Friday, August 10, 2007

Next Stop - Chip Away the Presumption of Validity?

When the FTC released their report in October 2003, titled "To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy" (link), a big commotion was made over the proposition that the "clear and convincing" standard was not justified:

[A]s many have noted, the PTO is underfunded, and PTO patent examiners all too often do not have sufficient time to evaluate patent applications fully. These circumstances suggest that an overly strong presumption of a patent’s validity is inappropriate. Rather, courts should require only a “preponderance of the evidence” to rebut the presumption of validity.
At the time, many practitioners scoffed at this proposal, and dismissed it as an academic pipe-dream. Since then, this concept has been gaining ground, and has found at least a modicum of traction at the Supreme Court:

"Assuming that we sweep [the TSM test] aside and say it's been incorrect, what happens to the presumption of validity of, of patents which the courts have been, have been traditionally applying? Does it make any sense to presume that patents are valid which have been issued under an erroneous test for the last 20 years?"

- Justice Scalia, KSR v. Teleflex, oral arguments (p.23)

"We need not reach the question whether the failure to disclose [prior art] during the prosecution of [the patent in suit] voids the presumption of validity given to issued patents, for claim 4 is obvious despite the presumption. We nevertheless think it appropriate to note that the rationale underlying the presumption - that the PTO, in its expertise, has approved the claim - seems much diminished here."

- KSR v. Teleflex, slip. op. (p. 22-23)
Now, Doug Lichtman and Mark Lemley have released a draft paper titled "Rethinking Patent Law's Presumption of Validity" where they advocate the abolition of the "clear and convincing" standard for all patents. Instead, they propose the introduction of a 2-tiered patent system, where only the applicants that apply for "gold-plated" patents would get this presumption.

The notion of "gold plated" patents has been previously proposed (Lichtman et al., "What to do About Bad Patents?"), and can be summed up this way:
[B]ecause legitimate inventors need as much certainty as the law can give them, we would give applicants the option of earning a presumption of validity by paying for a thorough examination of their inventions. Put differently, applicants should be allowed to “gold-plate” their patents by paying for the kind of searching review that would merit a presumption of validity. An applicant who chooses not to pay could still get a patent. That patent, however, would be subject to serious - maybe even de novo - review in the event of litigation. Most likely, applicants would pay for serious review with respect to their most important patents but conserve resources on their more speculative entries. That would allow the Patent Office to focus its resources, thus benefiting from the signal given by the applicant’s own self-interested choice.
The draft paper explores these options and provides some interesting responses to many of the criticisms of this regime.

Notably (perhaps disturbingly?) the paper notes that a first step towards disclaiming the presumption begins in the USPTO, and calls for the Office to actively engage in dulling the presumption:
First, the PTO should disclaim the strong presumption currently recognized in favor of its work. The presumption is for the most part a judicially created rule of deference under which courts acknowledge what they understand to be the PTO’s desire to have its earlier evaluation respected. The PTO should speak up and disavow that desire. Specifically, the PTO should instruct patent examiners to do exactly what they do today but also to include, upon patent issuance, boilerplate language welcoming the courts to revisit the question of patent validity in the event an issued patent ends up in litigation. The PTO obviously cannot, and in any event should not, reject the statutory baseline; that is, challengers should still have the burden of bringing forward evidence that the patent was wrongly issued. However, the PTO should politely decline the heavier presumption that courts today recognize as a matter of course. To the extent that the PTO has valuable arguments and insights to contribute, it can do that by influencing how the issued patent reads and what documents are in the file. The PTO need not wield its influence through the use of a heavy presumption

Read "Rethinking Patent Law's Presumption of Validity" (link)

See "Want to Do About Bad Patents?" (link)

3 Comentários:

Anonymous said...

It is notoriously difficult to find out if a claim embraces something obvious, until you put two opposed parties up against each other, and cross-examine their respective technical experts in front of a single fact-finding judge who can follow the debate. That much you can observe in the slew of recent cases in which the Technical Boards of Appeal of the EPO (civil law: no x-examn) have been bamboozled by canny patent owners, until the English High Court (common law) gets to the heart of the matter and revokes the stupid European patent. But what to do in USA, where you don't use to find the facts a judge who was 20 years a patents QC before he turned his hand to judging patent actions? In England, 95% of cases settle before trial, ie within 12 months. Only a few of the trialled decisions get appealed. Mostly, there's no point. Thus all but a very few actions are dead within about a year. The Loser Pays principle weeds out the no hoper Plaintiffs. Contingency fees gives David good chances against Goliath. England, with common law fact-finding under the EPC, could usefully do all the world's patent litigation single-handed. Meanwhile, the chances are zero, of any other country lifting the successful English recipe, but it doesn't stop US academics casting wistful eyes at England.

Anonymous said...

I thought the trend was to move issues of patentability back to the PTO, rather than to the Courts, many of which have little experience with patents.

Sean said...

"The presumption is for the most part a judicially created rule of deference under which courts acknowledge what they understand to be the PTO�s desire to have its earlier evaluation respected."

Actually, the presumption is statutory. The "clear and convincing" standard appears to be judicially imposed, however.


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