Some additional notes upon further reflection on the Obama Patent Reform Announcements - Are they Just Selective Tort Reform?
By Arthur J. Kyriazis, Biotechnology Consultant, Molecular Biologist, M.Sc.E.
[some additional notes upon reflection: After reflecting on this, it comes to mind that this series of proposals and changes by President Obama amounts to a proposal of TORT REFORM for industries and companies which are heavily depending on patent portfolios. Essentially, the proposals are to 1) limit the scope of patent claims, which would more closely approximate the Japanese system, wherein patent claims are narrow, and patent litigation is therefore discouraged in favor of the trading of patent rights 2) make plaintiffs pay litigation costs if they lose, which is the British loser pays rule, a keystone of Tort Reform (although the jurisprudence of loser pays in the British Courts is complex and tedious, since there is complex litigation after the trial over who "won" and who "lost" each and every point, and who who therefore should bear the cost on each and every point.]
[The Basic point being, if the President really wants to unshackle US Industry and make it competitive, he should come across with a comprehensive Tort Reform package, and focus on unshackling physicians, attorneys, businessmen in general, from lawsuits, and apply these principles across the board, instead of proposing a "GET OUT OF JAIL FREE CARD" to his friends at Google, Facebook, Apple, Microsoft, etc. who happen to have large patent portfolios, and have suddenly discovered that the plaintiffs' bar has targeted them for litigation. To paraphrase Willie Sutton, the reason the Plaintiff's Bar has targeted companies with large patent portfolios, is because this is where the money is. But when it came to Tort Reform as part of Obama Care, the President and the Democrats said NO even though malpractice, and the cost of defending frivolous malpractice, is probably 50-90% of the reason health care costs are so high in the US compared with civil law countries like Europe, where it is impossible to sue a doctor for medical malpractice. And the President and the Democratic Party stand and stood opposed to President Bush's sensible proposals for tort reform across the board, but here the President wants Tort Reform for the Patent Holders only--carving out a special exception of Tort Reform for Businessmen who are Democrats? None of this makes any sense.]
If the President wants Tort Reform, he should simply propose it across the board. This might gain bipartisan support for his other proposals by gaining support from the business, medical and opposition communities.
Patent Reform 2013: Adding Clarity and Transparency to the System
By Dennis Crouch
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| The Google-Oracle-Samsung-Microsoft-Apple et al Patent Litigations - Why I-Phone 4 is illegal Now |
Prof. Crouch's comments are pro-Obama; we do not favor Pres. Obama's actions, and indeed, we are of the opinion that his proposed actions via executive order exceed his powers and will eventually be challenged in court and reversed or overturned. Also, the experts who studied this problem for the White House, are, without exception, all anti-patent and favor a system whrere there is no patent protection at all, notwithstanding that we are international signatories to an international treaty known as the PCT, and international treaties covering trademark, copyright and other IP rights with all other countries. If we relax IP protections, then all that will remain will be international piracy on a global scale.
other pertinent links: the official white house statement:
the official executive report, which surprisingly is only 14 pages long:
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| the Patent Troll |
[For the record, the patent assertion entities holding the most patents, who do a great deal of litigation and asserting patent claims, are in fact universities. Lemley, Mark A. "Are Universities Patent Trolls?" Fordham Intellectual Property, Media & Entertainment Law Journal 63, no. 1 (2008): 611-631. Prof. Mark Lemley was a major contributor to the report that underpinned the President's actions, and yet Lemley sees no distinction between PAEs and Universities, seeing both as Patent Trolls, which begs the semantic yet essential question, what on earth is a patent troll?]
[according to an anonymous comment to this blog, the report was the work of just a handful of professors: anon said...
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| Prof. Mark A. Lemley's POV on Patents is pretty well-known. He's Against Them. |
"The bulk of the report that identifies the "problem" is based upon the work of professor Colleen Chien (Santa Clara); Jim Bessen & Mike Meurer (BU); Mark Lemley (Stanford) and Michele Boldrin (WUSTL) & David K. Levine (WUSTL)."
No kidding.
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| Prof. Colleen Chien UC Santa Clara. Also anti-patent. |
Never mind the fact that most of the predicate analysis has been debunked.]
President Obama today released information on planed executive orders and push for new legislation that will attempt to block companies from asserting their patents unless they are also manufacturing a product based upon the patented design. And at the same time, the President's National Economic Council and Council of Economic Advisers released a report a report titled "Patent Assertion and U.S. Innovation." The report generally takes the viewpoint that Patent Assertion Entities are bad for the US Economy and makes the bold claim that, in the past year PAE's have threatened "over 100,000 companies with patent infringement." The bulk of the report that identifies the "problem" is based upon the work of professor Colleen Chien (Santa Clara); Jim Bessen & Mike Meurer (BU); Mark Lemley (Stanford) and Michele Boldrin (WUSTL) & David K. Levine (WUSTL).
Despite the unknowing hyperbole of the report, the suggested actions are, for the most, welcome and will benefit the patent system as a whole. In fact, this move to finally address the problem of predictability of patent scope and patent validity hits the sweet spot of where problems emerge in the system. Of course, the devil will be in the details of these approaches.
Executive Actions:
1. Knowing Who Owns the Patents: Through the PTO a new rule will require patent applicants and owners to regularly update ownership information with the "real party of interest" so that the assignment records are accurate complete.
2. Tightening Functional Claiming. The PTO will provide new targeted training to its examiners on scrutiny of functional claims and will, over the next six months develop strategies to improve claim clarity, such as by use of glossaries in patent specifications to assist examiners in the software field.
In my view, these two elements are sorely needed and will generally improve the patent system without actually limiting the ability of patent assertion entities to derive value from their innovations through patent assertion. In addition, the PTO will begin a number of outreach mechanisms intended to provide assistance to non-patent-insiders who receive patent demand letter.
Legislative Actions:
1. Require patentees and applicants to disclose the "Real Party-in-Interest," by requiring that any party sending demand letters, filing an infringement suit or seeking PTO review of a patent to file updated ownership information, and enabling the PTO or district courts to impose sanctions for non-compliance. [DC: This would add statutory back-up for the PTO rulemaking]
2. Permit more discretion in awarding fees to prevailing parties in patent cases, providing district courts with more discretion to award attorney's fees under 35 USC 285 as a sanction for abusive court filings (similar to the legal standard that applies in copyright infringement cases). [DC: This can be helpful if allowed to go both-ways, although courts generally find that patent litigators are the most well-prepared and honorable of any that they see in court.]
3. Expand the PTO's transitional program for covered business method patents to include a broader category of computer-enabled patents and permit a wider range of challengers to petition for review of issued patents before the Patent Trial and Appeals Board (PTAB). [DC: This has the potential of capturing a substantial percentage of issued patents, but that may be fine.]
4. Protect off-the-shelf use by consumers and businesses by providing them with better legal protection against liability for a product being used off-the-shelf and solely for its intended use. Also, stay judicial proceedings against such consumers when an infringement suit has also been brought against a vendor, retailer, or manufacturer. [DC: We are on our way here toward a fair use of patents.]
5. Change the ITC standard for obtaining an injunction to better align it with the traditional four-factor test in eBay Inc. v. MercExchange, to enhance consistency in the standards applied at the ITC and district courts. [DC: The focus here is to get patent assertion entities out of the ITC]
6. Use demand letter transparency to help curb abusive suits, incentivizing public filing of demand letters in a way that makes them accessible and searchable to the public. [DC: This sounds good, I wonder how those writing demand letters would respond.]
7. Ensure the ITC has adequate flexibility in hiring qualified Administrative Law Judges. [DC: However, must ensure that the flexibility is not used to hire because of particular political bent.]
