January 1, 1970 (Vol. , No. )

Gerry J. J. Elman, J.D.

I have been reading the book “Make the Rules or Your Rivals Will” by Wharton professor Richard Shell. This motivates me to call your attention to a “perfect storm” that could break the U.S. patent system unless the issues are thoughtfully and carefully resolved. It’s been brewing for a few years, but really gained significant momentum during the past half year.

The question of “what kind of patents are going to be granted and enforced in this country” has become a hot topic of public debate. On a single day in March, editorial articles on the subject appeared in both the NY Times and the Wall Street Journal. One of them had a generally pro-patent tone, while the other was anti-patent. It is reported that the information technology community generally expresses anti-patent views, while the biotechnology community generally is in favor of an economy in which patents are strong and enforceable.

Congress has taken up the issue, under the rubric of “Patent Reform.” Various proposals are pending, and although it’s late enough in the term that nothing is likely to pass this year, well, as they say on the radio … stay tuned.

In the midst of this, the relevant agency (U.S. Patent and Trademark Office “PTO”) chose in January and then in July to put forth a few major changes in procedure that would drastically impact the nature and cost of patent protection for innovative companies. One proposal would put a “cap” on the number of continuation patent applications that can be filed and the other would increase the complexity of patent prosecutions with a large number of different claims. Rumor has it that the PTO is likely to issue a final rule on this subject before year’s end. If so, strategies to deal with these new procedures will need to be implemented. Therefore … stay tuned.

Since 1982, a single court (the Court of Appeals for the Federal Circuit, or “CAFC”) has been charged with handling appeals in litigation involving patents. But recently the Supreme Court has shown unusual interest in accepting appeals in CAFC cases. For example, in mid-May, the Supreme Court changed the principle, previously applied by CAFC. that a patent owner is automatically entitled to an injunction against an infringer. From then on, a patent owner has needed to show that it is equitably entitled to make the defendant stop the infringement. Otherwise it would get only monetary damages, which would in effect be a compulsory license under the patent. Next term, the Supreme Court is poised to decide KSR International v. Teleflex, which could change the rules for how the Patent Office and courts determine which inventions are unpatentable because they would have been obvious to someone of ordinary skill in the field. Again … stay tuned.

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