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Posts Tagged ‘patent reform’

Fed Circuit kills all pending false marking cases retroactively. Are patent infringers next to be dismissed?

11 Jul

In a policy move based on illogic, the Federal Circuit affirmed a USDC decision dismissing a qui tam false marking suit based on false marking occurring prior to passage of the law limiting recovery to actual damages. The law was prospective, but the USDC, affirmed by the CAFC, applies it retroactively in a docket clearing move. This is a policy move by the Court to clear the massive backlog of qui tam false marking cases by effectively pardoning all those who false marked. The decision is doublespeak, as it says what is clearly a court-made pardon is not a pardon. When a court says black is white and the Fed Circuit affirms, the Fed Circuit is showing that, for it, the ends justify the means. The Court appears to me to have found that the Court’s case management is the priority not the enforcement of legal rights. So, the next move will I suppose come if the pending patent troll legislation passes the best Congress money can buy to kill independent inventors cases at the behest of big business lobbying. This false marking pardon sets the stage for the dismissal of all perceived troll cases using the same logic. That is, why not just pardon willful infringement by big business on the basis that such pardon is not a pardon but what Congress really intended to do. I am not a fan of massive qui tam false marking cases, but that WAS the law. If the Federal Government wants to eliminate rights and deny due process, it seems just compensation should be paid BY THE GOVERNMENT. The 5th Amendment’s just compensation clause is there to protect citizens against Government deprivation of due process or taking of property. So, rather than summary dismissal by court fiat, it seems to me that summary dismissal and some payment of just compensation is the proper route.

Here is the Fed Circuit opinion.

http://law.justia.com/cases/federal/appellate-courts/cafc/13-1180/13-1180-2014-07-10.html?utm_source=Justia+Law&utm_campaign=d5cc2808a1-summary_newsletters_practice&utm_medium=email&utm_term=0_92aabbfa32-d5cc2808a1-406034737

 

Congress diverts patent fees despite AIA promise not to divert.

30 Jul

Hate to say “We told you so.” Congress is stealing the higher PTO fee revenues for other programs and the PTO is putting its “improvement” programs on hold due to the resultant lack of funding. Same old same old. Congressional lies and corruption.

In our opposition to the AIA we predicted Congress would see the USPTO as a revenue stream to be spent and would divert fees despite the promises of Senator Patrick “IBM” Leahy and former PTO Director David “IBM” Kappos to the contrary. You remember, IBM Kappos assuring the AIA was needed so the PTO could keep its revenues and would be properly funded and could cut down its backlog and that Section 22 of the AIA made sure that would occur. I predicted the PTO revenue fund would be raided and that the promises to the contrary were lies. Surprise, they lied and just as we predicted, the increased fees are being diverted. The PTO has announced that it will stop hiring, stop the branch offices and the backlog will not decrease, but that the higher fees will remain in place.

Unfortunately, our predictions have been proven accurate. Congress is using “Sequestration” to steal money from those paying increased patent fees who agreed to support increased fees in return for Congressional promises to use the money exclusively for the PTO.

http://www.bloomberg.com/news/2013-07-29/congress-betrays-3m-to-google-over-patent-fees-with-cuts.html

No surprise really that Congress welches on a promise to patent applicants or that Congress steals $148,000,000 of PTO revenues for other programs, just sad that no one listened when we were saying the loophole that might allow that needed to be closed so Congress could not welch on its “promise.” After all, this is the best Congress money can buy. And, if there is not enough money to buy them, they steal some.

Here is what I said back in Sept. 2011 about Sec. 22 of the AIA:

“Sec. 22. Patent and Trademark Office funding.  Establishes the USPTO Public Enterprise Fund (replaces the Appropriation Account) as a revolving fund available to the Director without fiscal year limitation. Requires all fees paid to the Director and all appropriations for defraying the costs of USPTO activities to be credited to the Fund. Requires fees charged or established by the Director to be collected by the Director and available to carry out USPTO activities until expended. Directs fees from specified sources to be deposited in the Fund, recorded as offsetting receipts, and available to cover appropriate expenses. [This is the fund that would be set up as a means to capture all PTO revenue and expenses and make a ready fund available for easy diversion by congressional money grabbers eager to fund earmarks in totally unrelated areas by making inventors pay for them. This is an idiotic provision that will obviously run up patent fees and hurt American inventors of all sizes. So, we have to give another point to the idiots. This actually hurts everone, so Bigs & Foreigners +38, Small Guys-22, Idiots -16] Requires the Director to submit an annual report to Congress including: (1) the USPTO’s operating plan, expenses, and staff levels; (2) long term modernization plans and related progress updates; and (3) the results of an annual independent audit of the USPTO’s financial statements required by this section. Requires the Director to annually: (1) notify Congress of its spending plan, and (2) submit to the President a business-type budget as prescribed by regulation for the federal budget. [This annual report is obviously designed to make the PTO budget subject to annual appropriation so that PTO fees can be diverted to earmarks. That hurts everyone. Bigs & Foreigners+37, Small Guys-23, Idiots-17]”

See my full review of the AIA at the time it was passed, here: http://www.burdlaw.com/blog/?m=201109

This is one time when it hurts to be proven right. It is times like this when we see that the AIA really was what we called it from the start, the “ANTI-Inventor Act” rather than the “America Invents Act.”

 
 

Patent Awards Reach Billion Dollar Mark

19 Mar

2012 saw 3 patent awards reach a new milestone, exceeding $1,000,000,000.

The largest award last year, for $1.17 billion, was made in December by a jury in Pittsburgh federal court to Carnegie Mellon University, which sued claiming Marvell Technology Group Ltd. (MRVL) infringed integrated-circuit patents. Marvell has denied infringing despite the award and says it will appeal. Will it escape this huge verdict? Will it stand as the biggest patent award ever? Or, will it be reduced.

In the second largest award, Apple won in August when a jury in US District Court in San Jose, California, awarded $1.05 billion for alleged infringement of smartphone technology design patents by Samsung Electronics Co. of South Korea. Samsung also denied infringement and said it would appeal.

And in the third largest award, Monsanto Co. (MON) won a $1 billion verdict in August from a jury in US District Court for the Eastern District of Missouri here in St. Louis in a suit against DuPont Co. (DD) over a patent for genetically modified soybeans. DuPont motions to set aside or reduce the verdict are pending.

So, unless all 3 Defendants prevail, 2013 may see the largest damages payments for patent infringement in US history.

 
 

Obama makes anti-patent troll remarks

21 Feb

http://www.reuters.com/article/2013/02/15/us-obama-patent-idUSBRE91E03320130215

President Obama seems to be catering to big business again, duped into attacking patent aggregators as impediments to progress. There is an underappreciated flip side, and that is that the patent reforms so far enacted at the behest of Obama’s team actually aggravate the problem by making patent enforcement even more expensive so that such aggregators are effectively the only option for many small businesses seeking to obtain redress for blatant infringement by big business. The software industry certainly has a legitimate beef due to the rapid pace of new inventions and the inability of the USPTO to keep pace, which leads to long pendencies and issuance of highly questionable patents that often serve more to slow down progress and reward marginal advances. We have for more than two decades here been advocating that the US move to a patent registration system with an opposition period and with PTO adjudication of validity and infringement issues so that this situation can be eliminated, patents issue rapidly, oppositions come quickly and disputes are decided quickly and more reliably by the most qualified experts (patent examiners). Once the validity and infringement issues are resolved, the remainder of the patent infringement issues generally follow and settlement comes quickly. If the patent is held invalid or not infringed, the accused infringer goes on about its business without further interruption or delay. If the patent is held valid and infringed, the accused infringer either stops or negotiates a license to or purchase of the patent on the one hand or sets about to design around the patent to create a non-infringing alternative. Such design around activities unquestionably promote the progress of the useful arts, as those designing around patents naturally want to create something not just different, but something better so that they can turn the tables, advertize advantages of their new design, and get the patent on that new workaround that stops the patentee from making, using or selling the improved workaround.

We encourage further patent reform, but reform that builds on the reforms by recognizing the need for speed in patent issuance and the need for speed in patent conflict resolution so that certainty can be brought more quickly in order to allow businesses and individuals to invest with more confidence in American ingenuity and to devote resources currently spent litigating patents on R&D instead. I like us patent lawyers getting rich, but I would prefer inventors getting rich instead.

 
 

PTO Issues Expansive Ruling on Post Grant Review

26 Sep

The PTO has chosen the Director’s Forum, a moderated PR blog by David “IBM” Kappos to state that in PGR (post grant review) the PTAB (Patent Trial and Appeal Board) will review subject matter patentability, a court-defined (See the Bilski and Prometheus cases) prerequisite for issuance of a valid patent as a “condition for patentability” along with other statutorily defined conditions (see 35 USC 102, 103, 112). Presumably that will only occur when the petitioner for PGR raises the issue. The legal justification given by Kappos was somewhat shaky, although we expect correct, grounds. See http://www.uspto.gov/blog/director/entry/ptab_and_patentability_challenges . This was expressly issued to quell the commentators on Patently-O (see http://www.patentlyo.com/patent/2012/08/can-a-third-party-challenge-section-101-subject-matter-eligibility-in-the-usptos-new-post-grant-review-procedure.html) that suggested the PTO had no authority to review subject matter patentability in PGR under the AIA (America Invents Act, or as we more fittingly call it, the “Anti Inventor Act of 2011”).

We agree with IBM Kappos on this one, as it seems clear to us that the Supreme Court has in analyzing subject matter patentability under 35 USC 101 judicially added another condition of patentability, in effect another paragraph to 35 USC 102, that reads “h) or, the invention is an abstract idea, a law of nature, a mathematical formula, an intangible business method devoid of structure, or some other subject matter that has been determined by the Supreme Court to not be proper subject matter for a patent.”

 
 

Christal unclarity on patent law?

07 Aug

From our “Muddled Thinking?” Department comes this recent post on guest post on Patently-O, which we will repeat and then dissect with commentary.

Guest Post by Christal Sheppard: Solving a Knotty Problem: An Outrageous Call for Patent Reform Part Deux

Dr. Sheppard is an Assistant Professor of Law at the University of Nebraska Lincoln College of Law.  Prior to joining the University of Nebraska, Dr. Sheppard was Chief Counsel on Patents and Trademarks and Courts and Competition policy for the United States House of Representatives Commmittee on the Judiciary. – Jason

By A. Christal Sheppard

Just over a week ago, Dennis Crouch stated on Patently-O that “[i]t is simply ridiculous that after 40 years of debate, we still do not have an answer to the simple question of whether (or when) software is patentable.”  The confusion on what is and what is not patentable is not a new debate but has come to a head in the last few years with the Supreme Court taking on certiorari multiple cases on the matter of patentable subject matter and the Court of Appeals for the Federal Circuit, arguably, disregarding Supreme Court precedent.

We all understand the problem[1], but what is the solution?  The question of what should be patentable is fundamentally a public policy decision.  This public policy decision is one that the framers of the Constitution contemplated and specifically tasked one specific entity with balancing the equities.  The Constitution states “The Congress shall have Power…[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”  Congress not the Courts was tasked to determine what should be eligible for the “embarrassment of a patent.”  However, the Courts, led by the Court of Appeals for the Federal Circuit, not the Congress, have driven the expansion of Patentable Subject Matter to “anything under the sun made by man.”

Case law dictates that the intent of Congress was 1) that patentable subject matter is a requirement separate from that of the other requirements of the patent laws and 2) that Congress intended for anything under the sun made by man to be potentially patentable with the exception of laws of nature, natural phenomena and abstract ideas. Thus, the Courts have, by a stepwise expansion of patentable subject matter to software and business methods, created a situation whereby the high tech industry has been legally encouraged to tie itself into a Gordian knot.  A knot that, without overruling prior precedent, or creative interpretation of precedent, the Courts cannot resolve.

This blog post is to propose that the United States Congress immediately take an active role in the creation of the parameters for patentable subject matter.[2] Congress is the only entity that has the ability and the resources to resolve this conflict in a reasonable and responsible manner. It is also the entity charged by the Constitution with doing so.

I’m not unaware that using the terms “reasonable” and “responsible” in the same sentence with the United States Congress during an election year will globally elicit sound effects from chortles to foul language questioning my mental facilities.  However, below are a few points that are worth considering regarding who is best positioned to advance a solution to what most of the intellectual property community would consider a mess.

  1. The Constitution does not require patents to be granted and while our international agreements do require minimum patent rights, software and business methods are not among them.[3]  Currently we have a Court created expansion of the definition of what is eligible for patent.  Congress has yet to wade into this morass of what should be eligible for a patent except to provide for exceptions to the Court-created expansion. Congress has created exceptions in piecemeal “fixes”, specific individual carve-outs, instead of addressing the broader issue head-on.[4]
  2. History shows that Congress once before stepped in when the Supreme Court and the predecessor to the Court of Appeals for the Federal Circuit were in discordance.  In the 1940s, the country was then also wrestling to establish a standard of invention.  The Administration appointed a Commission and the patent bar was up in arms.  As a result, section 103 – nonobviousness – was added to the statute by Congress in 1952 to inject a stabilizing effect that the Courts and general practice had not been able to accomplish over decades.  What is needed in the current situation is stabilization.  Today, the Courts are destabilizing the law of patentable subject matter rather than stabilizing it.
  3. Businesses need certainty to operate and to plan effectively. Only Congress can be prospective in its resolution.  For instance, if Congress decides that software and business methods are not patentable subject matter ONLY the Congress can make this prospective to not conflict with settled expectations.  If the Supreme Court narrows patentable subject matter, or patentability more generally, trillions of dollars of company valuation evaporate from the balance sheets with one Supreme Court decision.[5]  However, Congress can decide that starting on a date certain in the future that all patents granted or applications filed before that date are under the “old” common law rules and all patents post-implementation are under the new law.  Congress can provide finality on this issue without gutting company value.[6]
  4. Only Congress can create an alternative method of protection, apart from patent, for items that they determine do not meet the test for “promoting the process of science.”  For example, concurrent with the delayed implementation of a narrower definition of patentable subject matter, Congress can provide sui generis protection for those fields they decide to carve-out.  Many such ideas have been proposed, such as shorter exclusivity duration and limited remedies.
  5. A Congress, unlike the Courts whose precedent binds future judges, cannot bind a future Congress.  Should the law of patentability need to expand for unknown advancements, Congress can do that in a way that is much less disingenuous than the Courts.   The framers of the Constitution contemplated this in their directive to Congress.  The language in the Constitutional defining  what should be eligible for the monopoly is malleable so that patent law can adjust as technology and the need for promotion for the advance of science changes over time.

There are a multitude of very good reasons why calling on Congress is not a perfect solution.  But with Myriad and the patentability of gene sequences and genetic testing on the horizon, does the intellectual property community want the Courts or Congress to decide this public policy issue?  Businesses need certainty and only Congress can now provide that stabilizing influence without destabilizing entire industries.  Whether Congress will or not, ought not prevent the assertion that they should.

Food for thought…


[1] The Supreme Court decisions have done nothing to clarify what is and what is not patentable.  At this juncture, not only is the Federal Circuit in rebellion against the Supreme Court; an influential judge from another circuit dismissed an entire high-tech case with prejudice and promptly penned an article entitled “Why There Are Too Many Patents in America”; the International Trade Commission is under siege from an explosion of technology cases and recently sought comment from the public as to whether certain patents should have limited remedies; the Administration (United States Patent and Trademark Office and the Department of Justice) have differing opinions regarding the patentability of genes and genetic tests; thermonuclear patent warfare between high tech companies is overloading our courts; market based solutions are spawning Fortune 500 companies as the new patent troll; and a patent valuation bubble reminiscent of the real estate market before the crash is driven ever forward as companies amass patents as a shield of paper armor not as an instrument of innovation.

[2] One thing is certain, there will not be unanimous agreement on what should be patentable subject matter; however, someone should decide and should decide now.  Moreover, that decision should not negatively affect those who have relied upon the law as the Court defined and expanded it over the last 40 years only to now sound the horns of retreat.

[3] I am not here advocating for any particular resolution, I am merely pointing out a fact.

[4] Prior user rights for business method patents in the 1999 American Inventors Protection Act; Human organisms, tax patents and creating a business method patent post-grant opposition procedure in the 2011 America Invents Act.  The Congress did not address the latter three as patentable subject matter issues, but in carving them out the Congress is showing that there are additional areas that they have determined should not be entitled to patents where the Courts have determined otherwise.

[5] Of course patents are subject to case-by-case challenges but the Supreme Court seems to be signaling that whole categories of patents, while still technically eligible, would not meet the Courts inventiveness test as a practical matter.

[6] Congress can also provide some finality on the issue of whether patentable subject matter is a separate requirement from 102, 103 and 112.

http://www.patentlyo.com/patent/2012/08/guest-post-by-christal-sheppard-solving-a-knotty-problem-an-outrageous-call-for-patent-reform-part-d.html

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COMMENTARY

“The confusion over what is patentable and what is not.” is an artificial confusion, created as a straw man by those seeking to alter 200 years of constitutional law by making “discoveries” mean not “discoveries” but “discoveries in areas other than those where rewarding inventors is inconvenient to the rich and powerful people paying lobbyists to confuse us into denying rewards to inventors.”

“We all understand the problem”? First she says “we do not have an answer” and then “we all understand”. Typical Washington doublespeak.
She is wrong to say that Congress, not the Courts, is tasked to interpret the Constitution and laws. For 200 years since Marbury v Madison, the Supreme Court has been the ultimate interpreter of what the Constitution and laws mean. Congress is the elected legislative body which passes laws based on public policy considerations, or more truthfully based on financial election campaign contribution considerations. The Courts are there to keep Government, including the best Congress money can buy, in check by preventing public policy (i.e. campaign contribution) considerations from over-riding the Constitution and enacting fat cat legislation. The Courts are there to try to protect the people from oppression by their Government.

“Case law dictates that the intent of Congress was” – now there is an interesting about face, “case law” means Court decision. First she says Congress decides then relies of Court decisions to try to make her point. There is indeed confusion there, and it is in her muddled logic. With changing positions so often, she must be a Romney supporter like Jenna Jameson.

“Currently we have a Court created expansion of the definition of what is eligible for patent.” BS, we have a Congressional and Court created contraction of what is eligible. The Constitution says patents may be awarded for, without any limitation whatsoever, “discoveries”, whereas the Court has contracted that to exclude abstract ideas, laws of nature, and natural phenomena, which are discovered as having been created by God not man. Some of the most important discoveries are law of nature such as the Theory of Relatively, or natural phenomena such as The Higgs Boson (“the God particle”)..

“section 103 – nonobviousness – was added to the statute by Congress in 1952 to inject a stabilizing effect that the Courts and general practice had not been able to accomplish over decades.” That’s an interesting lie. She rewrites history to her liking. Nonobviousness was definded by the Supreme Court in Graham v John Deere and Giles Rich wrote it into the 1952 Patent Act to merely adopt the Graham v. Deere standard. Congress did not stabilize the law by injecting the “non-obviousness” standard, the Supreme Court did. Credibility goes out the window when you are caught rewriting history to try to push your political agenda.

“Only Congress can be prospective in its resolution.” More altered universe. The Courts are routinely prospective in their holdings. The non-obviousness standard in Graham v Deere, which she just miscredited to Congress, is one example. The bright-line machine or transformation test (that the CAFC attempted to impose and the Supreme Court muddled up by instead using a vague and nebulous commercial viability standard) was clearly prospective in intent. The purpose of having CAFC jurisdiction over patent cases was to encourage this prospective unification of court decisions to lend certainty to patent law. It is Congress and the Supreme Court that are mucking it up with uncertainty, as we never know what monied lobbyists will get Congress to do next, and we never know for sure what the non-patent lawyers of the Supreme Court will do to muddle patent law.

“Should the law of patentability need to expand for unknown advancements, Congress can do that in a way that is much less disingenuous than the Courts. The framers of the Constitution contemplated this in their directive to Congress.” Wishful thinking does not substitute for fact. Since when did Congress become anything other than disingenuous? Congress’s 9% approval rating shows how Americans feel about that. The framers set the Courts, not Congress, as the final authority on the Constitution and all the wishful thinking of how it would be nice if Congress was less disingenuous than the Supreme Court does not change the fact that it is the best Congress money can buy and no amount of money seems to be able to buy a Supreme Court justice, as Justice Roberts recently showed in his Obamacare decision. Congress is not working to do anything that is less disingenuous than the Courts, and that is just the way it is and why we have the Courts and not Congress as the final authority on the Constitution. What a crock that “Congress is less disingenuous” statement is!

“does the intellectual property community want the Courts or Congress to decide this public policy issue?” That presupposes the conclusion that Congress should handle Constitutional patent law issues. Easy for me. I think it’s a matter of constitutional law, not public policy, and I choose the Courts. Look at the AIA if you think Congress is competent to reform patent law. Congress is competent to do what big campaign contributors tell it to do unless the public outrage gets so severe that big campaign contributors can’t overcome the outrage.

” I am not here advocating for any particular resolution, I am merely pointing out a fact.” LOL. Get out the water hose your pants are on fire.

 
 

SHIELD Act to “Protect against patent trolls” – Would it?

05 Aug

http://www.article-3.com/shield-against-patent-trolls-98209

An article recently published extolling the virtues of a proposed Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act. The Act seeks to protect high tech businesses against suits by patent enforcement companies (patent trolls or PECs) by adopting a one-sided “loser pays the costs of the winner, but only if loser is the patent owner” policy.  The author of the article says “As they stand today, our current patent laws do little-to-nothing to protect businesses from egregious lawsuits. A new bill proposed this week might actually make a dent in the saga of tech patent wars.”

So, the party asserting a patent would pay costs of the alleged infringer if the infringer proves the patent invalid, but the infringer does not pay costs of the patent owner if the invalidity defense is frivolous.

So, the proposal would make a patent infringement trial inherently unfair.  It needs an amendment to make it simply “loser pays”.

Bruce Burdick

The Burdick Law Firm, Alton, IL

 

Real Patent Reform

02 Aug

In several recent blogposts on his popular TechDirt blog http://www.techdirt.com/, Michael Masnick suggest that “real patent reform”, should begin with the following:

Independent invention defense. In his [ed. Judge Posner’s] article, he even mentions that copyright already (effectively) has this. Copyright infringement has to involve copying. Patent infringement does not. The fact that so many patent infringement cases involve independent invention is lost on most people who don’t understand the system. Adding an independent invention defense would fix a very, very large percentage of the problems with the patent system today.
Independent invention as evidence of obviousness. This is very similar to the idea above, but slightly more nuanced. Patents are only supposed to be given if something is both new and non-obvious to a person of ordinary skill in the art. For the most part, patent examinations focus much more on the “new” part, and not whether the idea is “non-obvious.” Some people think that if an idea is new then clearly it’s non-obvious, but that’s not the case. Often there are obvious ideas that don’t go anywhere because the technology/market/etc. just isn’t ready yet. But if a number of different people “of ordinary skill in the art” are all coming to the same solution at around the same time, that certainly suggestions the invention itself is an obvious next step, and all such patents should be declared invalid.
Actually asking those skilled in the art. Patent examiners are often very skilled and highly educated, but they’re working in the patent office, not out in the field innovating. It’s not as easy as many people think to really keep up on the state of the art if you’re not working on it. Just think how many ridiculous patents we see all the time. Many of those bad patents could have been prevented if a patent examiner just went to people in the field and asked them. I know that some people criticize this idea, because they claim that (1) everything looks obvious in hindsight and (2) this will just lead jealous others to insist something is obvious to deny a patent, and then copy the idea themselves. Neither of these are convincing. I’m not saying to just ask, and if someone says it’s obvious, the patent is dead. Rather, the patent examiner could ask a few people for an explanation of why it’s obvious, and then determine if the reasons are convincing. Already, inventors effectively have “advocates” who argue for them that a patent is valid, so why not create the same sort of thing on the other side — setting up a true adversarial process — by seeking out experts who can explain why something may be obvious.
Get patents going back to the different circuit appeals courts, rather than funneling them all through CAFC. Having a single “patent” appeals court was an experiment, and I think it’s clear that it’s failed. The court, constantly spending time with patent lawyers, but not with innovators, clearly has an expansionist view of patents, and multiple judges refuse to recognize that patents could have any downside. Spread the cases around a bit, and hopefully you get some more judges who get past the cover story and see the real problems.

See http://www.techdirt.com/articles/20120712/18322919680/judge-posner-mission-to-fix-patents-we-have-some-suggestions.shtml

I have a different view of what real patent reform would look like, but see wisdom in all but the last of the suggestions from Mr. Masnick.

1. Independent Inventor defense. To me this should be a partial defense only, one that prevents an injunction and perhaps is taken into account in mitigation of damages, but which should not be an absolute defense.  The patent system was set up by James Madison, and modified as a result of objections by Thomas Jefferson, as a reward and incentive to the “true and first inventor” to disclose his invention to the public, for the benefit of the public and to promote the progress of the useful arts and sciences, so that the invention would not die with the inventor in secrecy.  It was never envisioned to be a defense that one independently later reinvented that which the inventor had already disclosed to the public.  If one independently invented prior to the patentee, then there was a Section 5 of the original act that allowed the prior inventor to invalidate the patent based on proof of prior invention.  However, the point of an independent inventor defense is that the independent inventor has, by definition as “independent”,  not received any benefit from the disclosure and thus should not be restricted by or pay any reward to the patentee. However, that defeats the incentive to disclose purpose of the patent laws by eliminating the risk of non-disclosure.  A compromise is in order to resolve these competing interests. To me the most logical compromise is to allow the independent inventor to continue to practice the invention but require the payment to the inventor of a reasonable royalty, taking in mitigation the independence of the independent inventor while enhancing the royalty by the benefit of the disclosure of the invention to the public. Thus where the invention was an incredible breakthrough of immense value to the progress of the useful arts and sciences and the prove of independence marginal there might be no reduction in the reasonable royalty.  And, by contrast, where the invention was of limited value to such progress, and the proof of independence of the later invention clear and convincing, there might be little or no royalty due from the later (or earlier but non-disclosing) independent inventor to the patentee.

2. Independent invention as evidence of obviousness. This is already the law, so no change is needed. Independent invention by others is relevant and admissible as evidence tending to show the invention is obvious to those of ordinary skill in the art. The more independent inventors, particularly contemporaneous, the more likely the invention was obvious to a PHOSITRA (mythical “Person Having Ordinary Skill In The Relevant Art”). One independent invention would likely not meet the burden of proof as such proof would more likely be evidenced that an ESPIRT (pronounced “expert”  for Extraordinarily Skilled Person In Relevant Technology) had come up with the same invention rather than a PHOSITRA. In contrast, if 10 routine researchers had independently come up with the same solution, it should be help obvious to a PHOSITRA. So, while independent invention might not be “prior art” it should nevertheless be “relevant art” for purposes of showing obviousness, and it’s status as secret or public should not be determinative. I would submit that there should be some cut-off period, such as one year after publication of the invention, after which evidence of independent invention shall not be accepted. And, evidence that the disclosure by the patentee of the invention was readily accessible to the alleged independent inventor should defeat the claim of independence.

 

3. Actually asking those skilled in the art. This sounds good in principle, but is impractical unless that means a patent examiner, or it occurs AFTER issuance of the patent. Otherwise, the invention is revealed to industry with no corresponding benefit to the applicant for patent. What a perverse turn of events it would be if an inventor would have the
Government reveal the invention to competition prior to granting a patent on it. Competition would try to shoot it down and steal it. What a disincentive to disclosure that would be. That would impose a penalty not a reward for filing a patent application. Perhaps this would work if those asked were made to sign a secrecy and non-use agreement prior to receipt of the disclosure of the invention, as that might benefit both the inventor and the industry reviewer so asked. There would likely be a need for compensation to the reviewer if we are to get the best reviewers. However, I think we already have such a system and that is what examiners do, serve as that expert. What is needed perhaps is better industry training of examiners if industry is not satisfied examiners are up to snuff in a particular technical area such as software and communication technologies where the pace is so incredibly fast and the compensation so much higher in industry than in the PTO.

4. Get patents going back to the different circuit appeals courts, rather than funneling them all through CAFC. This was not “an experiment” but rather a permanent change made in recognition that patents are Federal law and require special expertise not common in most Judges. There is nothing in the law that labels the CAFC either temporary or an experiment. It is disingenuous to call it an “experiment” after this many years. We require patent attorneys to be specially licensed to prosecute patents so it is entirely fitting and proper that we should have patent judges who have a similar level of expertise in patent law. In fact, most patent attorneys would contend that the CAFC has been relatively contractionist and not expansionist on patent rights. The CAFC was established to give more uniformity to patent law which prior to that time was quite divergent among the various circuits and often based on misunderstandings of patent law or aversion to technology. Circuit judges previously tended to take the most expedient route to divesting their docket of patent cases, so nonsensical summary findings of obviousness (or by contrast, of infringement) were common. The CAFC was, and is, prone to realize that bright-line tests may not always produce the best result in an individual case but are of overall benefit to industry by lending certainty to the patent system for purposes of reliance by investors on presence or absence of patent protection. It is the Supreme Court which has intervened in patent cases to quite often confuse the issues and give uncertainty to the system. So, I would say that what is needed is for the Supreme Court to give much greater deference to the Fed Circuit in patent cases, particularly where the CAFC is making bright-line tests that have some rational basis in the law.

Some perhaps better reform proposals:

A. Switch to a patent registration system, more like trademark or copyright registration.  This would drastically reduce the examination burden that is backlogging the patent system, as minor inventions of limited commercial significance are taking an inordinate amount of examiner time and effort, so much that they are overwhelming the system. This would swiftly eliminate the backlog of unexamined patent applications currently standing at over 700,000 and growing, which is causing such uncertainty in the patent system. It is not unusual for a patent not to issuance until the technology has been adopted by an entire industry not aware that a patent application is pending or, if aware, not knowing whether it will issue or what it will cover .  A registration system would result in publication and issuance within days or weeks rather than years. With the switch to electronic filing and the use of high speed scanners with advanced technology, already in place at the USPTO, we certainly have the technology to publish in days of filing. An opposition period could allow challenge and examination of issued patents and, just as with trademark oppositions, would likely be used mostly on just those patents that have commercial value.  Following that, the patent should be open to a cancellation proceeding up to 5 years after issuance and incontestability obtained by Declaration of Use some 5 years after issuance to quiet title for subsequent investment certainty. That would give certainty to patents, give quick issuance, give a prompt reward to the vast majority of applicants who will never license their inventions, and focus the patent examiners’ attention on those patents of commercial value.

B. Have the Patent Examiners Write the Patent Claims, Not the Applicant.  This would have two great benefits. First the cost and complexity of a patent applications could be drastically reduced. The application would disclose his or her best mode and the various alternatives and the patent examiner would evaluate that disclosure against the prior art and determine what it is that is new and unobvious and write patent claims to cover that.  The inventor can normally disclose the best mode but can seldom write a decent patent claim. This proposal would avoid the problem for independent inventors as the patent examiner would take on that task, and would presumably do it with a fair and comprehensible set of just a few claims rather than the myriad gobbledygook claims that are currently the norm. The applicant should be free to suggest claims in the application so that corporate patent attorneys can aide the patent examiners in that way, but the Examiner would be free to totally restructure and rewrite the claims.  This would even the playing field between big and small entities. As most patent attorneys and patent examiners will likely acknowledge, it is usually much easier to write claims from scratch than to decipher and edit someone else’s claims.

C. Mandate PTO interpartes examination of infringement and invalidity issues in infringement litigation (if not Incontestable) The examiners can make these decisions, usually in minutes or hours, rather than months or years as is the case with non-technically trained USDC judges or worse, unsophisticated juries. There are close to 7000 patent experts at the Patent Office, each with expertise in a special technical area unmatched by any court anywhere, and these are called “patent examiners”. This PTO Examining Corps currently makes thousands of these determinations each and every day and have a huge MPEP with detailed guidance that they know intimately and follow on a daily basis.  They have an academy of their own to assure this. They make every effort to be consistent with each other in their determinations and they generally know their respective arts very, very well. Yet, they are often currently bogged down in minutia. The PTO Examining Corps is not elected and, due to their high level of expertise, is relatively immune to bogus arguments of counsel, which levels the playing field for big and small entities. In contrast, most patent litigators know quite well that outcome in patent litigation often depends primarily on the money available for legal fees and the skill of the advocate more than on the merits or demerits of the case. If you can afford the very best litigation team you are likely to win and if you can’t you aren’t (unless both sides have to go cheap, in which case we often get an unpredictable and freaky case result.) Only where both sides are well funded can we expect a fully competent airing of the issues. Having the PTO determine these issues will produce far more objective and consistent determinations and those decisions will be based on technically competent reviews of the relevant art. The current system, frankly, relies on determinations by technically incompetent people of complex technical and legal issues.  Taking this into the PTO could completely turn that around, producing much fairer and more consistent results since in almost every case these results will come from a patent examiner who is an expert in the particular technology and who is familiar with what is being patented and what is being filed and thus in perhaps the best position of anyone in the world to know what is and isn’t obvious to that mythical PHOSITRA. There would no longer be a need to educate the examiner in either the technology or the law in most cases. Indeed, the examiner would likely take offense at such attempted instruction. This would be especially important to independent inventors who simply cannot afford multi-million-dollar patent litigations to educate unskilled judges sufficiently to enforce their patents. A PTO examination of these issues should take less than $10,000 in most cases rather than millions of dollars as is typical in patent infringement lawsuits. A patent enforcement proceeding would thus become feasible for a small inventor where presently such an inventor is in no position to effectively enforce a patent. The mechanism for this is already largely in place, called “supplemental examination (ex parte re-exam)”, “inter partes re-examination”, “post-grant opposition” and the like. In fact, infringement and invalidity determinations are what examiners now do and are specially trained to do. When an examiner examines for prior art, the examiner is looking to find prior art that “anticipates” the claim. If such art were subsequent it would “infringe.” (Hence a saying familiar to nearly every patent attorney and patent examiner “What infringes if later, anticipates if earlier”)  You see, it’s the same determination, and as noted, they do these determinations, usually instinctively in seconds, hundreds or thousands of times every day. In fact, the average patent examiner has surely done this thousands of times more  than any US District Court judge and has done it on the very technological field in question. Frankly, the comparison is like night and day (judges and juries being “in the dark” and examiners “seeing the light”). The appellate process for this is also established with the BPAI (Board of Patent Appeals and Interferences). With the establishment of branch offices, the locations for these determinations should be more convenient, thus achieving further cost savings to participants.

 

 

 
 

More patent fee increases on the way. Still no Micro-Entity fees. How is that fair or smart?

23 May

“I am sometimes asked why we need the additional fee increase, given the 15 percent surcharge already in place and plans to implement a revised fee schedule by the first quarter of next year.

The answer is: leveling, cash flow, continuity — much like with any large enterprise. Think of the CPI adjustment as ensuring “bridge funds.” This planned CPI adjustment will provide a small but needed increase in funding, allowing the USPTO to continue reducing the backlog and pendency until our new fee schedule–which will provide long-term financial resources–is in place.”
-David Kappos, Director, US Patent and Trademark Office, May 14, 2012
http://www.uspto.gov/blog/director/entry/cpi_rulemaking

Where are the micro-entity fee reductions that were mandated by the AIA 9 months ago? Answer: Delayed indefinitely by David “IBM” Kappos. Instead of the mandated 50% reductions,  15% increases for micro-entities went into effect as first order of business immediately on passage of the AIA (Anti Inventor Act of 2011). Likewise, the Fast Track For Fat Cats system of examination (where “money talks” when it comes to examination priority) went into effect right away in response to Big Business lobbyists (IBM?) Now Kappos is back asking for even higher fees for small and micro entities based on CPI. Meanwhile the mandated reductions for micro-entities are on hold for “consideration”. This translates into “Screw the little guy, we are working for IBM.” That means IBM and other Fat Cats get special treatment and “leveling” of their fees with those of small entities so they can send more jobs overseas and together with big foreign companies can further stifle American ingenuity and small American business. How is that smart for America, where most new jobs are created by small businesses, not IBM, which is busy shipping jobs overseas. http://techcrunch.com/2009/03/26/ibm-cutting-5000-us-employees-sanding-jobs-to-india/

When will this madness end? Apparently not while IBM is running the Patent Office.

 
 

When an Invention is Not – Mayo v Prometheus – a Supreme error

15 Apr

A unanimous Supreme Court invalidated a patent on a diagnostic method for helping doctors safely administer thiopurine (TP) drugs that are used to treat autoimmune diseases such as Crohn’s disease and ulcerative colitis. Prometheus Laboratories (Prometheus) found that a certain compound 6TG could be administered with the TP drug and the level of 6TG in the blood measured with a specific level indicating more TP is needed and another specific level indicating less TP is needed. This was important to have enough TP to be effective but not so much as to be unsafe, as excessive dosage was potentially lethal, but had yet to be achieved because different people tolerated different amounts and different people required different doses to be effective. Prometheus solved that riddle with this invention. Specifically claim 1 of the patent  directed to a method of optimizing treatment of an immune-mediated gastrointestinal disorder had 2 steps, first administering a dose of certain medicine containing 6TG, second measuring the level of 6TG in the blood, and 2 wherein clauses, first that 230 pmol/ 800,000,000 red blood cells (“units”) indicated a need to increase TP dosage and second that 400 units indicated to decrease TP dosage. Prometheus licensed manufacture of a diagnostic kit based on the patent. That Prometheus invented this was not in doubt. Mayo Clinic wanted to use the patented method without paying Prometheus so began selling kits and challenged the patent on the basis that it was an unpatentable as claiming a law of nature. That Prometheus discovered this alleged “law of nature” was not in dispute. That they spent lots of money inventing it was not in doubt. That it was valuable was not in doubt. That it was a major advance in TP treatment methodology was not in dispute.  Yet, the trial court nevertheless agreed with Mayo that it impermissably claimed a law of nature and was invalid. However, on appeal the Federal Circuit (twice) held it patentable. The Supreme Court reversed, and went unanimously for Mayo, declaring the patent invalid as claiming a law of nature.

 

Was it correct or a travesty of justice?

 

The reviews have been mixed, with Patently-O, law.com and biotech blogs publishing posts suggesting the Supreme Court blew it as the claim was really to a diagnostic method not a law of nature, and may invalidate all diagnostic method patents and medical treatments patents and will reduce the incentive to develop such treatments and thus slow the progress of medical science.
On the other hand, the anti-patent lobby is rejoicing, saying this is good because such patents lock up life-saving medical treatments and make medical care much more expensive and this will encourage development of new treatments utilizing the methods declared unpatentable.

It’s a hard case with both sides having good points. We join those concluding the Supreme Court blew it. The founding fathers already decided oppositely when they created the patent system, and the first patent was to a method that merely claimed a law of nature, that heating soda ash a second time would give a higher purity of potash. The founding fathers were Deists and individualists who believed in a natural rights theory of property, namely that property comes naturally as the fruit of labor and not from a King or Church, and that intellectual property rights are the rightful fruit of original creative intellectual labor and serve as a just reward for the effort of inventors. They also believed that exclusive manufacturing and sales rights belong rightly to the person(s) who invented the thing being made or sold, because when invented it was solely in the mind of that person unknown to the world and thus actually in the inventor’s exclusive control, i.e. his or her “intellectual property”. To encourage inventors to give their inventions, their “intellectual property” to the public, James Madison proposed that the Government grant patents to the first and true inventor rather than, as King George did, to some special friend or rich patron of the King/Government who really did not exert the effort to create the item being patented. Thomas Jefferson opposed the issuance of patents at all, contending that the system would be corrupted by Government and patents end up going to the big, wealthy and powerful and thus used by Government and the wealthy to oppress the people. The compromise was that patents would go to inventors after reasonable examination to assure that it was the true and first inventor that got the patent and no one else such as a friend of Government. This approach has served the US well for 222 years since 1790, but will be ditched next March pursuant to the Anti-Inventor Act of 2011 (officially misnamed the America Invents Act and commonly called “Patent Reform”) in favor a system where the first and true inventor does not get the patent but rather the first one to file at the US Pat. & TM Office claiming to be an inventor. The first and true inventor loses out unless he or she has proof of derivation by the one who filed, but such proof is in the possession of the one who derived and thus challenges will be ineffective and pointless.
That means the fat cats will get the patents and the real inventors will lose, which gets us close to what Jefferson predicted.

Mayo v Prometheus brings us yet another step closer to abandoning the patent system envisioned by the founders, as it prevents the patent reward going to the inventor and instead allowing big pharma to steal the invention without rewarding the inventor. When Prometheus came up with its discovery, it chose to file a patent disclosure giving the invention to the public in return for the limited period of exclusivity provided by the patent system. Prometheus viewed the incentive of the patent system as worth disclosing its invention rather than keeping it secret. Jefferson likely agreed with Madison on setting up a patent system because he agreed with Madison that otherwise inventors might go to their graves with their invention and the public thus be deprived of the invention, but that a patent system as we have it would not only reward the creative effort of the inventor to encourage them to invent but would also reward the inventor for disclosing his invention. Mayo v Prometheus tells the inventor of a diagnostic method to keep it secret to keep possession of it rather than lose it by disclosing it, and Mayo v Promethius does this by preventing the patenting of the method.

It is hoped that this erroneous and counterproductive interpretation of the patent system will be overruled by Congress in new legislation. It is also hoped, but not likely, that the best Congress money can buy will go back to first to invent so the vision of Madison and Jefferson can be kept alive for the benefit of America as the technical leader of the world. Unwittingly, the Supreme Court is killing our technical edge, as did Congress with the Anti-Inventor Act of 2011

The natural rights theory on which the patent system was founded is now under attack. Anti-patent activists claim patents retard rather than promote the progress of science. Small inventors correctly contend that patents are a great and necessary equalizer that do not depend on how big, rich or powerful you are, and which should reward their risk-taking so as to encourage them to risk inventing as they develop the majority of new products. In effect the patent system requires the inventor to give the invention to the public in return for an exclusive lease to the invention for about 17 years (20 from filing, less about 3 years of red tape at the US Pat & TM Off). This is so because at the end of that time the invention becomes public domain, free for everyone and anyone to use. That exclusive lease, that patent, can be very valuable to the inventor if the invention is very valuable. And, the invention thus given to the public can be very valuable forever, as those whose lives are saved by the lowered cholesterol from use of atorvastin calcium (Lipitor) which just came off patent this year can attest.

Here, the Supreme Court misses the point that the patent system is intended to encourage inventors to give their invention to the public and to reward their risk taking in making the research discoveries that leads to such discoveries as the safe way to administer this valuable medical treatment. Safe administration of TP had alluded researchers until this invention was made. Would Prometheus have invested the money to invent this if it knew Mayo could reap where it did not sow and take the invention for free? Arguably not. How many future diagnostic methods will now go to the grave with their inventor as a result of this? How many future diagnostic methods will be missed due to lack of incentive to invest in R&D to develop them? We will never know, but really it is our loss, and it is one that the founding fathers sought to prevent 222 years ago only to have the Supreme Court unanimously kill the goose that laid the golden eggs in diagnostic medical methods.