“The prospect of real legislative reform seems close, indeed closer than anyone would have predicted just a few months ago, and people in-the-know inside the beltway are truly beginning to become optimistic that something can be done to fix Section 101—and soon.”
There is little doubt that the way intellectual property is viewed and protected has transformed over the last 12 years, at least in the eyes of those who strategically appreciate both the importance and limitations of rights available today.
Once upon a time, corporations would seek to patent as much innovation as possible, working to obtain gargantuan patent portfolios. These gargantuan patent portfolios often provided protection in numbers, and not necessarily in quality. But with the Supreme Court becoming more interested in patents since 2007, and with decisions in KSR, Bilski, Myriad, Mayo and Alice, many of these gigantic portfolios were reduced to rubble.
There were several very large technology companies that led the charge both in the courts and on Capitol Hill to change U.S. patent laws in a way that many believed would weaken patent rights and ultimately the patent grant itself. These companies enjoyed tremendous success, and today, U.S. patent laws simply do not look anything like they did a mere 12 years ago. This became indisputably clear last year when the U.S. Supreme Court decided Oil States and said that a patent is merely a government franchise, which shocked many observers.
Back to the Future
Today, both public sector and private sector trade delegations that travel the world encouraging developing nations to adopt strong intellectual property laws find themselves encouraging those nations to enact patent laws consistent with the way America used to protect patents, rather than the way America currently protects patents.
So bad and uncertain has the law of patent eligibility become that, for example, the Cleveland Clinic and other major institutions are beginning to refrain from researching and developing innovative medical diagnostics because they cannot be patented. And because they cannot be patented, this means investors are unwilling to provide the capital necessary to take the exciting early stage innovative research and turn it into developed medical diagnostics that can be deployed in hospitals and laboratories. This should send shivers down the spine of every American.
This is alarming because, as any medical device company will tell you, it is necessary to diagnose disease before treatments and cures can be invented. And, according to a brief filed by Medtronic at the Supreme Court when Bilski was argued, new innovative devices often trail diagnostics by a decade. This means the U.S. patent system has been inhibiting innovation, not enhancing or promoting innovation as the Constitution commands. Sadly, the U.S. patent system continues to inhibit innovation as the patent policies of America have continually grown to favor the few and not the many.
A Principled Approach to Change
As bad as all of this sounds, there is hope. For the first time there is a bipartisan group of Senators and Representatives working hard to find a legislative solution. Talks are proceeding to the point where a bill to legislatively fix patent eligibility and overrule at least several Supreme Court decisions is expected to be introduced late Spring—perhaps in May or June of this year. Senator Chris Coons (D-DE), Senator Thom Tillis (R-NC), Congressman Doug Collins (R-GA) and Congressman Hank Johnson (D-GA) currently have a four-principle framework that includes the following:
Guiding Principles for Section 101 Reform
- Patent eligibility should not turn on the existence of related technology or the current state of the art. In other words, subject to meeting all other requirements of the patent statute, especially novelty, obviousness, enablement, written description, and definiteness, any useful invention should be eligible for protection regardless of whether it is new or old, conventional, known, or using other terms relevant to determining obviousness or anticipation.
- When assessing the eligibility of patent claims, those claims must be construed as a whole, with each limitation in a claim given equal weight, and none dismissed or discounted as “routine,” “known,” “conventional,” mere “data gathering,” mere “post-solution activity,” or the like. It is impermissible to carve up a claim into different parts and assess the eligibility of the parts of a claim separately, rather eligibility must consider the claimed invention as a whole.
- Diagnostic and life science technologies should be eligible for patent protection per se, subject to meeting the other existing statutory requirements, and should not be considered a law of nature, natural phenomena, or otherwise patent ineligible subject matter.
- Any reform to Section 101 should statutorily codify a definition and/or exception(s) to patent eligibility. Any statutory exception(s) should not use the existing judicial exceptions of abstract ideas, laws of nature, or natural phenomena. Any statutory exceptions should be the sole and exclusive basis for excluding subject matter from eligibility and may not be expanded upon by courts. Any definition of eligible subject matter should be adaptive to include new technologies not yet invented.
This is all good news for innovators for a variety of reasons. First, it would mean a return to patent laws that encourage entrepreneurial risk-taking, which fosters innovation among the many individuals and start-up companies that have always dared to dream about the future and explore different and exciting ways to envision that future. Second, the prospect of real legislative reform seems close, indeed closer than anyone would have predicted just a few months ago, and people in-the-know inside the beltway are truly beginning to become optimistic that something can be done to fix Section 101—and soon. Third, while the Supreme Court is supposed to be wholly independent and above the political fray and public debates that sway the masses, Supreme Court watchers know that isn’t exactly correct. Supreme Court Justices are people and they react, and the Supreme Court has reacted to Congress pursuing legislation in the past, including in the early 1980s on the cusp of the formation of the Federal Circuit, which was formed because Congress was displeased with the fact that few (if any) patent claims were ever upheld as valid in federal courts.
So, there is great optimism for the future. There does appear to be a light at the end of what has been a very long tunnel. And given the delay between filing a patent application, a patent ultimately being awarded, and a patent being litigated or licensed, it seems likely that patent applications filed today will enjoy a much brighter future than those filed during the darker days of the past decade.
While the future looks brighter, it will be critically important, however, to continue to remember that quality, not quantity, will be the rule moving forward. And, frankly, it always should have been the rule. It always struck me as odd that companies would artificially inflate patent numbers with poorly drafted patents that describe marginal innovation, at best. Those patents cost money to draft, file, prosecute and maintain. And was anyone ever really scared by those paper tiger patents? Maybe. But was it the patents that were scary or just the thought of litigation?
In any event, regardless of the “mine is bigger than yours” mentality that led to the competitive rise to huge patent portfolios without much thought about quality, today, what is required is a thoughtful and strategic approach to innovation that holistically takes into account innovation possibilities, market realities, and legal trends. That will be the way forward for the foreseeable future as well. Of course, budgets are frozen or decreasing, which means navigating the increased complexity will still require working smarter, not harder. Because even as the patent eligibility crisis might soon find a resolution, patent law across the board has become more complex and the requirements to obtain and keep a patent only more onerous.
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Join the Discussion
19 comments so far.
NJ ThomasMay 10, 2019 10:35 am
While legislation is needed, the legislation currently proposed by Coons and Tillis is far to complicated. It will only create more confusions at the PTO and in the courts for years. New legislation needs to be S-I-M-P-L-E!!!
Barrett HaynesMay 6, 2019 03:01 am
Entrepreneurs put products on market without a patent. Do not file for patent until after you go to market. File utility & design claims. Advertise you are original inventor & defame your pirates/trolls. Let them lose as palaintifs in defamation lawsuit. File Intrnl. & protect in countries you can protect in. The Trump administration has to reverse the Mason’s System from our founding that says we are wards of the state & your patent is govt. franchise. Pray for a Trump family presidency for next 29 years !
Night WriterApril 2, 2019 07:10 am
I think that this is a good analysis of the problem. Now if you have more money, then you can endless harass a patent holder. Plus, I think that the balance has shifted where with IPRs it may require more money to defend than to file.
anonymousApril 1, 2019 05:31 pm
Section 101 reform should also include a simple patent incontestability provision. “Patent eligibility under this section shall become incontestable 3 years from the patent’s issue date. No patent shall be adjudicated invalid for lack of patent eligibility after 5 years from the patent’s issue date.”
As Gene is fond of saying, correctly, a patent’s title must vest. This would go a long way toward advancing that principle. After all, it is the “limited times” provision that mitigates the risk that an infringer would need to pay a license amount that is too high. The waning patent term ALWAYS works against the patent owner, never for him.
To prevent patent term stealing, the term of a patent should be tolled as relates to any defendant who challenges validity, for so long as he challenges validity.
angry dudeApril 1, 2019 04:42 pm
Dude, I hear you, but nothing like what you describe is going to happen
Just lip service by politicians
To add to your comment:
The largest and wealthiest infringers are mostly PUBLIC companies subsidized by the general public, me and you including, through 401Ks etc
So the more they steal with impunity, the better their stocks do, which benefits
more than a few individuals including myself
BUT they steal patented tech from small PRIVATE companies owned by few PRIVATE individuals – inventors and their investors
This is not a good recipe for growing tech startup ecosystem, only for killing it
ED WilsonApril 1, 2019 03:43 pm
It is time for a day of reckoning for the bullies out there. The patent office should make changes to provide help for little guy patent holders that are being victimized by the willful infringing bullies.
Something must be done regarding the exurbanite costs of a legal law suit which by the way is not being helped by PTAB. Thousands of inventors simply cannot afford to enforce their property rights due to the enormous costs of the legal system, not only due to the dollar cost but also for the time involved in a long legal battle.
Perhaps the top executives of large wealthy companies should be held personally and publicly accountable for the “White Collar Crime” of Theft. The top executives are allowing their legal team, (the little guy can’t begin to have one), to knowingly allow the willful infringement of a little guy’s patents because they know that the little guy can not begin to fight them in court. The only way a little guy can fight is to hire a large law firm at the exurbanite cost of contingency fees plus expenses. Often the bullying large infringer will not even begin to negotiate a licensing fee with a little guy for fear of admitting they might be infringing.
OK. It is time to call it for what it is when a knowingly wealthy willful infringer fails to pay a realistic licensing fee. It is THEFT pure and simple. Wealthy companies, and everyone knows who they are, don’t want the public to know it is THEFT which is what they are doing and what the proper name for it is. It is just another form of “White Collar Crime” that all too often gets unreported and seldom is punished. The wealthy infringer knows full well that in most cases he is going to get away with it. He usually has almost unlimited money and a well-funded legal department to enforce his desires. He knows that the little guy will drown in legal fees and most likely bankruptcy if he tries to enforce his rights. A little guy not only does not have the time to fight, but certainly does not have the funds. He most likely has no way to come up with hundreds of thousands if not millions of dollars to fight the big guy. Therefore, the bullying wealthy guy usually gets away with the “White-Collar Crime” of Theft. The bully simply copies the inventor’s ideas, in effect steals them, and goes haply on his way.
As I recently stated in another post and have now added publicity and personal liability: So, what can be done. First, PTAB must be eliminated. It eliminates a fair playing field for it is designed to help the wealthy infringer instead of the thousands of little guy patent owners which the US Patent and Trademark office should be helping instead of hindering. Why the patent office decided to help finance PTAB is beyond me. A patent should be worth more than just the right to buy an overpriced coffee mug with the inventor’s name, patent number and a patent office logo on it. Secondly, somewhat like the wealthy people who got caught at the crime of illegally paying to get their children into the college of their choice, perhaps the FBI should be brought in to investigate the crime of THEFT of the property rights of the little patent holder. Usually the theft crosses state boundaries. Let the FBI hire the experts they need to investigate and prosecute the case. This would not cost the little guy the enormous costs of hiring lawyers on a contingency basis – 30 to 40% – plus costs for Markman hearings, transportation, hotel bills, mock trials, video depositions, expert witnesses, etc. The ability, which should be endorsed by the patent office, of being able to report the crime of theft to the FBI would not cost the little guy anything, and it would level the playing field. (I am sure all lawyers would hate this idea.) Thirdly, if the little guy does have to hire a wealthy law firm to handle the case for him and wins, the willful infringer should be compelled to pay not only the triple damages, but also on top of that, all expenses, contingency fees and trial expenses, expert witnesses etc. as well as, on behalf of the little patent holder and inventor, directly pay any IRS charges that the little guy might have to pay as a result of winning the law suit. Also, the top officers of the Bully company should be held legally liable for the THEFT. The top executives should be forced to appear for depositions as well as in court to publicly try to defend their company’s willful infringement. Perhaps if the top executives of the wealthy willful infringer must face even larger expenses and public scrutiny than he faces now, he will not have his team of lawyers fight a long legal battle, which unfortunately now favors him, before willingly paying a realistic licensing fee without a fight. Turnabout is fair play. The little inventor also needs to realize he could face the same types of penalties if the big guy is not copying his ideas.
In the a multiple patent holder case, a typical little guy inventor, multiple large companies including Apple have for years been told numerous times that they are infringing on several of the multiple patent’s claims. It is time for the bullies, which includes many well-known companies, to have a day of reckoning. Perhaps when the little patent holder hires a large well-known law firm on a contingency basis, some of the bullies will realize that negotiating would have been a better option than a long law suit. This would be especially true if the top executives can be held personally and publicly liable for THEFT. They should not be able to hide behind their corporate shield.
Kim WonMarch 30, 2019 01:46 pm
I have been schooled by special interest groups in the passed a small inventor with a new 5G or AI invention will not have the legal footing as a large Tech company like Apple has in the current America There is very little incentive to file a patent in the U.S. as the laws and the special interest groups have gamed the system. I do not see America fixing patent right for small to mid size patent holders. Patent protection is not going to happen no one wants to see there fb Apple Google shares drop in value even if it means a greater good for the American economy. The anti patent lobbyist will squash what ever proposals are brought forth to fix the current anti patent laws like 101, Ebay and Alice. Europe and Asia might be new places an inventor could go in order to help their invention prosper. Its the sad new reality, as they say greed will kill it self and Americas addiction to greed is on a one way path to destruction for the rest of the country, regardless of the USPTO and a handful of Congress members warnings that their current path will lead to the death of protection for the American inventor and IP holder. Greed for the few and death to a nation. Will not be the first empire to fall because of it.
concernedMarch 30, 2019 04:30 am
Kim [email protected] 8:
It is possible that big pharma will get a special thrust from any new patent legislation. And certain drug cases are getting patent consideration now, namely a certain drug compound, at a certain dosage, on a certain person to cure a certain medical problem.
My appeal emphasized a certain solution, on a certain problem, on a certain person at a certain time. Hopefully that corollary argument and others we made win the day.
Accordingly, if (big if) all this Washington D.C. talk is just for a certain group, the spill over should help other groups of people. I doubt any new legislation would be exclusionary, by design or otherwise.
I think Mr. Quinn is correct. Quality, not quantity, will be the key factor. And if one can prove an existing problem is solved or quality of life improved with a patent application, we just got to hope it prevails.
Need injunctions and patent enforcement also. Otherwise, all bets are off.
concernedMarch 29, 2019 08:52 pm
I sent you a copy of the appeal brief as promised. Thank you for all your assistance!
JacekMarch 29, 2019 06:13 pm
From inventor point of view. I submitted one of my already patented solution to a company and right now I can not stop thinking if they are going steal it from me or not. It makes me angry. Did I spend money and time only to create problem for myself? Am I going repeat such mistake? Of course not. I rather start doing something else. All this empty talk, hopes but things are like they used to be for last 8 years. Technology I developed is replacing 132 years old one still used to this day. So isn’t better to kip it hidden for my kids or better go to EU and set up shop there. My Future and my family can be build only on my work not on false hopes. You are talking about statistics etc. I am not a statistic. My life is at stake. The false narrative of this country is that you can control your destiny. Really It is Fake news.
BMarch 29, 2019 05:23 pm
@ concerned “We filed our PTAB brief last night. My claims had no 102, 103 or 112 rejections, just a 101 rejection using court cases outside my field of technology”
Good luck. Seriously. You have competent counsel but incompetent judges. Hopefully one of the s101 cases before the SCOTUS will be heard soon.
Kim WonMarch 29, 2019 03:08 pm
Patents values for IP holders and new inventors are worth nothing! The new Sub Committee on IP that has been resurrected will carve out legal rules for the pharma industry and will leave the rest of the IP holders and new inventors in the cold. Only hope anyone will have is applying for a patent in China or Germany. Apple and Google will take what they want and when they want and there is nothing anyone can do about it.
SCOTUS, and all the judges and politicians work for and are paid for by the corporatocracy. Sen. Tilis Sen. Coons and the USPTO have no chance. Apple has close to $500 Billion in offshore and onshore dollars, its not hard to get what you need when you have this kind of money! Thanks to laws like EBay, Alice, Mayo, AIA/PTAB that helped kill patents. Yes the game is rigged and bought and paid for by Silicon Valley, no point inventing or filing for a patent in America, patent have no value and the elites will drag your case out until they bleed you dry. All we are seeing and hearing is political theater all bark no bite. Patents are dead and its time inventors move to Europe and Asia for better protection.
angry dudeMarch 29, 2019 02:26 pm
I call bs on you, dude
IF infringement is *willful* and deliberate then to hell with your “safety proposals”
Why should anyone care if some household brand name product is shut down by court-ordered injunction because the CEO of that large *public* company told his engineers (in private) years ago to read the patents of some small *private* company and reverse-engineer their products to steal their tech without paying anything ?
What other “balance and safety measures” can you propose ?
Mandatory lectures for convicted drug dealers about the detrimental health and societal effects of the sh1t they sell instead of sending them to prison ?
And hope they won’t do it again
PTO-IndenturedMarch 29, 2019 12:30 pm
The Trouble with the Courts / AIA — double-standard / double-edged sword
If by “the Few” here, we mean (actually) the 1% of companies (or less) e.g., in ‘tech’ that became the wealthiest, under what appears to have been an intentional weakening of U.S. patents by the Courts / AIA — literally at the expense of thousands of other U.S. companies — then, here’s a fitting analogy:
Imagine a hypothetical first-year patent practioner with a young inventor/client with a viable invention, but who don’t understand that vagueness and ambiguities unwittingly written into a specification and/or its set of claims (IP) can come back to haunt, in various ways. Additionally, who’s specification and claims are absent even the most basic understanding of the economics of innovation e.g., that only certain features of a viable invention can be most effectively be monetized, to an extent they are precisely represented in one or more claims.
What will be the result? Such a viable invention will easily be subsumed for example, by ‘larger entities’ who, comparatively, have far more resources and reach than that of the practioner’s client, and who know how such IP vagueries and ambiguities can be side-stepped, overcome.
Is there some similarity between how the U.S. Courts / AIA have steered IP rules?
What the U.S. Courts have not, still don’t (and possibly never would?) take adequately into consideration is that there are — ‘larger entities’ with far
more resources and reach in the world — than each of ‘a Few’ (tech-stagnated) elite tech companies of the U.S. such as FANG.
Those entities are called entire countries, who are not only standing behind their IP (or even substantially helping to fund it), they’re doing so by a successful reverse-engineering, out of their own patent systems — vagueries and ambiguities written by U.S. Courts / AIA into a USPTO-challenged patent system.
In order to yield what? Essentially, the best of the U.S. patent system (the proven ‘viable invention’) before the under-informed writing, before a double-standard / double-edged sword, short-sightedly wielded–only in the U.S.–its mighty, most debilitating (and still punishing) blows.
But, instead of an enriched U.S. economy and thriving on-going legacy of innovation being OUR ‘earnings’ in this century, U.S. Court and AIA rule-tweaked vagueries and ambiguities have in effect, outsourced that once-prized ‘economic engine’ yet again to “the Few” / ‘larger entities’ — now however, well beyond our own U.S. borders. While still, continuing to tie the hands of our own innovators behind their backs.
As mere U.S. citizens, we cringe, we bend, we perish under a remoteness of judicial impartiality, while witnessing its double-standard / double-edged sword increasing IP value and rights abroad, while decreasing IP value and rights in the U.S.
anonyMarch 29, 2019 11:31 am
Proposed 101 amendment: “Whoever invents or discovers any [[new and]] useful process, machine, manufacture, or composition of matter, or any [[new and]] useful improvement thereof, [[may]] _shall_without_exception_ obtain a patent therefor, subject to the conditions and requirements of this title.” ([[deletions]], _additions_)
This should meet principles 1 and 2 directly and solve principles 3 and 4 by cutting out the exceptions created by the courts. A concern with such an amendment is that it may spur an uptick in litigation because doing so may dramatically lessen the validity cost barrier that is currently preventing large numbers of patents from being enforced (i.e., small inventors cannot currently afford the costs to survive validity challenges and therefore do not litigate). With an uptick in litigation, defendant litigation costs may go up exponentially (i.e., companies will have to defend against more patents and will have to spend more in defense costs for each patent). Companies (large, medium, and small) would lobby to “tame” the patent system, similar to the pre-AIA and pre-Alice days when the patent troll narrative was established. In other words, the cycle will likely repeat itself.
While amending 101 may be the correct first step, consideration should still be given for the ramifications of what will happen after such an amendment is made. There should be a counterbalance for when defendant litigation costs become too burdensome that still allows for the enforcement of patents by small inventors and that does not unreasonably burden companies (of all sizes) with disproportionately expensive legal costs. (Too burdensome meaning so burdensome that it spurs defendant companies to lobby Congress to repeat the AIA and prompts the courts to reiterate Alice).
One idea would be for optional mandatory licensing regulated by a patent royalty board. Optional because a company may optionally register individual products (and services) into a product registry, which invokes mandatory licensing. The patent royalty board sets the rates for royalties (e.g., 30% of revenue generated by product sales to pay for all infringement), the company pays the amount to the patent royalty board, the patent royalty board distributes the payments equitably to patentees that have established infringement to the board. In other words, in exchange for a defined percentage of revenue, companies can avoid the legal expenses from defending against large numbers of patents. Small companies benefit because they won’t get buried by infringement suits from either large companies or from masses of small inventors. Small inventors benefit as well in that it creates a streamlined process for small inventors to enforce patents against even large companies that would otherwise ignore small inventors.
angry dudeMarch 29, 2019 10:49 am
Raymond Van Dyke @3
Dude, cut the bs please
I will never believe in “a renewed appreciation of the patent system” by our government (and by general lemming population) until I see some major household brands by giant tech corps pulled off the market by US court-ordered injunctions – with all the consequences to *willfull* infringers like 50% drop in stock, massive layoffs, firing of CEOs and c-level execs, possible criminal prosecution for them etc.
What’s the likelihood of that happening in America ?
This is not “communist” China, dude, not even Russia
The “Big Tech” (giant *public* companies and industrial conglomerates) has been freely and *willfully* stealing valuable patented inventions from individuals and small private companies for well over decade
Why do you think those giant SV corps have trillion dollar valuations and piles of cash in overseas accounts ?
That’s why – they never bothered to pay patent licensing fees, just took what they wanted
Raymond Van DykeMarch 29, 2019 09:46 am
The rise of modern technology, starting in the 50s and 60s, exploding in the 70s and 80s, and then going hyperbolic in the 90s and onward with the Internet and other technologies caused patents to have value. Alas, as Gene and others point out, some tech companies rallied against this for their own benefit, changed the paradigm, and that appreciation for a patent system changed dramatically over the last two decades. In my view, the pendulum for patent was halted and started swinging backward. We reached bottom a year or so ago, and are now on an inflection curve. The pendulum is very slowly trending towards a renewed appreciation of the patent system. The appointment of Director Iancu, and a growing consensus within Congress to act gives me some hope. I fear, however, that Winter is not over (Games of Thrones reference), and the struggle will be great for years to come.
Our Founders enshrined the patent system into the Constitution itself. They valued a robust patent system where human creativity and ingenuity were rewarded through patenting. They did not envision the power of corporations, but the patent paradigm is still there and that paradigm is not just for big business. Our Founders democratized the patent system for all Americans. The Supreme Court and Congress have unfortunately not always accorded the Founder’s wishes in their actions. America is a nation of invention. We must protect American innovation by leveling the playing field again. I hope that an upcoming Congress can meet that challenge without caving to special interests. This unfairness to American inventors is NOT fake news. It is an American tragedy.
concernedMarch 29, 2019 05:54 am
We filed our PTAB brief last night. My claims had no 102, 103 or 112 rejections, just a 101 rejection using court cases outside my field of technology. The 101 rejection did not reconcile with any of the evidence on record. In fact, we proved with hard documents that no possible end user in the country uses my approach, how many patent applications have that luxury?
Conveniently for the sake of rejection, every court case used against us was a court case where no problem was being solved, the solution was long prevalent in society and a generic computer added. The Examiner even admitted on record that the court cases were not in my subject matter, only similar, and the Examiner completely ignored all the evidence placed into the record. Would not even address the evidence.
So I would embrace the guiding 101 principles reflected in this article. I may also be an inventor that Mr. Quinn refers to as benefiting from any new Congressional action due to its timing. House Representative Steve Stiver’s Office (my representative) said my contact with them and my story could not have come at a better time. Their Office knew Josh Malone, and my contact info for Representative Stiver’s point man (Nick Bush) regarding the Stronger Patents Act was passed along to Mr. Malone.
So here is hoping for a new day for all inventors. I am hoping injunctions are also part of the new legislation.
Thank you Mr. Quinn for sharing the article.
Paul MorinvilleMarch 29, 2019 12:37 am
I was worried they would include 103 and/or 112 changes, which could pass the abstract idea exceptions to a different part of the law. But, according to the principles, it looks like they are not going to do that. We are watching closely. There has been no evaluation of changes in either 103 or 112, so making a change would be without debate.