Judge Michel: Patent Reform Bills Would Weaken Patent System

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.

“AIA II,” as Judge Michel collectively called the bills, assumes that (1) patents owners/NPEs are evil and (2) U.S. District Court Judges are inept at judging bad behavior.  He admonished these assumptions by explaining that while people misbehaving and invalid patents are bad; most people and valid patents are good.  You can’t judge inventors or patent owners by their status- nor can you judge them all the same way.

AIA II would severely restrict a non-practicing entity’s right to enforce its patent.  But, Judge Michel explained, this is contrary to what our Founding Fathers wanted.  British law, at the time, only granted patents to practicing entities.  The drafters of our Constitution did not want to limit patents to the rich and wrote our laws to reflect that position.  Judge Michel emphasized this point by invoking the names of Thomas Edison and the Wright Brothers as people who were then able to choose “inventor” as a career.  Neither of them ever produced a product.  They were non-practicing entities and would be considered as such by the bills before Congress.

Further, district court judges currently have an array of tools to punish bad behavior and they use them.  Such tools include Federal Rule of Civil Procedure 11 and 28 U.S.C. § 1927.  The court system does not need Congress to step in.  Indeed, our Forefathers desired a separation of powers.

Judge Michel also addressed Chief Judge Diane Wood’s recent speech on returning patent appeal jurisdiction from the Federal Circuit to regional circuits.  He disagreed with her arguments and further explained Japan and other countries are creating unified appellate court systems modeled after ours.

Patents are the single best incentive for innovation.  They also are the best promoter for job creation and growth.  Judge Michel urged both students and litigators to get involved by writing letters to Congress expressing the opinions of the IP community and also asking that hearings include positions from judges and IP practitioners.  Otherwise, Congress will only hear one side of the debate and take action that will weaken the patent system.

Niro Haller & Niro has sponsored the Distinguished Intellectual Property Lecture series since its inception in 1998.