I seem to have started a firestorm by writing a post openly questioning how a patent attorney (i.e., Stephan Kinsella) could be of the opinion that it is preferable to have weak patent rights. I openly questioned how and why any individual or corporation would hire a patent attorney who does not believe in the patent system and seems to think that patents are bad, perhaps even evil, and certainly the preferable model would be to have exceptionally limited rights. I appreciate the debate that is ongoing in the comments to that article, but I remain extremely confused regarding the irrational arguments being made. It seems facts are largely being ignored, and when they are being used they are distort reality, history and truth. When I make direct statements about facts and history off handed non-responsive and dismissive statements are made along the lines of “if you hold that belief it is obvious you don’t understand.” Saying that is fine, but that needs to be backed up with facts and argument, which is not happening. We all know why that isn’t happening, namely because there are no facts or legitimate arguments that can be made to counter what I am saying, so rather than addressing them an artificially zen approach to deflecting and recasting, even ridiculing, is preferred. Notwithstanding, below are my thoughts regarding some of what is being said.
Last week I wrote an article titled Inauspicious Start to Greater USPTO Transparency, in which I wrote about how disappointed I was that some things never seem to change at the Patent Office. I was referring to the fact that a Federal Register Notice had been published on September 17, 2009, and gave until September 28, 2009, to provide comments on the interim Bilski guidelines that the Patent Office wanted in place. I also wrote about how disingenuous it seemed to be not only because of an 11 day comment period, but because the Patent Office by their own admission was already training patent examiners on the guidelines prior to receiving any comments. This smacked of the same type of nonsense that happened all the time during the Dudas days, where many hundreds of comments were received and summarily ignored. It also smacked of CYA requesting comments, which also happened during the Dudas days. I was disappointed because there was so much hope for a Kappos Administration. I am extraordinarily happy to report that the United States Patent and Trademark Office has decided to extent the comment period. I guess things really are changing at the Patent Office, and that is a very good thing and definitely something for all those in the innovation space to be happy about.
I stumbled across an interesting article today from The Post and Courier regarding how interest in US patents is picking up in Cuba. First, it was interesting enough to learn that it is possible for companies and individuals in Cuba to obtain a US patent given how Cuba and the US have been on rather inhospitable terms for many decades. It was also interesting today to see this article, which discusses how since 2000 there has been a steep rise in patent applications from Cuba, on the same day that the typically anti-patent blog Tech Dirt published What Kind of Innovations Do Patent Encourage? In all fairness to Tech Dirt, which I rarely if ever agree with, the post today was extremely even-handed and even solicited input from those who disagree with the thesis that patents do not promote the right kind of innovation. The belief is that patents prevent “vertical innovation” and instead promote “horizontal innovation.” Apparently, patents prevent from building onto patented technology so innovation never really advances with patents and all you can hope for is modest improvements. Never mind that the thesis ignores reality and that those with a sophisticated understanding of patent laws and a strategy understand that companies build on patented technology constantly, and that is in and of itself a strategy, and a wise one at that. Never mind that blocking patents exist in every technology and that causes fragility of a patent portfolio and causes every company to continue the invention march or risk obscurity. See, when you ignore facts and what actually happens such a thesis makes perfect sense.
Last week I was in New York City teaching the PLI Patent Bar Review Course along with John White. The week was a good one, although the city was crazy with heads of state at the UN, terror worries about NY City hotels and President Clinton at the Sheraton across the street from PLI headquarters at the Clinton Global Initiative gathering. Despite all of this another group of patent bar students are going through the right of passage called the Patent Bar Exam. The last live course for the PLI Patent Bar Review will be in San Francisco, CA, the week before Thanksgiving, so if you or someone you know is going to be taking the patent bar and would like to study for it over down time during the end of the year it might make sense to take this live immersion course to ramp up quickly and get the patent bar complete before the USPTO changes the exam. Will the USPTO change the exam and actually start testing relevant laws? That is a good question. No announcement has been made, which is curious in and of itself. One would think that eventually the USPTO will have to change the exam and test laws that at least approximate practice, right? Who knows, but testing a version of the MPEP that is 4 or 5 years out of date is not a long term strategy.
At the beginning of August 2009 the United States Court of Appeals for the Federal Circuit issued its decision in Exergen Corp. v. Wal-Mart Stores, Inc., et al., Case Nos. 2006-1491, 2007-1180 (Fed. Cir. 2009), a decision that changed the playing field with respect to charges of inequitable conduct in patent litigation. Essentially, the Federal Circuit decided that since inequitable conduct is in essence a fraud based theory there needs to be highly specific information plead in the pleadings in order for the defendant to be entitled to raise the defense. It is still to early to state definitively how this will turn out over the long haul, but based on the test announced it seems like it could become very difficult if not impossible to plead inequitable conduct as a defense unless there is real factual evidence to suggest that there has in fact been inequitable conduct. As simple as this seems it is rather revolutionary, which is sad in and of itself. Gone are the days where inequitable conduct can be plead as a defense without any support and only to enable a fishing expedition during discovery. Likewise, as a result of In re Bose, which was decided on August 31, 2009, the days may be numbered for the loose application of fraud theories on the other side of the building at the USPTO. Specifically, the Federal Circuit has made it harder for there to be a finding of fraud on the Trademark Office, which could mean we are in for a complete reconstitution of fraud based theories. To the extent that means fraud actually requires intentional deception the Exergen and Bose cases are indeed very welcome and long overdue.
I certainly hope this is much ado about nothing, but it is hard to ignore the fact that it seems as if we are off to an inauspicious start under David Kappos. Yes, he is saying all the right things, seems to understand the mistakes of the past and there is real reason for hope and optimism. Nevertheless, despite the many positive developments that have occurred over the last several months, the United States Patent and Trademark Office may have just fired a shot across the bow. I hope this doesn’t mean we are back at it with an all new cast of characters playing by a tired and worn out playbook. What am I talking about? This morning I came across a post by Peter Zura at the 271 Patent Blog explaining that if you want to comment on the interim patentability guidelines you need to do so no later than Monday, September 28, 2009. The notice was published in the Federal Register only on Thursday, September 17, 2009, and set an 11 day comment period, suggesting that the promises of transparency may be greatly exaggerated. A Federal Register Notice giving an 11 day comment period is probably not the best way to further goodwill, and not likely going to lead to making friends and playing nice with the patent bar.
Let me set the record straight from the start. I do not agree with President Obama on much, and I voted for and supported John McCain dating all the way back to his first run for President. Having said this, it is impossible to ignore the fact that so far President Obama and his Administration is saying all the right things with respect to innovation and patents, and there is real cause for optimism, at least if you believe that innovation and strong patent rights will lead to a better economy and leverage what Americans do best, which is solve problems with ingenuity and innovation. Not only has President Obama appointed a patent attorney to run the Patent Office, which is sadly revolutionary, but when he speaks of innovation his words sound Reaganesque. This has never been more apparent than in his speech on innovation and sustainable growth delivered at Hudson Valley Community College in Troy, New York, on Monday, September 21, 2009.
Last week USPTO Director David Kappos explained during his speech at IPO that intellectual property law “is widely recognized as the engine that drives our information age economy, maintains our competitiveness and is responsible for creating and sustaining tens of millions of U.S. jobs.” I have been beating this drum now for several years, and despite the obvious and indisputable correlation between innovation and economic expansion that leads to new jobs, the old guard at the USPTO simply couldn’t or wouldn’t understand. It would seem that the days of shuffling chairs on the Titanic are over, and if nothing else at least the USPTO has a leader that seems to understand the link between recessions, start-up companies forming and increased innovation leading to new industries that create jobs. Of course, it certainly helps that Kappos is a patent attorney and was responsible for being Captain of the IBM intellectual property ship, which after all is really all IBM has because without intellectual property protection, particularly without patent protection, IBM would be just three random letters rather than one of America’s mega-corporations that provides jobs.
Last week David Kappos addressed the IPO annual meeting in Chicago, Illinois. Kappos’ remarks were varied and really set a new tone for the future of the USPTO under his watch. Kappos continued the theme he has already established in differentiating how the USPTO will run under his regime, as compared to how it ran under the previous regime. Specifically, Kappos promises to cut pendency across the board, to develop a count system for patent examiners that does not require an endless stream of RCEs and he wants a patent system that does not favor (or disfavor) any particular technology over others. On the negative side, Kappos was the bearer of bad news with respect to the fiscal crisis facing the Patent Office, and saying that there will be no new hires during 2010 and likely no way to dig into the backlog of pending cases. He also announced his support for patent reform, which will get many shaking in their boots. It is hard to argue with what he says, namely that it has been long enough without any overhaul of the patent system. I think everyone will likely agree with that statement, but the devil will be in the details. In any event, the agenda set out by Kappos is ambitious. Now we have to see where it leads and whether it will result in a truly better patent system.
Legend has it that Zeus punished Prometheus by binding him to a rock while having his regenerating liver eaten daily by a great eagle. After the case of Prometheus Laboratories, Inc. v. Mayo Collaborative Services, we in the patent world may now be subjected to similar torture in determining when medical/drug dosage calibration methods qualify as statutory subject matter under 35 U.S.C §101. The district court in Prometheus ruled that a patented drug dosage calibration method was non-statutory under 35 U.S.C §101 as essentially correlations of “natural phenomena,” citing Justice Breyer’s dissenting opinion in Laboratory Corp. v. Metabolite Laboratories, Inc. But in the resulting collision with the “machine or transformation” test of In re Bilski, the Federal Circuit held, instead, that this patented method was “transformative,” and therefore statutory subject matter under 35 U.S.C §101.