Presidential "Debate" on U.S. Patent Policy

By Donald Zuhn --

On Wednesday Senator Barack Obama and Senator John McCain will be participating in their third, and final, presidential debate.  While the third debate will address the economy and domestic policy issues, there is a strong likelihood, particularly in view of the current financial crisis, that U.S. patent policy will draw little attention from either candidate.  The lack of such a discussion at tomorrow's debate does not, however, mean that the candidates' positions on the U.S. patent system have yet to be articulated.

Both candidates, for example, provide some information about their patent platforms on their websites.  Senator McCain has pledged to push for greater resources for the U.S. Patent and Trademark Office, so that the Office can "hire and train quality examiners . . . to ensure timely, predictable and effective patent review."  The Senator states that the increased workload at the Patent Office "threatens to undermine the quality of our patent examinations."  Senator McCain also believes that because "[t]he lack of an affordable, reliable means to ensure that the Government only grants valid patents has led to overly broad, frivolous lawsuits designed to force innovative companies into big settlements," alternative approaches to expensive patent litigation are needed for resolving patent challenges.

Senator Obama, meanwhile, believes that the patent system must be updated in order "to promote . . . innovation and investment while ensuring that intellectual property owners are fairly treated."  The Senator states that "[a] system that produces timely, high-quality patents is essential for global competitiveness in the 21st century."  Like Senator McCain, Senator Obama wants to give the Patent Office the resources it needs to improve patent quality, and has further pledged to open up the patent process to citizen review in order to "reduce the uncertainty and wasteful litigation that is currently a significant drag on innovation."  While Senator Obama received some attention last November concerning the concept of "gold-plated" patents (see "Mitt Romney on Patents"), neither the Senator's website nor his 83-page "Blueprint for Change" (available at his website) make any mention of such patents.

Fortunately, the portion of the electorate that may be interested in the Senators' views on U.S. patent policy need not rely solely on the nominal information being presented on the candidates' websites.  Instead, patent practitioners, assignees, and inventors are encouraged to watch the panel discussion, sponsored by the Colorado Bar Association, that took place in Denver on August 28th.  The discussion, entitled "Intellectual Property Policy and the Presidential Election: A Discussion on its Future by Leading Policy Advisors to the Candidates," brought together two representatives from each of the candidates' campaigns to address patent, copyright, and antitrust issues.

Representing Senator McCain's campaign were Edward Reines, a partner at Weil, Gotshal & Manges LLP and member of Senator McCain's Justice Advisory Committee, and Ray Gifford, a partner at Kamlet Shepherd & Reichert, LLP.  Representing Senator Obama's campaign were Professor Arti Rai, from the Duke University School of Law (and a former classmate of Senator Obama's at Harvard Law School), and Associate Professor Christopher Sprigman (at right), from the University of Virginia School of Law.  The panel discussion was moderated by Jonathan Alter, a columnist and senior editor for Newsweek magazine.

With respect to patent policy, the panel discussion covered Federal Circuit appointments, patent eligible subject matter, the Patent Office's application backlog, patent reform, and PTO rulemaking.  On the topic of CAFC appointments, Prof. Rai (at left), who has been "tasked to coordinate some of the thinking on IP" for the Obama campaign, informed the audience that the Senator would take a serious interest in Federal Circuit appointees -- something she claimed past Presidents had not done.  Mr. Reines said Senator McCain would do likewise, and agreed with Prof. Rai that the appointment of a district court judge to the CAFC would make sense.

While none of the panelists would speculate on outcome of In re Bilski, Mr. Reines (at right) distinguished the candidates' positions on patentable subject matter by noting that Professor Lawrence Lessig, an Obama advisor, had argued that the burden is on each industry "to prove that patenting makes sense" for that industry.  Prof. Rai, however, argued that both she and Professor Mark Lemley, another Obama advisor, had advised against subject matter limitations, and indicated that this difference in opinion demonstrated the diversity of opinions on Obama's technology team.

When the discussion turned to the Patent Office's application backlog, Mr. Reines took the opportunity to attack Senator Obama's gold-plated patent strategy.  Mr. Reines asked the audience to go to Senator Obama's website for more information on what he called the Obama campaign's "only real concrete proposal" for improving the U.S. patent system (as mentioned above, Senator Obama's website no longer mentions the gold-plated patent plan).  Mr. Reines argued that such a system would provide those with deep pockets and "silver spoons" with patents having "some super-heightened presumption of validity," while leaving independent inventors and small businesses with "regular, garden variety patents with no presumption of validity, or essentially no presumption of validity."  Mr. Reines contended that gold-plated patents are "an example of a professorial class that sounds good as a speech, and sounds good as an academic concept, but in terms of the actual execution, is more trouble than it's worth."  According to Mr. Reines, the way to address the application backlog was to reform the Patent Office, not create a tiered patent system.

In response, Prof. Rai explained that the gold-plated patent plan (which she noted was first set forth in a paper by Prof. Lemley) had nothing to do with fee structure, but rather, focused on the rigorousness of the examination.  She added that "if you want really secure patent rights, you presumably want a rigorous examination."  Mr. Reines, however, was skeptical that the USPTO, which is already facing an enormous application backlog, would be able to offer independent inventors and other small entities bulletproof patents (as Prof. Rai alternatively referred to them) without a significant increase in fees.

Mr. Alter opened the discussion on patent reform by observing that Senator Leahy had been an early supporter of Senator Obama, and since Senator Leahy was "in there early," he would have "a direct line" to Obama if he is elected President.  Mr. Reines noted that Senator McCain strongly supported reforming the patent system in a "sensible, balanced" manner.  Mr. Gifford (at left) went a step further, arguing that a vote for Obama was a vote against patent reform.  He explained that "there are two major constituencies in the Democratic Party that have completely opposite views on IP reform generally . . . the law professoriate . . . who as a general matter have never met an intellectual property right they didn't want to weaken [and] the constituencies of Hollywood and Silicon Valley that rely on copyrights or patents to do business."  Mr. Gifford contended that these two factions within the Obama campaign would "fight to a stand-off."

Prof. Rai responded to Mr. Gifford's characterization by pointing out that "nobody listens to law professors for the most part," and then clarified that by "nobody," she meant "Congress."  She added that the biggest opponent to patent reform is the biopharmaceutical industry, noting that the Democratic Party and this industry "have not historically been very close."  Prof. Rai also observed that Senator Kyl's "much weakened" patent reform bill had been heavily influenced by the biopharma industry (she did not note that Senator Kyl is a member of the McCain Justice Advisory Committee).

Turning to PTO rulemaking, Mr. Alter asked the panelists whether Tafas/GSK v. Dudas had been correctly decided.  Prof. Rai, who had argued that Judge Cacheris got it wrong as an administrative law matter in a Patently-O post (see "The GSK Case: An Administrative Perspective"), responded: "That's a very complicated question.  That's an administrative law question, not a patent question."  She thought the bigger question was whether the enjoined rules would have actually helped the Patent Office address the application backlog, and suggested that they would not have helped.  Mr. Reines declined to offer his views on the case, stating that "if an authority on administrative law thinks the case is complicated, then I'm not going to predict the outcome on the fly."

During the question and answer portion of the discussion, the panelists were asked what reforms needed to be made at the PTO.  Prof. Rai provided four suggestions:  putting "very competent people with backgrounds in patent law at the helm," permanently ending fee diversion, giving the PTO the authority to set its own fees, and increasing examiner pay.  Mr. Gifford agreed that the Patent Office needed more and better resources, but argued that the PTO administration did not necessarily have to be stocked with "patent people."  He asserted that "there is value to having someone who is a generalist who understands broader trends of government, and that doesn't make the patent world this arcane cul-de-sac where only patent lawyers can fear to tread."  Mr. Alter concluded the discussion by predicting that at least two of the panelists would play a large role in vetting the next USPTO Director.

For additional information regarding this and other related topics, please see:
• "Follow-on Biologics in the News: Presidential Candidates Support Follow-on Biologics Regulatory Pathway," September 23, 2008
• "Mitt Romney on Patents: A Reason for Thanksgiving," November 21, 2007

Comments

[Lawrence B. Ebert]

Of the text --neither the Senator's website nor his 83-page "Blueprint for Change" (available at his website) make any mention of such [gold-plated] patents.-- please note that the Obama site obama.3cdn.net DOES make mention of "gold-plated" patents. This and some other matters are discussed in the post at Intellectual Property Today on 26 Sept 08 titled On Aspects of Barack Obama’s Technology Policy available at
http://www.iptoday.com/news-article.asp?id=2976&type=ip. A version will appear in the Nov. 2008 issue of Intellectual Property Today.

[Fred Flintstone]

As an Obama supporter, I am disappointed to see that he is consulting with Professors Rai and Lemley, because I strongly disagree with previous statements they have made about the patent system and the PTO. On the other hand, Professor Rai's comments above sound much more reasonable and less anti-applicant than the points made in the amicus brief she recently submitted along with Professor Lemley in Tafas v. Dudas. This might suggest that academics feel pressure to write articles or submit briefs that are more controversial than their actual views in order to attract attention, or it might suggest that Professor Rai was self-censoring when speaking in a public forum (or perhaps it suggests neither of these things), but in any event I am hopeful that Senator Obama's advisors are capable of giving him objective advice. I also like Professor Lessig's suggestion about subject matter limitations, since that might resolve the current disagreement between biotech/pharma and the computer industries, but it seems like the kind of thing that might be hard to design and implement since there might be significant incentives for having subject matter fit into certain categories.

[Maxwell Klinger]

FYI. The Toledo Intellecual Property Law Association is showing a recording of the panel discussion that took place in Denver on August 28th, at the University of Toledo, School of Law auditorium tomorrow at noon. The event is open to the public. See: http://toledopatentlaw.wordpress.com/2008/10/13/intellectual-property-policy-and-the-presidential-campaign/