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 developed over the last two decades or the U.S. patent system will become irrelevant.
U.S. Innovators: Closing Shop
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.
The Right Solution
Beginning with eBay, patents have become markedly and progressively weaker. While a major reason for this has been the Supreme Court’s often too broad, misguided or misinformed opinions, some Masters felt the Federal Circuit, as the court responsible for streamlining and developing IP law, was more to blame. Others said that—as the CAFC has itself stated in recent opinions—the Federal Circuit is simply stuck with what the Supreme Court has done and is sick of being overruled, and thus Congress is the only viable alternative to remedy the problems.
One of the Masters, former Federal Circuit Chief Judge Paul Michel, went on record with IPWatchdog to say that Congress must be the vehicle for effectively fixing the patent system:
As imperfect or even dysfunctional, in the view of some, as the Congress might seem, it is the right branch of the government to be making these hugely important national decisions that are going to decide job creation, global competitiveness, national security, economic growth, and productivity growth. Even if they make decisions I might disagree with, it’s still better for the decisions to be made by the duly elected representatives of the citizenry, not by black robed lawyers at any level, including the Supreme Court. I’m of the view that Congress can learn what it needs to learn, as it does all the time, to make rational, logical decisions on behalf of the country and, unlike the courts, if it works badly in practice they can come back and change it. The Supreme Court is focused on precedents, so once set it’s very hard to ever get around them. When Congress initiates a new law, it only applies in the future; when the Supreme Court or Federal Circuit decides a case, they’re often deciding that something done 10 or 20 years ago now has to be invalidated. The retroactive reach of judicial decisions is hugely problematic in our society.
Glimmers of Hope
Much of the two days was spent discussing solutions on the horizon, such as the various legislative proposals that could be introduced this term. These include the STRONGER Patents Act, which would address almost all of the major sticking points, from locking in the Phillips standard for claim construction to changing the burden of proof at the PTAB, reducing repetitive IPR attacks on the same patents, and restoring the presumption of injunctive relief. Prospects for movement on this bill and separate reform to Section 101 law are thought to be generally good, since the Senate IP Subcommittee includes some very patent-savvy players who seem genuinely interested in resolving these issues—many as the result of their constituents directly expressing concerns to them.
In closed-door meetings on the Hill about Section 101 issues, the following principles have been agreed upon by those seeking to propose legislation:
Guiding Principles for Section 101 Reform
- Patent eligibility should not turn on the existence of related technology or the current state of the art. In other words, subject to meeting all other requirements of the patent statute, especially novelty, obviousness, enablement, written description, and definiteness, any useful invention should be eligible for protection regardless of whether it is new or old, conventional, known, or using other terms relevant to determining obviousness or anticipation.
- When assessing the eligibility of patent claims, those claims must be construed as a whole, with each limitation in a claim given equal weight, and none dismissed or discounted as “routine,” “known,” “conventional,” mere “data gathering,” mere “post-solution activity,” or the like. It is impermissible to carve up a claim into different parts and assess the eligibility of the parts of a claim separately, rather eligibility must consider the claimed invention as a whole.
- Diagnostic and life science technologies should be eligible for patent protection per se, subject to meeting the other existing statutory requirements, and should not be considered a law of nature, natural phenomena, or otherwise patent ineligible subject matter.
- Any reform to Section 101 should statutorily codify a definition and/or exception(s) to patent eligibility. Any statutory exception(s) should not use the existing judicial exceptions of abstract ideas, laws of nature, or natural phenomena. Any statutory exceptions should be the sole and exclusive basis for excluding subject matter from eligibility and may not be expanded upon by courts. Any definition of eligible subject matter should be adaptive to include new technologies not yet invented.
Other possible fixes—or further damage—could come in the form of cert being granted in Berkheimer, Vanda, or Athena Diagnostics. While Berkheimer and Vanda are awaiting input from the U.S. Solicitor General at the invitation of the Court, Athena Diagnostics has not yet filed a petition for certiorari but is expected to. Many at the Patent Masters Symposium were fearful that the Supreme Court taking these cases up would only do further damage on eligibility law.
If Congress does pursue patent reform, the patent bar will have a key role to play in ensuring that inventors’ stories and the real-world effects of weak patents get told. With the AIA, big tech was able to swing the pendulum toward reforms that worked best for them thanks to massive lobbying efforts and PR campaigns, but the tide could be turning, as increased scrutiny has been placed on them over privacy concerns, and as more companies become vocal about the harmful effects of being unable to rely on patent rights.
In the words of one Master: “We’re in the ditch, but optimistic about the future—but I think we need to realize it will only get better if we make our voices heard.”
IPWatchdog’s next Patent Masters™ Symposium will take place June 24-25 and will focus on the status of patent eligibility five years after Alice. Discussion topics will include possible legislative reforms, impact on the economy, uncertainty in the application of irreconcilable Supreme Court decisions, and how one can attempt to protect computer implemented innovations in uncertain times.