Posts in US Supreme Court

It is impossible to know for sure, but it is reasonable to assume that the 1000+ page IDS Kappos referred to might be in response to what the Supreme Court will likely do. The Supreme Court doesn’t seem to like to apply changes in the law prospectively, even radical changes as this would be. So if they do lower the burden the changes will be applied retroactively and affect (and infect) issued patents and pending patent applications. With that in mind, those with patent applications pending might want to anticipate the worst and file “everything made by man under the sun” information disclosure statements. That way you will be protected if the Supreme Court says there is a reduced standard for invalidating patent claims when prior art was not submitted to the Patent Office.

Today it is quite difficult to demonstrate that a patent claim issued by the United States Patent and Trademark Office is invalid and should not have been issued. Microsoft, along with a great many others, is urging the Supreme Court to change that and make it easier for them to demonstrate that patent claims, and thereby the associated patent rights, are invalid and should not have been issued. A strange association of those who are large patent owners themselves are urging the Microsoft position because they are tired of getting sued on patents that they infringe and having to pay tens of millions or hundreds of millions of dollars because they have trampled on the rights of innovators. So in order to excuse their own infringement they are asking the Supreme Court to throw the entire patent system under the bus, which is sadly more likely to happen than not.

If you are anti-patent then you are anti-innovation because those who innovate are not the behemoths of industry, but rather start-up companies that absolutely require patents in order to attract funding, expand and create jobs. Thus, given the hostility toward patents it is entirely accurate to characterize the Roberts Court as anti-innovation. The Roberts Court increasingly puts hurdles in the way of high-tech job growth. You see, it is easy for anyone to characterize the Supreme Court as “pro-business” because selecting a victor in a “business case” almost necessarily means that a business has been victorious. But what business? One that is likely to innovate, expand, create jobs and form new industry? Or one that once innovated and expanded, but now finds themselves stagnant and laying off employees?

One of the most debated issues in patent and antitrust law today involves pharmaceutical patent settlements. Brand-name drug manufacturers pay generic firms to settle patent litigation and delay entering the market. How should the antitrust laws respond? The Cipro case presents an ideal vehicle for Supreme Court review. It involves a simple, undisputed payment from brand to generic to delay entering the market.

The latest edition of Fortune magazine has John Roberts, Chief Justice of the United States Supreme Court, on the cover proclaiming the Roberts Court to be the most pro-business court we have ever seen. So how can it be that the Roberts Court, which has shown hostility toward innovators and contempt for patents that is unusual, is considered pro-business? On top of that, the Roberts Court seems poised to strike at the very heart of the patent right granted by the United States federal government; namely the presumption of validity. That sure doesn’t sound very pro-business to me.

At this time of the year all typically sit back and reflect on the year that has been, spend time with family and friends, watch some football and set a course to follow into the new year. So here are the top 10 events that shaped the patent, innovation and intellectual property industry during 2010 — at least according to me, and with a heavy patent emphasis. What did you expect?

United States Supreme Court issued a non-decision in the matter of Costco Wholesale Corporation v. Omega, S.A. The Per Curiam decision simply read: “The judgment is affirmed by an equally divided Court. Justice Kagan took no part in the consideration or decision of this case.” Unfortunately, this non-decision could well signal the beginning of the end for the first sale doctrine given that goods manufactured and sold outside the United States can apparently be controlled downstream by the copyright owner without the copyright owner having exhausted rights through the sale.

The Supreme Court agreed to hear the appeal of Stanford University v. Roche Molecular Systems, Inc.; faculty and student inventors, the public, and American industry have an enormous stake in the Court’s decision. The appeal pits university patent administrators against university inventors. If the administrators win, university inventors will have no invention rights—not in the work they do at the university, and not in the work they do in the community. This is a crucial juncture for every researcher who has ever or might someday work in federally funded research. Likewise, it presents a tipping point for innovative industry and anyone with a vested interest in American research.

Earlier today the United States Supreme Court granted certiorari in Microsoft Corporation v. i4i Limited Partnership, with Chief Justice John Roberts taking no part in the decision or petition. This comes only days after the United States Patent and Trademark Office refused to grant reexamination of the patent in question. Given Microsoft doesn’t even have strong enough prior art to provoke a reexamination by the USPTO it seems absurd to think they could have been victorious even if the district court reviewed the patent claims de novo and without any presumption.

The dispute arose because Omega, S.A., sought to prevent the petitioner, Costco Wholesale Corporation, from reselling genuine watches originally sold by Omega to authorized foreign distributors. Omega, a Swiss company that manufactures watches in Switzerland, did not authorize the importation of the watches by Costco, despite the fact that Costco legally purchased the watches abroad. Thus, the question in this case will be whether copyrighted materials made abroad and legally purchased abroad can be imported without the express permission of the copyright owner. In other words, does the first sale doctrine extinguish the rights of the copyright holder when the goods are made abroad and sold abroad.

On Friday, September 17, 2010, I had the opportunity to chat with Professor Mark Lemley, who is the William H. Neukom Professor at Stanford Law School and partner in the San Francisco law firm Durie Tangri LLP. Lemley is well known both in the academic community and the practice community. In fact, he is one of only a select few that have managed to simultaneously have a stellar career both in academia and in private practice. I chat with Lemley via e-mail from time to time on various matters, and we have talked about an interview for some time. Then a draft of a amicus brief Lemly filed today with the United States Supreme Court arrived in my inbox and I knew this was the issue that would make for an excellent interview. Lemley is leading the charge of law professors who are asking the Supreme Court to review i4i v. Microsoft and address the presumption of validity enjoyed by an issued patent, pegging the presumption to those references considered by the patent examiner during prosecution.

In this final installment of my interview with Chief Judge Paul Michel we discuss Bilski v. Kappos and what he thought of the Supreme Court’s decision. Judge Michel talks about how only one of the Justices who decided Bilski ever decided a patentable subject matter decision, leaving the impression that the Supreme Court should probably just leave well enough alone. He tells us that he “think[s] the Federal Circuit can help minimize harm” that may otherwise be caused by the Supreme Court’s decision in Bilski v. Kappos, but is unsure whether the Federal Circuit can all “the harm that may lie inherent in the approach of the Supreme Court in that opinion…” Chief Judge Michel also discusses how he feels that the patent system is now favoring extremely large companies over independent inventors, start-ups and small businesses. Plus, the fun stuff!

So now what does SCOTUS’ ruling in Bilski “really” mean to us “mere mortals”? First, we’ve got two “wild cards” to deal with as noted above: (1) Stevens has retired; and (2) what does Scalia’s refusal to join Parts II B-2 and C-2 of Kennedy’s opinion for the Court signify. Some aspects of “wild card” #2 are dealt with above, but as also noted, there are still some aspects which are unclear or at least ambiguous as to how this refusal by Scalia should be viewed. This lack of clarity/ambiguity will require some sorting out by the Federal Circuit, which may come as early as the reconsideration by the Federal Circuit of Prometheus, Classen, or even the appeal in AMP v. USPTO involving the gene patenting controversy. In AMP, District Court Judge Sweet’s invalidity ruling regarding the method claims for determining a pre-disposition to breast/ovarian cancer using the BRCA1 and BRCA2 genes relies at least in part upon the “M or T” test which, as noted above, SCOTUS unanimously relegated to “second class” status in Bilski as not the only test for patent-eligibility.

Now that the Supreme Court has vacated and remanded both the Classen and Prometheus decisions, the Federal Circuit must revisit these issues. For Prometheus, the decision may be simpler, because the claims were already held to meet the machine-or-transformation test. Although the Supreme Court’s Bilski decision held that the M-or-T test was not the only test by which patent-eligibility can be determined, the Supreme Court seemed to have agreement from all nine Justices that the machine-or-transformation test was still a useful tool and valid option. See, e.g., Bilski, slip. op. at 2 of J. Breyer’s concurrence. Although a claim that does not meet the M-or-T test may still be patent-eligible under other theories, one can presume that the M-or-T test is still a “safe harbor” for claims that meet its provisions. The Federal Circuit’s re-visitation of Prometheus will be the first opportunity for this presumption to be tested.

Where this decision takes on a surreal quality is how the various Justices viewed the impact of 35 U.S.C. § 273 in determining whether “business methods” are patent-eligible. Justice Stevens and 3 other Justices (Ginsburg, Breyer and Sotamayor) are completely WRONG in treating 35 U.S.C. § 273 as if this statute doesn’t exist. Even Scalia, who obviously doesn’t like patents on “business methods” (by his refusal to join Part II B-2 of Kennedy’s opinion) couldn’t stomach rendering the language of 35 U.S.C. § 273 a nullity.