Continued Chaos in Obama Administration Patent Policy

By Kevin E. Noonan --

President Obama has reportedly decided against nominating Johnson & Johnson executive Philip Johnson in the face of political pressure from the hi-tech industry and Members of Congress, including Senator Charles Schumer (D-NY), as reported by The Wall Street Journal and GigaOm ("White House pulls plug on controversial Patent Office nominee after tech sector backlash").

The proposed nomination, floated as a trial balloon last month, and its fate illustrate the rift between the biotech and pharma industry, who rely on patent exclusivity to provide the return on investment necessary to bring new drugs to market, and the IT industry, who are more concerned with the threat of so-called "patent trolls."  Mr. Johnson was known to oppose troll legislation that passed the House last fall and stalled in the Senate this spring (purportedly as the result of pressure from trial lawyers who feared the fee-shifting provisions in the bill would provide precedent for such provisions to spread from patent litigation to other lawsuits).

There has been speculation about the fate of Michelle Lee, the current interim Deputy Director, but if the President was going to nominate her it would seem he would have done so by now.

As the result of the President's decision not to nominate Mr. Johnson, the Office remains without a Director (for about 18 months and counting).  Because the time remaining on the President's term continues to diminish, the likelihood that a quality nominee would be willing to take on PTO leadership without sufficient time to make a difference is becoming less and less.  As the current subject matter eligibility Guidance shows, the Office needs a Director but the chances it will actually get one are becoming smaller and smaller.

Comments

[Skeptical]

Litigation concerns (as reflected in the "Troll" hysteria, and here in an apparent derailment of the filling of a long empty leadership post) continue to be the result of FUD whipped about to distract what needs to be done to resolve ANY actual problems with the patent system: focus on the examination process.

On the flipside, I am not naive enough to think that the well vested interests will stop the various spin campaigns long enough from them to realize that a rising tide carries all boats higher.

Lost in the shuffle is the fact that a duly granted patent (whether or not inducing litigation) is a sign that the system of Quid Pro Quo has worked, is working, and will continue to work to promote the progress.

Once the exchange - at the time of grant - is made, the patent system has obtained for the public (the seeming rallying cry) the quo - and all of the quo - that is to be expected. Litigation costs and corporate structure clarity are nothing but smokescreens and collateral attacks on the quid obtained in exchange for the quo taken.

There are some things that stand out above all the attempted spin. The absence of choosing is a choice, Mr. President. Leadership by abdication will be your legacy.

Will reason prevail? Will the big picture and the benefits of a vigorous (read that as a system amply utilized) exchange of Quid and Quo overcome the concerted negativity being kicked up? Or will we continue to see politics as usual and a continuation of squandered opportunities?

Alas, I remain...

[EG]

Kevin,

"Continued chaos" correctly characterizes Obama's current patent policy. And American innovation will continue to suffer while that "chaos" continues, including that created by Our Judicial Mount Olympus.

[L. Ebert]

The response of some to the nomination of Mr. Johnson, who had a high profile in the "patent reform" discussion, was foreseeable and could easily be seen as "orchestrated."

Gee, fellows, I tried, and look what happened.

[max hensley]

I suppose it is a sign of the times. The USPTO used to be a nice quiet backwater, a technocratic agency largely free of the usual Washington shenanigans. Now Washington is waxing fat on the drippings from the fires of contending factions in many fields. Why should patents be exempt? I'm glad I experienced the glory days and can watch the sad DC judicial and political patent spectacle - retired - from a distance.

[Martin Snyder]

The tens of thousands of dollars a month I am paying to be trolled by, of all suspects, IBM, on the crappiest of a 90's software patent imaginable, are I can assure you, not FUD or hysteria.

Bad patents will make it past examiners; the problem is the jurisprudence. If you are a small business, to be accused is to be ruined, with no recourse, and its happening this moment all around the country. Most absurd racket in the history of the world...

There needs to be fee shifting and probable cause hearings right up front to shake out the shakedown artists. The courts and patent bar made this mess, they should unmake it before it's unmade for them.

[Skeptical]

Mr. Martin Snyder,

I have read your rants on several blogs. Hysteria is indeed an apt phrase for what you have posted.

The shoe fits.

[jvd]

Chaos? Bush 43 created chaos when his USPTO appointees brought the patent allowance rate to all-time, historic lows. Obama turned that around, and restored order to our patent system. As much as I don't like and don't respect the AIA, it remains one of the most significant pieces of legislation that both Rs and Ds can agree on, and that was signed into law by Obama.

It's unfortunate that persons exercising their constitutional right to patent protection are referred to as "trolls", but this is part of the same Fox News-induced hysteria that considers rejection of a one nominee to be "chaos."

[Heebie-Jeebies]

"It's unfortunate that persons exercising their constitutional right to patent protection are referred to as "trolls", but this is part of the same Fox News-induced hysteria that considers rejection of a one nominee to be "chaos.""

An, um, unusual way of looking at things. No nominee for PTO Director has yet been rejected by the Senate, because in the over 18 months since David Kapppos left office, Obama hasn't seen fit to nominate *anyone* to fill his shoes. Instead there's been:
-- the likely ultra vires appointment of Michelle Lee, who seems (at least from her public appearances) to have morphed into a spineless lackey of someone higher up the totem pole;
-- the new 101 guidelines in the wake of Myriad and Mayo, which go far beyond anything required by Supreme Court jurisprudence and appear to be aimed at killing the biotech industry and with it new methods of diagnosing and treating diseases;
-- rumors of a decision to nominate Phillip Johnson [a curious decision to begin with given his (correct) public statements that "patent reform" at the legislative level is unnecessary as opposed to Obama's (clueless) statements, such as in the State of the Union address, that "patent reform" is needed] and then rumors of backtracking on that decision because of opposition from Silicon Valley heavy hitters, who want "patent reform".

As now-retired Chief Judge Rader tried to emphasize, if judges would exercise their discretion under the current framework, a lot of frivolous troll litigation could be done away with (by sanctioning parties who bring frivolous suits), and a lot of the cost of litigation could be mitigated (by limiting discovery). And if the PTO actually learned how to examine patent applications in the high tech sphere, so that it didn't issue so much junk (a cry Greg Aharonian has been making for 20+ years), most of the frivolous suits wouldn't even get out of the starting gate because there would be no bogus patent to begin with.

The Constitution says that Congress can pass laws "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries". It doesn't say that Congress has to do so; and it doesn't say that one has a right to obtain a bogus patent and then use asymmetries in the judicial system to extort others with that.

[Skeptical]

Heebie-Jeebies,

Whenever I see someone attempt the "don't have to" line of reasoning, my first thought is: "But they have done so."

You might want to check out the law that deals with rights granted in a "but they have done so" regime. Once that point of discretion has been passed (the point that laws in fact have been placed on the books), the law no longer is considered "optional" in the manner that the "don't have to" line of thought stands for.

Bygones.

As to a right to obtain a bogus patent, I completely agree. Bogus patents have no right to be obtained. But the meaning I think you intend to imply is that "bogus" is what you deem to be bogus, as opposed to "bogus" deemed by the controlling law.

There are quite a few NON-"bogus" patents out there that people of all walks of philosophies would consider "bogus" but are quite simply NOT "bogus" under the law.

As to using "asymmetries in the judicial system," well, that is not strictly a patent issue, now is it? You are pursuing the wrong forum of correction for that problem.

[jvd]

Mr. Jeebies:

When a few special interests and one party in Congress determines that it will not process nominations - regardless of what they are nominated for - then those interests and that party do not also get to bemoan a lack of progress in nominations.

Your comment "if the PTO actually learned how to examine patent applications in the high tech sphere" - is an arrogant condemnation of the patent organization that is the gold standard for the world. Please forgive the USPTO - and the rest of US culture - if it might just be a little bit unclear as to how much monopoly should be granted in computer and biotech fields. By gosh - a few of the biotech companies trying to achieve patent protection on some aspects of DNA may just be biotrolls.

When your only tool is a hammer, everything looks like a nail. How can Pres. Obama be blamed for the Myriad and Mayo decisions?