The opening lines of the press release announcing the introduction of the Senators Coons’ and Cotton’s STRONGER Patents Act (SPA) emphasize the bill’s important economic impact. They understate the bill’s breathtaking legal impact which is set forth in two other summary documents linked in the release; a “one pager” and a “two-pager.” Both are concise and must read. They reveal a masterpiece of common sense content designed to restore our once gold standard patent landscape to its former greatness. All three important documents are linked below. Here is a preview:
Among other things, SPA’s enactment would end PTAB’s reign of terror over lesser-resourced inventors and disruptive technology by harmonizing its burden of proof and claims construction standards with those of the district courts restoring patents’ presumption of validity while confirming patents’ property rights. Its put-up-or-shut-up one-time PTAB claims nullification process, its standing requirements and its meaningful estoppel provisions will help curb routine and abusive misuse by efficient infringer defendants against under-resourced early stage innovation. There are more equally important provisions.
Continue reading STRONGER Patents Act – a Masterpiece
Before the long weekend ahead we want to call your attention to two hurdles ahead as Congress considers the Coons-Cotton STRONGER Patents Act and SCOTUS considers PTAB’s constitutionality in Oil States.
When our Founders expressly established patent rights in the Constitution they underlined the document’s unique establishment of a new and different sovereignty for the US. It was to be vested by the people in a Constitution not by a deity in a king. Patent property rights were expressly defined and vested in the inventor whose labor produced it and were no longer subject to a royal grant or withdrawal pursuant to the king’s sovereign whim. Like the Constitution itself, patent property rights were based upon the property theories of John Locke. Congress was given the power to codify them but Congress could not completely cancel, replace, or repeal them by completely denying their exclusivity. In short Congress could set a time limit but could not do so in a way that allowed for no time at all to securely exercise the rights conferred.
By characterizing these constitutionally-established rights as “public rights” for their entire term anti patent advocates aver that Congress can amend their term. But even if that was the Founders’ intent because of the words “secure …for a limited time” Congress cannot eliminate them entirely. Nor can Congress create an administrative agency like PTAB by which PTO’s administrative examination powers enables PTAB to nullify those rights all the way to and through the end of a patent’s term. PTAB’s nullification powers up to and through the final nanosecond of a patent’s entire term is contrary to the express words of the Constitution.” Secure for Limited Times” cannot mean for no time at all. This matters because unless parent rights are property rights in which ownership can become settled for a limited time such patents cannot support investment in commercialization. Gene Quinn provides further chapter and verse in a link below.
In another recent IPW post pro-patent all-star Paul Morinville, describes Google-bro Issa’s recent smarmy dismissal of Professor Adam Mossoff’s property rights testimony and explanation of what is now referred to as the China syndrome as the Asian powerhouse strengthens its patent system while weaken ours. Apparently preferring re-election support from Google and friends, Issa (who just won a close election in a recount) stands firmly on both sides of the property issue. In Paul’s description of a recent hearing, Issa first champions patent property rights but later mocks Professor Mossoff’s refutations of proponents’ support of patents as public rights. As Judiciary Chairman Goodlatte’s anti-patent poodle, Issa can be expected to block (or even adversely amend) much-needed pro-patent progress in the House during this unusual session. If Senator Coons’ STRONGER Patents Act clears the Senate, Issa will do what its takes to sabotage its passage in the House.
Both obstacles are not insurmountable but they are formidable. Please take a moment to read Gene Quinn’s take on choosing a “patent as property” PTO Director and Paul’s post describing Google tub-thumper Issa’s oily duplicity on the issue and the China Syndrome. They both are linked below. Continue reading “Secure for Limited Times” Can Not Mean No Security Ever
PTAB now appears to have gone “rogue” – a term originally applied to domesticated elephants that suddenly would become destructive, but is now appropriately applied to PTAB. In the post excerpted below, IPW’s Steve Brachmann and Gene Quinn precisely outline the administrative tribunal’s recent rejection of some district court decisions with jury verdicts confirming VirnetX patents’ validity. Such Article I outrage needs no further elaboration for us.The excerpts below from the IPW post are alarming. The post itself is bone-chilling.
“So obviously the patent claims VirnetX has used to pursue infringers such as Apple and Microsoft are not the weak patents that opponents of the patent system claim are the scourge of the system. Well — not so fast! Just because an Article III federal district court confirms the validity of a patent doesn’t mean anything anymore. Indeed, federal courts have become subordinate to the PTAB, which is as ridiculous as it sounds but sadly true. A patent is not valid until an Article I executive tribunal says so, and absolutely no deference is paid to Article III judges of the United States federal courts.”
Continue reading Has PTAB Gone Rogue?
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
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
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
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
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
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
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