Former USPTO head Kappos offers devastating critique of overly broad patent reform

In a speech in Washington DC on Friday, former USPTO Director David Kappos pulled no punches as he critiqued the case for the kind of broad-based reform of the patent system proposed by the Goodlatte Innovation Act. Speaking at the LeadershIP conference, Kappos referred constantly to detailed data to argue that only targeted reform was needed to reduce needless litigation in a US IP system which, he insisted, is in recovery.

"Facts and data complicate the Washington narrative," Kappos stated. "In D.C., people have a set of a priori arguments they wish to make and they mold information to fit the arguments. Facts and data deflate rhetoric and emotion; they contradict carefully selected anecdotes; and, worst of all, facts and data can give us pause—force us to consider that the actions we are advocating as "decisive" and "bold" may actually be something else: reckless and destructive." And looking at the facts and data, he continued, one thing is clear: "[T]here is no patent troll driven crisis facing our nation that needs to be corrected with sweeping new legislation."

 Although he did not mention the Innovation Act by name, there was no doubt that the speech was intended as a detailed deconstruction of many of the key provisions of the bill currently being considered in the House of Representatives. In contrast, he did reference the recently introduced STRONG Patent Act which he credited with having some good ideas. You can see a full transcript of the speech here.

Many parts of Kappos’s arguments will be familiar to anyone who has been following the reform debate but it was the force of his rhetoric which must surely make all those involved in the legislative process take note. Although it seems inevitable that parts of the pro-reform camp will question his points, it should be remembered that Kappos was assistant general counsel for IP at IBM before heading the USPTO between 2009 and 2013 and is now a partner at Cravath Swaine & Moore, a law firm that counts a broad swath of corporate America among its client base. He is also a senior adviser to the Partnership for American Innovation, a representative body which includes Apple, Ford, General Electric, Microsoft and Pfizer among its members.  

In other words, it is very hard to cast Kappos as a myopic member of the patent community valiantly banging the drum for a position that is grounded on questionable facts or made from a biased market position. During his speech it was easy to see why, towards the end of his time at the USPTO, many saw him as isolated in a government that is perceived to be too closely associated with part of the tech community and which has firmly pinned its colours to broad reform.

It should be pointed out that with this speech Kappos has not suddenly become a patent Pollyanna, ignoring the real problems in the system. While he questioned large parts of the reform agenda, he admitted that some legislation was called for to curb aggressive demand letters, to address problems in pleading, discovery and section 101 of the US patent statute and to put an end to USPTO fee diversion. He also proposed including a few measures to address problems with the post-issuance procedures at the Patent Trial and Appeal Board including the recent targeting of pharmaceutical patents by Kyle Bass and Erich Spangenberg, in a package which he described as “smart reform”.

“Our patent system is like a retirement savings plan,” Kappos said in conclusion. “Historically, we have agreed as a nation to pay a little more now for today’s innovations in exchange for having more great innovations available in the future. As we wrestle with competing short-term and long-term objectives, it is crucial that the arguments rest soundly on facts and data, and are not hastily propped up by misleading anecdotes and divisive rhetoric.”

While industry groups, lobbyists and legislators continue to debate the scope of reform, Kappos’s words should be ringing in their ears.