Posts Tagged: "Capitol Hill"

First, I predict that the United States Supreme Court will find post grant procedures under the America Invents Act to be unconstitutional. It is my belief they took Oil States not as a patent case, but rather as an Administrative State case, and if that is correct this could be the first in a series of decisions over a number of years that will pull authority back from the growing Administrative State and toward the Judiciary. Second, in the event the Supreme Court does not declare post grant challenges unconstitutional, I predict the new USPTO Director will substantially modify PTAB rules and procedures, making them more fair and balanced. Third, again assuming my first prediction is incorrect, I predict the PTAB will continue to ignore Eleventh Amendment immunity and will likewise rule Indian Tribes do not deserve to claim sovereign immunity when in front of the PTAB. This will set up a showdown at the Federal Circuit that will ultimately be settled by the Supreme Court, likely in 2019. Finally, I predict there will be continued discussion about patent reform, with the conversation becoming increasingly pro-patent as Members of Congress continue to see undeniable proof that the U.S. patent system is regressing while the patent systems of the EU and China are on the rise. More specifically, I predict that the U.S. will fall out of the top 10 for patent protection in the annual Chamber IP Index, which will send a shockwave through the Capitol.

Unlike previous years where we had near unanimity on the biggest moments, this year we see wide variety of thought, from SCOTUS to Capitol Hill to the DOJ… Steve Kunin focus primarily on the Supreme Court patent cases, which Bob Stoll also mentions but then goes on to discuss the lack of momentum for more patent reform and the nomination of a new Director for the USPTO as key moments. Paul Morinville also mentions the political on Capitol Hill, but focuses on Members of Congress not buying into the patent troll narrative like they once did. Erik Oliver focuses on a rebound in the patent market, Alden Abbott sees a pro-innovation, pro-patent Assistant Attorney General for Antitrust as a dramatic shift for the DOJ. Ben Natter, Jess Sblendorio and Alexander Callo focus on the Supreme Court’s decision in Matal v. Tam, which declared the prohibition against registering disparaging trademarks unconstitutional.

This week US Inventor, an inventor organization working in Washington DC and around the US to advocate for strong patent protection for inventors and startups, rolled out the U.S. Inventor Act in the House of Representatives… Early stage funding for U.S. startups has dropped 62%. We are at a 40 year low in new business formation. What used to be approximately 85% of all venture capital invested in U.S. startups is now about half invested in China’s startups. Not surprisingly, in communist China, the startup market is booming, growing by 23%. As a result, China has taken the lead in swaths of new technologies, including technologies critical to our national security like artificial intelligence (AI). AI runs not only our power grids, but our tanks and ships. We will soon be mired in the swamp of a national security disaster as China moves even further ahead and we are forced to purchase these products from them.

The rule treating the transfer of a patent prior to its commercial exploitation as being available for long-term capital gains treatment would be repealed… Obviously, it is disheartening to see Republican leadership move to treat patents in this way, which suggests they do not view patents as a private property right. Not viewing patents as a private property right has become a growing and disturbing trend.

Overrule eBay v. MercExchange and grant permanent injunctions to victorious patent owners as a matter of right. This singular change to U.S. patent laws – which is also found within the STRONGER Patent Act at Section 106 – would rectify much of the mischief caused by Congress and the Courts over the last 12 years. No single decision has so singularly tilted the balance between patent owners and technology implementers. Indeed, if you ask knowledgeable innovators and patent owners about the one decision or event they would undue if they could in order to bring the system back to some acceptable level of equilibrium and the answer will either be to overrule eBay v. MercExchange or to do away with post grant challenges at the PTAB.

On Thursday, October 12th, a pair of letters addressed to the bipartisan leadership of the Senate Judiciary Committee were delivered in an attempt to inform Senators on that committee of various issues in play regarding the recent patent deal between multinational pharmaceutical firm Allergan and the sovereign St. Regis Mohawk Tribe. The two groups sending the letters represent stakeholders in the U.S. patent system coming from very different backgrounds who realize that there are fundamental flaws in the system created by inter partes review (IPR) proceedings which are carried out at the Patent Trial and Appeal Board (PTAB).

There is growing speculation among Capitol Hill watchers that the Judiciary Committee may soon be ready to hold a nomination hearing to vet Iancu’s credentials to serve as USPTO Director, perhaps as soon as this month. Although there’s a strong chance that the hearing would focus on recent developments like the Allergan-St. Regis Mohawk Tribe patent arbitrage deal, the hearing will be the patent world’s first true glimpse into Iancu’s vision for the role of the USPTO in promoting America’s innovation economy… Some additional details have begun to emerge thanks to a public response to a questionnaire submitted by Iancu to the Senate Judiciary Committee. This filing and attached documents help to flesh out many of the details surrounding the patent attorney’s experience as well as his viewpoints on certain trends affecting patent system stakeholders as outlined in articles and speeches given by this individual.

The patent deal with the St. Regis tribe doesn’t shield the patents from validity challenges coming from a Hatch-Waxman trial recently concluded in Texas federal court. “To be clear, if the District Court ruling is adverse to Allergan’s patent position, and there is an FDA approval of a generic version of RESTASIS®, that product could enter the market many years in advance of the listed patent expiry dates,” Allergan’s note reads. The drugmaker further argues that the IPR process in force at the PTAB undermines the 33-year-old Hatch-Waxman statutory regime regarding validity challenges to pharmaceutical patents, is subject to changes to validity proceedings implemented within the executive branch which are not impartial, and creates an unfair burden on innovators by opening patents to challenge proceedings which are often inconsistent before both the PTAB and the Court of Appeals for the Federal Circuit, the court to which PTAB decisions can be appealed.

Senator McCaskill (D-MO) has introduced a bill to abrogate the sovereign immunity of Indian tribes as a defense in inter partes review (IPR) proceedings at the United States Patent and Trademark Office. Indeed, the sole purpose of McCaskill’s short, ill-conceived and hastily assembled bill is to make it impossible for Native American Indian Tribes that own patents to assert sovereign immunity when those patents are challenged in proceedings at the Patent Trial and Appeal Board… What this means is McCaskill’s bill cannot and will not remove claims of sovereign immunity from PTAB proceedings. McCaskill’s bill would only discriminate against Native American Indian Tribes.

Congressman Lamar Smith (R-TX), has sponsored a bill to amend Rule 11 — H.R. 720. The changes are made to remove the safe harbor provision and make sanctions mandatory. This bill has passed the House. A companion bill — S. 237 — has been introduced in the Senate with no action yet being taken… The proposed changes to Rule 11, if enacted, will have an impact of keeping unrepresented parties out of courts, and make the U.S. courts even more inefficient. It will have an adverse impact on patent owners in patent cases… Given the nature of patent litigation, experience teaches that it is inevitable that whenever a case is disposed of the winner will almost certainly try to shift litigation fees by any means possible, including by invoking Rule 11 sanctions. The parties with strong financial powers will have better chances to get sanction awards.

Inasmuch as the new Director can change, or do whatever they want once in the job, and will be subject to political winds, I thought I’d just tell them what I want and why. Simple. Here’s my list. First, believe in your product and the team that produces the product. Stop the labeling of “legitimate patents” as compared to other, presumably, “illegitimate patents”. There is only one type of patent, the one produced by the PTO. End of story. Each receives the examination it can in light of the fees paid. Each examination is done according to the laws and rules set forth in the statute and in accord with the CAFC administration of that statute vis-à-vis the PTO. This is true across all technologies. Examiner’s do the best they can with the tools available. This includes training, searching, and examining. The PTO does not favor one group over another. It calls balls and strikes in light of the relevant statute or rule.

Both the U.S. House of Representatives and the U.S. Senate are currently contemplating versions of the Defending Against Imitations and Replacements of Yogurt, Milk and Cheese to Promote Regular Intake of Dairy Everyday (DAIRY PRIDE) Act; the House version is bill H.R.778 and the Senate’s is S.130. If passed, the bill would amend the Food, Drug, and Cosmetic Act to prohibit the sale of any food using the market name of a dairy product, is not the milk of a hooved animal, is not derived from such milk and doesn’t contain such milk as a primary ingredient. The findings section of the bill notes that the U.S. Food and Drug Administration (FDA) already has regulations finding that milk is “the lacteal secretion, practically free from colostrum, obtained by the complete milking of one or more healthy cows.” The Senate bill is originally sponsored by Sen. Tammy Baldwin (D-WI) while the House version is sponsored by Rep. Peter Welch (D-VT). The House bill includes five original co-sponsors: Rep. Michael Simpson (R-ID); Rep. Sean Duffy (R-WI); Rep. Joe Courtney (D-CT); Rep. David Valadao (R-CA); and Rep. Suzan DelBene (D-WA).

Those now familiar with IPR proceedings will already have recognized how little resemblance current IPR proceedings have to what most supporters of the AIA envisioned upon its passage. In current practice, the role of the Director as an independent IPR gatekeeper never materialized because the USPTO’s implementing rules bypass the Director altogether, assigning the institution function to the PTAB, which in turn routinely assigns both the institution and final decisions to the same three judge panel. As a result, most of the safeguards against patent owner harassment were lost…. By failing to adopt the implementing rules needed to carry out the intent of the AIA, and by adopting other rules and procedures that are plainly skewed towards petitioners, the PTAB has intentionally tilted its IPR proceedings against patent owners. While this has been good for the PTAB, which has quadrupled in size, it was neither Congress’s intent nor that of most of AIA’s supporters to create an unfair IPR patent “killing field.”

There are clearly many thousands of companies both large and small with far greater experience and in a far better position to advise Congress on the issue of patent reform. So why Mapbox? As is so frequently the case whenever business and politics intersect, follow the money! We have done just that and we’ve found that a no-name, no-experience company like Mapbox, without any patent applications and no patent litigation experience became thrust into the public debate over patents because all the money people behind Mapbox are card carrying members of the anti-patent efficient infringer lobby.

Given that Lee testified that Mapbox has been a party to multiple patent lawsuits and only a single lawsuit can be located, coupled with Lee’s testimony that Mapbox has used the patent system as an applicant and no patents or applications can be found, Congress should question whether or not false testimony has been given in this case. Perhaps there is a reasonable explanation, but based on publicly available information serious questions exist regarding the veracity of his testimony.