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February 2, 2008

In A Hurry

Two former patent office commissioners show themselves as shoddy analysts in their capacity as toads for the corporate special interest group Coalition for 21st Century Patent Reform. But in doing so, they prove the hoary adage that every once in a while, even a blind pig finds an acorn.

Gerald Mossinghoff and Stephen Kunin, now at Oblon Spivak, penned the report: The Need For Consensus On Patent Reform.

The authors fawn upon the 2004 NAS report, an opinion piece long on discussion of abstract goals, but woefully scant on empirical evidence. If logic is the carving knife of rationality, the NAS goals come out like slivers of overcooked chicken:

"(1) preserve a flexible, unitary, open-ended patent system;" [mere platitude]

"(2) reinvigorate the non-obviousness standard with particular attention paid to business method and gene sequence related inventions;" [KSR]

"(3) institute a post-grant open review procedure;" [why? more an admission of intrinsic USPTO incompetence than anything else]

"(4) strengthen USPTO capabilities in personnel, electronic processing, analytic capability and financial resource [already done; all the USPTO needs now is competent management]

"(5) shield some research uses of patented inventions from infringement liability;" [why? ironic, as patents stimulate invention; retarding innovation in research tools is inherently counter-productive]

"(6) limit the subjective elements of patent litigation such as willful infringement and enhanced damages, best mode and the inequitable conduct defense;" [what are we talking about? subjectivity is already well curtailed by courts]

"(7) harmonize the U.S., European and Japanese patent examination systems, including moving the U.S. to a first inventor to file system, preserving a one year personal grace period, eliminating the best mode requirement, redefining the definition of prior art, publishing at 18 months from their earliest claimed priority date all pending patent applications not subject to secrecy orders and exploring common approaches to search and examination among major patent granting authorities in the world." [a smorgasbord that goes beyond mere harmonization for the sake of inter-patent office examination efficiencies]

The paper then swings at issues.


As early as 1965, a major Presidential Commission studying the United States patent system strongly recommended that the United States adopt the otherwise universal first-to-file system. Given the increasing use of low-cost and easily filed provisional applications, which became available in 1995, such a system would be of significant benefit to independent inventors and small businesses.

The report mentions that the Philippines in 1998 went to first-to-file, the second-to-last country in the world to do so. Only the U.S. remains.

The authors find an acorn, though for the wrong reason.

The USPTO cannot practically hope to handle its workload without effective work-sharing with other patent offices, particularly the European Patent Office and the Japan Patent Office. And such work sharing will not be possible if the U.S. continues to be isolated with an outdated first-to-invent system of priority.

Making examination easy on the patent office is one seriously lame reason for changing patent law. But, in reading the report, one is repeatedly struck by the authors' orientation that what's good for the patent office is good for the patent system.

Patent Hawk favors first-to-file as equity for the quid pro quo of a patent grant, and as a guard against dishonest swearing back (37 CFR § 1.131), avoiding the ginned process of interference currently extant. Patent Hawk also strongly favors absolute novelty as respect for true invention, not the shoddy nationalistic ruse currently embodied in U.S. patent law.

Post-Grant Review

Naked but for opinion, without a scintilla of rationale, the authors plump for a one-year open season for punters to take pot shots at patents. Post-grant review has never been more than an abject accusation and admission that USPTO examination sucks. That may be the case, but, if so, the solution is to oust the retards running the show and slot in competent managers. Ironically, the authors think it quite alright that the same clowns who can't examine a patent in the first place get an automatic second bite at it.

No one in favor of post-grant review ever answers why a patentee should have to pay to defend from infringers a grant that by law is presumed valid (§282). It seems that concept never crossed the authors' minds.

Inequitable Conduct

The report drapes the backdrop:

The inequitable conduct defense is a judge-made doctrine used to render a patent unenforceable if it was procured during prosecution through a material misrepresentation or a material omission, with intent to deceive the USPTO. Inequitable conduct is decided by a judge, sometimes with guidance from an advisory jury verdict, and must be proved through clear and convincing evidence. Proof of both materiality of the information and intent to deceive is required. Once a threshold level of materiality and intent has been proven, the judge will balance the level of materiality and intent to determine whether inequitable conduct occurred. Courts have indicated that, the higher the materiality, the lesser the showing of intent is required and vice versa to prove inequitable conduct.

The consequences of a finding of inequitable conduct are severe. A court may hold the entire patent unenforceable, other patent family members may be held unenforceable under the doctrine of infectious unenforceability, attorneys’ fees may be awarded in an exceptional case and the patentee may be exposed to an antitrust claim.

The authors would eviscerate inequitable conduct, lamenting its purported plea "in almost every important patent lawsuit." Never mind that the charge almost never sticks, except when it probably should, and as often as not dents the credibility of the accuser before the court.

In self-contradiction to their position for post-grant review, where the authors want patents presumed invalid, the authors want patents to have a high wall from invalidity: "safe harbor" from inequitable conduct charge, an illogical non-sequitur requiring at least one claim invalidated by some other means before inequitable conduct can be considered.

The stated position is pure Pollyanna: that applicants are presumed honest, and that they are so stupid when dishonest to leave evidence lying around readily proving their guilt.

Apportionment of Damages

Another acorn is found: "there is no need for a new drastic, untested process."

Their deference is to the opinion of CAFC Chief Judge Michel.


In a vacuum for guidance...

The NAS report did not identify patent venue as an issue for reform. It is the authors’ view that changes to the venue provisions are not needed at this time.

Interlocutory Appeals

A dumb idea which the authors see for what it is, again taking their cue from Judge Michel.

Willful Infringement

Given the Federal Circuit’s en banc holding in Seagate, it is the authors’ view that the problems articulated by the NAS have been effectively addressed by the judiciary, and that there is no need for legislation, which at this point would only interrupt and confuse an orderly development of common law based upon Seagate.

Mandatory Publication

The authors favor mandatory publication, based on cock-and-bull.

Delay of publication of U.S. - origin patent applications will adversely impact examination quality. Examiners would not have the ability to cite earlier-filed U.S. applications as prior art against a patent applicant if at the time of examination of a later-filed application an earlier application was not published and thus not available as prior art due to this new requirement.

If examination quality is defined by being able to cite prior art, it becomes imperative to have absolute novelty: worldwide prior art applicable to the date of filing in the U.S. If the authors are so concerned about the sanctity of invention, why didn't they argue for absolute novelty? Well, gee, it wasn't in the NAS report.

As to unpublished applications not qualifying as prior art: not necessarily true. In Bruckelmyer v. Ground Heaters, the CAFC found abandoned drawings of a foreign patent application "publicly accessible," because the file history could be located from the published patent.

A given reference is 'publicly accessible' upon a satisfactory showing that such document has been disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence, can locate it.

Based on current CAFC logic, an unpublished patent application in the patent office may be considered publicly accessible. The specific issue has not been addressed by the courts, owing to the patent office being remiss in not taking advantage of its own database.

But mandatory publication has an equity consideration. The quid pro quo of patent protection is revealing the invention in return for patent grant. Absent the grant, an inventor is entitled to whatever trade secret protection may inure after filing.


The authors practically fall down squirting over KSR; don't touch that dial. Again, the vista is whether it favors the patent office.

The unanimous KSR opinion gives patent examiners more flexibility when analyzing the fundamental issue of nonobviousness, ensuring that allowed applications must meet the statutory standard... The KSR opinion and its implementation by the USPTO, in the authors’ view, will positively affect the USPTO’s role in maintaining a strong system of only granting quality patents for nonobvious inventions.


Squirming with infantile impatience, the authors conclude:

The time for reaching consensus is now, so that legislation can be enacted in 2008.

Posted by Patent Hawk at February 2, 2008 12:54 AM | The Patent System


Good stuff Hawk. Now, don't you agree that First to File fits better with the basic rationale of any under the sun, innovation-fostering, patents system, namely, the public will reward with a 20 year monopoly the first to come forward with a disclosure to the public (the A publication) of an enabling disclosure of a new and non-obvious contribution to a technical field. FTI rewards the party who is not necesarily the first so to come forward with such a disclosure, so is intellectually bankrupt.

As to the rest, without some sort of "Loser Pays" principle, the system (insofaras it involves disputes about rights) will stay broke. But loser Pays is buried at the bottom of the "Too Difficult" tray, right?

Posted by: MaxDrei at February 2, 2008 8:56 AM

As a seasoned blog-reader, you probably know that US patent litigation is MAJOR a crapshoot - will the court use a dictionary? or not? will the court import limitations from the spec because the drafter wrote 'the object of the invention'? or NOT. what type of interpretation will the CAFC take of KSR for situations that are different than the original KSR case? will the court decide to invoke 35 USC 112 paragraph 6 even though the claim does NOT recite "means for" or NOT will the court apply the claim differentiation? or NOT etc etc etc etc.

Thus, while "loser pays" may or may not work on your side of the pond (I do not presume to be an expert), in the USA "loser pays" essentially means the end of patents for all except for those with deep pockets to absorb the financial loss associated with an aderse outcocme at trial.

Nobody would want to take the risk to enforce even the presumably-"good" patents except for the exceptionally wealthy.

The wealthy fortune-500 corporations could STILL afford to be reckless and try to enforce invalid patents against weaker competitors.

Posted by: anonymousAgent at February 3, 2008 1:25 AM

Yes Hawk but:

ALL the aspects of legal uncertainty you recite, without exception, are within the competence of the judges to eliminate, no? So, when you write "Thus" Loser Pays can't work here, I read it as an admission of despair, that the judges in USA will NEVER bring themselves to use their own power to eliminate the legal uncertainty that would block the introduction of "Loser Pays". Does it always have to be this way?

Posted by: MaxDrei at February 3, 2008 4:36 AM

That last comment was NOT by Patent Hawk but by anonymous agent.
My answer is that IF we were to eliminate the legal uncertainty (and maybe re-invigorate injunctions so that they are automatic), then it would make sense to discuss a "loser pays system."
The "loser pays" would balance the automatic injunction.
But I do not see that happening ANY time soon, and I think a "Loser Pays" rule would be a DISASTER under the current regime.


Posted by: anonymousAgent at February 3, 2008 8:07 AM

OK, thanks, but no point in even debating this logical "balanced" stuff, right? . If I (as a European) understand it right, there is no chance of "Loser Pays" receiving serious consideration any time soon. Politically a non-starter, what? So, onwards, reconciled to the legal uncertainty, eh?

Posted by: MaxDrei at February 3, 2008 12:26 PM


Where are you getting this one:

"Based on current CAFC logic, an unpublished patent application in the patent office may be considered publicly accessible."

Apparently, the Brucklemyer case you cite was based on a French file wrapper. Presumably, in France the file wrappers are open to the public, but in the US the public is barred by statute from crawling into the file of an unpublished application until the patent issues. So where's the disclosure?

Posted by: BabelBoy at February 4, 2008 10:36 AM

In reply to BabelBoy:

Bruckelmyer v. Ground Heaters was over a unissued figure in an application at the Canadian Patent Office in Hull, Quebec. There is a link in this entry to that CAFC ruling.

Reading the CAFC quotation in the entry, "persons interested and ordinarily skilled"; doesn't say public at large. Would the CAFC define "publicly accessible" if it were limited to patent examiners? Should they? Interferences can occur from unpublished applications; why not prior art?

My comments about mandatory publication were intended as open-ended food for thought and comment. The language was purposefully couched with "may."

Posted by: Patent Hawk at February 4, 2008 11:06 AM