By Michael Borella --
This weekend The New York Times published an editorial opinion entitled "Save America's Patent System." It bemoans the purported prevalence of "bad patents" -- including "uninspiring tweaks" to existing products -- that supposedly undermine innovation. This led the Times to call for radical patent reform.
The Times continues a trend that has been at play for well over a decade now. The "bad patents" narrative raises its misguided head from time to time and lodges complaints about the supposed inequities of the patent system. According to the Times, these include higher drug prices and extortion by patent assertion entities.
Perhaps ironically, the Times does not identify any of these "bad" patents. Every U.S. Patent has at least two unique numbers by which it can be differentiated from all others, but none of these are provided. Therefore, it is unclear which patents the Times believes to be "bad."
Further, the Times does not go into any detail regarding how it determined the "badness" of these unidentified patents. What part of the patents did the editorial board consider? Did they ask a patent attorney for help? Did they properly consider how the scope of the claimed invention might be construed?
If you think that you can just look at an issued patent and determine that it is "bad," think again. All patents are required to be novel and non-obvious (among other requirements). But the legal principles of novelty and non-obviousness are notoriously tricky, even for seasoned U.S. Patent and Trademark Office (USPTO) patent examiners, patent attorneys, and federal judges.
First of all, the claims of the patent define the invention. These numbered paragraphs at the end of each patent are where you start. All too often the popular press does little more than read the abstract of the patent and conclude that the patent is "bad." But the abstract is required by the USPTO to be no more than 150 words and thus is almost always a high-level summarization of what is claimed. Put another way, concluding that a patent is "bad" through a cursory reading of it is not unlike determining the guilt of a person accused of a crime by only considering their shoe size.
Instead, the claims must be construed. Claim terms are given their ordinary and customary meaning (e.g., based on dictionary definitions or how the term is used in the relevant field). Further, one must look to the specification of the patent to determine whether the inventors used any particular term in an unconventional fashion that would override its ordinary and customary meaning. Also, one must look to the file history of the patent (a written record of back-and-forth arguments made between the patentee and the USPTO that led to the granting of the patent) to determine whether the patentee made representations that would further color the definition of the terms. In some cases, testimony of the inventors or experts in the patent's field of technology may also be used to determine how the claims are to be interpreted.
As a consequence, rather than just glancing at the abstract, a drawing or two, or the claims themselves, the process for determining whether the claims are valid may require reviewing many hundreds of pages of documents. Further, much of the patent statute has been heavily interpreted by the courts. Thus, even after all of this material is reviewed, applying the law to the claims may involve additional review of a few dozen Supreme Court and Federal Circuit decisions. This is a process that can take weeks. And even after that, reasonable minds can differ. The legal notion of non-obviousness is still somewhat subjective.
Furthermore, some of the most innovative ideas and products are obvious only when 20-20 hindsight is applied. If you look at a patented invention and think "I could have done that!" slow down and think again about whether you could have come up with that idea only having the information available to the inventors at the time the application for this patent was filed.
Did the Times go through this process before complaining about "bad" patents? It seems unlikely.
Nonetheless, the Times did get some things right. It wrote that the USPTO has "devolved into a backwater office that large corporations game, politicians ignore and average citizens are wholly excluded from." This is mostly correct. The high cost of doing business with the USPTO (not to mention attorneys' fees) is prohibitive for most Americans. And the economics do favor the companies with deep pockets who can persist through multiple rounds of examination. And some patent assertion entities do act in bad faith, spamming lawsuits with the hope of recovering nuisance damages.
But this is not the whole story. To be fair, the USPTO regularly issues patents that it probably should not. But the USPTO also throws up arbitrary barriers to patenting solid inventions on the basis of dicey reasoning.
The quality of examination at the USPTO varies dramatically between art units and examiners. Not all examiners are equally well-trained on the technology or the law. Some seasoned examiners have 95% allowance rates and others allow less than 5% of their examined applications. If an individual inventor or small business patentee finds themselves with a difficult examiner, they may lack the resources to conduct an extended prosecution or to appeal. In some cases, the patentee will give up simply because it cannot afford to continue.
Also, once a patent is issued, the story is not over. Since the passing of the America Invents Act in 2011, patents can be pulled back into the USPTO for further review. Typically this occurs prior to or during litigation. Also, the 2014 Alice Corp. v. CLS Bank decision from the Supreme Court has made it significantly easier to invalidate software patents on completely sketchy grounds. As a result, litigation of even a patent reasonably believed to be valid is a very risky and expensive process.
The Times also fails to explain how small businesses can struggle to obtain a few (often just one or two) patents, and then have to spend millions over the course of years to shut down copyists and free-riders. In the last decade, the term "efficient infringer" has been used to describe how a large corporation can infringe its competitors' patents with little risk of consequence. Seeing a patent all the way from application to issuance to successfully winning an injunction, settlement, or damages award is not unlike trying to hop across a minefield on one leg.
Moreover, the strain on innovation goes both ways -- an overly permissive patent system would limit innovation, but so does an overly strict system. Not granting patents that should be granted disincentivizes innovators from publicly disclosing their inventions and motivates the use of trade secrets instead. And an economy based on trade secret limits our ability to share our advances in science and technology -- to stand on the shoulders of giants.
So determining whether a patent is "good" or "bad" is not at all analogous to sorting ripe fruit from rotten. It is a process that requires more than a glance and a roll of the eyes. You need to put in the work.
If the Times wants to improve the patent system, it needs to call for a higher quality of examination at the USPTO rather than a higher bar for non-obviousness. It needs to call for lower fees and a less onerous examination process for individual inventors and small companies. And it needs to stop its vigorous hand-waving away of the complexities of patent law in order to provide a more accurate and well-reasoned viewpoint.
Faux-Populist Patent Fantasies from The New York Times
By Kevin E. Noonan --
This is evinced immediately by the principle basis for the sentiment regarding the patent system -- "Drugs cost too much!" -- and the basis for this conclusion: the Initiative for Medicines, Access and Knowledge (I-MAK), a policy advocacy group dedicated to lowering drug prices by attacking the patent system. The Times' reliance on I-MAK is particularly inopportune in light of recent events. First, Professor Adam Mossoff of George Mason University's Antonin Scalia School of Law published a report for the Hudson Institute, entitled "Unreliable Data Have Infected the Policy Debates Over Drug Patents," that raised serious issues over the data I-MAK relies upon in making its policy arguments regarding the relationship between drug pricing and patents. Professor Mossoff's critique was sufficiently provocative that Senator Thom Tillis wrote to I-MAK asking them to explain themselves (see E. McDermott, Tillis Wants More Info on I-MAK and Other Data Driving Anti-Patent Narratives Around Drug Pricing). I-MAK responded, not with the information the Senator requested but with a reiteration of their rhetoric (see E. McDermott, I-MAK Defends Integrity of Its Patent Data in Response to Tillis Letter), prompting the Senator to ask for further clarification. Professor Mossoff's analysis suggests the Senator will have a long wait for a satisfactory answer.
The Times also wrongfoots its example of so-called "patent evergreening" -- insulin manufacturers providing devices for administering doses of the drug. The Times might have had a point if drug companies had taken off the market traditional insulin in vials and administered by patient injection with syringes -- but a simple search shows that this is not the case. What these devices supply are ways for a patient to readily inject the correct dose, therefore improving compliance and avoiding dosage mishaps, which improves clinical outcomes and so is desirable to physicians because it avoids complications, thus reducing costs to payors such as insurance companies. And it is the very "simplicity" of the technology that prevents any one company from dominating the injection device market -- after all, many different drugs besides insulin are delivered using such devices -- and that both warrant and require patent protection, lest knockoffs flood the marketplace. This protects both American industry -- from whence exactly does the Times Editorial Board suppose such cheap knockoffs would arise? -- as well as providing the return on investment that regulatory approval costs require to incentivize development of products having such benefits for patients, their doctors, the insurance industry, and (because the bulk of drug costs are borne by the U.S. government one way or the other) taxpayers. And should the Times Editorial Board wish to understand rather than grandstand about this issue, there is academic scholarship, such as Professor Erika Lietzen's work in "The 'Evergreening' Metaphor in Intellectual Property Scholarship" and "Distorted Drug Patents" that would provide much better information for their readers.
The editorial resurrects for a new age an idea current at the turn of the century -- that applicants could "wear down" examiners who would then grant patents "out of kindness, I suppose" -- which created the ill-considered Claims and Continuation rules changes promulgated by the Patent Office encouraged by scholarship untethered to the realities of the Office or patent prosecution (see "The 'Word' on the New Continuation Rules (from the USPTO Webcast)" -- Part I and Part II); they were enjoined by the District Court of East Virginia (see "Tafas v. Dudas; SmithKline Beecham Corp. v. Dudas (E.D. Va. 2007)") and invalidated six months later. These limitations on prosecuting patents were particularly deleterious for the type of complicated technology common in the biotechnology and pharmaceutical arts, where patent examiners, who are typically not lawyers and, while having degrees and perhaps experience in the relevant technologies are not "cutting edge," understandably require time to absorb and apply patent law to claims for such complex inventions. Ironically, it is the very diligent gatekeeping function that the Times Editorial Board alleges the examiners are not doing that causes the delays that require applicants to pursue lengthy prosecution efforts (all while the twenty years from filing term clock is ticking and applicants are losing time during which commercial products embodying their inventions have exclusivity).
Paradoxically, the very means by which Congress has provided a mechanism for eliminating "bad patents" (which frequently just means someone else's patent that prevents you from selling something you'd like to; see "The IPO's Marc Adler on Patent 'Quality'"), the Patent Trial and Appeal Board and the various flavors of post-grant review afforded challengers under the Leahy-Smith America Invents Act, come in for criticism, based on rules permitting the Board to refuse to institute a proceeding based on avoiding duplicate adjudications before the Office and in the courts (see M. Buttman, "Turning Away a Patent Challenge: The NHK-Fintiv Rule Explained," Bloomberg Law, March 3, 2021). In doing so, the Editorial Board comes perilously close to accusing the former Director of instituting the rules improperly, and in the process (again ironically) illustrating why Justice Thomas and others advocate overturning the protections from libel suits by public officials in N.Y. Times v. Sullivan.
Because no one can always be wrong -- including the Times Editorial Board -- there are a few, albeit precious few, reasonable ideas in the editorial. One is giving examiners more time for examination, which could "solve" the excess prosecution "problem" the editors perceive exists. Another is having increased public participation, although the means for achieving this goal smacks of the same motivation that has made virologists out of financial advisors during the pandemic -- the idea that people who actually understand the process and issues are somehow suspect. And the idea asserted by the Times Editorial Board that the PTO does not coordinate with other agencies like the FDA and FTC is just wrong and illustrated by an example not representative of the realities of patent prosecution, such as the duty of candor and the penalty for violating it called inequitable conduct.
Perhaps the editors will be motivated to look into some of the deficiencies of their reasoning and understanding of the real issues facing innovation that the patent system grapples with, like "efficient infringement" by large companies with the financial wherewithal to expropriate smaller companies' inventions (see "The Proper Role of the Federal Circuit" and "The ACLU, Working for the Man"). But this is unlikely because reality does not fit the editors preconceived notion of what "everybody knows" (see "The Road to Hell Is Paved with What Everybody Knows"). The editorial pages of the Times have a long history with this type of prejudice (see "Science Fiction in The New York Times"; "The Anti-Patent Beat Goes on at The New York Times"; "Anti-Patent ("Sullivan?") Malice by The New York Times"; "The Continuing Assault on Innovation at The New York Times"; "War is Peace, Freedom is Slavery, Ignorance is Strength"; "New York Times to Innovation: Drop Dead"; and "More Patent Nonsense from The New York Times") and frankly there is no reason to think it will change. There is nothing in this latest editorial to the contrary.
Posted at 11:53 PM in Media Commentary | Permalink | Comments (8)