What the PTO should do about Alice

Last week I had the very good fortune to be a speaker at a Bloomberg BNA conference in San Francisco on the Impact of the Supreme Court on Patent Enforcement. I was invited by Wiley & Rein partners Brian Pandya, a former student of mine, and James A. Wallace. Along with Bloomberg BNA's Steffan Welch, they put together an excellent program.

I was on the panel on "Ineligibility of Abstract Ideas, Business Methods, and Naturally Occurring Substances" moderated by Jim Wallace. The slides I prepared to accompany some brief remarks are here.

I am not a fan of 101 or of the latest phrase associated with it, patent ineligibility. Ineligibility is invalidity without bothering with messy things like proof.

The only sensible part of 101 is the final phrase "subject to the conditions and requirements of this title." Those conditions and requirements are found in 102, 103, and 112. Like Annie Oakley when she compared herself to Frank Butler, those sections can sing to 101, "Anything you can do, I can do better."

Likewise, 101's judicially-created implicit exceptions -- "laws of nature, natural phenomena, and abstract ideas" -- do not need to be exceptions, implicit or otherwise. That's because there has never yet been a patent claim that passes the tests of 102, 103 and 112 that is nevertheless offensive for attempting to patent one of those exceptions. Or anyway, nobody has been able to show me such a claim. No, not even the Supreme Court, not in the most recent 101 cases and not in any earlier ones.

Whenever these judicially-created implicit exceptions have been invoked, it has been to combat advances in technology that patent examiners and judges find scary. These are cases where unfamiliarity breeds fear which is then masked as contempt.

But none of that matters if my suggestion* for the Patent Office is put into effect. Yes, I know, the PTO has ignored my advice about 101 law in the past. (See, e.g., Urgent Letter and Time-Sensitive Proposal to then-new PTO Director David Kappos, posted right before the oral argument at the Supreme Court in Bilski v. Kappos.) But the PTO/DOJ brief in Mayo gave me hope (Argument II: "The disputed claims ... are likely invalid under 35 U.S.C. 102 or 103") and regime change gives me more.

*  Because of time constraints at the San Francisco conference, I was unable to present my "What would you do about it" slides (32-53). The idea for this post is on slide 34 item C and slide 35 item A.

Many at the conference seemed happy with 101 especially because it has become a weapon to resolve cases quickly, in some cases without discovery. My suggestion should be even faster and less costly for the parties and the taxpayers, without knuckling under to the 101-first wrong-headedness. Here's how it would work:

Step 1. As soon as an Accused Infringer (AI) asserts a 101 defense in court, whether by a Rule 12 motion to dismiss or a Rule 56 motion for summary judgment, or perhaps even after an early status conference, the court notifies the PTO.

There is an alternative that would not involve direct communication between the trial judge and the PTO. By statute (35 USC 290), the clerks of the district courts must notify the PTO when a patent lawsuit is filed. The PTO could monitor all such dockets so that it would know when an AI filed a pleading with a 101 defense.

Step 2. The PTO, sua sponte, throws the patent into reexam.

The Director of the PTO has the statutory right to begin reexamination proceedings. 35 USC 303; see also 37 CFR 1.520. True, the Director has to identify relevant prior art. That, however, should not be hard if the AI has argued that the claims-in-suit cover one of the implicit exceptions combined only with well-understood, routine, conventional activities.

As mentioned in slide 12 of my talk, that phrase from Mayo, quoted with approval in Alice, has the acronym WURCA, a plural noun. The associated adjective is WURC. Finding prior art should be easy: WURCA -- if truly WURC -- will be documented in patents, patent applications, journal and media articles, websites, product advertisements and specifications, tweets, etc.

WURCA and obviousness prior art are very similar. The main difference is that obviousness prior art is identified with specificity and considered in a careful manner with intellectual rigor and honesty. WURCA are whatever a decision-maker -- judge or patent examiner -- believes they are, no evidence required, and intellectual rigor impossible by the very nature of the legal standard.

Step 3. As soon as the reexamination is declared, the court entertains a motion to stay proceedings until the reexam is completed. Absent unusual circumstances -- so unusual I can't imagine any at the moment -- the court grants the motion.

Benefits: This suggestion benefits the parties, the courts and the public because it:

a. frees up court time. Judges would not have to write Rule 12 opinions or hold status conferences or anything else until the reexamination is completed and the time has run out for all possible appeals;

b. gets rid of the baloney patents so wittily described by panelist Morgan Chu. Claims that are invalid under 103 are just as dead as claims that are patent ineligible under 101;

c. brings the matter back to the PTO, whose search the first time may have been nonexistent or inadequate;

d. gives the patent owner (PO) a chance to narrow the claims. That might save some claims from attacks under both 103 and 101;

e. discourages use of 101 as a delaying tactic or legal boilerplate with only a minor relationship to the substance of the controversy;

f. helps everyone -- courts, PTO, inventors, competitors, the public -- return to an appreciation of 103 and its powerful, intelligent standard, the HOA-TA (hypothetical ordinary artisan, time appropriate, pron. WHAT-uh), which inherently keeps pace with technological change. See slides 23-24 and, e.g., slides 20-21 in my 2012 talk to the Oregon Patent Association; and

g. saves taxpayer money because, with respect to pubic funding, the PTO is probably a much less expensive forum than is a federal district court.

Advantages over AI-initiated reexamination: Having the PTO Director start the reexamination rather than putting the onus on the AI has additional advantages in terms of fairness, efficiency and justice:

a. No waiting: The Director acts predictably and early in the litigation;

b. the PO interacts with the PTO without the AI having first characterized the prior art and the claims;

c. the AI saves the filing fee and the lawyer bills associated with the reexamination, possibly a life-saving savings for young, financially-strapped AIs;

d. the PTO gets a chance to do its job right in the specific case and to collect data concerning searches in all the cases of Director-initiated reexamination so that improvements can be made; and

e. examiners have no incentive to whitewash these patents. Compare: when the AI initiates the reexam, examiners may want to make the original issuance look good; when the Director initiates the reexam, examiners may want to do it to get it right, not just to get it done (see this post for more about the getting it right/getting it done continuum).

Now, how can I convince the PTO and courts to work together on this?

March 20, 2015; rev 0321-27, 0402

The Missing V-Word in KSR v. Teleflex : VACATED

Everyone is writing about the Supreme Court's decision in KSR v. Teleflex. I have already written a little about it, in anticipation of the decision (IPToday, April 2007, pp. 29-31), and I am not going to jump in again to decide whether the sky has fallen now, or not. (My first entry into blogdom wondered about the falling sky after MedImmune, so perhaps that will be a theme of myunpublishedworks, the blog.)

No, what I want to mention is that what the Federal Circuit did in Teleflex was to VACATE the summary judgment of obviousness, and remand for FINDINGS. It absolutely did NOT reverse. It absolutely did NOT find the patent in suit to be nonobvious.

Who is misleading us?

Among others, the Supreme Court itself. The word "vacat!" is absent entirely from the opinion. In fact, the appeals court decision is affirmatively characterized as a REVERSAL, rather than a VACATING. (See REFERENCES below for supporting quotations.)

I am pretty sure I learned in law school that VACATING was not the same as REVERSING, and I am pretty sure that when I have practiced law, everyone acted like those two words were different, at least for the parties to the suit. But maybe everyone on the Court is so far removed from either law school or practice that they see things differently?

Who is helping keep us misled?

The BNA PTCJ, among others. Its HIGHLIGHTS summary of the cases says: "Reversing and remanding a ruling of patent invalidity, the high court ...." (emphasis mine) No, there was no ruling from the Federal Circuit "of patent invalidity." There was not even a ruling of patent pro-validity. The only thing available for reversal by the Supreme Court was a vacating of a district court's ruling of invalidity. It's complicated, but not impossible.

Another surprising perpetrator is Hal Wegner, whose excellent newsleter had this parenthetical remark,

"(It would have been truly astounding for the Court to have affirmed a holding of 103 nonobviousness on the merits, something the Court the Court has never done in the entire history of this section of the statute.)"

I wrote him about how truly astounding it would be for the Court to affirm something not before it. He thanked me, and then issued a correction about other things in that news item, but not the implication that the Federal Circuit had made a HOLDING OF NONOBVIOUSNESS. I remain astonished.

I have not checked the blogosphere enough yet, but I can confirm that, since the Supreme Court decision was announced, the words VACATED or VACATING and KSR have not yet appeared in the excellent blog of Dennis Crouch's www.patentlyo.com Or at least I could not find those words using wordsearch and google.

I start to wonder whether my copy of the Federal Circuit's decision is different from everyone else's.

Those INFAMOUS "gas pedal" patents: another shooting star in the (falling) sky?

Many (including Wegner) are pushing hard on all those "gas pedal" patents out there. But how many belong to KSR itself? (Answer: 15, on a search today of uspto.gov, looking for 'pedal' and assignee=ksr.) KSR's big victory in the Supreme Court makes its investment in those patents, if not also the research and development that led to them, look like a poor use of corporate time and money.

Will a whole new class of class action suits come out of KSR: stockholders claiming that their money is being misspent on acquiring big patent portfolios -- so often on minor improvements in crowded arts (where the arts may be crowded because of that very company's own efforts)? All that money on patent attorney fees and fees to the PTO, all that researchers' time wasted meeting with patent counsel, etc., etc., spent getting patents that are of no value does not sound like intelligent management. (The defense bar, with the patent bar to serve as experts, may be thrilled.)

Perhaps, though, the foreign counterpart patents are worth something in other countries, ones with a more pro-patent climate? And perhaps the US patents could be worth something again when the pendulum swings back, if the patents have not yet expired, and if their maintenance fees have been paid?

But maybe I exaggerate.

REFERENCES

Cases:

KSR Int'l Co. v. Teleflex Inc., 2007 U.S. LEXIS 4745 (U.S. 2007): The Supreme Court thinks that it was reviewing a reversal of invalidity:

At slip op. 29: "...The District Court granted summary judgment for KSR. [new paragarph] With principal reliance on the TSM test, the Court of Appeals *reversed.*" (emphasis mine -RJM)

Teleflex, Inc. v. KSR Int'l Co., 119 Fed. Appx. 282 (Fed. Cir. 2005) , http://www.fedcir.gov/opinions/04-1152.pdf. Proof that the appeals court VACATED, rather than reversed:

At 283: "[W]e _vacate_ the grant of summary judgment and remand the case to the district court for further proceedings." (underlining by Federal Circuit)

At 286: "We agree with Teleflex that the district court did not apply the correct teaching-suggestion-motivation test. We also agree that, under that test, genuine issues of material fact exist, so as to render summary judgment of obviousness improper. For these reasons, we vacate the decision of the district court and remand for further proceedings consistent with this opinion." (underlining of the word "vacate" in the last sentence appears only the LEXIS version of the decision, but on on the Federal Circuit's pdf.)

At 290: "(3) We consequently _vacate_ the decision of the district court and remand the case for further proceedings on the issue of obviousness, and, if necessary, proceedings on the issues of infringement and damages." (underlining by Federal Circuit)

*

Other References

Roberta J. Morris, "Thoughts on Patent-Bashing, Obviously," _Intellectual Property Today_, April 2007, at 29-31. Discussion of KSR is on 30-31.