Looking back on 2007

Looking back; looking ahead (12/25/07)

Your humble patent blurber is in a reflective mood now that 2007 is about to expire, and is therefore breaking with his rule against opining. In 2003, the Federal Trade Commission released a study entitled, “To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy. It is interesting to re-read this study 1) with the modern-day perspective.

The 2003 FTC Report

This report approves of the legal standard in 2003 for patentability:

“The patent system does, for the most part, achieve a proper balance with competition policy. The statutory standards of patentability appear largely compatible with competition; properly interpreted, they tend to award patents only when necessary to provide incentives for inventions, their commercial development, or their disclosure.”

Of course, the report goes on to state that “questionable patents are a significant competitive concern and can harm innovation” and details the reasons for this, which are well known to practitioners and engineers alike.

A series of recommendations follow:

  1. Enact legislation to create a new administrative procedure to allow post-grant review of and opposition to patents.
  2. Enact legislation to specify that challenges to the validity of a patent are to be determined based on a “preponderance of the evidence.”
  3. Tighten certain legal standards used to evaluate whether a patent is “obvious.”
    • In applying the “suggestion” test, assume an ability to combine or modify prior art references that is consistent with the creativity and problem-solving skills that in fact are characteristic of those having ordinary skill in the art.
  4. Provide adequate funding for the PTO.
  5. Modify certain PTO rules and implement portions of the PTO's 21st Century plan:
    • Amend PTO regulations to require that, upon the request of the examiner, applicants submit statements of relevance regarding their prior art references.
    • Encourage the use of examiner inquiries under rule 105 to obtain more complete information, and reformulate Rule 105 to permit reasonable follow-up.
    • Implement the PTO's recommendation . . . that it expand its “second-pair-of-eyes” review to selected areas.
    • Continue to implement the recognition that the PTO “forges a balance between the public's interest in intellectual property and each customer's interest in his/her patent and trademark.”
  6. Consider possible harm to competition - along with other possible benefits and costs - before extending the scope of patentable subject matter.
  7. Enact legislation to require publication of all patent applications 18 months after filing
  8. Enact legislation to create intervening or prior user rights to protect parties from infringement allegations that rely on certain patent claims first introduced in a continuing or other similar application.
  9. Enact legislation to require, as predicate for liability for willful infringement, either actual, written notice of infringement from the Patentee, or deliberate copying of the patentee’s invention, knowing it to be patented.
  10. Expand consideration of economic learning and competition policy concerns in patent law decisionmaking.


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On Obviousness
2003 FTC Report KSR
…assume an ability to combine or modify prior art references that is consistent with the creativity and problem-solving skills that in fact are characteristic of those having ordinary skill in the art. …the analysis need not seek out precise teachings directed to the specific subject matter of the challenged claim, for a courtcan take account of the inferences and creative steps thata person of ordinary skill in the art would employ. … A person of ordinary skill is also a person of ordinary creativity, not an automaton.


A simple observation is that a couple of the changes championed by the FTC Report were implemented, to varying degrees, by the courts, not by Congress or the Executive. Recommendation number 3 was addressed by the Supreme Court in KSR, which uses almost the exact same words from this 2003 report! Likewise, recommendation number 9, relating to willful infringement, was addressed by the Federal Circuit in the Seagate decision, which removed any affirmative duty on the part of the infringer to avoid willfulness, and attached an “objectively reckless” standard.

The Patent Reform Act of 2007, a veritable and venerable cash-cow for Congress, continues to roll and bounce its way around the congressional roulette wheel 2) pitting high technology and big businesses against Pharma and independent inventors. Many of the other recommendations from the 2003 Report are contained in that legislation.

The rules recommendations contained in the 2003 FTC Report seem so reasonable when compared with the rules packages actually implemented (or attempted to be implemented – or in the case of the IDS rules, in the process of being implemented) by the PTO. In fact, under Recommendation number 8, the FTC Report stresses, that “Legitimate reasons exist to amend claims and use continuing applications. Any proposed remedy for the opportunistic broadening of claims should also protect such legitimate uses. Creating intervening or prior use rights would most directly achieve this balance; it would cure potential competitive problems without interfering with legitimate needs for continuations.” Of course, none of the recommendations cite “too many claims” or “too many prior art references” as problems that need to be addressed through legislation or rule-making.

Looking Ahead

With new IDS rules looming in the near future, as well as the uncertainty surrounding the continuations and claims limits rules packages, which are currently in judicially-created limbo pending the GSK suit, 2008 holds about as much promise as the average business-method patent, which is to say, as Sting wrote in his classic Bring On The Night, “the future is but a question mark, / Hangs above my head, there in the dark.” Has the world of patents has ever faced this much uncertainty since the days when Thomas Jefferson filed patent applications in shoe boxes? If 2008 can promise us one thing, it is that 2008 is going to be an interesting year.

Cheers and happy new year to all!

Well, at least the Executive Summary – who has time to read this 315 page monstrosity?
where it goes, nobody knows

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