The unfortunate reality is the United States is no longer the most favorable jurisdiction for innovators. There has been a full assault on patent rights that started at least as early as 2005 when the U.S. Supreme Court issued its decision in eBay v. MercExchange. Encouraged by this success in the courts, which largely ushered in an era of compulsory licensing, the forces that wanted to weaken the patent system to suit their own agenda put their foot on the accelerator. Ever since we have seen proposed legislative change after proposed legislative change, as well as a never ending stream of cases at the Supreme Court and Federal Circuit that continue to weaken patent rights. Innovators are under attack from ever expanding judicial exceptions that render more and more subject matter patent ineligible, and from an ever expanding view of what it means to be obvious. This coupled with fresh new ways to challenge issued patents and concern about a patent litigation explosion that doesn’t exist is leading to extraordinary mischief in the Courts, on Capitol Hill and in the White House.
“The Supreme Court is making national economic policy in Section 101 cases, despite lacking economic expertise, factual information or statutory authority, based on its own decades-to-century-old dicta and unfounded assumptions that seem merely to mirror editorials in certain media that equally lack factual basis,” former Federal Circuit Chief Judge Paul Michel says. “Meanwhile, Congress threatens to micro-manage patent infringement proceedings, abrogating the Federal Rules of Civil Procedure that controlled all civil cases since 1938, interfering with the independence of this co-equal Branch of government, undermining the Separation of Powers and severely restricting the necessary discretion of Federal judges.”
These and other issues will be the focus of a free webinar I am hosting on Thursday, November 13, 2014. The webinar, sponsored by Innography, will take place from 12pm to 1pm Eastern. Joining me will be Judge Michel and Richard Baker, a senior IP licensing executive who is on the Board of LES and is one of the top 300 IP strategists according to IAM Magazine. Judge Michel will provide commentary both about what we are seeing in the Courts and inside the beltway with respect to legislative initiatives ostensibly aimed at “solving” problems. Baker will discuss the implications on the patent brokerage and licensing business of so many patent claims being invalidated as a result of SCOTUS decisions, and will specifically address how things have changed over the past several years.
This is the third and final installment of my recent interview with former Federal Circuit Chief Judge Paul Michel. In this installment of the interview we discuss the future of the Federal Circuit now that Judge Rader is a private citizen. We discuss the type of candidate that should be appointed to replace him, and the always concerning panel dependency.
QUINN: So now we still have one topic still to discuss. Perhaps, if you have the time, we could talk about the Federal Circuit. I don’t want to get into any of the touchy subjects, which some people are diving into. I’m more interesting in talking about moving forward, you know, Judge Rader is now a private citizen and he was clearly one of the champions of the patent system and a believer in the power and the importance of patents. And now he’s not on the Court any more. I wonder what that’s going to mean moving forward. I wonder— and then I can’t help but wonder about panel dependency, which is a problem that a lot of people talk about. And particularly in light of the fact that the Supreme Court has remanded Ultramercial to the Federal Circuit. And Judge Rader was on that panel. So you already have people talking about whether that outcome in what could be a very important case will become panel dependent.
MICHEL: Right. Well, first of all I think Judge Rader will continue to play a very constructive role as a vocal spokesman now in the private citizen realm. And in fact being a private citizen he can be much more frank and candid than he was able to be as a sitting judge. So his voice may get even more interesting and even louder as a part of the overall debate. His replacement will be very important. So just as people are focused on is Phil Johnson going to become the new patent director, will he get nominated, can he get confirmed, how will he do? All those interesting very important questions, people should also be asking who will replace Judge Rader? Who will get nominated, can that person get confirmed, can they get confirmed as fast as they need to get confirmed so the Court is at full strength?
On July 3, 2014, I had the opportunity to interview Judge Michel, former Chief Judge of the United States Court of Appeals for the Federal Circuit. The interview took place at the University Club in Washington, DC. Our conversation was wide ranging, dealing with all the pressing issues of the moment in the patent world. In part 1 of the interview Judge Michel explained exactly why the Supreme Court’s decision in Alice v. CLS Bankwas terrible, saying that he thought the decision would lead to “total chaos” because there is no repeatable, predictable test that can be objectively applied.
In part 2 of the interview, which appears below, we continue our discussion of Alice, but focus on how the Supreme Court is importing considerations that historically (and correctly) are matters of obviousness under 35 U.S.C. 103.
QUINN: Well, I know one of the things that we’ve talked about in the past as a concern is with all these decisions patents have gotten a lot longer, a lot more difficult to read, and really almost in some ways hide the innovation. And it’s not necessarily a conscious “I want to hide it,” sometimes it may be, but patents from 50, 60 years ago used to be a couple pages long and that included the drawings. What do you think the Alice decision is going to do to the complexity of patent applications moving forward?
MICHEL: Well, it’s hard to imagine that it will encourage shorter or simpler applications. But I don’t really know. I can’t predict. And part of what worries me is the extent of the harm is difficult to gauge. I think there will be harm. My concern is that it’s likely to be massive harm. But it can be equally argued that the harm will be very small because really nobody knows. So we’re taking a huge gamble here where nobody knows what the risks and harms can be. Also consider this you talk about the stability of property regimes in the law, how about the right of a property owner as to who’s going to decide things? In our lawsuit where you sued me if I claim your patent’s invalid as obvious I’ve got to prove it. I’ve got to prove it to an elevated burden with admissible evidence to a jury. But in a 101 matter it looks to me like there’s no role for the jury it’s all going to be up to the district judge to decide whether to invalidate the patent by declaring it ineligible. So there’s a lurking issue here of right to jury trial because the Supreme Court has now shifted the center of gravity of an invalidity case from the trial and the jury to a pretrial motion with no jury and probably very limited factual records.
Chief Judge Michel (ret.), Dec. 10, 2013, at IPO Inventor of the Year ceremony in DC.
Recently I had the opportunity to sit down with private citizen Paul Michel, who we know in the patent community as the former Chief Judge of the United States Court of Appeals for the Federal Circuit. Judge Michel left the Federal Circuit several years ago now, choosing to retire rather than take senior status. Michel told me back then that he wanted to step down so he could say what needed to be said on behalf of the patent system, something he felt he couldn’t do while a member of the federal judiciary.
Judge Michel has been true to his promise. He keeps an active speaking schedule, he continues to appear on Capitol Hill to discuss matters of concern for the patent system, he continues to attend numerous industry events, and he has freely given of his time on the record for us at IPWatchdog.com.
In our latest conversation we talked about a great many things, including the seemingly inevitable nomination of Phil Johnson as Director of the USPTO, which now seems very unlikely. We also spent considerable time talking about the Supreme Court’s decision in Alice v. CLS Bank. As you will read in the interview below, Michel thinks the decision was terrible and will lead to nothing short of chaos because there is simply no workable, repeatable test that can evenly and predictably be applied by the numerous decision makers in the patent world.
Phil Johnson at IPO Inventor of the Year award ceremony, December 10, 2013.
The Washington Post recently reported that the anticipated nomination of Phil Johnson to head the United States Patent and Trademark Office is dead. News of the death of Johnson’s nomination is both a shocking surprise and yet all too predictable in a town that increasingly makes little logical sense. Johnson is extraordinarily qualified, he is willing to take the position, he has seen the patent system from virtually all vantage points, and yet his nomination has stalled after many months of vetting and no legitimate red flags surfacing.
It seems that Johnson’s major flaw may be that he strongly supports the patent system, which is a very sad commentary. In fact, there are some starting to believe that the only candidate that may be acceptable to certain political forces is one who opposes the patent system on a fundamental level. Of course, such a candidate would be unacceptable to a great many other powerful industry interests, so this could mean that the USPTO will indefinitely be without a politically appointed and confirmed leader, at least unless the White House is willing to step up and make a nomination.
I am on record supporting the nomination of Phil Johnson, and simultaneously pointing out that the proffered rationale used by his detractors is factually false. Those suggesting Phil Johnson hasn’t been supportive of patent reform efforts are simply misinformed. In fact, you would be hard pressed to find anyone in the private sector who has been more supportive of patent reform over the last 8 to 10 years. In fact, Johnson was a strong supporter of the American Invents Act (AIA), which has been one of President Obama’s signature accomplishments. Johnson was also a strong supporter of fee-shifting legislation. Stay tuned more on Johnson’s support of patent reform efforts in the coming days and weeks.
Former CAFC Chief Judge Paul Michel filed an amicus brief in Alice v. CLS Bank.
In a few weeks, the Supreme Court of the United States will begin to hear arguments in Alice Corp. v. CLS Bank International. This case involves the very basics of U.S. patent law, namely what is considered patent eligible, and will have wide-reaching effects in the American technological sector. The case before the Court will ask it to decide upon the patent eligibility of software based on the most foundational aspects of patent law: Section 101 of U.S. Code Title 35. If a category of innovation is not patent eligible under Section 101 it does not matter whether the invention is highly useful, new and non-obvious. In fact, an invention can even be pioneering and revolutionary and not deserve a patent if it is deemed patent ineligible under Section 101. Because a determination that an entire area of technological pursuit can be deemed patent ineligible under Section 101 historically that has been only infrequently used so as to not unnecessarily kill innovative developments in their infancy.
In recent years, however, the Supreme Court has shown far more willingness to find things patent ineligible, which is a disturbing trend. In fact, In Mayo v. Prometheus, the Supreme Court conflated Section 101 with 102 to say that something that a patent claim that does not related to a law of nature was still nevertheless patent ineligible as a law of nature because the additional steps added that made it different than a law of nature were merely conventional. Up until Mayo such an analysis had been mandated by the Supreme Court to occur under Section 102. Indeed, the statute the Supreme Court ostensibly must follow requires novelty and conventionality to be addressed under 102. Thus, as the result of Mayo, and the Supreme Court’s decision in Myriad, there is great concern about the future of patent eligibility because it seems the Supreme Court now seems to prefer to find inventions patent ineligible without the mandated statutory analysis under 102, 103 and 112.
Software innovations are ubiquitous in our country, in use by machines and systems from consumer devices on to basic utility grids. There are numerous individuals who are keenly interested in the outcome of this case, and many have volunteered to participate and provide their insight, opinions and arguments to the Supreme Court. With this in mind we wanted to share some of the most informative amicus curiae briefs that have been filed with the U.S. Supreme Court. We have already published articles about the IBM amicus brief, the brief filed by the Solicitor General and the Trading Technologies amici brief joined by another 45 companies. Now as a part of our ongoing coverage of this case, we’ll look at what several other interested parties have to say about the patentability of software, and how our country’s patent system should be treating this issue.
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.
Left to Right: DePaul Law Professor Josh Sarnoff, Chief Judge James Holderman (N.D. Ill.), Ray Niro, Chief judge Michel (CAFC, ret.), DePaul Law Professor Roberta Kwall.
Former Federal Circuit Chief Judge Paul Michel gave an invigorating speech at the DePaul University College of Law Center for Intellectual Property Law & Information Technology (CIPLIT®) on October 15, 2013 at the 15th Annual Niro Distinguished Intellectual Property Lecture on the topic “How to Retain Patent Enforcement While Reforming It – Judges and Counsel Should Manage Infringement Suits, not Congress.”
To an evenly divided room of practitioners and law students, Judge Michel urged practitioners to take action against Congress’ incorrect understanding of the patent system. Judge Michel explained legislators are proposing bills because they are being heavily lobbied by a small (but powerful and well-funded) coalition of companies. He highlighted the common problem with the nine active bills currently before Congress. If passed, the bills separately and together would weaken the patent system; not strengthen it. None of these current bills would address the problems with the current patent system: litigation is slow, complicated and unpredictable. The bills, however, would make litigation slower, more complicated and less predictable. In short, congress’ solution would add to the problem.
On Monday the Intellectual Property Owners Education Foundation held its popular annual event simply titled PTO Day, which started early in the morning and ran throughout the day. PTO Day is, however, not the only event on the IPO calendar for December. After the close of the conference proceedings and as afternoon turns to evening a who’s who of the patent and innovation communities don black-ties (for the men) and elegant gowns (for the ladies).
One of the highlights of the year in such circles is the awarding of the National Inventor of the Year Award at a dinner ceremony in Washington, DC. This year the Awards Ceremony was hosted at the old Patent Office building, which today houses the Smithsonian American Art Museum and the National Portrait Gallery. If you have never been to this venue it is, in my opinion, one of the finest venues in all of Washington, DC for such an event. Of course, the fact that it was a first class, extraordinarily well done event only added to the evening. The meal was a fabulous shrimp appetizer, followed by filet mignon and an incredibly rich chocolate cake and ice cream for desert. The wine flowed throughout the evening, and everyone had a great time.
On Sunday, September 30, 2012, Timothy Lee of Ars Technica wrote a terribly researched and demonstrably erroneous article attacking the Federal Circuit titled How a rogue appeals court wrecked the patent system. The article is a cheap shot, factually inaccurate and just plain embarrassing. Lee concludes the Federal Circuit is at the heart of all problems in the patent system, which is, itself, simply not true. Of course, conclusions are not evidence and if he could have backed up what he was saying with any kind of factual, true information then it would have been a matter of opinion. Instead, he was wrong about pretty much everything he wrote.