Earlier this morning Wayne Sobon, President of the American Intellectual Property Lawyers Association, sent an e-mail to members announcing that Todd Dickinson will step down as Executive Director of the AIPLA. The announcement suggest this will be effective immediately, and provides no reason for Dickinson’s departure, although the announcement says Dickinson will remain engaged within the IP community.
Dickinson has been rumored to be on various short lists for appointments throughout the Obama Administration. Perhaps Dickinson is stepping down because he is being vetted for an appointment, or perhaps he just needs a break. In any event, for what it is worth, I think Dickinson appointment to the United States Court of Appeals for the Federal Circuit to replace the now retired Judge Randall would be extremely well received within the industry.
Congress is moving forward with at least some patent reform efforts this year, taking up the Targeting Rogue and Opaque Letters Act of 2014, which is scheduled to be marked up in the House Commerce, Manufacturing, and Trade Subcommittee on July 10, 2014. This Subcommittee is a subcommittee of the House Energy and Commerce Committee. This draft of the bill is as it existed earlier this week.
This draft legislation — creatively dubbed the TROL Act — addresses the sending of abusive and bad faith patent demand letters by clarifying that such activity may violate the Federal Trade Commission Act and authorizing that agency and state attorneys general to bring actions to stop the abusive behavior, among other things.
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.
The en banc Federal Circuit on September 13, 2013, heard oral argument on whether to overrule its en banc decision in Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998), and hold that claim construction can involve issues of fact reviewable for clear error, and that it is not entirely an issue of law subject only to de novo review. Lighting Ballast Control LLC v. Universal Lighting Technologies, Inc., Fed. Cir., No. 2012-1014, 3/15/2013.
Lighting Ballast Control LLC (LBC) owns a patent (5,436,529) on control and protection circuits for electronic lighting ballasts commonly used in fluorescent lighting. The patent includes the term “voltage source means” in the following context: “voltage source means providing a constant or variable magnitude DC voltage between the DC input terminals.” LBC sued Universal Lighting Technologies, Inc. (ULT).
District Court Decision
On appeal is the district court decision that a person of ordinary skill in the art would understand the claim term “voltage source means” to correspond to a rectifier or other voltage supply device. It thus rejected ULT’s argument that the term invokes Section 112 ¶6 and that the claim is invalid for indefiniteness for lack of specific structure in the specification. A Federal Circuit panel reversed in a nonprecedential decision, concluding from a de novo review that “voltage source means” does invoke Section 112 ¶6 and that the claim is invalid for indefiniteness. That panel decision was vacated when the appellate court decided to consider the claim construction issue en banc.
The Supreme Court on June 24, 2013, called for the views of the Solicitor General on petitions to review the Federal Circuit’s en banc decision on joint infringement of process patents. That decision held that induced infringement of a process patent claim may be found even though no single entity performed all of the claimed steps as long as claim steps are performed collectively by multiple parties. In Akamai Technologies, Inc v. Limelight Networks, Inc., U.S., No. 12-960, 6/11/2013, the question presented is:
Whether a party may be liable for infringement under either 35 U.S.C. §271(a) or §271(b) where two or more entities join together to perform all of the steps of a process claim?
In Limelight Networks, Inc., v. Akamai Technologies, Inc., U.S., No. 12-786, 6/11/2013, the question presented is:
Whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U.S.C. § 271(b) even though no one has committed direct infringement under §271(a).
The Supreme Court on May 20, 2013, agreed to review a Federal Circuit decision that a patent licensee bears the burden of proof in its action for a declaratory judgment of noninfringement where the license remains in effect to preclude the defendant patentee’s infringement counterclaim. Medtronic Inc. v. Boston Scientific Corp., U.S., No. 12-1128, 5/20/2013.
The question presented in the petition for certiorari is as follows:
In Medlmmune, Inc. v. Genentech, Inc., 549 U.S. 118, 137 (2007), this Court ruled that a patent licensee that believes that its products do not infringe the patent and accordingly are not subject to royalty payments is “not required … to break or terminate its … license agreement before seeking a declaratory judgment in federal court that the underlying patent is … not infringed.”
The question presented is whether, in such a declaratory judgment action brought by a licensee under MedImmune, the licensee has the burden to prove that its products do not infringe the patent, or whether (as is the case in all other patent litigation, including other declaratory judgment actions), the patentee must prove infringement.
On Tuesday, May 21, 2013, Jeffery Lewis, who is the President of the American Intellectual Property Law Association (AIPLA), sent a letter to Sylvia Matthews Burwell, who is the Director of the Office of Management and Budget (OMB). In this letter Lewis, speaking on behalf of the AIPLA and its 15,000 members, challenged the legal interpretation of the budget cuts the Obama Administration says are required of the USPTO thanks to sequestration.
In the letter Lewis points out that the USPTO is at a critical point in the implementation of the America Invents Act (AIA), and this significant reduction in USPTO funding is based on an erroneous legal interpretation. Lewis also points out that the cut in funding to the USPTO is contrary to the promises made at the time the AIA was passed.
Those of us who followed the AIA debate and passage knew that it would only be a matter of time before the government reneged on its assurances that the USPTO would be allowed to keep 100% of the fees it collected. Senator Tom Coburn (R-OK) championed an amendment that ultimately failed, which would put into the Statute the requirement that 100% of fees collected be allowed to be used by the USPTO. That was rejected by Republican House leaders, who in turn promised in a letter that they would still provide 100% funding. A promise in a letter is, of course, worthless in Washington, DC.
The House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet on March 14, 2013, heard from six witnesses that the business of “patent assertion entities” (PAEs) is inflicting severe harm on a broad range of technology users.
That business involves the enforcement of weak or invalid patent claims against initial and downstream users of devices that are remotely related to the patent claims for the sole purpose of extracting settlements in amounts much lower than the cost of litigating the rights. The witnesses at the hearing agreed that, when confronted PAE demand letters on frivolous claims, settlements by and large are economically unavoidable.
Committee Members Are Cautious
The Subcommittee had before it a particular bill (H.R. 845; the Shield Act) to create a limited loser-pays system. It would award full costs to the prevailing party unless the plaintiff is (1) the inventor, (2) the original assignee, (3) one who produced or sold items covered by the patent, or (4) a university or technology transfer organization.