Fordham 27 (Report 4): Government Leaders’ Perspectives on IP

The final session before lunch on the first day of the Fordham IP Conference, was on Government Leaders' Perspective on IP.   

Director Iancu
Andrei Iancu (U.S. Patent and Trademark Office) spoke on "USPTO Updates: New Section 101 Guidance & Other Hot Topics".  He said that the most important issue of substantive patent law is Section 101 - patentable subject matter.  The statute hasn't changed since 1793 when Jefferson and Madison wrote it and it worked well for some 200 years, until recently.  "The issue must be fixed and it can be fixed given that there is broad based consensus in industry" and also because the shift was not as a result of legislation.  The key principles to keep in mind in fixing the problem are as follows:  (1) the 1952 Act separated eligibility from the requirements of patentability;  "We cannot mix them up again"; and (2) Section 101 patentable subject matter is what is not, per se, part of the Useful Arts - i.e. what is not meant to be in the patent system.  Director Iancu explained that every single Supreme Court case that dealt with eligibility had limited itself to the four basic categories of excluded subject matter, but the Court has deviated from these touchstones in recent years.  The mistakes that are and have been made include the application of the exclusions to all types of matter and all types of technology, even if it is not per se problematic.  Other mistakes, Director Iancu explained, are the conflation of Section 112 issues with Section 101 and considering inventive concept and novelty under the Section 101 assessment.  To address the current state of affairs, Director Iancu reminded the audience that the PTO has looked at all the cases and in January provided Guidance to examiners that synthesized the case law.  "The examiners really appreciate the new approach which has resulted in consistency", he said.  The unknown element right now is what the Courts will do, but  Director Iancu feels optimistic that the US legislature will deal with this issue, just as other jurisdictions have.  He also thinks that if the Federal Circuit wants to resolve the issue, they can fix the problem.  Howe do they do that?  They could take a few cases en banc and ask for amicus input to have a broad discussion on several cases to try and address the matter holistically.  Director Iancu concluded that given we are at the cusp of the fourth industrial revolution, we need clarity and certainty which incentivizes innovation.  Otherwise, the US could risk its leading position in innovation. 

Judge Michel
Paul Michel (Former Chief Judge, U.S. Court of Appeals for the Federal Circuit) said that the Supreme Court has treated patent law "not as if it is commercial law, but as if its constitutional law".  It has adopted terminology that is intellectually incoherent  - "directed to", "markedly different", "basic building blocks of science", etc.  These are not terms known in science with no clear meaning and no definition was given by the Supreme Court when it used these terms.  They are really undefinable.  It seemed to him, Judge Michel explained, that we are thus trapped by this situation.  This has resulted in massive uncertainty.  Judge Michel also flagged that a lot of US originated venture capital money is being directed to Europe and China - and quite properly because the patent eligibility issues that are being faced in the US are not present there.  He considered that the laws on patent eligibility in Europe and Asia have done a much better job in providing certainty and clarity on these issues which "is good for them but bad for the US".  Legislation, therefore, is really the only solution since the Supreme Court has turned down every cert petition  that could straighten out the mess.  Hugh agreed, saying that he didn't think that the Supreme Court knew what they were getting into.  Judge Michel thinks that it is more likely than not that over the next 2-4 years will see a positive change, which will be triggered by a clear realization by Congress of the problem caused by the outflow of investment out of the US to other countries.  This will speed up the resolve to make change, concluded Judge Michel.   

Karyn A. Temple (U.S. Copyright Office) followed addressing the audience on the "New Era in Copyright Legislation?" says she senses a change in the air for the ability in the US to actually enact copyright legislation.  Updating copyright law has often been an arduous and painful process (see DCMA).  There have only been minor updates of copyright legislation for many years and the Stop Online Piracy Act (SOPA) and Protect IP Act are cautionary tales of perhaps what not to do in trying to pass legislation.  Provisions and processes which already existed elsewhere (like blocking legislation), came to an end following slogans such as "SOPA means "loser" in Swedish". But recently, Karyn is hopeful that legislation dealing with small claims, enforcement, orphan works and issues in the music system will be passed.  The Copyright Office is ready to get to work on passing this legislation, she concluded, with the support and "team spirit" between all areas of technology and rights owners. 

Andrew Finch
Maria Martin-Prat (DG Trade, European Commission) then addressed the audience on "The Current State of IP International Norm Setting", before Andrew C. Finch (Antitrust Division, U.S. Department of Justice) addressed the question of "Why Patent Law’s Right to Exclude Is Pro-competitive".  Andrew felt that there has been a re-balance in the system, somewhat informed by the Head of the Division who started life as a patent lawyer.  There has to be an acknowledgement, Andrew declared, that the patent right is embodied in the Constitution.  The only place where the word "right" and, indeed, "exclusive right", is found is in relation to patent rights.  Andrew says that you can see this re-balancing in the application of SEPs.  The view that a breach of a FRAND commitment could automatically give rise to an antitrust claim is a concern, he said.  "That is a concern to us as its inconsistent with a right to exclude and somehow suggests there is a treble damages claim simply by virtue of an SEP owner's FRAND commitment (to negotiate on a FRAND basis)", said Andrew.  However, when negotiations break down and a breach of contract claim possibly arises, this does not automatically convert into an antitrust claim just because that commitment is made in the context of a standard setting association.  To take a different approach would disincentivize innovation.  However, there is a role for antitrust in standard setting organizations (SSOs) because they are a group of competitors who can exclude technology.  Because of this there needs to be a balance between rights owners and users.  The Antitrust Division is therefore interested in how SSOs adopt their patent policies.  They have written letters to the American National Standards Institute and look at the joint conduct of members of SSOs, to make sure they are adopting the most innovative technology.  Should FRAND disputes be automatically subject to an arbitration (a question from the audience)?  Andrew said that it is possible that it might work, but depends on who wants to implement it and how it works.   Claudia Tapia (Ericsson) asked whether antitrust bodies are interested at the point of the development of standards or at the approval of IPR Policy?  Andrew replied that it was certainly the latter - there is focus and attention on the antitrust risks on IPR Policies. 

Marco Giorello (DG CONNECT, European Commission) concluded on "Europe’s Copyright Reform. The Final Outcome" explaining that the Directive was adopted only 10 days ago.  Marco explained that it was a very long and controversial political process, full of public debate. 
Fordham 27 (Report 4): Government Leaders’ Perspectives on IP Fordham 27 (Report 4): Government Leaders’ Perspectives on IP Reviewed by Annsley Merelle Ward on Friday, April 26, 2019 Rating: 5

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