The Supreme Court doused patent enforcement in 2006 in its anti-injunction eBay v. MercExchange ruling. Injunctions through the court now seem to be a sure thing only between marketplace rivals, leaving the ITC as the only safe-house of injunctive relief. Aldo Noto of Andrew Kurth mused, "Now non-competitors, such as patent-holding companies, are losing leverage early on in a case because they can no longer force an injunction." How that affects the arc of patent litigation and settlement is one trend to watch in 2007.

But that doesn't mean patents aren't enforceable. Paul E. Krieger at Fulbright & Jaworksi: "If anything, they're getting even more aggressive now. They're still finding the courts will uphold the patents when they're good." If anything, courts seem more willing to cut to the chase. "Statistics out of lower courts show that they're now more comfortable in granting summary judgment against patent holders, bolstered by two recent decisions in the Federal Circuit that affirmed patents were invalid. The Eastern District of Texas was notorious for not granting summary judgment and that's changed as well."

Patent monetization is on the upswing as vehicles manifest. Companies are more aware than ever that good patents spell profit. Ocean Tomo auctions provide an open exchange medium. And patent-holding companies are gaining experience and strength. Acacia is expected to have a banner year in 2007. Noto: "Those will absolutely increase. People realize there are a lot of companies that go bankrupt or for other reasons abandon IP that has value. More companies like Acacia will emerge to take those on... More and more companies are asking for contingency fee cases, sometimes big companies. They just happen to have the patents in an area they're not using. We've seen the beginning of that trend. When you have these large companies with many unused patents, they're handing them over to Acacia, etc. That will lead to an increase in such cases, including forum shopping."

The extraterritoriality case of Microsoft v. AT&T will pop out of the Supreme Court toaster in 2007. The issue for review is 35 U.S.C. 271(f), which cites patent infringement if product components are made in the U.S. and shipped abroad for assembly, a concept alien to traditional patent law, but incorporated into statute in 1984 to overrule the 1972 Supreme Court decision of Deepsouth Packing v. Laitram. Microsoft has argued that software doesn't count. Rambling by the SC in this 271(f) matter even puts the patentability of software at risk, some think. Cindy Kernick at Reed Smith, "This opens the door to the Court to address the thorny question of whether software should be patentable at all." Prima facie, such a notion is ridiculous to a knowledgeable technologist, as software is merely the soft option of electronic functioning - software being a more malleable way to achieve the same functionality that could be implemented in hardware. But the Supreme Court is nothing like a knowledgeable technologist, and this ill-disciplined Court has already shown madness with no method in its pot shots, such as its eminent domain ruling. That said, the SC could merely affirm the CAFC decision, although that simple outcome is not expected by many court watchers.

Amgen v. Hoechst Marion Roussel hasn't been appealed to the high court, but cert is expected this month. The issue is appeal court deference to trial court claim construction. The 1998 CAFC Cybor v. FAS ruling was that claim construction is an issue of law to be reviewed de novo. Cybor essentially ignored the 1996 Supreme Court Markman v. Westview Instruments ruling, which specifically identified credibility determination related to claim construction, a fact-oriented matter. "[T]he decision maker vested with the task of construing the patents is in the better position to ascertain whether an expert's proposed definition fully comports with the specification and claims and so will preserve the patent's internal consistency," opined the SC in Markman. Cybor opened the door to the appeals court ignoring the credibility of experts in construing claims. If the Supreme Court takes the case, it would do well to remind the Federal Circuit of the Markman precedent, that claim construction has a factual ingredient, and that findings of fact are to be treated with some degree of deference.

The Hatch-Waxman Act created a path for quick generic drug approval (ANDA) following patent expiration, but no such path exists for approving biotech drugs, drugs made from living cell cultures rather then chemical synthesis. Legislation that was proposed but didn't pass last year is likely to be taken up again this year. That may spark the FDA into action that it has acknowledged as necessary, but has yet to act upon.

Meanwhile, pharmaceutical patent holders having been pushing the envelope of the Hatch-Waxman Act with authorized generics as a way to hobble competitive generics, thus controlling distribution and keeping prices higher than they would be in a competitive marketplace. Again, proposed 2006 legislation may get legs in 2007.

Now that the top guns at the patent office have lost their Republican majority backing, management at the agency seems only a bit less likely to continue its benders of self-inflicted patent reform, such as the mooted foolishness of limiting continuations. Still, management self-admittedly unable to hire enough staff because of its unwillingness to make the patent office a decent place to work, the agency will continue to promulgate initiatives intended to serve its own purposes in streamlining expediencies, often with a blind eye to total life cycle cost of prosecution. The good news is that business with the patent office will continue to become more online, with less paper flying around.