Followers of U.S. patent practice will understand that patent law and its application in the U.S. courts and the United States Patent and Trademark Office (USPTO) has an ebb and flow from patent friendly to patent hostile. Historically this trend moves like a pendulum peaking in one direction and then pulling back to repeat the flow from overly liberal in the allowance and enforcement of patents to overly conservative and restrictive of allowable patent scope.
So where are we today on the patent spectrum? Arguably we are very high on the patent hostile side. Two major factors weighing on anti-patent sentiment in the U.S. are patent eligibility requirement under 35 U.S.C. §101, and post grant procedures enacted by the American Invents Act (AIA). First let’s address patent eligibility. 35 U.S.C. §101 requires inventions to fall within certain categories of statutorily patent eligible subject matter. There categories include “any new and useful process, machine, manufacture, or composition of matter.” Conversely, courts have defined three areas of patent ineligibility, namely, laws of nature, natural phenomenon, and abstract ideas. Historically there was very little (at least compared to the last ten years) discussion of what patent eligible subject matter meant and how to apply it. However, two areas of modern technology have drastically ratcheted up the discussion of patent eligibility. These areas are computer assisted technology/software and biotechnology, and the relevant court cases are Alice Corp. v. CLS Bank (“Alice”) and Mayo Collaborative Services v. Prometheus Labs. Inc. (“Mayo”). Without getting into a dissertation on how to apply the rules of patent eligibility and/or the holding in Alice/Mayo and their progeny, a short explanation is that computer software patent claims that solely recite abstract ideas (e.g., a method for hedging financial risk) and biotechnology patent claims that recite naturally occurring compositions of matter (e.g., a DNA marker for breast cancer) are patent ineligible. This a massively truncated explanation of how these classes of inventions have been limited, but the fact is that they have been limited. It has become much more difficult to obtain and subsequently enforce patents in these technological areas. There are reasons why these limitations exist. The patent system was designed to promote innovation and not just discovery. Inventions should provide novel applications of inventive ideas, not just the abstract idea itself or the identification of the compound found in nature. At the extreme ends of patent eligibility these concepts seem relatively simple, but in practice a mix of abstract ideas and natural compositions with inventive methods, processes, compositions and article of manufacture have led to invalidity and unpatentability of thousands of patent applications in the last decade. Subsequently, this preference for reduced allowability to avoid potentially patent ineligible inventions has results in fewer patents and very likely a reduction of investment in U.S. biotechnology. The second recent development (recent being the last 10 to 15 years) was the passage of the America Invents Act (AIA) in 2011, and subsequent enactment of its provision over the following years. The AIA, also referred to as the Patent Reform Act, created multiple changes in U.S. patent law that generally brought the U.S. in line with most of the world’s industrialized nations. These features include changing the U.S. to a first-to-file country (from a first-to-invent), updating applicant eligibility (allowing corporations, and not just inventors to be the applicant for patents), and adding additional post-grant procedures to challenge patents at the USPTO (as opposed to litigating in federal courts). Two of the new post-grant procedures of particular importance to this discussion are IPRs (Inter Partes Reviews) and PGRs (Post Grant Reviews). As a summary explanation, IPRs allow challenges to any pending patent (all first-to-invent, and first-to-file patents 9 months after grant), but with limited challenges (obviousness and anticipation); and PGRs allow challenges to any patent filed after March 2013 (but within 9 months of the patent grant or reissue) with expanded challenges compared to IPRs. These procedures are similar to many post grant procedures that exist in other countries or regions, particularly oppositions in the European Patent Office (EPO). Arguably these procedures have made it more cost effective for entities to challenge patents. The USPTO procedures are intended to reduce litigation discovery costs and the duration of litigation. As an example, IPR/PRG’s are designed to reach a final decision in 18 months and can cost around $100,000. In contrast, federal district court litigations can take multiple years and cost millions of dollars. What is undisputable is that these new procedures have made it easier to challenge and invalidate patents. While this may lead to a better crop of patents with poorer patents being weeded out before they can be asserted and litigated in courts, it also increases the chances for all patents to be invalidated by decreasing the hurdles for patent challenges. Should the U.S. be more patent friendly or continue in this anti-patent trend? The answer often depends on your view of patents. Patents are governments grants of a limited monopoly in exchange for the public disclosure of novel and non-obvious invention (including the know how to practice these inventions). The tradeoff is designed to advance technology through the disclosure and simultaneously support research and development with the promise of limited future exclusivity. The public disclosure of the innovation (in contrast to trade secret protection) enables others to understand and build on the technology, hopefully leading to greater technological advancements. A counter argument to increasing the strength and value of patents is the view that patents are anti-competitive and reduce incentives to innovate and commercialize new products and technologies for fear of infringing existing patents. The challenge is to balance the competing interests of increased incentives to innovate while simultaneously providing competitive and fair marketplaces. These countervailing interests create the ying and yang that pull patent law in different directions over time. Recently the pendulum has swung significantly into anti-patent territory, but history suggests it will likely swing back. While it is unlikely we will see wholesale elimination of IPR and PRG’s, their scope and enforcement will probably be tamed. Further, Federal Circuit and Supreme Court decisions (followed by USPTO allowability guidelines) will likely temper the patent eligibility requirements currently in force. It will take time, but eventually the U.S. will be back in a patent friendly mindset. In the future the pendulum will likely move towards overly patent friendly, and then oscillate back toward anti-patent sentiment, but hopefully by then I will be long, long retired. If you have any questions about patents, trademarks or copyrights, and would like to discuss protection and registration please contact me at [email protected] or visit my website at www.chiaraiplaw.com Comments are closed.
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Should I Copyright the Trademark in My Patent?
AuthorNick Chiara is an IP attorney with over twenty years of patent and trademark experience. Archives
July 2022
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