DARK
DAYS
AHEAD
The Patent
Pendulum
By Gene Quinn
An Ambitious Agenda
Phase 1
A Brief History of the Problem
Phase 2
Recent SCOTUS Decisions
Phase 3
CAFC on Obviousness
Phase 4
The End: Q & A
Phase 1
A Brief History of the Problem
For a very long time there has been a
believe that innovation simply happens.
Some innovations, even if new/useful,
don’t deserve to be patented.
Whenever a patent is granted something
has been taken from the public domain.
This view traces all the way back to
SCOTUS flash of creative genius test.
Today the problem is ignorance,
misinformation and propaganda.
Flash of Creative Genius
Cuno Engineering Corp. v. Automatic Devices Corp., 314 U.S. 84 (1941)
Since Hotchkiss v. Greenwood, decided in
1851, it has been recognized that, if an
improvement is to obtain the privileged
position of a patent, more ingenuity must be
involved than the work of a mechanic skilled
in the art... That is to say, the new device,
however useful it may be, must reveal the
flash of creative genius, not merely the skill
of the calling. If it fails, it has not established
its right to a private grant on the public
domain.
Anti-patent Ignorance
Twitter founded in 3/2006
Filed patent application to cover “tweeting” in 7/2008
As of 9/30/2013 has 9 U.S. patents and 95 patent applications
Twitter went public in 11/2013
Acquired 900 patents from IBM in 12/2013
SEC filings: constantly explain patents are “important”
and other companies have MANY more patents, which
presents significant risk moving forward.
Modern Tech Industry Doesn’t
Exist Without Patents
Software has been patented since 1965.
The tech industry is VERY different today than before software
patents, which should be self-evident. It is also VERY different
compared to when software patents started to first become
more commonplace in the early 1980s.
Apple, Facebook, Twitter, Google, Priceline and SO many other
companies have been built on software patents.
Do we only want trivial? Plugins that don’t work, or software
created and then not updated, or Apps that do trivial things
may not need patents, but they are never patented anyway.
Software Programming
Taken from Fairy Tales and Other Irrational Beliefs About Patents
Published on IPWatchdog.com September 26, 2014.
“It can take many years and many hundreds of team
members to create a software package akin to something
you might see from IBM or even a new Apple operating
system. These things are not coded by a second year
engineering student, and they are not trivial. It is amazing
to me that anyone things creating software is trivial given
how infrequently software works, how often it needs to be
updated and patched, and all of the security vulnerabilities
and identity theft issues that even the largest retailers face
on an increasing basis.”
http://www.ipwatchdog.com/2014/09/26/fairy-tales-and-other-irrational-beliefs-about-patents/id=51360/
Phase 2
SCOTUS
Mayo v. Prometheus
566 U.S. ____ (2012)
http://www.supremecourt.gov/opinions/11pdf/10-1150.pdf
SCOTUS proclaimed that they “decline the Government’s
invitation to substitute §§102, 103, and 112 inquiries for the
better established inquiry under §101.”
First, it is not an invitation to use 102 and 103 for novelty and
non-obviousness; it is absolutely required by Title 35.
Second, 101 is not the “better established inquiry” because in
the 200 years leading up to Mayo v. Prometheus it had NEVER
been used by any court to find a patent claim invalid because it
lacked novelty, which is exactly what the Supreme Court did
when it acknowledged that the claims did not cover a law of
nature but rather only added conventional steps.
AMP v. Myriad Genetics
U.S. Supreme Court, June 13, 2013
http://www.supremecourt.gov/opinions/12pdf/12-398_1b7d.pdf
“cDNA is not a product of nature and is patent eligible under §101,
except insofar as very short series of DNA may have no intervening
introns to remove when creating cDNA. In that situation, a short
strand of cDNA may be indistinguishable from natural DNA.”
“Nor are Myriad’s claims saved by the fact that isolating DNA from
the human genome severs chemical bonds and thereby creates a
nonnaturally occurring molecule.”
But Chakrabarty said: “[R]espondent’s micro-organism plainly
qualifies as patentable subject matter. His claim is not to a hitherto
unknown natural phenomenon, but to a nonnaturally occurring
manufacture or composition of matter – a product of human
ingenuity…”
Alice v. CLS Bank
Decided June 2014
http://www.supremecourt.gov/opinions/13pdf/13-298_7lh8.pdf
Used what they called the Mayo framework, which is ironic given how
the Court so famously misapplied patent law in the Mayo case.
First, determine whether the claims at issue are directed to one of
those patent-ineligible concepts. Second, examine claim elements to
determine whether it contains an inventive concept sufficient to
transform the claimed abstract idea into a patent-eligible application.
“The relevant question is whether the claims here do more than
simply instruct the practitioner to implement the abstract idea of
intermediated settlement on a generic computer. They do not.”
“The method claims recite the abstract idea implemented on a
generic computer; the system claims recite a handful of generic
computer components configured to implement the same idea.”
Bilski v. Kappos
561 U.S. ____ (2010)
http://www.supremecourt.gov/opinions/09pdf/08-964.pdf
The machine-or-transformation test is not the sole test for patent
eligibility. Federal Circuit erred when it ruled that MOT was the singular
test to determine whether an invention is patentable subject matter.
101 does not categorically preclude business method patents. The
categorical exclusion argument was undermined by the fact that federal
law – 35 USC §273(b)(1) – explicitly contemplates the existence of at
least some business method patents: Under §273(b)(1), if a patentholder claims infringement based on a method in a patent, the alleged
infringer can assert a defense of prior use.
All 9 agreed Bilski application was properly rejected. Majority: it was
properly rejected because it was an abstract idea. Concurrence: wanted
to say business methods are not patent eligible unless tied to an
otherwise patentable invention (see Stevens footnote 40).
Consequences
U.S. no longer has favorable patent laws for biotech, medical
diagnostics and software. Companies will move to more
favorable jurisdictions (see tax inversion).
Expect far fewer medical devices (see Medtronic brief in Bilski),
far more copying, only crawling incremental innovation.
Portfolios substantially devalued will eventually mean
shareholder value will be compromised. Wall Street will figure
out that tech companies have no useful exclusive rights.
Market for selling and licensing is drying up fast. Why both
patent? Trade secret the new norm, which harms public.
Investors reluctant to invest; not good for job creation.
Phase 3
CAFC and Obviousness
The Next Battleground for Patent Owners
Phase 4
The End ~ Q&A
Gene Quinn
Patent Attorney
Founder of IPWatchdog.com
Email: gquinn@IPWatchdog.com
Phone: 703-740-9835