Patent Reform Dead Now and for the Future

Once upon a time I used to not get worked up at all about proposals for patent reform, because after all they almost always didn’t seem to go through, or even if they did what was passed was hardly what was suggested. Then, my good friend John White told me several years ago that this time patent reform was going to happen, it was just a matter of time. Since then I have written article after article on proposed patent legislation, followed the issue and even reviewed transcripts from Congressional hearings. The end result is that not much has changed, at least not yet, and for that we should all be thankful.

We have heard this all before, and to some extent it does sound a little like a “chicken little mentality” has captured the imagination of policy wonks and patent attorneys alike, but it is hard to deny the fact that there is growing momentum for real reform at the United States Patent Office, and real legislative reform.  So why then can’t we get the reform we all know the system needs?  Perhaps the Patent Office will get reform from David Kappos and newly hired consultant and former long-time USPTO Official, Nick Godici.  But the Patent Office is only going to be able to do so much without help from Congress.  The Supreme Court has repeatedly demonstrated a lack of understanding of patent law, and they could do real harm when they hear Bilski.  I am completely happy that patent reform has died given that the legislation pending is not reform calculated to help, but rather calculated only to be different, and likely harmful.  Nevertheless, we so desperately need patent reform that will solve problems.  If only the Senate Judiciary Committee would listen to Senators Jon Kyl and Orrin Hatch, who both seem to be the only ones who really understand patent laws.

One common thread of the talk about patent reform this time around is the all to familiar cry that patent litigation costs have skyrocketed. While this has certainly been good for patent litigators and law firms, it has not really been all that helpful for businesses, particularly small businesses, but those wanting change over play their hand and so frequently seem to be looking for legal shielding with respect to their ongoing infringements.  Merely saying that litigation costs have skyrocketed without also admitting that in many high profile cases there have been monumental acts of infringement, which quite correctly have lead to monumental damages being awarded.  So who is really to blame for paying high priced lawyers and then losing hundreds of millions of dollars?  So what is the answer? One answer seems to be to create a new post-issuance review procedure, which in my opinion has real potential to backfire in a big way!

Of course, post issuance review at the Patent Office is not at all new. There does exist such a procedure, which currently takes the form of one of two types of reexamination proceedings, but such proceedings are so constrained by what can be considered that they are all but useless, except for a small handful of cases. So how could a new and allegedly improved post-issuance review process work where reexamination has so horribly failed? That is a good question, and one that does not seem to get asked much, if at all.

Why would we expect a new post-issuance review to work any better than the current prosecution process? Why are we to expect the Patent Office, who is certainly not equipped to handle litigation-like proceedings, could adequately and appropriately resolve issues of patentability in an adversarial proceeding? Why would anyone think this is a good idea? If a whole new division within the Patent Office needs to be created in order to handle these new post grant review proceedings that will take examiners away from other areas within the Patent Office, which will further lead to less examiner hours being spent on the backlog, which is a horrible way to attempt to move forward.  With the Patent Office’s self created budget problem, caused by the artificial depression of the allowance rate, there is no ability to hire new examiners even to replace retiring examiners.  We simply cannot stand for further diversion of patent examining resources to appease tech giants that want a “get out of infringement free” process that lets them tie up entrepreneurs and small businesses.  They simply want to insulate their market, and since they cannot invent any more they want to make sure the next wave of new technologies never get patented, which will let them keep their monopoly even without any advancement of technology.  Talk about perversion of the system.

Patent reform has died this time, and given the contentious nature of the debate and the growing tensions in Congress I don’t see it returning this year, and maybe not even next year because the 2010 election will soon start, assuming it hasn’t already started.  Nevertheless, if the past is any indication of the future when patent reform resurfaces it will once again have big tech friendly proposals regarding damages and post-grant review, which are deal breakers for so many other industries.  As long as we have a one-size-fits-all patent law nothing will get done, unless some in Congress actually want to solve the problem that is dragging down our economy, preventing the development of new technologies and impeding the creation of new jobs based on new technologies.  Eventually someone will step up with a sensible reform package, right?


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3 comments so far.

  • [Avatar for Josh K]
    Josh K
    August 3, 2009 12:54 am

    As the article points out, patent litigation has become very expensive essentially limiting small businesses with limited liquid assets. The legislation most recently floating through Congress does attempt to rectify some of these concerns but Gerry makes a good point in that it is almost impossible to imagine a system that adequately addresses large and small patent disputes.

    For more on patent litigation see,

  • [Avatar for dale carlson]
    dale carlson
    July 28, 2009 02:41 pm

    Gene, you make several good points. Your position regarding post-grant review echoes my National Law Journal opinion piece “Don’t Adopt Oppositions” from on Sept. 17, 07 (available under “articles” at As you suggest, re-forming the patent statutes in order to legislatively address recent Supreme Court rulings, such as those in Ebay and KSR, is what is needed. That will certainly take time and effort to accomplish.

  • [Avatar for Gerry Elman]
    Gerry Elman
    July 28, 2009 10:09 am

    You make a good point in questioning our one-size-fits-all patent system.

    How about taking a serious look at a two-tier system, where “inventions” that fulfill 35 U.S.C. secs. 102 and 103 get protected by a regular, “utility patent,” and baby steps that are novel but not necessarily “nonobvious” under the KSR test get protected by a different kind of patent, such as by what is called abroad a “utility model” or “petty patent”?

    Since there’s so much attention being focused on “harmonization” with foreign patent systems, let’s take a look at that option, as has been available in numerous European countries, notably Germany, and now in China, where about a third of patent applications are “utility model” cases.

    I don’t advocate limiting the subject matter of “utility model” protection to just machines and manufactured articles, which tends to be the practice abroad. I think we’d do better by creating this form of protection for, say, everything under the sun made by the hand of man, as the Supreme Court said in Chakrabarty back in 1980, when the tide turned in favor of patent protection.