Is it too late on Patent Reform?

Occasionally, when we’re on the road, Gene and I take up the chance to speak at law and corporate clients of either of us or PLI. These talks can be free ranging, sometimes CLE, sometimes just patent focused topics of interest. Recently we gave a talk in Chicago on the likely and looming patent reform to a group of practitioners; the only question when we wrapped: is it too late?

For reasons that are not very clear, patent practitioners have been largely mute in the reform debate. Maybe we thought it would never happen, or maybe we thought it would never include some of the crazy ideas and language that was being bandied about. Oops. Wrong on both counts. So, now what?

Well, the PTO is getting everything it never wished for: lots of work and no money. The rest of the reform seems to be a grab bag of disjointed lobbyist written anti-patent leavings. Sort of a permanent patent pending status, with a reduced likelyhood of enforcement. Yippee. Just what we need to get us out of a jobless doldrum: Rights that are hard to get; and harder to enforce. It certainly keeps the status quo in place. I thought it was that status quo we wanted to re-place. This is, as written, not a jobs bill. It is an anti-jobs bill.

What we have had, to this point in 35 USC 102, is a statutory expression of patent policy developed since the first patent act 220 years ago. The sentiment of Jefferson and the reason of many a Supreme Court decision was written into its present form mostly, if not entirely, by P.J. Federico and Giles Rich. These people were not lobbyists, or anyone else with a pocket full of money, making permanent the current theme of the moment against patents. Their brief in ’52 was to make permanent and clear, the law and policy that had helped make the US economy fully 50% of the world’s GDP at that time. It is true, use an almanac to look it up.

Now, we’re about to toss it out in favor of a “first to file” bent with post grant challenges and derivation proceedings? Say what…….why? What did the statute do wrong? 8 million patents is a reasonable figure to have achieved. The US is the cross roads of the world’s technology with a statutory “negative pressure” that draws innovators and their ideas here. This country has flourished.

More than anything else, what the patent system and the PTO itself needs are resources. What is paid in fees should be reflected in what the PTO has to spend on the work it is asked to perform. Every other fee collecting enterprise on the planet works on that basis. But, not our PTO. Give the PTO at least a fixed proportion of their money, say 85%, with the rest subject to purse string controls held by Congress for capital investment in the PTO’s future. But a fixed proportion should go to the work it is collected from. Work goes up, resources go up. Work goes down, resources go down. Pretty simple.

The Courts are clueless when it comes to reading claims and enforcing patents. Judges and their clerks do their best, I am sure. But given what is submitted in an average patent…bafflement is the usual result. There should be 10 or so patent only courts around the US. Period. We all know where they should be. Patent Attorneys should be appointed to them, and the work should proceed.

Right now, litigation is utterly unpredictable and, as such, becomes an attractive gamble for NPEs (trolls, etc.). Defendants pay be relieved from participating. After all, they have no idea what the outcome will be. If necessary, limit damages or set formulas in some technical areas, but do not take the whole system, along with its well developed jurisprudence, out behind a shed and finish it off.

The patent system needs tweaking, not reform. The tweaks should be: 1) get the PTO at least a fixed proportion of their collected money. 2) create patent specialty courts. 3) limit damages to formulas in selected technical areas.

Is it too late? If we do not speak up: yes.