By James Korenchan --
At the U.S. Chamber of Commerce Patent Policy Conference last month, U.S. Patent and Trademark Office (USPTO) Director Andrei Iancu (at right) gave a keynote address on the role of U.S. patent policy in domestic innovation and the potential impacts on investment towards the advancement of science and technology. The primary goals of the address was to address the results of the U.S. Chamber of Commerce's 5th annual study on worldwide intellectual property systems. The study dropped the U.S. patent system to 13th in the world, thereby extending the U.S.'s decline since 2016 (in 2016, the U.S. was ranked 1st, and then ranked 10th in 2017). Further, the study attributed the decline to weak and uncertain patentability standards -- particularly those surrounding subject matter eligibility -- as well as to weak patent opposition procedures established by the America Invents Act (AIA).
Iancu's address, which was unsurprisingly bookended and peppered with emphases on the ongoing importance of the U.S. patent system in innovation and economic growth, first acknowledged the substantial changes to the U.S. patent system over the past few years. "Importantly," he added, "the rhetoric surrounding the patent system has focused relentlessly on certain faults in, or abuses of, the system—instead of the incredible benefits the system brings to our nation."
Iancu then laid out a two-point plan to reverse the U.S.'s downward trend and reinvigorate the role of the U.S. patent system in the economy. First, he aims to draw focus away from the skepticism of IP rights and the faults of the U.S. patent system and instead create "a new pro-innovation, pro-IP dialogue":
A successful system cannot be defined by its faults. Rather, a successful system must be defined by its goals, aspirations, and successes. Obviously, errors in the system should be corrected. And no abuse should be tolerated. Errors and abuse should be identified and swiftly eliminated. However, the focus for discussion, and the focus for IP policy, must be on the positive. We must create a new narrative that defines the patent system by the brilliance of inventors, the excitement of invention, and the incredible benefits they bring to society. And it is these benefits that must drive our patent policies. . . . Here's a start: when we write, interpret, and administer patent laws, we must consistently ask ourselves "Are we helping these inventors?" Whether it's an individual tinkering in her garage, or a team at a large corporation, or a laboratory on a university campus, we must ask ourselves "Are we helping them? Are we incentivizing innovation?"
This led into Iancu's second point: To increase the reliability of granted patents, giving applicants more confidence in seeking to protect their inventions and giving patent owners more confidence in the rights they hold.
Iancu followed with certainly the most stimulating remarks of the address, where Iancu acknowledged the unpredictability and frustration with subject matter eligibility analysis under 35 U.S.C. § 101.
First, our current law surrounding patentable subject matter has created a more unpredictable patent landscape that is hurting innovation and, consequently, investment and job creation. Recent cases from the Supreme Court -- Mayo, Myriad, and Alice -- have inserted standards into our interpretation of the statute that are difficult to follow. Lower courts applying these cases are struggling to issue consistent results. Patent lawyers trying to advise their clients are, in turn, struggling to predict the outcome with respect to certain patents. And examiners at the USPTO must spend increased amounts of time addressing this challenging issue. The current standards are difficult for all: stakeholders, courts, examiners, practitioners, and investors alike. System-wide, a significant amount of time is being spent trying to figure out where the lines should be drawn. . . . Something must be done.
While we might not be able to rest assured just yet, Iancu stressed that, while faithfully applying the law, the USPTO will do more within the bounds of the statute to increase the clarity and predictability of eligibility analyses and outcomes. "Currently," he said, "we're actively looking for ways to simplify the eligibility determination for our examiners through forward-looking guidance. Through our administration of the patent laws, which we are charged to execute, the USPTO can lead, not just react to, every new case the courts issue."
Iancu then turned to patent opposition procedures, primarily Inter Partes Review (IPR). (Note: Since giving this address, the Supreme Court held in a 7-2 decision in Oil States v. Greene's Energy that IPR proceedings do not violate Article III or the Seventh Amendment of the Constitution.)
Acknowledging the popularity of IPR proceedings since the AIA ("more than 8,000 such proceedings"), Iancu also acknowledged the divisiveness surrounding the IPR system:
Pointing to the high invalidation rates in IPR proceedings, some hate the new system with vigor, arguing that it's an unfair process that tilts too much in favor of the petitioner. Others love the system, and think it's the best tool we have to correct errors, eliminate "bad patents," and improve patent quality. Who is right? Well, both arguments have legitimate elements. But I encourage people to reduce the hyperbole and look at the process with fresh eyes, in order to understand its true benefits and true challenges.
Further, Iancu called this understanding of IPR proceedings "one of [the USPTO's] highest priorities," as well as achieving balance between the interests of both petitioners and challengers. "And so," he said, "among various other things, we are now examining: how and when we institute proceedings, the standards we employ during the proceedings, and how we conduct the overall proceedings. The goal, with whatever action we take, is to increase predictability of appropriately-scoped claims."
Not stopping there, Iancu next stressed that, to further increase the reliability of patent rights, the USPTO needs to issue "appropriately-scoped patent claims from the get-go." To do this, he seeks to ensure that examiners are properly-equipped with the guidance and search tools needed to improve the initial examination. Iancu hopes that this will in turn reduce the gap between prior art found during initial examination and prior art found during litigation and improve the U.S. patent system as a whole.
Near the end of his address, Iancu again stressed the importance of the U.S. patent system and quoted the co-founder of SanDisk, Dr. Eli Harari, who is credited with the invention of Electrically Erasable Programmable Read-Only Memory (EEPROM) and perfection of flash memory data storage:
"If you are not protected," [Dr. Harari] said, "God help you!"
The benefits of an increased reliability in obtaining and holding patent rights are clear. And as stimulating as some of Iancu's remarks may be, we can only wait and see whether he delivers on his ambitions.