Posts in Government

Earlier today the United States Court of Appeals for the Federal Circuit ruled that Dolly the cloned sheep, and any other genetic clones, are patent ineligible in the United States because the “claimed clones are exact genetic copies of patent ineligible subject matter.” — The holy grail of personalized medicine, at least with respect to organ transplantation, is to create an organ that is identical to what occurs in nature. Now we know that if that is accomplished the resulting organ will not be patentable. That being the case, why is anyone going to spend the billions, or possibly trillions, of dollars it will require to make this branch or personalized medicine a reality? Without possibility of exclusive rights research will dry up.

I think that the Supreme Court decision will be enough to prevent the so-called “patent reform” from gaining any traction in the Senate. The cynical view is that there is so much lobbying money flowing why would Congress want to turn that spigot off when it could easily flow into the next Congressional term? Further, there has been a growing and steady effort by those opposed to the pending patent legislation. Opponents were already making their case heard as the Senate continued to time after time postpone dissemination of the Manager’s Amendment, signaling the consensus that some Senators desperately wanted to reach was illusive, if not impossible. Now with the Supreme Court decisions in these two cases those on the Hill who were already skeptical have more than enough ammunition to slam on the brakes, at least for now, to see what the ultimate ramifications of the decisions will be on the reality of patent litigation.

The FTC brief explains that the no-authorized-generic (no-AG) commitment at issue raises the same antitrust concern that the Supreme Court identified in Actavis. A no-authorized-generic commitment means that the brand-name drug firm, as part of a patent settlement, agrees that it will not launch its own authorized-generic alternative when the first generic company begins to compete. An FTC empirical study of the competitive effects of authorized generics found that when a brand company does not launch an authorized generic during the exclusivity period reserved for the first-filing generic under the Hatch-Waxman Act, it substantially increases the first generic company’s revenues, and consumers pay higher prices for the generic product.

The purpose of the U.S. patent system has been to promote innovation. The various ”Patent Reform” bills will in fact retard innovation and cost America jobs. They are contrary to the Founding Fathers’ intent in Article 1, Section 8, Clause 8 of the Constitution, contrary to the policies of over 220 years of patent law, contrary to the advice of the Office of Advocacy of the Small Business Administration, and contrary to prior statements of President Obama.

35 U.S.C. § 285, which is an extremely short statute, authorizes a district court to award attorney’s fees in patent litigation to the prevailing party. In its totality, § 285 states: “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” With such a simple statute you might wonder how or why it was necessary for the Supreme Court to step in and provide clarity. Because in 2005 the Federal Circuit departed from three decades of case law and made it difficult, if not impossible, for prevailing parties to demonstrate entitlement to attorneys fees.

In this Part IV, we will discuss the proposal that all interested parties by plaintiffs, the enhanced pleading requirements, limitations on discover and customer stays. While some of these provisions may seem to make sense on their surface, and tailored to provide greater transparency, the reality is that the provisions are extraordinarily burdensome. For example, as written one proposal would require a corporation bringing a patent infringement lawsuit to disclose every stockholder no matter how few shares are owned. Furthermore, by micromanaging patent litigation discretion will be taken away from district court judges while at the same time onerous obligations are placed on small businesses before they can even begin to assert patent infringement, which is problematic because so many entities already knowingly choose to infringe rather than negotiate licenses or engineer around patent rights.

In this Part III, we will discuss the Covered Business Methods (CBM) expansion and the proposed elimination of post grant review estoppel. If these provisions are enacted it will provide greater incentive to challenge granted patents, making serial challenges the new norm. This will substantially and negatively impact small business innovators who will be forced to continually fight to keep the patents they have obtained after having already spent many years during patent prosecution to obtain the rights. This means patent rights will never be more than an expectation and not a true property right. Therefore, if these provisions are enacted it will mean no patent is every truly safe, no title is every quieted, and this will substantially, and negatively, impact investment opportunity and ultimately the commercialization of innovations.

The US House passed the Innovation Act (HR3309) in December 2013. The Senate is now well on its way to incorporating this legislation which will make Americans poorer. The bills have many problems that will inhibit small inventors, but the most insidious are “Loser Pays” and “Pay to Play”. It changes the law, singling out inventors as a class so onerous that only they must pay the other side’s legal fees if they don’t win every claim. Pay to Play makes inventors guarantee payment up-front. Some proposed Senate bills (e.g.: S.1013 & S.1612) make sure that almost all Americans and most small companies will never be able to afford to enforce their patents on their inventions.

For small business, patents will become mostly unenforceable due to the proposed much higher upfront cost of litigation, thus making small business patents significantly less valuable. Loss of patent value constricts new company formation, chilling new investments, and choking job formation. Legislating disincentives for capital investments will result in the loss of many hundreds of billions of dollars of wealth in America and dry up the major source of new jobs, small inventing businesses… Patents are the number one indicator of regional wealth according to the Federal Reserve Bank… If these “Patent Reform” bills are signed into law, they will discourage small business patents, and the contrapositive indicates that we will be a poorer nation.

The purpose of the roundtables is to engage further with members of the public on the following issues: (1) the legal framework for the creation of remixes; (2) the relevance and scope of the first sale doctrine in the digital environment; and (3) the appropriate calibration of statutory damages in the contexts of individual file sharers and of secondary liability for large-scale infringement. The roundtables, which will be led by USPTO and the National Telecommunications and Information Administration (NTIA), will be held in Nashville, TN on May 21, 2014, Cambridge, MA on June 25, 2014, Los Angeles, CA on July 29, 2014, and Berkeley, CA on July 30, 2014. The meetings were called for in the Task Force’s Green Paper on Copyright Policy, Creativity, and Innovation in the Digital Economy released last year.

The U.S. Department of Commerce’s United States Patent and Trademark Office (USPTO) will host a public forum on May 9, 2014 at the USPTO headquarters in Alexandria, Virginia, to solicit feedback from organizations and individuals on its recent guidance memorandum for determining subject matter eligibility of claims reciting or involving laws of nature, natural phenomena, and natural products (Laws of Nature/Natural Products Guidance). The Laws of Nature/Natural Products Guidance implemented a new procedure to address changes in the law relating to subject matter eligibility in view of recent Supreme Court precedent.

Many, many, many patents have issued to cover the physical elements and intuitive steps to make this familiar sequence possible and increasingly reliable and refined. Mechanical elements, i.e., rotating shafts with a gears on each end, have been replaced by a toothed wheel and magnetic sensor and a wire, but the information about where the engine is in its cycle of rotation is the same… To illustrate to the lay person that just because software is the ”tool” being used to “do” things, we are still ”doing” the same things in the same ways for the same reasons. To wit: That, in the modern era, the execution of the ”useful arts” is done using software does not change what is done or the fact that it is a ”useful art”; and, the patentability thereof should be unaffected simply because we ”do” it differently now as compared with how we ”did” it then.