What follows is a bit of our conversation to wet your appetite. We discuss the Supreme Court generally, the lack of technical expertise at the Supreme Court, the realities of creating software, amicus briefs, the ramifications for watering down patent rights, the need for bright line rules and whether Congress needs to get involved.
STOLL: As someone very interested in the patent arena and getting the standards correct, I’ve been really worrying about things. I think we are in a very confusing state at the moment. I think that the courts are actually undermining patent eligibility in many different areas. And the irony seems to be, Gene, that the Supreme Court and now this Court of Appeals for the Federal Circuit seem to be not considering the fact that the United States is leading in many of these emerging technologies and specifically thinking about software and diagnostic methods and personalized medicine and gene sequences. I mean we are actually leading the world in this subject matter. We’ve developed these emerging technologies. We’re quite good at building upon a base of patents in these areas and I don’t think anybody’s taking into consideration the job creation and economic growth that these industries bring to the United States before mucking around in the standards.
I continue to hear arguments that that’s not the case with software and yet we have major companies in the United States who are engaged in software creation. Microsoft, Oracle, IBM – I think they’re the top three software producers in the United States – all of them very familiar American names who invest huge amounts of resources into developing software. So I think the evidence isn’t just in the economics statistics, but it’s in the actions of these very important companies that are putting in efforts and funding behind creation of new things. I think that is really a very important piece that we need to publicize – the importance of these to our economic growth. We need to publicize and hammer again and again.
I agree with you that jobs not created is a much more difficult thing to measure. But let me also say that I anticipate, based upon what I’ve been seeing in the courts, and I’m going to tag this with the Supreme Court, I think you’re going to start to see some of these companies who are engaged in these areas particularly in the biotech and pharmaceutical area start to move to other jurisdictions, for example Europe where they seem a little bit better on some of the issues. I think you’re going to see jobs leaving the United States and research going overseas in the not too distant future based upon the fact that we are not doing what we should be doing in protecting these types of efforts. Some investors want some sort of certainty as much as they can possibly get that they’ll get some return on their investments. So you’re going to see that investors, in fact I’ve seen statistics to this point, do seek companies that are emerging that have patent protection for some of their areas of software. So that’s an extremely important aspect to the investor funding of some of these companies. It’s not exclusive but it seems to be that more of the investors are interested in companies that in fact do have a software portfolio of patents…
… [W]hat really needs to happen is there needs to be an education at the Supreme Court ,and maybe at the Legislature, as to subject matter. I think there were some technical errors, for example in Myriad where you have an isolated purified DNA segment or full DNA which isolated and purified means bonds are broken. So it’s not something that’s naturally occurring in nature. But you need technical subject matter expertise at the Supreme Court, which I don’t think they have. And you need patent law expertise at the Supreme Court. And you see in Prometheus where they’re analyzing 101 using 102 and 103. So I think what we need to do is further education of the populous, hopefully reaching the Supreme Court so that they can make more intelligent decisions on some of these very difficult technical issues and legal issues.
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QUINN: Let me stop right there because you hit on a topic that I really want to make sure we talk about. I don’t know whether you saw but recently there was an article in the New York Times that discussed the fact that… the Supreme Court is increasingly relying on amicus briefs particularly with respect to facts. And in some of the cases the facts that are in these amicus briefs are not actually accurate. And I’ve seen this. I’ve observed this as a growing issue in our space. It’s problematic for many reasons. One is the facts that they are relying on in these amicus briefs haven’t been vetted because the first time they’re being raised is in the brief and the Supreme Court then relies on them because they are perceived to be experts. But it’s also problematic from a straight process perspective because an appellate case is supposed to be decided on the record and these things are not in the record. So it’s a moving target for the appellants and the appellees. So that’s problematic.
But I do sense that the Supreme Court is doing this, so I wonder what difference does it really make if they do have the subject matter expertise at the Supreme Court. And don’t get me wrong, I think it would be great, but it seems to me they’re going to do what they’re going to do. I mean that’s the cynical way to view it. The other way to view this is if you’ve got clients that have a budget, and these issues matter, whether it’s biotech patent eligibility or software patent edibility, and you’re not getting involved in filing an amicus or putting together an amicus or joining an amicus then shame on you because we really do have to get involved. These amicus briefs matter far more than I think the law says they should.
STOLL: I agree with that. And I think what is important for us is to affiliate with the natural associations who are interested in the subject matter. And it could be by subject matter, it could be by any commonality and work through organizations. And I’m going to mention that AIPLA, IPO, ABAIP section, BIO, PhRMA, there needs to be more information provided. Now I’m glad to see technical experts at that level. I believe the CAFC has had technical experts before. I’m not sure the Supreme Court has ever had technical patent experts, or maybe using some of the clerks from the CAFC to help them sift through the technical subject matter that they need to handle. But whatever, you are right, they will decide how they want to decide. I would much prefer that they had accurate technical information in front of them in making their decisions because I do think that it will affect their decisions and I would love to see them have more access to technical and legal issues related to those patent areas.
I’d like to ask you, Gene, what affect does this whole troll issue have on these attempts by the Supreme Court to limit subject matter patent ability? Do you see any relationship between the publicity of troll efforts to do limitations of patent eligible subject matter by the Supreme Court?
QUINN: I personally do. And that is extremely troubling because if the Supreme Court is taking that into consideration, which I think that they are, they’re then taking into consideration issues that are not in the case in front of them. So we have the worst of all kinds of worlds. One, the Supreme Court is simply not knowledgeable about patent law. And that’s not to say that the Justices couldn’t become knowledgeable, but even in this active state they’re only handling six or eight patent cases a year at most and so a lot of those deal with contracts and that sort of thing. So they’re not ever going to do enough patent cases to develop a specialty.
Two, they’re allergic to bright line rules despite the fact that in our space we have 10,000 front line decisions makers between the patent examiners, the Board, the district courts, and the Federal Circuit. You can’t have that many decisions makers without bright line rules, which should be self-evident to anybody including those that went to Ivy League schools and wear black robes. But apparently it’s not.
Then the third, they seem really concerned with the politics and policy of these issues whether it’s in health care or whether it’s with gay marriage, or whether it’s with patents. And the politics is not in front of them. They shouldn’t be involved, it’s not the proper role for an appellate court judge on any level. The job of the appellate court judge is to decide the case in front of them. But I do think that that certainly has cause and effect. And shame on many of us in the industry for not reigning in the industry on our own well before this. And just like it is shame on those people who are asking for these broad software claims that have no business being filed, couldn’t have been issued likely even under a State Street standard let along a Bilski or Alice standard, and then something pops out the other end at the Patent Office. And, yeah, I know how that happens, you know how that happens. With so many decision makers things happen, right? But then you have the EFF criticizing it and rightly so in some cases. It’s a mess. We as an industry need to I think start to police ourselves, don’t you think?
STOLL: I think you bring an interesting piece to this discussion now. I have already acknowledged that I think that the PTO needs to put more effort into the quality initiative. But you’re actually adding to that in a manner I think is very helpful and that is that the bar, the patent bar needs to actually draft claims that are less vague and nuanced and more clear with respect to what is the patentable subject matter they’re trying to claim. I think that it’s incumbent upon the PTO to set better standards for that as well. So there are lots of culpable people and practitioners both from within the PTO and outside the PTO. But the remedy needs to be clearer, more well-defined boundary of the claim and can better issuance, meaning that when you are looking at the claim you know whether or not the activity you’re interested in doing would infringe that claim or you would be able to clearly understand what you needed to do to get around that claim. And I think that’s a critical piece to improving the system and making sure that we keep subject matter that’s increasing the benefit of the human condition even in the United States and it can continue to improve.
QUINN: Yeah, I agree with that. I think that right now there is such an uncertainty, but we really do need to recognize that gone are the days that you could just throw up a method claim with nothing tangible in it and actually get it. In an interview with Mark Lemley he suggests something that I’ve been thinking about but have almost been afraid to say out loud because it almost sounds crazy. But I think you ought to use means plus function claims in your applications. And I understand what that means. I understand what the algorithm cases say, namely that if you don’t have 100% any algorithm there then you can’t use means plus function. But means plus function does give you the whole scope of what you’ve disclosed and the equivalents in the spec. And would it be better to get some claim than no claim? And that’s the question that we have to start asking, I think. So I think you want to claim these things in means plus function format. I personally think you want to stay away from method claims altogether. System claims, I would still include because at some point in time I really would like to have a conversation that a machine is not patent eligible because it’s abstract. Which is what a system is, a system is a machine. And maybe morph the system claims into the way they used to get software claims in the 70s. After the Supreme Court said absolutely no software claims, right? What we did is we say it’s not software it’s a machine that does these things. So write your claims like that, your going to have to have this information in there, of course.
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QUINN: I think you were mentioning prosecutorial laches and the thought that came into my mind is how could that ever come up in today’s day and age with software? Because if don’t accelerate any of these things you’re going to wait for three years ore more to get a First Action. Respond appropriately. File an RCE or two, which is standard practice in that space as in many spaces, and then park this thing on appeal. And by the time you ultimately get to appeal the law is likely going to have evolved at least once, probably two or three times in this space because it seems like every few years we pick a different lane. And I know that’s frustrating, but I think, and what I tell my clients is, there’s no such thing as a cheap software patent any more. You must have a lot more in technical disclosure. I think we want to overwhelm the lay readers so that they don’t understand what’s going on so that they will appreciate that this is something that’s innovative because they can’t really understand it themselves. Which I know stinks, but I think that that’s where we’re at with the disclosure in these things. And then if you don’t try and get the patent now by the time the law changes or loosens a bit or Congress gets involved it’ll be way too late.
STOLL: Let me ask you a question about that. What about Congress getting involved in patent eligibility issues? I think that— I’m very concerned about it in one mechanism. I know that Senator Schumer was out for expanding covered business methods even before we had the first ten of them decided by the Patent and Trademark Office, and he wanted to make the program permanent when the program itself was there because of a temporary problem. He also wanted to expand it to software and my guess is that there are just people who just don’t like software patents. And I’m very happy that both the House and Senate took that piece out of the bill. But is there an opportunity maybe to have Congress start discussing it. Now, the problem is if they do not move forward with something someone may use that as evidence that Congress didn’t intend this to be patentable subject matter. So I am worried about that idea as well. But do you think that maybe it’s time that we have folks on the Hill start at least discussing issues about maintaining broad patent eligible subject matter to protect job creation and economic growth?
QUINN: I think the answer is a resounding yes. And I was on that bandwagon before Alice when we were just dealing with Mayo and Myriad. Because the problem with Mayo and Myriad is it really devastates about 30% of the biotech industry, I think. I think a third of the industry probably wasn’t really impacted. A third of the industry probably is better off to some extent, or at least are happy that they don’t have pay licensing fees. But a third of the industry is really in harm’s way. So I was in favor of that back then. And then when you see what the Patent Office comes out with with respect to the Myriad/Mayo guidelines, and that they snuck in a question about Alice in to that at the last minute, so it’ll be interesting to see what happens on that. [The Myriad/Mayo guidelines] seemed overly restrictive to me. And then we get the Alice decision and I’m like “oh, my goodness, they have to get involved.” There really are jobs going to be on the line.