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Tuesday, 8 March 2016

Are myth and metaphor the primary drivers of innovation in intellectual property law?

It wasn't me....
Are myth and metaphor the primary drivers of innovation in intellectual property law?  First, I think the answer is no (knock the straw over). However, they likely play a role in shaping public opinion.

As Blogmeister Emeritus Jeremy warned in his parting comments, the traditional media needs to be watched when it comes to their positions on intellectual property. Even the Economist can make a mistake as Neil Wilkof recently pointed out. The media and the public love to run with a myth or a metaphor to point out “oh the IP system is so broken.” Even scholars, commentators and activists have no problem using a myth or a metaphor to their advantage (including me). Do myth and metaphor matter—the answer is likely yes.

Who doesn’t like a good story about a troll? Indeed, the troll metaphor is so prevalent, we have patent trolls, copyright trolls, trademark trolls, and even trade secret trolls. Recently, I gave a talk at the VIT University Law School in Chennai, India, and discussed patent trolls. A very bright student asked whether we could use the metaphor to describe the United States when it tries to push TRIPs standards on least developing countries (implementation delayed until 2021 and 2033 for pharmaceuticals.) My response was essentially--“why not.” The use of “troll” isn’t tied to the story of the troll under the bridge anymore. It is a bad dude who everyone should not like—especially when tied to IP. If you are on the side against the US, then why not use the term. There are, however, some good reasons we shouldn’t use the language. In an excellent recent article entitled "IP as Metaphor," by Professor Brian Frye at the University of Kentucky (also a talented film maker) in the Chapman University Law Review, Frye states:
"[I]ntellectual property metaphors provide the best of both worlds for rent seekers. They enable rent seekers to rely on the ostensible welfarist justification for intellectual property, in order to claim that it is efficient in theory, without actually ever considering what the efficient scope and term of intellectual property actually is. And they enable intellectual property owners to draw on moral intuitions about intellectual property ownership, without being obligated to actually justify the scope and duration of intellectual property in moral terms. In order to understand intellectual property, we must abandon intellectual property metaphors, and evaluate intellectual property in welfarist terms. Of course, it is probably impossible to abandon metaphor entirely, because it performs such a fundamental role in our conceptual systems. But we can certainly adopt metaphors that emphasize the welfarist justification of intellectual property, rather than obscuring it. For example, we could use the metaphor of “privilege” rather than “property” to describe those rights. Or we could use the metaphor of “charity” to think of the relationship between innovators and the public."
I am just a baby (UPC)! Who knows what
I will do?!
As to myth, what comes to mind is the case law cause of, and the USPTO’s reaction to, business method patents. Yes, business method patents can be a problem—perhaps unneeded, overbroad and indefinite. The cause of the large number of applications for business method patents is often attributed to the State Street case (1998) authored by the venerable Judge Giles Rich. However, that case wasn’t even a business method case! The claims at issue in State Street were system claims. All of that stuff about business methods was likely dicta. It set forth the useful, concrete, tangible result test, but still dicta as to business methods. It wasn’t until AT&T v. Excel Communications (1999) that business method patents were arguably sanctioned by the Federal Circuit. Indeed, even though there was such a brouhaha over business method patents in the U.S. for quite some time, examiners at the USPTO were applying the “technological arts” test which minimized the issuance of some of those supposed odious patents until the Ex Parte Lundgren case (2005) by the Board of Patent Appeals and Interferences. (It would take another 5 years to get to the U.S. Supreme Court’s Bilski case, which sanctions some business method patents, and is limited by the subsequent Alice decision.) Of course, quite a few business method type patents slipped through and we continued to have some “not so great patents” issued. However, the USPTO may have been “Rationally Ignorant” as Professor Lemley may say. And, the USPTO may have been savvy before Ex Parte Lundgren.

Unfortunately, business method patents still appear to be troublesome even after the establishment of a prior user defense for business methods, the Alice case, and the recent America Invents Act broadly applicable prior user defense. Notably, the Federal Circuit issued an opinion, Blue Calypso v. Groupon, on March 1, 2016, which takes a broad interpretation of the application of Covered Business Method Review by the USPTO’s Patent Trial and Appeal Board. The decision, following precedent, takes a wide view of what is a financial patent, and a narrow view of what is a “technological invention,”(which takes a patent outside of the Covered Business Method Review.) It essentially sweeps more patents into review by the USPTO. Business method patents still haunt us, and intellectual property law innovation continues — hopefully not to the detriment of innovation.

Professor Frye explores metaphors such as the farmer (reap where you have not sowed), the thief, as well as troll and others.  As he notes, the metaphor obscures what we should be doing or asking, but is such a useful way to comprehend difficult to understand concepts. Yet because of the power of a metaphor, it can push reform. Metaphor is probably not a primary driver, but it does influence us. No one likes a bad actor. (I thought there were not bad people, just bad behavior). What does the future hold? At Patently-O, Professor Dennis Crouch, in a post titled “US Patent Applicants Heading to the EPO,” notes that many practitioners believe that the EPO is less restrictive in its application of patent eligible subject matter than the USPTO. [Is that the beginning of a new myth? What do you think?] Interestingly, he also notes that recent data from the EPO supports that belief and that the Unified Patent Court will only make those EPO patents more valuable. Others have said it, but will the UPC be a troll friendly zone?


THE US anon said...

"However, they likely play a role in shaping public opinion."

An interesting comment to lead off the article.

Interesting in the least as it seemingly attempts to give weight and make legitimate that which should have a spotlight trained on it and its illegitimacy emphasized.

That "public opinion" - being shaped by whatever available forces - should play a role in determining the "primary drivers of innovation in intellectual property law" is simply a fallacy. The opinion does not make the universe revolve around the opinion.

This is arse-backwards.

The drivers are what they are.

Those drivers are the source of understanding in the study of innovation - and most decidedly NOT the result of public opinion manipulation.

It is NOT that "even the Economist can make a mistake" - it is that such are driven TO making mistakes when a desired end is being pursued to the exclusion of an objective view of innovation. It is that the Economist is making - and will continue to make - mistakes because it is pursuing a philosophical end divorced from the underlying reality. This highlights the very problem of thinking that innovation becomes driven by something if only the public is convinced of a certain philosophical view.

I am reminded most strongly of Galileo: Eppur si Muove. The "if only the 'popular view' is the driver accords with the Church and its "if only our view is the driver.

When one says "does it matter" - one must be clear as to what is being considered - opinion versus underlying substance. Opinions can be confused, obfuscated and conflated - and it is in the drive for clarity and objectivity that the underlying substance can be revealed for what it is.

For example, the attempt to tie "business methods" to State Street or later cases ignores the fact that "business methods" have been granted by the USPTO throughout its history.

The sweeping that you see is - and should be - recognized as a philosophical battle, and the reason the battle continues is because the arse-backwards treatment works. It is simply no coincidence that this is exactly the same mechanism behind the fact that propaganda works. "Sound-byte" journalism works. Swaying people by emotion (the "Tr011" pejorative) works.

Instead of lending credence to this type of methodology, the emphasis should be on exposing the methodology for what it is - and pointing instead to the elimination of the emotive "buzzwords" without substance and the discussion instead on the underlying reality.

MaxDrei said...

Mike you ask what we the readers think, on the issue whether the EPO is more permissive on patent eligibility than the USPTO.

Well, given that the EPC, Art 52, is more restrictive on eligibility than Section 101 of the US patent statute, it certainly would be interesting, if it were indeed the case. Me, I am sceptical that Europe really is more permissive on business method eligibility than the USA.

Mike, I suggest to you and other readers that an important factor in the USPTO's current strictness on eligibility is nervousness about the consequences of letting claims through to issue. Owners of issued US patents can use them to intimidate accused infringers in ways not known in Europe. That's because of the notion in the USA that it has a "strong" patent system which deters folks from infringing. If you choose to operate within the ambit of a duly issued claim, you are "betting the farm" ie putting your entire business at risk. The US patent system is one in which there is a high presumption that issued patents are valid and enforeceable, and that wilful infringement can be punished by triple damages.

Whereas in Europe there is far less fear of infringing.

In Europe, nobody gives any deference to the work of the EPO. A patent owner has to prove the fact of infringement and the infringer has only to get to a "more likely than not" standard of proof to blow away the asserted claim. That being the case, the EPO can take a relatively relaxed view on eligibility/patentability, and let 50:50 claims through to issue, to give the striving Inventor his or her "day in court".

Readers, keep in mind that the filtering the USPTO does on "eligibility" the EPO chooses not to do under Art 52 EPC. The strongest filtering is left at the EPO till we get to obviousness under Art 56 EPC. No other Patent Office in the world confines itself to technological obviousness, or has a "technological arts" test for obviousness. That's how it can filter out business methods under the obviousness filter. Nobody else has the "Problem and Solution Approach" so everybody else (including the USPTO) has to do the difficult filtering under the "eligibility" section of its Statute.

Mike Mireles said...

Dear THE US anon,

Thank you for your thorough and thoughtful comment. I think you capture the spirit of the post quite well. I also feel the emotion that you have about how these debates play out, particularly in the public and through the political process. There is much frustration out there, and I think Professor Frye is making some very valid points. While I agree that we can do better, as you note, the "arse backwards" methods work (to a certain extent)--practically speaking. If they will be used (and they will be used), the question becomes how to counteract them--likely with another metaphor for example. So, in a debate about the Defend Trade Secrets Act in the U.S., you have one side claiming "theft" and the other "troll." (I will write more on the Act soon). Also, with the Economist, in the specific instance, I don't know if philosophy really explains the mistake (or perhaps more charitably, the misunderstanding). I could be wrong. Thank you again for your comment and your passion (and reason). I hope you continue to post comments to my posts as there is much I obviously can learn from you even though we may disagree. Warm regards, Mike

Mike Mireles said...

Dear MaxDrei,

Thank you for your very helpful comment. I will be the first to admit I know very little about the workings of the EPO and European patent law. I probably know enough to be dangerous. I will say that I agree with the position taken by some scholars that the U.S. should filter through obviousness and not patent eligible subject matter. I think we are swinging too far against patents which I believe will ultimately harm innovation in the long run. I think the Supreme Court was stuck with statutory interpretation issues under the Patent Act and compromised by essentially considering obviousness (inventive concept) in patent eligible subject matter. I think the main reason besides Alice, that US practitioners may think the USPTO is more strict is because of the standard the USPTO is applying in inter partes review proceedings--basically taking the broadest reasonable interpretation of the claim. This standard will be reviewed by the U.S. Supreme Court. It will be interesting to see if the court swings us back the other way, or keeps it. The case is the Cuozzo Speed Technologies case. Please see here. [] Thank you again for your enlightening comment. Warm regards, Mike

Coal Stoker said...

And how about the biggest mythology in the whole field, handed down reverently from generation to generation - that publication of an invention in exchange for an monopoly is a fair trade that benefits society, hundreds of years after the concept was first dreamt up and many decades after the conditions of that trade were last substantially changed.

Mike Mireles said...

Dear Coal Stoker,

And who can forget economist Fritz Machlup’s famous statement to Congress that:
"If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one. But since we have had a patent system for a long time, it would be irresponsible, on the basis of our present knowledge, to recommend abolishing it."

Thank you for your comment. Anyone want to suggest what they think are IP Myths? Warm regards, Mike

Ashley Roughton said...

Is Prof Frye not just saying is that the same straw men can come in many guises and that our real task is to make sure that the argument does not concern the straw man?


Martin said...

That being the case, the EPO can take a relatively relaxed view on eligibility/patentability, and let 50:50 claims through to issue, to give the striving Inventor his or her "day in court".

Another reason for some of us EPO examiners to let 50:50 cases get granted is, that besides the unforeseeable outcome of an appeal after refusal, there are no independent courts which can overrule our regusal and still grant a monopoly, whereas alleged infringers and/or other parties do have access to courts to invalidate the granted patents.

Applicants do not get a third instance, opponents do get third instances...

So, in case of doubt I tend to lean towards granting...

Mike Mireles said...

Dear Ashley Roughton,

Yes, I generally think that is correct. And, at a certain level, I would hope that the ultimate policy makers are not influenced by the metaphor. However, my guess is that they are given the nature of the political process and their constituencies. But, perhaps I am not giving many as much credit as they deserve. Thank you for your question. Warm regards, Mike

Tim Jackson said...

Coal Stoker: "And how about the biggest mythology in the whole field... - that publication of an invention in exchange for an monopoly is a fair trade that benefits society

Ironically, this statement itself perpetrates a bigger myth: that obtaining the publication of inventions is the whole reason behind the patent system.

A more important reason is to provide the economic environment that enables and encourages innovation. Research and development of new products is expensive and time-consuming. And it's risky: there are significant chances that the work will be unsuccessful, either technically or commercially, and that the investment, time and effort will be wasted.

Given that, how many will be prepared to take that risk to invest in R&D, knowing that if they are successful their competitors will be able to just copy the new product? And not having had to make the initial investment, the competitors will be in a position to undercut their prices. So there will never be an economic return that pays for the R&D.

Patents are an incentive that drives investment in R&D and brings innovative new products to market.

MaxDrei said...

Martin, you EPO Examiner, you worry too much I think. You write that there is no independent court that can reverse your refusal.

That's wrong though, isn't it? How about the DSS patent application with its claims covering every Euro bank note that ever issued. Refused in DG1, upheld by DG3, then revoked by the national courts.

slartibartfast said...

Max, I think you miss Martin (EPO Examiner's) point. As I read it, he means there is no court external to the EPO which can reverse a decision of refusal. So if an application is refused by DG1 and that refusal is upheld by DG3 on Appeal, that's it: end of the road. The DSS case you cite isn't really informative. The refusal was overturned by DG3 - whereas Martin, I think, is referring to a case where the refusal would have been upheld by DG3, leaving the applicant with nowhere to turn.

Third parties have the option to file 3rd party observations before grant; then to file an Opposition against the grant of the patent; then to Appeal against any decision to uphold the patent after Opposition proceedings, or to act as respondent in an Appeal against revocation. At the end of all of this, if the patent is still upheld, they have yet another opportunity to try to invalidate the patent in the national courts or (soon) the UPC.

In other words, a third party has more opportunities to invalidate a (possibly erroneously) granted patent than a patent applicant has opportunities to appeal against the (possibly erroneous) refusal of their application. And for this reason Martin says that he will err on the side of the applicant in a borderline case. I think this is a reasonable approach to level the playing field for applicants, don't you?

MaxDrei said...

I hear you Slartibart. Sorry if I mis-read you Martin.

Me, I see in DG3 (on appeal from an Examining Division) a slight pro-Applicant bias. Fair enough except that, in the DSS case, being generous to a single Applicant/Inventor had the consequence that a troll (DSS) tried with the issued (but invalid) patent to shake down the ECB for a royalty on every Euro note that ever there was.

But what's the alternative? Of course the Applicant in a real 50:50 case should get through to issue. That has always been the case, since before the EPC was written, at least in the UK, and always will be (I hope).

But what about post-issue oppositions at the EPO? Does DG3 harbour a residual pro-Owner bias, should DG3 favour the patent owner, because the infringer can have another go at revocation elsewhere?

Martin (EPO examiner) said...

Thank You Slartibartfast.

sorry for having been too complex in my formulation, MaxDrei.

In cases of 50:50, I think yes. Erring in favour of the side which does not have further instances when the other does have another chance should be done.
But in cases of 49:51 the dice should fall even the on a final decission.

But how do you decide the wighing of the arguments? One argument I see as a heavy con may be seen as dissible by my chairperson, and as a showstopper by the second examiner.... So, in the end we vote, and since we have three members we will have a decission.

I am seen as slightly pro-applicant by my colleagues, but some applicants were of a different opinion.
All a matter of where you stand.

Have a fine day, everyone! The sun is shining wonderully here!

MaxDrei said...

Thank you Martin. But do not despair. Chin up and hold your ears stiff.

You see, every other Patent Office puts its users at the mercy of a single Examiner. Only at the EPO do I have the chance (at Oral Proceedings) to address all three of you face to face. And as we know from Kahnemann, Haidt,and many others, the Confirmation Bias is all around and the best chance I have of overcoming an irrationally negative First Member Examiner standpoint is to involve that Examiner in serious debate with two other colleagues. They can help him (or her) to see the flaw in his thinking, thereby enabling the Division as a whole (or TBA) to come to a decision that is as fair as humans can make it.

I have one passionate request to you: don't let one member of the Division (perhaps your line Manager) suppress all debate and insist on his assessment being followed. Even if you are not many years inside the EPO, you are intelligent enough to have a legitimate viewpoint. The senior member of the Division should be able to convince you with the quality of his argument, not by his potential to stagnate your career. Increasingly I have the feeling that Examiners at the EPO are too frightened of the consequences to debate patentability properly. As I see it, it is the debate that comes with oral proceedings that lifts the quality of every Communication from every EPO ED. I do not want to see that high quality dwindle away.

Mike Mireles said...

Dear Ashley Roughton,

I should make one more point to your very good question. I do think that labels matter--and not only the metaphors as I mentioned. I've heard at least one report that academics are being paid (not just through their ordinary pay from their institution) to redefine what exactly is, for example, a Patent Assertion Entity. Interestingly, several US academics circulated a draft on research ethics that, if I am remembering this correctly, would require a disclosure of funding for articles. I don't know if the two are connected, but I wonder. Thank you again for your question. Warm regards, Mike

THE US anon said...

"As Blogmeister Emeritus Jeremy warned in his parting comments, the traditional media needs to be watched when it comes to their positions on intellectual property."

As can be noted on several threads, the next question is "who is watching those watching the traditional media?"

Do we (the royal we) want to not watch a rather non-objective academia be the un-watched watchers?

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