I frequently ask myself why it is that patents continue to come under attack by those who want to pretend they are only a burden on society and provide no benefit.  Believing patents provide no benefit to society demonstrates a failure to understand fundamental aspects of the patent system, disclosure and publication of applications, as well as the basic economic reality that to innovate requires funding.  Innovation, particularly cutting edge innovation, requires quite a bit of funding, sometimes many millions or hundreds of millions of dollars of funding.  Where will that money come if there is no reasonable expectation of recouping the investment?  Free-riders are not innovators and policies that encourage free-riders at the expense of innovators are nonsensical.

At this time of the year all typically sit back and reflect on the year that has been, spend time with family and friends, watch some football and set a course to follow into the new year.  It is also that time of the year where we are inundated with lists, top 10 this, top 10 that, it gets rather mind numbing after a while.  So with that in mind — I have my own top 10 list.  I know, I know, but they are so much fun to put together and there is something useful about looking back and reflecting that helps put things into perspective.

Without further ado, here are the top 10 events that shaped the patent, innovation and intellectual property industry during 2010 — at least according to me, and with a heavy patent emphasis.  What did you expect?

Senator Birch Bayh

On October 12, 2010, I had the honor of interviewing retired United States Senator Birch Bayh at his office at Venable LLP.  Senator Bayh was the primary architect of the landmark Bayh-Dole Act, which gave Universities the ability to own the patent rights to the inventions made.  The 30th Anniversary of passage in Congress is rapidly approaching, which provided the backdrop for our discussion.

Those familiar with Bayh-Dole and government funded research in generaly know that the United States has for years funded research at Universities.  Prior to the enactment of Bayh-Dole, however,  it was virtually impossible for private enterprises to license the rights to patents obtained through federally funded research. Thus, society was funding the research and the innovations were simply being withheld from the public due to the existence of too much red tape. Bayh-Dole changed everything, and has been described as the “the most inspired piece of legislation to be enacted in America” since the end of World War II.

In part 1 of the interview we discussed some of the accomplishments of Bayh-Dole and Senator Bayh told me the story of how Bayh-Dole came to be. But for another Senator lifting a hold with an hour left in the 1980 lame duck session there would never have been a Bayh-Dole Act. In this second and final installment of my interview with Senator Bayh we will discuss the aforementioned loft praise for Bayh-Dole, which came from The Economist. We will also discuss statements of Vice President Biden (when he was a United States Senator) regarding the tremendous success of Bayh-Dole, how the United States can stay on the cutting edge of technology, and how to successfully lobby for changes in the patent system.

As the evening moves forward it is increasingly apparent that the Republicans are having an excellent night, and exactly what the vast majority of pundits have predicted seems to be coming true. The Republicans are poised at this hour to take control of the United States House of Representatives by margins larger than the last so-called Republican Revolution, which swept Republicans to power in 1994. The Republicans are also poised to gain substantial numbers in the United States Senate, although it seems likely they will fall short of the 10 needed to take control of the Senate, as widely predicted. Republican Governors seem to be fairing exceptionally well, as are Republican State Representatives and State Senators, which has long-term implications with redistricting on the agenda over the next several years. Not withstanding the potentially historic nature of this election, there will be plenty of time to consider what the election results mean in general, for business and for a variety of issues important to families; the so-called kitchen-table issues. But for tonight I will reserve my commentary to what the election results mean for patent reform. Those following my recent articles might find themselves surprised.

In order to discuss the impact of patent reform we first need to define what is meant by “patent reform.” I am going to divide patent reform into two categories: (1) pending patent reform that might get consideration in the lame duck session; and (2) patent reform that we desperately need the next Congress to take up.

The Honorable Paul Michel, Chief Judge of the CAFC (ret.)

In July 2010 I had the privilege of interviewing Chief Judge Paul Michel of the Federal Circuit, who had just recently retired from the Court effective May 31, 2010. Chief Judge Michel spoke with me on the record for over 1 hour and 40 minutes, and even then I only was able to get to a fraction of the topics that the Chief Judge agreed to discuss on the record. Chief Judge Michel agreed to go back on the record with me to address those additional topics, such as the confirmation process to become a judge, the state of the federal judiciary, funding for the Patent Office, Federal Circuit decisions over his tenure on the Court and more. We had our second interview on September 24, 2010, again at the University Club in Washington, DC.

The timing of the publication of this second interview with Chief Judge Michel is quite fortuitous. This evening the Federal Circuit Bar Association is holding a retirement party for him, together with dinner and dancing. Unfortunately, I find myself in San Francisco teaching the PLI patent bar review course and I am unable to attend. Renee Quinn is attending the event and will have a full report of the festivities, so check back tomorrow for more.

WASHINGTON (Wednesday, Sept. 15, 2010) – A bipartisan group of 25 Senators Wednesday sent a letter to Senate Majority Leader Harry Reid (D-Nev.) urging him to schedule a vote on the bipartisan Patent Reform Act. The legislation will make the first reforms to the nation’s patent laws in more than 55 years, and will update the patent system to improve patent quality and increase certainty among parties in litigation.

Last week the United States Court of Appeals for the Federal Circuit issued a ruling in Goeddel v. Sugano, which might be one of a dying breed should patent reform actually pass.  The case dealt with an appeal from an interference proceeding where the Board awarded priority based on a Japanese application.  The Federal Circuit, per Judge Newman, explained that it was inappropriate to say that the Japanese application demonstrated a constructive reduction to practice because the application merely would allow the skilled reader to “envision” the invention covered in the interference count.  If patent reform passes (and yes that could really happen) cases like Goeddel would become a thing of the past, although priority determinations like this one in Goeddel will certainly not go away.

Todd Dickinson, AIPLA Executive Director, 8/19/10

In this second installment of my interview with current AIPLA Executive Director and former USPTO Director, Q. Todd Dickinson, we start out discussing pendency at the Patent Office.  Dickinson tells me about the incentives he used to keep patent examiners as they matured into the level of experience where they are ready to really roll up their sleeves and become the work-horses the Office needs.  We talk about the AIPLA position on the proposed Three Track Proposal now pending at the USPTO.  We then moved into a very interesting discussion of patent reform, and a bombshell is dropped, at least in my opinion.  I was surprised to hear Dickinson say that he does not think patent reform is dead for THIS legislative cycle.  He says: “The clock’s running and, the plays have to be run a little faster,” but that he “can see a path forward once the Congress returns.”  He goes on to point out that the American Inventors Protection Act was attached to an appropriations bill.  Looking at what Congress has on its plate upon returning it looks like there are a lot of appropriations bills.  Curious indeed!

Mass hysteria seems to have been unleashed on the Internet and directed toward Amazon.com for patenting social networking.  Some of the Internet media have suggested that Amazon has patented Facebook, but it is apparent that virtually no one has read the patent (U.S. Patent No. 7,739,139) past the first sentence of the Abstract, which is really the only thing that gets quoted in most of the stories on the Internet.

It is truly sad that massive anti-patent hysteria can be whipped up simply based on a single sentence in the Abstract of a patent.  For crying out loud people, the Abstract is hardly considered to be a part of the patent application and has absolutely nothing to do with the exclusive rights granted.  The claims are what defines the exclusive right, nothing else!  But we will never get the anti-patent types to ever read a claim because they are just too difficult to understand and there are way too many details.  WAKE UP!  That is the point!  The more details in the claim the more narrow the rights!

Kappos delivers speech at Center for American Progress, 6/2/2010

Earlier today the Center for American Progress hosted a speech given by David Kappos, Undersecretary of Commerce for Intellectual Property and the Director of the United States Patent and Trademark Office.  The speech was open to the public, RSVP was required and space was limited.  A light lunch was served.  I was lucky enough to be present as a member of the Press, and unlike the United States Supreme Court which requires members of the press to sit in partial view seats behind the tall pillars with an extremely large diameter, the Center for American Progress reserved front row seating for the press.  Not that such front row treatment is required, but it sure does make taking pictures far more easy, but I digress.

A packed room of at least 200 individuals, including the newly retired Chief Judge Paul Michel, former USPTO Director Q. Todd Dickinson, former USPTO Director Bruce Lehman and others listened to Kappos give an impassioned speech about how innovation can create jobs, how the Patent Office is unfortunately continuing to hold jobs hostage due to a staggering backlog of pending patent applications and how American economic security depends upon development of a comprehensive national IP strategy.  This is something near and dear to my own heart, as readers of IPWatchdog.com know I have been beating that drum since before Kappos was appointed (for example see this, this, this and that; and more recently here and here, among many others).  But can Director Kappos persuade Members of Congress and others in the Executive Branch of the truth we all know?

Representative Zoe Lofgren (D-CA) grills Kappos on Capitol Hill

On Wednesday, May 5, 2010, David Kappos, Undersecretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office, testified in front of the United States House of Representatives Committee on the Judiciary. See Hearing Page and Kappos Prepared Remarks.  Many issues were covered during the hearing, but there were a couple matters that jump out as quite important. Most significantly, it seems that once again the Senate patent reform bill may be running into some difficulty in the House of Representatives. Some in the House of Representatives seem interested in slowing down regarding the substantive changes embodied in the Senate bill, but seem willing to consider legislation less grandiose and focused solely on giving the Patent Office fee setting authority and perhaps the ability to retain its fees. This, however, lead to a heated exchange that has been misreported in some outlets, so lets set the record straight.

L to R: Armitage, Kappos and Gurry chat on
stage before Super Session at BIO

This week I am attending the BIO International Convention in Chicago, IL. This is my first trip to a BIO Convention and I have to say it is a sight to behold. Those running the event expect approximately 15,000 people this year, and the number of buses and cabs lined up outside McCormick Place in a steady and revolving stream suggests that the many attendees are coming and going in great order.

Inside the Convention Center the programs have started in earnest, and the first program I attended today was the first so-called “Super Session” of the Convention, staring David Kappos, the Director of the United States Patent and Trademark Office, and Francis Gurry, the Director General of WIPO, who I interviewed earlier in the day. The conversation was facilitated by Bob Armitage, the Senior Vice President and General Counsel of Lily, who himself would be a headliner on most other occasions. The session title was “Leveraging IP to Spur Global Biotechnology Innovation, Investment and Jobs,” which largely was preaching to the choir. You would be hard pressed to find a more patent dependent industry in the US and worldwide than the biotech industry, particularly when you realize that as BIO defines the biotech industry it not only includes those companies with a clear biotech research and development focus, but also includes pharmaceutical development.

Without strong patent protection the entire industry would not exist, and neither would the countless thousands of companies and the hundreds of thousands of jobs. While it may be in vogue in some circles to beat up on those innovating on new frontiers the reality is that without such innovation real people would not have paying jobs, and life saving innovations would not occur. So for those paying attention the greater good is clearly on the side of the industry and not on the side of those who vilify the industry to forward an agenda. But there I go again.  It seems even when I try and play it straight I just cant help but weave my 2 cents in!

What follows are pieces of Director Kappos’ remarks at the session prior to taking questions and answers.  While it is probably unfair to call these remarks prepared remarks, it was clear that he referred to his notes as he provided detailed information and statistics.  He also seemed to be reading what he said when he spoke about the ACLU case against Myriad Genetics, but who can blame him given the USPTO was a nominal party to the case and it will be appealed to the Federal Circuit.  Discretion is the better part of valor, and while I was somewhat surprised he addressed the case so directly, I was glad he did.  After all, how could he present at a BIO Convention and not discuss the 800 pound gorilla in the room?

In a decision handed down earlier today in Avid Identification Systems v. The Crystal Import Corporation, a bad acting President of a closely-held company managed to create potentially bad inequitable conduct law for the rest of us. Intent to deceive was admitted, if you can believe that, but as it turns out the prior art withheld, a prior sale, was not invalidating and would not have lead to an appropriate rejection by the Patent Office. Nevertheless, the prior sale of an earlier version of the invention in question was the closest prior art and the Federal Circuit, per Judge Prost, explained that materiality does not require that the the withheld prior art lead to a good rejection. So Judge Prost applied the Patent Office law relative to materiality as it existed prior to the 1992 revision of 37 CFR 1.56. In a feat of mental gymnastics, however, Judge Prost quoted the current Rule 56 to support her decision, muddying the waters even further in the area of inequitable conduct. Who would have thought muddying the inequitable conduct waters was even possible!

Senator Patrick Leahy (D-VT), Chair of Judiciary Committee

Senate Judiciary Committee Chairman Patrick Leahy (D-VT) recently came to agreement with Committee Ranking Republican Jeff Sessions (R-AL) on changes to the Patent Reform Act of 2009 (S. 515), winning Senator Sessions’ support for passage and making it extremely likely that patent reform will happen this year, and likely very soon. An individual involved in the ongoing patent reform debate on Capitol Hill tells me that the Leahy-Sessions language would substitute for the Committee-passed language, and then be considered by the Senate as a whole. This is an important procedural step toward passing patent reform, and could mean that patent reform will be passed by the full Senate any day now. Leahy’s procedural move is called a “hot line”, in which Senate Majority Leader Harry Reid (D-NV) will ask all Senate offices for unanimous consent to proceed to the bill, substitute the new language, and consider it passed.

RENO, NV: A group of Nevada patent owners and experts announced the formation Thursday of a coalition to oppose legislation aimed at changing U.S. patent laws in a fashion that will have a strongly negative impact on patents, innovation, and job creation generally and particularly in Nevada.

Called “Nevadans for Fair Patent Reform,” the coalition combines the leadership of some of the state’s top entrepreneurs and innovators with the technical expertise of attorneys from top intellectual property businesses and law firms.