Editorial by Arti Rai, Elvin R. Latty Professor of Law, Duke University
From the perspective of a candidate running for President, articulating a position on the subject of patent reform might appear a fool's errand. For many (perhaps most) voters, the subject will be impossibly arcane. Within the small group that closely follows the highly divisive debate (e.g. patent litigators and prosecutors, stakeholders in the various industries most affected by patents), virtually any position a candidate takes will alienate a significant percentage.
Complicating the situation further is the reality that the patent system has so many moving parts. In particular, for better or for worse, a large chunk of patent policy is currently made through Federal Circuit decisions. For good reasons, the Constitution insulates Article III judges from direct Presidential control. But the result of this lack of control means that reform proposals that a President can readily implement, and that might appear sensible on first examination, can be undermined by judicial action. For example, requiring disclosure of prior art by applicants (who presumably know a lot about their area of invention) might seem sensible. But the reasoning behind the policy is undermined if the Federal Circuit decides to invoke a highly aggressive doctrine of inequitable conduct.
So ignoring the subject – as Senator John McCain has done, at least thus far, may be the politically expedient course. (We will see if the McCain technology plan, about which McCain advisor Michael Powell has been dropping hints and which is supposed to be unveiled formally soon, talks about patents.) But politically expedient behavior on an issue as important to innovation, and our country's future, as sound patent policy is hardly what we want from our next President.
What is striking about Senator Barack Obama's approach is that he has not only articulated a position, but that he did so back in November 2007, as the patent reform wars were raging in Congress. (Senator Obama's position appears in the technology platform that he released at Google last November.)
Senator Obama's approach reflects a nuanced understanding of the concerns of the various stakeholders. It also reflects an ability to rise above narrow interest group politics and suggest creative solutions not contemplated by the interest groups most active in the latest round of the Congressional reform wars.
For example, the Senator says that when "dubious patents are being asserted, the PTO could conduct low-cost, timely administrative proceedings to determine patent validity." Thus he comes out in favor of a "second window" for post-grant administrative review of patent validity at the time the patent is asserted. As IT firms that are faced with constant litigation threats have pointed out (and as other countries' experience with post-grant review shows), this option could represent a real savings relative to expensive litigation over patent validity. Moreover, at least in the long term, the availability of this option might reduce the incentive to file dubious patent applications in the first instance (and hence might reduce the current backlog of over 700,000 patent applications).
At the same time, Senator Obama's plan accommodates the interests of those firms (e.g. biotechnology and pharmaceutical firms) that have made reasonable arguments about their need for early certainty about patent validity. It provides for an option not contemplated in the Congressional debate – self-selection ex ante into "rigorous and public peer review that would produce a 'gold-plated' patent." Under default principles of administrative law, gold-plated patents would be much less subject to future administrative or judicial challenge.
Of course, much of the devil will be in the details. For example, as the GAO has recently pointed out, management and personnel practices at the PTO need to be improved substantially in order for the PTO to retain the qualified examiners necessary for implementing even existing procedures. New procedures will require even more attention to reform of internal PTO practices.
A Presidential candidate's policy proposals cannot include all of the details he might contemplate. But Senator Obama's willingness to stake out some clear reform positions early in his campaign, and at a time of great sensitivity over the issue, performs what economists call a signaling function. The Senator has sent a signal that he would take patents seriously, both in terms of substantive proposals and in terms of the people he would appoint to formulate and implement these proposals.