Dan Ravicher is the Founder and Executive Director of the Public Patents Foundation, a New York based not-for-profit whose stated goal is to focus on the harms caused to the public by wrongly issued patents and unsound patent policy. One of their major activities is supporting re-examination issues actions at the PTO for wrongly issued patents. Prior to the founding of PUBPAT as it's referred to, Dan had a long history as a Patent Attorney with firms including Skadden, Arps, Brobeck, Phleger & Harrison. He also clerked for Judge Randall Rader of the Federal Circuit. Dan has been an active writer and speaker on the topics of patents and patent policy. Doug Crouch at the blog that's well known probably to many of you, Patently-O, wrote last week, Dan continues to do interesting work at PUBPAT. And then went on to include at length to his recently launched Software Patents Watch Program. In my research I found that he testified before the House Committee on course the internet and IP on June 9 2005 on the topic of patent reform. I met Dan last June at Bolt Hall where he entertained the group gathered to discuss patent reform efforts with an analogy between the siege of the hi-tech community and a swift boat attack ads targeting the Kerry campaign in 2004. Dan is going to take us through the subject of patent reform. What's it all about and why should we care? Here is Dan. Well thank you very much and thank you Jenny for having me here tonight. It's always a pleasure to speak to people about my work and about the patent system and its relevance to everyday life. I am very impressed by the hi-tech forum and looking forward to participating in the community that it builds around it. But I am sure at some point down the road you would be blamed for some pedaphile attracting a 14 year old to leave her house and meet in some there will be some comments blog that somehow it will be your fault and you will serve a short prison sentence. So I generally like to tailor my talks to whatever the audience wants. These are some of the issues that Jenny and I when we were talking about tonight's talk thought might be of interest to you. But if anyone has some burning desire for some question or issue to be addressed I would like to ask for that up front so I can work it in into my talk. Is there anything about patent reform that someone really wants to make sure that they leave here tonight, having a better picture of Yes. Where Trolls fit into this and what do you define the troll as? Okay, I have definitely got that as a bullet point some where. So I will address that, yeah. The second window being proposed for -. Okay, excellent, also covered so far, I am two for two. Anyone else? Inter party re-exams? I will work that in, yes okay? The role of universities? The role of universities, okay, in patent reform, okay. That's one that's off my radar screen, so I am reaching my maximum ram capacity. So there are lots of people other than yours truly who think patent reform is a worthwhile topic to be discussing. Several years ago the Federal Trade Commission and Department Of Justice held hearings about the state of affairs of the patent system and its effect on competition. The result of those hearings, they published on their website, transcripts, and lots and lots of people talked and they had them all over the country, was that the Federal Trade Commission published its own report about some issues with the efficiency and the workings of the patent system and some proposed recommendations about how to making things better. Noticeably absent was the Department Of Justice from that report. After this the National Academies of Science had their own hearings which were smaller in number than the FTC\DOJ hearings but nonetheless substantial in their own right, they also published their own report and there was substantial overlap with respect to the issues that were identified by these groups as needing some attention and proposed reforms. Congress people are interested in patent reform; we can draw assumptions about why Congress people care about something. To say about I am a cynic of Congress probably says I am too favorable. But they are driven by their consistencies, their donors, so their constituents and their donors must care about patent reform, thus that's why they care about patent reform. The PTO itself has identified patent reform as a very important topic and something that they are working very hard at accomplishing. There are also large constituents in the information technology industry. Microsoft ran full page ads in Washington Post and other newspapers saying that we need patent reform, that the system in their words needs to be rehashed or tweaked in order to make it better and finally articles having speared in The New York Times, The Wall Street Journal and dozens and dozens of other press media outlets, highlighting problems with the patent system and need to reform it. So what's wrong with the patent system or what can be done better? One of the most frequently identified issues is patent quality. Now patent quality, the most people means that the decision being made by the Patent Office are correct. They are rejecting applications that do not meet the standards for patent ability and they are allowing patents that do meet the standards for patent ability. When asked about a year ago the Commissioner of the Patent Office said, that in his mind poor patent quality means he is not issuing patents that are broad enough. To many of us we think poor patent quality means the Patent Office is issuing patents that either do not deserve to exist in absolute terms or that are broader than they deserve to exist. Many on the pragmatic front care about the extent of the remedies awarded for patent infringement. A good friend of mine, he is trial lawyer, he has absolutely nothing to do with patents whatsoever, he said Dan, when it comes to my slip and fall cases, its not the act, it's the injury, okay. I don't care how my plaintiff got harmed. I don't care if it was a car accident, ice on the side walk, I don't care what I care about is the X rays, what I care about is the proof of the harm. So a lot of people on the patent world have the same type of feeling. If Jaywalking is a crime may be that's good or bad, but what they really care about is how long of a prison sentence do I have to serve if I am guilty of jaywalking or in this case patent infringement. So remedies specifically for those of you who don't know are injunctive relief and enhanced damages that are available for willful infringement. Many people are also concerned about litigation abuses that are existing in the current patent system, namely by continuance fee plaintiffs litigators and they are also concerned about what are called the subjective elements of patent law which our judgments that are difficult to preordain or set a predictable test for because they come down to some subjective factor that is fact specific. So speaking of subjective opinion, the opinion about these issues varies greatly depending upon who you ask. There are some people who feel very passionate that there is a drastic need for patent reform and there are other people who feel there is absolutely nothing wrong with the system whatsoever. Many large patent holding practicing companies have the opinion that the patent system, much like Josh Leonard wrote in his book "although once created fuel to the fire of innovation is now throwing sand in the wheels of innovation" and that it's a government system and by definition government systems have errors and that those errors are negatively impacting their ability to bring better products at a better price to consumers. Small inventors feel very passionately about the need for strong property rights to defend their intellectual property as they see it. Whereas many small businesses realize that even if they have a big gun themselves they will be always be outgunned by their larger competitors. And so they there are at a disadvantage in an arms race mentality or in arms race system. Patent attorneys generally most patent attorneys I meet are ethically responsible in adopting whatever position their client has, although the existence of a patent system is a good thing for patent attorneys, I don't think there is any patent attorney who would argue for the abolition of a patent system. Law makers are similar, they are driven by their constituencies, but there are some good research done about the tendency of specialized courts to enlarge their jurisdiction by expanding the scope of the law over which they govern and also expanding their own jurisdictional basics and some people have asserted or accused the Federal circuit of falling pray to this phenomenon. A patent troll the term troll I don't like, I think it misrepresents the issue, but a lot of the press likes it it's a very sexy, easy grab able, sticky term for people. It generally, it refers to a patent holding entity that has no significant business other than to assert the patent. Right so there a holding company and there is some patent trolls who literally don't even have a phone number, they have just a PO box with a Delaware corporation registration and they are represented by contingency fee patent attorneys. This is similar to the strike suits by the share holder who is a secretary at the law firm for the patent attorneys. So this is a new phenomenon for a legal world, but in the patent world, it's a relatively new and to some people annoying phenomenon and the press overwhelmingly have been in favor of patent reform and their articles they usually rely on anecdotle evidence or specific cases of some bad thing that happened, this one small business got put out of - out of business because of some patent holder or etc. And so they are generally for patent reform and the non patent holding public i.e. my mom - doesn't even know what a patent is. So, they have no opinion. Some people that I think you could classify as being opponents to reform, these are - since the reform efforts we have talked about so far would all be categorized as weakening patents, if you want to use that term. These are people that rely on the strength of patents. So, the pharmaceutical industry, independent inventors, your trolls and perhaps not surprisingly but perhaps causing concern is the fact that many bar associations AIPLA, IPO, IPO that are Intellectual Property Owners but any AIPLA and bar associations tend to be very conservative with their advocacy for reform. So where is reform when it come from? The first place most people think of and sometimes the only place they think of is from congress and there has been a lot of activity in congress. I will not use the word productivity, I will just say activity, do you still remember having substitute teachers in school and they just - busy work. At the end of the day you did a whole lot of effort running side to side but you didn't move any closer to the enzone. As Jennie said, I was asked to testify in the day that the house introduced their patent reform act of 2005 and to tell you what was then a confidential statement I was asked by the democrats to come - be the crazy liberal guy who would make their proposal seem very moderate. So, I didn't tell them I am actually very strong conservative, I was more than happy to come and share my views. But I have not been asked back. That was in June 2005, there was a lot of reaction to the text of the patent reform act and there was - what was called a cotton coalition. I don't know if that was the buzz word for 2005 but there was a coalition revision which meant a bunch of the industry people got together in the pharmaceutical industry on one side and many of the large IT companies on the other side said lets come to some compromise because the chairman of the sub committee Lamar Smith had said basically I am not going to push through anything that pisses anyone off right. So if you guys can all get together and agree on something I will rubber stamp it - of course, so they got together and they talked and you know, BSA and Microsoft and IBM on one side and you have got the Phizers and the Eli Lily and etcetera on the other side and they got rid of some provisions and they modified a few other provisions and so they came up with this coalition print of September 2005. They had lots and lots of hearings both before the introduction of the bill, in between the bill and the coalition revision and sense and it still sits in committee. The senate also had many hearings during this whole time; they introduced their own patent reform act of 2006 just last month. It is substantially similar to the house bill some provisions that are missing in the senate bill from the house bill and there are some additional provisions in the senate bill that were not in the house bill. And, perhaps very illuminating is the - the sponsor of the bill's own statement within the second paragraph that is introducing this bill that he is very proud of it's not perfect. I don't think he passed that statement by any marketing person, I don't think there is any marketing person worth their grain of salt, they would say when you are putting this out to the public admit it - its not perfect. Its so up there with I am not Santa Claus, so what's in these bills, what are they talking about, well there are lots of different provisions, one of the perhaps to use surprisingly controversial provision is the move to what is called a first to file system. Everywhere in the world is first to file as between two people come up with the same idea. The first one to file the application in a patent office is the one who is entitled to get a patent. It doesn't matter if I came up with it 15 years before you did, if you beat me to the patent office by one day, you are the only one who can get a patent on that idea if its new and unobvious. The United States is different, we have currently a first inventor system, so if I came up with its 15 years ago, you just came up with it today, tomorrow you file and I file on Friday, then what gets declared is an interference and we fight out, who ever can prove to have been the first inventor to have come up with. Now many people assume that a first inventor system favors the small guy - right because who else would be delayed and running to the patent office, right the big guys can file patent applications every day, they can hire a team that lowers to do this. The statistical analysis of interference proceedings show that small guys and big guys win the same amount of time. So the statistics say its not really small guy favorable but lots of people debate whether or not moving to a first to file would be good for small inventors and not in fact, a small inventor lobby, small inventor representatives are very upset about moving to a first inventor to file system. Both bills tend to limit the situations in which willfulness is which is the basis for trouble damage. Is it available, if you are guilty of patent infringement, you pay either the higher of loss profits or a reasonable royalty, which is pretty fast and economically sound principles almost like contract, you infringe a contract, you put the other person in the position they would have been, had you not breached. It is the same thing for a regular basic infringement. But if the patent holder can prove that you acted with some disrepute in infringing the patent, you didn't abide by your duty to avoid infringing, then the judge in her or his discretion can increase the damages up to three times and also award the attorney's fees of the plaintiff against you. So where as regular infringement is a speeding ticket, well from this is a reckless driving, they get you arrested. So a lot people are concerned more about the remedy's aspect of this enhanced damages than they are about regular damages. Inequitable conduct is kind of like the willfulness, analogy but with respect to what the defendant's allege against plaintiffs is the subjective - you purposefully did not disclose that 300th reference which may have been material and therefore the entire patent should be invalid because you committed some inequitable conduct. I think it is disgusting because 90 percent of all litigations involve allegations of inequitable conduct and whatever you may think about me, most patent lawyers are good people. So, in 90 percent of the cases of patent prosecution, there wasn't someone trying to fraud or mislead or lie to the patent office. And to incentivize litigators, who some would always say "it's malpractice not the claim inequitable conduct. To incentivize to make these allegation against their peers, I think is very destructive for our work and for our area of the wall and I am fully in favor of minimizing inequitable conduct to a reasonable size. We see in both bills what is called Post-Grant Review and everyone is all excited. Oh now people can challenge patterns in this administrative proceedings without having to go to court and like the question was asked well what about re-examination. Isn't that a post grant review and the answer is obviously yes, the x-party re-examination was created in early 80s, enter parties was created in 1999. So you already have two forms of post grant review but these bills wanted to create a third form of post grant review. Now, I will talk about the second window issue when we come back to this later. The going back to remedies - there is some recent cases from the federal circuit which make the damages awarded to a plaintiff much larger than, what a lot of IT companies would like for one instance of apportionment means, if I have to sell a software system like an operating system and office productivity software, if some guys has got a patent on how email gets filed in a folder automatically, because I set up a filter, I shouldn't have to pay five percent on the cost of my entire software. My damages should be calculated on what's the value of that one piece of functionality with in my entire set of software. Under current federal circuit law, its much easier for that plaintiff to argue they deserve five percent of the entire thing. The entire cost of all the software not just what ever is that, what ever is that inventive added amount or added value by that specific invention. And so these bills try to force the federal circuit to a portion, the relative amount of damage is awarded to the relative inventive input of the infringed patent. There is also the 271F case about its territorial, extra territorial infringement. I will talk about that in a second. Venue, a big cause that a lot of people see is the reason why we all have these trolls and plaintiff's fee, continues if the lawyers is because Texas passed tort reform about four or five years ago. So you had all these plaintiffs attorneys in Texas who were doing slipping falls and car accidents, now they have nothing to do, because Republicans took over Texas legislature and put the kebash and all that stuff. So they are sitting around and twiddling their thumbs and they are like, there is this law firm up in Chicago that makes a lot of money off of suing people and contingency fee. The law firm's Nerose Givoni for anyone who wants to look them up. And they were a kind of the Archetype of this Business Model which is to take a contingency fee or an equity share in a patent, and then start asserting it. Send out form letters to hundreds to people and then start suing some people and get settlement. Lemolsen was one of the first named inventors, who perfected this business model, and Cades after him and now we have the whole pedigree of followers. So some of the parties the IT industries specifically says, well we can't get just favorable jurisdiction because now all these guys like filing in the eastern district of Texas which a friend of mine went there and he said, he thought he was the only Jew, who was there, who had ever been there and who would ever be there. So, now about two and half hours east of Texas, is one of the most busy patent courts in the entire country. That's because you you got all these Texas lawyers down in there and all these war stories about, and if we don't hire the brother of one of the judges, law firms then you going to get less favorable treatment by the courts and, its all those great things that we learn about and Civ Pro about, about why, venue should be fair and not such a home town advantage. So there is some provisions who try the limit venue to more equitable if not defending friendly jurisdictions. So I call the Supreme Court - the back yard, because its kind of back behind the hill. There is lot of reform coming from the Supreme Court. On average in supreme court we take one patent case every three or four years, in the last two years they have at least considered taking over a dozen. eBay was their biggest decision so far, this case started with the federal circuit rule ,that upon proving infringement, a permanent injections so automatically be granted for closing any concern for equitable factors that all other permanent injunctions and all other areas of the law get reviewed, and the court said patent laws is no different than every other barrier of the law, even when it comes to granting a permanent injunction, all the equitable factors ,which on law the granting injunction should be considered. So in the first house bill, there was a provision talking about this granting of permanent injections in that all that group of factors should be considered, pharmaceutical industry went nuts, crazy said absolutely not this is deal breaker and so it was removed from the coalition revision. So the Supreme Court did it for them. The next case was regarding what subject matter is eligible for patenting the federal circuit has said, it was congress's intent that any thing under the sun made by man shall be patent eligible, I strongly disagree with that, I think the federal circuit has greatly expanded the subject matter which is eligible for patent law, for patenting beyond what the Supreme Court precedent allows, so the supreme court took the lab court case which involved this issue and after hearing their arguments and reading everyone's briefs and wasting about $500 of my money to send them briefs, they then said you know what - we shouldn't have granted the petition for a certain. So they got rid of it. KSR as you heard mentioned on the snip it earlier as a case dealing with the federal circuit's test for obviousness, that's going to be heard in late October. Medimmune is versus Genentech which I think is a some what smaller employer in this area. This question deals with, if I have a valid and paid up license to your patent, do I have declared to the judgment jurisdiction to sue for a declaration of invalidity of the patent. And the federal circuit has said, that no you don't, because there is no justice able controversy. You have a fully paid up license, you cannot say that you have a reasonable apprehension of suit because you have a license in the patent can't sue out well the Supreme Court precedent Leer v. Atkins said, well there is some issues about public policy and some times the licensee of the patent is not only the best party to challenge the patents validity, but some times the only party you can adequately do so, and there is a strong public policy in encouraging people to challenge wrongly issued patents and ensuring that we wet ourselves ,of what are truly invalid patents. So the Supreme Court took that case and they will be hearing that the early part of October. 271f which I talked about earlier, is the extra territorial, infringement case. This is the provision of the patent law which says, if you exports a component of something, a part of something that wouldn infringe a US patent, and that some thing is made overseas, you can be guilty of patent infringement here. So this is the case where Microsoft sends one gold disk overseas and then they take that gold disk and they make their thousands of copies and put it in all their computers in, China, Taiwan, or what ever and then they distribute all these computers AT&T sues Microsoft infringement and say And Microsoft say its okay we are guilty of infringement, we will pay you one reasonable royalty for a golden disk and AT&T says, oh no no no no. You owe us a royalty on all those computers that you made overseas. And so many people believe that is an overly expansive reading of 271f, and so this case is up at the Supreme Court, for the social reviews of the solicitor general. Okay from down the river, which is the patent office in my language ,because its down the river, they have proposed some very controversial changes to their rules, as we all know there is the statue and then the agency is empowered to implement that statue comes up with its own rules to further implement the law. They have proposed two significant rule's changes. One would limit the number of continuation applications that you have a right to file as an applicant. A continuation application is a way of keeping the discussion on going with the patent office, when you are applied for a patent. Typically when you apply for a patent and the patent examiner rejects it, you can then respond to the examiner's rejections. And then the second time, she makes the same rejection, she can make that final. Traditionally then you would have to appeal that final rejection to the board of appeals with in the PTO, if they backed her up then you would go to the federal circuit. Other avenues that you can take is where you have to get the final rejection you can pay a fee to file a continuation application, and by paying that fee and filing continuation application, you can force the examiner to withdraw the finality of their rejection. So you can continue this in seriating filing of application after application after application, you continue the negotiation. Well the patent office sees that as rework, they say why should miss Examiner have to do the same evaluation of the patent time again and time again. So they want to limit the number of continuation applications that any applicant is allowed to file. They also want to make the examiners job easier by limiting the number of claims she will initially review. Some unverified stories of tactics that patent prosecutor use is, if I want to get a patent on some thing I can overborne the patent office by submitting 500 claims in my patent and tons and tons of prior references and because of the quota system, which is applied to each examiner, which allows them to spent about 20 hours for applications in total, they will let it off through. So the patent office wants to prevent people from using the multiple claims as they - prevent people from using the multiple claims as a way to burden the examiners and say you are only allowed to propose ten claims and those are the only ten at the examiner will view and if she allows those ten or some of those ten then she will move on to examine more claims. But as an initial matter you consider many things as you want to but really going to review a certain number of them in order to decrease the work load and the burden on the examiner. Of course lot of patent applicants don't like that because that is going to add delay and uncertainty and burden on them all of which is harmful to their interest. The patent office also recently released its five year strategy plan, don't give them too much credit for that they required by law by having new five years strategic plan every five years and the due date has come out. So I guess they want to run into holiday so they got it out but some there is some interesting language in here which is quite quite unique they are indicating that they may want to come up with a menu of options for applicants to select from, pretty much today there is only one option, you file your application for utility patent and it gets in line unless you have a petition to make special and when the examiner gets to it in 18 24 months, then you start talking about it. Well the commissioner Dudis has said that well we recognize that some of our customers may want different resulting products from us than other customers. And so there are many specifics about these but to be talking about different kinds of patents is a very provocative topic and then the other sentence which follows it up is - we need to move away from these one sized fits all system that we have today. So here is where I get on my high horse - and tell you what I think about all this. Well to me the constitution says the patent system is to remote progress in the arts and useful sciences. Its not to make people rich, it's not to do all these other things that people says patents are about reward inventors and that kind of stuff. Those are intermediate steps and sometimes unnecessary steps to advance technology. Above all else every decision should be made to advance technology that's the goal that our constitution set forth. Secondly as a matter of fairness I think everyone who is impacted by the patent system should have a right to say what they think about the patent system. Traditionally the largest and sometimes only voices heard in discussions about the patent system are patent holders. That is changing some what and there is more representation of other interests in policy making decisions about the patent system but it is still not to state where I think all sides are being given equal time to represent their views. Being a conservative and some could call radical conservative, I see patent law as an economic vehicle much like contract law and therefore if it's an economic vehicle, it is meant to encourage innovation in advanced technology. Everything that is based in equitable rhetoric right I have a property right, you are stealing my property, it reaches out to a advance of our persona which exists, but when it comes to economic law just like with anti trust law and just like with contract law put that aside and making an analogy here in contract law, penalty causes and contracts are generally enforced. You know I have my contract and say you will sell me your verdicts at this dollars at these times and then I had a cause is and if you breach you have to give me your first born child okay. Courts are not going to they are not going to enforce that right. Because that's economically wasteful right they are whole Cos Theorem like I somewhat remember that from UVA. We should maintain the same perspective with patent law and our decisions should not be influenced because as I heard one federal circuit judge once say I was sitting there thinking about what to decide and I knew if I ruled the patent invalid, that a lot of people would loose their job that just made me sick right. We are going to uphold the patent that is invalid because some people may loose their job, I mean no I don't want anyone to lose their job that's not the point of patent law so that un innovative people can keep their jobs, that's now our patent law is all about we want to have a full employment act and I am more than happy to talk about that in separate regimes, patent law is not that a regime. Now on that tangent, on that rant, it needs to be recognized that over rewarding inventor ship has a net harmful economic effect right, if some one has added one million dollars worth of value to the economy by coming up with a certain invention over 10 billion dollars or whatever. Every dollar or more than that that we reward them is a net economic loss to the system we are giving them more than they have given society and all of our legal regime should have a net beneficial effect on society, not on individuals and lastly once when I get to these point most people think I just cant stop patents and I am just this crazy, lunatic - I actually believe in a strong and fit patent system and what I see today is a sick and perhaps obese patent system and what we need to recognize is just like giving every student an A makes people feel good. Right? It harms those kids who really deserved the A right? Grade inflation, financial inflation, I sometimes ask this - how many people in here would be happy if I said starting tomorrow you will be paid twice, your regular salary for doing the same level of work right? Anybody unhappy about that? What if I said everyone else in the room starting tomorrow is going to get paid four times, their regular pay, now you are not so happy right? So when we start talking about rewarding inventory ship, we need to look at the whole symbiotic relationship in the patent system and say yes it feels good to give more patents to people but if that has an inflationary effect which is devastating to the technological innovation stream, we need to recognize that and we need to have some pollution control, we need to have some inflationary controls to make sure that we are not just handing out you know I can call up the treasury tomorrow and say stay open in this weekend, print more $100 bills and mail them to everyone right? And that sounds good to a lot of people at first and so our entire currency is devalued to nothing. And that's what I see is happening with our patent system today and also really scares me is the value of patents is decreasing as it is expanding beyond what is reasonable. Now the same thing that's faulting the patent system flaws almost every other areas of law. This is why we have to have law because in nature there is this tragedy of the commons and we need to coalesce interest, we all have incentives right to go I have the example of every there is a whole group of trees in the forest and there is a whole bunch of people. Everyone has an incentive to go grab their tree and just to keep it and cut it down and use it. But that has a net negative effect that they all will get together inside, how is the best way for us to ration the trees to make sure, we have what we need and then you can grow more trees for the future so that they were wise about our some total usage of the resource which is available to us. The same type of discussion, the same type of thinking needs to occur when it comes to the patent system. There is a - what I mean by that is generic drug companies are the best example. Most people think generic drug companies hold the flag for the non patent holding public right? Generic drug companies will fight the patents of the brand right? Go generics- false. A generic drug company's incentive is to somehow work itself under the umbrella of the patent so that it can sharing the profits created by a douopoly the brand and itself as supposed to having the compete they are fully competitive market. So when the first generic challenges of brand name patent, it actually does not want to prove the patent is completely invalid, why? Because its sunk all that resources all that time, it took all that risks, to create a playing field where all of its competetitors can enter the market without having recruit that investment. The generic company and you can make the analogies to the IT industries, when an IT company is challenged by a patent, they really don't want to prove the patent invalid because an everyone else is going to free ride on that effort. What they want to do is negotiate some very cushy license or they want to get some deal, or work something else so they can get under the economic umbrella and protection and super competitive pricing provided by that pattern protection. They don't want a fully comparative pattern so these economic incentives actually don't encourage people to challenge patents and prove they are invalid. And one of the largest problems is we don't have adequate participation by all interests which are affected by the patent system in namely the general public, they don't see how are the prices for goods or the less availability of goods is directly impacted by our patent system and one of the reasons for this unawareness apathy is the mantra oh the patent system is too confusing. It doesn't relate to you or you couldn't understand it, or its just for inventor, its not for you. So you need to be this increase in awareness and knowledge that the patent system impacts me even if I am not a patent holder, simply by being a consumer, simply by being a tax payer and being significantly impacted by the patent system. I have these concerns about the harms that are caused by the patent system. I don't think its fair that some people can't afford to be representative in the patent system, this happens a lot of litigation where the average cause of litigations being two and four million dollars, a lot of your small businesses just simply can't afford that so they came to settle. I have due process concerned about that, substantive constitutional concerns, there are patents on that relate to voting the women's right to choose to terminate abortion pre viability, there are even patents that could imply to religious activity and unlike copyright law were we have fair used is absolutely no defense to patent infringement for exercise of a constitutional right. I also have the concerns about the recapture of the public domain that the supreme court has had for a decades and decades and the resulting economic and technological harms that result from a siphoning of funds from R&D in the advance of the technology to undeserved patentees and the transaction cost attendant there too. So what is my organization doing about it, one thing we do is use post grand opposition proceedings, re-examination, the challenge patents that we determine are causing significant public harm and have substantial questions regarding their validity, we provide free probono counseling to economically disadvantage clients. Do not in any way assist parties in acquiring or asserting patent rights we do amicus briefs and talks like this, and talk to people of the ideas of sharing and premise the licensee of patent so that collaboration can occur without everyone worrying about, well they have got all these arms and these have got these arms and so in essence a patent commons is a peace treaty - negotiating a peace treaty amongst arms holders. So what about some of the specific patent reform issues we that we discussed. I don't see any economic justifications for injunctions what so ever. I am just going to say it's how I feel injunctions is a equitable relief, as I said earlier equitable rhetoric should not pollute economic law. We don't see injunctions in contract law, we don't see injections in many other areas of economic law, I don't think we should have them in patent law what so ever. There is always a price that can be paid for the value that the patentee is given to the community. Now de facto injunctions will exist. I.e. the pharmaceutical industry, if a branding pharmaceutical patents are infringed entitled to the lost profits, say they will profit much more from the sale of one pill then the generic manufacture, they will make from the sale of their pill. Because you can assume the manufacturing cost of the same the generic will only sell at a discount to the brands of the generic will always less profit. Therefore the generic will not be able to come on to the market if they have to pay the lost profits of the brand, because they wont be able to make enough money to pay for that, and also have some additional profit left over, it will be losing proposition, and de facto staying off the market I am fine with - its just the court ordered injunctions where there isn't that economic justification for the precluding of competition, that I have a problem with. Continuations, I don't think there should be any continuations what so ever, they already get four bites at the apple, you get your application you get your response to initial rejection, you get your appeals for the patent appeal board with in patent office and you get your appeal to the federal circuit. That's more opportunities to prove your case ,than the average criminal defendant that my significant other defends everyday gets and so I have a hard time feeling sorry for the patentees having more opportunity than poor minorities and poor other defendants have, of proving their innocence of a crime. But I know that's a movement from a we have this bites at the apple as we want system and paradigm. So there is some uncomfortable with that. The second window which is mentioned right now ,the post grant opposition proposal say, you can follow your post grant opposition with in, nine or twelve months the difference between the two bills and the issuance of the patent or there is second window, within six months if the patent is asserted against you, then only you can file it. Well a lot of patents don't become important or valuable within the first twelve months of their issuance, so its not its not going to be an incentive for someone who challenge that quickly. so that window will not be used very often, and then the second window is only available to someone who the patent is been asserted against, they have a disincentive to piss off the patent although by following the post grant reexamination or the post grant opposition and organizations like mine which were created in order to beat the bad guy, be the front person challenging these patents, wouldn't be able to involve itself in that process. So I have substantial concerns about the limitations on the post grant oppositions preceding introduced in the bills. Obviousness, the federal circuit test, in my mind vitiates obviousness ,as you heard on the snippet earlier they pretty much require a literal suggestive motivation, or teaching, the SMT or smut test as I call it ,which you have a prior reference which specifically suggests doing some thing that's novelty, its no longer novel. So what's obvious if its, obviousness has been something different than novelty and under the federal circuit's test, there is no difference, so I have severe concerns about the federal circuit's test, and I am hopeful the supreme court will do something about it. I mentioned the quota system and the fact that the patent office calls the patent applicants, their customers, I think that all decisions on whether or not to grant patents should be made purely on scientific merit without any time pressure, the quota system is not only a time pressure, its also financial pressure, because, you are man of bonus is determined by the how many cases you closed this month. Its much easier to close the case by issuing the patent, because no one is going to object to the issuance of the patent, if you try to reject the patent, you going to have to do this fights and appeals briefs and all these kind of stuff, its much harder to reject the patent, and if you issue the patent, you get your claim, your quota made much easier, and constitutionals rights and technological research should always rain supreme over patent rights. There should be a fair use of equivalent under patent law, and with respect to technological research there should be an exemption from patent infringement for research. Patent infringement in my mind will be fine and who is defined only by the sale of an infringing article, and not the making and using of it or you know, we can compromise somewhere in the middle - the making and using of in scientific research. The issues around research tools but the general theory should be that, a system designed to advance technology should not itself be used to thwart the advance of technology. So that is the end of my presentation. Thank you for coming this evening, thanks again to Jennie and I will be happy to answer to any questions or responds or comments any one may have.
