Thursday, December 01, 2005

Cacaphony missing some references?

In an article Patent Reform Cacophy in IEEE Spectrum, Steven J. Frank discusses patent law reform without once mentioning the fee diversion issue.

He does mention "bad" patents (without framing this as a patent quality problem) and talks about the proposal of post-grant oppositions contained in H.R. 2795:

To address this problem, the Patent Reform Act proposes a "post-grant review" system. Under this process, after the patent office and the applicant have come to an agreement, but before the patent is finally issued [?], the public receives an opportunity to weigh in. Up until relatively recently, the post-grant review idea has drawn surprisingly little controversy [?], given the potential impact on innovation. But in fact, it's a proposal that illustrates how efforts to improve the system may, in the end, merely contribute another layer of cost, delay, and uncertainty.

Of the issue of time expended -->

The Bostonians weren't buying. Perhaps the most insightful objection to the proposed reforms came from Robert Millman, chief intellectual property counsel of Alnylam Pharmaceuticals Inc., in Cambridge, Mass., who warned that the real problem is the length of time, or pendency, it takes the patent office to process applications. "Pendency is currently what's killing technology," said Millman. "Anything that increases pendency is really detrimental to the ability to secure capital."

Joseph Hosteny had warned of the effect of added time and burden on patent applicants of an opposition procedure in several articles in Intellectual Property Today in the year 2004. Of Frank's assertion of "little controversy," one of Hosteny's articles drew a written response from AIPLA. Ironically, Frank's article is a microcosm of what some perceive as a problem at the PTO: the failure to identify relevant prior art.

Specifically, as to the assertion of "little controversy", recall the letter of Michael K. Kirk, Executive Director, AIPLA, which appeared at page 6 in the December 2004 issue of Intellectual Property Today:

I read with interest an article by Joseph Hosteny entitled "Dear
AIPLA: Keep Our Message Consistent" in the October, 2004 issue of Intellectual Property Today. In this article, Mr. Hosteny suggests that the advocacy efforts of the American Intellectual Property Law Association (AIPLA) regarding post-grant opposition to U.S. patents are made at the expense of AIPLA's efforts to end diversion of fees paid to the United States Patent and Trademark Office (USPTO).
I would like to state for the record that finding a means for ending
the practice of diversion continues to be the top legislative priority of this Association.
We believe that a carefully crafted post-grant opposition system
such as AIPLA presented in its statement at the June hearing can be a useful and cost-effective alternative to litigation as a means of challenging patent validity.
We certainly agree with Mr. Hosteny that a post-grant review system
such as AIPLA and others propose will not work unless the PTO is properly funded.

Mr. Hosteny's article in the Oct. 2004 issue of Intellectual Property Today had been blunt:

The AIPLA's proposed opposition smacks of the Star-Chamber. In it,
the initiator of the proposed post-grant proceeding can keep its identity secret. Nothing like anonymous informants. (...) Even the secret party that initiated the post-grant proceeding gets
another bite at the apple: if the patentee wins the post-grant opposition, the patentee will face additional issues in a district court suit where the initiator-defendant (assuming the patentee ever discovered its identity) can raise -- you guessed it -- inequitable conduct, the refuge of the defendant with no real defense, except a smear campaign. (...) The upshot is that there is little, if
any, finality in an opposition for a patent owner.
Getting off the message with post-grant oppositions is hurting us all.

In an article in the March 2005 issue of Intellectual Property Today [What Now? Post-Grant Oppositions and the Proposed Budget], Hosteny commented on Kirk's letter:

The AIPLA responded to one of my columns with a letter to the editor
of this publication. The letter noted the AIPLA's efforts to end fee
diversion. All well and good, so far. (...)
It should come as no surprise that, as far as I am concerned, we
shouldn't have any post-grant proceeding. But the one being proposed now by the AIPLA is even poorer than a 1996 proposal from the AIPLA's Committee on Oppositions. The most recent AIPLA proposal has been modified from the 1996 proposal; the modifications favor an opposer, and are disadvantageous to the patent owner.
For example, in the 1996 proposal, a patent owner in an opposition
would have been expressly allowed to file broadening amendments during an opposition. Now, however, the AIPLA proposes that "[n]o amendment enlarging the scope of the claims of the patent shall be permitted in the opposition." That seems to be to be terribly unfair to a patent owner. (...)
Improving the quality of PTO examiners and examinations should be the only issues addressed by Congress. And, if the PTO does get better funding under this budget, or if fee diversion ends, then we
need to use those resources to improve what the Patent Office does now.


Additionally, both Cecil Quillen and myself opposed oppositions at the Stevenson, WA meeting on April 22, 2005 (both verbally and in our written texts), and I opposed them in my article in the New Jersey Law Journal on July 18, 2005.

Of a comparison between re-examinations in the US and oppositions in Europe, Frank wrote:

The reasons for the difference aren't immediately obvious. One factor discouraging reexamination has been the way it historically favored the patent owner. While any member of the public can initiate the process, that person would be sidelined as soon as the patent office agreed to the review and could only watch helplessly as the patent owner and the examiner?often the same one who granted the patent in the first place?worked through the reexamination together.

Separately, the LA Times had an article Patent Sanity is Pending about problems with the patent system.

The last paragraph discussed RIM and NTP:

Besides, the near-automatic granting of injunctions can lead to the absurd result of a company being forced to pay royalties to license patents later found to be invalid. That's the potential result in the battle between Research in Motion, the company behind the popular BlackBerry wireless e-mail devices, and patent holder NTP Inc. A federal judge may reinstate the injunction he granted against RIM for violating NTP's patents even though the Patent Office, which is reexamining the patents, has issued preliminary findings that all five are invalid.

Slashdot is running a thread. One poster did mention the baldness patent (US 4,022,227) and another the IBM restroom patent. Snore...

***to IEEE on 13 Dec 2005-->

In the article Patent Reform Cacophony, Mr. Frank mentions defects in the proposed post-grant opposition procedure of H.R. 2795, but does not mention the larger problem giving rise to the perceived quality problem at the Patent Office, the diversion of fees from the Patent Office. Of his remarks on the proposed opposition, he incorrectly states that the proposed opposition procedure occurs "before the patent is finally issued." H.R. 2795 contains no provision for suspension of patent issuance, and Section 321(a) states "A person may request that the grant or reissue of a patent be reconsidered by the Office by filing an opposition seeking to invalidate one or more claims in the patent." That oppositions are against issued patents in H.R. 2795 is seen in the second of the two windows for filing an opposition: within "6 months after receiving notice from the patent holder alleging infringement, except that, if the patent owner consents in writing, an opposition request may be filed at any time during the period of enforceability of the patent." Although Mr. Frank states "Up until relatively recently, the post-grant review idea has drawn surprisingly little controversy," one notes that lawyer Joseph Hosteny repeatedly criticized the concept of oppositions in articles published in Intellectual Property Today in 2004. One of these, published in October 2004, referred to the opposition proposal of the AIPLA in the following way: "The AIPLA's proposed opposition smacks of the Star-Chamber," and provoked a written response from the AIPLA in December 2004, with Hosteny in turn responding with another article published in March 2005. In the month following the introduction of H.R. 2795, I published an article in the New Jersey Law Journal criticizing the proposed opposition procedure, and noting the irony that while one Boston area professor, who lamented the exalted role of lawyers in the patent process, advocated oppositions (which would increase the role of lawyers in the patent process), actual patent lawyers, including Joseph Hosteny, Cecil Quillen, and myself, opposed oppositions. At this point in time, it appears that H.R. 2795 is going nowhere, largely because of the divergence between powerful interests over the proposed provision on injunctions. However, one notes the lack of movement on the most important issue, diversion of fees from the Patent Office, which diversion starves the Patent Office of resources necessary to perform its core function, examining patents. Discussion of mechanisms for product inspection, such as opposition, are off-point when the problem is with production, the examination itself.

Nothing happened to the "letter to the editor" so I posted a comment at on Dec. 14, 2005.


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