11th Amendment Sovereignty Reach to be Tested

The availability of state sovereign immunity shields against IPR petition challenges to patent claims of state-chartered universities and their affiliates is a hot topic within TTO circles. Where available PTAB immunity increases patent value and royalties. Issues still under consideration, however, include:

  • How broad is the immunity’s reach from state capitals beyond state-chartered university affiliates?
  • When must non-waiver status be asserted?
  • When is it legally presumed to have been abandoned?
  • Does it apply to other PTO proceedings like reexaminations?
  • Are there any district court patent proceedings to which it does not apply?
  • If you assert a patent in a district court enforcement proceeding is it then considered waived at PTAB?
  • Can its protective shield be shared with non-state chartered universities or other co-owners?

The extent of state sovereign immunity’s availability under the 11th amendment has been considered again at PTAB. A petition against a state-chartered university was rejected when the university in question was found not to have waived its immunity despite its initial engagement in the preceding. This post highlights some of these issues and also links to an IPWatchdog post that does so in more depth. PTAB is an expensive and deadly procedure for all university patent holders. Yet only same have 11th Amendment immunity. CAFC will have to clarify some of these issues. One open question is how its eventual clarification will bear on the formation of friendly “ownership alliances” with state agencies or with state-chartered universities. Continue reading 11th Amendment Sovereignty Reach to be Tested

STRONGER PATENTS ACT -The Pro Patent Force Awakens

Legislation has been introduced today sounding the charge for a pro-patent congressional counter-attack to the patent reform carnage currently afflicting the patent landscape. This new Stronger Patents Act of 2017 will be strongly resisted by the big tech infringer oligopoly. House amendments could convert it into a new Innovation Act. Research universities must actively engage directly now by expressing their support. This effort could backfire into a Bay of Pigs-type defeat if we do not. As you will see from the summary below, this proposal addresses both AIA flaws and SCOTUS imposed harms inflicted on today’s patent landscape harming research university commercialization essential to obtaining research grants.

Here is the sponsor’s one-pager summarizing the bill. This is big bold and beautiful. Please urge your university spokespeople to act quickly.

Continue reading STRONGER PATENTS ACT -The Pro Patent Force Awakens

Cruel of Law

An important feature of the rule of law is the economic support imparted by its predictability, a growth-supporting quality enabling the economically necessary use of contracts, deeds, debt, trusts, currency and licensing. Without it, long range planning and investment are impossible, variously timed delivery differences would cancel trades, and mutually beneficial transactions would necessarily be crammed into the immediate present. The absence of a predictable rule of law thus severely hamstrings economic progress. Patent law depends heavily on its special rule of law. It is expressly created in our Constitution to authorize Congress to provide future investment reliability for a “limited times.” What does limited mean? It doesn’t say how much time but it certainly means some. But if AIA’s IPR can nullify a patent throughout its term all the way to expiry, metaphysically there is no “limited” time. If laws and court decisions continue to nullify effective patents retroactively, the express constitutional provision for prospectively “limited times” is distorted. If patent rights are property rights instead of public privileges, Article I agency-appointed PTAB tribunals cannot be constitutionally enabled to cancel them without reference to the protections in Article III and the Bill of Rights.

A wise man once warned me that standing by themselves, arrogance or ignorance was to be pitied, not condemned but combined in positions of power, they are extremely dangerous. So it is with patents. Our nation’s patent system finds itself caught between apathetic ignorance and under-informed assertiveness. On the one hand, there is the proud apathy of congressional ignorance that resulted in AIA’s PTAB. On the other, there is the under-informed assertiveness of SCOTUS that still uses the term “patent monopoly” in Impression Products v. Lexmark while erasing decades of established patent law by retroactively altering the impact of conditional sales that conformed to existing law when made. Such retroactive conduct scorns patents’ special “limited time” rule of law, by enacting retroactive nullifications unforeseeable during past compliance by legal practitioners as well as practitioners of grant patents. Retroactive patent nullification decisions have become commonplace in the courts and Congress. From AIA’s IPR to Lexmark’s recent nullifications of then complying conditional sales, such conduct not only cancels past established economic process, but it also deters future investment of innovative time and developmental financial support in our nation’s innovation ecosystem. It harms our economic future. The on-going self-inflicted collapse of the patents’ rule of law has become a counter-productive “cruel of law.” Worse, stopping this relentless DC march to economic madness may itself be madness. Can we halt them? Continue reading Cruel of Law

Turtle on a Fence Post

A  Saturday New York Times editorial called to our mind an old saying:  “If a turtle is perched on a fence post you know it didn’t get there by itself.”

With Congress now in recess and, when it returns, still entangled in health care, tax reform and Russia-gate, how is it that a high-priced, big tech PR firm would be trying to breathe life into patent litigation reform to justify its monthly retainer? No problem, just call in a favor and get a NYT editorial praising SCOTUS for its latest weakening of US patents. The editorial praised the recent SCOTUS decisions in TC Heartland v Kraft Foods and Impression Products v Lexmark under the headline, “Protecting Consumers in Patent Cases.” It was planted, we suspect, (like the turtle) on the Editorial Board’s patent troll narrative Kool-Aid cabinet shelf.

The Court in both decisions overturned years of patent law precedent on defendant venue in Heartland while in Lexmark it effectively held that any sale whatever or wherever of a patented product, including sales in other countries where our patent laws have no effect, cancels its US patent protection. One major problem is that when applied to existing arrangements such decisions have a retroactive impact. So if drug maker XYZ has made a discounted sale to the Gates Foundation of a patented anti-pandemic therapy for use in Africa, (even with a routine boilerplate restriction on further resales or other gray market activity) the US patent protecting the product is now automatically nullified. The Impression Products decision and the Court’s reasoning are explained in an IPWatchdog twin posts last week where experts comment on its “known unknowns.” As usual, however, the problem is the decision’s “unknown unknowns.” It appears to us that new uncertainties may further adversely affect investment in university life science research. It definitely will disrupt today’s biopharma innovation ecosystem.

Continue reading Turtle on a Fence Post

USPTO Fee Diversion

In a quick release, Gene Quinn explained that the USPTO got what it asked for in the Trump budget. There appears to be no fee diversion. The House will begin the process anew anyway so it may be too early to expect fee diversion to end in our lifetime. As Gene puts it:

“Under President Trump’s FY 2018 budget the USPTO will receive $3,586,193,000 from fees collected and to be available until expended. This appropriation would result in $0 being provided to the USPTO from the general fund of the United States. Any fees collected by the USPTO in excess of that amount would be deposited into the Patent and Trademark Fee Reserve Fund and remain available until expended. There does not appear to be any mention of any fee diversion anywhere, which would mean the USPTO has dodged the fee diversion hands of an often greedy federal government who over the last 30 years has frequently diverted user fees to other purposes.”

The other budgetary language quoted below is either routine or an indication where underlined that the anti-patent curtailing of frivolous lawsuits interpretation justifying PTAB has been affirmed by the administration. We will just have to wait and see.

“Requested funding for 2018 will be used for examining patent applications and granting patents. USPTO will continue its aggressive patent pendency reduction agenda to reduce overall pendency and backlog; continue to enhance patent quality; ensure optimal information technology service delivery to all users; improve the appeal and post-grant processes, and improve intellectual property protections worldwide. The Budget supports USPTO’s administrative efforts to address abusive patent litigation practices and repeats the President’s call for Congress to enact legislation that promotes greater transparency in the U.S. patent system and prevents frivolous lawsuits that stifle innovation.”

To read Gene’s timely post on the issue, please visit our always free website at ipstrategic.com

USPTO gets $3.6 billion in President’s FY 2018 budget, avoids fee diversion

Confused and frustrated, patent policy experts bemoan America’s absurd compulsory licensing patent system

The following article appeared first on ipwatchdog.com.

The English language has interesting group nouns. Groupings like a “gaggle” of geese, a “murder” of crows or a “pride” of lions come to mind. Anyone attending the IIPC’s Capitol Hill Conference earlier this week might wonder if there is a group noun for a gathering of patent policy experts. We would respectfully suggest referring to such gatherings as a “confusion” of patent experts. Many Conference attendees have been on opposite sides over the years, but the experts gathered that day were in concerted agreement that the patent landscape has been carpet-bombed with confusion caused by the Courts, the Congress, and the PTO. Despite their collective confusion regarding the roiled patent landscape, as Steve Brachmann and Gene Quinn noted in their joint summary of the proceedings, there were a number of key issues where despite confusion imposed by DC decision makers, general agreement was the order of the day.

Continue reading Confused and frustrated, patent policy experts bemoan America’s absurd compulsory licensing patent system

Restoring Sanity to the Patent Landscape

Summarizing IIPC’s recent Capitol Hill Conference IPWatchdog’s Steve Brachmann and Gene Quinn highlight a consensus assertion by its numerous panelist experts. In simple terms they repeatedly asserted that patents are property and were intended in our Constitution to be legally recognized as such. Patents are not privileges granted by sovereign whim as they were in England. That John Locke’s property ownership theory influenced the drafters of our Constitution is universally accepted by constitutional scholars and historians.The Patent Act reflected it. Yet this historic differential between patent property and privilege has been watered down by PTAB and the Federal Circuit (CAFC) in recent decisions holding that patents are simply “public rights”. As such patent holders are not entitled to the basic protections set forth in the Bill of Rights. SCOTUS has declined cert in earlier appeals from Federal Circuit public rights decisions. It is again considering a cert petition in a dispute involving the applicability of Art. III and Art. VII to PTAB’s proceedings.(Oil States Energy Services) Below are excerpts from a typically thorough Watchdog post highlighting the misleading big tech troll narrative’s pernicious influence on patent property rights.

“Although many of the industry insiders at the event held similar opinions on the current state of the U.S. patent system, bringing their message to a mainstream audience has been difficult. Much of this has to do with the “patent troll” narrative that has been forwarded by the efficient infringement lobby. As Sen. Dick Durbin (D-IL) pointed out at a recent Senate judiciary hearing on intellectual property as a driver of innovation, “whoever came up with that phrase [patent troll] should get a special bonus” because it has created a massive mischaracterization of patent owners asserting their rights.”

Continue reading Restoring Sanity to the Patent Landscape

Fundamental Incongruities of PTAB Operations Affect the Integrity of the Patent System

This article appeared first on ipwatchdog.com

The first 100 days of the Trump Administration have now come and gone. So far, they have not revealed much more than the obvious fact that there is a significant disconnect between President Trump’s 4-year re-election objectives and the 2-year re-election timetable of House Republicans. Retaining their seats is job one for both. The President believes that will require Republicans to enact legislation on the issues central to the President’s campaign and the party Platform; issues Republicans have been complaining about over the past eight years.

The mismatched re-election priorities of Republicans can be expected to continue roiling Capitol Hill throughout the remainder of 2017 and likely into 2018. With healthcare and tax reform likely to take up much of the summer oxygen in Washington, DC, and into the fall of 2017 when insurance premium hikes will be announced again, what, if any, signature Republican issues will be addressed remains in significant doubt.

With small ball policy left far behind by both inter-party and intra-party politics, what will the current state of Congressional legislative enactment capacity mean for patent reform? An argument could be made that so much energy will be placed elsewhere that matters of peripheral importance in the greater scheme – like patent reform – will receive no attention. But intellectual property generally and patent policy more specifically tends to be an apolitical issue where ideologues on both sides of the aisle can reach agreement. Without knowing how the cards will fall, and given that those who perpetually seek patent reform are once again working the halls of the Capitol, prudence suggests that those with a pro-patent vision remain ever vigilant.

Last week IPWatchdog.com explained why eBay, Mayo and the creation of the Patent Trial and Appeal Board to hear post-grant challenges to patents were the three most significant legal causes of today’s patent crisis.  The common thread that led to each “event” was a brilliant anti-patent strategy that converted policy maker apathy towards patents and our nation’s innovation ecosystem into a belief that simply stopping a few bad actors by passing comprehensive patent litigation reform would solve any ills.

The patent troll narrative has worked well. Indeed, at a recent hearing of the Senate Judiciary Committee Senator Dick Durbin (D-IL) quipped: “Whoever came up with that phrase should get a special bonus because they manage to mischaracterize anyone who goes to court to assert patent rights as a troll…”

The beauty of the patent troll narrative was it took little time to absorb and instantly painted a pejorative picture in the minds-eye of the listener. It became easy to repeat. Its bumper-sticker simplicity led to widespread usage, which ultimately (and quickly) became accepted as fact without much, if any, critical thought. Most important, the strategy by-passed the arcane complexity of its convoluted subject matter by shifting the burden of Congressional persuasion to its victimized and under-resourced opponents. Politically outmatched from the start – inventors and innovators had, up until this point in our history, always been held in high esteem were overwhelmed. That suddenly changed with the patent troll narrative and inventors became persona non grata, even viewed as evil and villainous. Indeed patent reform’s innate obscurity was its most important ally. Few knew more than the patent troll narrative, so as it was often repeated people unfamiliar with patents on even the most basic level became horrified by the myth the narrative painted.

Over the next 100 days, patent reform’s obscurity may become the enemy of patent reform instead of its ally. After all, if the public isn’t interested in patent reform why should President Trump spend time on the issue? Moreover its proud parent, “efficient infringement,” has now become the enemy of Trump’s conservative, property-devoted base. Patents are property rights as has been recognized by the U.S. Supreme Court for over 100 years and as stated explicitly in the Patent Act. Nevertheless, the patent troll narrative has returned to Capitol Hill. Even with more pro-property right, security-conscious, conservative allies than in previous cycles patent reform opponents, who 500 days ago rallied loudly enough to make HR 9 too controversial for pre-campaign enactment, must rise again.

Expect big tech and its leftist bed-fellows to exert more effort to “de-propertize” patents on Capitol Hill and in the courts. Expect to hear that every patent holder who protects her lawfully established exclusivity by responding to efficient infringement in courts to be called “ambulance chasers.” Expect proponents of reform to mischaracterize patent reform as a step towards tort reform, which is nearly comical given that the tortfeasor in the equation is the party that is trampling on the property rights of patent holders through infringement, which is many times purposeful and willful. Expect lobbyists for Main Street retailers to again be flattered by attention from big shot Silicon Valley lobbyists and support their latest version of the anti-patent, anti-property right patent troll narrative. Expect new academic junk science and more speculation by professorial patent policy “experts.” Expect the USPTO to praise the PTAB’s star-chambered repression of so-called “bad patents.” Expect efficient infringement to continue while the courts and Congress are asked to dither over patent trolls.

We must explain the truth to those who understandably drank the patent troll Kool-Aid and believed that Silicon Valley’s tears for Main Street retailers were real. Efficient infringement’s cheaper, faster, better economics compel its continued deployment. The patent troll narrative has distracted Congress and the courts from seeing how it protects incumbency for our nation’s most dominant big caps by diluting investability in new technology that might one day unseat them. The patent troll narrative’s flaw is that the repressive litigation it supports applies not to a few remaining patent abusers but to ALL patent holders, especially startups who produce the most jobs.

The efficient infringement narrative is no more complicated than the troll narrative. The patent troll narrative just reached the Hill first, which means the story of efficient infringers trampling patent property rights, though perfectly true, has a tougher road given it must not only gain its own traction but it has to undo the damage caused by the misleading patent troll narrative.

To be re-elected Congress may need to focus on less obscure issues this year than patent reform. But if party leaders choose to consider patent reform the bill will be driven by the patent troll narrative, not its content. Pro-patent Senator Chris Coons (D-DE) has wisely reminded us that Congress likes to learn through stories. Patent reform’s proponents will again bypass content explanations by repeating the patent troll narrative. Pro-patent opponents can respond with their own efficient infringement narrative. Let proponents then explain the contents of any bill in simple, easy to understand terms. Let us work to put a face on efficient infringement, which has ruined so many inventors who have seen Silicon Valley giants make so many millions of dollars infringing patents after taking technology originally invented by individuals and small start-up businesses who never had a chance.

 

Patents are Property

As usual Paul Morinville, (joined this time by his good colleagues) is right-on. State universities and their affiliates have been given a “get out of PTAB card ” by the University of Florida decision because of their 11th Amendment sovereignty. It may be that other research universities are not so blessed. But the patents as property issue he details affects everyone. Paul’s IPWatchdog piece is, therefore, essential reading for all. The difference between the juridical “liability” and “property” theories is how research universities were punished by eBay in 2006 and ever since. Now its “Public Rights Vs Property Rights,” and that debate not only affects everyone it affects the very survival of our patent system. Paul explains it well enough to help readers tell it to their congressional delegation. To read their excellent and detailed explanation, please visit our IPStrategic.com website.

Patent Decline’s Top Causes and US Chamber’s Plea for Increasing its Strength

In his World Property Day post, IPWatchdog’s Gene Quinn predicts continued but not permanent decline for US patents after naming its three top contributors. His typically insightful prose pulls no punches and IMHO correctly identifies the decline’s legal culprits and their consequences. But in IMHO he fails to give due credit is to the influence of the ubiquitous Patent Troll narrative created first at Intel then brilliantly injected into the minds of congressional, SCOTUS and PTO lawmakers. Propagated by unsubstantiated law journalists’ speculations, bogus economist projections, misleading falsities to a lazy, uninformed press, occasional anecdotes and the over-anxious suspension of disbelief accorded to the Silicon Valley vanguard of the Information Age, its self-serving shiny object distraction penetrated DC policy top of mind. Its “litigation crisis” theme delivered it to sympathetic Judiciary Committee salons, an under-informed Supreme Court and a politically pliable PTO. Fueled by Amici blather Justice Kennedy’s injection of trolls into eBay blessed it. PTAB was presumably established to curb trolls. Mayo’s expedient nullifications based on expanded eligibility grounds reflect the story’s so-called “bad patents” allegedly wielded by patent trolls. The patent troll narrative was conjured to protect the efficient infringement that compelled the cut-throat competitive smartphone markets. Indeed, efficient infringement inevitably helped create them. The troll story masked efficient infringement and perpetuated because it has worked so well and will be needed still. Mega-tech wars among big tech peers may someday shift to cars and IoT. But big tech’s need to push down patented component costs and infringe their patents will remain. The troll narrative was an early avatar of alternative facts and fake news. It will be hard to extinguish. But until the troll story is snuffed out by targeted legislation and thoroughly debunked by public disbelief, today’s decline in patents will continue. Yesterday offering “the other half of the story” the US Chamber of Commerce issued a statement strongly supporting our economic need for strong patents saying:

“Over the past decade, a growing number of academic and industry researchers have been exploring the relationship between patent protections and innovations, particularly as it relates to technology startups. What they continue to find is that patents and other intellectual property protections are absolutely vital to supporting innovation; in fact, many of the technologies and innovations we take for granted today would never have come to bear without patents.”