A Toxic Brew – and the Cure for the U.S. Patent System

Recently I provided my advice for the Trump Administration with respect to the U.S. Patent and Trademark Office. My advice was simple – revert to a user friendly approach led by careerists who manage the day-to-day operations of the Office with political operators standing to the side to do what they do best.

As full of insight as my observations may have been, other issues tend to dominate how any prescription or remedy might be viewed and implemented by whoever assumes the mantle of Director of the USPTO. For example, the recent article by Gene Quinn discussing the wish list of reforms put forth by the patent infringer lobby should put everyone on notice that these moments of policy consideration, between administrations, create pools of advice from across the patent spectrum. Some good, and some not so good. Mix them together and you get a Toxic Brew.

Why Toxic? Look at the name calling and attendant labeling the Internet Association continues to use. We need to dispatch unhelpful labels, which only obscure the merits of any discussion of how we go forward. Here is an example: The patent infringer lobby (aka – efficient infringers of which Goggle is probably most notorious) has been pitted against the troll lobby (aka – Patent Assertion Entities (PAEs), Universities, aggregators, etc.) for the past several years, with the infringers (aka – technology thieves) largely winning the day against the latter (aka – patent muggers/extortionists). This narrative is responsible for passage of the America Invents Act (AIA), and a number of Supreme Court decisions that seem cognizant of these proxy battles even when the case they are deciding has nothing to do with either.

It is hardly surprising that calling one a technology thief or a patent extortionist will create irreconcilable sides to a given issue and, depending on your perspective, place you on the side of good or evil. Worse (and both sides do this), each perspective has tragic mom and pop anecdotes illustrating just how dire their situation has become! On the one side, without patents, or worthless patents, no small entity/start-up can obtain funding to proceed, or the funding they had dries up; on the other side, you have baseless lawsuits driving unsuspecting defendants to the wall. This way of defining the issues is not helpful to anyone and results in both an administrative and legislative stalemate. All stakeholders suffer by virtue of inaction; a toxic brew, indeed, which undermines the vitality of innovation. Everyone loses.

You see, patent policy is a compass heading set by those largely outside of our insular patent realm. To them, our jargon is dense, esoteric, and incomprehensible. This is underscored by the statement from the Supreme Court bench by the late Justice Antonin Scalia that this patent stuff is “gobble-de-gook.” While you may have disagreed with Justice Scalia’s decision no one could serious characterize him as being “intellectually deficient.” The point being, we need to make suggestions that are well understood by those beyond our little realm, and we need to reconcile these opposing issues before we start issuing policy statements. Legislators are influenced by the last person (and/or last $$$ contribution, if you’re truly cynical) who passed through their office. To make progress, we need to put forth a united front to address commonly perceived problems. If we don’t, the risk is a status quo that is rapidly hollowing out the US patent system.

To wit: last week, I attended a very useful symposium on 35 USC 101 that laid out how dire things have become. The Supreme Court has run two areas of technology, bio and software, into a legal ditch from which there is no escape. Supreme Court decisions on 101 are flatly irreconcilable; and, the interim band-aids being applied by the Court of Appeals for the Federal Circuit are like staunching a dam break with a bucket. It is way, way, too slow and hit-or-miss. The formerly expansive scope of 101 (as recently as Diamond v. Chakrabarty and Diamond v. Diehr, in 1980 and 1981 respectively) has been unwittingly narrowed to exclude huge fields of endeavor and, accordingly, research investment and US patent filings have tanked. Why? The risk of loss, both past and future, is profound. It should be no surprise then that research and progress in these two fields is decamping and moving off-shore, along with the attendant jobs and economic activity. In essence, the boundless technical future, upon which the US economy has long thrived, is being given to others with whom the US competes.

No one, on either side of the political aisle, or on either side of the PAE v. Efficient Infringement argument wants to see this outcome, yet it is this dispute that renders progress impossible. The new Administration has loads of priorities: healthcare, immigration, national security, etc. If we want patents to make that list, and it can, we need to come forward, collectively, with an agreed legislative fix for patents. Someone has to broker peace. That someone has to have a reflexive understanding of where and how to make the fix. If Google and Qualcomm and Pfizer and Ford and Tech Transfer and Independent Inventors all walked around Capitol Hill with the same PowerPoint slide deck – presto – legislative fix done. It would easily tag onto any other of the myriad legislative items that will likely occur. Until we collectively do that, however, nothing happens. Capitol Hill will not broker peace among us, they are not equipped to accomplish that, especially when so many other matters clamor for attention.

As for the 35 USC 101 conundrums, here’s the fix. DO NOT MODIFY 101! Rather, modify the definitions in 35 USC 100 as follows, and also supply a one paragraph legislative history as to why this definition was changed. Be crystal clear! I suggest the following, with new language to be added to the statute underlined:

35 USC 100(a): “The term ‘invention’ means invention or discovery, whether of a naturally occurring or man made phenomena.”

Legislative History of 100(a): This definitional change is expressly intended to overrule the Supreme Court decisions of Myriad and Mayo such that a discovery of a new naturally occurring or man made phenomena, and any application thereof in a process, fall within the ambit of patent eligible subject matter.

35 USC 100 (b): “The term ‘process’ means process, art, or method, whether accomplished manually or through the application of an intermediate controlled device, such as a computer, and includes a new use of a known process, machine, manufacture, composition of matter, or material.”

Legislative History of 100(b): This definitional change is expressly intended to overrule the Supreme Court decisions of Bilski and Alice such that computer implemented methods and the machine control instructions leading thereto are within the ambit of patent eligible subject matter.

Done. 101 is fixed. Investment may resume, the future is secure.

My next few articles, in the spirit of a modern “patent federalist paper”, will seek to fix the PTAB and Post Grant procedure(s)!