The Uneasy Relationship Between Innovation and Intellectual Property Protection

Transcript

check one two checking one two check one two testing one two testing one two testing one two testing one two for for all right good afternoon I'm Dean Jessica Berg and my role is very simple I get to say welcome this afternoon to our spangberg Center for Law technology and the Arts distinguished lecture the lecture is part of an an extraordinary gift that was given to the law school by the spangenberg Family Foundation established by Audrey and Eric spangenberg who is a graduate of the law school I get to turn the podium now over to Professor Craig nard who is our inaugural director of the spangenberg center who will introduce our very distinguished lecture good afternoon everyone thank you for being here this afternoon uh those of you who practice in the area of Ip or bump up against its uh borders in that space are certainly aware of our distinguished lecture today uh K Melly is a native of Cleveland spent much of her personal and professional life here uh went to this law school was a graduate order of the koif uh and then went on to a six circuit clerkship and from lir to Jones Day and Porter Wright uh before being tapped to be the general counsel were Chief counsel and chief of staff for L Attorney General Lee Fischer and from there President Clinton appointed her to the Northern District of Ohio here in Cleveland which I could tell you uh when I was uh practicing and started getting into Pat law uh judge Elli very quickly uh gathered a reputation uh for being maybe one of a handful of district court judges of the 94 districts we have in this country of getting patent law at a deep level understanding its nuances and complexities and I would talk to litigators and they would I would ask well who do you have and they would say well K Mali and they knew they were in for a really good trial a fair trial but somebody who just got it and as a former patent litigator myself there's nothing like a district court judge who just gets it you may win you may lose uh but it's wonderful uh when she was nominated by President Obama in 2010 to go to the federal circuit El a bit of a mixed blessing for us uh leaving having her leave the district court was clearly a loss for the Northern District but a student of patent law would certainly rejoice in her going to the federal circuit uh where some of her opinions reflect much of the nuance and intelligence uh that occupied her District Court opinions but now she has a bit more influence uh and and so we're really happy that she's been on that Court patent law and the court are better for it uh today she was going to talk to us a bit about Innovation and IP I look very much look forward to her thoughts and welcome her home in a sense [Applause] Kate you notice Craig has the mic way high and I need it way low um thank you I always get the best welcomes in Cleveland it always makes me feel very good I want to thank all of you for being here especially given the timing of the tribe games today I really appreciate the die hards um you know having been a lifelong Clevelander and a and a Die Hard fan of every Cleveland sports team which as you know is not always that easy um i' I've been one of those people that's always torn about whether to watch the games when one of my teams is playing because I've seen so many losses that for some reason I started to blame it on myself I'm watching so that's why they're losing um so I I always am torn about whether I watch or not so I actually think that while some of you may it as a little bit of a sacrifice to have to be here uh instead of watching the game you should think of it as get you know giving one for the team because by being here and giving me an audience to give this lecture you're preventing me from watching it so they'll probably win um turning to the lecture I am going to talk about a topic of my choosing that I feel pretty strongly about but when I'm done I'm happy to entertain questions on anything that you want to talk about so we've all heard uh this the view that history is bound to repeat itself a wise caveat to that belief is that history is bound to repeat itself unless we learn from it our experience with the patent system to date evidences cycles of repetition and there are few glimpes glimpses of wisdom having reared its head in that experience perhaps it's time that we start thinking outside the box or outside the cycle of repetition if you will the development of our current patent system began with the birth of our nation before The Constitution the nation had no centralized mechanism for granting patent rights and there's no indication that the delegates that put together the Articles of Confederation which was designed more with giving power to the states and less to a centralized federal government even considered whether a strong patent system was wise some states did Grant patent rights during that time in an effort to encourage and reward quote men of learning and genius note only men but according to a later Senate report written in 1836 it became clear that the states could not actually provide adequate encouragement to incentivize inventors because they couldn't promise that other states would honor any patents that they granted the report concluded that this lack of incentive resulted in quote very little progress on this side of the Atlantic with ratification of the Constitution in 7 1988 the new federal government was given the power it needed to incentivize Innovation Article 1 Section 8 Clause 8 of The Constitution gives Congress the power quote to promote the progress of Science and useful Arts by securing for limited times to authors and inventers the exclusive right to their respective writings and discoveries end quote contemporaneous records such as Madison's notes indicate that members of the Constitutional Convention adopted this Clause without any real debate although some have interpreted this as a lack of interest on the part of those present other indications suggest that the framers actually considered it so important that they believed it to be Beyond debate soon after ratification George Washington gave his first state of the union address in 1790 although the address uh comprised only about a thousand words he included this entire passage related to patents the advancement of Agriculture Commerce and manufacturers by all proper means will not I trust need recommendation but I cannot forbear intimating to you the expediency of giving effectual encouragement as well as to the indu introduction of new and useful in Inventions from abroad as to the exertions of skill and genius in producing them at home nor am I less persuaded that you will agree with me in opinion that there is nothing which can better deserve your patronage than the promotion of Science and literature in one of its first three statutory enactments Congress passed the patent Act of 1790 the ACT called for a patent to issue for any useful art manufacturer engine machine or device or any Improvement thereon not before known or used the a the ACT had the inventor present a petition to the Secretary of State the secretary of the Department of War and the Attorney General of the United States who jointly would consider the patent applications and any two of these three could Grant a patent if they found the invention sufficiently useful and important the first baton board notably was Thomas Jefferson as Secretary of State Henry Knox as Secretary of War and Edmund Randolph as the Attorney General the board was to perform an in-depth analysis of the applications it was to meet to discuss the applications and to hold hearings with applicants it even actually uh participated in interference proceedings where multiple people sought the same patent now as a member of the first board Thomas Jefferson was a particular ad advocate of the patent system and its accompanying incentive for Innovation records of his letters show that he believed an inventor ought to be allowed a right to the benefit of his invention for a certain time he said nobody wishes more than I do that Ingenuity should receive liberal encouragement despite this sentiment supporting the patent system and its beneficial effects on Innovation the three members of the patent board soon found that the work in analyzing the applications was a bit much only 57 patents were granted between 1790 and 1793 but even that small number caused Jefferson Knox and Randolph concern over the amount of time these patent duties took away from their other obligations to our young country and applicants expressed concern regarding the amount of time it took to get a patent in other words some felt that the system set up by Congress in its First Act meant that the inventors were not receiving sufficient or timely protection for their inventions and that the patent system was not indeed promoting in the progress of of useful Arts and Science in response to these concerns Congress amended the patent act in 1793 the 1793 act sought to decrease the amount of work required and to improve the rapidity with which applicants could obtain protection for their inventions it did this by completely removing any review by a patent board instead patent applications received no substantive examination the new act Consolidated the over sight of patents within the purview of the Secretary of State but it provided the secretary of state with no power to reject a patent everyone who applied for a patent would receive one as long as they paid the necessary duty this news patent act as you can imagine this system turned out to be a disaster the incentives to innovate were largely defeated by those who sought to abuse the law the 1836 Senate report concluded that the 1793 act harmed Innovation it determined that a considerable portion of the patents granted were worthless or void or even fraudulent the excess of granted patents flooded the economy with monopolies that infringed on one another and resulted in alarming increase in patent litigation that was according to the 1836 report quote onerous to the court ruinous to the parties and injurious to society the Senate report also found that it became common for frauds to copy patented machines just in order to obtain their own patents on those very same inventions because the Secretary of State couldn't reject these applications the government granted the applications a matter of course and the claimed inventors went forth selling their patent rights to the public who only later came to learn that they had purchased useless rights this speculation in patent rights became a regular business with hundreds of thousands of dollars paid for void patents often patents HS held by what we would call today non practicing entities the system created by the 1793 Act created a climate in which quote patents even for new and meritorious inventions were so much depreciated in general estimation that they were of but little value to the patentees and the object of the patent laws that of promoting the Arts by encouragement was in a great measure defeated in order to recreate an innovation incentive Congress tried again amend the patent act in 1863 the new law established a patent office as a distinct entity within the Department of State with a commissioner of patents as its head it mandated a systematic examination method for reviewing patent applications so that the patent office could ensure the validity of an invention prior to issuing a patent the ACT required an applicant to file a specification a drawing and even provide a model if possible it required the applicant to provide a detailed description so that anyone could construct and use the invention after the expiration of the patent and the patent office was tasked to undertake an examination of the application to discover discover whether the alleged invention had been invented published or used previously only if the patent office determined that the application provided for a novel original and useful invention with the commissioner Grant the patent under these terms Congress attempted to restore respect for and Trust in the patent system so that the system could perform its intended purpose that of promoting Innovation the 1836 report expressly noted that is that it is not at this day to be doubted that the evil of the temporary Monopoly is greatly overbalanced by The Good the community ultimately derives from its Toleration and that the new bill should be designed to better suit the law of patents quote to the present condition of the Arts and the altered circumstances of the community the pendulum began to swing back to a place where patent quality was considered Central to a functioning patent system now the newly refined patent system was deemed Central to America's Pro progress Abraham Lincoln the only president to have obtained a patent gave a speech in 1859 just before becoming president in which he discussed what he believed to be the key developments facilitating the inventions and the discoveries for which the new country was becoming known these developments he characterized as of peculiar value and he said they included the Arts of writing and printing the discovery of America and the introduction of patent laws in that same speech President Lincoln described the patent system as the development that added the fuel of interest to the fire of Genius in the discovery and production of new and useful things others soon echoed President Lincoln's sentiments Laing the patent systems impetus for Innovation while attending the 1876 Centennial Exhibition in Philadelphia Sir William Thomas the president of the mathematical and physical section of the British Association stated that quote if Europe does not amend its patent laws America will speedily become the nursery of useful inventions for the world corito Takahashi Japan's assistant Secretary of State along with a special commission from Japan visited the United States in the 1800s during that visit they toured the patent office Mr Takahashi later said that he and his commission wished to discover quote what it is that makes United States such a great nation and we investigated and we found it it is patents and we will have patents Sir Henry Su m a British jurist and legal historian acknowledged that the Federal grant of patent Rights was one of the quote provisions of the Constitution of the United States which have most influenced the destiny of the American people and quote and that because of it the United States was the first in the world for the number and Ingenuity of the inventors by which they have promoted the useful Arts now despite all this praise the 1836 patent act which was welld designed indeed it served as the design for our patent system all the way until the America invents act in 2011 still had problems that continued and those problems continued to plague the system the lingering effect of the bad patents that flooded the system in the country's early years left a bad taste many in the C many in the community and many judicial officers showed a disdain for patents even valid patents were met with resistance when owners sought to enforce them and Geographic and the geographically dispersed nature of our courts led to wide disparities in the treatment of patents even the very same ones while many changes to the patent laws were considered and proposed in the early part of the 20th century Congress ultimately decided that codifying current current law in a clearly clearly detailed statutory scheme would suffice with codification it was hoped that the differences in judicial treatment of patents would narrow and a measure of certainty might be established thus we were given the patent Act of 1952 the act itself explained that no basic changes to the general character of the patent laws had occurred since 1836 and that the ACT did not intend to make such changes either except at the margins in 1967 the Senate published a report prepared by the president's Commission on the patent system in the report the commission unanimously agreed that a patent system today is capable of continuing to provide an incentive to research de development and Innovation the commission stated that that it had discovered no practical substitute for the unique service that the patent system continued to offer by promoting Innovation it conceded however that the long pendency of patent applications and great uncertainty and considerable expense involved in the enforcement of patents plagued the current system and notably it concluded that changes to the system should be made in order to quote raise the quality and reliability of the US Patent the 19677 reports recommendations for change are really interesting among other things it recommended a first toile system like that used in most countries around the world and suggested that other changes be considered to align our approach to patent law with an international system for the protection of intellectual property rights it also recommended the patent protection not be afforded for design patents plant patents or any what it called programming patents on this last point the report concluded that computer code was and should remain protected by copyright but that all other programming should be unprotected because its development already had occurred rapidly without the need for patent protection in other words it saw software as an innovation that had its own incentives making patent protection unnecessary to its further and Rapid development now imagine how much angst uncertainty and judicial resources would have been saved if these suggestions had been adopted the report also suggested that the pto's funding not be diverted that the quality of the examination process be improved with additional training and that a six-month post Grant review period be adopted how precient do these ideas seem now in fact though nothing ever came of the 1967 report at least until a few of its suggestions found their way into minor Congressional amen amendments in 1984 and more found their way into the AIA un fortunately we also saw an insufficient benefit from the codifications in the 1952 act because the ACT expressly said it was adding nothing new to the patent laws the attitudes of Jud judicial officers and those in the community did not change patents continued to receive little respect in many parts of the country and the judicial circuits exhibited a wide disparity of views regarding the quality and enforceability of patents litigated before them patent owners had no ability to predict whether and where their patents would be enforced let alone whether they would be able to recoup the costs of their inventions I recently heard a barrister from the United Kingdom described the world of US Patent litigation in the 1970s he said patents in the US were treated as unsavory things and law firms saw them as so unlikely to be of value to their clients that they assigned patent cases to what he called dweebs with no trial experience so those were his words not mine um so the federal circuit was formed in 1982 to address this lack of uniformity and uncertainty regarding the enforcement of patent rights Congress realized that a lack of consistency in how the patent law was interpreted and applied endangered Innovation by making it difficult to rely predictably on the rights patents conveyed the federal circuit was formed to limit form shopping and reduce inconsistencies among the circuits as explained in a statement from The Carter Administration the creation of the federal circuit would expand the federal Judiciary system's capacity for definitive adjudication of national law and thereby in part encourage industrial Innovation Congress was right to an extent by its very existence the federal circus went a long federal circuit went a long way toward achieving the Congressional goals that led to its creation once declared not invalid by a federal circuit judgment a patent retained that status on a nationwide basis unless the Supreme Court said otherwise and if a given product infringed a patent claim in one state it infringed in them all during its early years of of jurist prudence the federal circuit also was far more protective of the rights granted in patents than most Regional circuits had been this led inventors and businesses to return to the patent system seeing value in patent protection both from an offensive and a defensive standpoint applications and enforcement actions both soared to some extent however we ultimately found ourselves in the same Thicket in which the country had been in the early 1800s the PTO was so flooded with applications and was under such pressure to move its backlog that meaningful examination of patent applications suffered patents were issues that never should have been authorized and often Pats patents covering virtually the same technology were issued to more than one applicant the numbers are telling in 1967 the PTO received 990,000 patent applications and granted 69,000 patents the number of applications had nearly doubled to over 176,000 by 1990 and the number of patent grants was up to over 100,000 by 2013 the PTO received over 600,000 applications and granted over 300,000 of those and in 2015 the numbers increased once more this explosion of applications and grants was accompanied by an expansion in the fields of technology in which people and companies sought patents even into the late 1970s mechanical inventions made up the majority of all patents issued by the PTO at least one study found that this prevalence in mechanical inventions dropped significantly by the late 1990s at which point mechanical inventions accounted for less than onethird of the patents granted by the PTO in instead this time frame saw meaningful increases in the number of patents granted for among other things computer related inventions including those very programming matters that the 1967 report recommended not receive patents semiconductors medical devices pharmaceutical products Automotive inventions and others and many of these patents were either granted to entities with no intention of or wherewithal to practice the claimed inventions again Crea a speculation or an incentive for speculation and patents that had not been seen for almost 200 years we were also brought back to a world where interferences re-exams and litigation first to a degree that in the now echoing words of the 1836 Senate report were again quote onerous to the court ruinous to the parties and injurious to society again the numbers help paint the picture in it's first first year the federal circuit entertained appeals from District Court judgments in only about 175 cases this despite its Nationwide jurisdiction over patent actions arising in all district courts the patent cases that the federal circuit did receive accounted for less than 30% of its overall docket fast forward to fiscal year 2015 where the federal circuit entertained appeals from District Court judgments in 632 cases District Court patent filings Rose to almost 6,000 and appeal from PTO decisions were up to 476 a 600% increase in four years patent cases now make up 60% of the court docket actually over 60% the last time I checked and two familiar problems emerged corporations began to feel the financial burdens of patent litigation and questions regarding the predictability of one's ability to protect their intellectual property rights were renewed patent litigation had become overwhelming to many business owners and inventors and came to be viewed as a deterrent to the very Innovation that Congress sought to encourage when it formed the federal circuit Congress again responded to The Cry For Change with the AIA Congress acted to redefine the patent laws in ways not to done since 1836 again Congress couched the need for reform in the mantle of promoting Innovation as Senator Le he stated a balanced and efficient in ual property system that rewards invention and promotes Innovation through high quality patents is crucial to our nation's economic prosperity and job growth innovation has always been at the heart of America and American success from the founding of our nation we recognize the importance of promoting and protecting Innovation the patent system plays a key role in encouraging Innovation and bringing new products to market the discoveries made by American inventors and researched institutions commercialized by our companies and protected and promoted by our patent laws have made our system the Envy of the world now the belief behind the AIA was that by improving patent quality and speeding up the processes by which the quality of already issued patents could be reassessed the entire patent system would be strengthened are you beginning to see a pattern here it keeps repeating itself now although Congress purported to promote Innovation when passing the AIA many now argue that the AIA has not fully done that that has actually thrown out the baby of good inventions in need of serious investment in research and development with the bathwater of undeserving patents and its implementation has taken us even farther out of step with the international world of Ip no other country employs different standards of claim construction or different burdens of proof when assessing the validity of issued patents in administrative and Court tribunals they in fact think our system is out of whack the question being posed now both here and on an international level is whether we have swung the pendulum too far whether patent protection is being so diluted that this country's system is no longer sufficiently robust robust to protect and Foster Innovation is the US losing its preeminence when it comes to encouraging Innovation as other countries speculate so what do we do do we keep always in the name of promoting Innovation swinging back and forth between promoting an expansive patent system and creating processes that disfavor broad patent protection or is it time for a more nuanced approach one that will rather than swing the pendulum back and forth recognize the need for more targeted reform there's no doubt that as some of the proposed bills in Congress reflect Congress is tempted to rethink the free reign the PTO was given to implement the AIA and to assess whether the PTO is really doing what is consistent with what Congress intended that is whether the AIA will ultimately incentivize Innovation rather than squelch it beyond that though perhaps it's time we realize that our one siiz fits-all system may not really work to incentivize Innovation while I'm not the first to think of this it has for some reason gotten almost no traction over the years if we are to VI to provide patent protection for software and other programming related interventions inventions which even after bilsky and Alice we still do perhaps that protection should be different in kind if as the 1967 report noted those kinds of technological improvements continue a pace without great need for patent protection or as some Scholars have pointed out with far shorter times to Market perhaps the length of patent protection for such Innovation should be shortened commensurate with the investment of time and money they reflect the swiftness with which the technology changes the ease with which the technology can be designed or the public benefit flowing from the advancement rather than 20 years of I protection perhaps three would suffice or even five for certain categories of innovation or perhaps we should require as Professor Mar Lemley has suggested that the public disclosure of such high-tech inventions be more definite we could refi require functional claiming for programming or other high-tech inventions so that the claims are both clear and narrow all of this could help assure that older patents do not unintentionally cover later developments that were never really envisioned by the original inventor these limitations could afford afford necessary protections for an inventor's Discovery while ensuring that that we do not discourage later invention in that space on the other hand where Technologies such as as first-in-class medical devices Pharmaceuticals and biosimilars take longer to develop require far greater upfront cost and provide a different character of benefit to the public a broader scope of production May remain appropriate because of the increased time and necessary significant expense associated with these inventions these and similar Industries may require a greater incentive and greater level of patent protection if they are to thrive and continue to innovate so too smaller or academic innovators may may have no incentive or funding source other than patent protection to move from Innovation to Innovation while those entities capable of manufacturing and marketing embodiments of their inventions are less in need of and their continued Innovation is less dependent upon upon long-term patent protection a congressional report on Innovation prepared in connection with the AIA acknowledged the existence of quote differing patent values in distinct Industries it recognized experience and economic research suggest that distinct Industries encounter the patent system in different ways it noted that the reasons for diverging assessments of the patent system include the cost of research and development the technological risk associated with such research and the availability of effective non-patent means of protection these differences necessarily create different views of the incentives needed from the patent system by different Industries despite this recognition no effort to differentiate the desired and useful level of patent protection on an industrywide basis is evident anywhere in the AIA and it's my understanding that the current PTO director has resisted Ed such differentiation every time asked about it by Congress now I can't resolve this debate for congress in the time I have left but I believe it may be time for Congress to consider more targeted changes to the patent system that will better acknowledge the disperate industries and Technologies and and understand that they are seeking protection from patents in different ways a recent article by John Allison Mark Lemley and David Schwarz explains that based on the findings of the authors it is entirely possible that pharmaceutical patent owners insisting that patents serve as strong and valuable drivers of innovation may be just as correct in their assessment as software companies are when they assist that patents are overclaimed often invalid and operating as a disincentive to Rapid Innovation our courts can and have begun to acknowledge differences among Industries we have recognized that an exclusive right to practice one in one's invention does not always translate to the right to exclude others where the other is not in fact practicing the invention or there is a substantial need for the allegedly infringing product I mean that was the point and impact of the Supreme Court's decision in eBay and we have recognized that damages calculations require different levels of apportionment where the infringing patented products are multi-component products rather than single formulation Pharmaceuticals or a mechanical item or where the costs of discovering the patented invention are not great but as article three courts with limited policymaking flexibility we cannot address all the issues that Congress can or develop the law so that the Innovation incentive that Congress has espoused since 1788 can be realized in this changing World our patent system continues to provide a one-size fits-all reward in an effort to promote Innovation even though it has become apparent that there is no one siiz fits-all incentive that covers all the industries in our economy harking back to President Lincoln's words the patent system has added the fuel of interest to the fire of Genius in the discovery and production of new and useful things but we can strive for better our goal in having a patent system should not be just an exercise in trying to incentivize some generalized measure of innovation we want to have a patent system that magnifies this incentive so as to maximize the range of inventions developed and it must be a system that is flexible enough to as the 1836 report said continue to adapt to the present condition of the Arts the limits of our Discovery are endless as the 1836 Senate report acknowledged whoever imagines that because so many inventions and so many improvements in Machinery have been made there remains little else to be disc discovered has but a feeble conception of the infinitude and vastness of mechanical powers or of the unlimited reach of science or of man much has been discovered infinitely more remains unrevealed despite the passage of over 180 years this sentiment remains just as true today as it was in the 1830s Congress has a Constitutional directive to provide a patent system that provides rights to potential inventors so that they will have an increased incentive to explore for exhaustless Treasures of Ingenuity and knowledge we are finding that the unlimited reach of science increasingly applies to a multitude of fields each having different incentives and a different timetable for progress as Congress seeks to promote the progress of Science and useful Arts it may be time for Congress to consider diverse and flexible solutions that can better promote and maximize progress in disperate fields of Discovery rather than continue to attempt one size fits-all solutions that result in the pendulum of patent protection swinging back and forth without ever arriving at a desired equilibrium my father used to say that the measure of a man is not whether he makes mistakes but whether he is making the same mistakes a year from now I wonder what he would say about an entire country making the same mistakes today that it made almost two years a 200 years ago it's time we come up with more Creative Solutions to break the cycle of these centuries thank [Applause] you okay it doesn't have to be about this it can be anything yeah that's maybe that is the answer you know that's I I'll have to build that into this speech this the first time I've given it so I don't know but I think that um I think that some of the things have been thought through pretty well uh I think that one of the the things that that shocks me is that the AIA didn't exempt um Pharma patents that are subject to the to Anda or um biomedical devices that are subject to the biosimilar ACT from interart review and the reason is that those two acts really represented very detailed thoughtful back and forth about how much protection was really needed for that particular injury industry and how much we can take away from it uh and allow for for generic copying to to ultimately allow for less expensive products to be put on the market in the interest of the public to have those kinds of detailed acts out there that did that careful back and forth with with the entire industry and then to basically throw them the baby out with the bath water I mean you you know that in in parties reviews what's happening with the the pharmaceutical and biomedical industry is that it's mainly being used by Venture capitalists to affect the stock price of the pharmaceutical companies rather than to actually address the validity of their patents so I I do think that you're right to to certainly in the AIA one size fits none I would agree with that but I think there before that we had some at least nuanced development with respect to certain industries that that we were looking at and we've sort of Forgotten that of CAS law that is more indf you must have been listening to Craig outside in the hallway because we were having some of this discussion um I I think you're right it's it's dangerous to always trust Congress just because so many things as you understand often compromises end up not working for anybody uh one of my problems is that I I do believe that the federal circuit as an article 3 court has a li policymaking function now not everybody on my court is as conservative as I am about that um I'm very much a believer of our place in the system that they should respect us we should respect them with respect to our different roles I certainly think that Congress could address the the the the basic question of whether shorter protection should be allowed but I do think and I alluded to that that the courts are starting to do some of those things and you're right and Craig pointed out even in our obviousness law we are recognizing to some extent that things are more obvious especially in those instances where the technology is fast moving um I'm still not sure how this 101 world is playing in I think the 101 world is kind of a a as they say a coar filter but it's a coarse way of trying to accomplish what I think the 67 report would have had us accomplished which is to do away with at least most programming related inventions um though not all but so I think you're right the courts can do some and I think you're right to be skeptical about Congress I think Congress could go back and fix some of the problems in the AIA they could create a standing requirement they could require them to use the same burden appr proof they could require them to use the same standard for claim construction the while the the Supreme Court endorsed the different standards for claim construction the only explanation I've ever heard from the PTO as to why they do it is that well they're just used to doing it that way uh [Music] how well I I mean I think it is a constraint I'm not sure that the the wrong claim construction gets you to a faster conclusion in my mind but um it gets you to more invalidations but not necessarily a faster conclusion I think that those that I know that were involved in the AIA actually envisioned A system that was much more like the ITC where there would actually be a meaningful real um exchange and dialogue um I I think that that they did not really think that a quote trial would be no more than an hour with no Discovery and virtually you know no uh interaction with respect to Witnesses or even any real back and forth so I I I don't know that it's really being the implementation is exactly what those involved in its passage intended uh and I know there are some proposals for what they call an AIA fixed um I don't know that they'll be able to fix the standing question because they like the idea that the public can come in and complain about a patents but but they don't realize that the only public that's coming in and complaining about it are those with with different kind of vested interests yes being okay where's the question going okay thank you hi your honor and uh welcome back to Cleveland thank you you mentioned the different standards in the USPTO particularly in interart taste review and in the federal courts um my question for you is how often in practice do you think that the standard is truly different um whether it's really is a interpretation unreasonable or is it the plain and ordinary meaning no they I I can tell you that for instance judge Chan ofar Court thinks that probably it only happens at the margins that it makes a difference I've seen enough cases where I have said that that the that your review of the claim Construction in my mind whether the claim construction was right or wrong depends on which standard you're using uh I because it really is a much broader View and it will have the result of invalidating many more patents based on uh anticipation or obviousness um so I I don't know that it's always different because you know we do have cases that say brought us reasonable construct that there's still an r in Bri that it has to be reasonable and so it has to be you know at least within the bounds of reason as it Rel as you look at the specification and and the other intrinsic record um but having said that I think it makes a difference enough times and and I do think there's no reason I mean I understand the Supreme Court said they could do it but why shouldn't we have one standard so that the district court understands when the PTO makes a decision what it means so that we can just be using the same standards when we're reviewing those things on appeal uh it doesn't make a lot of sense to me and I can tell you having just been in Europe that our European counterparts are just they lack at us they think it's crazy uh first of all thank you for a very fascinating talk um my question it's going to sort of the suggestions that you were raising about perhaps with respect to different fields of innovation maybe having some flexibility there with I guess with regard to how long we can have exclusive licensing um I think to sort of the um biotechnology field where obviously we have large corporate interests that wield incredible monetary and intellectual Capital um how do we strike that balance between those institutions and not for-profit academic institutions whose uh revenues from that licensing um sort of become more of a significant um source of income how do we strike that balance between sort of Academia and corporate uh use of those well I think that that you know it is true as I said that that we need to recognize that the small inventors um don't always have the same ability to make money off their inventions um and and we don't necessarily even want them to be doing that I mean I had the privilege to meet Dean Cayman very recently and you know I know you think of all of him you think of him about the segue but he had so many inventions that had nothing to do with that and that were all based on on medical inventions designed to help those who are disabled and and those who in fact the segue was originally designed for that but he said that his very first invention was a a clever one relating to to diabetes and he said he tried to manufacture it and to Market it and he wasn't good at it uh and he didn't like it and he found that he kept thinking of the next idea down the road and he finally realized that he was better off if he could license he could get a patent license that patent and put all that money into the next invention and that's really what we want small inventors to do and that's what we want academic research facilities to do so the notion that we just shouldn't have patents which I you know there is some broad belief that that we'd all be better off and Technology would move a lot faster if we didn't have them I think there's a reason that every time anybody's ever studied it they come up with the conclusion that a strong patent system is important they just have a hard time defining what a strong patent system is so I do agree with you that there is that differentiation um but even with big biomatter IAL and big Pharma I think what you're talking more about is fighting them in litigation and that they have you know they have different uh resources for purposes of fighting litigation but even big Pharma has to spend a ton of money to go through all the clinical trials and to you know so usually they're actually working with some of these small inventors um to act to undertake all the additional research I I think it's really it it becomes primarily the tech World versus everybody else uh and and I don't mean that as a a bad War I mean it's just that those involved in the tech were very really believe that the best way we can Pro promote Innovation is to take this take what you have put it out there and allow us to just slightly design around it so we can move to the next great iPhone whatever um and so that's where the battles come in uh you know the uh the guy who started Qualcomm I heard him speak recently and he said you know I'm in the tech world I'm one of those people that everybody files lawsuits against and I should hate patents and he said but I wouldn't be here today without patents so I get it I get that in the beginning you have to have patents to to incentivize people to build these huge companies and to then create a world where these great ideas can move forward I don't know all the answers but I I but I know that we have to figure out a way to recognize that there are legitimate interests on on both sides and instead of just saying okay you win or you win in terms of what our patent system is going to look like we need to find ways to make it flexible and creative given um our Pace the pace in Congress and um enacting legislation and then also um having the courts really limited to issues that come between them to decide um do you think there's any possibility of implementing quality control more at the USPTO level um whether it's some system like the uh how trademarks are examined having patent attorneys in the US PTO doing examinations doing trademark examinations a us doing patent examination examinations like the trademark system where they have trademark attorneys rather than just I think that a lot of the the PTO uh oh I see what you're saying having the examiners be attorneys you know well that was one of the points I made about one of the early acts where they said let's give the PTO a lot more money and then have an education system all of that that ended up in the AIA I didn't actually state that because I thought everybody probably knew what was in the AIA but that whole thing about proposing more money and more examinations and that the PTO money shouldn't get diverted ultimately reared its head in you know in the AIA and I think that's what they're trying to move toward I mean I had some young lawyers that came to work for me who said that they were examiners right out of college before they ever went to law school and they said it frightens them now to think about the patents they were granting or denying um and but it's not that examiners aren't good and that they don't work hard it's just I don't think they're given the training or the resources and I think that you might be right maybe attorneys with technical background should be doing the patent examinations I think that makes a lot of sense I've never thought about it quite that way but that's a good proposal and trust me there are plenty of tech attorneys out there right now and we're making more of them right it was it was a boat but I can't yes over the shes right right right right right right he got the patent but of course he probably got that when they were granting them all As a matter of course right but it was a boat question I forgot what is the what is the current status of the genome gen that I know there to talk about it I I I just don't follow it so I just wondered if yeah since we have a few minutes yeah well there was there's right now there's a lot that's going on in the in the you know the world not just the tech world but the legal World about the patentability of of things that can be found in nature and there are a couple Supreme Court decisions that said things certain kinds of of you know discovering DNA if you discover a particular DNA that that's not patentable uh they even had cases where we said if you discovered but find a a use for it that is that was that's unusual that that should be patentable and the the Supreme Court disagreed with us so there's you know but but there's still patent sequencing for instance that's deemed patentable and so there's there's a lot that's still working its way through the courts in terms of uh and that I think is a that's a very sensitive subject for some of the judges on our court who truly believe that those Supreme Court decisions were wrong and that they actually rather than promote uh medical Innovation will actually slow down the process of the Innovation but I you know the sup the Supreme Court seems to have a different view than than our court on a lot of what should be or shouldn't be patentable um but but there are these exceptions including things that are found in nature which they say even if you can't find them very easily they're still found in nature for I've got a procedural question um as I recall when the federal circuit was first formed it adopted an internal operating rule that provided that when in the case of competing decisions the earlier precedent prevails is that right and um at the time that struck me as somewhat at odds with concepts of the evolution of law under star decisis and I'm not sure it's it's a operate internal operating rule in all the other circuits as well oh I think it is I think every circuit yeah you're bound by what prior panels say until you sit on Bank okay um and the reason we sit on bankk as often as we do is we don't have other circuits to bounce this off of um or the Supreme Court to resolve circuit splits so we have to sort of create our own circuit flit splits or try to resolve our differences within the circuit but I think spiritually every Court does that uh and it's frustrating sometimes because you could see I mean I've often written something very short saying we're Bound by this but we shouldn't be um sometimes that works and sometimes it doesn't not all intellectual property is technical or or mechanical do you have anything to comment on on copyright law you know we don't see copyright law as much as other courts do we've had some big copyright cases we had the Google Oracle copyright case and it's coming back to us um I thought that it was interesting that the 67 act which I think was incorporated in into law in 1973 which is what I said in Google Oracle made it clear that programming code is covered by copyright law um and I do think it's interesting because I get you know you will we'll get all these briefs in a copyright case saying no leave that to the patent world and in the patent case they say leave it to the copyright World um but I I do think that that copyright that a lot there's a lot going on in copyright I mean a huge amount of of change going on in copyright and uh you know the Supreme Court I think is likely to take a case out of our court with respect to you know International patent exhaustion to compare whether I mean sometimes the Supreme Court says copyright and patent are similar other times they say Well they're not so similar um so I think that as the evolution is occurring in copyright they're also trying to to to look at those issues to see the extent to which they import or don't import into the the patent world and of course there's all kinds of stuff going on in trademark the Supreme Court just took the case of the uh to the slant case that we had which said that the the portion of section two of the trademark act that says that um anything that could be uh that could that anyone in the community would feel burdened by or some phrasing that would hurt the community is not subject to trademark registration so it's kind of like the Redskins case or whether or not the Indians should be allowed to wear their uniforms in in Canada uh we said it was unconstitutional um the majority said for you know straight up on his face unconstitutional under the first amendment I said it was unconstitutional because it's void for vagueness um and so they've taken that case which would pretty much decide the Redskin's case I think um but so there's a lot going on throughout all areas of Ip I wish we had all the copyright cases so it would be a lot more fun for me you want to Vis Jud [Applause] thanks okay judge [Music] the