Thursday, September 27, 2018

USPTO - Director Iancu Remarks -- 35 USC 101 Patent Eligibility

At a recent IPO annual meeting, Director Iancu delivered remarks on how we should view patent eligibility under 35 USC 101:

"I’ll focus my remarks on a specific proposal for Section 101—patentable subject matter.

As many of you know, we recently issued to our examiners two new guidance memos on Section 101: the first dealing with the "conventionality” step in the Mayo/Alice framework, and the second on “methods of treatment” claims. Our data shows that these two memos have already improved the 101 analysis during examination.

But significantly more work needs to be done, especially on the “abstract idea” exception.

I know that IPO committees have been hard at work on a legislative fix to Section 101. Indeed, IPO and AIPLA have joined forces recently and proposed new statutory language. Should Congress be interested in moving forward with hearings or legislation, the USPTO would be very happy to help. As we all know, however, any legislative effort takes a long time, and the result is uncertain.

In the meantime, the USPTO cannot wait. We have thousands of examiners who struggle with these issues on a daily basis. Our examiners need additional guidance now. And so do patent applicants, patent owners, and the public. Whether through legislation or otherwise, there is a growing consensus that the issue must be promptly addressed.

In fact, several Federal Circuit judges have recently filed concurrences or dissents explaining the uncertain nature of the law and calling for change.

In order to “work its way out of what so many in the innovation field consider are §101 problems,” Judge Lourie—in an opinion joined by Judge Newman—appealed to a higher authority. “Resolution of patent-eligibility issues requires higher intervention, hopefully with ideas reflective of the best thinking that can be brought to bear on the subject.”

Judge Plager, in another case, noted that “the state of the law is such as to give little confidence that the outcome is necessarily correct.” He explained that, given current §101 jurisprudence, it is “near impossible to know with any certainty whether the invention is or is not patent eligible.” And he concluded that we currently have an “incoherent body of doctrine.”

And Judge Linn explained that the abstract idea test is “indeterminate and often leads to arbitrary results.”

I agree with all these sentiments.

Judge Giles Rich, an icon of patent law with an unparalleled understanding of—and impact on—our system, stated, in 1979, the crux of the problem with respect to §101 jurisprudence. He said at the time that problems can arise due to the “unfortunate … though clear commingling of distinct statutory provisions which are conceptually unrelated, namely, those pertaining to the categories of invention in §101 which may be patentable, and to the conditions for patentability demanded by the statute…”

This was almost 40 years ago! How perceptive and prescient Judge Rich was.

Let me put this in my own words: How can a claim be novel enough to pass 102 and nonobvious enough to pass 103, yet lack an “inventive concept” and therefore fail 101? Or, how can a claim be concrete enough so that one of skill in the art can make it without undue experimentation, and pass 112, yet abstract enough to fail 101? How can something concrete be abstract?

These problems confound the most sophisticated practitioners in our patent system. People simply don’t know how to draw these distinctions. If something is not inventive, then invalidate it under 102 or 103. If something is indefinite, or too broad to be fully enabled or described, then invalidate it under 112.

We have decades of case law from the courts and millions of examinations at the PTO which guide us in our 102, 103, and 112 analyses. People know these standards and how to apply these well-defined statutory requirements.

The genius of the 1952 Patent Act, of which Judge Rich is widely viewed as a principal author, was that it categorized the bases for patentability. Our recent §101 case law mushes them all up again. As Judge Rich said, this “may lead to distorted legal conclusions.” And it has. And it must end.

So I propose that we go back and heed Judge Rich’s direction, and keep rejections in their own distinct lanes—as directed, in fact, by the 1952 Act. Let’s stop commingling the categories of invention on one hand, with the conditions for patentability on the other. Section 101 is about subject matter. It is meant to address categories of matter that are not ever eligible on their own, no matter how inventive or well-claimed they are.

Here is a hint: If the claims can be fixed by slightly different claiming, by narrower claiming, or by more definite claiming, this is likely a “conditions” problem—not a subject matter problem. A pure discovery of nature, like gravity for example, is not eligible no matter how new, how brilliant, and how carefully the claims are written. This is an example of a subject matter issue. The category itself is problematic.

Alright, but what are these problematic categories? I ask because I believe that we must define the categories for these exceptions clearly, lest—in Justice Clarence Thomas’s words—we “swallow all of patent law.” Because—again quoting Justice Thomas—“at some level, ‘all inventions…embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.’” Clearly, though, not all inventions are subject to a judicial exception. So what is the specific subject matter that is problematic and we must exclude? We must be clear, lest we perpetuate the current state. People should know up front. If nothing else, for the sake of a predictable ecosystem, let’s be transparent.

And in particular, the issue needing most attention is, what precisely is the meaning of the “abstract idea” exception? Section 101 itself lists four categories: process, machine, manufacture, and composition of matter. The judicial exceptions should likewise be clearly categorized. As Judge Rich explained, when we deal with §101, “the sole question…is whether the invention falls into a named category, not whether it is patentable...”

So at the USPTO we are contemplating revised guidance to help categorize the exceptions—and indeed to name them—and instruct examiners on how to apply them.

More specifically, the contemplated guidance would do two primary things: First, it would categorize the exceptions based on a synthesis of the case law to date. And second, if a claim does recite a categorized exception, we would instruct examiners to decide if it is “directed to” that exception by determining whether such exception is integrated into a practical application. These two clarifications would help drive more predictability back into the analysis while remaining true to the case law that gave rise to these judicial exceptions in the first place.

So first, what exactly should be captured by the judicial exceptions to §101? In essence, and because we no longer want to mush subject matter with the conditions of patentability, the exceptions should capture only those claims that the Supreme Court has said remain outside the categories of patent protection, despite being novel, nonobvious, and well-disclosed. And what are the categories of inventions that the court told us that we should not patent even where the applicant demonstrates full compliance with Sections 102, 103 and 112? The Supreme Court gave us the answer: the “basic tools of scientific and technological work.”

And what are these “basic tools?” I believe that the Supreme Court has also told us that, at least through their examples. For example, they certainly include pure discoveries of nature, such as gravity, electromagnetism, DNA, etc.—all natural and before human intervention. So, no matter how brilliant the discovery of a certain DNA sequence in nature might have been, the court said we should not issue a patent in the absence of more. The Myriadcase is a recent example.

Also, fundamental mathematics like calculus, geometry, or arithmetic per se. That is, no matter how novel and well-described Newton’s calculus may have been, it is still not patentable by itself. It can be thought of as abstract no matter what. Perhaps “inherently” ineligible, some might say. The Bensoncase is an example.

Some basic “methods of organizing human activity,” such as fundamental economic practices like market hedging and escrow transactions, have also been excluded by the Supreme Court in Bilski and Alice.

And the court has also warned against pure mental processes such as forming a judgment or observation. Again, by itself, something performed solely in the human mind can be thought of as abstract no matter how it is claimed.

The Supreme Court has been interpreting this statute for the past 200 years or so, and throughout that time has given only a limited number of examples of these “basic tools of scientific and technological work”—and arguably they can all generally fit into the categories I just mentioned. So let’s turn now and ask in a bit more detail, what do the various exceptions articulated by the Supreme Court really encompass? There is less difficulty with understanding the categories for laws of nature and natural phenomena.

Folks can arguably identify things like gravity or DNA in a claim. Abstract ideas, on the other hand, have proven more challenging to define. But a thorough review of the relevant case law helps us draw more clear lines. At the USPTO we have undertaken just such a review and have studied every relevant case in detail.

And so, the proposed PTO guidance would synthesize “abstract ideas” as falling into the following three categories:

Mathematical concepts like mathematical relationships, formulas, and calculations

Certain methods of organizing human interactions, such as fundamental economic practices commercial and legal interactions; managing relationships or interactions between people; and advertising, marketing, and sales activities

Mental processes, which are concepts performed in the human mind, such as forming an observation, evaluation, judgment, or opinion.

Under the first step of the proposed guidance, we would first look to see if the claims are within the four statutory categories: process, machine, manufacture, or composition of matter. This is not new—we always do this. If statutory, we would then check to see if the claims recite matter within one of the judicial exceptions, categorized as I just mentioned. This is the new approach.

If the claims at issue do not recite subject matter falling into one of these categories, then the 101 analysis is essentially concluded and the claim is eligible. This alone would resolve a significant number of cases currently confounding our system. If an examiner does not find matter within the disallowed categories, he or she can move on.

Now, on the other hand, if the claims do recite subject matter in one of the excluded categories, the Supreme Court has instructed that we need to do more analysis. Specifically, the court instructed us that in such cases we need to decide whether the claims are “directed to” those categories.

To that end, we must first understand what the line is that the court wants us to draw to decide whether the claim is “directed to” an excluded category or not. The proposed new guidance would explain that Supreme Court jurisprudence taken together effectively allows claims that include otherwise excluded matter as long as that matter is integrated into a practical application. The line, in other words, delineates mere principles, on one hand, from practical applications of such principles, on the other.

For example, in Le Roy v. Tathem, the court said in 1853 that “a new property discovered in matter, when practically applied in the construction of a useful article of commerce or manufacture, is patentable.” Then 128 years later, in Diamond v. Diehr, the court repeated that “an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.” And recently, in Mayo, the court explained that “applications of such concepts to a new and useful end … remain eligible for patent protection.”

And so, if the claim integrates the exception into a practical application, then the claim is not “directed to” the prohibited matter. In such cases, the claim passes 101 and the eligibility analysis would conclude. Otherwise, we would move to step 2 of Alice, for example as explained in the office’s Berkheimermemo from earlier this year.

It is important to note that the first step of our analysis does not include questions about “conventionality,” which are addressed in Alice Step 2. That is, it does not matter if the “integration” steps are arguably “conventional”; as long as the integration is into a practical application, then the 101 analysis is concluded. This helps to ensure that there is a meaningful dividing line between 101 and 102/103 analysis.  A fully “conventional” yet patent-eligible claim may still be unpatentable as obvious. But it is better to address such a claim with obviousness law that has been developed over 65 years of practice.

The analysis also does not deny claims as ineligible merely because they are broad or functionally-stated or result-oriented. I understand the concern with certain types of broad, functionally defined claims that do not have sufficient support in the specification. But for these cases, USPTO examiners know, and will receive further guidance and training on, how to apply well-defined Section 112 principles.

Put another way, the examination does not conclude merely because we overcome Section 101; we must still examine for patentability under sections 102, 103 and 112. And so for claims that pass 101 because they do not articulate matter in a defined category, or that integrate the matter into a practical application, we can rest assured that other sections of the code should still prevent a patent if the claim is not inventive or is merely on a non-enabled or undescribed or indefinite idea.

In sum, the proposed guidance for Section 101, which addresses step 1 of Alice, would explain that eligibility rejections are to be applied only to claims that recite subject matter within the defined categories of judicial exceptions. And even then, a rejection would only be applied if the claim does not integrate the recited exception into a practical application. This provides significantly more clarity for the great bulk of cases.

Sure, there will be a number of cases that would still be difficult to resolve when we ask whether a claim is within one of the excluded categories, or whether it is a practical application of it. But for the vast majority of cases in the big middle, I suspect that the proposed approach would be significantly simpler.

And we are certainly in need for some simplification.

For many claims right now, we have an option to reject or invalidate, for violations of patentability conditions, under either:

A patentability condition such as 102, 103 or 112, or Section 101 subject matter.

Judge Rich was again perceptive, when he noted 40 years ago that “To provide the option of making such a rejection under either 101 or [a condition for patentability] is confusing and therefore bad law.” Just as Judge Rich warned, we have gotten ourselves into a rut when it comes to Section 101 analysis. With the proposed new guidance, the USPTO is trying to navigate our examiners out of that rut given the current statute and judicial precedent.

And I hope other authorities will join in helping us get out of the rut, at least by keeping rejections in their lane and by clearly categorizing the subject matter of any exception. Please note that if we are to issue such revised new guidance, it would take some time to finalize. During that time, I welcome your comments and thoughts on this and any other proposal.

In the end, we all have the same goal in mind. Born of our Constitution and steeped in an inspiring history of world-changing innovation, the American patent system is a crown jewel, a gold standard. Working together, we can ensure increased clarity in the patent system, and thus ensure that the United States will continue to lead the world in innovation and technological development."

Copyright © 2018 Robert Moll. All rights reserved.

Friday, August 31, 2018

Supreme Court - SAS Institute Inc. v. Iancu - PTAB Must Decide the Patentability of All The Challenged Claims

Congress created inter partes review (IPR), 35 USC 311-319, to allow a party to challenge the validity of a patent under 35 USC 102 and 103 based on prior art patents and/or publications at relatively low cost in the US Patent Office.

If the party can prove a reasonable likelihood of success of showing the invalidity of at least one claim, the USPTO should institute an IPR.

All patents are eligible for an IPR challenge, but if the patent's earliest effective filing date is on or after March 16, 2013, the IPR must be filed later of the nine month period following issuance of the patent and termination of any post-grant review.

In SAS Institute Inc. v. Iancu, the US Supreme Court addressed a practice of the USPTO to institute an IPR on part of the challenged claims. In SAS, the Supreme held when the USPTO institutes an inter partes review to consider the validity of an issued patent the USPTO must decide the patentability of all the challenged claims. In other words, if PTAB institutes an IPR, it can’t just review the claims that meet the threshold for institution, but must review all of the challenged claims.

My comment is SAS forces careful selection of the patent claims to be challenged, because a written decision that a challenged claim is patentable, may raise an estoppel against further challenge of the claim on the same grounds or grounds that could have been reasonably raised.

Copyright © 2018 Robert Moll. All rights reserved.

Monday, August 13, 2018

USPTO - PTAB Study on Motions to Amend in AIA Trials

In recent years it has been very challenging for a patent owner to amend claims during an America Invents Act (AIA) trial. The USPTO published a study that suggests this is still the case. Here's the results from a PTAB Motion Study that tracks and analyzes motions to amend filed in AIA trials up to the end of March 2018:
  • "Of the 3,203 trials that have gone to completion or settled, patent owners sought to amend the claims in 305 trials.
  • Of the 305 trials with motions to amend, the PTAB ultimately decided the merits of the motions in 189 trials. In the remaining 116 completed trials, the motions to amend were rendered moot because the PTAB did not find the original claims unpatentable, were not decided because the trial terminated prior to a final written decision, or were an amendment that only sought to cancel claims.
  • Of the 189 motions to amend that the PTAB decided, the PTAB granted or granted-in-part 18 motions. For 160 of the 182 motions denied or denied-in-part, the PTAB determined that proposed amended claims did not satisfy at least one statutory requirement of patentability akin to an examiner rejecting a proposed amended claim because it is anticipated, obvious, not adequately described in the written description, indefinite, or directed to non-statutory subject matter or found that the patent owner failed to satisfy the statutory requirements for a motion to amend under 35 U.S.C. 316(d). For the remaining 22 motions, the PTAB denied on procedural grounds related to the regulatory requirements for a motion to amend.
  • As of the midpoint of FY 2018, patent owners had filed more motions to amend than in recent fiscal years."
For more details see the Motion to Amend Study Update under the PTAB Statistics.

Copyright © 2018 Robert Moll. All rights reserved.

Friday, August 10, 2018

USPTO - Update AIA Patent Trial Practice Guide (August 2018)

In August 2012, the USPTO published Office Patent Trial Practice Guide (the Guide) for 37 C.F.R. Part 42 (Part 42 is currently on pages 416-447). The Guide was intended to give guidance to parties participating in inter partes review, post-grant review, covered business methods, and derivation under the America Invent Act (AIA) that had just passed.

In August 2018, the USPTO published Trial Practice Guide Update (August 2018) to update the Guide on topics such as expert testimony, motion practice, institution of trial, reply to patent owner response, reply to motion to amend, challenging admissibility, motions to exclude and strike, and oral hearings.

Copyright © 2018 Robert Moll. All rights reserved.

Wednesday, August 1, 2018

Wired - Despite Pledging Openness, Companies Rush to Patent AI Tech

If you are considering patenting artificial intelligence (AI), you are not alone. See Wired Despite Pledging Openness, Companies Rush to Patent AI Tech.

My quick comment on the article. I don't think a company's decision to patent AI is inconsistent with maintaining openness of its AI platforms. A company would disclose a platform so others can build on it yet reasonably expect IP protection of other advances that distinguish them from its competitors. In software we look to trade secret, patenting, and copyright for legal protection. If a company elects to rely on trade secret, it prevents others from being aware of that information. So again how would clamping down on AI patents and pushing companies toward trade secret, help to advance AI research? I don't think the article addresses my question, but it might update that AI patenting has increased greatly in the USPTO.

Copyright © 2018 Robert Moll. All rights reserved.

Saturday, June 30, 2018

NY Times - Apple and Samsung End Smartphone Patent War

In Apple and Samsung End Smartphone Patent War, the NY Times argues the patent war that began in 2011 was a waste because the technology is outdated and became largely a fight about money rather than an exclusion of infringing Samsung phones.

This article doesn't make sense to me. Successful tech companies management would not engage in patent litigation unless it was economically rational. So should we jump in after the fact and speculate they after careful consideration wasted time and money? One way to consider if it is wasteful is to take the value of infringing a patent multiplied by the probability of a successful defense. If that product is greater than the cost of defense, the defendant should litigate as a matter of economics. This appears to be Samsung's approach. I am not sure how they conclude hundreds of millions were spent on defense even after seven years of patent litigation. On the other hand, if you own patents like Apple and are a marketplace leader, you would be rational to enforce the patents against others copying or infringing to catch up. Otherwise you encourage many others to free ride off your R&D.

Samsung had seven years of patent litigation and setbacks and victories that should have been opportunities to settle the cases. Yet Samsung didn't and managed to whittle down the damage awards. However, a jury ordered Samsung to pay Apple $539 million for patent infringement in May. This is a large value for infringing the patents, the defense had failed, and shortly after Samsung settles. Santa Clara University law professor Brian Love claims the litigation "didn't really accomplish anything" because "at the end of the day, no products went off the market." I have trouble accepting this "didn't really accomplish anything" given the likelihood substantial money was transferred to Apple in settlement after the $539 million award. Finally, the Apple and Samsung phones contain the patented technologies the article says is long outdated. Again, nothing in the article to support this claim.

Rutgers law professor Michael Carrier saying "the case is likely to serve as a lesson that 'the courtroom is not always the place to try to get ahead" sounds right but to me Apple was not trying to get ahead; Samsung was trying to catch up and decided to infringe/copy patented features and Apple said not so fast and sued after failing to reach a settlement.

Professor Carrier's statement "there’s always the trade-off between litigation and innovation, and in the time these companies spent in the courtroom, they weren’t innovating." This lost time idea might make more sense for a small company but appears inapplicable to Samsung and Apple given that large tech companies largely insulate key innovators from the litigation. Moreover, reasonable litigation of patent rights should protect the incentive to innovate.

Copyright © 2018 Robert Moll. All rights reserved.

Thursday, June 28, 2018

USPTO - Proposes Changes to the Claim Construction in Trial Proceedings Before the Patent Trial and Appeal Board

The USPTO is proposing changes favorable to patent owners with regard to claim construction in the following Patent Office proceedings: (1) inter partes review (IPR), (2) post-grant review (PGR), and (3) the transitional program for covered business method patents (CBM) proceedings before the Patent Trial and Appeal Board (PTAB).

As stated in the regulatory notice: the USPTO "proposes to replace the broadest reasonable interpretation (“BRI”) standard for construing unexpired patent claims and proposed claims in these trial proceedings with a standard that is the same as the standard applied in federal district courts and International Trade Commission (“ITC”) proceedings. The Office also proposes to amend the rules to add that the Office will consider any prior claim construction determination concerning a term of the involved claim in a civil action, or an ITC proceeding, that is timely made of record in an IPR, PGR, or CBM proceeding."

If this change is implemented, it should be more difficult for a challenger to invalidate patent claims in certain cases, which may be reasonable given patent owners are rarely afforded the opportunity to amend claims in Patent Office proceedings to date.

See the USPTO Notice of Proposed Rule Making.

Also see U.S. Supreme Court's prior decision in Cuozzo Speed Technologies v. Lee that affirmed PTAB's use of the broadest reasonable interpretation of the claims in inter partes review.

Copyright © 2018 Robert Moll. All rights reserved.

Monday, June 11, 2018

IP Watchdog - Iancu: People have a right to know what is patent eligible

Today, Gene Quinn posted an article: Iancu: People have a right to know what is patent eligible that should encourage those dealing with the current law of patent eligibility under 35 U.S.C. 101.

"Director Iancu would go through the list of things we collectively understand are not patent eligible, such as isolated DNA, gravity and the like.

'Let’s be transparent,' Iancu said. 'Let’s make a list.'

'What is it that we want to exclude from patenting, people should know up front,' Iancu said forcefully.

'We must be careful to not overread the Supreme Court’s exclusions,' Iancu said before quoting the Supreme Court recognizing that their tests could if applied expansively swallow all of patent law.

'Why not simplify,' Iancu asked."

I like where our USPTO Director Iancu is going, but think if and when Congress, the courts, and the USPTO put together an "exclusion list" we would then hear much disputing on whether a given invention is "on" or "off" the list.

Congress and the Supreme Court need to reconsider whether or not 35 U.S.C. 101 should  have vaguely defined judge made exclusions to patent eligibility. It does not track the language of the statute and look how much uncertainty it has generated. I don't think everything man thinks up should get patent protection. However, we can exclude what shouldn't receive patent protection by comparing a claimed invention to prior technology, and by applying the substantial body of case law set forth in 35 U.S.C. 102 and 35 U.S.C. 103. Otherwise, we may continue to watch the courts stretch the language of 35 U.S.C. 101 under Alice/Mayo test to encompass novelty under 35 U.SC. 102 and non-obviousness under 35 U.S.C. 103.

Copyright © 2018 Robert Moll. All rights reserved.

Friday, April 13, 2018

Harvard Journal of Law & Technology - Special Issue - Software Interface Copyright

The Harvard Journal of Law & Technology published a Special Issue - Software Interface Copyright worth reading if you are interested what certain academics think regarding copyright's role with respect to application programming interfaces (APIs). It also discusses fair use and relates to Oracle v. Google.

Copyright © 2018 Robert Moll. All rights reserved.

Wednesday, April 11, 2018

USPTO - Director of USPTO Andrei Iancu - Role of U.S. Patent Policy in Domestic Innovation and Potential Impacts on Investment

On April 11, 2018, Director of USPTO Andrei Iancu delivered an encouraging and insightful speech:

"Thank you Neil (Bradley) for that generous introduction. Thank you also to the U.S. Chamber of Commerce and its Global Innovation Policy Center for hosting this impressive gathering and inviting me to speak here today.

 Dr. Eli Harari, an electrical engineer, always tinkered and invented things. He tells, for example, that he invented a new type of fishing rod, although he never fished. “Imagine how much more successful you’d be,” his wife said, “if you’d invent in a field you knew something about.” And so he did. Dr. Harari is credited with inventing the Electrically Erasable Programmable Read-Only Memory, also known as EEPROM, or “E-squared PROM.” This was in the 1970s, when Harari was working at a major corporation, where he was a star.

But a few years later, he wanted to be on his own, to invent, to perfect, to commercialize. In his late 30s, he was also married and had a child. So in the prime of his career, with a family at home, Harari left his comfortable life with major corporations. Seeding it in part with his own money, Harari started a company of his own. And he did not even draw a salary the first several months. He risked everything: his career, his finances, and his family.

That first company actually did not work out well, but a few years later, Harari risked it all again and co-founded a new company, which he ultimately called SanDisk. At SanDisk, Harari built upon his EEPROM technology, added critically important new inventions, and perfected flash memory data storage. And he obtained patents, including on how to turn memory chips into reliable systems. Harari’s flash technology came to be used almost universally in devices like digital cameras and cell phones. In 2016, Western Digital acquired SanDisk for $19 billion.

But think about it: Without patents, how could someone like Dr. Harari risk everything, put aside his secure career at an established company, and strike it on his own? As Dr. Harari told me: “The only asset you have is your idea. If you have no way to protect your idea, you are at the mercy of the next bad guy. The U.S. patent system is genius, really the bedrock foundation of capitalism.”

Harari’s sentiment was echoed by President Ronald Reagan, who said in 1982: “Throughout our Nation’s history, the patent system has played a critically important role in stimulating technological advances.” How true that is.

 Yet today, our patent system is at a crossroads. For more than just a few years, our system has been pushed and pulled, poked and prodded. The cumulative result is a system in which the patent grant is less reliable today than it should be. This onslaught has come from all directions: There has been major reform legislation, and proposed legislation. There have been massive changes brought about by major court cases. And the USPTO itself has taken a variety of actions in an effort to implement these changes. Plus, importantly, the rhetoric surrounding the patent system has focused relentlessly on certain faults in, or abuses of, the system—instead of the incredible benefits the system brings to our nation.

We see the result of this years-long onslaught in your own study, the U.S. Chamber’s 6th Annual International IP Index. I don’t need to tell this audience that the American patent system, which in prior years was deservedly ranked as the number one system in the world, in 2017 fell to number 10. And this year it fell further, tied for number 12. But make no mistake: we are still an elite system, a mere ¼ point away from the systems ranked 2-11. And the United States remains the leader for overall IP rights.

Still, we are at an inflection point with respect to the patent system. As a nation, we cannot continue down the same path if we want to maintain our global economic leadership. And we will not continue down the same path. This administration has a mission to create sustained economic growth, and innovation and IP protection are key goals in support of that mission. So, how do we reverse the trend? The good news is that reclaiming our patent leadership status is within reach. For today, let me focus on two principal points: (1) Creating a new pro-innovation, pro-IP dialogue, and (2) Increasing the reliability of the patent grant. First, we must change the dialogue surrounding patents. Words have meaning. Words impact perception and drive public policy. And for too long, the words surrounding our patent system have been overly-focused on its faults. A successful system cannot be defined by its faults. Rather, a successful system must be defined by its goals, aspirations, and successes. Obviously, errors in the system should be corrected. And no abuse should be tolerated. Errors and abuse should be identified and swiftly eliminated. However, the focus for discussion, and the focus for IP policy, must be on the positive.

We must create a new narrative that defines the patent system by the brilliance of inventors, the excitement of invention, and the incredible benefits they bring to society. And it is these benefits that must drive our patent policies. At my swearing-in, I remarked that through the doors of the U.S. Patent and Trademark Office comes our future. And indeed it does, and it always did. We must celebrate that. From Thomas Edison to the Wright Brothers, from Stanley Cohen and Herbert Boyer to Steve Jobs, American inventors have fueled the imagination of our people for generations. We are a pioneering people, who overcome large obstacles in order to realize our dreams and create prosperity. Inventors help make dreams reality. And American invention changes the world. Indeed, with American patents, humans made light, began to fly, treated disease, and enabled instant communications across the globe from tiny devices in our pockets. And those patents also enabled these inventors to start companies and grow our economy. Our dialogue and policies need to be focused on these amazing achievements, and how we can encourage more of them. Take Walter Hawkins as another example: Hawkins, who in 1942 became the first African American scientist on staff at AT&T’s Bell Labs, developed the plastic coating that covers telephone wires, a more versatile, durable and eco-friendly alternative to the lead standard at the time. It was so durable, in fact, and so effective, that Hawkins’ invention enabled huge investments to bring affordable phone service across America, including rural areas, and to millions of people in the 20th Century. Inventor stories like Hawkins’ and Harari’s are those we need to tell. This is the American patent system. This is the dialogue we need to have. And this should be the focus of our patent policy. This is how we incentivize innovation and growth.

But, how exactly do we translate this into a better patent system? Here’s a start: when we write, interpret, and administer patent laws, we must consistently ask ourselves: Are we helping these inventors? Whether it’s an individual tinkering in her garage, or a team at a large corporation, or a laboratory on a university campus—we must ask ourselves: are we helping them? Are we incentivizing innovation? And that brings me to my second principal point for today: increasing the reliability of the patent grant. Because that is key to incentivizing innovation. Without reliable patents, inventors like Dr. Eli Harari are less likely to risk it all in order to bring their new concepts to the market. As I said at my Senate confirmation hearing: “When patent owners and the public have confidence in the patent grant, inventors are encouraged to invent, investments are made, companies grow, jobs are created, science and technology advance.”

This year’s Chamber report explains why our patent system has dropped to number 12: “innovators and creators face a challenging environment for protecting their IP under current U.S. law… U.S. patentability standards and patent opposition procedures continue to create uncertainty for rightsholders.” So your report identifies two principal reasons for the increased uncertainty (or lower reliability) of our patents: (1) Patentability Standards, or more specifically, patent subject matter eligibility pursuant to 35 USC Section 101; and (2) Opposition procedures, namely, the post-grant procedures, such as IPR, that were established by the America Invents Act.

Let me address each of these in turn. First, our current law surrounding patentable subject matter has created a more unpredictable patent landscape that is hurting innovation and, consequently, investment and job creation. Recent cases from the Supreme Court – Mayo, Myriad, and Alice – have inserted standards into our interpretation of the statute that are difficult to follow. Lower courts applying these cases are struggling to issue consistent results. Patent lawyers trying to advise their clients are, in turn, struggling to predict the outcome with respect to certain patents. And examiners at the USPTO must spend increased amounts of time addressing this challenging issue. The current standards are difficult for all: stakeholders, courts, examiners, practitioners, and investors alike. System-wide, a significant amount of time is being spent trying to figure out where the lines should be drawn, and what’s in and what’s out. And multiple people looking at the same patent claims often have trouble agreeing on, and predicting, the outcome.

Something must be done. To be sure, we must and will apply Supreme Court law faithfully. This does not mean, however, that more cannot be done to increase clarity and predictability. Of course, given our statutory mandate, there is only so much that the USPTO can do. But within that mandate, we will do everything we can. Currently, we’re actively looking for ways to simplify the eligibility determination for our examiners through forward-looking guidance. Through our administration of the patent laws, which we are charged to execute, the USPTO can lead, not just react to every new case the courts issue.

Second, your report also mentions our “patent opposition procedures” as a reason for the increased uncertainty of our patents. This refers primarily to our Inter Partes Review, or the IPR system. This was a creation of the America Invents Act, and since its introduction five and a half years ago, we have now conducted more than 8,000 such proceedings. It’s been a very popular proceeding. Opinions on this new system diverge widely. Yet each opinion is passionately held by its supporters. Pointing to the high invalidation rates in IPR proceedings, some hate the new system with vigor, arguing that it’s an unfair process that tilts too much in favor of the petitioner. Others love the system, and think it’s the best tool we have to correct errors, eliminate “bad patents,” and improve patent quality. Who is right? Well, both arguments have legitimate elements.

But I encourage people to reduce the hyperbole and look at the process with fresh eyes, in order to understand its true benefits and true challenges. This is what we are now doing at the USPTO. Indeed, it’s one of our highest priorities. We need to carefully balance rights-holder’s and rights challenger’s interests. On the one hand, for example, this proceeding can come years after issuance, when the patent owners and the public may both have relied on those rights and made investments accordingly. On the other hand, we do want to execute the statutory mandate and help maintain the quality of patent rights. And – assuming the Supreme Court does not declare it unconstitutional – we do want the IPR system to effectively address invalid claims, but at the same time, we don't want to throw out the baby with the bathwater. The filters need to be appropriately set. And so, among various other things, we are now examining: how and when we institute proceedings, the standards we employ during the proceedings, and how we conduct the overall proceedings.The goal, with whatever action we take, is to increase predictability of appropriately-scoped claims.

Finally on the predictability front, let me mention something that was not addressed directly in your report. If we want truly reliable rights, we must ensure that we issue appropriately-scoped patent claims from the get-go. In other words, we must also focus on the front end. And since our examiners are first in line, we must ensure that they have the tools they need for a thorough search and examination. Our examiners already do a fabulous job. And it is not easy, given the state of the law and all the information that needs to be processed and analyzed. To further improve the original examination, a next step would be to increase examiners’ ability to find the best prior art during examination. At times, there is a gap between the prior art found during initial examination and the prior art found during litigation. There are many reasons for this, but the main culprits are the ever-accelerating publication and accessibility explosions. These are issues that face every Patent Office around the world. Indeed, we are ahead of most others on this front. But if we could further narrow this gap in prior art between examination and litigation, then the accuracy of the patent grant – and therefore, its reliability – would increase. We are focusing on this as well, together with the other issues I’ve already mentioned.

Overall, addressing these various issues, especially as outlined in your report – from patentable subject matter to a carefully balanced post-grant process – we can return our patent system to a higher level of predictability and stability. Finding the right balance on these issues requires work, and a holistic, collaborative approach.

As Neil mentioned in his introduction, I come from the private sector. I’ve seen our patent system at work from all sides. And I have represented clients from various sectors, of different sizes, and in different postures. I understand that there are a variety of legitimate points of view. We must work together to achieve a careful balance that is most beneficial to the American economy as a whole. In the end, the hallmarks of a well-functioning patent system are the reliability and predictability of quality patents. This is critical for both patent holders and the public. And the benefits of a well-functioning patent system are indeed unmistakable. It enabled inventors like Eli Harari and Walter Hawkins, who exemplify the brilliance of American innovation, to make significant technological advances while also generating remarkable job creation and progress for our nation. Of his flash memory inventions, Dr. Harari told me, “We really changed the world.” And as to how his patents helped him start his company? He said, “With a patent at a minimum we were able to speak relatively freely under an NDA. And in a small start-up, you need partners who can help you accelerate your development and to invest in you.” “If you are not protected,” he said, “God help you!”

Let me leave you with this: During his first address to Congress in February of last year, President Trump noted that, on our 100th anniversary, in 1876, citizens from throughout the country came to Philadelphia to celebrate America’s centennial. At that celebration, the country’s inventors showed off their wonderful creations. Alexander Graham Bell presented his telephone for the first time. Remington revealed the first typewriter; and Thomas Edison showed an automatic telegraph and an electric pen. President Trump then asked all of us to imagine the wonders our country could know in America’s 250th year. He asked us to think about all the illnesses that could be cured, the distant worlds we could walk on, and the marvels we could achieve, if only we could set free the dreams of Americans. That’s how I think about intellectual property.

As I see it, no dream is too big if we unleash the power of innovation, and give our nation’s inventors the protections they need to succeed. That’s why it’s so important that we find the right balance in the IP system. This is something I’m very passionate about, and fully committed to, as I lead the U.S. Patent and Trademark Office. We have a remarkable patent system, born from our Constitution and steeped in our history. It is a crown jewel; a gold standard. We have a unique opportunity to ensure it meets its full Constitutional mandate to promote innovation and grow our economy. I look forward to working with all of you in support of that great endeavor. Thank you again for the invitation to participate in this important discussion."

I have only a few comments on Mr. Iancu's speech. His story about Dr. Harari is correct. I worked at WSGR on the SanDisk team that defeated Samsung in the ITC in 1996-1997. As I worked on that case, I came to respect both his brilliance and kindness and willingness to come from Israel, earn PhD in Physics from Princeton, work at Intel then leave all of that to start his own company. Dr. Harari really does believe in the US patent system. Check out how many SanDisk patents have issued and filing patents was the first order of business. You can ask Dr. Harari, but in my view that enforcement of SanDisk's patents was fundamental to its early success in the marketplace and many cell phones and digital cameras still use SanDisk patented technology today.

Because not many know about the SanDisk v. Samsung case, I should note SanDisk precipitated the patent dispute by having the audacity to ask the much larger Samsung to sign a patent license. Samsung would have none of that and filed a declaratory judgment action seeking to show the patents invalid in the district court. SanDisk aware of the expense of fighting it out in district court decided to file an ITC action to seek patent enforcement within 12-18 months. Fortunately, SanDisk won on both the patents which led Samsung and other large foreign competitors to sign patent licenses. Question whether with the unpredictable subject matter eligibility law, it would have had the same outcome.

Mr. Iancu mentions the negative view of patents being propagated in the press. For example, one myth I have heard is patents hinder innovation and startups. Keep in mind nearly everyone in the world acts in self interest -- and when a big tech companies (or related academic) tells you patents are harming the economy, or surprisingly that they harm innovation or startups ask yourself why is this academic/think tank or lobbyist telling me US patents are harming smaller competitors?

Thus, I appreciate Mr. Iancu's boldness cutting through the constant drum of misinformation and acknowledging we are at the cross roads with patents and startups need an improved reliable US patent system especially in terms of patent eligibility and IPR to succeed. I have seen patent success first hand, love this country and hate to see US patents harmed by misinformation.

Copyright © 2018 Robert Moll. All rights reserved.

Tuesday, February 13, 2018

USPTO & Berkeley Center for Law & Technology - Start-Up Nation Comes to Silicon Valley: Comparing the U.S. and Israel Patent Systems and Start-up Cultures

Today, the USPTO and Berkeley Center for Law & Technology announced registration is still open for "Start-Up Nation Comes to Silicon Valley: Comparing the U.S. and Israel Patent Systems and Start-up Cultures."

Here are the details:

"Friday, February 16, 2018
12 noon - 1:15 PM
Silicon Valley U.S. Patent & Trademark Office
26 South 4th Street
San Jose, CA 95112

Join leaders from across the innovation ecosystem in a comparative U.S. - Israel discussion on promoting start-up activity and fostering economic growth. Panelists will highlight trends in entrepreneurial activity taking place in both countries and will share their experiences with patent practices and address questions of patent subject eligibility and patentability across emerging technologies.

This event is free and open to the public. Space is limited.

Register here by February 15, 2018

Moderator: Peter Menell, Koret Professor of Law and Co-Founder/Director, Berkeley Center for Law & Technology, Berkeley Law
Asa Kling, former Director of the Israel Patent Office and Commissioner of Patents, Trademarks, and Designs (2011 - 2017) and Gilbert Distinguished Visiting Fellow of the Berkeley Institute of Jewish Law and Israel Studies at Berkeley Law
John Cabeca, Regional Director, Silicon Valley U.S. Patent and Trademark Office
Dan Lang, Vice President, Intellectual Property and Deputy General Counsel, Cisco Systems
Yasmin Lukatz, Executive Director, ICON -Israel Collaboration Network"

Copyright © 2018 Robert Moll. All rights reserved.

Friday, February 9, 2018

Waymo and Uber Announce Settlement of Self-Driving Trade Secret Case

Waymo settled its trade secret case with Uber during the trial. Uber gave 0.34% in equity to Waymo. If Uber is valued at $72B, the settlement is worth $245M.

Copyright © 2018 Robert Moll. All rights reserved.

Tuesday, January 30, 2018

USPTO - Manual of Patent Examining Procedure (MPEP) Revised on January 25, 2018

Today, the USPTO announced that it has revised the MPEP:

"On Jan. 25, the ninth edition, Revision 08.2017, of the Manual of Patent Examining Procedure (MPEP) was made electronically available as an update to the eMPEP.

The revision includes changes to chapters 200, 700-1000, 1200, 1400, 1500, 1800, 2000-2300, 2500, and 2700. Each section that has been substantively revised in this revision (published January 2018) has a revision indicator of [R-08.2017], meaning that the section has been updated as of August 2017. Appendices L and R were revised to include the laws and rules current as of Aug. 31, 2017, and Appendices T and AI were revised to reflect the PCT Articles, Rules, and Administrative Instructions that were in force effective July 1, 2017.

Learn more on the MPEP web page."

The MPEP is published by the USPTO to give guidance to examiners. However, I found it useful because it gives details not discussed in the 35 USC, 37 CFR, and federal court decisions, and also the USPTO's interpretation of the legal authority. It is free, in PDF and HTML, and searchable.

Copyright © 2018 Robert Moll. All rights reserved.

Tuesday, January 16, 2018

USPTO - Updated US Patent Fee Schedule Effective Today

Today, the USPTO announced the adjusted US patent fees became effective:

"The USPTO Fee Schedule has been updated to reflect the fee changes. For more information on the revised fees, see the Federal Register Notice of a final rule: Setting and Adjusting Patent Fees During Fiscal Year 2017 (Effective January 16, 2018).

The fee schedule provides information and fee rates for products and services provided by the USPTO. For more information, call the USPTO Contact Center at (571) 272-1000 or (800) 786-9199."

Copyright © 2018 Robert Moll. All rights reserved.

Sunday, January 14, 2018

Supreme Court - WesternGeco LLC v. ION Geophysical Corp. - International Damages

On January 12, 2018, the U.S. Supreme Court granted a petition for certiorari in WesternGeco LLC v. ION Geophysical Corp.

The issue to be considered is whether the Federal Circuit erred in holding that lost profits arising from prohibited combinations occurring outside of the United States are categorically unavailable in cases in which patent infringement is proven under 35 U.S.C. § 271(f).

As a reminder, 35 U.S.C. § 271(f) states "Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer."

Copyright © 2018 Robert Moll. All rights reserved.

Wednesday, January 10, 2018

Tech Crunch - IBM Led on Patents in 2017, Facebook Broke into Top 50 for the First Time

Tech Crunch's article IBM Led on Patents in 2017, Facebook Broke into Top 50 for the First Time lists the top 20 companies in US patent awards and an overview of what they patented in 2017.

Copyright © 2018 Robert Moll. All rights reserved.

Tuesday, January 9, 2018

IP Watchdog - With 9,043 U.S. Patents, IBM Tops for 25th Consecutive Year

In IP Watchdog With 9,043 U.S. Patents, IBM Tops for 25th Consecutive Year, Gene Quinn has an article on IBM's receiving 9,043 patents in 2017, including 1,900 cloud related patents, 1,400 artificial intelligence (AI) related patents, and 1,200 cybersecurity patents.

Copyright © 2018 Robert Moll. All rights reserved.

Sunday, December 31, 2017

Supreme Court - Impression Products, Inc. v. Lexmark International, Inc. - Patent Exhaustion

In Impression Products, Inc. v. Lexmark International, Inc., the US Supreme Court held that a patent owner's authorized sale exhausts all patent rights.

As the Court stated when a patent owner chooses to sell an item, that product is no longer within the limits of the monopoly and instead becomes the private, individual property of the purchaser with the rights and benefits that come along with ownership. A patent owner is free to set the price and negotiate contracts with purchasers but may not by virtue of his patent control the use or disposition of the product after ownership passes to the purchaser. The sale terminates all patent rights to that item.

Copyright © 2017 Robert Moll. All rights reserved.

Supreme Court - SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC - Laches

In SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, the US Supreme Court held that laches-- unreasonable delay plus prejudice-- cannot be raised as a defense against a claim for damages brought within the six-year limitations period of 35 USC 286, which provides "no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action."

Copyright © 2017 Robert Moll. All rights reserved.

Professor Janicke - Patent Venue: Half Christmas Pie, And Half Crow

Professor Janicke's Patent Venue: Half Christmas Pie, And Half Crow gives a nice summary of how patent venue works after the US Supreme Court's decision in TC Heartland LLC v. Kraft Foods Group Brands

Copyright © 2017 Robert Moll. All rights reserved.

USPTO - Public Tour San Jose CA - January 4, 2018

The USPTO announces:

"The Silicon Valley USPTO will host an informational public tour of its office located in the 3-story Wing building of the San Jose City Hall Complex. Participants will tour the office and learn about the U.S. Patent and Trademark Office from USPTO representatives. The event is free and open to the public Please RSVP here by January 4, 2018

Please note that the Silicon Valley USPTO is a federal facility.  Visitors are required to show a valid form of government-issued identification (driver license or passport) and may be subject to security screening to gain access.

For accessibility requests, please email or call (408) 918-9900."

Copyright © 2017 Robert Moll. All rights reserved.

IP Watchdog: What Mattered in 2017: Industry Insiders Reflect Biggest Moments in IP

IP Watchdog: What Mattered in 2017: Industry Insiders Reflect Biggest Moments in IP does a nice job of using industry experts to highlight the key events in patent law in 2017.

Copyright © 2017 Robert Moll. All rights reserved.

Saturday, November 25, 2017

USPTO - General Information Concerning Patents

If you are looking for an introduction to US patent law, I recommend General Information Concerning Patents on the USPTO website.

This article is well organized and gives a nice overview of the US patent system, explains the difference between utility and design patents, and the difference between inventions protected by patents and other intellectual property (IP) protected by copyright or trademark. It should help new inventors understand the requirements of patent applications, drawing requirements, and patent prosecution in general.

My critical comment is the description of patentability searching is way out of date. It actually recommends searching in the Public Search Facility of the USPTO or in patent libraries throughout the US or worse in CDs. This is not the way to conduct searches today and hasn't been the way since Web searching took over about 1995.

Copyright © 2017 Robert Moll. All rights reserved.

Tuesday, November 21, 2017

Professor Epstein - Patent Respect

In Patent Respect, Professor Richard Epstein continues to discuss Oil States Energy Services, LLC v. Greene's Energy Group LLC, which will be heard by the Supreme Court on November 27. Again, some persuasive arguments by a smart professor who is a leading expert on property law for decades. This case considers question of whether inter partes review by the USPTO to analyze the validity of patents violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury. If the Supreme Court rules inter partes review is held unconstitutional in Oil States, it should benefit many small entity patent owners.

Copyright © 2017 Robert Moll. All rights reserved.