Each December we ask a panel of industry experts to identify the biggest moments in IP for the previous year, and likewise ask them for their wishes for the new year. I always strive to do similar article on predictions, but I haven’t always been able to find enough experts willing to go out on a limb and actually make predictions. This year, however, I took a slightly different approach. I asked the experts to identify specific topics of interest to watch as the year unfolds. That question not only produced a great response, but it also provoked a few experts to offer predictions.
Given that several industry insiders were willing to make their own predictions, I’ll go out on a limb and make my own predictions… First, I predict that the United States Supreme Court will find post grant procedures under the America Invents Act to be unconstitutional. It is my belief they took Oil States not as a patent case, but rather as an Administrative State case, and if that is correct this could be the first in a series of decisions over a number of years that will pull authority back from the growing Administrative State and toward the Judiciary. Second, in the event the Supreme Court does not declare post grant challenges unconstitutional, I predict the new USPTO Director will substantially modify PTAB rules and procedures, making them more fair and balanced. Third, again assuming my first prediction is incorrect, I predict the PTAB will continue to ignore Eleventh Amendment immunity and will likewise rule Indian Tribes do not deserve to claim sovereign immunity when in front of the PTAB. This will set up a showdown at the Federal Circuit that will ultimately be settled by the Supreme Court, likely in 2019. Finally, I predict there will be continued discussion about patent reform, with the conversation becoming increasingly pro-patent as Members of Congress continue to see undeniable proof that the U.S. patent system is regressing while the patent systems of the EU and China are on the rise. More specifically, I predict that the U.S. will fall out of the top 10 for patent protection in the annual Chamber IP Index, which will send a shockwave through the Capitol.
Without further ado, here are the prediction of our panel of experts.
Schwegman Lundberg & Woessner, P.A.
I have never been very good at prognostication, especially with respect to the law. There are too many creative attorneys and unique fact patterns to predict when the “right” case will come along to change the law. For example, TC Heartland was a surprise to many who thought that district court venue was well settled law. But I will set forth two areas where I believe changes are possible, if not ripe.
The PTAB Trial Practice Guide does not define with bright lines a real party in interest, or privy, but states “rarely will one fact, standing alone, be determinative of the inquiry.” The Board, however, held in Dragon Intellectual Property, LLC v. Unified Patents, Inc., IPR2014-01252, that the record did not demonstrate that member companies subscribing to Unified Patents neither suggested or compensated Unified for the filing of the petition. Three years later, Unified Patents challenged more entities before the PTAB than any other party in 2017. I think it is only a matter of time that a patent owner takes this issue to the Federal Circuit to review the PTAB’s reasoning. I believe this is exactly what Congress was concerned about when it tried to avoid abuse of the post-grant system.
Turning to trademarks, the Supreme Court in Tam held that banning trademark registration to names or brands that disparage others violates the First Amendment. The Court noted “if the mark meets the Lanham Act’s viewpoint-neutral requirements, registration is mandatory,” unless it falls within an enumerated statutory exception. The Lanham Act does not contain an enumerated statutory exception for lawful use in commerce under federal law. The TTAB, however, held in In re PharmaCann LLC TTAB 86520135 (June 16 2017) that marijuana-related marks are not eligible for federal trademark registration based on the status of marijuana under the Controlled Substances Act. Now that 29 states have some legal commercial use of marijuana serving millions of consumers, I predict that a trademark applicant will successfully challenge the practice of trademark refusal by the government based on language not contained in the Lanham Act.
Russell Slifer served as Deputy Director of the United States Patent and Trademark Office during the Obama Administration. Prior to that he was Chief Patent Counsel for Micron. He has also served as a Board Member to the Intellectual Property Owners Association and as a President of the Association of Corporate Patent Counsel. He is currently a Principal with Schwegman Lundberg & Woessner.
Partner, Drinker Biddle
I am pretty optimistic for the patent world in the US during 2018.
As Andrei Iancu takes the reigns at the USPTO in early January, the new Director will look for ways to improve the patent system. He will engage with careerists at the Department of Commerce to prevent them from using the guise of “shared services” to siphon fees from the USPTO and he will redirect those funds to improving the quality of patents issuing from the Office. I fully expect Director Iancu to update the guidelines for patent subject matter eligibility to see that rejections under that part of the statute are more narrowly applied as intended by the Supreme Court decisions themselves. I also believe that the new director will exercise his rule-making authority provided to him in the AIA legislation that created the post-grant procedures at the USPTO to level the playing field so that it is not so tilted against patent owners in those procedures.
I do not expect much patent legislation to get enacted this year with such a contentious and divided Congress. But we may see something on sovereignty issues related to transfer of patent rights to Native American tribes to avoid post grant procedure jurisdiction at the USPTO. This ploy seems to have hit a nerve in the patent community and may be one of the few patent issues that draw Congressional action.
Two major patent decisions will be handed down in 2018. In Oil States, I don’t think that the Supreme Court (SC) will want the disruption that would result from finding that the PTAB procedures for revoking patents are unconstitutional because the judges there are not article three judges. My guess is that the Justices will deem a patent to be a quasi-public right for purposes of validity and avoid questions about all of patents that were already invalidated there. In SAS I think the Court will also find that the USPTO need not provide for a written decision on claims that that did not pass muster for institution. So my prediction in these cases is that the status quo is maintained.
Lastly, I believe the Trump Administration is engaged on treaties relating to trade and wants strong job creation so they will be supportive of strong patent enforcement. China will be getting some attention on intellectual property issues this year.
All in all, it will be a good year for patents.
Robert L. Stoll is a partner at Drinker Biddle and former Commissioner for Patents at the United States Patent and Trademark Office. The opinions expressed here are his own.
Sterne, Kessler, Goldstein & Fox P.L.L.C.
The level of global political change has been significant and in some ways unprecedented compared to recent decades. These political changes have been reflected in substantial changes in the global IP environment, particularly in China and the US. We predict comparable changes in the IP global environment in 2018.
The value of patents will continue to drop in the US, will stay the same in the EU, and will grow in China.
The US is no longer the “gold standard” of IP systems. With uncertainty regarding what technology is eligible for patent protection (“statutory subject matter”); the lack of injunctive relief in many infringement situations; the high rate of invalidation of issued patents by the PTAB; uncertain and diminished patent damages models; and the significant lengthening of the district court enforcement process, ROI for patent owners asserting their patent rights in the US has dropped significantly in 2017. This trend will continue for 2018.
Despite the Brexit fiasco, the EU will continue to offer relatively predictable, cost-effective, and timely enforcement of patent rights, particularly in the courts of Germany and the Netherlands.
The Unified Patent Court is still very much up in the air. At the earliest, it will become operational in January 2019, but there are many variables influencing whether this will come to pass, particularly the March 2019 deadline for the UK to leave the EU.
With massive filings of patent applications at SIPO, the creation of specialized patent courts, and the high rate of enforcement success by non-Chinese patent owners in the Chinese Courts, China will continue to refine and strengthen its IP system as dictated by the Chinese Government.
The cell phone wars produced a pervasive anti-patent troll narrative in the US. While many have come to believe that this story was overblown and has hurt startups, small enterprises, and university innovators disproportionately, the economic and lobbying muscle behind this narrative is enormous and continues to be exerted to maintain the current weakened US IP environment. This will produce intense fights between the stakeholders throughout the US IP environment in 2018. That will blur political lines and accentuate differences between the ‘haves’ and the ‘have-nots.’
Global economic power in many industries will continue to consolidate in fewer but much larger entities. Antitrust and anti-competition laws that previously had limited such concentrations of economic power are not being enforced in many jurisdictions. Overall, these dominant companies on the world stage do not favor strong IP regimes, unless it involves their own technology and R&D. And, because of their economic might, they will continue to push the global IP environment away from IP protection and towards unrestricted economic competition.
Big data and the global internet will grow rapidly in IP importance. Data and security breaches, national disasters, the risks associated with inter-connectivity, and trade secret misappropriation will continue to erode the luster of the new electronic world we live in. Governments and consumer groups will be much more vocal and assertive in this sphere of IP in 2018.
Technological innovation and new global business models will continue unabated and will outrun existing legal regimes globally. The legal systems around the world will be hard pressed to deal with the changes and challenges wrought by the global disrupters.
Robert Greene Sterne is a founding director of Sterne Kessler Goldstein & Fox. Sterne has been recognized by Law360 as one of the “Top 25 Icons of IP,” and among the country’s “IP Trailblazers & Pioneers 2014” by the National Law Journal.
President of IP Strategic.com
Let’s take note of big tech’s wilting welcome in Congress. Their economic dominance is seemingly sinister. Once praised for convenience and useful platform access, Apple, Alphabet (Google), Amazon and Facebook gatekeeper manipulation has recently shape-shifted from earlier sheep’s clothing into a more wolf-like menace. Relentlessly advancing technology exacerbates their addictive dominance. Size and scale enable them to swallow or smother disruptive competition. Advertising technology has destroyed our privacy. Russian electoral interference, EU regulatory activity and other negative news demonstrates on a daily basis the darkening clouds of their overbearing bad behavior. I expect this to only continue into 2018.
Congressional water-carriers who once sought public association with big tech are backing away despite possibly losing their political affection. Previously enthralled lawmakers now see why big tech’s push for troll-related patent reform was a diverting ploy to elevate the risk and costs of enforcing patents so they could continue their abuse of patents with less risk and simultaneously protect their incumbencies from competitive disruption. Big digital tech’s Hill environment has changed, and that should intensify in 2018, particularly now with Conservative groups joining to support patent rights.
Big tech has been lowering its Hill profile to avoid regulation, which we can expect to continue into and throughout 2018. They fear a more relevant update of the 20 year-old Communication Decency Act, which allows them legal treatment as uninvolved third-party carriers of corrosive content rather than sharing co-publishing responsibility with its authors. Recent Hill efforts to exempt sex-trafficking from such protection can easily be broadened to include other subject areas. Moreover these digital giants are commercially colliding as they drift into each others’ market verticals, a trend I expect to continue. In short, this changing Hill environment has damaged their assertiveness and unity, which should strengthen the pro-patent movement in 2018.
Burdened in the past by having to explain patent policy to campaign fund-craving lawmakers who had swallowed whole the overblown troll narrative, pro-patent advocates have endured a hard climb on Capitol Hill. But now efficient infringement can be seen as part of broader big tech bad behavior, which includes; abusing user privacy, transparency, discriminatory recruiting, and think tank support with strings attached. Meanwhile pro-patent advocates are working well together. Their collective effort is creating converts, but more needs to be done. Thus it is time again to remind our delegations that the Innovation Act was part of a larger self-interested behavior pattern. While we now play on a more-level field we must not be lulled by big tech’s lowered profile. Their objectives haven’t changed. To restore patents to their pre-AIA support of our innovation ecosystem we have a chance to win in 2018, but we must now play even harder and take advantage of the growing distrust of the motivations and operations of Silicon Valley’s largest companies.
Chris Gallagher is President of IP Strategic.com and a perennial selection to The Best Lawyers in America. Having spent years as one of the most influential and highly regarded advocates in the New Hampshire Legislature and state administrative agencies, Chris is now focused primarily on federal policies in Washington, DC.