Thursday, July 01, 2010

Leahy Post-Bilski Comments and Patent Reform

As the summer recess approaches, it is all but certain that Congress will (again) postpone efforts to enact patent reform.  Since the manager's amendment (S. 515) was forwarded to the Senate in April, very little has been done in advancing the legislation.  Senate Judiciary Committee Chairman Patrick Leahy is understandably frustrated over the lack of any progress, stating in a recent interview "I don't know why this hasn't gotten floor time . . . This has nothing to do with ideology. We need an updated patent system to create and protect jobs, and it wouldn't add a penny to the deficit."

For whatever reason, Leahy apparently believes that the manager's amendment is a "done deal" in the Senate, and will be passed quickly, once the Senate has a chance to vote on it:

Leahy noted that the bill has three Republican co-signers, along with three Democrats. As a result, he predicted that once it gets floor time, the bill could get passed in just three days -- a blink of an eye compared to the marathon sessions it took to get stimulus, health care and financial reform passed.
What is even more interesting is that Leahy has openly come out against business method patents after Bilski, and appears to be under the impression that patent reform legislation can "fix" what Bilski could not.  From Leahy's website:
In Bilski v. Kappos, the Court unanimously affirmed the judgment of the Federal Circuit that the application for a patent on a business method should be rejected.  The Court’s opinion, joined by only five of the Justices, however, needlessly left the door open for business method patents to issue in the future, and I am concerned that it will lead to more unnecessary litigation.

Since the debate over comprehensive patent reform began many years ago, the Supreme Court has demonstrated an increased interest in patent law cases.  The Court’s decisions have moved in the direction of improving patent quality.  While today’s decision will take time to analyze and may not have advanced the law and created the stability and certainty that it could have, it appears to continue this trend, which is consistent with the goal of patent reform legislation pending in Congress.  The courts, however, are constrained by the text of our outdated statutes, and it is time for Congress to act.”
In the meantime, scholars, attorneys and businesspeople have continued to publish critiques of pending patent reform legislation, pointing out that many aspects of the Patent Reform Act have unintended, and potentially adverse, consequences.  Most recently, Medical Innovation & Business ran a special edition on patents and patent reform, which included articles such as:

Patent Reform: Effects On Medical Innovation Businesses
Kaswan, Renee; Boundy, David; Katznelson, Ron

Alternatives to Legislative Patent Reform
Conversations with Two Chief Judges
Dowd, Matthew J.

9 Comentários:

Patentology (Mark Summerfield) said...

In their book The Patent Crisis and How the Courts Can Solve It (2009), Dan Burk and Mark Lemley make a fairly convincing case that all attempts at patent reform are doomed to failure.

While the debate over reform has focused largely on the diametrically-opposed interests of the software industry and big pharma, Burk and Lemley take a more nuanced approach. They identify five different models for the operation and effectiveness of the patent system, and argue that these models apply to differing degrees in different industries.

They also look (pp 93-100) at some past examples of industry-specific tinkering with the patents statute, and point out their failings. (In this, they do not address the success of Bayh-Dole, nor do they fairly consider the benefits of Hatch-Waxman, but largely their analysis seems valid.)

The nice thing about Burk and Lemley's approach is that it largely explains, and predicts, all of the roadblocks to patent reform, in terms of rent-seeking by special-interest lobby groups.

I found Burk and Lemley persuasive, I think the issues they identify are real, and as a practical matter there cannot be wide support for patent reform legislation so long as there are powerful, and legitimate, industry objections. And since different industries want (and need) different things from the patent system, there will always be legitimate objections to any specific reform proposal.

More contentiously, Burk and Lemley argue that the courts have the power and flexibility to tailor application of the patent statute to different industries, but that is probably a story for another time...

Incidentally, I was led to track down this book by a review on JOTWELL, here.

Anonymous said...

Did you count the number of times Lemley was quoted by Stevens?

Lemley's name has lost all credibility and is too entrenched with anti-patent rhetoric. He cannot be deemed a credible, impartial source.

Patentology (Mark Summerfield) said...

Thank you, "Anonymous", for your ad hominem attack on my comment.

I took a look. Justice Stevens cites Burk and Lemley four times, in 59 footnotes, plus one additional citation within the text on page 41, over a 47 page judgement.

He uses these citations to support the largely self-evident proposations that: the effectiveness of the patent system in promoting innovation is somewhat subject-matter dependent; many have expressed doubts about whether patents are necessary to encourage the development of innovative business processes; that companies employing more efficient business methods are rewarded by the competitive marketplace, even without patents; innovative companies can maintain a market-leading position without patent protection for their business processes through other strategies, such as branding; and business processes are generally cheaper to develop and deploy than more "traditional" technological innovations.

None of these assertions are anti-patent per se. I do not read Burk and Lemley generally as being "anti-patent." Nor does Justice Stevens appear to be "anti-patent."

I myself am a patent attorney who does a lot of work for clients in the fields of software and e-commerce, and I am not offended or unduly challenged by any of these propositions. I am interested in the reasoning and the evidence, not the purported political views of the authors.

As a non-American, I also find it fascinating that the US Supreme Court is considered such a highly-politicised institution that being cited, in a concurring judgement, by a senior (indeed retiring) justice of the Court can be detrimental to one's credibility and impartiality.

Perhaps (and this is just a suggestion, of course) you need to try to read more dispassionately?

Anonymous said...

"Perhaps (and this is just a suggestion, of course) you need to try to read more dispassionately?"

Project much, Mark? I saw nothing wrong with anonymous' 34-word informative comment, especially nothing that might warrant a passionate 277-word response from you. (BTW, his comment wasn't even an ad-hominem attack on your comment or on Lemley, in case your Latin is a tad rusty.)

From Wikipedia:

"The argumentum ad hominem is not always fallacious, for in some instances questions of personal conduct, character, motives, etc., are legitimate and relevant to the issue."

Gena777 said...

Thanks for these links; the articles look great. As far as Leahy's comments, I and many others in the world of patent law share his frustration at Congress's seeming inability to enact significant patent reform. However, Leahy's apparent hostility toward business method patents makes me skeptical that his bill constitutes the reform that we need. Contrary to Leahy's assertion, it does have something to do with ideology; though most of us want change, it comes down to a question of whose version of it we really want.

Anonymous said...

"We need an updated patent system to create and protect jobs, and it wouldn't add a penny to the deficit."

The problem is Leahy's changes would do the reverse. It will kill the patent system for innovative small businesses and with them the jobs they create.

Small businesses create virtually all net new jobs in America; from 1996 to 2006 firms with fewer than 20 employees created 77.2% of all net new jobs, firms with fewer than 500 employees created 92.7% of all net new jobs while firms with 500 or more employees created a paltry 7.4% of new jobs.

Patent reform is a fraud on America. It is patently un-American.
Please see for a different/opposing view on patent reform.

Anonymous said...

too much info!!

Naruto shippuden said...

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