By Kevin E. Noonan --
The New York Times is at it again, proselytizing on its OpEd page about patents and how bad they are. This time the topic is the Supreme Court's upcoming argument in the Microsoft v. i4i case, involving the standard for determining whether the U.S. Patent and Trademark Office should be second-guessed by a lay jury.
Under current law, the standard for assessing whether the USPTO has improvidently granted a patent is by "clear and convincing evidence," which is higher than the "preponderance of the evidence" standard typically employed in civil trials. The rationale for the higher standard is that the USPTO is entitled to deference in its area of expertise. The question in the i4i case is whether that deference is appropriate under circumstances where the Patent Office has not considered art raised by a defendant in asserting invalidity. It is a provocative argument, and one that the Supreme Court has indicated an inclination to approve, for example in KSR Int'l Co. v. Teleflex Inc.
In the article, entitled "Patently Obvious" the author, Professor Douglas Lichtman (at left) from the UCLA Law School, evinces no appreciation for the subtleties of the issues, involving as it must patent law, administrative law, and the burdens on a private defendant in establishing that an executive agency has erred in the performance of its duties. All of these issues and others will no doubt inform the Court's opinion, but Prof. Lichtman would have us believe this is just another example of defects in a U.S. patent system that routinely grants "bad patents." In his analysis, juries are "discouraged" from questioning a patent's validity, meaning that "all too often . . . dubious patents are nevertheless enforced." This, of course, "inhibits innovation," he says, neglecting to mention that frequently it is the accused infringer who "inhibits innovation" by attempting to expropriate truly innovative technology from those who actually invent it.
Keeping with the theme of "bad patents," Prof. Lichtman asserts that the USPTO cannot possibly perform its duties, due to the number of new patent filings each year and the lack to time patent examiners have to perform their duties. The cogency of the first argument is diminished by the fact that the same argument has been made for at least ten years, well before the recent backlog of pending applications became an administrative nightmare. The second argument has more heft, but Prof. Lichtman operates under the mistaken impression that patent examiners have a total of 17 hours to perform their examination, "typically spread over two or three years . . . interspersed with work on hundreds of other open files." The 17-hour figure is accurate, but only for shorter and less complex applications. So while it is true that more examiners are needed to devote sufficient time to the examination process (a fact well-appreciated by the Office, which has hired thousands of new examiners over the past six years), the idea that the Office is a "rubber stamp" for patent applicants is ludicrous. "[I]n practice, even the best examiners are so overwhelmed and so poorly informed that the benefits of their expertise are fully dissipated," according to Prof. Lichtman. But in situations when that is the case, examiners refuse to grant patents, because the burden is always on the applicant to convince the examiner that her patent application should be granted under the appropriate statutory requirements.
This is something Prof. Lichtman might appreciate if he had any experience with the patent system outside opining on it from academe. According to his biography, he graduated from Yale Law School in 1997, spent 10 years at the University of Chicago Law School, and since 2007 has been at UCLA. No matter how intelligent Prof. Lichtman may be, there are some things that require actual experience to understand, and on that score the Professor is woefully lacking.
This is further illustrated by allegations in the piece regarding the ex parte nature of patent examination. "The only parties" involved in prosecution are "the patent applicant and the applicant's lawyers," Prof. Lichtman notes, contrasting the situation with litigation where a patentee is faced with a motivated adversary. What he neglects to mention in the equation are examiners on the one hand, who do not want to grant patents improperly, and the strictures of the rules of practice before the Office on the other hand, which require good faith and candor in an applicant's dealings with the Office, with the threat of an inequitable conduct finding if such candor is not maintained (a finding that renders the entire patent unenforceable against any infringer should it be made).
The philosophical basis of Prof. Lichtman's views are set forth in his penultimate paragraph:
If the current approach were abandoned and juries were instead given real freedom to review patent validity, not much would change at the Patent Office. Examiners would still evaluate the validity of patent applications and document their views. And, in the event of litigation, those views would still be admissible in court. The key difference would be that the examiner's view would then rise or fall on the merits, rather than enjoying substantial deference from the jury.
Actually, in that event, real chaos would ensue, as we effectively substituted a layman's views for expert ones, and the value of patents and innovation would suffer. That would be good for companies who could benefit from the inventions of others without having to compensate them. (Similar arguments are raised by those who would rather exploit university research without the bother of complying with the Bayh-Dole Act.) But it would not be good for "genuine innovation," which Prof. Lichtman professes to value.
In the i4i case, the Supreme Court may very well decide that patentees and the Patent Office do not deserve the higher level of deference for art not considered by the Office during patent examination. Or it may recognize that such a decision would implicate all other administrative agencies, and permit disgruntled citizens to challenge every agency action based on "evidence" not considered during agency review (and the costs that may ensue in encouraging manipulation of when such "evidence" is or is not presented during initial agency review). In any case, Prof. Lichtman's article becomes just another example of how certain academics and their industry supporters are ready, willing, and able to take any opportunity to tell the public that the American patent system is broken. It ain't necessarily so.