Federal Judges Say Patent System Not Broken, but Further Reforms Needed
The U.S. patent system is not entirely broken, but reforms beyond the America Invents Act (AIA) are needed to fix issues the system continues to face, a group of current and former federal judges said Tuesday at an event sponsored by the Federalist Society and George Mason University School of Law’s Center for the Protection of Intellectual Property. The judges credited AIA, which Congress passed in 2011, with helping improve conditions at the U.S. Patent and Trademark Office (PTO).
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AIA and other reforms over the last four years have helped PTO grow its patent examiner corps, but the agency remains “understaffed and under-resourced,” said Judge Richard Posner of the 7th U.S. Circuit Court of Appeals. PTO said it had 6,780 examiners at the end of fiscal year 2011 and had 7,808 examiners at the end of April -- down from the 7,935 it reported at the end of fiscal year 2012. All other levels of the patent adjudication system also “do badly,” Posner said. The U.S. International Trade Commission, which has been assessing a rising number of patent disputes in recent years, routinely overlaps and comes into conflict with U.S. district courts; at the district court level, judges and jurors are often uncomfortable with the technological jargon and complex statutes that are part of patent litigation, Posner said. The U.S. Court of Appeals for the Federal Circuit has become a “promoter” of the patent system since its creation in 1982, yet still was not able to “get its act together” in deciding the recent software patent litigation case between Alice Corp. and CLS Bank International, he said. The full court ruled Monday that Alice Corp. could not claim four of its software-related patents because they were too abstract, but five of the judges issued opinions that partially or fully dissented from the majority opinion (CD May 14 p12). Justices on the Supreme Court also do not appear to be comfortable with technology or patent law, Posner said.
Shorter and more variable patent terms are necessary for fixing the patent system, Posner said. Most patents currently expire 20 years after the first U.S. application is filed; design patents expire 14 years after the patent is issued. Variable terms would reflect, as in U.S. copyright law, that “different types of technology” require different lengths of protection, Posner said. The U.S. should also consider broadening the defense of “obviousness,” he said, arguing that “any time an invention is the result of routine research activities by a firm, it should be regarded as obvious as not requiring patent protection.” The U.S. should also consider instituting rules that would require a patent holder to manufacture a product based on a patent by a certain point in order for the patent to be considered enforceable, Posner said. “That would cut down on the [patent] trolls,” he said. While PTO’s pilot post-grant review program is great, the judges involved need more training in patent law and technology, Posner said.
It’s inaccurate to say the entire U.S. patent system is broken, said former Chief Judge Paul Michel of the Federal Circuit. The system is a “large, complicated machine” that contains parts that need to be oiled or replaced on occasion, he said. Problems remain in the PTO, but the agency has improved over the last four years and “seems to be on track” for further improvements, Michel said. The Federal Circuit, meanwhile, is actually more balanced than some critics claim, he said. But courts need to improve their handling of patent cases, which remain “too slow, too expensive, too unpredictable,” Posner said. Further action is also needed to curb abusive patent lawsuits, he said. Congress can solve some of these problems through additional legislation, including bills to generally reform litigation and additional tweaks specific to patent-related cases, Michel said.
Former Judge Arthur Gajarsa of the Federal Circuit said he agreed with Posner that patent terms need to be variable based on the type of technology involved. “Software, I think, is an area that needs to be looked at,” he said. “When you have a 20-year term period for a software patent, I wonder if it’s necessary for that particular purpose. The investment in software development is not as large as it is for developing a molecule, for a heart valve.” Congress -- not the courts -- needs to take the lead on issues like reforming patent terms, Gajarsa said. “The courts can’t do it,” he said. “We're not policy-setting individuals … it’s up to the legislature to do it.”