Not a week passes without commentators extolling the need to remedy a “broken” patent system — a system where patent trolls (also referred to an “non practicing entities” or “NPEs”) that don’t manufacture anything can garner extensive licensing fees from companies, both big and small, which do. And as the debates surrounding NPEs rage on, so too do the calls for patent reform. But if the reform to date has had the unintended effect of creating more opportunity for NPEs, while making it substantially more difficult for innovators without millions of dollars in the bank to protect their intellectual property, shouldn’t we be wary of the harm future reform may cause?
Already, Congress has passed sweeping patent reform known as the American Invents Act (“AIA”). Implemented over a multi-year period, the AIA contains several provisions designed to disrupt NPE advantages and to make it easier for defendants in patent litigation to gain the upper hand. Whereas, for instance, NPEs could previously sue as many defendants as they liked, in one case and with one filing fee, the AIA changed that, requiring the filing of multiple cases and as many filing fees. But much more significantly, the AIA created a slew of game changing, “post grant” proceedings, run very much like mini-trials, which defendants facing NPE district court litigation can file in the patent office and yield to their significant advantage.
WASHINGTON – The U.S. Department of Commerce’s United States Patent and Trademark Office (USPTO) announced that it will host seven roadshows across the country between September 16 and October 9, 2014, to increase understanding of the First Inventor to File (FITF) provisions of the America Invents Act (AIA). The public meetings will serve as an opportunity for USPTO subject matter experts and stakeholders to discuss the FITF provisions and updates since its implementation in March 2013.
The USPTO specifically wants to broaden public knowledge of the FITF provisions and assist understanding of the provision’s administrative processes to aid inventors and their representatives in the filing and prosecuting of patent applications under the FITF system. At each roadshow, panelists will discuss FITF statistics to date, the applicability of the FITF provisions on patent applications filed today, the FITF statutory framework and its exceptions, and AIA evidentiary declaration practice useful to invoke these exceptions. The experts will present a variety of sample scenarios to illustrate both the applicability of the FITF provisions as well as tips for prosecuting applications filed under the FITF provisions.
The U.S. Department of Commerce’s United States Patent and Trademark Office (USPTO) today announced that it will host a public forum to discuss the first-inventor-to-file (FITF) provisions of the America Invents Act (AIA). The forum marks the first anniversary of the implementation of FITF, and will be held on March 17, 2014, at the USPTO headquarters in Alexandria, Virginia. Deputy Under Secretary of Commerce for Intellectual Property and USPTO Deputy Director Michelle Lee, along with experts from the offices of the Deputy Commissioner for Patent Examination Policy and the Deputy Commissioner for Patent Operations, will participate in the event.
The public meeting will serve as an opportunity for USPTO subject matter experts and stakeholders to discuss the FITF provisions and updates since its implementation. The forum will begin with an informal meet-and-greet session, followed by remarks and a question and answer session with USPTO experts. Topics to be discussed include FITF statistics to date, how to know whether an application will be examined under FITF or not, and the exception provisions of the FITF statutory framework. The experts will present a variety of example scenarios to illustrate the FITF provisions.
Under the Leahy-Smith America Invents Act (AIA), Inter Partes Review (IPR) proceedings became an option for challenging validity of a patent at the U.S. Patent and Trademark Office on September 16, 2012. IPR proceedings allow for a petitioner to challenge the validity of a patent under 35 U.S.C. §§ 102 and 103 on the basis of prior art consisting of patents or printed publications. They are supposed to be completed quickly in a maximum of 18 months under 35 U.S.C. §§ 326(a)(11), and the availability of IPR proceedings provides a cost-effective option in litigation tactics. Despite the benefits provided, an Inter Partes Review is not without risk, and just how much risk is not yet known.
There is a time limit for preventing certain petitioners from initiating an IPR proceeding against a patent, and there is currently a petition for writ of mandamus to the Federal Circuit as to the scope of petitioners covered by the time bar. This issue arises because 35 U.S.C. §§ 315(b). 35 U.S.C. §§ 315(b) states that “[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” Unfortunately, the critical question regarding who exactly is covered by “privy of the petitioner” is not defined by the statute and is subject to great debate.
Bernard Knight, known throughout the industry simply as “Bernie,” was an important part of “Team Kappos” during what many are already referring to as the “Golden Years” of the United States Patent and Trademark Office. Knight has a resume full of government service, rising through the ranks to become Acting General Counsel of the Treasury Department, and then General Counsel of the United States Patent and Trademark Office during the Kappos era. That means that he was one of core group of leaders tasked with creating and then implementing the rules of practice necessitated by passage of the America Invents Act (AIA).
In September 2013, Knight left the United States Patent and Trademark Office. I bumped into him shortly thereafter and he agreed to go back on the record with me for an interview, which took place on December 16, 2013. To read my first interview with Knight please see Exclusive Interview: USPTO Attorneys Bernie Knight & Ray Chen.
Knight is now a partner in the Washington, DC, offices of McDermott, Will & Emory, where he focuses his practice on complex patent litigation matters. Knight advises clients on intellectual property cases before the United States Supreme Court, as well as engaging in oversight on patent and trademark cases before the Court of Appeals for the Federal Circuit and the district courts.
There was nothing off the table, so to speak, in this interview. We discuss how and why he choose McDermott, as well as what it was like working for David Kappos and working with Judge Ray Chen when he was Solicitor at the USPTO. We also discuss the future of the Patent Office, the appointment of Michelle Lee to be Deputy Director of the USPTO, substantively what the USPTO was trying to do with respect to post grant procedures, the new ethical rules applicable to Patent Attorneys and Agents, and a variety of other issues.
Phil Johnson (left) and Judge Michel (right) will be on the panel at this Sedona Conference. Shown here at the 2013 IPO Inventor of the Year ceremony.
Next Wednesday, The Sedona Conference will present a webinar that will take a look at an important, topical issue facing innovators – is legislative patent litigation reform necessary or can the Courts handle what some observe are abusive litigation tactics. On January 22, 2014, Patent Litigation Best Practices: A Matter for Congress or for Bench and Bar? will address the issue with an all-star faculty of leading practitioners in the field. The faculty includes former Federal Circuit Chief Judge Paul R. Michel, as well as current Federal Circuit Judge Kathleen O’Malley. Tina Chappell of Intel Corporation, Philip S. Johnson of Johnson & Johnson, and Alexander Rogers of Qualcomm will also offer their perspectives and insights as faculty members.
Patents and patent reform has been in the news, even the popular press, on an increasing basis. The issue of patents generally and patent litigation specifically has been the subject of intense debate over the last 8 years. Congress passed the America Invents Act (AIA) in 2011, with the bill being signed into law by President Obama on September 16, 2011. The overhaul of U.S. patent law was extraordinary, but not all of the parties involved were happy. Some thought the law went too far in some ways, others thought the law did not go far enough. Despite the AIA being the most significant change to patent laws since at least 1952, Congress is considering further reforms again, with the House of Representatives already passing the Innovation Act (HR 3309). Companion legislation in the Senate is likely to move forward during Q1 2014.
2013 turned out to be a very big year for IP, and especially patents, and the year took a course that few would have predicted this time last year. At that time, the senior team at the PTO was primarily focused on the imminent departure of our then-boss, David Kappos, and the end of what had clearly been an extraordinarily active and successful tenure. The AIA had been almost entirely implemented, the new Patent Trial and Appeal Board was up and running, and most of us expected 2013 to be focused on implementation and execution of the AIA and the other initiatives that had been set in motion under Director Kappos.
But things turned out rather differently. Nobody would have predicted a year ago that President Obama would personally call for additional patent reform legislation to curb patent troll litigation. Or that a comprehensive patent litigation reform bill would speed through the House by a lopsided margin and be heading to Senate consideration with a full head of steam. Nobody also would have predicted that the USPTO would also fall victim to sequestration and once again be denied full access to its fees so shortly after the passage of the AIA, which held forth the promise of full access to fees. And few would have predicted that the PTO would be without stable political leadership since Dave Kappos left eleven months ago. Or that a new Chief of Staff and a new Deputy and Acting Director would be named before a new Director was nominated. This unusual and lengthy transition period has caused understandable concern in the IP community, but we should all be pleased that a new Acting Director has been named and will take the reins on an acting basis in just two weeks.
When it comes to the history of software patents it seems that everyone believes they are an expert. Unfortunately, few in the popular press actually take the time to get the story correct. In fact, there is a popular misconception in media that the Federal Circuit was the court that first authorized software patents. I have dealt with this nonsense in the past, and now have to deal with it once again. None other than the Wall Street Journal has published an article on the topic that is simply fiction.
The clearly erroneous Wall Street Journal article in question was published on December 15, 2013, under the title Jimmy Carter’s Costly Patent Mistake. The article, written by Gordon Crovitz, seems to take the position that patents stifle innovation, although Crovitz thesis is not explicitly stated. It would be erroneous enough to state that patents stifle innovation when all of the evidence is to the contrary, but that isn’t the major Crovitz sin in this article, although it is a whopper of a lie often told by patent critics.
Before proceeding, allow me to state what should otherwise be obvious: if patents stifle innovation you would expect run-away innovation in places where there is no patent system, but that isn’t what you see. You see extraordinary poverty, no economy and zero innovation where there are not patent rights. Likewise, you see economies established, domestic innovation and innovation from overseas flowing into countries that adopt strong patent rights. Furthermore, the entire point of a patent system is to grant exclusive rights that force creative, inventive and entrepreneurial individuals who are blocked to design around, which is exactly what happens. Designing around patents leads to enormous leaps in innovation. See Forfeiting Our Future Over Irrational Fear of Software Patents. And for those who don’t get it and erroneously state that we are seeing historic levels of patent litigation, read your history. There were close to 600 patent litigations associated with the invention of the telephone, and smart phone litigation has been but a small fraction of that number. Furthermore, the smartphone as we know it came out in 2007. In the past six years have the over abundance of patents stopped smartphone innovation? Hardly, and everyone who is at all honest knows that to be 100% true. So why the pretending about patents stopping innovation? Obviously there is real patent hatred and critics, like Crovitz, simply ignore facts and prefer their own brand of fantasy over truth.
As ridiculous as it is to suggest that patents stifle innovation, this ill-defined Crovitz thesis isn’t the major issue with the fiction published by the Wall Street Journal. There is objective and verifiable error in his article that even those with an agenda will have to admit.
What follows is a portion of the written statement of Q. Todd Dickinson, Executive Director of the American Intellectual Property Law Association, republished here with permission. Mr. Dickinson testified today at the Senate Judiciary Committee hearing on “Protecting Small Businesses and Promoting Innovation by Limiting Patent Troll Abuse.” To read Mr. Dickinson’s full prepared statement please see Testimony of Q. Todd Dickinson.
Q. Todd Dickinson, Executive Director of the American Intellectual Property Law Association.
A recurring theme that can be traced through the patent reforms of the AIA to the current debate over patent litigation abuse is the issue of patent quality. A key component of the reported abuses is the assertion of allegedly invalid or overbroad patents, the very abuse for which AIA post-grant procedures were created, in order to improve patent quality. These matters of patent quality are being addressed by the changes made to the law by the Judiciary and by Congress in the AIA, which are only now beginning to be felt.4 It may well be premature to conclude that they are not doing the job.
Take one major example, as a former Director of the USPTO in particular, I would support, as former Director Kappos did, giving the post-grant processes in the USPTO a chance to work.
They have only been in place for less than two years, and in the case of PGR, less than one.5 Early data suggests that they are performing in many ways as Congress intended, at least at the macro level, to provide an efficient, less expensive means to address potentially low quality patents. We believe that the prudent course is to give these reforms the chance to demonstrate their efficacy to deal with the concerns for which they were created before we consider making significant additional changes which may have their own unintended consequences. In support of this proposition to wait and see how they are working, we would simply point out that the AIA itself requires that USPTO study the reforms implemented by the AIA and report back to Congress by September 16, 2015. Those reports would serve as an important and more empirically-driven body of data which would allow for greater clarity and direction in making any necessary changes.
Congressman Goodlatte (R-VA), Chair of the House Judiciary Committee
UPDATED: Monday, Nov. 18, 2013 at 1:13pm
Last week CQ Roll Call reported that House Judiciary Chairman, Congressman Bob Goodlatte (R-VA), is continuing to fast track the Innovation Act (HR 3309) despite growing concerns from both Republican and Democrat members of the House Judiciary Committee. CQ Roll Call reports that there are 8 members of the Judiciary Committee who are asking for more time to study the legislative proposal. Two of those 8 are Congressman John Conyers (D-MI), who is currently Ranking Member on the Committee and himself a former Chair of the House Judiciary Committee, and Congressman James Sensenbrenner (R-WI), also a former House Judiciary Chair.
It is hard to understand the rush to move on the Innovation Act, which was only introduced a little more than three weeks ago on October 23, 2013. Yet, despite bipartisan misgivings within the House Judiciary Committee and a growing concern among innovators and Universities, Goodlatte is planning a markup of the legislation for Wednesday, November 20, 2013.
By e-mail sent late this morning House Judiciary Committee Members were advised that if they wanted Amendments to be considered they needed to be pre-filed no later than 11:15am on Tuesday, November 19, 2013. Accompanying this e-mail were the current version of HR 3309 as well as the Manager’s Amendment.
Of course, action in Committee does not guarantee passage by the full House of Representatives, but a bill supported by a senior member of Republican leadership like Goodlatte should certainly get its day on the floor in the House if it makes it out of Committee, which I suspect it will. Even then it would have to go across the Capitol to the Senate before it would ever wind up on the President’s desk.
Enter Professor Robin Feldman, who has become the preeminent researcher on issues of patent litigation, particularly as it refers to so-called patent monetizers. Professor Feldman has found striking new data on patent trolling and the effects of the America Invents Act, which to me suggests that the AIA has clearly been successful in its intended goal of reducing the number of defendants in a single patent infringement litigation.
Professor Feldman’s new analysis was developed by breaking down the massive data set she collected into a month-by-month analysis of patent infringement lawsuits. The data examines all patent lawsuits over four key years, which represents approximately 15,000 patent infringement lawsuits and 30,000 patents asserted. Not surprisingly to those of us who have closely followed the America Invents Act, but there was an enormous spike in litigation leading up to the implementation of the AIA in September 2011. The following graph tells the story.
The USPTO has revised the rules of patent practice to implement preissuance submissions by third parties in accordance with provisions of the America Invents Act (AIA).  Third party submissions provide a mechanism for interested parties to contribute to the quality of issued patents by submitting patents, published patent applications, or other printed publications of potential relevance to the Patent Office for consideration during examination and inclusion in the file. See 37 CFR 1.290(a).
A preissuance submission may be made in any non-provisional utility, design, and plant application, as well as in any continuing application. It is worth specifically noting that preissuance submissions may be made regardless of when the underlying application was originally filed. Thus, a third-party preissuance submission can be made in any application filed on, before or after September 16, 2012.
A third-party preissuance submission must include a concise description of the asserted relevance of each document submitted, and must be submitted within a certain statutorily specified time period. The third party must submit a fee as prescribed by the Director, and a statement that the submission complies with the statutory provision.