One of the longest running features on IPWatchdog is our Industry Insider’s series, which started out many years ago with an annual “wishes” article. Each year we invite industry insiders to make patent wishes for the new year.
For my wishes, I’ll make four. First, as I did last year, I again continue to wish for patent eligibility reform in Congress that would overrule Mayo, Myriad and Alice.With there major industry organizations coming out in 2017 to support legislative reform perhaps this wish will eventually come true, although as of now it seems to be a long shot in 2018. Second, I hope the Federal Circuit dramatically decreases its use of Rule 36 affirmances, and specifically stops using this docket management tool when cases are appealed from the PTAB and also with respect to appeals dealing with 101 patent eligibility issues. Third, I wish for the AIA post grant procedures to be declared unconstitutional, which with the Supreme Court set to decide Oil States in 2018 is at least plausible. Finally, assuming the Supreme Court does not do away with post grant challenges, I wish for the new PTO Director to dramatically reform the post grant process in ways that remove the systemic biases that have made the proceedings hopelessly one-sided against patent owners.
Without further ado… I present the patent and IP wishes of our industry insiders for 2017.
Chief Patent Counsel, IBM
I wish for a successful and lengthy term in office for the next Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office (USPTO). Although the next leader of the USPTO will likely be Andrei Iancu, my wish is not specific to him, but to anyone confirmed as the next leader of the USPTO because the near future will be critical to the patent system and the US economy.
Let me explain what I mean by a successful and lengthy term in office. By “successful” I refer to substantive intellectual property and related public policy accomplishments. I have previously written about the challenges facing the next USPTO leader and the direction needed to meet those challenges (here, here and here). In recent years many fundamental and important issues have deeply divided the patent community. Attempts to influence policymakers have intensified into public protests with sharp rhetoric that has confused the public about the value of the patent system. To be successful, the USPTO leader will need to advance balanced positions around which consensus is built and investment in both innovation and production thrive. If the USPTO leader is not able to bridge the sharp divide that currently exists, the public’s confidence in the US patent system will continue to deteriorate and the U.S. economy will suffer.
Why do I also refer to a “lengthy term” in office? The typical USPTO leader (not counting those USPTO leaders that have served in an acting/interim capacity) serves for only 3-4 years, even when the President appointing the USPTO leader is re-elected. Frequently changing USPTO leadership, responsible for managing a complex system that so significantly impacts the US economy, likely results in uncertainty, a lack of continuity, and lost opportunities to ingrain sound patent policy. We need USPTO leaders with the foresight to initiate sound strategies and the runway to see them through — beyond that which can generally be accomplished in just a few years. As other countries strengthen their patent systems (recognizing the growth and societal benefit of patents that the U.S. has long promoted) it is vital that the U.S. also advance our patent system with vision and consistency. I fully respect the right of each President to opt for a new USPTO leader and I understand that leaders step down for many reasons, but it is critical that our country commit to farsighted innovation strategies and the USPTO leader is the epicenter of our centralized intellectual property system and policies. There are appointed government leaders that serve out the entire span of a president’s time in office, and even over-lap presidential administrations.  The success of our next leader of the USPTO will best be achieved and the critical role of intellectual property will best be recognized if that leader is provided the opportunity and the resources to create a legacy that serves as a model for the future.
 As of this writing the Senate Judiciary Committee has voted to advance Mr. Iancu’s nomination to the full Senate for consideration. Joe Matal currently occupies the USPTO leadership position in an acting/interim capacity.
 Consider, for example, many past Chairs of the Board of Governors of the Federal Reserve System. I take no position as to whether the USPTO should exist inside or outside of the federal executive branch departments.
Manny Schecter is Chief Patent Counsel and Associate General Counsel at IBM. He has helped IBM generate over $20B of income from IP during his career while maintaining its position as the top annual US patentee for 24 years.
Schwegman Lundberg & Woessner, P.A.
If you are going to spend time wishing for change, you should wish big. World peace, equality for everyone and the US political divide to heal. So, my wishes for IP change in 2018 are equally big!
My top 4 wishes for IP in 2018 are: 1) The Supreme Court truly embraces the Constitution’s language that patents promote science and the useful arts, 2) Congress corrects the damage done to software-related inventions by amending section 101, 3) the PTAB post-grant institution rate reaches 50% and the invalidation rate after trial drops to 30%, and 4) nobody speaks the long over-used term “patent troll” again.
The Supreme Court has an opportunity to make my first wish come true in Oil States. The Court can hold that patents are property rights granted to promote science and the useful arts and cannot be taken away in an administrative proceeding. I predict, however, that the clear anti-patent bias of the Court since the eBay decision will continue and the Court will rule that patent owners never had an expectation of property rights (especially after the AIA).
Legislative fixes always have unexpected, or ignored, consequences. That is why I am hesitant to wish for Congress to fix the patent eligibility mess created by the Supreme Court. But waiting for the courts to narrowly interpret the Alice and Myraid decisions in all fact patterns is not practical and USPTO certainly cannot solve the problem by ignoring the law during examination. IPO and AIPLA have provided suggested statutory language and I would at least like to see those proposals gain traction on the Hill.
The current post-grant institution rate is too high at about 70%. That rate needs to approach the odds of a coin toss. Further, the claim invalidation rate should approach a level close to EPO opposition rates of 30%. Both parts of this compound wish can come true if the PTAB follows its informative decisions and liberally recognizes where petitioners are trying to readjudicate substantially the same prior art and arguments as those presented during prosecution and considered by the Examiner.
Finally, can we finally move beyond the rhetoric? There is, and never was, a wide-spread patent troll problem. What problems existed with litigation abuse against vulnerable defendants have long since been addressed multiple times over.
Russell Slifer served as Deputy Director of the United States Patent and Trademark Office during the Obama Administration. Prior to that he was Chief Patent Counsel for Micron. He has also served as a Board Member to the Intellectual Property Owners Association and as a President of the Association of Corporate Patent Counsel. He is currently a Principal with Schwegman Lundberg & Woessner.
My hope is that public policy evolves in a manner that strengthens the U.S. patent system, and, more generally, respect for strong intellectual property (IP) rights. My wish list, which does not take into account political feasibility, is as follows (see here for my more detailed discussion of the wish list items):
First, I would like to see enactment of the STRONGER Patents Act, which would subject Patent Trial and Appeals Board (PTAB) inter partes review (IPR) to greater due process and strengthen patentees’ rights in other key respects – by, for example, restoring the presumption favoring an injunction as a judicial remedy for patent infringement. (It would be a nice surprise if the U.S. Supreme Court, in deciding the Oil States case, holds that PTAB IPR violates Article III of the Constitution, but I would not count on it.)
Second, I hope that Congress will hold hearings on the harm to the patent system caused by Supreme Court decisions that have undermined patent rights by: (1) creating new restrictions on patent eligibility; (2) injecting greater uncertainty into “patent non-obviousness” analyses; and (3) broadening the scope of patent exhaustion. Such hearings could pave the way for appropriate legislation to overrule these holdings.
Third, I would like to see the President issue memoranda to federal agencies (and, when appropriate, Executive Orders) making the enhanced protection of patent rights a top Administration priority, to be reflected in the Administration’s formal and informal regulatory actions, policy pronouncements, litigation policy, and international negotiations.
Fourth, I would recommend that the Director of the Patent and Trademark Office (PTO) play a high-profile role in ensuring that a “pro-patent” orientation prevails at the PTO and is communicated to all patent examiners.
Fifth, I hope that the Justice Department’s Antitrust Division, in cooperation with the Federal Trade Commission, will take action to reverse the Obama Administration’s policies regarding the application of the antitrust laws to patent rights. In particular, I hope they clarify that unilateral efforts (not involving anticompetitive agreements with owners of competing technologies) by a patent holder to maximize the value of its patent rights—and, in particular, through patent licensing restrictions—should not give rise to antitrust liability. They should advance sound IP policy through guidance documents, court filings, speeches, and consultations with foreign officials, here and abroad. (Assistant Attorney General Makan Delrahim made an excellent start toward restoring sound IP-antitrust policy in this November 2017 speech. Follow-up initiatives will be most welcome.)
Sixth, and related to the fourth and fifth points, I would hope that the PTO Director and Assistant Attorney General for Antitrust will work closely together to enhance respect for patent and other IP rights throughout the federal government. (There is precedent for this. PTO and the Antitrust Division leadership successfully worked in tandem during the Reagan Administration to strengthen IP rights.)
Alden Abbott serves as Deputy Director of Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation.
Partner, Oblon, McClelland, Maier & Neustadt, L.L.P.
My wish for 2018 is for incoming Director Andrei Iancu to have a long and successful tenure as the new head of the USPTO. I hope that he will bring to the position the vision, energy and leadership needed to strengthen IP rights both abroad and domestically. The opportunities to make great strides in patent harmonization will be at hand in 2018. Taking on the challenges of USPTO funding and avoiding fee diversion, improving patent quality and addressing reformations in the areas of patent subject matter eligibility and AIA administrative trials are some of the key objectives he should adopt early in his new position. I hope that he will be given the freedom to exercise his authority within the Administration to promote pro-IP rights policies and programs for the coming years.
Stephen Kunin serves as an expert witness and consultant on patent policy, practice and procedure. Mr. Kunin served three decades at the USPTO, including 10 years as Deputy Commissioner for Patent Examination Policy.
Partner, Richardson Oliver Law Group
Many people have put a Supreme Court decision in favor of Oil States on their wish lists; however, we predict that those wishing for that will get a lump of coal in their stockings and might better pin their hopes on a new USPTO Director. Nominee Andrei Iancu will play a significant role in the IPR process, possibly striking more balance between patent owners’ interests and the public at large.
Replace the q-word with value when discussing patents: quality discussions lead to multiple non-overlapping definitions and requirements. Our wish is that IP executives would talk more about the value a patent delivers for its intended business purpose.
For example, if your business purpose is counter assertion against a specific operating company then the value is the estimated change in the payment for the cross license with vs. without the patent. Consider this counter example showing why “quality” is meaningless, that same patent has been vetted for validity, infringement, Alice, and similar issues. However, the specific company abruptly terminated the infringing product line last week, quality: great, value: $0.
The punchline from this second example: quality tells you nothing about the ability to use your patent, or portfolio, for its intended purpose. Thus, if the “quality” word was removed from the discussion, more productive discussions might come about. For more on this see our IP Watchdog article, “Patent Quality Isn’t the Question. Patent Value is the Question”.
Mr. Oliver counsels clients on a variety of patent and business matters, including licensing, buying, selling, valuation, prosecution and business processes. Prior to founding the ROL Group, Mr. Oliver was a Vice President at ThinkFire Services USA, Ltd’s Silicon Valley office.
Brody Berman Associates
Giant technology firms with unprecedented growth and size have been blamed everything from anti-trust violations to serially ignoring the inventions and content of other businesses and individuals. They are likely to be blamed for more in 2018. These businesses must be mindful of which way the political winds are blowing. The window is closing on the opportunity to show shareholders (and government regulators) they are able survive responsibly in a complex, knowledge-driven world without destroying others’ innovation. Rather than continue to see most IP rights impediments, and holders who enforce them as threats, smart businesses will learn to emulate and accept good IP behavior, not because it is ethically or legally right, but because it is good for business and value.
Bruce Berman is principal of Brody Berman Associates, a management consulting and IP communications firm. In 2016, Bruce founded the Center for Intellectual Property Understanding, an independent, non-profit that focuses on IP awareness and attitudes.