Bob Stoll Part 3 – SCOTUS, the Future CAFC, Inequitable Conduct

On July 19, 2012, I interviewed Bob Stoll at the Washington, D.C., offices of Drinker Biddle. In part 1 we discussed his adjusting to life in the private sector, the fact that he doesn’t enjoy the billable hour part of private practice (just like every other attorney I know) and we discussed politics a bit, as well as the U.S. economy and innovation policy. In part 2 we discussed Presidential politics, how innovation drives the U.S. economy, why a great new technology that has spawned an entirely new industry as we have coming out of so many recessions in the past, patent examination process and how to streamline the examination process.

In this final installment, Bob Stoll and I discuss the United States Supreme Court. We spend some time talking about the Supreme Court’s recent patent eligible subject matter decisions. We also discuss the problem of bad patent applications contributing to bad law and slower, more inefficient patent prosecution. We also discuss inequitable conduct after Therasense and who might make a good addition to the Federal Circuit. Stoll says the name he keeps hearing is Todd Dickinson.

Without further ado, here is part 3 of my interview with Bob Stoll.

QUINN: Well, certainly as the application has gotten more complex. Just the Federal Circuit decisions over the last 20 years have continued to layer on requirements. You need to have this, you need to have that, you need to have this and that to satisfy an adequate disclosure requirement. That has required applications to have gotten longer and more detailed and the number of patents and prior art have only ballooned in complexity, so things have gotten a lot more difficult. I wonder — the thing that worries me is some of these cases, particularly at the Supreme Court, without getting into specific cases, but when I was in law school we were always taught and told the Supreme Court waits for the right case to say the important stuff. This is a good case, but they’ll eventually get to that once a couple of other circuits decide it and have conflicting views and viewpoints and so forth. The fear that I have is a lot of the cases the Supreme Court seems to be taking relate to really poorly drafted claims. So then it winds up sending a shockwave through the industry. Is this really an assault on this particular technology or this particular industry or is this because this was really a bad claim?

STOLL: Well, I hear what you’re saying and I do think some of theses cases contained poorly drafted claims but I also think the Supreme Court is erring in the way it’s applying the law, particularly the law with respect to 101 where they are inculcating arguments of 102 and 103 into 101 which I hate to say it but I don’t think they get it.

QUINN: Well, I wish I could agree with you on that and the reason that I don’t –

STOLL: Ewww, now we’re gonna get into an argument.

QUINN: Well, no, no, no, no, we’re not going get into — because we’re on the same side here I think. I’m going to go maybe one more step anti-Supreme Court, like I normally do. Because I don’t think they get a lot of things, I’ve taken to saying that the Supreme Court knows enough about patents to fill a thimble – maybe. But anyway, there’s a part of the Prometheus decision where they talk about the Solicitor’s brief they said that this really should not be a 101 issue, it should be analyzed under 102 and 112 and then Justice Breyer writes that the Supreme Court declines that invitation. And it wasn’t so much really an invitation as much as that’s what the Supreme Court itself has forever said was required. I mean, that’s the law. That’s what the statute says. It’s supposed to be that way and their cases have always said it’s supposed to be that way.

STOLL: Maybe. And far be it for me to get into the mind of a Supreme Court Justice but all I can say is it doesn’t match with my understanding of the statutes with respect to patent law as I have worked with them for 30 years so I —

QUINN: Yes, I know, and I don’t —

STOLL: And I was very disappointed with the decision.

QUINN: Yes. And then in the Bilski decision they basically to some extent agreed with Judge Rader.

STOLL: Well, I liked the Bilski decision if you want to know the truth. The only problems I had with it is they said , the machine and transformation test was a test but there may be others but they didn’t give me any other tests.

QUINN: Yes, but they didn’t give you any others.

STOLL: And I haven’t heard of any since then, and then they came out with Prometheus.

QUINN: And the way that that’s playing out is if you have machine or transformation that’s your safe harbor so that’s where everybody’s going. But much like you said, there may be others. They didn’t tell us what others. They also said that this was an abstract idea but they didn’t say why this was an abstract idea and that’s one of the problems. That’s how you get into Prometheus and that’s how you’re going to get into the Myriad case, because I think it’s almost guaranteed that they’re going take Myriad, there’s too much interest in it and because this seems to be a politically observant Supreme Court and they look for the important or hot issues. That’s the hot one in our area.

STOLL: I think they’re going take Myriad too.

QUINN: So then the question becomes what does this all mean?  And where we went off on this was the law is shifting.  A lot of these applications that you wrote prior to Bilski — the Federal Circuit Bilski, really are in jeopardy.  There were people who are doing it right and, you know what they charge — they charge the fair rate for doing it right.

STOLL: Right.

QUINN: And then there was a whole bunch of clients saying well, we don’t want to pay that.  We want to pay 20 percent of that.  So then they get 20 percent of the disclosure which doesn’t include any discussion of the technology, it only discusses the method steps and all those you might as well just throw them away.

STOLL: Which is getting back to the problem that I’m talking about and the solution.

QUINN: Yes.

STOLL: The problem is bad applications being put together because people are trying to pay too little for it.  Then there is the examination side, not giving enough money to the resources of examination.

QUINN: Right.

STOLL: Enough time, enough technical capability, enough training, all of that.  If we fix those two problems I really do believe we’d be heading in the right direction.

QUINN: Yes, it can be done.  I mean —

STOLL: Yes, it can be done.

QUINN: I use Apple as an example.  Apple’s an innovator and any time I read an Apple patent, if I were going to grade it I would give an A+, A, or an A-.  They don’t seem to go after any of the C stuff.  And you have a lot of companies you put this or that obviously put this or that patent application on their C list — there’s almost no disclosure and very little time was spent and clearly very little money went into it.  So there is a path. Qualcomm is another example.  They are a heavy user of the PCT.

STOLL: Yes.

QUINN: They know how to go about doing things.

STOLL: Yes.

QUINN: So there is a recipe and —

STOLL: And each firm — and each company seems to have their own recipe.

QUINN: Right.  Right.  But there — there is two sides of the room.

STOLL: Yes.

QUINN: There are different recipes, but there are two sides to the room and that is interesting.  I do work mostly with the startup businesses and small businesses and there’s a lot of anti-patent stuff out there and they’re saying oh, well, this company says patents are bad and so we’re not going to go ahead and get them.  What do you say to that?

STOLL: I think that’s a mistake.   I think it is particularly bad for a developing company,  If you’re in an emerging company with a technical product ,in most areas it is difficult to base the company’s future entirely on trade secret  What are you gonna do to be  ahead of the pack?  You’ve got some sort of breakthrough idea that you believe is going to take your company forward without having some patent protection for it.  I don’t think that’s a wise way to actually move forward.  I recognize the problems, I recognize the fact that it’s expensive, the fact that, , large companies have more resources than the small company does but bottom line is a good patent  is something that’s very important if you ever want to become one of those large companies.

QUINN: Right.  Well, they all had some kind of advantage.  They had some kind of platform to start building from.

STOLL: Yes.

QUINN: Apple seems to have done pretty well, you know, so why wouldn’t you want to model yourself after a tech company that has been wildly successful?  Which all of them have got patents, by the way.  Every last one of them have patents so it’s always interesting to me to hear the anti-patent argument.

STOLL: Me too.

QUINN: I just don’t get —

STOLL: I think it’s a frustration with the — of expense of having to procure and defend the patent.  I think that’s what you’re hearing and I understand that frustration.

QUINN: That’s true but, you know, it’s easier now than it ever has been to get contingency representation.  Now it’s still not — it’s not easy.  You don’t see patent commercials saying “have you been injured or would you like to be injured?”  Not those kind of commercials on late night TV but if you have a good patent and you have a good case and there are infringers out there, you know as well as I do that there will be an attorney that will represent you on a contingency basis.

STOLL: Yes.

QUINN: I kind of scratch my head as to — as to what’s really going on in the industry.  But, you know, to shift gears a little bit.  You mentioned inequitable conduct. I would be remiss if I didn’t take one run at that. I understand in your experting position you may not want to or be able to comment, but I’d like to get your thoughts.

I thought that when Therasense came out we had tied it with a bow, put it on the shelf and it was in its position and now we at least get a few years, like the same way that we had when he had Kingsdown, you know, back in the 80s, a few years apiece before we’re gonna have to go back and look at this and it’s gonna rear its ugly head again.  And it seemed to almost immediately come back up and in some cases doesn’t seem to have made any difference.  So, I mean, I —

STOLL: Do you want my comment on that?

QUINN: Well, I’m throwing it out there and —

STOLL: Well, let me say —

QUINN:  — say what you can.

STOLL: — I thought what you thought.  I mean, I hate to admit that but I thought Therasense —

QUINN: So you’re starting to come to your senses.  You’re starting to think like me.

STOLL: Well, no, I was always at my senses.  [Laughter] I thought Therasense kind of put an end to inequitable conduct.  I thought that was a very stringent test but for and the single most reasonable inference is that the attorney or the inventor intended to deceive the Patent and Trademark Office, those are pretty tight.

QUINN: Yes.

STOLL: And I have not looked at statistics recently to see if there has been a significant reduction but I have been talked to by several firms about being involved in those types of cases  — I have a lot of people asking me to expert for them and I am reviewing each of the cases individually and I am on both sides.  I represent folks on both sides of the issue.  Sometimes defending the patent, sometimes not, based on the facts as I see it and the facts as I see it either meet that Therasense standard or don’t and y.  some of them do meet the Therasense standard and some of them don’t and I evaluate it based upon what documents I have in front of me and I thought it would all go away and it hasn’t.

QUINN: Yes.  Maybe the take home here really is if you’re in the patent prosecuting business and you thought it was safe to go back into the water you may want to take a second look at what’s going on.

STOLL: I have — I’m getting lots of calls.  I don’t know if that’s because I’m now the new ex-Commissioner on the block or because  I do feel passionate about what I eventually take but I am getting lots of calls and I did not expect to when I left the Patent and Trademark Office.  I thought the inequitable conduct issue had been buried with Therasense and that does not seem to be the case.

QUINN: No, it does not. I don’t know where this is going to go.  I don’t know what buries it if Therasense didn’t — because you got to have some wiggle room.

STOLL: You have to.  I mean, there are cases where there is an intent to deceive the Patent and Trademark Office and that should be wrong.

QUINN: Right.

STOLL: And I don’t think it’s in most cases but it is in some.

QUINN: Do you get the sense that – and maybe you can’t generalize it like this — but do you get the sense that it’s a lot of times dealing with the stuff that comes from overseas, the foreign origin work where there’s somebody overseas that knows about something and maybe doesn’t tell us in the US or a US agent or —

STOLL: — I have the issue arising in US cases and in foreign cases so it is not  one way or the other.  I’ve seen it in both.

QUINN: Yes.

STOLL: But like you said, I was surprised.  I did not think that this would be something I’d be spending a lot of time on and I hope it does resolve itself.–

QUINN: Once it didn’t seem to resolve itself I thought to myself, “you know, that silver bullet cure is just too hard to resist.”

STOLL: You’ve got to have a charge for fraud upon the Patent Office–

QUINN: I understand that but, the looking for it and the continued interest in that from the litigator standpoint, you know, I mean, if you’re trying to kill Dracula you’re looking for a stake.

STOLL: The stake.

QUINN: You know, and that’s the stake.  I mean, that’s the one that goes and kills it all so maybe the temptation is still just even in the marginal cases.

STOLL: But the fact is a lot of people are finding it.  , I’ve seen a lot of court cases where they have been upholding inequitable conduct.

QUINN: Yes, and that was a shock to me too.  Maybe it really is inequitable conduct but those who aren’t paying attention I think need to focus in.

STOLL: I agree with you.  I think that it is not gone and I think people need to be careful about what they’re doing, and be honest about what they’re doing.

QUINN: Yes.  So we’ve gone through a whole number of different things.  Is there anything — is there something that you wished I had asked you that we haven’t talked about or something you want to get out there and say?  Other than what we’ve talked about what’s the hot topic that you see in the industry or on your desk on a daily basis or —

STOLL: You know, friends of mine are starting to talk about the next piece of legislation that needs to wind its way through.  I know there’s exhaustion on the Hill right now.

QUINN: Yes.

STOLL: But,  I think we need to continually look at ways to improve the system.  And I really believe we need to now focus on the examination and the incoming application and that might be a mechanism for finding a solution to these improvidently granted patents.  And I think we need to get industry really engaged in noodling this problem out because that’s who’s being affected.  I think there should be coalitions of companies where, , even those that don’t agree on a lot of issues I think everybody can agree that it’s probably in their interest to have valid patents out there. —

QUINN: Right.

STOLL:  –Tthe junk needs to be done away with.  So I think we need to really focus on that because I do believe that after we come out of these recessions and hopefully another isn’t in the offing, the way we are gonna excel in the world is by our intellectual property.

QUINN: Yes.

STOLL: We are very creative as a society, maybe because we’re individualists in concept but I think that IP is something we should build upon to improve our system and create the opportunities for our youth to develop in the science area and carry on with the tradition of inventiveness in the United States.

QUINN: Yes.  You know, looking at the science and math scores in the US anymore it’s depressing.  I don’t know what the answer is but whatever we’re doing isn’t working.

STOLL: No.

QUINN: It doesn’t seem to be working.  So the one thing and I did think of it that I wanted to ask you about, I mean, you’re a guy in the know.  I mean, who are you hearing may be on the short list to be on the court of the CAFC?  Do you know any rumblings?

STOLL: Todd Dickinson is one name that I keep hearing.

QUINN: I keep hearing his name as well.  I think he would be great.

STOLL: I think he would be great as well.

QUINN: I’m a fan.

STOLL: I think he’s got a strong background in intellectual property.  He’d be a good selection.  He is the one I’m hearing the most about.

QUINN: I hear about him as well and I think he would be a great selection.  Do you hear any other names as well?

STOLL: No.  I keep hearing Todd.  So his press is doing very well.

QUINN: Yes, if he does have a lobby.

STOLL: But I think he’d be good.

QUINN: I think he would be very good.  And I do worry. I love Judge Newman, but eventually she won’t be on the court anymore and I look at the court and I just don’t see enough patent people, you know, like you and me patent people.  Folks who are patent experienced in and out are few and far between on the court. Todd would be great because he is a guy who gets it from multiple different vantage points, you know, as a corporate —

STOLL: I agree.

QUINN: — counsel, as a former Director, as, you know, running AMPLA.  I almost think we need to stack the court with people like that.

STOLL: I wish it was a patent court.

QUINN: I do too.  Don’t get me started.  I just — and I understand that that probably wasn’t politically available at the time that they did that but it seems like the patent cases are the ones that really are the ones of consequence that they deal with.  So I would like to see more patent attorneys on these cases.

STOLL: Me too, but I do think Chief Judge Rader is doing a good job leading this court.

QUINN: Well, he gets it.  He was there in the Senate at the time that they were creating this.

STOLL: Yes.

QUINN: He knows the history; he played an integral role —

STOLL: Yes.

QUINN: — he’s a student of history and he really gets —

STOLL: And a great guy.

QUINN: A great guy and he gets the importance of what it is that he’s doing.  He’s been a great ambassador.  He’s like the Energizer bunny on the outside of the Patent Office.  He goes everywhere.

STOLL: Well, he is going to the judges where we can’t move  their executive branches so he can actually work with the judges in some of these countries like China and explain to them why our court decides in a certain manner.  I think it’s extremely useful to everyone for that relationship to develop.

QUINN: Right.  I agree.  I have high regard for him and I also like what he does with en banc cases.  He seems to be more en banc friendly than most of his predecessors.

STOLL: Yes, I do.  I think it’s good to get them all up there making decisions together on very important issues.

QUINN: I do too because at least there for a while then you’ll get some kind of unanimity, which I think is very important.

STOLL: Yes.   Gene, a pleasure talking with you.

QUINN: It’s great to talk to you, Bob.

STOLL: Always.

QUINN: Thank you for taking the time.

STOLL: Absolutely.