By Kirk Teska
The Daily Record Newswire
Technology may advance rapidly, but the law is generally slow to change.
Still, when we take a look at the big picture over the last several years, patent law has undergone several important changes that likely affect the way engineering and technological innovation is protected. The Wild, Wild West of patents is being reined in by the courts, and, at the same time, businesses have changed how they view patents.
The U.S. patent system has long been maligned. A few scholars have even opined that patents aren’t really necessary to foster innovation. Even scholars who believe in patents have scathingly criticized the proliferation of business method patents as evidence of the disintegration of the U.S. patent system. Amazon’s “one-click” patent and silly patents like the one for a method of exercising a cat using a laser pointer were the chief evidence.
Congress for the past several years has attempted to “reform” the patent system, but the votes have not been enough to move the proposed legislation out of committee.
The courts, however, seem to be listening to the criticism, as evidenced by the U.S. Supreme Court’s Bilski decision on May 28, which renders some business method patents at least highly suspect. Abstract ideas, the court held, are clearly not patentable.
The problem, though, is where to draw the line between non-patentable ideas and patentable discoveries. A law of nature or mathematical formula cannot be patented, but the act of applying a law of nature or a mathematical formula can result in patent protection.
In the eyes of the Supreme Court, the key is whether or not a given patent would effectively grant a monopoly over an abstract idea. Since the patent application in question in the Bilski case preempted the use of risk-hedging in all fields, the patent application was rejected.
Changing tide
Other cases in recent years also prove the tide is changing. One Supreme Court case severely raised the bar for patent eligible subject matter by holding that just because something is new does not mean it is patentable.
Following the Supreme Court’s lead, the Federal Circuit Court of Appeals found an electronic version of a previously known mechanical device obvious and thus not patentable. Another case held that just because an idea is new to the Internet does not necessarily mean it is patentable.
In other Supreme Court and Federal Circuit cases, it suddenly became harder to obtain an injunction pending, or even after, a trial against a competitor who violates your patent, especially if you happen to be a patent troll.
Willful patent infringement is now more difficult to prove, and the attendant extra damages and attorneys’ fees are now harder to recover. It is also now more difficult to assert a U.S. patent against infringing activities occurring overseas.
Examples of the patent pendulum swinging back continue. It used to be a worthwhile exercise to patent an industry standard, for obvious reasons. Now, based on a few recent cases, that could be extremely difficult. It is also now easier for companies that license other companies’ patents to later challenge the very patents they license.
Broad generic patent claims are also now more difficult to procure, which could adversely affect how biotech inventions and university research is protected.
If a patent covers a genus, for example, it is presently unclear how many species of that genus have to be disclosed in the patent in order for the patent to be valid.
Even the lowly design patent received full treatment by the Federal Circuit in a decision that basically supports the notion that such a patent provides only very limited protection for the way a product looks.
The way businesses think about patents has also changed. Today, you might hear a CEO of a high-tech company say: “We’re facing a patent thicket with little white space where the major players have established a patent truce, so we need to map the IP landscape and make sure we’ve got patent alignment and multiple patent fences.”
The basic notion of strategic patenting evolved from a number of ideas, including the fairly old idea of patent management; studies that showed about 20 percent of a company’s patents had value while the remaining 80 percent were basically worthless.
Companies also came to realize that their patent portfolios could be used to generate money even if, and maybe especially when, a given patent was not being used.
A patent “hidden in the attic” may be worth something and might be sold or licensed, even to a competitor. Following MIT’s lead, universities across the nation have set up “Technology Licensing Offices,” many of which are highly profitable. Some companies are following suit.
Patent Court guidelines
In 2008, Massachusetts became yet another district to adopt formal guidelines for dealing with patent litigation. Will the guidelines reduce costs and increase certainty? Or, do the guidelines provide litigators with still something else to argue about? Only time will tell.
Patent-holding companies
These companies buy the patents of individuals or bankrupt businesses and sue large business like Google, Sony and Cisco. They then use the winnings to fund additional patent purchases and litigation. Call them patent trolls if you like, but they are here to stay and are a threat in many industries.
ITC patent litigation
This little-known venue allows a business with a patent to litigate the patent in the International Trade Commission to stop infringing imports. The latest trend is a great increase in these types of cases. Be careful, though: Based on a recent court case, it can be difficult to stop downstream manufacturers using the ITC.
Patent mismarking
If a company marks a product with a patent number and it turns out the patent doesn’t really protect that product, the company can be subject to a fine for each product so marked. “Marking trolls” have sprung up and have sued several companies for patent mismarking.
Kirk Teska is an adjunct professor at Suffolk University Law School and the managing partner of Iandiorio, Teska & Coleman, an intellectual property law firm in Waltham.
