Would stricter venue rules improve patent law? In Patentography (NYU L. Rev. 2010), Professor Jeanne Fromer (Fordham Law) argues that considering the "geography of patent disputes" by "making patent venue proper only in the district in which the principal place of business of any of a case's defendants is located" would help resolve complaints of (1) forum shopping, (2) poor district court performance in patent litigation, and (3) insufficient deference by the Federal Circuit. Her basic insight is that this venue restriction "will lead to a concentration of an industry's patent suits in the districts where that industry's firms are densest," so that most pharma suits will be in D.N.J., while software suits will be in N.D. Cal., D. Mass., and W.D. Wash.—and she argues that this industry-specific specialization by generalist courts would produce more reasoned opinions than specialized patent trial courts. I'm not sure that "patentography" is the clearest name for patent geography ("-graphy" refers to a writing or field, and patent attorney Mark Rosen made aborted efforts to define "patentography" along these lines), but Fromer presents an intriguing argument that taught me something new and made me rethink my views on specialized patent courts.
Tuesday, March 29, 2011
Sunday, March 27, 2011
Michael Risch on Patent Trolls and Utility
Michael Risch (Villanova Law) has posted two new articles on SSRN that are related to recent Written Description posts. The first is Patent Troll Myths (forthcoming in the Seton Hall Law Review), which compares results with Patent Quality and Settlement Among Repeat Patent Litigants by John Allison, Mark Lemley, and Joshua Walker. Risch begins with a provocative claim: "It turns out that just about everything we thought about patent trolls—good or bad—is wrong." Risch started with the ten "most litigious" non-practicing entities (NPEs)—including Acacia Technologies, General Patent Corp., and Ronald A. Katz—and searched for all cases involving these NPEs from 1986 and 2009, resulting in a dataset involving 1011 cases and 400 patents.
Wednesday, March 23, 2011
Do Patents Disclose Useful Information?
I recently uploaded a revised draft of my current working paper, Do Patents Disclose Useful Information?, on SSRN. I am grateful for all the feedback I have received on this paper so far, and I welcome more—please feel free to email me. Here is the abstract:
Courts often state that patents are justified by disclosure theory, the idea that patents are awarded as quid pro quo for the public disclosure of inventions. Economists have long argued that disclosure theory should be accorded no weight in the design of the patent system because patented inventions would have been disclosed anyway. Even the few legal scholars who dispute these economic arguments agree that, in practice, patents are currently not useful as technical sources for other innovators. This Article challenges all these arguments, arguing not that disclosure theory is a valid justification for the patent system, but rather that the benefits of full technical disclosures are stronger than is generally believed, and that these benefits probably outweigh any incremental loss in innovation incentives. Using results from a new survey of nanotechnology researchers and case studies of individual patents, this Article shows that patents do contain useful technical information that is not available elsewhere. This technical content could be improved, however, in at least three ways: stronger enforcement of disclosure requirements (including through an obligation to respond to good faith reproducibility questions from skilled researchers), elimination of legal barriers to using patents as technical sources, and improved access to patents through peer production. These changes will help defuse the tension between patents and the open culture of science.
Monday, March 21, 2011
Tim Holbrook: Can presumptions save patents' technical nature?
Are patents legal documents or part of the technical literature? Both, but the balance is currently skewed, says Professor Timothy Holbrook (Emory Law), in Patents, Presumptions, and Public Notice (forthcoming in the Indiana Law Journal): because of patents' "Janus-like nature, reading and interpreting them can be challenging, as courts must parse both the legal and the technical." This article builds nicely on Holbrook's prior work, including Possession in Patent Law (arguing that the purpose of patents is not disclosure, but rather to show that the inventor possessed the invention).
Saturday, March 19, 2011
Allison, Lemley & Walker: Repeat Patent Litigants
Do repeat patent plaintiffs have stronger patents? Are they more likely to settle to prevent these patents from being invalidated? John Allison (UT Austin Business), Mark Lemley (Stanford Law), and Joshua Walker (Lex Machina, Inc.) empirically address these questions in Patent Quality and Settlement Among Repeat Patent Litigants, which was just published in the March issue of the Georgetown Law Journal.
The study was based on the Stanford IP Litigation Clearinghouse, which links all patent suits since 2000 with their corresponding patents (and is "free to academicians, public interest researchers, judges, policymakers, and the media" and run by Lex Machina). The authors compare the 106 patents that were litigated 8 or more times with 343 patents that were litigated only once. Among their findings:
The study was based on the Stanford IP Litigation Clearinghouse, which links all patent suits since 2000 with their corresponding patents (and is "free to academicians, public interest researchers, judges, policymakers, and the media" and run by Lex Machina). The authors compare the 106 patents that were litigated 8 or more times with 343 patents that were litigated only once. Among their findings:
Wednesday, March 16, 2011
Samuelson & Schultz: What business methods are patentable after Bilski?
The final paper presented at Stanford's Bilski Symposium was "Clues" for Determining Whether Business and Service Innovations Are Unpatentable Abstract Ideas by Pamela Samuelson and Jason Schultz, both of Berkeley Law (though this paper looks like it is being published by the Lewis & Clark Law Review, not the Stanford Law Review). The paper discusses the "clues" in Bilski for "distinguish[ing] between unpatentable abstract ideas and patentable processes."
Sunday, March 13, 2011
John Duffy on Business Method Patents
"[W]hy did business patents arise, and why did they survive?" John Duffy (GW Law) seeks to answer these questions in Why Business Method Patents?, the fifth paper in my review of Stanford's Bilski Symposium. Unlike the first four papers, Duffy neither explains how Bilski should have been decided nor focuses on how Bilski will be interpreted going forward; rather, he presents a compelling (and well-written) historical explanation of how we ended up where we are today.
Thursday, March 10, 2011
Dmitry Karshtedt: Samsung-Stanford Symposium on Patent Remedies
This is a guest post by Dmitry Karshtedt, a 3L at Stanford with a Ph.D. in chemistry. Karshtedt is the Stanford Law Review Senior Symposium Editor, and his legal scholarship is available on SSRN.
The inaugural Samsung-Stanford Symposium on Patent Remedies took place on February 18, 2011, at Stanford Law School. The panels featured both law professors and students who won the Samsung-Stanford prizes on the basis of their proposals. Links to videos of the panels and PDFs of the papers are included below.
The first panel, moderated by Professor Robin Feldman of U.C. Hastings College of the Law, was focused on injunctions. Janet Freilich, a 2L from Harvard, kicked off the discussion and presented a nuisance framework that judges could use to determine when to issue injunctions, supplementing the four-part test endorsed in eBay v. MercExchange. Professor Christopher Cotropia, from the University of Richmond, then presented an empirical paper that showed that the Federal Circuit’s Kyocera case did not have the expected effect of reducing the number of filings by patent owners to prevent the importation of infringing goods through the International Trade Commission. Professor Ted Sichelman, from the University of San Diego, argued that patent remedies must be based on harm to the public caused by diminished incentives to innovate due to infringement, rather than on injury to individual patent owners. Professor Peter Lee of U.C. Davis then proposed a rule, based on the law of accession in the real property context, holding that infringement suits against owners of improvement patents should result in damages rather than injunctions. Finally, Professor John Golden of University of Texas discussed the compliance of patent injunctions with the Federal Rules of Civil Procedure.
The second panel, moderated by Brian Love, a teaching fellow at Stanford Law, focused on patentee overcompensation and apportionment. In the first paper, Professor Amy Landers of McGeorge demonstrated that the history of the Patent Act supported apportionment based on the novel contribution of the patentee over the prior art. Professor Bernard Chao of the University of Denver then argued that more reasonable damage awards will be reached if courts, as they may, allow accused infringement to implead other infringers for contribution. Using the example of the iPhone, 3L Ravi Mohan of Santa Clara argued that the use of apportionment is unavoidable for complex technologies. Finally, Dmitry Karshtedt, a 3L at Stanford, highlighted a panel split in the Federal Circuit involving differing treatment of proven acts of direct infringement in figuring indirect infringement damages.
The third panel, moderated by Professor Colleen Chien of Santa Clara, showcased empirical papers on patent damages. Damon Andrews, a 3L at the University of Iowa, argued that the goal of much of patent litigation is to extract settlements from defendants. Professor Michael Mazzeo of Northwestern University, in a paper co-authored by Jonathan Hillel of Skadden Arps and Samantha Zyontz of George Mason University School of Law, showed that patent damages are not as extravagant as commonly perceived. Rhonda Sadler, a 3L at Mercer Law School, suggested approaches to simplifying jury instructions based on evidence of lack of understanding of current jury charges in patent cases. Professor Christopher Seaman of Chicago-Kent College of Law, completed the panel by demonstrating the effects of opinions of counsel on cases dealing with various issues in patent law such as willful infringement.
The fourth and final panel dealt with structured calculation of reasonable royalties, and was moderated by the Honorable Ronald Whyte of the Northern District of California. Professor Thomas Cotter of the University of Minnesota discussed four principles that should guide courts in calculating reasonable royalties—faithfulness to substantive law, focus on compensation sufficient to make the patentee whole, increased damages only when this is needed for optimal deterrence, and basis of damages on licenses that parties would have actually entered into but for the infringement. The second paper was given Kanav Hasija, a Master in Intellectual Property at the University of New Hampshire School of Law and co-authored by Paul Tanpitukpongse, a 3L at UNH, and discussed a game theory approach to calculating reasonable royalties. Stanford LLMs Tony Lai and Samuel Windley co-authored the third paper, presented by Samuel, which involves courts encouraging patent litigants to negotiate actual royalty agreements and using such negotiations as the basis for reasonable royalties. The conference ended with Stanford’s Mark Lemley, who explained how courts should approach the issue of ongoing royalties in cases where injunctions are not granted and the losing defendant continues to infringe.
The inaugural Samsung-Stanford Symposium on Patent Remedies took place on February 18, 2011, at Stanford Law School. The panels featured both law professors and students who won the Samsung-Stanford prizes on the basis of their proposals. Links to videos of the panels and PDFs of the papers are included below.
The first panel, moderated by Professor Robin Feldman of U.C. Hastings College of the Law, was focused on injunctions. Janet Freilich, a 2L from Harvard, kicked off the discussion and presented a nuisance framework that judges could use to determine when to issue injunctions, supplementing the four-part test endorsed in eBay v. MercExchange. Professor Christopher Cotropia, from the University of Richmond, then presented an empirical paper that showed that the Federal Circuit’s Kyocera case did not have the expected effect of reducing the number of filings by patent owners to prevent the importation of infringing goods through the International Trade Commission. Professor Ted Sichelman, from the University of San Diego, argued that patent remedies must be based on harm to the public caused by diminished incentives to innovate due to infringement, rather than on injury to individual patent owners. Professor Peter Lee of U.C. Davis then proposed a rule, based on the law of accession in the real property context, holding that infringement suits against owners of improvement patents should result in damages rather than injunctions. Finally, Professor John Golden of University of Texas discussed the compliance of patent injunctions with the Federal Rules of Civil Procedure.
The second panel, moderated by Brian Love, a teaching fellow at Stanford Law, focused on patentee overcompensation and apportionment. In the first paper, Professor Amy Landers of McGeorge demonstrated that the history of the Patent Act supported apportionment based on the novel contribution of the patentee over the prior art. Professor Bernard Chao of the University of Denver then argued that more reasonable damage awards will be reached if courts, as they may, allow accused infringement to implead other infringers for contribution. Using the example of the iPhone, 3L Ravi Mohan of Santa Clara argued that the use of apportionment is unavoidable for complex technologies. Finally, Dmitry Karshtedt, a 3L at Stanford, highlighted a panel split in the Federal Circuit involving differing treatment of proven acts of direct infringement in figuring indirect infringement damages.
The third panel, moderated by Professor Colleen Chien of Santa Clara, showcased empirical papers on patent damages. Damon Andrews, a 3L at the University of Iowa, argued that the goal of much of patent litigation is to extract settlements from defendants. Professor Michael Mazzeo of Northwestern University, in a paper co-authored by Jonathan Hillel of Skadden Arps and Samantha Zyontz of George Mason University School of Law, showed that patent damages are not as extravagant as commonly perceived. Rhonda Sadler, a 3L at Mercer Law School, suggested approaches to simplifying jury instructions based on evidence of lack of understanding of current jury charges in patent cases. Professor Christopher Seaman of Chicago-Kent College of Law, completed the panel by demonstrating the effects of opinions of counsel on cases dealing with various issues in patent law such as willful infringement.
The fourth and final panel dealt with structured calculation of reasonable royalties, and was moderated by the Honorable Ronald Whyte of the Northern District of California. Professor Thomas Cotter of the University of Minnesota discussed four principles that should guide courts in calculating reasonable royalties—faithfulness to substantive law, focus on compensation sufficient to make the patentee whole, increased damages only when this is needed for optimal deterrence, and basis of damages on licenses that parties would have actually entered into but for the infringement. The second paper was given Kanav Hasija, a Master in Intellectual Property at the University of New Hampshire School of Law and co-authored by Paul Tanpitukpongse, a 3L at UNH, and discussed a game theory approach to calculating reasonable royalties. Stanford LLMs Tony Lai and Samuel Windley co-authored the third paper, presented by Samuel, which involves courts encouraging patent litigants to negotiate actual royalty agreements and using such negotiations as the basis for reasonable royalties. The conference ended with Stanford’s Mark Lemley, who explained how courts should approach the issue of ongoing royalties in cases where injunctions are not granted and the losing defendant continues to infringe.
Monday, March 7, 2011
Robin Feldman on Owning You
The fourth paper in my review of Stanford's Bilski Symposium is Whose Body Is It Anyway? Human Cells and the Strange Effects of Property & Intellectual Property Law by Robin Feldman (U.C. Hastings Law). Feldman's thought-provoking paper was presented in the same panel as the paper on genetic diagnostic patents by Dreyfuss and Evans, and she expresses a similar concern about genetic patents. Although the title and beginning of the paper led me to believe that it would focus on moral and ethical concerns of patenting DNA (which I have argued are not as significant as potential concerns about healthcare and basic research), Feldman actually presents a "modest and practical approach." She concludes that genes should be patentable, but only under a narrow claim scope.
Part I is about neither patents nor Bilski: Feldman argues that Moore v. Regents of the University of California (holding that a patient who consented to removal of his cells did not have a property interest in those cells) was wrongly decided, and that a person should have a property right in cells that are removed from his or her body. (If I were editing this piece, I might recommend that this Part be cut or reduced to a paragraph in the Introduction: this argument isn't new, and I think it detracts from the more interesting arguments in Part II.)
Part II examines "the extent to which inventors can tie up human genes and related substances" in light of Bilski and Association for Molecular Pathology. Like Dreyfuss and Evans, Feldman focuses on the use of "pre-empt" in Bilski, arguing that "[i]n gene-related inventions, pre-emption problems can emerge ... in the context of attempts to tie up a natural phenomenon." Under this preemption test, inventors should not be allowed to patent "the relationship between elevated blood sugar levels and diabetes" but should be able to patent "personalized medicine diagnostic methods, which may involve hundreds of biomarkers and complex statistical modeling." Considering the breast cancer genes at issue in Molecular Pathology, Feldman argues that the diagnostic claims are closer to personalized medicine, while the therapeutic claims (for "the 'method' of determining whether a cancer therapeutic is effective") have "greater problems."
"The more interesting question," writes Feldman, "involves the claims to particular DNA and cDNA sequences created outside the human body." She argues that the common analogy between gene patents and isolated and purified natural products (like the paper pulp in the 1874 American Wood-Paper case) is outdated because "the modern creation of genetic inventions no longer requires purification"; instead, genes can be built "from the ground up" through chemical synthesis. Feldman argues that genes should be patentable if researchers can develop specific uses for them, and that "the fact that genes exist in a natural form in the human body should not prevent patenting of genes in laboratory form." The subject matter test is related to novelty and utility: "we ask whether the invention allows us to accomplish something that we could not accomplish with the natural product. Applying that yardstick to isolated DNA and cDNA would suggest that such products should be considered human invention, rather than the handiwork of nature."
Feldman says that the problem is not gene patents per se; rather, it is "allowing patent holders to reach beyond the state of knowledge at the time of the invention," and "[t]he solution lies in properly limiting the scope of the allowed claim." But unlike Lemley et al., who argue that § 101 independently limits claim scope, Feldman says that "this limitation could be accomplished through the disclosure requirements of section 112." Myriad's BRCA1 patent claims, for example, should be limited to the BRCA1 sequence "for the purposes of breast cancer diagnosis in a designated patient population." (Feldman doesn't explain what "a designated patient population" would be, but presumably it would be something like "women at risk for breast cancer.") These restrictions might be important in some hypotheticals, but they wouldn't satisfy the Molecular Pathology plaintiffs, since the use of the BRCA1 gene for breast cancer diagnosis is what they care about. But presumably Feldman would argue that under our current patent laws, that makes doctrinal sense.
Part I is about neither patents nor Bilski: Feldman argues that Moore v. Regents of the University of California (holding that a patient who consented to removal of his cells did not have a property interest in those cells) was wrongly decided, and that a person should have a property right in cells that are removed from his or her body. (If I were editing this piece, I might recommend that this Part be cut or reduced to a paragraph in the Introduction: this argument isn't new, and I think it detracts from the more interesting arguments in Part II.)
Part II examines "the extent to which inventors can tie up human genes and related substances" in light of Bilski and Association for Molecular Pathology. Like Dreyfuss and Evans, Feldman focuses on the use of "pre-empt" in Bilski, arguing that "[i]n gene-related inventions, pre-emption problems can emerge ... in the context of attempts to tie up a natural phenomenon." Under this preemption test, inventors should not be allowed to patent "the relationship between elevated blood sugar levels and diabetes" but should be able to patent "personalized medicine diagnostic methods, which may involve hundreds of biomarkers and complex statistical modeling." Considering the breast cancer genes at issue in Molecular Pathology, Feldman argues that the diagnostic claims are closer to personalized medicine, while the therapeutic claims (for "the 'method' of determining whether a cancer therapeutic is effective") have "greater problems."
"The more interesting question," writes Feldman, "involves the claims to particular DNA and cDNA sequences created outside the human body." She argues that the common analogy between gene patents and isolated and purified natural products (like the paper pulp in the 1874 American Wood-Paper case) is outdated because "the modern creation of genetic inventions no longer requires purification"; instead, genes can be built "from the ground up" through chemical synthesis. Feldman argues that genes should be patentable if researchers can develop specific uses for them, and that "the fact that genes exist in a natural form in the human body should not prevent patenting of genes in laboratory form." The subject matter test is related to novelty and utility: "we ask whether the invention allows us to accomplish something that we could not accomplish with the natural product. Applying that yardstick to isolated DNA and cDNA would suggest that such products should be considered human invention, rather than the handiwork of nature."
Feldman says that the problem is not gene patents per se; rather, it is "allowing patent holders to reach beyond the state of knowledge at the time of the invention," and "[t]he solution lies in properly limiting the scope of the allowed claim." But unlike Lemley et al., who argue that § 101 independently limits claim scope, Feldman says that "this limitation could be accomplished through the disclosure requirements of section 112." Myriad's BRCA1 patent claims, for example, should be limited to the BRCA1 sequence "for the purposes of breast cancer diagnosis in a designated patient population." (Feldman doesn't explain what "a designated patient population" would be, but presumably it would be something like "women at risk for breast cancer.") These restrictions might be important in some hypotheticals, but they wouldn't satisfy the Molecular Pathology plaintiffs, since the use of the BRCA1 gene for breast cancer diagnosis is what they care about. But presumably Feldman would argue that under our current patent laws, that makes doctrinal sense.
Wednesday, March 2, 2011
Dreyfuss & Evans: Bilski and Gene Patents
Does Bilski bar patents on genetic diagnostics? All the Justices in Bilski agreed that patents may not "preempt" (or "pre-empt") something, but what does "preempt" mean? Is a gene patent that can't be designed around preemptive? Rochelle Dreyfuss (NYU Law) and James Evans (UNC Genetics and Medicine) tackle these question in the third paper in Stanford's Bilski symposium: From Bilski Back to Benson: Preemption, Inventing Around, and the Case of Genetic Diagnostics.
Like Lemley et al. and Menell, Dreyfuss and Evans agree that the fractured Bilski opinions were uninformative. (Does anyone think the Bilski opinions were great? That would be a novel argument.) They write that "preempt" is used "entirely within the legal domain" and has no meaning in "technological discourse." (It addition to describing displacement of state law by federal law, the term frequently came up in law review article discussions: a "preempted" piece failed the novelty prong for a good law review article.) In Part I, Dreyfuss and Evans argue that § 101 does not tell us "whether" a new technology can be patented, but rather "how" the technology is claimed: "claims that 'preempt' competitive development—that cover prospects that cannot be efficiently mined by individual rights holders—are barred." This is very similar to the argument by Lemley et al. that § 101 is about claim scope, not gatekeeping.
In Part II, Dreyfuss and Evans apply these ideas to patents on genetic diagnostics, which is a subset of what are often called "gene patents," and I will use the "gene patent" shorthand in this post. Lawyers who are unfamiliar with genetic diagnostics will enjoy II.A on "The Science of Genetics." II.B then reviews the SACGHS report on genetic diagnostic patents (Evans was chair of the SACGHS task force). The piece reports that "when there were patents held exclusively by a single entity, both clinical practice and scientific development were impaired," which is a different message from the SACGHS draft report, which concluded that "patents covering genetic tests ... do not appear to be causing wide or lasting barriers to patient or clinical access," as I quoted in Access to Bio-Knowledge: From Gene Patents to Biomedical Materials. But because the draft report found that patents do little to help the development of new genetic diagnostics, I argued in Access to Bio-Knowledge that the report still supported calls for exempting genetic diagnostics from patentability—a conclusion that the final report makes even stronger.
Dreyfuss and Evans hint in Part III that a legislative carve-out may be unnecessary because patents on genetic diagnostics might "preempt" competitive development for at least four reasons: (1) inventing around gene patents is impossible, (2) gene patents limit interoperability, (3) gene patents create broad unmined prospects, and (4) patentees for genetic diagnostics tend to be academics who are not primarily motivated by patents. (This last factor seems like an important policy concern, but the link to preemption is less obvious than for the other three.) The authors never actually say that they think genetic diagnostic patents are not patentable subject matter under Bilski, but they note that "it is no wonder that courts have begun to question the validity of these patents" (citing Association for Molecular Pathology) and that "one Federal Circuit judge has already suggested that Bilski's preemption test raises serious questions about patents on isolated DNA molecules" (citing Judge Dyk's opinion in Intervet v. Merial).
I wish that the paper had a more explicit conclusion—even if the authors do not feel comfortable claiming that genetic diagnostic patents do preempt development and are thus unpatentable subject matter, they could at least lay out what factors still need to be examined to decide whether this is true—but I still think the paper does a nice job of highlighting the preemption concern and thinking about factors that might be relevant in investigating preemption.
Like Lemley et al. and Menell, Dreyfuss and Evans agree that the fractured Bilski opinions were uninformative. (Does anyone think the Bilski opinions were great? That would be a novel argument.) They write that "preempt" is used "entirely within the legal domain" and has no meaning in "technological discourse." (It addition to describing displacement of state law by federal law, the term frequently came up in law review article discussions: a "preempted" piece failed the novelty prong for a good law review article.) In Part I, Dreyfuss and Evans argue that § 101 does not tell us "whether" a new technology can be patented, but rather "how" the technology is claimed: "claims that 'preempt' competitive development—that cover prospects that cannot be efficiently mined by individual rights holders—are barred." This is very similar to the argument by Lemley et al. that § 101 is about claim scope, not gatekeeping.
In Part II, Dreyfuss and Evans apply these ideas to patents on genetic diagnostics, which is a subset of what are often called "gene patents," and I will use the "gene patent" shorthand in this post. Lawyers who are unfamiliar with genetic diagnostics will enjoy II.A on "The Science of Genetics." II.B then reviews the SACGHS report on genetic diagnostic patents (Evans was chair of the SACGHS task force). The piece reports that "when there were patents held exclusively by a single entity, both clinical practice and scientific development were impaired," which is a different message from the SACGHS draft report, which concluded that "patents covering genetic tests ... do not appear to be causing wide or lasting barriers to patient or clinical access," as I quoted in Access to Bio-Knowledge: From Gene Patents to Biomedical Materials. But because the draft report found that patents do little to help the development of new genetic diagnostics, I argued in Access to Bio-Knowledge that the report still supported calls for exempting genetic diagnostics from patentability—a conclusion that the final report makes even stronger.
Dreyfuss and Evans hint in Part III that a legislative carve-out may be unnecessary because patents on genetic diagnostics might "preempt" competitive development for at least four reasons: (1) inventing around gene patents is impossible, (2) gene patents limit interoperability, (3) gene patents create broad unmined prospects, and (4) patentees for genetic diagnostics tend to be academics who are not primarily motivated by patents. (This last factor seems like an important policy concern, but the link to preemption is less obvious than for the other three.) The authors never actually say that they think genetic diagnostic patents are not patentable subject matter under Bilski, but they note that "it is no wonder that courts have begun to question the validity of these patents" (citing Association for Molecular Pathology) and that "one Federal Circuit judge has already suggested that Bilski's preemption test raises serious questions about patents on isolated DNA molecules" (citing Judge Dyk's opinion in Intervet v. Merial).
I wish that the paper had a more explicit conclusion—even if the authors do not feel comfortable claiming that genetic diagnostic patents do preempt development and are thus unpatentable subject matter, they could at least lay out what factors still need to be examined to decide whether this is true—but I still think the paper does a nice job of highlighting the preemption concern and thinking about factors that might be relevant in investigating preemption.
Tuesday, March 1, 2011
Peter Menell on Bilski Methodology
How should courts think about interpreting the Patent Act? Although it has one of the more awkward titles I've seen recently, I enjoyed Peter Menell's contribution on this subject to Stanford's Bilski symposium: Forty Years of Wondering in the Wilderness and No Closer to the Promised Land: Bilski's Superficial Textualism and the Missed Opportunity To Ground Patent Law Interpretation and Return Patent Law to Its Technology Mooring.* Menell is a professor at Berkeley Law and has a Ph.D. in economics, and much of his research has involved the intersection of copyright and software / computing / the internet (see, e.g., his recent article about copyright and knowledge-preservation efforts like Google Books).
In his Stanford symposium piece, Menell argues that Bilski was a missed opportunity to delineate the confusing boundaries of patentable subject matter. This by itself isn't news: as soon as Bilski came down, the patent blogosphere said it was a vague letdown that offers no clarity. And the opinion fit nicely with Peter Lee's thesis about Supreme Court patent cases raising cognitive burdens for judges. But Menell does not simply critique the Court's fractured majority as vague; he also criticizes its methodology: "In its effort to shoehorn analysis of patentable subject matter into a textualist mold, the Court collapsed the rich historical development of patentable subject matter into three amorphous, static, and ill-defined exceptions [for laws of nature, physical phenomena, and abstract ideas]. The resulting methodology and analysis are incoherent." Although Menell argues against the Supreme Court's "textualist turn," he is still able to wield the tools of textualism more deftly than the Court when criticizing the majority opinion in Part II.
Rather than using textualism, Part IV argues that the Court should "integrate the constitutional and jurisprudential traditions surrounding patentable subject matter with statutory construction principles and forthright recognition of the challenges of applying historic doctrines to unforeseeable technological developments." Specifically, courts should (1) "ascertain whether any constitutional provision constrains legislative or judicial power" and then (2) "determine the appropriate interpretive lens" based on whether the statutory text in question was intended to change prior law—if not, courts should continue the common-law patent tradition.
Applying this framework to Bilski, Menell argues that "[t]he historical record strongly indicates that 'useful Arts' was understood at the time of the Constitutional Convention to limit patents to technological fields," and that "[t]here is no reason to believe that 'business methods' have become a science or technology," so "the Court did not need to reach the statutory question." But if it did consider the statute, the Court should have noted that the 1952 Patent Act "perpetuated" a "functional, common law approach" for patentable subject matter, using "process" not in its 1952 dictionary sense but "based upon the rich jurisprudence of the prior 150 years," which "limited 'process' or 'art' to physical acts that produce a physical or chemical transformation or operate a machine."
It sounds like Menell thinks the Federal Circuit got it right with the machine-or-transformation test, and since he was on the same panel at the Stanford symposium with Mark Lemley, whose paper argued against gatekeeping approaches like machine-or-transformation, it would have been interesting to hear their conversation about this. Any readers who were there want to share any details?
*Nitpicky Bluebook tip of the day: The Bluebook is full of unnecessarily complicated rules (see my classmate James Kwak's critique), but once you have been an articles editor, little mistakes jump out at you. One of the most common mistakes that slips past editors is the capitalization of the word "to," which should be lowercase when used as a preposition (rule 8(a)), but uppercase when used as part of an infinitive verb (as in two of the examples in rule 16.3). So in the title of this article, we have "to the Promised Land" and "to Its Technology Mooring" but "To Ground." (Also note that "Its" should be capitalized, even though it is under five letters, because it is not an article, conjunction, or preposition.) Will "mistakes" like this keep your brilliant article from getting accepted? Of course not. But will lots of Bluebook mistakes signal that you might have been sloppy with more important details? Maybe. (Whether editors should be so worried about the capitalization of "to" is another question...)
In his Stanford symposium piece, Menell argues that Bilski was a missed opportunity to delineate the confusing boundaries of patentable subject matter. This by itself isn't news: as soon as Bilski came down, the patent blogosphere said it was a vague letdown that offers no clarity. And the opinion fit nicely with Peter Lee's thesis about Supreme Court patent cases raising cognitive burdens for judges. But Menell does not simply critique the Court's fractured majority as vague; he also criticizes its methodology: "In its effort to shoehorn analysis of patentable subject matter into a textualist mold, the Court collapsed the rich historical development of patentable subject matter into three amorphous, static, and ill-defined exceptions [for laws of nature, physical phenomena, and abstract ideas]. The resulting methodology and analysis are incoherent." Although Menell argues against the Supreme Court's "textualist turn," he is still able to wield the tools of textualism more deftly than the Court when criticizing the majority opinion in Part II.
Rather than using textualism, Part IV argues that the Court should "integrate the constitutional and jurisprudential traditions surrounding patentable subject matter with statutory construction principles and forthright recognition of the challenges of applying historic doctrines to unforeseeable technological developments." Specifically, courts should (1) "ascertain whether any constitutional provision constrains legislative or judicial power" and then (2) "determine the appropriate interpretive lens" based on whether the statutory text in question was intended to change prior law—if not, courts should continue the common-law patent tradition.
Applying this framework to Bilski, Menell argues that "[t]he historical record strongly indicates that 'useful Arts' was understood at the time of the Constitutional Convention to limit patents to technological fields," and that "[t]here is no reason to believe that 'business methods' have become a science or technology," so "the Court did not need to reach the statutory question." But if it did consider the statute, the Court should have noted that the 1952 Patent Act "perpetuated" a "functional, common law approach" for patentable subject matter, using "process" not in its 1952 dictionary sense but "based upon the rich jurisprudence of the prior 150 years," which "limited 'process' or 'art' to physical acts that produce a physical or chemical transformation or operate a machine."
It sounds like Menell thinks the Federal Circuit got it right with the machine-or-transformation test, and since he was on the same panel at the Stanford symposium with Mark Lemley, whose paper argued against gatekeeping approaches like machine-or-transformation, it would have been interesting to hear their conversation about this. Any readers who were there want to share any details?
*Nitpicky Bluebook tip of the day: The Bluebook is full of unnecessarily complicated rules (see my classmate James Kwak's critique), but once you have been an articles editor, little mistakes jump out at you. One of the most common mistakes that slips past editors is the capitalization of the word "to," which should be lowercase when used as a preposition (rule 8(a)), but uppercase when used as part of an infinitive verb (as in two of the examples in rule 16.3). So in the title of this article, we have "to the Promised Land" and "to Its Technology Mooring" but "To Ground." (Also note that "Its" should be capitalized, even though it is under five letters, because it is not an article, conjunction, or preposition.) Will "mistakes" like this keep your brilliant article from getting accepted? Of course not. But will lots of Bluebook mistakes signal that you might have been sloppy with more important details? Maybe. (Whether editors should be so worried about the capitalization of "to" is another question...)
Friday, February 25, 2011
Lemley, Risch, Sichelman & Wagner on Bilski
Bilski v. Kappos was one of the most anticipated patent cases in recent history. Almost all observers agreed that Bilski's method of hedging risk was not patentable; the question was how broadly the Supreme Court's opinion would reach. In the end, the Court rejected a categorical exclusion of all business method patents (although Tom Goldstein has argued that Stevens's concurrence, which would have rejected business methods completely, reads like a lost majority). The Court also rejected the Federal Circuit's holding that the machine-or-transformation test is the only test for determining whether a process is patentable subject matter under § 101. But the Court noted that "the machine-or-transformation test is a useful and important clue," and lower courts have continued to rely upon it. So where does this leave us?
The Stanford Law Review recently selected six Bilski-related papers for its 2011 Symposium on The Future of Patents: Bilski and Beyond. Michael Risch has already shared brief descriptions of the papers over at Madisonian; I will examine each of the papers in a series of posts over the coming week.
First up is Life After Bilski by Mark Lemley (Stanford), Michael Risch (Villanova), Ted Sichelman (San Diego), and Polk Wagner (U Penn). These four were attorneys for, and signatories to, an amici brief in Bilski that argued for a technology-neutral applied/abstract approach: "Where an idea is claimed as applied, it is eligible for patentability, but if it is claimed merely in the abstract it is not." Their symposium piece moves away from this focus on abstraction: "We don't exclude inventions from patentability because the invention is too abstract. We refuse to patent certain claims when those claims reach too broadly and thereby threaten downstream innovation."
The authors argue that the machine-or-transformation test "threatens to effectively become mandatory," and this is bad because "[g]atekeeping approaches have proven unsatisfactory." (This builds on Risch's Everything is Patentable.) The thesis is that the abstract ideas doctrine is not meant to exclude certain subject matters; rather, it "prevent[s] inventors from claiming their ideas too broadly." (§ 112 also limits claim scope, but while § 112 is only concerned with disclosure, § 101 "is primarily concerned with removing obstructions to follow-on innovation.") The authors describe three historical cases that "illustrate how excluding abstract ideas limits claim scope"—O'Reilly v. Morse, The Telephone Cases, and Mackay Radio—and describe how their theory "is also largely consistent with the Court's more recent 'abstract idea' decisions," such as Gottschalk v. Benson, Diamond v. Diehr, Parker v. Flook, and Bilski. They also claim that their theory "provides the only reasonable explanation" of In re Abele.
Section III.B describes the new proposed § 101 test, a "contextual, common-law approach" that considers at least five factors:
So does this proposed test help move the ball forward? There was no shortage of ideas on how the Supreme Court should define patentable processes in Bilski (see PatentlyO's summaries of briefs here and here), and articles of this form ("the current test is unworkable, and here's my better test") often fail, but this piece seems to satisfy my basic patent criteria for a valuable article. I haven't seen this idea that § 101 should be about claim scope, and I thought the examples of how this test would work in practice were very useful. Is their test really workable? Part of the appeal of the formalistic machine-or-transformation test is its relative ease of application, but I think this claim-scope test does a decent job of following Peter Lee's suggestion of making patent standards "enabled," such as by providing examples. And I think this piece could do more to emphasize the potential efficiency gains of the claim-scope approach, as it would help reduce the dynamic inefficiencies caused by patents.
The Stanford Law Review recently selected six Bilski-related papers for its 2011 Symposium on The Future of Patents: Bilski and Beyond. Michael Risch has already shared brief descriptions of the papers over at Madisonian; I will examine each of the papers in a series of posts over the coming week.
First up is Life After Bilski by Mark Lemley (Stanford), Michael Risch (Villanova), Ted Sichelman (San Diego), and Polk Wagner (U Penn). These four were attorneys for, and signatories to, an amici brief in Bilski that argued for a technology-neutral applied/abstract approach: "Where an idea is claimed as applied, it is eligible for patentability, but if it is claimed merely in the abstract it is not." Their symposium piece moves away from this focus on abstraction: "We don't exclude inventions from patentability because the invention is too abstract. We refuse to patent certain claims when those claims reach too broadly and thereby threaten downstream innovation."
The authors argue that the machine-or-transformation test "threatens to effectively become mandatory," and this is bad because "[g]atekeeping approaches have proven unsatisfactory." (This builds on Risch's Everything is Patentable.) The thesis is that the abstract ideas doctrine is not meant to exclude certain subject matters; rather, it "prevent[s] inventors from claiming their ideas too broadly." (§ 112 also limits claim scope, but while § 112 is only concerned with disclosure, § 101 "is primarily concerned with removing obstructions to follow-on innovation.") The authors describe three historical cases that "illustrate how excluding abstract ideas limits claim scope"—O'Reilly v. Morse, The Telephone Cases, and Mackay Radio—and describe how their theory "is also largely consistent with the Court's more recent 'abstract idea' decisions," such as Gottschalk v. Benson, Diamond v. Diehr, Parker v. Flook, and Bilski. They also claim that their theory "provides the only reasonable explanation" of In re Abele.
Section III.B describes the new proposed § 101 test, a "contextual, common-law approach" that considers at least five factors:
- "Is the claimed invention potentially generative of many kinds of new inventions?"
- "Does the industry rely heavily on cumulative invention?"
- "Is the technological field fast-moving?"
- "Has the patentee disclosed a small number of embodiments but claimed a broad inventive principle?"
- "Has the patentee made an important contribution relative to the prior art?"
So does this proposed test help move the ball forward? There was no shortage of ideas on how the Supreme Court should define patentable processes in Bilski (see PatentlyO's summaries of briefs here and here), and articles of this form ("the current test is unworkable, and here's my better test") often fail, but this piece seems to satisfy my basic patent criteria for a valuable article. I haven't seen this idea that § 101 should be about claim scope, and I thought the examples of how this test would work in practice were very useful. Is their test really workable? Part of the appeal of the formalistic machine-or-transformation test is its relative ease of application, but I think this claim-scope test does a decent job of following Peter Lee's suggestion of making patent standards "enabled," such as by providing examples. And I think this piece could do more to emphasize the potential efficiency gains of the claim-scope approach, as it would help reduce the dynamic inefficiencies caused by patents.
Monday, February 21, 2011
John Golden: Innovation Dynamics
Can fluid mechanics aid our understanding of how patents promote (or impede) innovation? This is the premise of a recent article, Innovation Dynamics, Patents, and Dynamic-Elasticity Tests for the Promotion of Progress (Harv. J.L. & Tech. 2010). Its author, John Golden (UT Austin Law), is another law professor with a physics Ph.D.* (supervised by Bert Halperin at Harvard), and he uses this background to write an article with more equations and figures than I have ever seen in a law journal. The analogy to fluid dynamics is somewhat strained, and some analytical details are unclear, but I admire the attempt to develop a more rigorous model of innovation.
The paper looks at the acceleration of technological progress (the rate at which the speed of progress changes with time), with the basic (and plausible) model given in Eq. 1. Progress is sped by terms that do not depend on the amount of existing technical knowledge (like the existence of grants) and by terms that do (innovation begets more innovation). And progress is slowed by "friction" and "drag" terms (as innovation goes faster, more hurdles will slow it down, perhaps including other patents). The clearest payoff from this model is the observation that "even under a relatively simple model for innovation dynamics, there is no single 'natural' trajectory for innovative progress. Thus, it appears wrong to assume that technological progress naturally proceeds exponentially, linearly, or according to some other simple general form with time." For example, Section IV.B looks at data on the growth of patent counts (which is a problematic measure of innovation, but probably the best available for these purposes). From the log-log plot in Figure 13, Golden concludes that the number of utility patents is "better modeled as having power-law, rather than exponential, time-dependence." While calling this a nice power law would have been a stretch, it is certainly true that it is closer to a power law than an exponential.
What are the implications of this model for patent policy? Golden notes that the relevant measure for patent policy is the ratio of the change between different coefficients in the model, which he calls "dynamic-elasticity" or "double-ratio" tests. He describes the impact of these tests on different industries:
*The other physics Ph.D. law professors I know of are Oskar Liivak (Cornell), David Friedman (Santa Clara), and Katherine Strandburg (NYU). Am I missing anyone?
The paper looks at the acceleration of technological progress (the rate at which the speed of progress changes with time), with the basic (and plausible) model given in Eq. 1. Progress is sped by terms that do not depend on the amount of existing technical knowledge (like the existence of grants) and by terms that do (innovation begets more innovation). And progress is slowed by "friction" and "drag" terms (as innovation goes faster, more hurdles will slow it down, perhaps including other patents). The clearest payoff from this model is the observation that "even under a relatively simple model for innovation dynamics, there is no single 'natural' trajectory for innovative progress. Thus, it appears wrong to assume that technological progress naturally proceeds exponentially, linearly, or according to some other simple general form with time." For example, Section IV.B looks at data on the growth of patent counts (which is a problematic measure of innovation, but probably the best available for these purposes). From the log-log plot in Figure 13, Golden concludes that the number of utility patents is "better modeled as having power-law, rather than exponential, time-dependence." While calling this a nice power law would have been a stretch, it is certainly true that it is closer to a power law than an exponential.
What are the implications of this model for patent policy? Golden notes that the relevant measure for patent policy is the ratio of the change between different coefficients in the model, which he calls "dynamic-elasticity" or "double-ratio" tests. He describes the impact of these tests on different industries:
[I]n industries such as the pharmaceutical industry, where regulation and safety concerns help generate large innovative drag that exists independently of the details of patent law, comparatively stronger or broader patent protection might speed progress even if such increased protection imposes substantial costs on follow-on innovators. . . . On the other hand, if a technology (such as software) would be characterized, in the absence of patents, by both strong incentives for innovation and relatively low costs for follow-on innovation, the analysis might be reversed.More generally, he also explains why double-ratio tests help justify both the "abstract ideas" and "natural phenomena" exclusions from patentable subject matter. Some patent theorists might respond, "So what? We knew all that." But even confirming settled patent law understandings in a new way seems valuable, and I can imagine follow-up papers that build on this idea. Besides, I just think it is fun to see a law review article with derivatives (the non-finance kind), exponentials, and power laws. Not many Bluebook rules for those!
*The other physics Ph.D. law professors I know of are Oskar Liivak (Cornell), David Friedman (Santa Clara), and Katherine Strandburg (NYU). Am I missing anyone?
Thursday, February 17, 2011
Fighting Over Green Patents: How To Appease China & India Without Hurting U.S. Business
Tomorrow at the Yale Climate & Energy Congress Symposium, I will be presenting on a Comment I published in the Yale Law Journal last May: Addressing the Green Patent Global Deadlock Through Bayh-Dole Reform. (I also wrote a nontechnical version of this argument for Slate: License To Green: Can We Have Clean Energy and Patents, Too?) Rather than summarizing the whole argument here, I will just point out the three pieces that I think are novel contributions:
- One way to address global concerns about green patents is by changing the way federally funded green technologies are patented and licensed. A number of articles had recognized that conflicts over IP are contributing to the deadlock in climate change negotiations, but none made the distinction between the patent incentives needed for public-sector and private-sector innovation. I examine the justifications for Bayh-Dole patents as applied to green technologies and conclude that in light of available evidence, patents will impede dissemination of most green technologies.
- Market segmentation should be used for green technologies. The strategy of allowing strong patent protection in rich countries (to recoup development costs) while allowing broad access in poor countries has been made by scholars, advocates, and universities in the medical context (see, e.g., this policy statement from AUTM and many universities), but I'm not aware of anyone who had extended this argument to green engineering technologies. And market segmentation is even more compelling for green technologies because patent protection is less important for them than it is for pharmaceuticals.
- Funding agencies should use their ex ante control over who receives federal grants to influence licensing policies. Several scholars, particularly Professor Arti Rai, have looked at the impact that funding agencies can have on Bayh-Dole reform, but their focus has been on the ex post influence of these agencies on technologies that have already been developed. I argue that agencies could influence university licensing more effectively through their ability to determine who receives federal grants in the first place. For example, the National Science Foundation's "broader impacts" criterion could be used to encompass access-promoting licensing policies.
I welcome feedback, either in the comments or by email. And for readers in New Haven, feel free to stop by the symposium!
Wednesday, February 16, 2011
Why the Best Law Review Articles Deserve Patents
As new articles editors begin screening the current wave of law review submissions, I have been thinking about when I was in their position a year ago, reading articles during every waking hour and trying to identify the best legal scholarship. My vision of legal scholarship was shaped as a 1L by reading Academic Legal Writing (I have the 3rd edition) by Eugene Volokh of the Volokh Conspiracy (highly recommended for new law students). Volokh argues that a good article should make a claim that is useful, novel, and nonobvious—paralleling §§ 101, 102, and 103 of the Patent Act. He credits this idea to Stephen Carter's 1991 Yale Law Journal essay, Academic Tenure and "White Male" Standards: Some Lessons from the Patent Law (pay access only, from JSTOR or Hein). Carter writes:
To the above "patent requirements" for articles, I would add the disclosure requirements of § 112. The article should "contain a written description" of the idea in "clear, concise, and exact terms." Clear: avoid jargon! Concise: keep it short! Some law professors think "word limits are for suckers," but we rejected otherwise outstanding articles for being way too long, and the long articles we took were accepted in spite of, not because of, their length. Articles should also "enable any person skilled in the art" to follow and use the idea, which raises the question of who the PHOSITA is for law review articles. For a generalist journal like the Yale Law Journal, I think a 2L who has taken a course in the relevant area should be able to at least follow the whole argument, even if faculty consults are needed to help fully appreciate it.
Finally, § 112 directs patentees to "conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention." Academic authors help their readers (particularly non-specialist 2L articles editors) by being similarly honest about the scope of their claims. What is really new about the piece? What is the "invention," and what is "prior art"? Too many articles falsely claim to revolutionize a field, and a few articles offer a truly novel insight without claiming it as their own.
Of course, as Carter pointed out, very few articles deserve a "patent." Many valuable articles fall short on one (or more) of the above requirements. But a few of the articles I read last year particularly stood out, such as The Inducement Standard of Patentability by Abramowicz and Duffy, or, in the non-patent world, Intersystemic Statutory Interpretation by Abbe Gluck and The One and Only Substantive Due Process Clause by Ryan Williams. As a reader—and especially as an articles editor looking for pieces to publish—it is thrilling to come across new "inventions" like these.
[M]y claim is not that every article must, in effect, deserve a patent if it is to be adjudged a good piece of work; my claim, rather, is that the works of scholarship that can meet the patent test are better—add more to human knowledge—than the works that cannot. So if one wants to argue the relative merits of different scholarly works, the patent law tests of novelty and nonobviousness provide useful and workable starting points.Volokh goes beyond Carter by adding the § 101 utility requirement: "It helps if the article is useful—if at least some readers can come away from it with something that they'll find professionally valuable." His examples focus on utility for legal practitioners, which makes me wonder if he would agree with Judge Posner's diatribe against too many "law and ..." articles being published by law reviews. I would agree that if an article is so esoteric or specialized that it would only be useful to a few people, then it doesn't belong in a generalist law review. But I think the top law journals should publish the top legal scholarship regardless of field, even if it is only useful for other academics, so I would argue for a broader concept of utility—the "some readers" who find something professionally valuable could be legal philosophers or economists or scholars of "law and literature."
To the above "patent requirements" for articles, I would add the disclosure requirements of § 112. The article should "contain a written description" of the idea in "clear, concise, and exact terms." Clear: avoid jargon! Concise: keep it short! Some law professors think "word limits are for suckers," but we rejected otherwise outstanding articles for being way too long, and the long articles we took were accepted in spite of, not because of, their length. Articles should also "enable any person skilled in the art" to follow and use the idea, which raises the question of who the PHOSITA is for law review articles. For a generalist journal like the Yale Law Journal, I think a 2L who has taken a course in the relevant area should be able to at least follow the whole argument, even if faculty consults are needed to help fully appreciate it.
Finally, § 112 directs patentees to "conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention." Academic authors help their readers (particularly non-specialist 2L articles editors) by being similarly honest about the scope of their claims. What is really new about the piece? What is the "invention," and what is "prior art"? Too many articles falsely claim to revolutionize a field, and a few articles offer a truly novel insight without claiming it as their own.
Of course, as Carter pointed out, very few articles deserve a "patent." Many valuable articles fall short on one (or more) of the above requirements. But a few of the articles I read last year particularly stood out, such as The Inducement Standard of Patentability by Abramowicz and Duffy, or, in the non-patent world, Intersystemic Statutory Interpretation by Abbe Gluck and The One and Only Substantive Due Process Clause by Ryan Williams. As a reader—and especially as an articles editor looking for pieces to publish—it is thrilling to come across new "inventions" like these.
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