patent law reform

  • January 26, 2016
    Guest Post

    by Kristen Osenga, Professor of Law, University of Richmond School of Law; Senior Scholar, Center for the Protection of Intellectual Property

    *This post is part of the ACSblog Symposium on Patent Law Reform.

    I have often argued that we do not need so-called patent “reform.” But I’ve had a change of heart. We absolutely need patent reform, but not the kind proposed in the Innovation Act, H.R. 9, and the PATENT Act, S. 1137. To get the real kind of reform that will encourage a strong and vibrant innovation economy, we first need a role reversal. Let me explain.

    If you ask any first-year law student about the roles of Congress and the courts, the likely answer is that Congress makes the laws and the courts interpret them. That answer, although simplistic and lacking nuance, is essentially correct. What’s happening currently in patent law, however, is the exact opposite, and innovation is going to suffer as a result. Courts, especially the U.S. Supreme Court, are creating brand new rules, making up patent law from whole cloth. Congress, on the other hand, is considering bills that micromanage the courts, trampling on areas traditionally left to judicial discretion and seeking to procedurally stack the deck against individual inventors and small companies who own patents.

    To illustrate the above point, let’s consider two issues: (1) patentable subject matter eligibility and (2) the customer suit exception.

    Many years ago, Congress spoke plainly in 35 U.S.C. §101 about the types of inventions that were eligible for patenting: processes, machines, manufactures, and compositions of matter. The courts initially (and correctly) interpreted that provision broadly as including “anything under the sun made by man” and limited by only a few judicially created exceptions. Recently, and devoid of any legislative intervention, the courts have been chipping away at the types of inventions eligible for patent protection. After the Supreme Court’s 2014 decision in Alice Corp. v. CLS Bank Int’l, many commentators have suggested that the realm of inventions that can actually be patented has significantly diminished. The Alice opinion represents a sea change, or significant alteration, in the previously existing law . . . and yet it occurred entirely within the courts.

    The activity surrounding the customer suit exception, on the other hand, demonstrates how Congress is trying to undermine judicial discretion in favor of bright line rules that make it systematically harder for individual inventors and small companies to defend their patents. In appropriate circumstances, judges traditionally will stay a patent infringement suit against a small retailer or end-user customer in favor of a suit against a manufacturer when the infringement results from the customer using the manufacturer’s product. This makes sense, for example, when a patent owner sues a mom-and-pop coffee shop for infringement based on the coffee shop’s use of an infringing wireless router. The company that manufactures and sells the router is in a much better position than the coffee shop to dispute whether or not the router is infringing the patent. The courts have been staying cases like these for years, and it’s working well.