Fixing America’s Patent System is the Best Strategy to Jump-Start our Stalled Economy

By Eli Mazour
April 24, 2017

Today, I launched an online video series (“Clause 8”) that will feature interviews with prominent members of the IP community.  The first posted interview is with former Chief Judge of the Federal Circuit, Judge Paul Michel.  The interview builds on a great series of interviews previously conducted by Gene Quinn and posted on this website.  As the readers of this website know well, Judge Michel is a legendary appellate Judge and has become known for his tireless advocacy on behalf of America’s patent system since his retirement in 2010.

My interview with Judge Michel coincidentally took place the day after President Donald Trump’s first address to a joint session of Congress.  A significant part of our discussion focused on how fixing America’s patent system is necessary for meaningful economic growth for America’s workers and America’s global competiveness over countries like China.  Not surprisingly, Judge Michel thinks that “[w]hile we’ve been weakening our patent system in many ways in recent years, China and other countries have been greatly upgrading their patent systems . . . investment is shrinking here and it’s growing elsewhere” (starting at 2:01 mark of the interview).

Judge Michel kept returning to the theme that the lack of new jobs “is the biggest single problem in America today,” and that “whether you talk about job creation or growth or revival of distressed cities . . . the innovation ecosystem is at the heart of the solution.”

However, this is not just clever positioning by Judge Michel in response to the 2016 election results.  Judge Michel was making the same arguments way back in 2010!  In a New York Times op-ed, published on August 5, 2010, Judge Michel argued that fixing America’s patent system may be the “best strategy” to “jump-start job creation in our stalled economy.”  In another op-ed the following year, Judge Michel highlighted that the ongoing failure to fix America’s patent system is costing an enormous amount of American jobs and bemoaned that President Obama was relying on advice from “a who’s who of outsourcing American jobs.”

Both of these op-eds were co-written with Henry R. Nothhaft.  At the time, Nothhaft was the CEO of the technology company Tessera and co-authored the book “Great Again.”  Yes, as in Make America Great Again.  Although it was originally a Reagan campaign slogan, Nothhaft’s book presaged Trump’s revival of the slogan and Trump’s campaign book with the same title, “Great Again,” by over five years.

To Judge Michel’s chagrin, policy makers in Washington, D.C. did not heed their advice of fixing America’s patent system to cure the economic malaise that is still being experienced by millions of Americans years after the Great Recession.  As countless commentators from across the political spectrum have pointed out, this economic malaise arguably led to Trump’s surprise rise and electoral victory in 2016.

If anything, Judge Michel believes that the situation has gotten only worse since those op-eds were written back in 2010 and 2011.  In the straight-talking manner Judge Michel has become famous for over the years, he told me: “I think [the American patent system is] doing badly, I think it’s highly distressed, has been substantially weakened and needs serious repair, revival, and strengthening.”

Specifically, Judge Michel talked about how the Supreme Court’s recent patent eligibility decisions and the formation of the Patent Trial and Appeal Board (PTAB) have made the situation worse by weakening patent rights in America.  “There’s such uncertainty because of the vague, subjective criteria for deciding eligibility, in both the electronic world and the human health science world, that investment is going elsewhere,” Judge Michel stressed.

Nonetheless, Judge Michel remains optimistic that Washington, D.C. will rise to the challenge of improving America’s patent system.  We discussed the path forward and how stronger patents fit into Trump’s Make America Great Again agenda, with Judge Michel pointing out that he’s “hopeful that the new Secretary of Commerce, whoever is going to be running the Patent Office will pay great attention that and will strengthen the patent system so we can create the jobs, increase the productivity, speed up the growth of the economy.”

Is Judge Michel being too optimistic?  During the interview, Judge Michel specifically noted that “Tomorrow, the PTO commissioner could revise the [PTAB proceeding] regs . . . That doesn’t require the Supreme Court or the Congress to act.  It could be done immediately by the PTO if it exercises strong vigilant leadership.”

About a month after I taped my interview with Judge Michel, the former head of Trump’s domestic issues transition team, Ken Blackwell¸ vigorously argued in defense of a strong patent system.  And, shortly after Blackwell’s rallying call, USPTO Director Michelle Lee, now serving under President Trump, announced an initiative to review and improve PTAB proceedings in line with Judge Michel’s suggestion.

Time will tell, but these are definitely signs that the Trump administration shares Judge Michel’s view that improving America’s patent system is a vital key to Making America Great Again.

If you are interested in hearing more about this subject, a story about how Judge Michel almost wasn’t nominated, and many other fascinating insights into the patent field, please watch my entire interview with Judge Michel by visiting Clause8.TV.

The Author

Eli Mazour

Eli Mazour is the host of the Clause 8 interview series and an Associate with Harrity & Harrity LLP in Fairfax, Virginia. Mazour has extensive experience in all aspects of the patent prosecution process, including preparing and prosecuting hundreds of patent applications related to computer software, Internet and e-commerce, business methods, electronic consumer products, and telecommunications. Eli has particular experience in helping clients identify and assess patentable inventions and developing patent prosecution strategies. He has also been involved with conducting patent infringement investigations and clearance of products.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 19 Comments comments.

  1. Paul Cole April 24, 2017 7:39 am

    From what I hear, the prospects of near-term reform of Section 101 do not look good, notwithstanding the IPO’s comprehensive and well-written report on the subject.

    The only practical solution, therefore, is for those of us on the patent drafting and prosecution side of the profession to up our game and ensure (a) that the main independent claims that we write positively comply with all the requirements of section 101 which are invention or discovery, novelty, utility and compliance with one of the four eligible categories of invention (b) that there are dependent claims for every feature that solves a further technical problem or brings about a further new result and (c) that scope is defined with reasonable particularity so that its language has the appearance of positive invention and does not look to the PTAB or judge as just a mess of woolly generality.

    At a recent meeting in the US I cited Groucho Marx who said: “I’ve found the secret of success in life. The secret of success in life is sincerity. If you can fake that, you’ve got it made!”

    I am not so clever as Groucho and merely believe that I have the secret of success in the patent system. The secret of success in the patent system is surprising new function or result. If you can fake that you’ve got it made!

    And if you have a questionable patent, consider re-issuing before sending out threats and litigating. You might end up with a sufficiently strong claim that litigation will prove unnecessary.

  2. Anon April 24, 2017 8:47 am

    Mr. Cole,

    With all due respect, your advice is simply insufficient to deal with the problems of 101.

    It would not be skeptical to note the echo of “I told you so” ringing in the background.

  3. Night Writer April 24, 2017 12:28 pm

    @1 and @2 reality: The CAFC unfairly burns down any high-profile patent from an NPE that they feel like burning down. Alice is not a law. Alice is an equity solution that can be used to invalidate any claim.

  4. Edward Heller April 24, 2017 4:32 pm

    The weakening of out patent system has more to do with legislation than decisions of the Supreme Court involving 101. From 1981, with the creation of reexaminations, to 2011 and the creation of IPRs, we guaranteed that examination is never done until the patent has been expired six years. At no time does a patent owner have a grant that he can rely on and that will only be taken from him by jury on clear and convincing evidence.

    Add to this the consistent weakening of the American patent system by legislation to the benefit of foreign companies. We gradually gave up the advances of inventions made in America by first including NAFTA and WTO countries, and finally by abolishing first to invent altogether in 2011. We were promised a strong grace period that would be the equivalent the former 102(b) — one year against all art. Those who voted for the AIA were said that this is what the legislation contained. But we did not get anything like that.

    Even while we were stripping patents of their presumption of validity, we stripped them of their guarantee of term. Seventeen years from issue that had protected the inventor against extended prosecution delays was taken from us at the behest of foreign interests and to combat Lemelson. But when Lemelson was taken care of by the courts, still we did not restore 17 years from issue.

    I am not adverse to getting rid of interferences because the first to file normally won anyway. Simply say that the first to file a claim to an invention is the one who gets the patent. But otherwise, prior invention is not prior art and any an all inventors get a one year grace period so that they can show prior invention to overcome prior art.

    Next we have to get rid of 102(e) as “prior art.” This provision is artifact of first to invent and is another way of saying that the first inventor to file gets the patent. But should provide no basis for making something that is NOT in the PUBLIC DOMAIN prior art, because the principle of prior art is to prevent the patenting of information and technology in the public domain.

    But patent reform should not be premised on reversing the Supreme Court because Congress will be extremely skeptical from the start. They will not be inclined to listen to anything we have to say.

    But simply restoring the law to its former state should not be all that controversial precisely because that former law stood the test of time and was clearly one of the reasons America was indeed great.

  5. Gene Quinn April 24, 2017 4:47 pm

    Edward-

    You say: “we guaranteed that examination is never done until the patent has been expired six years.”

    That is exactly right. Title to patents absolutely must settle at some point. This is egregious.

    You say: “But patent reform should not be premised on reversing the Supreme Court because Congress will be extremely skeptical from the start.”

    That may be true, but the two things that drove the patent system into the ditch were both SCOTUS decisions. Even with Congress shooting the system in the foot had the Supreme Court never taken (or correctly decided) eBay v. MercExchange and Mayo v. Prometheus, we’d be in a much different place. Those two decisions are #1 and #1A in terms of destruction of the patent system, with the creation of post grant proceedings a very close #1B.

  6. Paul Cole April 24, 2017 5:03 pm

    I am in the business of buying drinks at AIPLA in October.

    If ANON can suggest anything more positive that we can do NOW for our clients than what I have suggested, then drinks on me.

    If GENE can explain the positive case for eligibility in Mayo, then also drinks on me.

    The Prometheus claim had four features. Two contributed nothing eligible because they were mere statements of fact without any further transformative process step. The other two features were acknowledged as old on the face of the specification and hence did not count under section 101 which requires novelty. As an ordered combination in terms of human activity they took you no further than the known administration and analysis steps. If you can make a positive eligibility case out of that mess, you will truly deserve your drink.

  7. Anon April 24, 2017 5:28 pm

    A drink for

    hence did not count under section 101 which requires novelty

    Novelty is required under a different section of US law, Mr. Cole.

  8. Edward Heller April 24, 2017 8:03 pm

    Gene, we need, really need to succeed here on IPRs more than any other issue. That stands out, and is a problem caused by Congress itself. Congress can see that, and might be willing to fix a mistake because it does not involve the Supreme Court or our treaty relations with other countries that have been behind the termination of first to invent.

    We need to win this one. Let us not diminish our chances by loading it down with other issues.

  9. Anon April 24, 2017 8:21 pm

    Mr. Heller,

    You do not have any credibility with your statement of “The weakening of out patent system has more to do with legislation than decisions of the Supreme Court involving 101.

    None.

    Please stop worshiping at the alter of the Royal Nine.

  10. 30 year Innovator April 24, 2017 10:16 pm

    Sorry to speak from a different point of view here but the “Motivation-to-Innovate” (MoI) is hardly ever discussed. I’m an innovator with many patent portfolio’s and I no longer disclose innovations (attempt to patent). Inventor’s have been and are victimized. They hire and pay IP lawyers to get it “legally” right, they pay the USPTO filing/issue/maintenance fees – for what? A lower court judge to invalidate (Alice 101)? An IPR to invalidate? Yet, the inventor had nothing to do with the legalities but is burdened with all the costs? The patent lawyers make money and the USPTO makes money – from where? That’s my point and the reason the “Motivation-to-Innovate” (MoI) is quickly quickly going away – China’s massive population is motivated to innovate and without a quick correction to the US failed patent system, our economy will be crushed. We can never be confused about innovation, its a collective effort that is built on motivation to innovate and the associated disclosures that offer collective greatness.

  11. Paul Cole April 25, 2017 4:54 am

    @ Anon 7

    35 USC 101: Whoever invents or discovers any NEW and useful process, machine, manufacture, or composition of matter, or any NEW and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

    The novelty requirement occurs TWICE in the section. True it is further defined in Section 102, but the basic requirement is in 101.

    It astonishes me how little many commentators on US patent law actually know about the law, and how willing they are to throw their views about without the slightest reference to supporting authority (statute or judicial opinion).

  12. Anon April 25, 2017 7:42 am

    Mr. Cole,

    You confuse the presence of the word with the fact that a different section of law controls the legal requirement for that same word.

    It is simply legal error to state as you do that the occurrence of the word in that section sets forth a novelty requirement in that section.

    This is pretty basic stuff, and I am personally rather disappointed to see you making this type of error.

    Your statement then of “It astonishes me how little many commentators on US patent law actually know about the law,” is then merely self incriminating.

    In 1952, our Congress acted to break apart a former single paragraph into explicit and distinct sections of law (and one of the reasons why they did this can be seen in the shenanigans that the present Supreme Court is engaged in with section 101).

    You seek to lecture someone on a topic that that person knows far better than you.

  13. Paul Cole April 25, 2017 12:16 pm

    @ Anon

    I fully agree with you about the legislative intent.

    But if novelty is irrelevant, why is the IPO suggesting that the word NEW be deleted from section 101?

    In Prometheus/Mayo the administration and analysis steps contributed nothing to eligibility because they were old.

  14. Anon April 25, 2017 12:50 pm

    Paul,

    They make that suggestion because errors – like yours – continue to occur.

  15. Gene Quinn April 25, 2017 12:55 pm

    Paul-

    Novelty is irrelevant. See Diamond v. Diehr, which this Supreme Court continues to say remains good law. Of course, by any reasonable reading Mayo overrules Diamond v. Diehr because Mayo says newness SHOULD be considered under 101. Diehr explains in no uncertain terms that it is inappropriate to consider novelty under 101.

    IPO strikes “new” from 101 to overrule Mayo directly and force the Court back to Diehr.

    -Gene

  16. Paul Cole April 25, 2017 1:59 pm

    @ Anon & Gene

    As part of my researches on this topic I have spent many happy hours trying to figure out the rule(s) of law applied by Justice Douglas in Funk v Kalo. There does not seem to have been much doubt that the claimed subject matter qualified in the eligible category of composition of matter. How you then fit in the principle of nature objection can drive a quiet man nearly crazy.

    Funk Brothers has new and undeserved prominence following its mention in Bilski and its approving citation in Myriad, the lack of alteration of the genetic information in BRCA1 being equated with the (alleged) lack of alteration of the bacteria in Funk Brothers, and the key difference for the cDNA being that it was a non-naturally occurring synthetic creation.

    So there must be significant doubt whether the Diamond v Diehr holding survives Mayo and Myriad, which as we all appreciate is why the IPO wishes to delete NEW from section 101.

    The errors, I think and if such they be, are not mine but are in the jurisprudence.

  17. Anon April 25, 2017 2:27 pm

    Rules and Justice Douglas….

    There is your first mistake.

    Justice Douglass (much like Justice Breyer) did not (does not) care so much about rules.

    And yes, Mr. Cole, there are some rather serious errors in the jurisprudence.

    The helpful tactic is not to go quietly into the night, merely accepting those same errors. My path – and I do believe that it is indeed a helpful one – is to argue and show just how much in error the jurisprudence is.

    If people (and especially attorneys) meekly grow to not be able to challenge the Supreme Court (based on the fallacy that they are ‘supreme’ and must be followed), then attorneys are forsaking their individual state oaths and are placing a particular branch of the government over the Constitution.

    As you are not a U.S. attorney, perhaps you are not aware of the various state oaths and the hallowed place that the Constitution has – and the duty of the attorney to the Constitution above even the Supreme Court (and I have yet to see one single state oath produced that dictates otherwise).

    Those that know law and that study law recognize that the ultimate authority is NOT the Supreme Court.

    Quite in fact, one of my missives is the call for Congress to exercise their own Constitutional power of jurisdiction stripping and remove the non-original jurisdiction of patent appeals from the Supreme Court, create a new (and untainted) Article III court (to preserve the actual judicial review holding of Marbury), and eradicate the long-standing (even historical) anti-patent bent of the Supremes as those Justices engage in the very type of “scrivening” that they are so fond of accusing patent attorneys of.

    How many beers is that worth?

  18. Paul Cole April 25, 2017 4:08 pm

    @ Anon

    Quite a few beers, in respect and friendship.

    I think Justice Douglas wrote Funk Brothers on one of his plane trips – he was notorious for that with his clerks. And he was still smarting for not having been picked as vice-president in favour of that total nonentity Harry Truman (one of the best presidents the US has had).

    You are entirely right about mistakes in the Supreme Court – as an alien I have felt inhibited in challenging these and am reconsidering my position.

    On the whole the position that the US has got itself into demands a thorough-going review of the whole of patent law including in particular 103 jurisprudence, and a more equitable reexamination regime. In particular, invalid subject-matter should be preserved, but any remaining subject matter should be affirmed and amendment opportunities should be offered accordingly.

  19. Gene Quinn April 25, 2017 6:03 pm

    Paul-

    You say: “So there must be significant doubt whether the Diamond v Diehr holding survives Mayo and Myriad…”

    I agree with you completely. In other articles I’ve written that the Supreme Court overruled Diehr (including an article that will publish for World IP Day tomorrow). SCOTUS, in their infinite widsom, continues to tell us that Diehr is not overruled and remains good law. Obviously that is nonsense. Both Dierh and Mayo, with directly opposite approaches to 101, cannot both be good law. But that is what you get when naked emperors have the final word I suppose.