Balkinization  

Monday, May 07, 2007

Patents at the Supreme Court

Arti Rai

Patents at the Supreme Court

In a burst of activity not seen for decades (at least four decades and arguably more than a century), the Supreme Court has recently embraced the intricacies of patent law. Just last week, the Court handed down two major patent decisions, KSR v. Teleflex and Microsoft v. AT&T. These decisions follow closely upon Medimmune v. Genentech, handed down a few months ago, and three important cases from the 2005 term.

While the Court’s interest in patent law has been welcomed by the popular press and by at some legal academics, the reaction from many practicing patent lawyers has been decidedly negative. An easy explanation for the lawyers’ reaction is that the Court’s decisions substantially dilute the power of patents and thus the power of patent lawyers. Patent lawyers prefer the activities of the “expert” Court of Appeals for the Federal Circuit, which hears all appeals in patent cases and is quite pro-patent. In the case of both the patent lawyers and the “patent court,” we have the familiar story of expertise going hand in hand in capture.

But the capture hypothesis may be a bit too easy. In at least one recent case – the Festo decision of 2002 – the Supreme Court stepped in to overturn a case in which the Federal Circuit had dramatically limited patent scope.

Notably, the KSR case from last week shows the Justices attacking not the Federal Circuit’s pro-patent tendencies but, rather, its “rigid and mandatory formulas” for determining whether an invention is “obvious” and therefore unpatentable. In KSR, the Supreme Court stresses that such formalism – specifically a requirement that defeating patentability depends on written proof of a “suggestion to combine” invention elements that are publicly available – does not comport with the realities of ordinary scientific and technological creativity. In Festo, the Supreme Court similarly rejected a rigid rule – in that case, a rule harshly punishing a patentee for amending its claims for any reason during the application process. The Festo Court adopted instead a less rigid, and arguably more “pro-patent,” presumption.

So here is some speculation. More so than other lawyers, patent lawyers believe that legal decision making can and should be made as rule-like as possible, with all of the attendant predictability that allegedly comes with rules. Indeed, patent lawyers’ convergence around the mantra of predictability led to the creation several decades ago of the Federal Circuit. The hope was that this specialized patent court would enunciate crystalline rules that could be applied precisely in many, if not most, circumstances.

As any scholar of the rule/standards debate knows, however, rules may lead to socially undesirable results. For example, the requirement of a written “suggestion to combine” meant that trivial combinations could be patented simply because no one had bothered to suggest the obvious combination in writing. Additionally, ostensibly crystalline formulations (e.g. injunctions to focus on the “plain meaning” of words in construing documents) may leave much room for interpretation and discretion. The algorithms created from time to time by the Federal Circuit to guide the lower courts in determining the meaning of words in patent claims don’t appear to have yielded much predictability. In fact, a favorite complaint of patent lawyers is that one does not know what a patent actually covers until the Federal Circuit has opined on the question.

At the end of the day, as the Supreme Court appears to have recognized, there are good reasons to think carefully in any given circumstance about whether rules or standards work best. For this reason, if for no other, the Supreme Court’s intervention is welcome.

Comments:

I can't be the only one who's been waiting eagerly to see when KSR would appear on Balkinization! I was enthralled by the oral argument, the decision, and then a bit deflated by the reaction of patent lawyers (though I agree the capture question is overemphasized.)

In terms of the reaction, it seems like either denial or confidence in the CAFC's willingness to ignore the precedent. First of all, in an unintentional infringement case, isn't the mere fact that the technologies overlap by a short period enough to meet the new obviousness standard? (Ie, "the results of ordinary innovation.") I have been marginally involved in two successful troll cases (on the trolls' side), and the inventions were beyond obvious. One had to do with querying databases with a pseudo-natural language process that wouldn't have cut it for an undergraduate term paper. There was no parsing, no analysis of any kind, just a rough approximation of English speech in a way that got results from predefined tables, and therefore beneath the radar of any prior art. This is absolutely the norm, there is literally not a piece of software that doesn't infringe on dozens or hundreds of these asinine patents. I'm curious what academic IP law professors (who don't have as much skin in the game as practitioners or prosecutors) think about somehow reigning these abuses in without upsetting the biotech people.

Also, the discussion of the case hasn't generally discussed KSR in light of MercExchange. The fact that most of the trollish cases are brought by small players who make no products and therefore rely more on contingency might change the economics of trolling much more drastically than has been acknowledged. That is to say, if the opportunity for huge paydays goes away, and the chance of success is simultaneously lowered, far fewer lawyers will take longshots, and there will be no revenues with which to amass wider patent portfolios.

Fallout-wise, if the biotech people think that silly software patents are threatening their business, is there any chance of them joining with tech people to redefine patents away from software and retrench them in biotech? I don't know enough about the internal dynamics of the industries but there must be natural alliances.
 

I don't remember the priest telling me when I went to Confession when I was a kid, "Well, Lance, it was wrong of you to disobey your mom and talk back to her like that, but since you set the table every night and do your homework and sent your aunt a birthday card, what the heck! You're a good kid. Your sins are forgiven automatically. No need for you to do any penance." 文秘 心脑血管 糖尿病 高血压 高血脂 冠心病 心律失常 心肌病 心肌炎 中风 偏瘫 低血糖 And maybe it's happened a few times and I haven't heard about it but I can't recall a judge ever letting somebody walk on the grounds the crook was a good guy and his friends really like him.
 

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