Patent reform — Not too fast

Pundits have been prognosticating that patent reform legislation is imminent. The chair of the House Judiciary Committee, Rep. Bob Goodlatte (R-Va.), has been quoted in several media outlets as being ready to move similar legislation in early 2015 in the House. Some Republicans on the Senate Judiciary Committee, including the chair, Sen. Chuck Grassley (R-Iowa), have said to expect a bill in the next Congress.

In the fall of 2013, a patent bill overwhelmingly passed in the House — only to die in the Senate in the spring of 2014 because then-Majority Leader Harry Reid (D-Nev.) would not bring it to the floor. The proposed reforms were focused on addressing a problem with patent litigation and demand letters, and intended to provide relief to mom and pop shops and smaller businesses.

{mosads}With Republicans at the helm in the Senate, though not with a 60-vote majority, many believe that a similar reform bill is poised for a quick and easy ride to passage. Congress has changed but several hurdles remain — there are vocal dissenters within the tech community, small inventors and universities have concerns, and the trial lawyers are still opposed, as are the pharmaceutical and biotech industries. These are powerful constituencies who still believe that any legislation should be narrowly crafted, and they are gearing up for a fight.

Even if the prospects for patent reform seem to have brightened, there is an increasing amount of data that suggest the need for aggressive congressional action has waned. As we look toward the next Congress, it would be wise to take time to fully consider these developments. When it comes to patent reform, it is critically important that Congress deliver solutions using a scalpel instead of a buzz saw.

Patent jurisprudence has changed considerably. The Supreme Court has handed down decisions in six patent cases this year, providing significantly more direction in patent cases than in any other year in recent memory. Several of them tackle issues addressed directly in the proposed patent legislation purported to eradicate patent trolling. And the Court of Appeals for the Federal Circuit is also fixing many of the potholes in the patent superhighway with their recent rulings. The results of the judicial impact are clear. Patent litigation filings are down a whopping 40 percent over the past quarter!

The impact of the past round of patent reform is also beginning to be made clear. The recently created post grant procedures enacted by the America Invents Act only became fully operational in March 2013. Usage is now on track for 2,500 filings by the end of the year, tripling initial expectations. These new processes are relatively inexpensive and fast mechanisms for removing improvidently granted patents from the system. The new procedures prevent the misuse of poor quality patents against unknowing end users by providing an inventive way to challenge bad patents.

The United States Patent and Trademark Office (USPTO) has also been continuously working to improve patent quality over the past few years and has ramped up this effort over the past few months by engaging the patent community in a discussion about improving patent quality. Proposals have included: more time for examination; more training about sufficiency of enablement, fulfillment of written description requirements and the need for claim clarity; more technical training; and better search tools. The USPTO has stated that they would issue a new initiative on quality and better metrics in January 2015. Improvements in issued patents provide better quality claims that are clearly bounded and inform competitors and the public with an improved understanding of what the patented invention entails. This facilitates decisions to invent around the patent or to take a license, thus spurring economic growth.

All of these have had an impact on the how patents are granted, used and litigated. Well-known (and pro-reform) patent academic, Mark Lemley, remarked in October that “the need for legislative reform is a lot less now than it was a year ago.” In just a year, he believes the courts have taken such significant action that the best course for patent reform is to wait and see how case law develops and what the new dynamic looks like before we rewrite the rules yet again.

I agree with Lemley and urge Congress to proceed after a careful, factual investigation of what proposals are still needed in this new environment. Judicial decisions and administrative rules can fix many of the problems and, unlike statute, can be more easily adjusted for changed circumstances or new modalities. Let’s very carefully analyze and tackle problems in the patent system that are not being addressed elsewhere, instead of rushing through legislation that might have unintended consequences that harm economic growth and job creation by snaring legitimate plaintiffs in a legislative net, particularly when recent changes are already having some effects.

Stoll is a partner and co-chair of the intellectual property group at Drinker Biddle & Reath and a former commissioner for patents at the United States Patent and Trademark Office.