CAFC Up for Grabs, Harmonization and the US Economy

Several weeks ago, as summer was winding down and most of us were enjoying some slow times and gearing up for back-to-school, preparing for Labor Day festivities, on vacation or studiously studying fantasy football player projections, published a very interesting piece titled Slot Opens on Federal Circuit Bench, More Vacancies to Come? The article started out by discussing how Judge Alvin Schall recently informed the White House that he would be exercising his option to take senior status come October 2009.  When Judge Schall takes senior status that will raise the number of judges on the Federal Circuit with senior status to five.  So come October 2009 there will be five out of sixteen Federal Circuit judges on senior status, with another eight qualifying for senior status, should they choose, within the next two years.  Times are definitely changing at the Federal Circuit and whether all those judges who qualify for senior status take senior status or not, even if President Obama winds up spending only one term in Office, which is far from a foregone conclusion, his legacy may well wind up being defined by the impact he will have on innovation policy and patent law.

Given President Obama’s left leaning tendencies we could well wind up with a far different innovative future than we have previously enjoyed, and that could be a very bad thing for US competitiveness in the world economy.  I don’t want to be over dramatic about the prospect of what could be a completely remade Federal Circuit over the next several years, but it is certainly worth keeping an eye toward would could lay ahead.  Perhaps I am wrong, and if I am I am sure I will hear about it in the comments that follow this article, but it is my perception that the far left of the Democratic Party has among their ranks those who disproportionately are either against strong patent rights, or simply anti-patent.  It is also my perception that those on the far left are the ones who seem intent on a new world order where America becomes far more like the rest of the world, regardless of whether that is objectively a good thing or a bad thing.  I am all in favor of improving what needs improving, but I am definitely a conservative in the traditional sense, and an engineer in the practical sense.  If it is not broken don’t fix it, and change simply to do things differently just doesn’t make sense to me.

I fear that the debate over harmonization of laws, and patent laws in particular, will heat up, and historically that means US law changes, not that sensible changes occur to improve the patent systems of other countries.  It seems to me that the positions urged on us by other countries would be modifications that are not entrepreneur, small business or start-up friendly. For better or for worse the US economy is a consumer driven economy and employment is overwhelmingly provided by small businesses.  Any changes that have the potential to harm small businesses, make it more difficult for entrepreneurs or could work to the detriment of start-up companies are not wise, particularly given the fragile state of our economy presently.

In order to get my biases out on the table, allow me to point out that I am not trying to beat up on the far left.  I personally believe that the far right has many problems of its own, and isolationism or extreme nationalism ignores the reality that we do live in a world with a global economy.  Harmonization of laws, particularly patent laws, does make a lot of sense conceptually, but I simply cannot believe we are going to see any meaningful harmonization during my lifetime unless the United States simply capitulates, which in my view would be extremely bad, and extremely naive.  So I have to wonder whether the recent plea by Microsoft Deputy General Counsel Horacio Gutierrez for a global patent system is happenstance, or perfectly times.  I also wonder about the timing of Professor Arti Rai joining the Patent Office, which from what I am now hearing seems inevitable.

Whether anyone chooses to recognize it or not, the inescapable reality is that Europe cannot harmonize their own laws in any honest sense of what that term should mean.  Some like to claim that Europe has harmonized many of its laws and that is true to a large extent, but as a proposition it is about as misleading as saying the Titanic was the best ship ever made, or that on paper the design of the Titanic was flawless.  Ships don’t float on paper, and laws that are interpreted and applied differently are not harmonized even if identical language is used and a treaty has been signed. Each country agreeing to the wording of a particular law is nice, but unless and until multiple countries actually interpret the words in the same way to mean the same thing, having the same law doesn’t mean there is harmony.

But what does all of this have to do with the Federal Circuit?  Plenty.  Since I posted my article regarding Professor Arti Rai I have discussed the nature of the position she would have with the Patent Office, assuming the rumors are correct.  This is traditionally a position that is nothing more than a liaison between the Patent Office and Congress.  One person knowledgeable about the history of the position suggested that it is “nothing more than a job where the person will carry water for the Patent Office.”  Historically the position has existed so that a person familiar with the art of communication can translate from legalese and patent speak into terms that even Congress can understand.  There is no policy setting or implementing involved.  So why then would a distinguished law professor and personal friend of President Obama be given such a position?  It just doesn’t make any sense.  I have to be missing something.  For an articulate, intelligent, highly respected academic with a particular and strong viewpoint to be taking a spokesperson position just doesn’t make any sense to me.  It seems there is more here than meets the eye, and with speculation already beginning that Professor Rai might be in line for a position on the Federal Circuit (see Professor Rai to Join USPTO?, last sentence) and the winds of globalization and harmonization blowing, I have to wonder.

There is no doubt that the Federal Circuit could radically change in the not to distant future.  I have been a vocal critic of the Federal Circuit, saying when I think they get things clearly wrong, which admittedly is far more frequent these days than when I think they are correct.  More and more I disagree with the Federal Circuit on many issues, and find myself in near total agreement with Judges Newman and Rader, who increasingly are in dissent it seems.  I would venture to say that the majority of practicing patent attorneys and agents hold this view as well, so despite what some may want to believe and profess I hardly think this means I have a strange or distorted view.

One would suspect that I would be all for major changes at the Federal Circuit, and up until recently I thought I was as well.  As crazy as it may seem I fear the changes that may come will be far worse than living with a Federal Circuit that makes things up as they go along and ignores its own rules and precedent.  With every fiber of my body I feel we are heading for a failed innovation policy and the demise of what until at least a few years ago was a patent system that fueled economic growth.  I sure hope I am wrong, because if I am right this great experiment could cripple the software, biotechnology and pharmaceutical industries, and that is just for starters.  What would the US economy look like then?


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3 comments so far.

  • [Avatar for American Cowboy]
    American Cowboy
    September 16, 2009 02:00 pm

    I misspoke re Bush 43. Here is what I think happened: some big donor told somebody near the top that they are being pestered by patent trolls, leading to directive to some White House staffer was to look into the donor’s complaint. The Oval Office had little or no involvement after that, but the folks below them took that one statement and ran wit h it, leading to quality = reject, reject, reject.

    All of this is conjecture, but I bet that is what happened.

  • [Avatar for Gene Quinn]
    Gene Quinn
    September 16, 2009 10:55 am

    American Cowboy-

    I would agree, or at least my memory of Clinton coincides with what you say. It is hard to ignore the fact that under Clinton we has tremendous innovation relating to computers and the Internet, and the government and courts understood what was driving the economy, which was computer, the Internet and software.

    I am not sure I would agree completely regarding Bush 43. I don’t know that he was listening the anti-software patent crowd, or big business who wanted no start-up patents. Perhaps that is what happened. I learned early on in my practice from my mentor that you should not ascribe malice as a motive where incompetence is an adequate description. His reasoning was far more people are incompetent than are malice, which I think is largely true. Your version would certainly explain a lot, but I think what happened was Soviet era goals established to be met or exceeded without concern for whether the goals were forwarding any meaningful objective.

    I think you are right with respect to Obama and his administration. They talk innovation on a first level, and pay lip service to patents and do not seem to understand the business-incentive model of capitalism. If nothing else hopefully the articles here and elsewhere, along with good comments will present the issues and jump start discussions.

    Thanks for contributing.


  • [Avatar for American Cowboy]
    American Cowboy
    September 16, 2009 10:30 am

    I agree that often leftwingers are antipatent, but I don’t think we saw that in the Clinton administration, and the Bush 43 administration, in my view, was as anti patent was we have seen in 30 years. Bush 43 listened the software numbskulls who think no software patents should exist and that everything on the internet should be free to copy, and the BIG money, BIG businesses that saw their franchises threatened by upstarts with patents. Remember, patents are the antimonopoly; patents are the way the little guy gets to compete with the big guy, since he gets to call on the even bigger guy, the government, to back him up. Incumbents don’t like that, even if they have a few patents of their own just to be able to say they are “innovative.”

    My view of the Obama administration is that they have not thought much about any of this. They give lip service to the benefits of innovation, but since they spend their whole lives in NGOs, government and non-orofits, they have no idea what innovation is about, so they don’t know what helps or hurts it. The best they can do is acknowledge their ignorance and listen to the wise counsel of the better-informed posters on IPWatchDog.