the issue?

In this light, the following dicta from the CCPA's opinion in In re Hogan 559 F.2d 595 (CCPA 1977) is quite interesting. When rejecting a PTO argument asserting that an Examiner should be able to employ evidence of a later state of the art to determine compliance with the enablement requirement, Chief Judge Markey stated:

"The PTO position...reflects a concern that allowance of Claim 13 [a later-added, relatively broad claim] might lead to enforcement efforts against the later developers. Any such conjecture, if it exists, is both irrelevant and unwarranted. The business of the PTO is patentability, not infringement." (emphasis added)

Placing the proposed limits on continuation practice is a drastic move that has significant consequences, both for patent system stakeholders and society at large. Independent of the authority question, it seems to be a sufficiently significant issue that warrants both an investigation to assess the reality of the perceived problem and, if the existence of the problem is confirmed, a political debate on the issue of how best to deal with it.

The Patent and Trademark Office should focus on its business and leave patent reform to Congress.

Posted by J Matthew Buchanan at 02:05 PM | Permalink | Comments (1)

Now let's see who's really paying attention....did you catch this one? This morning, the Patent and Trademark Office released the list of new appointees to the Patent Public Advisory Committee. Among the new advisors is Mr. David Westergard, a patent attorney with Micron Technology in Boise, ID.

If the name sounds familiar, it should...Mr. Westergard, I think, is becoming the poster boy for the software patent reform agenda. He's been in the public spotlight on a few occassions. Most notably, he recently presented the "need for reform" underlying the proposed rule that would place limits on RCE and continuation practice, stating, in essence, that 'continuation abuse' must be stopped.

John Whealan, Solicitor and USPTO General Counsel for Intellectual Property, spoke at the same meeting and explicitly agreed with Mr. Westergard that 'continuation abuse' is an issue that must be addressed. Interestingly, Whealan noted that the proposed rule has nothing to do with addressing the backlog of pending applications and everything to do with 'continuation abuse.'

Under this new appointment, Mr. Westergard will serve a three year term as an advisor to the Office. While this new advisory role for Mr. Westergard was just announced this morning, I'm betting that he's been advising the current administration for some time, particularly on the evils of 'continuation abuse' and the plague it presents to our society.

Posted by J Matthew Buchanan at 07:21 AM | Permalink | Comments (2)

I've had a lot of fun over the last several years talking to patent attorneys, inventors, and business folks about the patent reform issue in the United States.  I've had intriguing conversations with colleagues, friends and adversaries alike.  The best discussions usually start something like this:  "Yeah...the changes would be a big deal.  Hey...I've got an idea...they should do this....."

I've heard ideas that range from the well-thought-out, practical approach to a specific problem, to the academically-interesting-but-not-so-practical approach (think maintenance fees based on economic impact of a patent), to the downright wacky.

I thought I'd share a couple of my favorites.  One is serious, and one is wacky.  I think they're both great ideas.

Try this on for practicality - why doesn't the Patent and Trademark Office build regional offices in strategic locations around the country that would allow it to build the examining corps by tapping local, specialized talent for particular technology areas.  Detroit seems a logical place for an Office that specializes in mechanical and electrical engineering (and, um, I'm guessing there's going to be a few talented automotive engineers looking for new careers over the next several years).  A computer/software shop could be established in northern California (could the PTO compete in this labor market?) and a biotech/pharma Office could be set up in Boston or New Jersey.  The whole network could be backed by a computer/software system that allows any Examiner in any location to work on any application.  I'm betting that a private company faced with the specialized labor demands and turnover rates experienced by the Office would have done this years ago....

And now the wacky.....I'm always glad to hear people thinking of new approaches, but come on!  Examiner house calls?  Yes...someone once suggested to me that the Office should "dispatch" an Examiner to the inventor's home (or company) when examination is first initiated.  I dismissed this at first (as wacky), but grew to like it the more I thought about it.  This idea has real genius behind it - a short period of intense prosecution where both sides can focus on an application (or a family of related applications) for a brief period of time.  The current prosecution process is incredibly inefficient...taking several years to accomplish only several hours of actual work.  Using the housecall idea, the whole process could be compressed into a single span of intense work.  Think about it.  If an Examiner asked you to come to the Office (Examiners travelling just won't work; we'll have to make the "housecalls") for "a couple days of intense prosecution" on a family of applications....would you do it?  You'd discuss the applications, the art, amendments (if necessary) and any other matters directly with the Examiner, and both of you would focus solely on the applications at hand.  You could break at times to talk in confidence with your client and the Examiner could leave to update searches, talk with other Examiners, etc.  At the end of a couple days, you might just walk away with a Notice of Allowance, or two, or three.  Prosecution could be wrapped up weeks after the Examiner first opened the file, instead of years later.....

Advice given to me years ago by a senior attorney seems appropriate:  "If you can't embrace the wacky ideas, you'll never make it as a patent attorney."

Posted by J Matthew Buchanan at 09:33 AM | Permalink | Comments (4)

After all this time, Senator Hatch finally spoke his mind on the reform issue when he introduced the Patent Reform Act of 2006 (S3818, .pdf available here) last week. Considering the fireworks in the House following introduction of Representative Smith's Patent Act of 2005 (.pdf), the significant number of oversight hearings that followed (the Smith bill, officially, never moved an inch), and the Senate's long period of silence (remember, we've only had rumblings from this side of the 109th Congress) on the issue, the mere introduction of the Hatch bill is a big deal.

Despite that, many Hill watchers are labelling the bill as Dead on Arrival and quickly dismissing it as unimportant. I agree the the bill is DOA. That part is easy - no legislative package that broadly addresses an issue as significant as patent reform has a chance of moving with only a few legislative weeks left in the session. This is especially true in the case of the patent reform issue, which has become very contentious.

That doesn't mean that the bill is unimportant, though. Indeed, I think it's quite significant.

Here's why -

Who? The Patent Reform Act of 2006 is the best thing we've seen to date on Senator Hatch's views on the nitty-gritty of patent reform. Sure, we've had sound-bytes and press clippings here and there, but, prior to introduction of the Act, we didn't have a public indication of his views on the ugly details that underly the issue. Does he support apportionment of damages? What about post-grant review and the controversial 'second window'? Now we have an idea where he's coming from...not that he's tied to the details of the Act as introduced, but it shows us what he's willing to put on the record as his starting point.

The Act shows us what Senator Hatch is willing to put on the record as his starting point on the reform issueWhat? So what does patent reform mean in the Senate? A lot of the details of the bill are not very surprising. For example, it includes a change to a first-to-file system and provisions allowing third parties to submit relevant art to the Patent and Trademark Office for pending applications. Many stakeholders support these reforms...no big surprises there.

If you dig a bit deeper, though, you find the interesting stuff. Perhaps most surprising is the bill's approach to post-grant review and the controversial second-window (which deals with the timing of the initiation of a review proceeding in the Patent and Trademark Office). This issue has proven to be very controversial, and the opposing sides couldn't be more divided. The pharmaceutical and biotechnology industries, along with individual inventors and other patent owner groups, have opposed the second window, viewing it as a provision that would create a cloud of uncertainty that will always ride with a patent, which would, of course, affect its value. In stark contrast, the software and computer industries see the second window as a necessary backup to the first window, which would run for 12 months following issuance of the patent (under the Hatch bill; 9 months under the Smith bill). These dramatically opposing views on this issue represent the diametrically opposed uses of patents by these two sectors of the economy (offensive v. defensive; high value v. marginal value of individual patents).

...the Act has no certainty with respect to timing of the second window...it merely creates a burden of proof under the control of the Patent and Trademark Office. Now that's a cloud of uncertainty...The Patent Reform Act of 2006 includes a second window that is left wide open, even more so than the second window of the Smith bill. It offers no certainty with respect to timing of the second window. It allows for the filing of a petition for review within 12 months from issuance (first window) or by anyone “who establishes a substantial reason to believe that the continued existence of the challenged claim causes or is likely to cause the petitioner significant economic harm.”

No deadlines....just a burden of proof controlled by the Patent and Trademark Office. Now that's a second window that creates a cloud of uncertainty.

Also surprising is the inclusion of an apportionment of damages section. This reform, advanced by the software and high-technology manufacturing sectors (along with the New Democrat Coalition), has been strongly opposed by the pharmaceutical and biotechnology industries in the House.

Where? (This could also be termed 'Who, Part II'). So where is the Patent Reform Act of 2006 coming from? The apportionment of damages and second window provisions are clearly items on the software/computer/high technology reform agenda, and directly opposed to the pharmaceutical/biotech agenda. The language of these provisions is very favorable to the software/computer/high technology industries and cut square across the grain of the pharmaceutical/biotechnology/and individual inventor agendas. Do the math.

When? Even the timing of this bill is interesting. The bill will go nowhere in the 109th Congress, of course. It's essentially a logistic impossibility for this massive bill to move anywhere in the waning days of this Congress. But, the bill does stand as a matching bookend to Representative Smith's Patent Act of 2005, which was introduced relatively early in the 109th. In that sense, the Patent Reform Act of 2006 serves as a trail blaze, showing us the direction in which the battle has moved.

Clearly, the software and computer industries have flexed their muscle and are standing their ground in the fight. Indeed, the blaze set by Hatch's bill suggests that these industries are tipping the scales in their favor...something that is surprising a lot of people.

Introducing the bill at this late stage also allows Senator Hatch to point to the issue as something he worked on in the 109th. Record-building like that is not insignificant, from both sides of the equation. Think about it.

So now what? Patent reform, in the broad sense, is dead in the 109th Congress, but we know that both the House and the Senate are set to tackle the issue in the 110th. Meanwhile, the Patent and Trademark Office continues to beat its reform drum....and it doesn't have to pause for pesky elections.

Posted by J Matthew Buchanan at 01:41 PM | Permalink | Comments (3)

Last week, Senators Hatch and Leahy introduced S3818, the first true patent reform bill from the Senate in the 109th Congress. I have made a .pdf of "The Patent Reform Act of 2006" available on Promote the Progress. I'll write more about the content, scope, and timing of the bill soon.

Posted by J Matthew Buchanan at 11:28 AM | Permalink

The 109th Congress is winding down and activity on patent legislation has slowed significantly over the last several months. It seemed like a safe time to vacation....so I did. Senators Hatch and Leahy didn't see it that way, though. The two introduced the Patent Reform Act of 2006 (S. 3818), the first true Senate patent reform bill in this session of Congress. I reviewed it quickly (while on the beach) and decided not to post any thing immediately. Why? Stay tuned....I'll have a detailed post later today or tomorrow.

Posted by J Matthew Buchanan at 08:09 AM | Permalink

The House Subcommittee on Courts, the Internet, and Intellectual Propery is set to markup H.R. 5418, a bill introduced by Representatives Darrell Issa (R-CA) and Adam Schiff (D-CA) to "establish a pilot program in certain United Satates district courts to encourage enhancement of expertise in patent cases among district judges." The Issa bill would establish an opt-in program under which volunteering district court judges would receive "education and professional development" related to patent matters. Judges who don't volunteer would be able to decline patent cases that are randomly assigned to them and, effectively, steer these cases to the volunteering patent experts.

You can view and/or download a .pdf of the Issa bill here.

The Issa bill has some momentum going into markup. It includes a relatively modest budget ($5M per year for 10 years) and doesn't attempt to sell itself as a guarenteed solution to any problem. The bill offers a fresh and simple approach to a real world problem - district court judges who lack patent expertise and those who bemoan the random assignment system when it places a nasty patent case on their docket. It could fail miserably, of course, if no one opts into the program. But, it's a pilot program, and that's all the bill attempts to create. "Let's give it a try" is the approach...and many people I've talked to are saying "why not?".

A pilot judicial patent expertise program... "let's give it a try" is the approach, and many people are saying "why not?One side benefit of establishing a judicial patent expertise program in the district courts, like the one proposed in the Issa bill, would be that there would finally be a "minor league" for judges to gain real experience that could be applied in the big leagues - the Court of Appeals for the Federal Circuit.

Patent reform is essentially dead in this Congress. But, as I've said before, a relatively small bill that has a bit of momentum could see some action, and perhaps passage, as the 109th prepares to wrap things up. Representative Issa's pilot program could fit this bill.

Posted by J Matthew Buchanan at 06:40 AM | Permalink | Comments (1)

Yesterday, the Supreme Court delivered its long-awaited decision on the writ of certiorari in the KSR v. Teleflex case. There was little drama in the answer, as the Solicitor General had recently recommended that the Court hear the case and, usually, those recommendations are followed. There's plenty of drama ahead, though. Expect oral arguments in the fall with a decision in Spring of next year.

With the granting of certiorari, the Supreme Court, for the second time, has agreed to hear a case that touches directly on patent reform. The case deals with the motivation/suggestion/teaching test developed by the Federal Circuit for dealing with questions of obviousness. While a change to the obviousness standard has yet to be included in any legislative proposal for patent reform, one of the two catalytic reports underlying the reform movement recommended a tightening of the standard and many groups have called for such a reform.

So, once again, patent reform has left the Capitol and walked across First Street to the Supreme Court.

Dennis Crouch already has a fantastic collection of documents from the case thus far.

Visit the KSR v. Teleflex archives for more.

Posted by J Matthew Buchanan at 07:25 AM | Permalink | Comments (3)

We held the "Bloggers' Corner" event earlier this week at the Spring meeting of the Intellectual Property Section of the American Bar Association. The Corner was a tremendous success by any measure, and a lot of fun to boot. As a follow-up post for people who weren't at the meeting or just didn't get a chance to step into the Corner, I thought I'd present a summary of some of the more interesting questions people asked me, along with the answers I gave.

What do you consider to be the most interesting issue in patent policy today?

I can't pick just one. I really think we are in the midst of an historical time in patent law and policy, and several interesting issues are developing. I think it's fascinating that all three branches of our government are currently working on various aspects of "patent reform." As for the "most interesting issues," though, I'd leave Congress out of it for now considering the current stalemate on legislative change. I'd rank the Supreme Court's decision in eBay v. MercExchange at the top for several reasons. The case opens the door for the development of varied district court law on the controversial injunctive relief issue (which we've just seen the beginning of with the z4 decision). Also, I believe it throws down a gauntlet for Congress on the same issue...does Congress intend a patent to carry an absolute right to exclude? Lastly, it ensures that patent trolls will stay in the limelight for the foreseeable future.

I'd rank the PTO's proposed rules as the second most interesting issue. Not so much for the substance of the rules per se (although the substance is pretty darn interesting), but more for the symbolic nature of the rules. The Office is undergoing a significant shift in culture, becoming more aggressive in its control over the patent process. It has become very clear over the last several months that the current administration is willing and able to test the bounds of its authority to regulate its own house. It's admirable that the Office wants to do what it can to add efficiencies to the patent process. I worry, though, as many others do, that this newly aggressive approach will damage the environment of cooperation that has developed between the Office and the bar over the last several years.

Is Patent Reform dead?

Yes...and no. We won't see a change come from this Congress. From a purely logistical standpoint, we're at the point where it's nearly impossible for this Congress to pass anything meaningful. I do think it's a real possibility that something relatively small could get lobbed into an appropriations bill or another suitable vehicle that has some momentum and/or pressure behind it. Representative Issa's bill to develop patent expertise in district court judges seems a likely candidate. Overall, though, I'd say that patent reform in the broad sense is dead in this Congress.

That said, you can bet it will show up in the next Congress, and the next, and the next. Patent legislation often takes many years to develop. So, in that sense, it's not dead..it's just entering the next stage of life.

Patent reform is also "not dead" because it has moved beyond Congress and into other venues, including the Supreme Court and the Patent and Trademark Office. All three branches of government are now looking quite closely at the patent system and considering various "reform" issues. This aspect of "reform" is likely to continue for some time as, for example, KSR v. Teleflex looms at the Supreme Court and the Office's proposed rules hang in the balance.

What's the legacy of eBay going to be?

I see two potential "legacies" of this landmark case. The first is Congressional action. I think eBay is a gauntlet, thrown down by the Court as a challenge to Congress. Congress needs to re-read the Constitution and think about the way in which it has exercised the Patent Power. Is the status quo acceptable or is a rethinking warranted? We know that Representative Berman believes the Court got the issue right, but we do not yet know how any other Members feel about the case. Time will tell if Congress accepts or ignores the challenge.

The second potential legacy depends on the first. If Congress does nothing...eBay will live on...and pockets of district court law will develop around the issue of the proper circumstances for awarding injunctive relief. Who is entitled to it? Who isn't? When? In this scenario, the concurring opinion of Justice Kennedy will become quite significant as district court judges use its permissive language to deny injunctive relief in all types of scenarios. If this legacy develops, the wise patent stakeholder will watch it closely...and leverage it, whether they are a patent owner or otherwise.

Is fee diversion here to stay?

I've been asked this question many times, and my answer is always the same. "Looks that way." I'm encouraged by the action of the House Appropriations Committee this week, but am concerned about the apparent unwillingness to adopt a permanent end to diversion. The current approach of temporary fixes is better than nothing, but it does continue the current environment that makes it difficult for the Office to effectively budget and plan for the future.

So who wins...Software/High-Tech or Biotech/Pharma?

I don't know who "wins" or even that a "battle" is at hand, per se. But, I do think the software and high-technology industries are using the patent quality and application pendency issues very effectively to advance their agenda.

What's the legacy of the 109th Congress relating to patent law and policy?

This Congress has done a wonderful job at documenting various viewpoints on our patent system and on several proposed reforms. The House conducted an amazing number of hearings and has established a decent record for going forward. I think it will have a legacy of laying foundation, and not one of implementing change.

I do note, however, that it's still not too late for this Congress to enact meaningful reform on PTO funding issues (i.e., fee diversion). It's unlikely, but possible. There are a couple of proposals with vastly different approaches that are looming in Congress. Perhaps they'll see some action during the appropriations process, perhaps not.

Do I need to worry about patent reform?

No less than four different people asked me this question (in one form or another). I didn't know how to answer it then, and I don't know how to answer it now. I guess the only thing to say is that you need to assess your individual situation and consider patent reform in all of its glory (which, today, includes all three branches of government). Change is coming, be sure of that. Hopefully, the goal of improving the patent system will remain the focus of the various reform efforts.

Why do you blog?

This one's easy...Passion. See the 'Why?' section in the 'About' page.

What are you doing with an Oklahoma-based firm?

There's a short answer and a long answer to this one. Here's the short answer - Family brought me home from Chicago and a similar mindset regarding the business of law took me to Oklahoma.

Want the long answer? Ask me in person sometime.

Posted by J Matthew Buchanan at 08:22 AM | Permalink

The Antitrust Modernization Commission, charged by statute to analyze and report on the question of whether a need exists for the modernization of the antitrust laws, is holding a public meeting today to discuss merger enforcement and patent reform issues. You can view and/or download .pdf version of the Discussion Outline and the Discussion Memorandum from the Commission's website.

Posted by J Matthew Buchanan at 02:17 PM | Permalink

Yesterday, the House Subcommittee on Courts, the Internet and Intellectual Property held a patent oversight hearing, dubbed "Patent Trolls: Fact or Fiction." Perhaps not surprisingly, the Subcommittee essentially ignored the "fact or fiction" question and focused its efforts on patent reform in the broader sense, including considerable attention to the recent Supreme Court decision in eBay v. MercExchange.

The hearing revealed the true divisive nature of the eBay decision. Ranking member Berman, long a proponent of injunctive relief reform, flatly stated that eBay brings a "return to the standard originally intended" and that "it is not necessary to further legislate on the issue of injunctions." If it wasn't clear before yesterday's hearing, it certainly is now - Representative Berman believes the Supreme Court got it right in eBay and that the law of injunctive relief is now in good order. It is safe to assume that he believes injunctive relief reform is officially off the table.

Rep. Berman clearly believes the Supreme Court got it right and that further injunctive relief reform is not neededDean Kamen, professional inventor and self-professed patent troll, views eBay a bit differently, though. Indeed, it's fairly clear that he believes Congress should accept the challenge and pick up the Supreme Court's eBay gauntlet. Mr. Kamen is in the business of inventing and makes his living by licensing inventions to big companies that, he believes, are better able to produce, deliver and support the products. The eBay decision clearly changes his business environment. He summarized his post-eBay world quite succinctly: "I can't do business with big companies if the injunction provision includes a 'sometimes' modifier."

Patent reform, in Mr. Kamen's eyes, now includes a legislative response to the eBay decision. He shrewdly suggested that he might be willing "to accept a higher standard for patentability in exchange for the certainty I had in the past" (referring to a tightening of the nonobviousness standard balanced against a strengthening of the injunctive relief provision post-eBay).

Mr. Kamen may be signaling the post-eBay shift of patent reform efforts predicted here earlier - the losing side in eBay might be beginning to focus its legislative resources on changing the law of injunctive relief as it stands after eBay. It's very interesting to see the gauntlet used as a bargaining chip.

So what does 'patent reform" mean in Congress now? It's perhaps as muddied as it's ever been. A response to eBay may be involved, but it's still not clear if any Subcommittee member is willing to pick up the eBay gauntlet. Changing the obviousness standard might be involved. We may learn more about this in a proposed oversight hearing that promises to bring us full circle by reviewing the catalytic reports underlying the reform movement, one of which recommends a tightening of the standard. Remember, though, the Supreme Court may steal the spotlight on this issue as well if it grants certiorari in the KSR v. Teleflex case.

What about the troll issue? The definition of the term 'patent troll' was given a bit of lip service in the hearing and everyone assured Mr. Kamen that they wouldn't sign on to a definition that categorizes him as a troll, despite his reaffirmation of his famous "I am a patent troll" pledge and repeated assertions that he meets most of the proposed definitions. Are patent trolls "fact or fiction"? That question was completely ignored.

Several peripheral and very interesting issues were touched upon....more to come on these in future posts.

Posted by J Matthew Buchanan at 10:14 AM | Permalink

The House Subcommittee on Courts, the Internet, and Intellectual Property continues its record pace of oversight hearings on the patent system today with "Patent Trolls: Fact or Fiction?" The hearing is scheduled to begin at 9AM Eastern. You can view a live webcast of the hearing here.

Dean Kamen, the professional inventor behind the Segway human transporter and DEKA Research & Development and who famously quipped "I'm Dean Kamen...I'm a patent troll," returns to the patent reform debate as a witness in the hearing. Dean certainly brings the perspective of the professional inventor to the hearing. Unfortunately, the witness list doesn't appear to include a representative of the university sector or a representative of individual inventors, two groups that have a vested interest in the patent troll debate. (Note: It is not clear yet on who's behalf Mr. Reines is testifying)

I'll have a detailed report soon.

Posted by J Matthew Buchanan at 07:43 AM | Permalink