Medical Device Daily Washington Editor
The rules proposed by the Patent and Trademark Office in 2007 to limit the number of claims continuations and limit the number of claims embodied in any patent application did not go down well for almost any industry, but there has been some pushback on those rules. According to one patent attorney, there is little reason for the new PTO director not to simply drop the rules proposal entirely.
Gene Quinn, patent attorney and founder of the blog at IPWatchdog.com told Medical Device Daily that Dave Kappos, who won approval from the Senate on Aug. 6, has little reason to be concerned about any backlash in response to such a move and that the signs are all there for such a reversal. "Once the Department of Justice asked the Court of Appeals for the Federal Circuit (CAFC) to hold off, I think that's a signal that this is what is going to happen," Quinn said.
Another factor to consider is that Kappos, who held a post dealing with intellectual property law at IBM (Armonk, New York), had filed a friend-of-court briefing on behalf of the litigants, GlaxoSmithKline (London) and Triantafyllos Tafas, MD, founder of device maker Ikonisys (New Haven, Connecticut), indicating at least a predisposition to dump the rules.
The proposed rules, Quinn said, reflected an effort to "increase the quality of issued patents" but despite that PTO received 350 unique comments against the idea, PTO "summarily rejected each and every one of them," Quinn said. On the other hand, he acknowledged that the problem with growing pendency times, which prompted the move in the first place, was not entirely PTO's fault. "There are bad actors" who will "bury the patent office with thousands of references and try to hide the relevant ones" for one reason or another, he said, but countered by stating, "treating the 98% of us the same way as the bad actors is not helpful."
The backlog at PTO is liable to persist for at least the short term, Quinn observed. "The allowance rate in the first quarter of 2009 was 42%," he said, which is "a low for the last 30 to 40 years." This is driven in part by technology, which has raised the amount of time needed to thoroughly sort through an application. "In order to do a competent job, you need more time across the board than a generation ago," he said, because "the length and complexity in just the write-up was dramatically less than today." The patents are also potentially more valuable so patent attorneys "have to go to a much greater depth to describe" the invention.
Another part of the expected persistence of long patent prosecution times – the average is now said to be in the area of 36 months – is the exodus of experienced examiners and their replacement by new faces. Quinn said "it takes two to three years for the examiner to see everything they need to see and to function without a lot of supervision." He said some are leaving because they see few prospects for advancement and because "they're paid extremely low" salaries compared to industry. And just as FDA inspectors are plucked by industry, so are patent examiners.
Another issue for applicants is that while patent attorneys are generally quite adroit at getting their clients an approved patent, this work is sometimes performed with a meager understanding of the business impact of how the claim is constructed and the impact of claims construction on turn-around time. This, Quinn says, is something executives should factor into their understanding of the advice they receive from patent attorneys. Sometimes a bare-bones set of claims that gets the invention to market quickly – followed by a filing to expand the claim – is the smarter approach, especially when outside investors are involved.
"The best thing a CEO could do is take a five-day intensive course on patent law and patent prosecution and learn what goes on," which would allow CEOs "to ask the right questions," Quinn said. "I guarantee that every CEO would get that money back in the first month, maybe the first week," assuming the fee is in the vicinity of $2,000-$3,000.
As for legislation, Quinn said that there are several no-brainer elements that Congress could easily pass. The first of these, he said, is "inequitable conduct, although the CAFC addressed that" in the case of Exegen v. WalMart. He noted that "first-to-file seems to be something everyone is interested in" as well, which would have the added benefit of harmonizing U.S. law with that of the rest of the world. Also venue shopping is on the list of no-brainers.
It appears from web searches that the inequitable conduct defense was not always used as freely as in the past decade, and Quinn confirmed that its expanded use was a case of "incremental creep and, quite frankly, some members of CAFC ignoring precedent." He said attorneys "all knew what it was as a result of the Kingsdown case" of 1988, but that after five or six years, "you started seeing this creep," consisting of attorneys using any inaccurate statements to try to prove inequitable conduct on the part of the litigant. Unintended consequences soon surfaced, he said, because patent applications got beefier as a prophylactic move, "then you started seeing pendency go out of control."
"I think every single patent case [currently on a docket] will be affected" by Exegen because the inequitable conduct defense is always raised due to the fact that it is highly effective. "Most cases have stronger defenses, but inequitable conduct is a silver bullet because if you committed it, you lose all the claims" whereas other defenses go through the patent filing claim by claim.
Revisiting the venue shopping issue, MDD also asked Quinn whether Bruce Saffran, MD, would have won his coronary artery stent patent lawsuit against Boston Scientific (Natick, Massachusetts) in any jurisdiction other than east Texas. Quinn remarked that the U.S. District Court for the eastern district of Texas does a lot to earn its nickname of the "rocket docket," but that a litigant cannot assume that a trip to Marshall, Texas, guarantees a win.
Would Saffran have beat Boston Scientific in another court? "I would say probably not," Quinn responded, adding that the rulings in that court "are plaintiff friendly and the juries are certainly not averse to awarding big money."
Mark McCarty, 703-268-5690; firstname.lastname@example.org