Posts Tagged: "Patent Reform"

Earlier today, the United States Court of Appeals for the Federal Circuit overruled the determination of the Patent Trial and Appeal Board (PTAB) in three separate IPR proceedings. The Federal Circuit found the claims of U.S. Patent Nos. 7,742,053, 6,897,871, and 7,327,369 (i.e., the Unified Shader Patents) patentable on appeal. ATI Technologies ULC v. Iancu (Fed. Cir. April 11, 2019). The question at issue was whether ATI Technologies was diligent from the moment of conception through to the constructive reduction to practice. There was no question that ATI’s conception had pre-dated the prior art of concern. Upon reading this decision, it is difficult to understand exactly why or how the PTAB could get this issue so wrong. Indeed, this decision exemplifies why many criticize the PTAB as an institution.

Recently, I’ve written several articles laying the blame for the patent eligibility crisis squarely on the Federal Circuit. Yes, we all know the Supreme Court is obviously to blame. They are the court with primary national jurisdiction, and there can be no doubt that the Mayo v. Prometheus decision is the root of the patent eligibility problem because it intentionally conflates novelty and obviousness with patent eligibility. In my recent writings, and in a variety or presentations and speeches I have been giving across the country—from Utah to Orlando to Charlotte—I’ve criticized the Federal Circuit for not distinguishing Mayo and Alice on the facts. If we listen to the Supreme Court at least, at issue in both Mayo and Alice were unusually simple “inventions” that are really not innovations at all. As I filed my latest article, Eileen said that she thought it was good because it would provoke discussion since I disagreed with Judge Michel’s view in the interview with him she had just published. There was a long pause in our conversation. “Am I really disagreeing with Judge Michel?” I asked. Whenever I disagree with Judge Michel, I pause. It isn’t that I am unwilling to disagree with him, but, over the years, I have come to learn that, when one is going to disagree with Judge Michel, prudence dictates reevaluating your position.

During a break at IPWatchdog’s recent Patent Masters™ Symposium, former Federal Circuit Chief Judge Paul Michel went on record to express his grave concerns about the U.S. patent system and where he believes it’s headed. Like many of the Patent Masters, Michel’s view was decidedly grim, but he did express optimism about the new IP leadership in Congress. Following are Judge Michel’s remarks in full.

IPWatchdog’s most recent Patent Masters™ Symposium, held Monday and Tuesday March 25-26 in Washington, D.C., examined the state of the U.S. patent system and how we arrived here. Some concluded that Congress, rather than the courts, must take action to resolve the many conflicts that presently exist in the muddled judicial approach to patents that has been developed over the last two decades or the U.S. patent system will become irrelevant. While the mainstream narrative traditionally has held that patents impede innovation by making access to technology too difficult or expensive, the narrative that unfolded over the two days of discussions with some of the leading legal experts in the field told quite an opposite tale. Institutions such as the Cleveland Clinic are closing up their diagnostics shops due to uncertainty around Section 101 law in that area, and small businesses are unable to secure funding due to the many risks and expenses surrounding patent enforcement in a post-America Invents Act environment. These developments demonstrate that patents are vital to economic prosperity and that weak patents result in medical and other technologies simply not being made here. Many of the Masters lamented the fact that China and Europe currently have more reliable patent systems than the United States, precisely because those countries have begun to copy the previous U.S. approach, while we stray farther away from it. Alden Abbott, General Counsel of the U.S. Federal Trade Commission, delivered a keynote speech in which he emphasized that uncertainty around the ability to obtain patents is also harming the U.S. competitive process.

USPTO Director Andrei Iancu participated in a fireside chat, titled “The Crossroads of Technology and Innovation,” hosted by the Consumer Technology Association (CTA) at its sixth annual Innovation Policy Day on Tuesday, March 12 at SXSW in Austin, Texas. Sitting with Director Iancu was host Michael Hayes, Sr. Manager of Government Affairs for the CTA. The chat was quite short and briefly touched on topics such as celebrating the 10 millionth-issued patent, the preparedness of the patent system for the future, artificial intelligence and patent eligibility, and the availability of patenting for all peoples. Then, in what some may consider to be an unscrupulous move, Hayes introduced the narrative of patent trolls.

With congress out of session this week, it is a good time to meet the members of the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property, and the Internet, which—unlike the Senate IP Subcommittee—has not yet convened this term. While the House may be largely preoccupied with issues outside the IP realm thus far, other House committees and subcommittees have been actively debating a number of topics relevant to IP. The 116th Congress brings both new and old faces to the Subcommittee with varying levels of IP knowledge and activity. Many of its members, such as Hakeem Jeffries and Zoe Lofgren, are well-versed in IP issues, starting with the full Judiciary Committee Chairman, Jerrold Nadler.

On the afternoon of Wednesday, March 13, the Senate Judiciary Committee’s Subcommittee on Intellectual Property held an oversight hearing of the U.S. Patent and Trademark Office featuring testimony from and questioning of USPTO Director Andrei Iancu. While this hearing was relatively short by Congressional standards, the Senate IP Subcommittee explored recent changes instituted during Iancu’s tenure as USPTO Director and also got into the debate on pharmaceutical patents—a topic that has been front and center for both houses of Congress in recent weeks.

Representative Steve Stivers (R-OH) and Representative Bill Foster (D-IL) introduced the Support Technology & Research for Our Nation’s Growth and Economic Resilience (STRONGER) Patents Act, which would in part restore injunctive relief as a remedy for patent infringement, in the U.S. House of Representatives in March of last year. While there has been much talk about closed-door discussions taking place on Capitol Hill recently around fixing Section 101 law, the House has not yet re-introduced the STRONGER Patents Act, and has thus far been focused on other issues this term. But Rep. Stivers seems confident that the Act has a chance this term, and says that this could be the consensus legislation the House needs. Read below for more on Rep. Stivers’ thoughts about patent reform in the 116th Congress, where the America Invents Act went wrong, and how we ensure the U.S. patent system is restored to number one.

I hold nine U.S. computer security device recovery and communication patents relating to Findmyphone technology, which helps owners display return or recovery information before or with the lock screen to help get their smartphone, tablet, computer or laptop back. In February, I was notified that my latest U.S. application overcame a 35 USC 101 objection following an amendment that explicitly referenced Director Andrei Iancu’s Section 101 Guidance. My story should provide some hope that the guidance can provide a clearer path for inventors on how to adjust their claims to meet the USPTO’s new high standards to achieve success and satisfy the requirements that Iancu is looking for to ensure stronger U.S. software patents.

The state of patent eligibility in America is shocking. Between the passage of the 1952 Patent Act and 2012, when the U.S. Supreme Court decided Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012), the patent eligibility threshold was an exceptionally low hurdle. A group of Senators and Representatives are currently considering a legislative fix to this patent eligibility debacle created by the Supreme Court and perpetuated by a Federal Circuit unwilling to define the contours of a sensible patent eligibility test. These talks, which are being held in closed-door roundtable format, will seek legislative language to introduce soon. It is anticipated that bills will be introduced in both the House and Senate sometime this summer. What those bills will look like seems to be genuinely up in the air—or perhaps it’s better to say open for discussion. If the discussion should turn to the one thing Congress could do that would have the most impact, the answer would be clear. In order to have the most immediate, positive impact Congress must expressly overrule Mayo. The root of all the patent eligibility evil lies with that single Supreme Court decision.

I am sure that the justices of the Supreme Court did not anticipate the confusion they created when they issued their controversial decision in Alice Corporation v. CLS Bank in 2014. That case effectively upended well-established precedence when the Court unanimously held that a computer-implemented scheme for mitigating settlement risk was not patent eligible subject matter because the claims were drawn to an abstract idea, and that merely requiring generic computer implementation fails to transform the claims to eligible subject matter. The Court itself said their holding was to be narrowly construed, but in providing a vague, two-step test to determine whether something is patent eligible, they unleashed a world of hurt on some of our domestic industries seeking patents in cutting-edge technologies. The application of the Alice test to some of our health-related industries is having disastrous effects. On February 6, 2019, in a split decision, the United States Court of Appeals for the Federal Circuit (CAFC) found in Athena Diagnostics v. Mayo Collaborative Services that diagnostic methods are not patent subject matter eligible unless they embody a separate technical improvement beyond the correlation of certain antibodies in bodily fluids to particular diseases. In a footnote, the majority lamented that they felt compelled by Supreme Court precedence to render their decision, but recognized that protection of diagnostic methods would be for good for society. The Athena case does not portend well for the CAFC adoption of the recent USPTO guidance on Section 101. The courts will eventually be able to either put their imprimatur on those guidelines or discard them. The sooner that is done, the better.

Last week, Senator Chris Coons (D-DE) and Senator Thom Tillis (R-NC)—respectively, Ranking Member and Chair of the Senate Judiciary Committee’s Subcommittee on Intellectual Property, which was resurrected on February 7 for the first time since 2007—met with Congressman Doug Collins (R-GA) and others for their second bipartisan meeting in three months in search of a possible legislative solution to the patent eligibility crisis facing biotechnology, medical diagnostics and software related innovations. The same players met in December to begin discussing the issue, and stakeholders are now being told that they should join the conversation sooner rather than later if they want their voices to be heard. With the Senate IP Subcommittee back up and running and the seeming momentum on fixing patent eligibility law, it’s worth taking a look at the Subcommittee’s leadership and what their collective experience could mean for substantive change.

On the morning of February 14, the New Hampshire Supreme Court will hear what could be one of this year’s most important set of arguments related to patent ownership taking place outside of the federal judiciary. At 10:30 AM that morning, the Court will listen to oral arguments in Automated Transactions, LLC and David Barcelou v. American Bankers Association et. al. to determine whether the New Hampshire Superior Court erred by dismissing a defamation case after finding that the term “patent troll” isn’t necessarily pejorative. Automated Transactions and David Barcelou alleged that the defendants in the action made defamatory statements by referring to them as a “patent troll.” This exposed them to hatred, ridicule and contempt, which caused them to be ignored by automated transaction machine (ATM) operators across the country and injured their legitimate business of licensing patents that they developed and that were issued by the U.S. Patent and Trademark Office. The appeal argues that the Superior Court did not examine the full context of the reference to the term “patent troll” when making its determination, dismissing the action before the plaintiffs were able to present any evidence or proof and depriving them of their rights to a trial on the merits.

The cost of obtaining a U.S. patent has not significantly changed for the past 10 years. This remarkable stability is confirmed by the AIPLA Economic Survey, our own fees, and our general knowledge of the market. The major costs for obtaining a U.S. patent include the drafting fee, the cost of responding to USPTO office actions and the USPTO fees. The first two fees have not increased in over 10 years for many firms and the government fees have increased but remain relatively low compared to the other fees. With respect to the price of issued patents, the 2018 IAM Benchmarking Survey points to a bear market for U.S. patents, which are “cheaper” year after year. A fall in prices is reported, with 24% of corporate respondents stating that patents are cheaper than a year ago; the previous year’s survey had 36% reporting a fall in prices. Such relatively stable cost and low price are disharmonious with the fact that a U.S. patent covers the largest market in the world—and a growing market. Despite a slight dip in 2009, the U.S. GDP has grown steadily for the past 20 years. Even if the recent volatility in the stock market is a sign of a difficult 2019, the long-term positive trend is likely to continue.

The opening salvo in what promises to be one of the hottest debates in the new Congress was fired January 29 during a day-long hearing in the House Committee on Oversight and Reform—how to lower the price of prescription drugs. And it didn’t take long to make it clear that patents are right in the middle of the scrum. The role of patents was a prominent part of the House hearing. While cursory nods were made to the importance of encouraging innovation, the witnesses discussed how patent exclusivity, thickets, and evergreening drove up prices while promoting the greater use of Patent Trial and Appeal Board (PTAB) reviews against drug patents. The Committee was assured that curtailing patents wouldn’t harm innovation because the National Institutes of Health (NIH) is such an important funder of life science R&D.