US Judge: US Patent Law Destabilising; ‘Right To Patent’ Under Attack

By Liza Porteus Viana for Intellectual Property Watch
BOSTON – Patent law in the United States is in danger of becoming “highly destabilised” as well-funded competing interests try to vie for legislators’ ears in Washington, a federal judge said Tuesday.

Speaking here to participants at the Harvard Law School Conference on Intellectual Property Law, the Hon. Paul R. Michel, chief circuit judge for the US Court of Appeals for the federal circuit, said such a disruption could have huge consequences for inventions, investment, property of individual companies, and economies.

“It seems the consequences are extremely high,” Michel said, adding that the statutory right to obtain a patent and enforce it are “both under attack and they’re under attack by different forces.”

Despite a desire by most sides for substantive patent reform in the United States, the legislative effort has stalled and is not expected to pick up again until the new year.

Michel is concerned that various interest groups are demanding quite different and inconsistent changes in patent law and its application, while the US Patent and Trademark Office (USPTO), he said, has tried to “engineer its own changes from present practices by issuing very expansive rules packages” to shift the burden and cost from examiners to applicants.

Patent reform is such a predominant issue right now that both John McCain and Barack Obama, the Republican and Democratic presidential contenders, respectively, have included patent reform in their policy platforms, and have substantive intellectual property staffs advising them. There is also much discussion in the media on who potential federal circuit nominees that would oversee patent-related cases may be, well in advance of actual vacancies.

It appears that never before have American presidential candidates talked about patent reform before they are even elected.

Michel, who said he never has seen such a debate in politics, said the patent process has become “way too politicised and monetised.”

“Perhaps soon, campaign contributions in the presidential context may replicate what happened” with donations made to lawmakers during the last two years of debate, he added. “Will those with the largest PACs [political action committees � targeted lobbying groups] be able to buy the patent system of their dreams?”

An increasing number of lobbying groups and corporations with deep pockets – predominantly hailing from the technology and financial centres of Silicon Valley (California), and Wall Street – seem to be the ones leading the “legislative jousting” and the only ones getting their voices heard, Michel said. Very few private practitioners, for example, were invited to testify publicly or to meet with Senate staff during stakeholder meetings, and there is very little transparency in terms of what is going on during private negotiations on Capitol Hill.

The judge said he heard reports that “literally hundreds of private meetings” on patent reform were held behind closed doors with members of Congress, their staffs and either the CEOs or general counsels of “mammoth firms.” Virtually no records exist of these meetings, he added.

“The access was not equal and many, many others were not heard from,” Michel said.

Changes on the Way?

Patent reform stakeholders are holding out hope that with a new administration and a new Congress, a satisfactory bill might pass next year. There remains not only a lack of agreement on application quality submissions, damages, inequitable conduct (when a company or other entity misrepresents or conceals information to deceive the patent office), post-grant review and other issues, but there is also often a lack of understanding that accompanies new lawmakers in office.

“It’s going to be a new environment,” said Dana Colarulli, director of government relations for the Intellectual Property Owners Association. “The education curve in getting a new staff up to speed on what came before and what’s necessary … there may be different priorities” with a new administration.

“We’re going to have to still stick to our guns – at least on what our organisation thinks is our priority,” Colarulli added.

The USPTO – which many criticise for its handling of patent reform – has continually stressed that despite all the industry and patent applicants’ complaints about a slow, ineffective examination process, applicants can do more to speed things up.

The USPTO, notes, for example, that about 25 percent of all applicants do not file any prior art with their submissions, and about 15 percent file more than 20 references with their paperwork for examiners to look up.

“We feel that both of those present problems for the agency,” said James Housel, a patent attorney with the USPTO’s Office of Intellectual Property Policy and Enforcement. “No information starts the examination off basically without any inertia, and without any information up front. Too much information basically overwhelms the examiner, puts the examiner into – if you will – an avalanche of references and perhaps wasting time going through references that really should not have been submitted” because they are not directly related to the invention.

Large pharmaceutical companies argue that it takes so much money, time and labour to research and manufacture a product, there need to be adequate protections afforded to patent holders. A sluggish patent examination and approval process does not help, either.

One proposal of GlaxoSmithKline’s to speed up the patent approval process and to perhaps get rid of a 700,000-applicant backlog at USPTO is to remove the search functions from the to-do list. Third-party vendors can be hired by the applicants to conduct the searches, or applicants can do it themselves if they can’t afford to hire someone.

“We understand that has been discussed – the unions have some problems with it, some other stakeholder have some problems with it,” said Sherry Knowles, senior vice president of corporate intellectual property at GlaxoSmithKline.

One of the easiest, cheapest ways to reduce repeat claims, Knowles said, is to change the fee structure. A graduated fee scale for each successive claim may discourage applicants from filing frivolous claims that have little to no merit.

“Economics motivates behaviour,” Knowles said.

This idea has also been advocated elsewhere in the world. Alison Brimelow, head of the European Patent Office, for example, also advocates a claims fee.

Knowles, Housel, and Mark Chandler – senior vice president of legal services and general counsel of Cisco Systems – agreed that if anything is to get done in the next Congress on patent reform, interested parties need to do more to come together on the more controversial issues. It is better for industries to hash it out themselves than let lawmakers muddle with the details, they concurred.

“This is a sausage-making process” and whatever industry gets accomplished with the USPTO could look totally different once Congress gets done with it, said Chandler. “I certainly believe there’s no one way to skin the cat and we should be able to find ways to work together toward more certainty in outcomes.”

Another problem with the patent system now, Chandler said, is that technology companies all too often find themselves as defendants in patent suits, and the number defendants being named in the suits has increased eight-fold in the last few decades.

Liza Porteus Viana may be reached at info@ip-watch.ch.