A Call to Arms

    By Kevin E. Noonan --

Resistance to the U.S. Patent and Trademark Office's new continuation and claims rules continues to grow (although how effective that resistance will be less than two weeks before the rules are implemented is a problematic question).  The latest salvo comes from the Practising Law Institute's Patent Blog, in the form of back-to-back posts by Gene Quinn (see "A Call to Action Against the Patent Office") and John White (see "Time to Get Involved & Stop the USPTO").

Mr. Quinn's (at left) post speaks frankly of "revolution" and a "call to action."  Lawsuits are recommended as the implement of choice in this fray, and in particular the lawsuit filed by GlaxoSmithKline in the Eastern District of Virginia last week (see "Horray! - (Finally) the Big Dogs Have Joined the Hunt").  Mr. Quinn agrees that pharma will be the hardest hit by the rules, but thinks that all high-tech patenting should be included in the list of technologies put at risk by the rules, including software.

Mr. Quinn points out that the Patent Office has asked the Court to wait until the night before the implementation deadline (fittingly, Halloween) to hear GSK's motion for a TRO and preliminary injunction, clearly hoping that the Court will not be able to respond "on the spot" and, of course, then setting up its next argument that the new rules are a fait accompli and that granting GSK's motion would prejudice those applicants who have already complied with the rules.

Mr. Quinn doesn't think filing separate lawsuits will be effective (in the short term, at least), but he does think that others can help the Court understand the gravity of the situation and the equities involved in granting the preliminary injunction motion until the Court can consider the issues on the merits.  He suggests that interested parties - everyone from individual inventors, small businesses, small cap, large cap, or Fortune 500 companies - should file amicus briefs with the Court to explain how the rules will negatively impact them.  The idea is for the Court to recognize that this isn't just one company disagreeing with the Patent Office, but that GSK's suit represents a large, even overwhelming, proportion of those entities most interested and invested in patents and patenting.

Recognizing that some groups may not have the time or the wherewithal to effectively mount such as effort - and cautioning against a letter-writing campaign to the Court that may backfire - Mr. Quinn suggests that anyone having any arguments or evidence against the new rules send them to him at: [email protected].  He asks for specifics, preferably with citations to relevant case law, statutes or the rules, and in any event, complete arguments rather than rants.  Mr. Quinn  proposes to use his blog to publicly vet the arguments and to make them available to others.  Anonymity is offered but not required  - after all, who (or what lawyer, at least) wouldn't want to take credit for the argument that persuades the Court to rule in "our" favor?

Mr. White (at left) is kinder in some ways to the current Patent Office administration, positing that the negative effects of the new rules are merely unintended consequences.  (As readers of Patent Docs will recognize, we feel that view is naïve - the Office cares about nothing other than reducing the backlog, and will do whatever it takes to do so.)  He recognizes that the comments provided to the Office merely "softened the blow" of the new rules (and as hard as it may be to comprehend, the rules as originally proposed were even worse than the rules as promulgated this August).  Like Mr. Quinn, Mr. White believes it's time to "rally the troops" and "grab the pitchforks" (whether analogizing the Patent Office with Frankenstein or Dracula is not specified).  His reasoning is the same as Mr. Quinn's:  not much time, and irrevocable loss of property rights.

Both authors correctly state the widespread beliefs of the vast majority of the patent bar (absent a few litigators who are willing to gut the patent system to kiss up to their patent-infringing clients):  the new rules are an illegal grab of executive power without consideration to the limitations of the enabling statute, done with scant factual support and supported by specious arguments (sound familiar?).  No one disputes that 20 years of Patent Office underfunding during an era of exponentially-increasing innovation (anyone at the PTO ever heard of Moore's Law?) has left the Office with a crushing backlog, but what is misunderstood (or misrepresented) is that this represents innovation, and the new rules are willing to force applicants to abandon protection for that innovation to satisfy merely bureaucratic goals.  Don't be surprised if one-quarter to one-third of the Patent Office backlog of applications are abandoned in the next twelve months (which is precisely what the new rules are intended to encourage if not force applicants to do).  And don't be surprised if we start feeling the consequences in the next few years.  Let's hope some of that abandoned innovation doesn't relate to new drugs that Americans will need as a large bolus of us get to the age where we wish we had all the pharmaceutical help we can get.  The Patent Office will be content with reducing its backlog on the backs of those with such needs.

Comments

[MJC]

Hi,
I was wondering if some kind of class action suit could be used. That way every inventor affected could join in and sue for loss of rights, list damages from continuations that are no longer allowed, etc.
That way there could be even tens of thousands of inventors, attorneys etc who give estimates of how much money they expect to lose from the new rules, from applications already filed. Pending applications from before the patent office announced possible changes would be even stronger, alleging misrepresentation or even fraud. After all, inventors and attorneys spend a lot of money and changing the rules can cost them a lot.
I don't know if the government can be sued like this but perhaps the patent office is arguably a business run by them for profit, since they take part of its fees as a profit. So this can be seen as a government owned business hurting customers to make more profits for itself. Maybe the GAO can be sued, etc and if enough appeals are made the issue stays alive and in the minds of voters perhaps until the next election.
While it might not succeed it would generate a lot of publicity, with inventors and attorneys claiming billions in damages collectively. Stories like this might get in the media with smaller backyard inventors losing their life savings, etc.
Patents are intellectual property and like other property in the constitution:
"nor shall private property be taken for public use, without just compensation." So if the patent office is taking people's property by denying continuations promised when they originally filed, they should have just compensation, perhaps in a class action. In effect people's private intellectual property is being taken from them for public use, i.e. their inventions enter the public domain.
The situation is like someone buying a home and then the government decides to take it for a public freeway and not pay them anything. The public benefits from a free invention by the promised continuations no longer allowed. if an inventor can prove he loses part of his invention from this then his property has been seized and the government should pay him royalties for it.
If a private company tried to break an implied agreement under which people paid a consideration, i.e. filing fees to cut costs and avoid hiring more staff then they would be sued by a class action, so why not here.

[MJC]

The new laws seem to hit attorneys harder than anyone. KSR makes inventors lodge fewer patent applications. The new PTO rules mean fewer fees from continuations. Fewer injunctions means fewer attorney driven patent trolls. The PTO is introducing more sanctions on attorneys and blaming them for the backlog.
Maybe this is really the Republicans against the lawyers, similar to the changes in damages claims and class actions. After all lawyers are perceived to vote Democratic. If patent attorneys approached the Democratic Congress and offered more contributions, and got some lobbyists a lot of this might be averted.
Once the Democrats saw this as Republicans attacking their financial contributors their attitude might quickly change. I would suggest the attorneys considering joining attacks on the PTO start writing some fat checks to Hillary instead and the problem will go away.
For example someone might form a PAC for patent attorneys. Look at the potential for lost fees in this, contact some Democratic Senators on the relevant committees, tell them you will organize, write to all patent attorneys for contributions, and the Republicans get the money if the Democrats do nothing. Just contact some lobbyists on K Street and they will set it all up.
It's all about money and politics. Patent attorneys give no money and big companies do, it's that simple. Big companies are now getting the payoff for their contributions, and patent attorneys are getting what no contributions usually gets.

[Kevin E. Noonan]

Dear MJC:

Don't worry about patent lawyers - we'll always make money. KSR will put a premium on being able to make a good argument of non-obviousness (vel non, in litigation), and who else will have the patience and attention to minute detail than a patent lawyer in deciphering the new rules?

The irony of your comment is that the "patent reform" legislation pending before Congress garnered (in the House) overwhelming support from the Democratic majority and was opposed by an overwhelming majority of the Republicans. The rationale is that the pharmaceutical industry has contributed disproportionately to Republicans, who were perceived after the Hillary health care episode to be more closely concerned with their interests, while the Silicon Valley types (much less corporate, trend setters and paradigm-shifters) tend to contribute to Democrats (who tend to "favor" access to health care for the aged, sick and poor over corporate profits). So I think the problem is the Democrats don't "get" the importance of innovation and nuturing innovation, and how that's tied to investment. Some do, such as Bill Clinton, but many are tied up in the politics of the class war. (Don't misunderstand me - there is a class war, and the wealthy are winning it. It's just that there are better places to fight this fight than on the backs of American innovation.)

Thanks for the comment.

[S. Colby]

I've provided the appropriate excerpts from the following links to my clients. Those who are being hurt (most) by the new rules were happy to have someone to call.

http://www.house.gov/house/MemberWWW.shtml
http://www.senate.gov/general/contact_information/senators_cfm.cfm

It doesn't take too many calls from Silicon Valley startups for my representatives to take notice.

Please pass these links around.

[MJC]

As the author Honore de Balzac once said,"Money solves all riddles". The Democrats may be behind this, but they like money, and need it to win elections. Attorneys should ask themselves if they stand to lose money from these new rules, and how much. I presume they are not complaining because they expect to make more money.
Giving some of these losses as contributions to the Democrats will solve the problem, particularly if the Democrats are doing this to punish pharmaceutical companies giving money to Republicans. Since the Republicans are already against it you don't need to give them money.
Any attorney can phone up some K Street lobbyists and find out how much money will be needed. Someone can do that today, right now by picking up the phone book. Once you have a good lobbyist, they can contact the right people, and ask for contributions. They write to every patent attorney and agent in the country, and ask for money.
If the right politicians know that within weeks they might have a million dollars in extra campaign funds then the new rules will be stopped in their tracks. Assuming GlaxoSmith Kline get a temporary injunction there will be time to block them permanently.
So who will be the one to pick up the phone, get a lobbyist and stop this thing? All it takes is someone to organize it.

[Kevin E. Noonan]

Dear MJC:

You are deeply cynical. But you may be right. Let's hope the court gives us some time to do what's necessary (pecuniary or policy) to convince Congress that patent "reform" is a bad idea.

Thanks for the comments.

[johng]

Kevin, unfortunately MJC is right. When I was at the patent office in the mid '90's we hired a lobbyist, Helen Bently, who put together a bipartisan group of Congressmen who were very effective in influencing the legislature for our particular purposes. Some of the things we were successful in changing was the "outsourcing" of our jobs and the non-publication option.

At the time, it seemed the right thing to do for our purposes. What I learned from it all is that the results you need have nothing to do with right or wrong, but instead who you know and how much money you have. The right/wrong aspects do eventually come out in the process when gathering support, but without that base, no one will care.

It is interesting that Jon Dudas et al. were the points of contact in our meetings on the hill. That was his bag for years.

[MJC]

It sounds like Dudas got the job done as a lobbyist for the PTO and then was hired as a reward for this. In a sense then this could be a vendetta of the PTO against patent attorneys like what happened to trial lawyers with damages and class actions. If the PTO sees attorneys as the cause of its problems then lobbying initially with Dudas got them an understanding with some key politicians. Then when Dudas came to work for the PTO he changes the rules assuming the political connections he has will back him up.
This is likely to be Republican politics, since Dudas was appointed by Bush. Once this is understood by the Democrats (with the aid of some contributions to grease the wheels) they might well stop these rules.
But the problem began because patent attorneys have no lobbyist and Political Action Committee to look after their interests. All their opponents have been giving political donations and using politcal influence to get what they want, and the one who gave nothing is now out in the cold.
Also a Political Action Committee or similar organization could get donations from inventors, not just patent attorneys. There needs to be a structure in place though to look after their common interests.
I think a call to the Democratic National Committee would get things underway very quickly. In fact I could imagine them holding hearings on the subject, who the PTO lobbyist was, and was Dudas did for his job.

[NIPRA anonymous]

Unfortunately, I think MJC is right - the problem (and the driving force here) is more politics than patents. The U.S. Patent System is now almost entirely in the hands of lobbyists ($) whose agenda is not near so selfless as promoting the progress of science and the useful arts.

If and when (in the future) the politicians and lobbyists finally silence the founding fathers, then the full decline of America into the greatness of its past will be complete. Perhaps inertia of accumulated capital will keep us going for one generation while the wheels of large corporations spin unhindered against nothingness. But then do pity our children's children for what we in our greed and silence and with closed-eyes have created in the last decade - a patent system so riddled with quality issues that it could be so easily assailed and sieged and bound (as was Samson) by the lobbyists, with not even two attorneys lobbying together for "USPTO reform" to deal with the quality issues. And so by our past inaction, we may have forever changed what we leave to our grandchildren, not to mention the hands that "care" ($) for their welfare.

God bless the Tafas and GSK teams.

[Kevin E. Noonan]

It seems that patent attorneys do have a variety of organizations that should have been more active - like the AIPLA and APLF - as well as inventor groups like the IPO.

The problem has been that attorneys tend to reflect, or at least are loathe to appear contrary to, their clients' interests. Since a good number of these clients (on the IT side) have their issues with IP, it is hard for attorney groups to speak coherently on these issues.

This is unfortunate, since the patent bar appreciates most keenly what works and what doesn't in the patent system. The bar also lost an opportunity when it didn't respond more vigorously to good-hearted but misdirected efforts by the FTC and the National Academy of Science directed towards the "problems" with the patent system.

What is needed is some input, at the Patent Office, in Congress and in the popular press, from the bar that focuses on the process rather than the substance - it is the substance that causes the client conflicts.

It is late in this part of the process - the House has passed its version of the "reform" bill and the Patent Office has promulgated its rules - but at least AIPLA has submitted an amicus brief in the GSK case, and PhARMA has asked the court for leave to "support" GSK's summary judgment motions due early in November. We are once again in the land of "wait and see;" not satisfying, but an object lesson going forward.