This afternoon I participated in a Federalist Society panel that was billed as a discussion about whether IP law had become unbalanced, but actually focused entirely on patent law. I was completely out of my element. Regardless, I learned a lot, and even tried gamely to answer questions about whether the specialized Federal Circuit Court of Appeals that has sole jurisdiction over patent appeals is good policy and whether the Supreme Court has a coherent patent jurisprudence (probably not and no).
The most interesting discussion came in response to Federal Circuit Judge Tim Dyk's question about whether there are a lot of bad patents nowadays, and what should be done about it. Much to my surprise, U Minn. Law Professor Dan Burk said that bad technology patents were likely to get better, and that the courts were the best place for fixing the problem. He reminded the audience that people have been complaining about patent quality for 200 years, and seeking many of the same fixes reform advocates want today. Wash U. Law Professor Scott Kieff advocated for a patent registration and publication system in which the presumption of validity is only procedural and not substantive, much like the Security and Exchange Commission's EDGAR system. Disputes over the small percentage of valuable patents (according to Kieff, only 5% have economic value and 2% are litigated) would be resolved in the courts. U. Penn Law Professor R. Polk Wagner called for courts to provide incentives for patent applicants to write clearer “claims.” A patent “claim” describes, in technical terms, the extent of protection conferred by a patent.
I was the only panelist who wanted to fix patent quality before it reached the courts. I called for three reforms: 1) ceasing the practice of funding the Patent Office through patent applications fees, since it provides an incentive to grant more applications (including bad ones) in order to encourage more applications; 2) ensuring that the Patent Office has examiners with relevant expertise to make determinations about technology patents; and 3) increased public participation through third party submission of prior art and opportunities for “post-grant review,” that is, asking the Patent Office to reconsider a patent previously granted. An audience member, a former patent examiner, emailed me later with a fourth reform – giving examiners adequate time to review a patent application. Examiners are pushed to churn out as many applications as possible, and this gentleman said that in his chemical group, they had about 22 hours to process applications, regardless of the number of claims.
Unfortunately, patent reform has stalled in Congress not so much over patent quality issues, but issues related to patent litigation reform, like how easy it should be for a party to get an injunction against a company that is infringing a patent. Unfortunately, this week's Supreme Court decision in Ebay v. Mercexchange, which held that a court must look to four equitable factors in determining whether an injunction should issue in a patent case, is unlikely to change matters much.