USPTO report shows growing support for changes to 101, but also reflects shift in patent reform debate 27 Jul 17
On Tuesday the USPTO published its report on views and recommendations from the public on patent eligible subject matter. The 60-page tome, which goes through the litany of recent changes to section 101 of the US patent statute and details contributions made at the series of public consultations that the agency has carried out over the last year, has much that would be familiar to any keen patent market watcher.
The report is not an advocacy document and is therefore not designed to influence the patent reform debate in one direction or another. But it does conclude that a majority of those who took part in the consultation process favour legislative change to 101. “A call for legislation was particularly strong from the life sciences industry but also had many supporters from computer-related industries,” the PTO wrote. “According to these participants, the [Supreme] Court’s precedent is having such a harmful impact on innovation and business development that a legislative solution is critical.”
More than anything the report reflects the growing level of support for change to what is perhaps the most fundamental part of the patent statute. The three major IP law associations — the Intellectual Property Owners Association (IPO), the American Intellectual Property Lawyers Association (AIPLA) and the IP section of the American Bar Association (ABA) — have all put forward proposed 101 revisions, so legislators certainly have a lot to work with. But what are the chances of something coming together in a bill? As ever with Washington politics, it’s complicated. There is, of course, the fact that Congress has plenty on its mind right now in the form of healthcare and then a likely attempt at tax reform. But there’s also a very different patent landscape to contend with as different constituencies shift their priorities.
Here’s how former Chief Judge of the Federal Circuit Paul Michel sees the lie of the land: “All three patent association proposals signal useful contributions but none can gather enough support. Even if they are somehow merged, building momentum will prove challenging. My guess is that the ultimately passable text is yet to be written. It is clear to me, however, that there is no higher priority for rescuing the faltering American patent system and forestalling further decline.”
In the meantime Michel suggests that the PTO itself could be playing a more active role. “It could improve matters by revising its guidance, supervision, and training for examiners,” he says. “At present, most examiners are over-extending Alice and needlessly so, adding undue delay and excess costs to inventors with proper applications. The Director needs to assert stronger leadership here."
The urgent need for change that Michel highlights is undoubtedly being felt most deeply in the life sciences field. According to the PTO’s report, the Supreme Court’s decision not to grant cert in Sequenom v Ariosa Diagnostics, a 101 case where a medical diagnostic technique for detecting genetic conditions in a foetus from a mother’s blood was ruled to be unpatentable, has convinced many in the sector that change is only possible through legislation rather than the courts.
Some observers have picked up on this to suggest the most likely path to elgibility reform. “If there is a case for narrowing 101, it is in medical diagnostics, and that is also where the opposition is likely to be weakest, so that is where I think reformers should focus their efforts,” comments Stanford law professor Mark Lemley.
So where does this leave tech? Beyond seeking more changes on venue, some parts of the community that were once pushing hardest for reform and threw their weight behind bills like the Innovation Act, are now urging caution when it comes to tinkering with the patent system. That much was clear at a recent hearing of the courts, IP and the Internet subcommittee — part of the House of Representatives Judiciary Committee — when Julie Samuels of tech advocacy group Engine claimed that recent changes to 101 and the rise of inter partes reviews were helping to improve patent quality and suggested that there was no need for legislative changes.
One key issue that continues to motivate many tech companies is venue - even after the Supreme Court re-wrote the rules on just where patent owners can bring cases in TC Heartland. The fact that defendants can still be sued where they have “a regular and established place of business” leaves a significant grey area and recent rules proposed by Judge Gilstrap in East Texas to add some clarity have been sharply criticised.
There’s also the politics of this to consider. Arguably no other members of Congress have pushed as hard for broad-based reform over the last four years as Bob Goodlatte and Darrell Issa, but both may now face the prospect of losing their central roles in the patent debate. Goodlatte’s term as chair of the House Judiciary Committee is due to finish at the end of this Congress, so has less than two years to run; while Issa, who faced an extremely competitive race in the last election in his California district, is likely to see a strong challenge in 2018. By the time patent reform again moves towards the top of the Congressional to-do list the personalities and main issues could look very different.
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