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Judge Michel: Patent Reform Bills Would Weaken Patent System

Written by Olivia T. Luk
Niro, Haller & Niro
Posted: October 16, 2013 @ 2:27 pm
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Left to Right: DePaul Law Professor Josh Sarnoff, Chief Judge James Holderman (N.D. Ill.), Ray Niro, Chief judge Michel (CAFC, ret.), DePaul Law Professor Roberta Kwall.

Former Federal Circuit Chief Judge Paul Michel gave an invigorating speech at the DePaul University College of Law Center for Intellectual Property Law & Information Technology (CIPLIT®) on October 15, 2013 at the 15th Annual Niro Distinguished Intellectual Property Lecture on the topic “How to Retain Patent Enforcement While Reforming It – Judges and Counsel Should Manage Infringement Suits, not Congress.”

To an evenly divided room of practitioners and law students, Judge Michel urged practitioners to take action against Congress’ incorrect understanding of the patent system.  Judge Michel explained legislators are proposing bills because they are being heavily lobbied by a small (but powerful and well-funded) coalition of companies.  He highlighted the common problem with the nine active bills currently before Congress.  If passed, the bills separately and together would weaken the patent system; not strengthen it.  None of these current bills would address the problems with the current patent system: litigation is slow, complicated and unpredictable.  The bills, however, would make litigation slower, more complicated and less predictable. In short, congress’ solution would add to the problem.

“AIA II,” as Judge Michel collectively called the bills, assumes that (1) patents owners/NPEs are evil and (2) U.S. District Court Judges are inept at judging bad behavior.  He admonished these assumptions by explaining that while people misbehaving and invalid patents are bad; most people and valid patents are good.  You can’t judge inventors or patent owners by their status- nor can you judge them all the same way.

AIA II would severely restrict a non-practicing entity’s right to enforce its patent.  But, Judge Michel explained, this is contrary to what our Founding Fathers wanted.  British law, at the time, only granted patents to practicing entities.  The drafters of our Constitution did not want to limit patents to the rich and wrote our laws to reflect that position.  Judge Michel emphasized this point by invoking the names of Thomas Edison and the Wright Brothers as people who were then able to choose “inventor” as a career.  Neither of them ever produced a product.  They were non-practicing entities and would be considered as such by the bills before Congress.

Left to Right: Thomas Filarski (Steptoe & Johnson), Olivia Luk (Niro Haller & Niro), Judge Paul Michel, Meredith Martin Addy (Managing Parter, Steptoe & Johnson, former clerk to Michel).

Further, district court judges currently have an array of tools to punish bad behavior and they use them.  Such tools include Federal Rule of Civil Procedure 11 and 28 U.S.C. § 1927.  The court system does not need Congress to step in.  Indeed, our Forefathers desired a separation of powers.

Judge Michel also addressed Chief Judge Diane Wood’s recent speech on returning patent appeal jurisdiction from the Federal Circuit to regional circuits.  He disagreed with her arguments and further explained Japan and other countries are creating unified appellate court systems modeled after ours.

Patents are the single best incentive for innovation.  They also are the best promoter for job creation and growth.  Judge Michel urged both students and litigators to get involved by writing letters to Congress expressing the opinions of the IP community and also asking that hearings include positions from judges and IP practitioners.  Otherwise, Congress will only hear one side of the debate and take action that will weaken the patent system.

Niro Haller & Niro has sponsored the Distinguished Intellectual Property Lecture series since its inception in 1998.

About the Author

Olivia T. Luk received a Chemistry degree from the Georgia Institute in Technology in 2000. She received her law degree from the Washington College of Law in 2005. From 2000-2005, Olivia was a patent examiner for the United States Patent and Trademark Office. She practiced patent prosecution in Washington, DC before moving to patent litigation at Niro, Haller & Niro. Olivia co-founded the Richard Linn American Inn of Court in Chicago. She served as President and is now the Executive Director of the organization. Olivia has been recognized by Illinois Super Lawyers as a "Rising Star" in Intellectual Property Litigation from 2009 to this year. She was awarded the American Inns of Court Sandra Day O'Connor Award for Professional Service in 2011 for representing a high school defendant in a first degree murder trial pro bono. She also received the first "Linn Inn Alliance Distinguished Service Medal" for her leadership in bringing the American Inns of Court experience to the Intellectual Property Community.

12 comments
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  1. true

  2. What? Congress trying to make things worse?

    Unherd of.

    (Typo intentional, as in sarcaustic pun ;-) )

  3. “Patents are the single best incentive for innovation. They also are the best promoter for job creation and growth. ”

    Troo Dat, No doubt.

  4. step back,

    Punny.

  5. The SHIELD Act is fatally flawed in its current form. It exempts “(1) is an inventor or original assignee of the patent;” but we all know that patents commonly change assignees through mergers, joint ventures, corporate restructuring, etc. So a company’s patent changes assignee and now the new assignee has to post a bond for the costs of litigation before suing for infringement. A lot of small companies wouldn’t have the $1M or so required for this thus rendering many patents unenforceable. This will only benefit the very large companies.

  6. “You can’t judge inventors or patent owners by their status- nor can you judge them all the same way.”

    I’m not sure if I agree Judge Michel. It is certainly possible to do so.

    “But, Judge Michel explained, this is contrary to what our Founding Fathers wanted. ”

    I wonder if it could be that we’ve moved a bit beyond what the Founding Fathers ever wanted in their patent system. Back when they were around changing materials wasn’t even considered an invention. Perhaps had we not strayed so far from their original ideas on how to limit the patent system to the useful arts then most of the current issues with NPE’s wouldn’t even have occured in the first place.

    Not to besmirch the good ex-Judge but as he’s stating these things he’s standing right next to a girl from Niro’s firm.

  7. “Wright Brothers as people who were then able to choose “inventor” as a career.”

    Apparently the good judge has never been to the air and space museum. They never chose “inventor” as a “career”. They made bicycles as their career. And they even continued to do so after they struck it big with some patents and met the president etc. Of course they eventually made their own aviation company in 1909, wherein, to be sure, they made airplanes. And of course wilbur died in 1912 practically right after they closed the bike shop.

    http://en.wikipedia.org/wiki/Wright_Cycle_Company

    http://www.wdl.org/en/item/11373/

    And of course after they formed that company they focused on enforcement of patents rather than being inventors.

    http://en.wikipedia.org/wiki/Wright_Company

    Great work patent system.

  8. John Smith-

    Are you really as ignorant as your comment suggests?

    You say: The Wright Brothers “never chose inventor as a career.”

    As if they just stumbled on their invention and didn’t work full time hours to achieve it.

    Please keep your comments intellectually honest, and if you are going to “besmirch” Judge Michel with innuendo you will need to go elsewhere to do so. And your condescending “girl from Niro’s firm” comment is the last such condescending comment you will be allowed here on IPWatchdog.com.

    Shape up or your gone.

    -Gene

  9. Gene I don’t know where you’re getting your wright brothers information but it sure seems to clash with that presented at the museum. Yes, they put in a lot of hours, but as hobbyists, so far as I can tell.

    I’m not too sure it was mere inuendo on the good ex-judge’s part. It sounded more like a statement of fact to me. Else I wouldn’t have bothered to post information for those who are reading, hopefully the good ex-judge even, to get some actual facts. If it was just an off the cuff remark then fine I withdraw my objection.

    And as to Ms. Olivia Luk from niro’s firm, I was more concerned with pointing out her employer than condescending anyone. If you prefer I use her full name or title or whatever I don’t mind my only point was her employer.

  10. John Smith – This regards the “Niro’s firm” comment. A good friend of mine, an independent inventor with few resources, had a patent on an invention that he was trying to get licensed. A large company infringed the patent. Mr. Niro took on the case. The internal documentation discovered indicated that the infringer made a calculated decision to infringe rather than license. With Mr. Niro as his attorney, my friend’s case was won. I consider Mr. Niro a hero to the inventor.

  11. Olivia – Where can I find information about the 9 active bills currently before Congress?

  12. The patent system encouraged the Wright brothers to invest time and resources into new ventures (e.g. planes/gliders). Otherwise, they likely would have been satisfied with bicycles and who knows how different things would be different today.