April 8, 2013 15:00 Age: 1 yrs

Faculty Voices | Summer 2012

Businesses prefer legal certainty. Whether environmental regulations, security disclosure obligations or tax laws, legal certainty permits companies  to plan efficiently. The same is true for companies engaged in innovation: certainty  surrounding intellectual property laws allows companies  to invest efficiently in research, development and commercialization. Unfortunately, the last two years have seen little legal certainty in patent law. Both the courts and Congress  have introduced considerable changes and, consequently, uncertainty into the system.

The evolution  of U.S. patent  law is generally coordinated by the U.S. Court  of Appeals for the Federal Circuit,  which hears every appeal arising under the patent  laws. The Supreme Court, however, has taken a heightened  interest in patent  law, deciding six cases over the last two terms. Six may not seem like many, but when the Court  only hears around 80 cases total per term in all legal areas, six is a sizeable proportion of the docket. While many observers believe the Supreme Court  is “anti-patent,” the Court’s decisions present more of a mixed bag.

The Supreme Court  agreed with the Federal Circuit’s reasoning  in three cases and rejected it in the others.  For example, the Supreme Court affirmed the strong presumption of validity afforded  issued patents in litigation in Microsoft v. i4i but continued to contract the types of inventions that are eligible for patent protection in Mayo Collaborative Services v. Prometheus Laboratories. The wake of any Supreme Court  decision creates uncertainty as the courts sort through the decision’s implications. For instance, after Mayo, courts now will have to re-address  whether isolated human genes are eligible for patent  protection.

The Supreme Court  was not alone in changing the law, however. The Federal Circuit heard  numerous cases en banc to reconsider its previous law. As a result, the court altered the standard for bringing contempt hearings against  an infringer, made it far more difficult to render a patent  unenforceable due to a patent  holder’s inequitable conduct  before the U.S. Patent  and Trademark Office (USPTO), and limited the availability  of an infringement defense that  arises when a patent’s scope is changed through post-issuance proceedings at the USPTO. The court is deciding two more cases en banc that will address when liability arises for patent infringement when multiple parties perform parts of a patented process, yet no single entity performs the entirety of the process or method. This dynamic is important for the protection of Internet-based inventions.

If all of this court-related activity were not enough, Congress ushered in the most significant changes to patent law in over 60 years by adopting the America Invents Act (AIA) in September. In addition to creating a host of procedures at the USPTO, the AIA removes what had been the singular, defining aspect of U.S. patent  law: the “first to invent”  system. Before the AIA, the first person to create the invention could get a patent. As a result of the AIA, starting  in 2013, the patent  will go to the first inventor to file an application at the USPTO, which brings the U.S. law more in-line with foreign systems.

There is considerable uncertainty surrounding the AIA, however. Even though Congress justified the AIA on harmonization grounds, the AIA actually  creates a system considerably different than  other countries’ regimes. The AIA is also rife with ambiguity  that  will require time and litigation to sort out. Complicating matters  more is that  patents  under the old system will remain in effect until at least 2033, meaning that  effectively the U.S. will have two patent systems for two decades. A nightmare for innovators, but a financial field day for patent attorneys.

Consequently, the last two years have been ones of considerable change and uncertainty in patent  law. Perhaps the courts and Congress will let the dust settle and permit businesses to find certainty in this brave new patent world.

Timothy R. Holbrook is a professor of law and the new associate dean of the faculty. He specializes in patent law and intellectual property.

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