Last year, I investigated the role that the presumption of validity, and the evidentiary standard for rebutting it, played in validity challenges adjudged at the Federal Circuit. In March 2010, Professor Crouch graciously published the study's results in the Patently-O Patent Law Journal. [Link]. In response to Microsoft's petition for certiorari challenging the Federal Circuit's hard-line application of a clear and convincing standard, please find updated statistics below that include Federal Circuit decisions through October 2010. To learn the methodology for collecting the data, and to read my understanding of what they suggest (and do not suggest), please refer to the original publication. A spreadsheet of the updated data is available. [Link].
At least eighty-eight of the one hundred nineteen (74%) patent challenges analyzed were evidentiary-standard independent. Of these determinations, forty-one (47%) were based on a granted motion for summary judgment, six (7%) were based on a granted motion for JMOL, twenty-four (27%) resulted from a jury trial, and seventeen (19%) resulted from a bench trial. Twenty-one (24%) determinations were reversals and seventy (80%) resulted in invalidation. The Federal Circuit mentioned the presumption or the evidentiary standard for rebutting it thirty-four times (39%) and expressly applied them eleven times (13%).
At most, thirty-one of the one hundred nineteen (26%) patent challenges may have been evidentiary standard dependent. Of these determinations twenty-three (74%) resulted from a jury trial and eight (26%) resulted from a bench trial. None of these challenges resulted in invalidation, and each was upheld at the Federal Circuit. The Federal Circuit mentioned the presumption of validity or the evidentiary standard twenty-one times (68%) and expressly applied them fifteen times (48%).
Thanks to Lucas Watkins and Steve Kenny for helping to create this update.
We must confront future with optimism
oh so funny!
Psst, IANAE – ya might try reading beyond the title – the list O stuff affected includes patents of invention, which be the same thing as…
wait….
.
.
wait…
.
patents of invention.
Trash I do not understand you. Europe does have one substantive law of patent validity. Been there since 1973. There is no lack of political consensus on that. The difficulty is whether a court in one country can shut down a factory in another. Can a Canadian or Mexican court shut down a business in the USA that it finds to be infringing a US patent? If not, why not. Is it the lack of political consensus, perhaps? There is not yet any United States of Europe. Are you saying there should be? Why?
C&C: Just look at your own apps & issueds.
Bottom line:
It took Clear & Convincing to get them.
No, it took “the examiner has not met his prima facie case” or “the examiner has not shown all the elements in the prior art” to get them. And generally I only have to address one piece of prior art in any meaningful way.
Clear and convincing is more along the lines of a search and an ESD. And we all know how applicants feel about those. Litigious, mostly.
Ned: When dealing with prior art that is not anticipatory, and the issue is obviousness, I would hope you would agree that the evidence should be convincing.
Well, it depends on what you mean by “convincing”. Evidence always needs to be convincing. I just don’t think it usually needs to be “better” than a balance of probabilities. If you have made your case on a balance of probabilities, you have a stronger case than your opponent. If that’s not enough to win your civil case, there should be a compelling public policy reason for it. I’m not clear-and-convinced that knee-jerk deference to the PTO is such a reason, particularly when you’ve just shown that the PTO was probably wrong.
Anon: He discounts without comment the better underpinnings of the standard
Really? Another land patent case? It says so right in the title. These are patents of invention. They’re not the same thing.
Max: How about useful arts in Germany? Are they progressing? What car do you drive Ned?
FWIW, the new Buick is proudly and uncompromisingly marketed as German-on-the-inside. Even Americans seem to think Germany has done better in advancing that particular art. You might say, if you were so inclined, that General Motors relies on German innovation for its start-ups.
Trash: How truly singular is your so called one substantive law, when even as you admit there is an absence of political consensus as to its application?
There’s always an absence of political consensus. Even America doesn’t have political consensus on a lot of things. Maybe that’s why the Federal Circuit doesn’t trust random district courts from all over the country to know the one substantive law and apply it the right way. It’s a veritable comity of errors, and Europe would do well to avoid that sort of thing.
MaxDrei,
Your summary of the situation captures nicely the content of the trade press article that happened across my desk. The only thing not captured was the tone of the article, which ran to the effect of “time is running out.” As I do not normally deal with such matters, the tone only caused a momentary stir in my mind.
As to your view of the US patent law and the “single” European law, I believe that a 180 degree view is appropriate. How truly singular is your so called one substantive law, when even as you admit there is an absence of political consensus as to its application? It is this diversity that belies your belief. Contrast that with the fifty United States, wherein there is a true single Federal Law that universally applies. This is not to say that patent law (here or in Europe) is not complex, but that complexity has little to do with the universality of application and the ensuing clarity.
Thanks Cy. I’m cool. Only too happy to “take the bait” as you put it. You see, I’m just expressing to Ned my reservations that the US patent system, as such, promotes the progress any better than the system in Germany.
Trash suggests that talks on a pan-European patent litigation regime have stalled for “a decade or two”. That is an underestimate. They stalled in 1973 and have gone nowhere since then. Think about it. Would you like a judge in Italy or Spain or Greece deciding whether to enjoin a factory in your town? When we talk patent litigation we are talking about folks losing their jobs, right?
But, meanwhile, in the absence of a political consensus, the judges in the main European patent litigation jurisdictions are doing something about it. There is only one substantive law of patent validity in 40 countries in Europe, and on what constitutes an infringing act. Now that the German Supreme Court has within the last 12 months fallen into the European line on novelty, there is a good degree of legal certainty and uniformity in Europe on all aspects of patent validity. As to what is the enforceable scope of a claim of a European patent, there too the degree of legal uncertainty goes down every year. Most people in the know do not want the European Court of Justice intruding on patent law and doing the damage it has already wreaked on trademark law.
Perplexing, you assert. Not half as perplexing as US patent law is to Europeans, I’ll warrant.
Can you give me a link to the press article you have in mind. Well-informed and on point, is it?
Ned asks whether we have a patent system in Europe, and what we do to promote the progress of useful arts.
And Max takes the bait. Relax, Max, we know that Germany rocks.
I believe that Ned was referring to the Euro-patent, where talks had stalled for a decade or two and that have received some press recently.
An individual country is nice, but to Americans, the labyrinth remaining after decades with the great multitude of countries, languages and different sets of rules is perplexing.
Ned asks whether we have a patent system in Europe, and what we do to promote the progress of useful arts.
Take Germany. Yes it has a patent system. Loads of patent applications, loads of patent litigation, and most of the opposition activity at the EPO. More patent attorneys per head of population than in the USA, I fancy.
How about useful arts in Germany? Are they progressing? What car do you drive Ned? What machines run in the factories of your clients Ned? Look at Hamburg. Container ships arriving round the clock, full of cheap goods from China. But they are not sailing away empty. The entire world is buying German manufactured goods. There is very little unemployment in Germany. Tax revenue is holding up. Its Government is spending money on infrastructure like there is no tomorrow. Not many people are grumbling. There are even a few start ups relying on a patent profolio to attract investors. I do not see the patent system in Germany as a drag, even the bit a certain Adolf brought in many decades ago, about employers having to pay monetary rewards to employees who invent patentable subject matter.
Is the German pharma industry 19th century? Biotech on the Isar? How about SAP? Any progress there?
Meh, we tried a registration system before, and it didn’t work too well. Let’s try funding the office appropriately, axing the bad SPEs, and delivering a decent examination instead.
Ned,
IANAE is convinced of his own beliefs and that is more than enough for him (and you, if you listen to him). Your hope is in vain.
IANAE is the veritable wolf in sheep’s clothing. With a friend like him, no patent holder ever needs an enemy. His selective reasoning and biased applications of concepts like equity and his disdain for the tie between patent (IP) and land grants is clearly driven by ulterior motives. There is no surprise that his desire to eliminate the Clear and Convincing Standard is reminiscent of the Supreme Court jurisprudence that was extremely anti-patent (the Douglas era). He discounts without comment the better underpinnings of the standard such as the Maxwell Land-Grant Case, 121 U.S. 325 (U.S. 1887):
“Where the purpose is to annul a patent, a grant, or other formal evidence of title from the United States, the respect due to such an instrument, the presumption that all the preceding steps required by law had been observed, the importance and necessity of the stability of titles dependent on these official instruments, demand that the effort to set them aside should be successful only when the allegations on which this attempt is made are clearly stated and fully proved.”
In contrast to his duplicitous nature here, one only has to review the plentitude of abbreviated conversations he has at the IP Watchdog site, where, undoubtedly, Gene Quinn’s short leash on outright legal falsehoods robs him of his most cherised debating tactics.
IANAE, I don’t think we had any fundamental disagreement. When you say “demonstrably probably” invalid, I presume you actually mean “clearly invalid.” I presume you do not mean “possibly.”
When dealing with prior art that is not anticipatory, and the issue is obviousness, I would hope you would agree that the evidence should be convincing.
Yeah Max, you euros certainly have your patent system’s, and until recently England had a good one, but whether they promote the progress of useful arts is another question entirely.
Does Europe for example rely heavily on startups for major innovations? If you do not, I think a lot of reason for this is the lack of a good patent system for Europe.
In fact does Europe even have a patent system?
Oh me oh my
FCC violations
Lying to the Court
Conspiracy
Another year of banging my head into the ground. Wasting another year of validity.
What a BOOK. John Grisham is going to have to call me.Have I got a Book/Movie deal for him. ow what?
shhh Clear & Convincing Indeed,
Ya gonna upset my main man by torching his straw that way.
Max: “Ned, what if patent owners were to be given the burden of proving infringement to a C+C level before they can get relief? Would that be fair, balanced and a good thing?”
IANAE: “Besides, the logical way to balance the clear-and-convincing standard for invalidating patents is to only grant patents in the first place when the examiner’s rejection is overcome on a clear and convincing standard.”
Come on guys. Even allowing for the recent, welcome movement back to reasonableness and fairness in examination (thank you again Mr. Kappos and your team; as well as the CAFC), if you can’t make a clear & convincing case for your claims, you’re not going to get them.
You know that.
Just look at your own apps & issueds.
Look at everyone else’s.
Look at all the RCEs.
Look at the Board; buried in 1,000’s and 1,000’s of appeals.
Bottom line:
It took Clear & Convincing to get them.
It ought to take Clear & Convincing to overturn them.
Well then, ping, you are asking the impossible. The PTO Examiner simply lacks the “mental furniture” of the PHOSITA. Is this not as often as not immediately apparent to your inventors when they get their Office Actions?
To decide validity properly, a court needs to be educated, up to the point of having fully comprehended that mindset. England does it by cross-examination of respective technical experts for the adverse parties. It is the heart of any patent trial in England and I see it as indispensible.
Often the cross-examination at trial is brief, because the disputed facts are few. But only because the experts write their reports mindful of the upcoming cross-examination at trial. Mind you, there is no jury and the judge has had 20 years of making a living as a patent litigator.
Maxie,
“it still does not put them into a position of knowing what was the state of the art, and what was the Phosita’s take on it, at the decisive point in time”
That is precisely their job, in case ya didn’t know.
Cy – not me – way too many nuts here to forget
;-p
Nuts have been highly touted as a great way to get healthy fats into your diet, but many people forget that seeds fall into this category too.
It’s true. I forgot, for instance.
There you go again ping, repeating your mantra for the umpteenth time. But even supposing they were to “do their job” perfectly, it still does not put them into a position of knowing what was the state of the art, and what was the Phosita’s take on it, at the decisive point in time. Only disputed proceedings, tried between adversarial parties, can reliably reveal both sides of the story. There are always two sides to every story. Teasing out the just result, in such circumstances, should involve assessing the preponderance of the adduced evidence. Seems to me a no brainer.
Howza bouts we simply have the examiners do the job they supposed to?
Wow, now there’s a novel idea.
Thanks for that, IANAE. I had not seen it that way before.
As to this point about the finding of allowability being an administrative act that should be accorded a high level of deference, I am thinking that, ultimately, validity falls to be decided by what the PHOSITA would have derived from the state of the art, back on the relevant date. Beats me how a PTO Examiner in his ivory tower, helped only by the Applicant, can find the relevant facts with any great degree of confidence.
Thus, I would say, there is a qualitative difference between this particular administrative act, and all those others where the administrator has at his disposal all the facts needed for a well-founded reasoned decision that is therefore entitled to due deference.
I like a system where the PTO has the duty to grant a patent except where an Examiner can get on its feet an objection that the app under examination fails to comply with some or other provision of the governing Statute. Seems to me unfair to Applicants to doom them to a refusal unless they can come up with “convincing” evidence to over-turn some barely reasonable objection of the Examiner. I like a system where patent disputes are settled using the ordinary burden of evidence used in every other civil case. This would make pre-issue processes notably less adversarial, because the PTO would not have to worry quite so much about letting through to issue claims where doubt about their validity remains, yet it could hardly make post-issue proceedings any more adversarial than they are already.
Ned, what if patent owners were to be given the burden of proving infringement to a C+C level before they can get relief? Would that be fair, balanced and a good thing?
Max, I’m not sure why you associate “fair and balanced” with either fairness or balance.
Besides, the logical way to balance the clear-and-convincing standard for invalidating patents is to only grant patents in the first place when the examiner’s rejection is overcome on a clear and convincing standard.
Well IANAE, I see Ned’s point. It might indeed be a total overthrow of the “system” that is so cherished by attorneys at law who make their living by filing and prosecuting US patent applications. But is that necessarily a bad thing?
As far as I know, the USA is not the only country in the world with a patent system. As far as I know, it is the only one with the skewed C+C evidential standard, post-issue. I’m told in these columns that this is what makes the US “system” so uniquely “strong”.
Ned, what if patent owners were to be given the burden of proving infringement to a C+C level before they can get relief? Would that be fair, balanced and a good thing?
What Microsoft and its allies are advocating is nothing less than a revolution, a total overthrow of the patent system.
Invalidating a patent that is demonstrably probably invalid is hardly a total overthrow of the patent system.
I would almost go as far as to say that upholding a patent that is demonstrably probably invalid is closer to being a total overthrow of the public domain.
Nuts have been highly touted as a great way to get healthy fats into your diet, but many people forget that seeds fall into this category too.
Max, the presumption demands only one thing, that the evidence of invalidity be both clear and convincing. As the CCPA and Feds said years ago, if
– the prior art is clear such as with a patent;
– if it raises issues not considered by the PTO; and
– if the reference is anticipatory or is convincing on a case for obviousness;
the burden of proof is met. Now consider whether trashing any or all of these elements is warranted by the simple assertion that a particular reference was not before the patent office. Such is what Microsoft wants. They would dispense with the following inquiries:
Is the reference clear? Or is it the kind built on hearsay or circumstantial evidence?
Does it raise a new issue or is it merely cumulative of other references actually considered?
Is it anticipatory? And, if not, just how convinced must the trier of fact be on obviousness to overturn a patent?
What Microsoft and its allies are advocating is nothing less than a revolution, a total overthrow of the patent system. They are radicals in the truest sense of that term.
What exactly did Paul F. Morgan say?
I agree that respect for patents is of vital importance Ned. But how to nurture that respect. No matter how many Examiner hours are apportioned to examining the merits of an application, claims will occasionally go through to issue that, when exposed under the spotlight of intense scrutiny, strike impartial but informed and patent savvy observers as claims that ought not to have got through. For the system (or, specifically, non-specialist judges and jurors who lack the science or engineering background to follow the debate on validity) then doggedly to persist in treating them as if they are valid will serve only to bring disrespect on the system, to the detriment and long term damage of the system, and a further loss of public respect for patents.
At what expense?
one of the pillars of our patent system, the presumption the patent office has done its job properly and the respect that that presumption is accorded in court through the presumption of validity.
That presumption is pretty clearly set out in the statute, so I don’t think it’s in danger. The only thing we’re talking about is whether we should still consider that the patent office has done its job properly when presented with evidence showing that the patent office probably did its job improperly.
Well, that and we could also debate the important distinction between the PTO doing its job properly and the PTO coming to the correct answer at the end of it, and which of the two is more important. If it’s respect we’re after, we should strive to make examination as thorough and effective as reasonably possible, but also show that when the PTO gets it wrong (either in allowing or in rejecting) the system is equipped to remedy the error.
New Light, you OP at 9:39 is simply put, well thought out and persuasive.
If, as Paul Morgan apparently believes, our current examination system is not sufficient, we need to look at improvements; but the present inadequecies of examination should not place in peril one of the pillars of our patent system, the presumption the patent office has done its job properly and the respect that that presumption is accorded in court through the presumption of validity.
Prior to 1836, patents were all but unenforceable and our patent system was all but a joke. The whole point of claims and examination was to give patents respect. That reform was highly effective and was THE critical reform in the history of patents that made the system functional.
It would be important that we all remember this history when discussing one of the most important reforms in the history of patent law and why it was important: Respect. Without it, patents are merely a printed invitation to litigation. Without it, the system fails. That is the lesson of history.
New light, you have not drawn a connection between the 17.9 hours that a young non-attorney spends examining a case and the quality of issued patents. You are assuming without evidence that the combination of 17.9 hours, along with the age and education level of the examiner result in such a huge number of invalid patents that we should have a registration system.
What is “suspect?” I have not heard of “suspect” examination until you made this statement. Who besides you thinks that “all examination is suspect?”
The real issue is the PTO’s ability to issue valid patents. What evidence do you have to show that the PTO is issuing invalid patents? What percentage of issued patents are invalid? Do you have any idea?
IANAE brings up a good point, the examination system is a filter that weeds out a lot of invalid claims.
Your argument is simply that because examination is not perfect, we should forget the whole thing.Maybe it is not perfect, but perfection is not the goal in patent prosecution. Perfection is also not the goal in every other area of law.
Either the application is properly examined or it is not. There is no middle ground here.
Anyone who doesn’t immediately realize why your statement above is ridiculous has no business being in our profession.
The point being made by Mr. Morgan wasn’t that some examination was made well, but rather that all examination is suspect given the 17.9 hours of combined examination and paperwork of a single young non-attorney government worker.
Yes, in much the same way that when a crime is committed everyone who was in the area at the time is suspect. That doesn’t mean they all did it.
Even so, have you ever seen a litigator spend 17.9 hours on an invalidity challenge (plus the time to draft his brief, prep witnesses, and do all the other things the examiner doesn’t have to do) and then call it a day? Of course not. An examination that has been done with insufficient resources, be those resources time or training or search tools, is inherently suspect and not worthy of high deference, particularly when those same resources are copiously available in litigation.
Changing the Clear and Convincing Standard does nothing to fix that problem, but only exasperates that problem with a band aid at the patent owner’s expense.
Yes, the problem is exasperating. But why should it not be at the patentee’s expense? He was the party to the examination. It was his job to secure a patent that would stand up in court. It was his job to make sure any art in his possession was before the examiner. The infringer is not responsible for the poor quality of issued patents, and he should be given every opportunity to defend himself against an invalid one.
please get the facts right
My facts were right. Just like Paul Morgan’s facts were right. If you don’t like facts, that doesn’t make them wrong.
If it makes you feel better, you are free to consider that only 30% of filed applications had no business issuing as patents. That doesn’t diminish what I said in any way. Even what you consider to be improper examination is capable of filtering out 30% of all applications as unworthy, not even counting those with fatal but fixable errors. Proper examination would catch even more.
Mr. IANAE, your sarcasm notwithstanding, you are incorrect. Either the application is properly examined or it is not. There is no middle ground here.
The fact of the matter is that if the time is not appropriate to do a quality examination you have a poor quality examination. With a poor examination, all results are suspect – even those that you wish to use to come to some middle ground. The point being made by Mr. Morgan wasn’t that some examination was made well, but rather that all examination is suspect given the 17.9 hours of combined examination and paperwork of a single young non-attorney government worker.
Please try to stay on point in your responses.
I do not think it is difficult to see the advantage of a registration system over a suspect partial (and expensive) examination system. As you yourself comment, the real problem is that the middle ground is under populated. Changing the Clear and Convincing Standard does nothing to fix that problem, but only exasperates that problem with a band aid at the patent owner’s expense.
Although this is besides the point, the percentage number you supply is also incorrect in regards to consistency. Anyone knows that the blip down to 40% is appreciably far below any reasonable “consistency” – which has historically been at 70%. I recognize that you enjoy chiding others, but please get the facts right when you do so in order to keep the conversation moving forward.
At most, thirty-one of the one hundred nineteen (26%) patent challenges may have been evidentiary standard dependent.
Would it be more meaningful to consider those 31 patent challenges as a percentage of the total number of challenges where facts were at issue in the first place? That would mean excluding the JMOL and summary judgment determinations that one would hope were based solely on questions of law.
There are 41 bench/jury trials that appear to be standard-independent and 31 that appear to be potentially standard-dependent. That means the standard potentially affected as many as 43% of cases where facts were in dispute, which is a disturbingly high percentage of the time for a legal error to affect the final outcome.
I do not see a middle ground
Amazing, isn’t it, how often people refuse to see a middle ground.
The presumption of validity and the clear-and-convincing standard are not the only benefits of examination to the patentee or to the public.
For starters, allowances as a percentage of actual disposals have consistently been roughly between 40% and 70%. That means examination is weeding out a whole lot of claims that turned out to be either invalid over examiner-located prior art or of little commercial value to the applicant.
Even of the 40%-70% that issue, many are amended during prosecution. Whether those amendments were for 112 reasons or to overcome prior art, they represent a validity-saving improvement over the originally filed claims that would not have occurred without substantive examination.
Even the ones that sail through the PTO unamended have had prior art considered by the examiner, which is some indication of what prior art might not be worth raising in an invalidity challenge. Deference or not, you’re more likely to succeed in invalidating a patent with art that someone else hasn’t already considered in, let’s face it, a previous invalidity challenge.
There really is quite a lot of middle ground between clear-and-convincing and a registration system. The real problem is that the middle ground is under-populated by well-trained examiners. Support your local PTO.
Inspite of the fact that Mr. Morgan mispeaks about just when the introduction of the clear and convincing standard originated, the crux of the argument against Clear and Convincing seems to be the relative little time spent by a relatively inexperienced government worker deciding on a rather important patent grant.
This can be seen from the careful and measured terms that Paul F. Morgan uses. Terms like “single”, “young”, “non-attorney” and “of only.” These terms paint a picture of the typical Office prosecution of patents as not worth any level of deference in the courts. If we have no deference, why bother with the examination, especially given the cost delays and apparent poor quality that Mr. Morgan alludes to.
As I see it, either this argument holds water or it does not. If it holds water, than the patent system should be pure registration and not bother at all with such faulty examination. If the argument does not hold water, then other arguments arise attacking why that “lax examiner” argument is even ventured forth.
I do not see a middle ground where “examination-lite” (the present system if Mr. Morgan is correct) can even come close to being worthwhile given the cost, delays, and seemingly poor quality that stems from such a only 17.9 examination and paperwork of a single young non-attorney government worker can provide for such a right as a patent grant at all – never mind the level of evidence question.
If Mr. Morgan is not correct, or even if he is, there are counter arguments stemming around punishing the applicant for the Office failure to adequately perform a true examination.
A lowered evidence standard will likely cause more lawsuits, not less. Excusing such inadequate examination by causing more lawsuits and less certainty does not seem an equitable solution. Afterall, the government has full control over how it chooses to exam the application, so why should the applicant lose something (the certainty of Clear and Convincing standard) through no objective fault of his own?
I think Administrative Law makes the issue rather black and white. Either the examination has merit or it does not. I do like the history lesson on this subject on an earlier thread and think that merely adjusting the level of presumption is a band-aid that will be ineffectual at best. If the desire is to treat the actual root cause, then we should be focusing on the root cause, not on the clear and convincing standard as a band aid for earlier, poor performance, which indeed would only serve to sanction that poor performance.
As another commentator noted, if this helps to show that the CCPA to CAFC [but not Court of Claims] addition of a “clear and convincing evidence” burden on litigation defenses of patent invalidity [on top of the statutory presumption of validity] might only change the final OUTCOME in relatively few cases, that would seem to be another reason to decide if that requirement is legally correct, well founded and appropriate, or not.
As to the Administrative Law issue, query if the respect due to final decisions of a full board of a federal agency after a formal hearing examiner proceeding should be equated with [as the PTO itself admits] the normal grant of the vast majority of patents solely by a single young non-attorney patent examiner after an average of only 17.9 total hours of examination and paperwork?
“of the one hundred nineteen patent challenges analyzed”
119 is the sample size. What is the population that that sample purports to represent?
Dear John Doe,
I finally found it. Who’d have thunk it would be under a Rock or Saddle.
Sea I found it. Now I know why John Doe was there. And why he was John Doe. Elementary my dear Watson. Now the fun starts.
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