Lefstin, Mossoff critique SCOTUS’ sense of history and negative impacts on today’s patent system

By Steve Brachmann
June 11, 2017

Professor Jeffrey Lefstin

Professor Jeffrey Lefstin

From trolls to abstract ideas, narratives about how well the U.S. patent system is functioning have led to system reforms that have created many unintended consequences. A critique of the narrative being told by the U.S. Supreme Court in recent years was offered at the International IP Commercialization Council (IIPCC) event on May 8th in the U.S. Capitol by Jeffrey Lefstin, associate academic dean and professor of law at the University of California (UC) Hastings.

“The Supreme Court has told us, and told itself, a particular story — a story based in history to justify its current regime,” Lefstin said near the top of his presentation, which was titled Invention and Discovery: A Fable of History. “But when one starts to inquire into that history, you find the story is quite different than the court has led us to believe.” According to Lefstin, this story and its diversion from a factual basis in history began with the Supreme Court’s 2012 decision in Mayo v. Prometheus, the case which established the current legal concept that a further inventive step was required in order to transform a fundamental principle or law of nature into patent-eligible subject matter. “In particular, what the Court has made clear is that if one has made a scientific discovery, one needs something more than known, routine, or conventional activity in order to transform that into a patent-eligible invention,” Lefstin said.

Although the inventive step principle has been applied by lower courts in various ways, the U.S. Court of Appeals for the Federal Circuit’s (Fed. Cir.) 2015 decision in Ariosa v. Sequenom was a good example of the impact of the Supreme Court’s Mayo ruling. In that case, a patent claiming a noninvasive method for testing certain fetal conditions by testing the mother’s blood was invalidated because the amplification of DNA from the mother’s bloodstream was well known at the time of invention and the fetal test was thus a patent-ineligible natural phenomenon. “I think it would not be an exaggeration to say that this mode of analysis is, step one, assume away from the inventor’s discovery and then, step two, ask if the inventor has invented anything else,” Lefstin said.

Helping to set the stage for the current patent narrative being promoted by the Supreme Court was that court’s 2010 decision in Bilski v. Kappos. In this case, the court established its ability to interpret 35 U.S.C. Section 101 on patent-eligible subject matter without input from Congress, and that such an interpretation was consistent with 150 years of historical jurisprudence. One issue with SCOTUS’ interpretation of Section 101 is that it doesn’t properly extend patent-eligibility to discoveries rather than inventions, which Lefstin argued Section 101 explicitly protects. “I think it’s fair to say the Supreme Court regards this as mere surplus verbiage,” Lefstin said. Congress, however, found this language important and Lefstin points to the 1930 enactment of the Plant Patent Act as proof. During passage of this legislation, Congress had to wrestle with questions surrounding the patent-eligibility of discoveries on inventions that “might involve nothing more than the inventor discovering a new mutant plant or sprout on a cultivated plant, propagating that with conventional techniques, and patenting that as an invention,” Lefstin said. Congress decided to fold the language of plant patents into the language of utility patents, creating strong protection for patent discoveries.

The 1952 Patent Act, and specifically Section 100(b) of that act, provides a definition for “process” which encompasses new uses of known processes, machines, manufacture, composition of matter or material. “This was to address certain doubts that had arisen about whether a new use of an existing process or use of an existing material could be protected as a new process,” Lefstin said. He cited commentary on the 1952 act by P.J. Federico, at that time a high-ranking U.S. Patent Office official involved in the drafting of that legislation, whose commentary made clear the point that claims cannot be rejected as ineligible simply because it recites conventionals steps. “Frankly, it is difficult for me to imagine any language more contrary to what the Supreme Court has done in Mayo and the Federal Circuit in Ariosa than Federico’s perspective on the language that he had drafted,” Lefstin said. “So much for the statute.”

Lefstin also rebuffed another foundational element of the Supreme Court’s narrative on Mayo, specifically the idea that the court relied on 150 years of historical precedence going back to English court precedent arising from infringement suits surrounding patents covering a hot-blast method for smelting iron developed by Scottish inventor James Beaumont Neilson. Justice Stephen Breyer’s opinion in Mayo cited the need for unconventional steps to turn a law of nature into patent-eligible subject matter. “The great irony of the treatment of the hot blast cases in Mayo is that when you go back and look at the case, it’s precisely 180 degrees from reality,” Lefstin said, noting that the hot blast patent cases were enablement cases in which both the patent owner and the court noted that Neilson’s heating apparatus was well known, routine and conventional. Although the hot blast cases did serve as the foundation of patent-eligible subject matter, the Supreme Court misconstrued the “dividing line” between patentable and unpatentable subject matter set forth from those cases, namely whether the inventor had made a practical, not inventive, application of the discovery.

Lefstin’s presentation was followed by further discussion on the negative impacts from changes to patent eligibility doctrine in the U.S., a conversation offered by Adam Mossoff, professor of law at George Mason University’s Antonin Scalia Law School. Mossoff noted that the U.S. has long had what others have referred to as a “gold standard patent system,” which refers to the country’s traditional policy of providing stable and effective patent rights for innovations which aren’t patentable in other jurisdictions. “So where other countries have faltered or have decided not to provide protections to new innovators, the United States has stepped forward and said, no, we will do so,” Mossoff said.

Even where other countries have denied patent-eligibility to processes, the U.S. has considered processes to be patent-eligible going back to the nation’s first Patent Act. Mossoff further noted that the first patent issued by the U.S. protected a method for making potash. Today, improved processes have made huge impacts on the biotech and software industries, two industrial revolutions which Mossoff said “go hand in hand.” Yet changes to the patent eligibility doctrine in recent years have “resulted in the widespread destruction of innovation” in these sectors.

Mossoff cited a series of statistics reported by Bilski Blog to support this viewpoint. In the federal court system, the overall rate of invalidation under Section 101 challenges was 67 percent as of March 2017; at the Fed. Cir. alone, that rate jumps up to 90 percent of patents deemed invalid when challenged as an abstract idea or a law of nature. “If any statistician looked at this, they would say this is a system out of whack,” Mossoff said.

More troubling statistics on patent invalidity extend from administrative trials at the Patent Trial and Appeal Board (PTAB). Covered business method (CBM) review proceedings reaching a final written decision on Section 101 invalidity challenges resulted in a 97.8 percentage rate of invalidity findings. This is made more significant by PTAB’s broad interpretation of business method patents to encompass other processes which have typically been patent-eligible in the U.S. Mossoff would later list an array of subject matter deemed unpatentable by PTAB including ultrasound machines, methods for diagnosing ovarian cancer, diagnostic methods for prostate cancer, breast cancer treatments, scanning thermometers and processes for operating an oil rig.

“Now, what you have, therefore, is this weird convergence of a test from the Supreme Court that is, ‘I know it when I see it,’” Mossoff said. “We can have no sense of what this means,” he added, calling the test “indeterminate.” Yet Mossoff said it was clear to see that this indeterminate test was killing large amounts of both patents and innovation in the U.S. This further echoed the day’s overall theme that uncertainty surrounding IP protection in the United States was harming venture capital investment in research & development.

Mossoff also added to the conversation about America’s patent system faltering when compared to patent offices in other jurisdictions. He had collected a list of about 1,400 patent applications where applications were filed in the U.S., China and the European Union (EU); in each of those cases, both China and the EU granted a patent whereas the USPTO issued office actions or rejections on grounds of patent ineligibility. High rates of abandonment followed such office actions issued by the USPTO.

“This is really significant. This is what we meant in our paper, turning gold to lead,” Mossoff said, referencing a paper on the U.S. patent eligibility doctrine which he co-authored and was published in March. Changes to this doctrine have caused R&D funding and investment to leave the United States and enter jurisdictions like China and the EU. “For the first time we are shutting our doors to this cutting edge innovation and the rest of the world… are saying, ‘Come here,’” Mossoff said. “‘Bring your inventions here. We will provide you with the property right protections.’ And as the result, that is where the licensing will occur. That is where the manufacturing will occur. That is where the economic activity will occur. As a result of that, that is where you will see the job growth and the economic growth in their innovation economies.”

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 8 Comments comments. Join the discussion.

  1. Anon June 11, 2017 8:36 am

    Bravo.

    Some children stating that the emperor is not wearing any clothes.

    We have a broken scoreboard. First order of business is recognizing that the scoreboard is broken.

    I already have the second order of business started with my suggestions for rectifying that broken scoreboard (and the nature of that scoreboard continuing to malfunction), but will let the comment section here focus on the points to the first order of business.

  2. Night Writer June 11, 2017 9:15 am

    The biggest thing that is lost is ethics. The SCOTUS feels no responsibility to present the truth or seek the truth. Expediency over ethics because they just know what is right. The SCOTUS is little better than common criminals. And academics like Mark Lemley of Stanford are at the forefront of dropping ethics from academy. Let’s look at another chart from Mark Lemley where he does not normalize patent filings to even exclude foreign filings when talking about the impact of litigation on patent filings (much less the population growth or the growth of technology to GDP). Mark Lemley has no ethics and it is shameful that Stanford Law School does not discipline him. We are in a world of post ethics.

  3. Anon June 11, 2017 9:50 am

    Night Writer,

    It is not the first time that ethics has disappeared. History is replete with examples that I still remember to this day, as a child thinking “didn’t they learn their lesson previously?”

    There are “bumper sticker” phrases (well, there are several, but here are two of them) that captures this:

    Those who do not learn from history are bound to repeat it.
    The ends do not justify the means.

    These go together – if we want to give those taking shortcuts through ethics the best benefits of doubts – in that those seeking to shortcut ethics are doing so because they believe in the ends that they are pursuing.

    The truly saddest thing about all of this though is that the number one intent of higher education – that of teaching critical thinking – is the first casualty of the capture of the educational system and the redirection of that educational system to be a channel for pursuing some (deemed) “correct” Ends.

    We have literally raised generations now of those who cannot employ critical thinking and instead only see that somehow the (deemed) “correct” Ends must be achieved, and it just does not matter how those Ends are achieved.

  4. angry dude June 11, 2017 6:14 pm

    He-He-He..

    Patent Titanic is already 80% under the water but on the upper deck some “luminaries” keep talking about recognizing “broken scoreboard”

    Wake up, dudes, most of (valid) US patents have lost nearly all of their value over the last decade
    Just think about this sorry fact for a second

  5. angry dude June 11, 2017 6:29 pm

    I was buying some cutting-edge VR tech from China lately

    Installation menus -all Chinese, user manuals – all Chinese, pre-loaded titles – all Chinese… go figure it out
    Those companies are well financed in China, so why don’t they care about people in great old USA ?
    But they simply don’t … because they can…
    Start learning Mandarin

  6. Anon June 11, 2017 7:18 pm

    Your FUD to the benefit of the Infringer’s Rights crowds is impressive, angry.

  7. Night Writer June 11, 2017 8:56 pm

    @5 angry dude: there is also indications that China is starting to take the lead in some areas.

  8. Frank Lukasik (Anon 2) June 13, 2017 10:15 am

    The Supreme Court dismissed my Petition to stop the expiration of 1500 Patents every Tuesday for non payment of Maintenance Fees, and for the AIA taking the Patent system away from Independent Inventors with their first to file system. Lucree v.US (14-1340)

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