Patent Law

A View from the Court

By Gary Odom and Jordan Kuhn

CAFC Judge Alan D. Lourie spoke to the Virginia State Bar IP Section last week.

For the past couple of decades, we have been in the midst of what many of us have called the golden age of intellectual property. Patents and copyrights have been recognized as important contributors to our system of industrial innovation and they have been readily enforced by the courts, which wasn't always the case historically, at least for patents. I used to issue cautionary warnings, though, in speeches to attorney groups, not to press their luck; don't overassert patents because sooner or later the pendulum might swing back. Well, the pendulum has now swung, and how far and to what result no one knows. The press now routinely talks about problems in the patent system, often including our court as part of the problem.

That the pendulum has now swung can be shown by the activity of both Congress and the Supreme Court, and by numerous articles in the press questioning, even asserting, that the patent system is broken. There is now pending in the Senate a so-called patent reform bill, and one has already passed the House.

The Supreme Court has also stepped in, deciding cases involving obviousness, injunctions, declaratory judgment jurisdiction, exhaustion of patents, and the extraterritorial effect of patents. In each case, they reversed us, and their actions were interpreted by many as weakening the strength of patents to the detriment of innovators.

Why have they reversed us so much in patent cases? And why is the patent system under attack? How did this turnabout occur? One can speculate how any social movement arose and what gave it momentum, but a few guesses can be made here. Articulate academicians, of which there were very few in the patent field until recent years, have been writing about the patent system and our court, attempting to point out what is wrong with the patent system. Writers do tend to criticize, not praise. They also criticize the Patent Office and what they assert is its tendency to issue poor patents. No doubt an overcrowded examination system that places quotas on examiners plays a role in our less-than-perfect examination system.

Our court has also been asserted to be too pro-patent and to unwisely favor juries. I think those comments are off the mark. In fact, given our Markman jurisprudence, assigning claim construction to trial judges, we are seeing a majority of our patent appeals come to us from summary judgments of non-infringement. In other words, fewer patent suits are getting to juries. Whether that is good or bad, and opinions in the bar and among commentators vary on that issue, I believe it is a fact. Thus, our court cannot justly be criticized for pushing complicated cases to jury trials, other than in its earlier years when it recognized that a plaintiff patentee is entitled to a jury trial under the 7th Amendment.

Moreover, I don't think we are unduly pro-patent. In its early years, before I was on the court, it tried to unify the patent law, as Congress intended when the court was created. In doing so, it gave meaning to various parts of the statute that had been honored in the breach for many years, such as the presumption of validity, the right to a preliminary injunction, the right to lost profits, and the right to a jury trial. That was perhaps a pro-patent period, but that was because it was pro-statute, reversing a period of weak patent law. That initial time of reform passed long ago.

Since I have been on the court, over 18 years, not once have we had a discussion as to what direction the law should take, whether we should be pro-patent or not. That is because we are not a policy-making body. We have just applied the law and precedent as best we could determine it to the cases that have come before us. In fact, we have been criticized for, in the view of some people, narrowing the doctrine of equivalents, emphasizing the need for a written description commensurate with the claims, and affirming summary judgments of non-infringement that in effect preclude juries from deciding these cases. To the extent those accusations may have any factual basis, they hardly comport with the fiction of a pro-patent court. They could be viewed as the opposite. So decisions are conscientiously made on the facts and law, not in any attempt to be pro- or anti-patent.

An important factor I believe is that a change has occurred in the attitude of industry toward the patent system. When I was in industry, all the innovative sectors of the economy supported the patent system, whether they used patents to exclude others from using their patented their inventions or whether they generally licensed them. But they all supported patents as important to encourage invention and innovation. That unanimity apparently has changed.

The chemical-pharmaceutical-biotechnology companies, which need strong patents in order to justify their lengthy and expensive research and development, have defended the system as always. But the computer and software people, with fast product development times, short product lives, and many components in their products, have felt burdened by lawsuits and threatened with injunctions and potentially large damage awards. The RIM suit, involving that nice little gadget many of us now carry around in our pockets, is an example of that concern.

These companies have urged changes in the law relating to injunctions, patentability, reexamination, and damages that the chem-pharma-bio people have opposed. Thus, large industry no longer has a unified front to present to Congress and the public on the attributes of an effective patent system. And the press picks up on this division of views and reinforces the criticism. Hence the controversial legislation that is now struggling to get passed.

Whatever Congress chooses to do with our law, and whatever the Supreme Court has already done, such changes will govern our jurisprudence, and we will continue to apply the law to the cases that come before us, based on the standard of review and the issues raised before us and decided below. As for the effect that the Supreme Court decisions will have on future decisions, time will tell. It depends upon how the Patent Office examines patents, how the district courts decide their cases, and, of course, how we review them. Advocates and lobbyists always forecast that the sky is falling; I doubt that it will, but of course I don't know whether serious adverse consequences will ensue from anything that has happened or is happening in the patent field, and, if so, how serious.

Let me include some advice for you practitioners, some nuts and bolts issues that the court encounters from time to time. First, make sure your case is final before you bring it to us. We see appeals brought to us with unresolved counterclaims, for inequitable conduct, validity, etc. Those cases thus are not final and appealable. Even if the district judge states in his or her opinion that the case is final, it isn't so until the counterclaims are dismissed. We have, regrettably, but necessarily, sent several such appeals back to the district courts to cross the t's and dot the i's.

Second, don't file a cross-appeal only to make another argument for affirming the judgment. That is not properly a cross-appeal. A cross-appeal is proper only for the purpose of changing the judgment in some respect. We therefore won't read a fourth brief and won't let an improper cross-appellant have a second chance for argument when it is only raises another ground for affirming the judgment. And we will unhappily suspect that the culprit is just trying to get added briefing space and argument time, which doesn't enhance our impression of the competence or integrity of counsel making this improper cross-appeal.

Don't over protect information in briefs on the dubious assertion that every business fact is super-confidential. It makes it difficult for us to ask questions from the bench and write an opinion.

Limit the issues. Having more than three issues in a brief suggests to us that you don't have a strong appeal. And, while you're about it, limit the issues before the district courts. I have little doubt that some courts are led stray by the shotgun pleadings attacking every conceivable aspect of a patent. I believe that is one reason why there are so many reversals in our court. District court judges do the best they can, but some lawyers make life difficult for them. And, on the other side of the line, don't overassert patents against parties reasonably not infringing. We see cases with all sorts of unrealistic arguments, where simply objectively looking at the claims and the accused device tells us that there is no infringement. Those cases should never have been brought, much less appealed.

Transcript.

Other commentary on Judge Lourie's talk from Patently-O.

Full post as published by The Patent Prospector on October 07, 2008 (boomark / email).