Posts Tagged: "Innovation Act"

The unfortunate reality is the United States is no longer the most favorable jurisdiction for innovators. There has been a full assault on patent rights that started at least as early as 2005. Ever since we have seen proposed legislative change after proposed legislative change, as well as a never ending stream of cases at the Supreme Court and Federal Circuit that continue to weaken patent rights. Innovators are under attack from ever expanding judicial exceptions that render more and more subject matter patent ineligible, and from an ever expanding view of what it means to be obvious. This coupled with fresh new ways to challenge issued patents and concern about a patent litigation explosion that doesn’t exist is leading to extraordinary mischief in the Courts, on Capitol Hill and in the White House.

In the 10 planned work days during September 2014, it does not seem as if the House of Representatives will take up the Innovation Act or any modifications thereto that might sweeten the bill for the Senate. So what happened between August 8, 2014, when the Innovation Act was going to be a piece of an omnibus jobs bill that would help define the messaging for House Republicans leading into the midterm elections and September 4, 2014, when it was removed from consideration as an important piece of the Republican jobs agenda?

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.

In part 1 of the interview we discussed why he choose McDermott, what it was like working for David Kappos and working with Federal Circuit Judge Ray Chen when he was Solicitor at the USPTO, and the appointment of Michelle Lee to be Deputy Director of the USPTO. In part 2 of the interview, which appears below, we discuss the new ethics rules adopted by the USPTO, the future of the USPTO, patent reform legislation, abusive patent litigation, and what the AIA was attempting to achieve relative to post grant patent challenges.

Patents and patent reform has been in the news, even the popular press, on an increasing basis. The issue of patents generally and patent litigation specifically has been the subject of intense debate over the last 8 years. Congress passed the America Invents Act (AIA) in 2011, with the bill being signed into law by President Obama on September 16, 2011. The overhaul of U.S. patent law was extraordinary, but not all of the parties involved were happy. Some thought the law went too far in some ways, others thought the law did not go far enough. Despite the AIA being the most significant change to patent laws since at least 1952, Congress is considering further reforms again, with the House of Representatives already passing the Innovation Act (HR 3309). Companion legislation in the Senate is likely to move forward during Q1 2014.

2013 turned out to be a very big year for IP, and especially patents, and the year took a course that few would have predicted this time last year. At that time, the senior team at the PTO was primarily focused on the imminent departure of our then-boss, David Kappos, and the end of what had clearly been an extraordinarily active and successful tenure. The AIA had been almost entirely implemented, the new Patent Trial and Appeal Board was up and running, and most of us expected 2013 to be focused on implementation and execution of the AIA and the other initiatives that had been set in motion under Director Kappos.

As the end of 2013 approaches and I look back on what has transpired I am saddened to see that through the year patent rights have continued to erode. Make no mistake about it, at every turn patent rights are eroding. You might think that there has been some collective, open-air discussion about whether this is a good idea. Nope! It seems government you get is the government you can afford, and those who have the ear of decision-makers on Capitol Hill are the extraordinarily well funding big tech companies that want to weaken patent rights or do away with them altogether. Indeed, there has been scant consideration paid to the effect of weakening patent rights. The erosion of patent rights is exceptionally alarming given the fact that the Founding Fathers thought it was self evident that a strong patent system was essential for America. The Founders believed the importance of patent rights to be so self evident that little debate was had on the topic. How the pendulum has swung!

A recurring theme that can be traced through the patent reforms of the AIA to the current debate over patent litigation abuse is the issue of patent quality. A key component of the reported abuses is the assertion of allegedly invalid or overbroad patents, the very abuse for which AIA post-grant procedures were created, in order to improve patent quality. These matters of patent quality are being addressed by the changes made to the law by the Judiciary and by Congress in the AIA, which are only now beginning to be felt. It may well be premature to conclude that they are not doing the job. Take one major example, as a former Director of the USPTO in particular, I would support, as former Director Kappos did, giving the post-grant processes in the USPTO a chance to work.

At this time of year we often see many prognostications of what the future holds. From the prospective of the small entity patentee we see big changes in store particularly as some in Congress seem hell-bent on amending the patent statutes once more. These changes are being pushed through without any real consideration for the impact of the changes on patents held by universities, research institutes, small and medium sized companies, emerging companies, independent inventors and new entrepreneurs.