Friday, January 13, 2012

Scott Kieff – The Perils of Patent Reform & Welcome to Patent Purgatory

What effect will the recently enacted America Invents Act (AIA) have on the commercialization of patents? Professor Scott Kieff’s essays, The Perils of Patent Reform and Welcome to Patent Purgatory, explore some reasons why the AIA may negatively influence the rate and the manner by which invention is brought to market.

Kieff begins his analysis by arguing that our patent system works best when patents foster the commercialization of inventions, while also increasing competition. Kieff illustrates this idea by comparing the divergent public policy views taken towards biotechnology and software patents in the 70’s and 80’s. In the first part of this period, patents on biologicals were not reliably enforced or granted. It wasn’t until the Supreme Court’s ruling in Chakrabarty that biological products and testing methods could begin receiving patent protection. And after that change there was a large growth in both the commercialization of inventions in that field, and a large increase in the number of small and medium sized companies in that field. During this same time period, software claims continued to be seen as non-statutory subject matter under 35 U.S.C. § 101; and what emerged against this backdrop of no patents for software was Microsoft, as a monopolist.

Kieff argues that the AIA is detrimental to commercialization and competition because it will interfere with the coordination among multiple market participants -- including inventors, managers, marketers, laborers, and other patent owners – that is needed to bring an invention to market. Kieff argues the AIA’s new procedures for continually challenging a patent’s validity will lead to weaker patent enforcement and thus, poor market coordination.

Kieff’s first criticism of the AIA’s impact on commercialization focuses on the expanded role of the Patent Office in determining a patent’s validity. Kieff argues that patent validity should be challenged in court and not by a federal agency. Kieff suggests that the PTO should be seen as merely conducting an initial assessment of patent validity, with the tangential responsibility of maintaining a centralized, easily searchable, database of issued patents and their file histories. By placing the responsibility for making validity determinations primarily with the courts, litigants can rely on both the rules of procedure and evidence to develop a more complete record of the facts. He argues that this is preferable to relying on a patent examiner or the Board of Patent Appeals and Interferences to assess the history of a given technological field because it relies on factual evidence rather than on opinion or personal judgment. To answer those who worry about the hassle costs of baseless litigation efforts and their threat, he points out that courts have long demonstrated the ability to punish bad faith litigation.

Kieff’s second criticism concerns the new avenues that can be utilized by third parties to challenge the validity of issued patents. In addition to the pre-existing ex parte and inter partes reexamination procedures, the AIA adds two additional methods, the post-grant review and supplemental examination. While these additional methods were added to increase the speed of reexaminations while reducing cost, Kieff points out that they accomplish this feat by relying on individual judgments by politically influenced officials instead of on facts. A big problem with such politically influenced actors is that they tend to favor the politically powerful, entrenched businesses over new challengers.

Kieff's arguments about agency capture are at odds with a number of scholars who have questioned whether concerns about agency capture are such cause for concern with regard to the PTO. See Sarah Tran, Patent Powers, 25 Harv. J.L. & Tech., (forthcoming 2012) (arguing that efforts to "capture" the Patent Office may actually produce positive benefits for the patent system and showing that patent reforms will likely reduce the harms of agency capture by increasing the Agency's obligation to make its decisions more transparent); Michael J. Burstein, Rules for Patents, 52 Wm. & Mary L. Rev. 1747, 1796-97 (2011) (arguing that agency capture concerns subside in light of the fact that "powerful interests in patent policy often fall on opposite sides of major questions"). Moreover, many benefits flow to inventors, industry competitors, and society at large when the Patent Office fast tracks key technologies. See Sarah Tran, Expediting Innovation, 36 Harv. Envtl. L. Rev. (forthcoming 2012). Yet Kieff articulates compelling grounds to be wary of a more subjective patent system.

Posted by Bryan Parrish (, a registered patent agent, research assistant to Sarah Tran, and a 2014 Juris Doctor candidate at SMU Dedman School of Law.

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