In part 1 of the interview we discussed patent reform and started to discuss patent eligibility, particularly as it relates to software. We pick up the discussion there.
QUINN: In looking back, Justice Stevens’ decision in Bilski had pieces that would have made for a much easier régime to live under because he did say in one in particular area that the innovation in question in State Street was patentable because it was a device. I’m optimistic that we’re going to get something good out of the Supreme Court in CLS Bank. But having said that, I’m still worried, because it seems to me that they totally missed the boat in Mayo where they said we’re not going to follow the solicitor’s invitation to let sections 102, 103, or 112 invalidate that claim. That wasn’t really an invitation, that’s what the statute mandates and up until then Mayo that was always what the Supreme Court had mandated. So you just never know what you’re going to get from the Supreme Court, but I can’t imagine we’re going to get anything less intelligible than the Federal Circuit en banc decision in CLS Bank. Now Janice, you have spent a lot of time teaching patent law to students. How would you describe that decision to people who are new to this field?
MUELLER: I have to confess, Gene, that the week or so that we would spend in my patent law classes on section 101 potentially patentable subject matter, at least with respect to the software and computer cases, was probably my least favorite topic to try to teach. It was virtually impossible because there were a lack of clear rules and some fairly impenetrable precedents. The broader policy debates were great, but discerning and explaining the controlling law was a struggle, frankly.
CHISUM: The Supreme Court may surprise us in CLS Bank. I’m forever hopeful. For example, the Myriad decision from the Supreme Court was pretty good. Two feet on the ground. The Court looked to the statutory definitions of what is a “composition of matter” and looked at the precedents in terms of applying them sensibly instead of articulating amorphous doctrines, such as those kicked around in Mayo. It’s just a more practical approach to the issue. I agree with you, Gene, about that part of Mayo that rejects the government’s suggestion that Section 112 could take care of this. The Supreme Court showed no awareness of how important Section 112 is. They slough if off as a mere administrative disclosure provision. That’s a fundamental mistake.
The Road Forward: Software Patents in the Post-Alice Market
Join Gene Quinn and Scott Alter for a discussion on patent eligibility, techniques for claiming software, prosecution strategies and more. Wednesday, March 4, 2015 at 12pm ET ~ CLICK HERE to REGISTER
QUINN: I totally agree. I do a lot of software patent work myself. What I always try and explain to inventors is that you want your patent to be something that you could hand to a programmer and say program this without that person having any questions about what they need to do and deliver. That type of design document really means that you have defined an invention. And if we’re never going to get that far and we’re always going to say, oh, sorry, this is not within section 101, so no patent for you, I don’t know how we move forward technologically. Judge Newman has always said, and I agree with her on this point, that we can’t have 101 be a hard filter because you never know what you’re going to cut off in its infancy. And I’m afraid that’s exactly where we’re at right now.
MUELLER: We won’t disagree with that.
QUINN: Let me ask you this then. How do you handle an issue like patent eligibility of software when you conduct your Chisum Patent Academy seminars? I understand there are a very limited number of people that can participate in each seminar, right? I bet the discussion can get deep and enthusiastic.
MUELLER: That’s right. What’s unique about our business model is that we purposely run seminars that are limited to ten people. It’s conducted a bit like your favorite law school seminar, but with experienced practitioners and a focus on how these concepts should be applied to every day practice. We’re sitting around the table debating these questions and trying to come up with practical strategies given the existing state of the law (or where we see it going). We encourage people to participate who want to talk and argue and debate with us and the other participants. Sometimes Don and I will intentionally disagree on a particular issue to get the discussion going. It’s not hard.
QUINN: At this point given the development of the law I bet if you get 10 lawyers in the room you probably have at least 11 different opinions.
CHISUM: No doubt, no doubt.
MUELLER: I think that’s great.
CHISUM: But to be clear, our seminars are not inconclusive, unstructured debates. We also cover topics that are not necessarily so frustrating as those raised in CLS Bank. In addition to some of the more unsettled topics, we address very concrete issues that attorneys face day-to-day in their practices, such as the potential problems in proving infringement for active inducement. [After this interview, the Supreme Court granted certiorari in Akamai v. Limelight, which will be discussed in the Academy’s March 2014 seminar. The Court on January 22 decided Medtronic v. Boston Scientific, clarifying burden of proof issues in licensee DJ actions. Medtronic also will be addressed in the seminar.]
We select topics that focus on the work product of patent professionals, using lots of examples where something really worked and was effective and avoided problems. We also look at avoiding problems by selecting quite a few examples where somebody didn’t do what they could have done and could have delivered for their clients much more effectively. Plus we have a seminar room full of people who have varying experiences, which they share with each other as well as with us. The exchange of ideas and best practices is exceptional.
MUELLER: There are not many opportunities for a small group of experienced patent professionals to come together around a table to share and debate strategy and talk about that in the context of what’s happening at the Federal Circuit and the Supreme Court. That’s the unique opportunity that our seminars provide and we all really have a blast, honestly. Don and I are teaching but also facilitating. Of course we do have a very organized structure; in no way is it a meandering academic debate. We have a syllabus and materials and the whole nine yards as required for 18 hours of CLE accreditation. But the interactivity of our seminars is absolutely key. We don’t consider ourselves in competition with other CLE providers. There’s certainly value in the big ballroom kind of presentation that passively lays it all out for someone. But that’s not what we’re doing.
QUINN: That’s what caught my eye. I mean three days is a big commitment for a lot of folks. So you probably are getting people who are really, really interested and are very committed to patent law. I know I’m a geek. I love talking about this stuff to everybody and everywhere we go. It sounds like a great opportunity. Have you ever thought of doing this for judges? I bet there’s a number of judges that would really enjoy this kind of opportunity.
CHISUM: We’ve thought about it. Our seminars might be very healthy for judges, or maybe better for the law clerks on the Federal Circuit. Janice and I each spend a lot of time carefully reading and analyzing the opinions of the Federal Circuit and how they impact patent practitioners.
MUELLER: Yes, that’s how we make our living.
QUINN: I think you probably would do well teaching the Supreme Court clerks, too. Because it seems to me that the Court is taking more and more of these patent cases and it doesn’t seem to have a particular facility with the nuances of patent law and technology. For example, recently I read, and maybe I’m making too much out of this, that in an interview Justice Kagan gave in Politico she said that the Justices on the Supreme Court don’t even use email and that they also rely on their clerks to explain technology issues to them. So that means that we have law clerks that are maybe two and three years out of law school having a disproportionate influence on some of the issues that I care most deeply about.
CHISUM: I don’t think there’s any doubt about that. But that has always been the case. Old timers in the system remember back to the days of Graham v. John Deere. Justice Clark, who wrote the opinion, had a law clerk who had been a student of Tom Arnold, a patent lawyer in Houston. And so that was one of the rare instances where a Supreme Court Justice had a law clerk who had some knowledge about patents.
QUINN: Yes. It’s strange times that we live in I guess. A friend of mine, you may know Joe Allen, likes to say that the old Confucius saying may you live in interesting times was really a curse because interesting times meant upheaval. It seems like we are living in very interesting times in the patent community right now. And I don’t know where it all lands.
MUELLER: But this is not the first “interesting time” the patent system has been through, is it, by any means?
QUINN: No, no. The law has been a pendulum. So let me ask you this. I would say that the pendulum swings further and farther, faster and quicker in the area of patent law than in a lot of other areas. I fear that we’re at a point where if things don’t come back to some kind of level of certainty and normalcy that the law may just fly straight off the string, to keep with the pendulum metaphor. Where do you come down on that?
CHISUM: I think there’s a danger of that. In the process of writing my treatise, I became intrigued with the radical swings to the pendulum that you described. For a few decades the patent system would be in very favorable regard by the Supreme Court and other judges. They would say very positive things about inventors and their contributions to society. Then you would get the opposite tone for another few decades. It’s very possible that the federal judiciary will again become very disenchanted with the patent system, including losing faith in what the Patent Office does. If the courts come to believe that the Office is just churning out patents because it’s a bureaucracy supported by fee income and doesn’t want to offend its “customers,” federal judges may start granting summary judgments that patents are invalid left and right. Back in the 1950s and 1960s, it was commonly believed that, in most areas, about 80 to 90% of patents, if they were litigated very far, would be held invalid. That was just assumed to be the case (not necessarily in some particular areas like pharmaceuticals, but generally). Part of that was a belief that the Patent Office just really wasn’t doing the job of searching the prior art and applying the proper legal standards. If we get back to that point, you could see a fairly rapid deflation of the patent system in response to what many believe was an excessive inflation of the patent system over the last 10 to 15 years.
MUELLER: I think a lot is going to ride on what we see going forward from the PTAB, for example decisions in post grant review. Will those decisions be high quality and will the courts respect them? We know that the Office has hired some really good folks but they’ve also been hampered by the sequestration. I’m delighted that Michelle Lee has taken the reins. I sure hope that’s going to be permanent. I think she’ll do an outstanding job and be highly respected. But I also think a lot of attention is going to be paid to what happens as those post grant review decisions start coming out.
QUINN: Yes. So far the Federal Circuit hasn’t been afraid to say they didn’t think the PTAB got it right, although I guess they haven’t really had much of an opportunity in some of the contested cases yet.
MUELLER: True. We have several new judges at the Federal Circuit. The new, younger folks are super impressive; for example, Ray Chen. I’m optimistic about the intellectual firepower and enthusiasm that they will bring. We’ve had a lot of turnover at the Federal Circuit; for example, Judge Bryson taking senior status was a big loss. I consider him one of the intellectual leaders on the court. Some of our most experienced judges with patent practice backgrounds—Judge Lourie and Judge Newman—they’ve been there a long time and I hope that just like Judge Rich they’ll go full steam ahead into their 90s and—
QUINN: I agree with that. It would be nice to get to a point here in the not too distant future where we can get our sea legs again. And maybe that’s one of the other reasons why I object more philosophically to this round of patent reform. I know that when Todd Dickinson testified in front of the Senate he said that we should just give the AIA some time and see how that works before we go back for more reform. I think that that’s where I would come down on this. Although I certainly like the idea of forcing more complete complaints, which is something that I’ve written a lot about in the past.
CHISUM: I agree with that. In my early years as a law professor, I taught civil procedure. Vague “notice pleading” was a great “reform” dating back to the adoption of the federal rules of 1938. But the people who wrote those rules knew extremely little about how patent litigation works, then and now, including the nature of patent infringement “claims.” For example, the drafters of those rules, and of the “form” for pleading patent infringement, seemed unaware that patents have multiple claims and that it is important to know which ones are alleged to be infringed.
QUINN: Well, I’ve written about this because I’ve always found it amazing – If you get sued for patent infringement and the complaint simply follows the authorized form in the Federal Rules the judge couldn’t even issue a default judgment because you can’t infringe a patent. You have to infringe a patent claim, not a patent, but that fundamental nuance is lost on whoever drafted the authorized complaint form for the Federal Rules. I understand wanting to make it much easier for people to seek redress, but those non-informing complaints have made it easier for the nefarious actors to say, hey, I bought this patent, this patent is titled X and you do something very similar to X and, therefore, you owe me money.
QUINN: All right. Well, let’s just wrap it up with that. Thanks for taking the time to speak with me, Janice and Don.