Guest Editorial: Obama Put Forward Sound Priorities on Patents Last Year. McCain May (Finally) Get To It Soon.

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.

Comments

[groveboy1]

Having litigated patent cases for three decades, and having thereby become intimately familiar with how patents are prosecuted and the mindset of patent-prosecutors,I have come to believe that patent prosecutors are among the most narrow-minded, elitist, self-centered and misguided members of the legal profession, with an inevitable pro-patent bias. Patent prosecutors are the last people we want to provide guidance concerning how we fix our patent system. Simply stated, if you get paid to obtain patents, you are hardly in a possession to objectively analyze whether the nation's patent system truly works to provide incentives to advance the sciences and the useful arts. The founders obviously did not understand that patents would no longer be primarily the property of individuals, but would be major corporate assets--indeed in many industries, the centerpiece of corporate attempts to monopolize markets and stifle competition. Obama seems to be on the right track--the system needs to find a way to more efficiently invalidite and declare unenforceable sham patents that represent only at best marginal improvements of the art, while at the same time truly reward "gold plated" inventions that truly benefit society by providing major advances in science or the arts. Unfortunately, too many patent prosecutors are in the business of collaborating with their corporate sponsors to game the system by obtaining patents for minor improvements (i.e., adding tutti frutti to a drug formulation to make it taste better)that in truth are neither inventive nor non-obvious. To restore balance and provide true incentives toward the development of science and the useful arts, we need to move toward a system where only "gold plated" inventions--i.e., first in a class of new anti-cancer drugs, new never before used source of energy, cure for aids--result in issued patents. The marginal improvements in the run of the mill patents that are allowed to issue today, particularly in the pharmaceutical and computer technology industries--simply serve to facilitate corporate interests in dominating and/or monopolizing markets, and the patent prosecutors (both in-house and in private firms) who devote their careers to obtaining such patents are merely the low-rent servants of corporate interests that, far from advancing the progress of science and the useful arts, serve to inhibit and impede development of truly "gold-plated" inventions. To put it another way, we need to reward and provide incentives to true inventors, not corporate monopolists and the patent prosecutors who unwittingly serve their interests by supporting a system that allows far too many patents to issue for inventions that at best represent marginal improvements, the purpose of which is not to advance the sciences and useful arts, but to permit corporate giants to expand their market dominance. I have confidence that Obama has the vision to reform the patent system in a manner that will encourage real progress in science, while at the same time developing checks and balances designed to dramatically decrease the influence of patent prosecutors and their corporate sponsors who wrongly game the system to obtain patents that are not worth the paper on which they are printed.

[somebody]

"I have come to believe that patent prosecutors are among the most narrow-minded, elitist, self-centered and misguided members of the legal profession"

Why thank you, groveboy1.

I would have given that honor to "IP litigators," but you've convinced me otherwise.

[stepback]

Wow grooveboy, you truly are a fork tongued litigator with ability to woo gullible jury members:

"we need to reward and provide incentives to true inventors, not corporate monopolists and the patent prosecutors who unwittingly serve their interests by supporting a system that allows far too many patents to issue for inventions that at best represent marginal improvements, the purpose of which is not to advance the sciences and useful arts, but to permit corporate giants to expand their market dominance."

true inventors?
marginal improvements?

A couple of years in the patent prosecution trenches is what you need to dispel you of your starry eyed appreciation of how innovation takes place.

[Malcolm Mooney]

"A couple of years in the patent prosecution trenches is what you need to dispel you of your starry eyed appreciation of how innovation takes place"

JEROME LEMELSON, BABY!!!

[Leopold Bloom]

"Having litigated patent cases for three decades, and having thereby become intimately familiar with how patents are prosecuted and the mindset of patent-prosecutors, I have come to believe that patent prosecutors are among the most narrow-minded, elitist, self-centered and misguided members of the legal profession..."

There's plenty of evidence for this thesis on this board. Even stepback's "rebuttal" appears to say nothing more than "You don't know what you're talking about, because you're not one of us." Do you folks really believe that nobody other than a patent attorney/agent understand how innovation occurs?

[M. Slonecker]

Mr. "groveboy1",

Perhaps your comments are best directed to the members of the CAFC, before which I presume you have appeared. I am certain that Judge Newman, Judge Lourie and Judge Linn would look quite favorably upon the points you make (as would doubtless all other members of the Court).

[johng]

These guys are not giving up, and now they have their claws in Obama. I told you guys many moons ago we needed to "get to know" Obama (like that Saturday Night Live guy Lovett used to say).

If we don't negotiate a fair and reasonable deal, we certainly won't like what eventually will be forced upon us.

[CAPat]

Yes, Lionel, I certainly do understand the meaning of "editorial". I also understand that you cannot properly evaluate someone's opinion without understanding their credentials and biases. Have they developed their opinion based on a relatively objective evaluation of the facts, like a judge, or is their opinion the product of their predetermined biases, and was their "review" merely a formality? In this case, in my opinion, an Obama partisan was hiding behind her credentials and trying to obtain more credibility for her "editorial" than it actually deserves.

Here's an ugly thought -- in actuality it appears that Obama's "plan" closely tracks that of Jon Dudas. Maybe Obama will re-appoint Dudas as Commissioner if he is elected.

"Faux News" -- very clever. I guess you get your's from MSDNC, and that paradigm of objectivity, Olbermann?

[weary lexicographer]

"I guess you get your's from MSDNC..."

I'm reasonably certain that "your's" is not a word.

"I also understand that you cannot properly evaluate someone's opinion without understanding their credentials and biases."

"Someone" is a singular noun. Thus, "you cannot evaluate someone's opinion without understanding his credentials..."

"Have they developed their opinion based on a relatively objective evaluation of the facts, like a judge, or is their opinion the product of their predetermined biases, and was their "review" merely a formality?"

I'm stepping out of my self-appointed role, but this is just plain silly. A judge's role is to at least attempt an objective evaluation of the facts. Where do you get the idea that an author of an editorial has the same obligation?

[somebody]

"To restore balance and provide true incentives toward the development of science and the useful arts, we need to move toward a system where only "gold plated" inventions--i.e., first in a class of new anti-cancer drugs, new never before used source of energy, cure for aids--result in issued patents."

Oh, now I get it. We issue the Wright brothers their patent, and then no more airplane patents because everything since then is only a marginal improvement, not a "gold plated" invention.

BTW, you don't seem all that concerned that for three decades you've earned (what is probably) a pretty decent living protecting your clients from the ravenous hordes of patentees with their ill-gotten, marginal patents procured by their narrow-minded, elitist, self-centered patent prosecuting minions.

Who's self-centered and elitist?

[Hank Rearden]

"...the patent prosecutors (both in-house and in private firms) who devote their careers to obtaining such patents are merely the low-rent servants of corporate interests..."

There's nothing quite like the swelled head of a litigator.

As Mooney would ask, do you have trouble getting your head through the door?

[i don't get it]

"... you've earned (what is probably) a pretty decent living ... Who's self-centered and elitist?"

Another withering rebuttal? Let's summarize: Grover says that patent prosecutors are narrow-minded, etc. Grover also says that patent system is being abused by corporate meanies. Grover defends corporate good guys against corporate meanies, and earns a nice living doing so. Grover is therefore self-centered and elitist.

Does this make any sense at all? Is this the kind of logic you use in responding to office actions? Should Grover add "illogical" to his list of criticisms to levy against patent prosecutors?

[somebody]

"Grover defends corporate good guys against corporate meanies"

Where did you read that? Is it possible that groveboy1 represents rip-off artists and thieves? Is it possible that groveboy1 is nothing more than their low rent servant?

Yes, I do use this logic in responding to office actions. All the time. Very successfully.

Any other questions?

[i do get it]

"Unfortunately, too many patent prosecutors are in the business of collaborating with their corporate sponsors to game the system by obtaining patents for minor improvements..."

But then,

"To put it another way, we need to reward and provide incentives to true inventors, not corporate monopolists and the patent prosecutors who unwittingly serve their interests..."

Followed up with,

"I have confidence that Obama has the vision to reform the patent system in a manner that will encourage real progress in science, while at the same time developing checks and balances designed to dramatically decrease the influence of patent prosecutors and their corporate sponsors who wrongly game the system to obtain patents that are not worth the paper on which they are printed."

So are patent prosecutors mere collaborators, unwitting dupes, or America's most highly influential lobby? Or are they all three?

[i still don't get it]

"Where did you read that?"

Actually, I got it from your premise: "... you've earned (what is probably) a pretty decent living protecting your clients from the ravenous hordes of patentees with their ill-gotten, marginal patents procured by their narrow-minded, elitist, self-centered patent prosecuting minions." At least that's where I got the "corporate meanies" part from.

But fine, reverse it: "Grover defends corporate meanies against corporate good guys." Your logic, concluding that he is thus self-centered and elitist, still makes no sense. I'm surprised that this kind of logic succeeds with the PTO. But then again, maybe I'm not.

[somebody]

My premise was sarcasm.

[i still don't get it]

"My premise was sarcasm."

Yes, I understood that, but you're off point. (So that's how you argue with the PTO!) Neither your stated premise nor its opposite leads to your conclusion. So what's up with that? Does your argument boil down to "No, I'm not - You are!"?

[somebody]

Now you're catching on.

Prosecution is so much easier than litigation. That's why we're able to get so many crap patents issued.

Thank goodness everybody else has groveboy1 to protect them from us.

[agent007]

"Patent prosecutors are the last people we want to provide guidance concerning how we fix our patent system. Simply stated, if you get paid to obtain patents, you are hardly in a possession to objectively analyze whether the nation's patent system truly works to provide incentives to advance the sciences and the useful arts."

Well, you can't have it both ways. If prosecutors should have no input because of their bias, then defense litigators should also have no input because of their bias. After all, you get paid to tank patents in court, and that role does not inherently put you in a position to "objectively analyze whether the nation's patent system truly works to provide incentives to advance the sciences and the useful arts".

Prosecutors should have input to reforms, as should the plaintiff and defense bar, and the office. However, the real impetus for reform is coming from industry, and their input on policy is (and generally should be) more important than input from the bar or office.

[Publius]

Nothing "narrow-minded, elitist, self-centered and misguided" about a self-described "litigator" haranguing about what "the founders" "obviously" did not understand about the patent system they created, how "corporate monopolists" (evildoers) and patent prosecutors (unwitting tools) today just "wrongly game the system to obtain patents that are not worth the paper on which they are printed" and how "we" need to marginalize the influence of such malign influences. No sirree. But maybe just a tad self-righteous and condescending?

Of course, this is probably just the effluent from the swelled head of a litigator, punctured by the outcome of a recent case.

[Malcolm Mooney]

I make my living by helping people navigate the legal ins and outs of our nation's patent system.

But "improved patent prosecution rules" does not appear on the list of the 20-30 top reasons that I would vote for Obama over McCain.

At this point in history, voting on such a trivial issue would be like voting for whoever will lower my income tax the most over the next four years, i.e., it would be selfish and short-sighted.

[M. Slonecker]

It seems to me that anytime one talks about a "plan" it is useful to have a copy in front of them. The pertinent portions of the plan are as follows:

"Protect American Intellectual Property Abroad: The Motion Picture Association of America estimates that in 2005, more than nine of every 10 DVDs sold in China were illegal copies. The U.S. Trade Representative said 80 percent of all counterfeit products seized at U.S. borders still come from China. Barack Obama will work to ensure intellectual property is protected in foreign markets, and promote greater cooperation on international standards that allow our technologies to compete everywhere.

Protect Intellectual Property at Home: Intellectual property is to the digital age what physical goods were to the industrial age. Barack Obama believes we need to update and reform our copyright and patent systems to promote civic discourse, innovation and investment while ensuring that intellectual property owners are fairly treated.

Reform the Patent System: A system that produces timely, high-quality patents is essential for global competitiveness in the 21st century. By improving predictability and clarity in our patent system, we will help foster an environment that encourages innovation. Giving the Patent and Trademark Office (PTO) the resources to improve patent quality and opening up the patent process to citizen review will reduce the uncertainty and wasteful litigation that is currently a significant drag on innovation. With better informational resources, the Patent and Trademark Office could offer patent applicants who know they have significant inventions the option of a rigorous and public peer review that would produce a “gold-plated” patent much less vulnerable to court challenge. Where dubious patents are being asserted, the PTO could conduct low-cost, timely administrative proceedings to determine patent validity. As president, Barack Obama will ensure that our patent laws protect legitimate rights while not stifling innovation and collaboration."

Perhaps it is useful to note that the Technology Plan contains 54 (assuming I counted correctly) bullets, of which the above three paragraphs comprise bullets 52 - 54.

[Leopold Bloom]

"Perhaps it is useful to note that the Technology Plan contains 54 (assuming I counted correctly) bullets, of which the above three paragraphs comprise bullets 52 - 54. "

Thanks, Mr. Slonecker. That ratio actually sounds about right. After all, the patent system (at most) promotes technology innovation, it's not the sine qua non of innovation.

It's also interesting to see that Obama's plan doesn't suggest that a gold-plated patent can be obtained by simply increasing the search time, as implied by some above. Rather, he suggests that the PTO needs better informational resources. Who can argue with that?

Finally, Obama appears to suggest that we need another (or revised) administrative procedure for challenging patent validity. Given the concerns that many have about current re-exam procedures, this seems to be worth discussing.

Of course it would be silly to vote for president based on just his IP agenda. However, it's nice to see that his (brief) position on IP appears to have at least some connection to reality.

[SF]

"At this point in history, voting on such a trivial issue would be like voting for whoever will lower my income tax the most over the next four years, i.e., it would be selfish and short-sighted.

I vote for the candidate who can best protect me from being struck by lightning.

[Bruce E. Hayden]

"Protect American Intellectual Property Abroad: The Motion Picture Association of America estimates that in 2005, more than nine of every 10 DVDs sold in China were illegal copies. The U.S. Trade Representative said 80 percent of all counterfeit products seized at U.S. borders still come from China. Barack Obama will work to ensure intellectual property is protected in foreign markets, and promote greater cooperation on international standards that allow our technologies to compete everywhere.Mom and apple pie. Every administration I can remember has fought this running battle, and I expect whatever candidate wins will do exactly this. Protect Intellectual Property at Home: Intellectual property is to the digital age what physical goods were to the industrial age. Barack Obama believes we need to update and reform our copyright and patent systems to promote civic discourse, innovation and investment while ensuring that intellectual property owners are fairly treated.Again, boiler plate mom and apple pie. Now if he would seriously try to rein in copyright term extensions, I might reconsider. Reform the Patent System: A system that produces timely, high-quality patents is essential for global competitiveness in the 21st century. By improving predictability and clarity in our patent system, we will help foster an environment that encourages innovation. Giving the Patent and Trademark Office (PTO) the resources to improve patent quality and opening up the patent process to citizen review will reduce the uncertainty and wasteful litigation that is currently a significant drag on innovation. With better informational resources, the Patent and Trademark Office could offer patent applicants who know they have significant inventions the option of a rigorous and public peer review that would produce a “gold-plated” patent much less vulnerable to court challenge. Where dubious patents are being asserted, the PTO could conduct low-cost, timely administrative proceedings to determine patent validity. As president, Barack Obama will ensure that our patent laws protect legitimate rights while not stifling innovation and collaboration."The first part of this is really not that debatable. I think most of those involved would agree that putting more resources into the process might just improve the quality of the patents and maybe even reduce some of the variability. But I think that the "Gold Plate" suggestion is prima facie evidence that this was written by people who don't prosecute patents for a living. As for "dubious" patents, they are invariably in the eye of the beholder. At least until a final verdict on the merits, most plaintiffs probably think their patents are just fine, while the defendants believe them to be dubious.

Part of the problem with the "Gold Plate" proposal is that in many industries, or at least in the electronics and software industries where I work, you often don't know which are your best patents until years later. In cross licensing, we used to figure that it would take at least five years of aging (after issue) before we knew how important and how strong a patent was. Trying to guess this during prosecution is just plain silly.

The problem with "PTO could conduct low-cost, timely administrative proceedings to determine patent validity" is that this might work fine with killer prior art provided by defendants, but they have yet to figure out how to make inter partes reexamination work, and expanding this would seem to be a major undertaking. Besides, what is really wrong with having a court take a decent amount of time figuring this out in multimillion dollar litigation? It seems a bit shortsighted to use a low cost administrative proceeding to determine tens, if not hundreds, of millions of dollars of damages. Indeed, what is it that they plan to remove from patent litigation for the low cost administrative proceedings? Discovery? Expert witnesses?

I would also ask whether we want the organization that can't figure out the patent laws, and routinely utilizes bad law (and often enshrines it in the MPEP) to make this sort of determination. Right now, they seem to be straying in both obviousness and software based statutory subject matter. And that doesn't even address the failings of individual examiners or ALJs.

[curious]

I still don't understand why more people don't utilize ex parte reexamination, relatively inexpensive and relatively fast.

[millard duckworth iii]

jeez i think i lost several IQ points reading all these comments.

[Bad Joke Ahead]

I like keeping roughly half of the money I earn. Effective tax rates in the 60% plus range don't interest me much. I won't be voting for Obama.

Maybe he'll just quit if he falls behind in the polls. He follows them more than a moral code or principle of government anyway.

I'm from Illinois. Politically speaking, well, just look at what your saviour is used to. Our speaker and our governor are going toe to toe with no budget, a deficit even if we could get one, and a multi-billion dollar capital spending and handouts plan aimed only at Chicago. You have no idea what pandering is, yet.

[dinnerbell]

please see http://www.piausa.org/ for a different/opposing view on patent reform

[dinnerbell]

According to Ms. Rai’s bio it does not appear she has any working knowledge of the patent system. She is not a patent practitioner -attorney or agent. She has never filed or prosecuted a patent application, nor has she ever litigated or licensed a patent. If I am mistaken, please correct me. Otherwise, what then in heavens name makes her competent to comment on the patent system? We might as well have her redesign and build New York’s twin towers!