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.


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Join the Discussion

16 comments so far.

  • [Avatar for patent enforcement]
    patent enforcement
    September 5, 2011 04:34 pm

    Congress has certainly pulled a classic bait-and-switch with this patent reform bill: it was the prospect of ending fee diversion that helped drum up so much support for the otherwise-unpopular legislation. However, once the bill had received significant support due to the anti-fee-diversion provisions, members of Congress then stripped those provisions from the bill, leaving us instead with unpopular legislation that offers the worst of all worlds.

  • [Avatar for step back]
    step back
    September 2, 2011 08:13 am

    Try driving “your” car across the border into Saudi Arabia –especially if you are an unchaperoned woman.

    You not only forfeit “your” car, but probably much more.

  • [Avatar for Blind Dogma]
    Blind Dogma
    September 1, 2011 03:26 pm

    Smack me upside the head – I agree without qualms with Bobby on something.

  • [Avatar for Bobby]
    September 1, 2011 01:39 pm

    “You should also add to your list some sort of reciprocity across country borders. You do not lose your car when you drive it into Canada, you should not lose your patent.”
    Technically speaking, you don’t lose your patent. However, a US patent only works in the US, so if you have a US patent, it probably doesn’t have any real value in the Canadian market. Different countries have significant differences in their patent policies, and it’s their right to do so as a sovereign country.

  • [Avatar for Ron Hilton]
    Ron Hilton
    August 31, 2011 12:04 pm

    “the antitrust laws have done more damage to the process of clearing patent rights”

    Any examples? I really question that, as the bar for antitrust is set much higher than for patent infringement. If anything, they should be placed on more of an equal footing. They each provide a necessary check on the other to keep the free market competitive and healthy.

  • [Avatar for Dale B. Halling]
    Dale B. Halling
    August 31, 2011 10:41 am

    Excellent article. We also need multiple patent office sites. It would be nice if more people would point out the absurd decisions, even on the CAFC, made by non-patent attorney judges. You should also add to your list some sort of reciprocity across country borders. You do not lose your car when you drive it into Canada, you should not lose your patent. You should also add that patent licensing agreements are explicitly exempt from antitrust laws – the antitrust laws have done more damage to the process of clearing patent rights than federal judges who do not know what they are talking about. Real patent reform should also make it explicit that all inventions are a combination of known elements (conservation of matter and energy).

    I too have called my congressmen, sent letters, written a book, and been very active in pointing out the stupidity of this law.

    Just Visiting – Agreed.

  • [Avatar for Ron Hilton]
    Ron Hilton
    August 31, 2011 10:29 am

    Yes, it is too late. Unless the House and Senate come to an impasse over fee diversion.

  • [Avatar for ben ford]
    ben ford
    August 31, 2011 10:01 am

    “The rest of the reform seems to be a grab bag of disjointed lobbyist written anti-patent leavings. ”

    You are so right.

    “patent reform”

    Just because they call it “reform” doesn’t mean it is.

    The patent bill is nothing less than another monumental federal giveaway for banks, huge multinationals, and China and an off shoring job killing nightmare for America. Even the leading patent expert in China has stated the bill will help them steal our inventions. Who are the supporters of this bill working for??

    Patent reform is a fraud on America. This bill will not do what they claim it will. What it will do is help large multinational corporations maintain their monopolies by robbing and killing their small entity and startup competitors (so it will do exactly what the large multinationals paid for) and with them the jobs they would have created. The bill will make it harder and more expensive for small firms to get and enforce their patents. Without patents we cant get funded. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs. Those wishing to help in the fight to defeat this bill should contact us as below.

    Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors.

  • [Avatar for American Cowboy]
    American Cowboy
    August 31, 2011 10:00 am

    John, you and Gene must have interesting airline conversations, since you seem to be on opposite sides on this legislation. Unless of course, Gene has come to his senses.

    The problem is that the big corporate interests who think patents are a nuisance have taken over AIPLA and IPO and ABA-IPL section and gotten those outfits to be for this stinking bill and to use their PACs to buy votes for it.

    Attorneys and other spokespeople representing other interests get drowned out.

  • [Avatar for step back]
    step back
    August 31, 2011 06:09 am

    jobs jobs jobs
    chops chops chops
    due due due
    clue? clue? clue?

    Those are the repeat noises you would probably hear if you could put a stethoscope near the echo chamber heads of most Congress critters.

    1) The first set is easy. If you repeat the word (jobs) often enough, the American voters will come to believe that you are personally creating the missing job thing out of thin air simply by repeating the word for it.

    2) As for the second noise: chop chop; that too is easy. Spending cuts. If the American voter hears you making chopping noises in the legislative kitchen then he will quickly conclude you are busily working at some fool proof recipe for bringing the ailing economy back to life.

    3) The “due due” noises are a bit harder to decipher. And that is a good thing. You don’t want the American voter understanding that your true goal is to suck more membership dues (a.k.a. taxes) out of him by crook or by bent hook. “First to file” forces the over-wealthy American inventor into filing more Provisional applications. That’s pure profit into the PTO front door without having to do anything, which free-for-us money sneaks out the back door and into the Congressional coffers when no one is looking. See? Dues dues dues. How do we pick the pocket of the American inventor now more than ever without anyone noticing? Simple. We say that overhaul is long over-“due”. (We “due due” on the American inventor. Get it? Ha ha. Bwahaha bwahaha.)

    4) The last set of noises you already understand. Your Congress critter is generally without a clue as to how America’s prosperity engine works. But then again, who ever needed a clue to vote yes for getting your unjust dues?

    Chop chop chop
    Dues dues dues

    Quite please. Here we are again, in the back rooms of the legislative kitchen,
    taking a few more turkeys for the proverbial ride of their lives. Nothing new here. Move along.

  • [Avatar for 4Mark]
    August 31, 2011 03:40 am

    One might think of attacking the problem at its root. Just like a UK’s National Health Service, the USPTO will take all the resources you throw at it, and it will still not be enough to do the job to the full satisfaction of its community of users. Merely throwing more money at it is not going to solve the problem.

    Then one might reflect on the abstruse (but blockbuster significant) technical content of one of today’s patents in telecoms or biotech and the correct PHOSITA in such cases, and then think on the science and engineering capabilities of the average juryman (or judge), the right to a jury trial enshrined in the US Constitution, and the handicap the USPTO works under, that it has to implement the fuzzy law handed down by SCOTUS and the CAFC. Are these the roots of the problem?

    One might then conclude it to be pure futility, to suggest attacking the problem at source.

    Meanwhile the world watches technology superpower USA, as ever, slack-jawed in amazement..

  • [Avatar for Just visiting]
    Just visiting
    August 30, 2011 09:23 pm

    Patent reform is happening as we speak … just read many of the recent decision from the Federal Circuit, which has gone out of its way to be hostile to patentees/applicants.

  • [Avatar for Gene Quinn]
    Gene Quinn
    August 30, 2011 07:34 pm


    Seriously? Who would be interested in an appointment to a US federal district court judicial position? What young lawyers would want to take a clerkship?

    There would be a long line of patent attorneys who would accept an appointment. You can count me as one. I would gladly accept an appointment as. Federal Judge on either the district court or Appeals level.

    Based on the many thousands of lawyers applying for clerkships every year there would be tremendous interest.


  • [Avatar for Mikk]
    August 30, 2011 05:59 pm

    Great post! It’s never too late. But the question is not only tweaking the US patent system but whole patent system needs tweaking….or reform? The problems are not only money or human resources or trolls. It’s the way how we see patent system. Economy and technology is not what it was ten or twenty or more years ago, but patent system is almost changeless. Product lifetimes are shorter and shorter but patent pending time/examination is longer and longer. And information amount is huge…why we have those weak patents? It’s not exmaniner’s fault, it’s not applicant’s fault. One examiner is not able to conduct meaningful search alone anymore. Give more money to PTOs, hire more examiners, but this is not solution.

  • [Avatar for AAA JJ]
    AAA JJ
    August 30, 2011 05:40 pm

    “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.”

    And how would you staff these courts? What law firm partners, senior associates, of counsels, even law professors, are going to give up their practices or tenure to handle the nationwide docket of patent litigation?

  • [Avatar for Anon]
    August 30, 2011 05:03 pm


    I concur with your view of the patent reform bill, but I disagree that the patent practitioners have been mute. I have personally called and talked directly with my House and Senate representatives a number of times.

    To this person, the problem is not one of being “mute,” it is one of being able to be heard over the din of the special interest lobbies.

    It is not enough to call for speaking up – more of the same will not work – we need effective speaking up. “How” can we be more effective? Where are our industry groups on this? Why are we not pressing them to be more effective?