Gene Quinn

Recent amendments to Federal Rule of Evidence 702 did not invent the trial judge’s gatekeeping obligation, nor did they transform economic analysis. They did, however, sharpen the focus on the burden of establishing admissibility and whether an expert has reliably applied a valid methodology to the facts. Combined with the Federal Circuit’s increasingly demanding review of patent damages opinions, the practical message is unmistakable: the economic case must be engineered from the beginning, or you will surely suffer the consequences only after it is too late.

The mythology surrounding the act of invention tends to concentrate on the breakthrough moment. There is a flash of insight, a sketch is made on a cocktail napkin, the prototype is assembled in a garage to prove the brilliance of the concept. Unfortunately, commercial markets are considerably less romantic. They do not reward ideas merely because they are clever, patentable or even technically superior. They reward products that work, solve a problem customers recognize, can be manufactured at an economically sustainable price and generate an acceptable return for whoever assumes the risk of bringing them to market.

In any patent dispute, the strength of the patent still matters. But increasingly, it is not the only thing that matters—or even, in some cases, the thing that matters most. That means where a patent dispute takes place cannot be a tactical afterthought or viewed as a choice of federal district courts in the United States alone. This is true today more than ever because despite patents ostensibly being property—at least according to the Patent Act—which tribunal and which judges make the ultimate decisions affecting the patent often matter most of all because patents and patent enforcement have become driven by ideology and the type of fervor normally reserved highly emotionally charged discussions, like religion and politics.

Patent monetization is often discussed as if the hard part begins when a patent owner makes the decision to license, sell, finance, or enforce its patent assets. That is a mistake and demonstrates a lack of understanding of the difficulties and complexities of patent monetization. By the time a patent owner is sitting across the table from a potential licensee, buyer, lender, litigation funder, or accused infringer, much of the outcome has already been fully determined. The real work begins years earlier in preparation for monetization.

The Supreme Court should grant certiorari in Hyatt v. Squires—a case it is scheduled to consider later this week—and finally put an end to prosecution laches in patent law. Not limit it. Not cabin it. Not send the Federal Circuit back to craft yet another multi-factor balancing test that will inevitably metastasize into a litigation weapon. The Supreme Court must end prosecution laches once and for all, period.