The song that never ends: Emerging issues in patent policy

Early in 2013, even before all of the provisions of the Leahy-Smith America Invents Act (AIA) were in force, discussions began on the next round of patent legislation. Before the year was over, the House had overwhelmingly passed the Innovation Act – only six weeks after it was formally introduced.

The Innovation Act did not make it through the Senate in 2013 or 2014, but it was reintroduced at the beginning of the current Congress, along with a Senate counterpart, the PATENT Act. Both bills have been approved by their respective Committees and are awaiting further consideration.

{mosads}No matter the fate of the current bills, patent reform has been a focus of Congress, USPTO, and the courts for more than a decade, and activity will undoubtedly continue.  With this in mind, it’s worth anticipating the emerging issues that could drive the next round of patent policy discussions.

I.       Certainty of Patent Rights and Obligations 

The most efficient version of the patent system would provide quiet title to owners, but would only grant patents on inventions that are truly novel, nonobvious, and provide clear notice to the world about the metes and bounds of the property right. The least efficient system is one in which high quality patents are difficult to defend and the public is left guessing about which patents are enforceable and which have claims that a court will not find patentable. 

Many of the concerns that animate the legislative patent debate stem from the perception that our patent system is teetering between the most and least efficient models. Patent owners are often concerned that high quality patents they own have become too difficult to enforce and too easy to challenge; users of patented technology are often concerned that low quality patents are too expensive to defend against and are used as tools to extract payments that are not related to the value of the invention. 

In this round of patent legislation, we have seen increasing concern raised about the application of some statutory changes that were made in the AIA, such as the revised inter partes review process. Inter partes review (IPR), like the process that existed prior to the AIA, allows limited challenges to patents at any time during the life of the patent. This limits certainty for patent owners, but is also seen by many as a necessary part of the system until the quality of patents issued and in the system is unassailable.

The drive toward enhanced patent quality is likely to continue, and, as the quality improves, we are likely to see a continued push for greater certainty by patent owners who, having gone through a more rigorous examination and initial review, want to know that they can rely on the rights granted by the USPTO. 

II.       Affirming Patent Eligibility

The last few years have been challenging, to say the least, for inventors and patent holders claiming inventions in medical diagnostic, genetic, or software-enabled areas of technology.  In 2012, the Supreme Court held that a method of medical diagnostic testing is not patent-eligible; in 2013, the Court held that isolated DNA sequences are not patent-eligible; and in 2014, the Court held that a computer-implemented method for performing financial transactions is not patent-eligible. These cases from the Supreme Court are important not only for their impact on decisions of lower courts, but because the USPTO changes its guidelines for examining patents as a result. 

The evolving law on what is patent-eligible subject matter has a real-world impact on research and development decisions.  At some point—and we may have reached this point—circumscribing areas of technology that are patent-eligible may deter investment and erode America’s leadership position in the world in crucial areas of technology.  

Section 101 of the patent law—which governs subject matter eligibility—has not been amended since 1952. There are some interesting cases in the pipeline, and greater clarity may result from future rulings.  In the absence of such clarity, we may well see an organized, cross-sector push for amendments to affirm eligibility for cutting-edge technologies. 

III.       Antitrust and Patent Rights in the Global System

While patent rights apply only within the jurisdiction granting them, the inventions are disclosed to a global audience. We participate in a global economy and that calls for a movement toward more consistent global norms.    

As patent law in different jurisdictions become more harmonized, differences will inevitably remain. Issues of patentability and enforceability are complicated, and we can expect there will always be some variation from jurisdiction to jurisdiction. 

One area in need of global norm setting is the intersection of antitrust and patent law. These areas of the law are often viewed tensely because they promote different kinds of economic efficiency. In the U.S., the administration has said that competition may be harmed if certain equitable remedies are pursued by a patent owner in the limited circumstance of (1) a patent that is essential to a standard and (2) the patent owner has committed to license the patent on reasonable and nondiscriminatory terms.

That narrow principle of antitrust policy has been expanded, particularly in the Asian region.  Some jurisdictions are reported to be using antitrust arguments to disrupt free market licensing of patents that cover differentiating technology – well beyond technology that is included in a standard and subject to a voluntary licensing commitment.  The increasing perception is that some countries are misusing the antitrust laws for protectionist purposes – and that may propel further policy engagement. 

Congress and the administration both have an important role to play in ensuring our trading partners do not disadvantage American companies using the antitrust laws as a pretext. An engaged discussion about norms of antitrust laws and how those laws appropriately balance the patent laws is in order.  

Whatever happens next, one thing is worth remembering: patent legislation will remain an area of activity and focus.  Congress has taken serious and significant bipartisan steps toward amending the patent laws in each of the last ten years.  There is no question that Congress takes seriously its mandate to ensure that laws governing intellectual property adhere to the Constitution’s call to promote the progress of science and useful arts, and thereby promote America’s position as the world leader in innovation.

Cooper served as chief IP counsel for former Chairman Patrick Leahy (D-Vt.) on the Senate Judiciary Committee.