Has the Academy Led Patent Law Astray?

Prof Jonathan Barnett (USC) has released his new article arguing that we’ve gone too-far — that those arguing for dramatic changes to the patent system did so with “little to no supporting evidence.” [READ IT HERE]. Barnett argues that

Depropertization of the patent system—yields three potential efficiency losses. First, depropertization impedes efficient resource allocation by shifting the pricing of technology assets from the relatively informed marketplace to relatively uninformed judges and regulators. Second, depropertization distorts markets’ organizational choices by inducing entities to undertake innovation and commercialization through vertically integrated structures, rather than contractual relationships now clouded by the prospect of judicial re-negotiation. Third, depropertization may facilitate oligopsonistic efforts to depress royalties on patent-protected inputs, resulting in wealth transfers to downstream entities and discouraging innovation by upstream R&D suppliers.

In the article, Barnett primarily focuses on the idea of a patent thicket and whether these patent thickets have inhibited downstream innovation.  Barnett concludes: “Without a secure expectation of injunctive relief and compensatory damages, false prophecies of too many patents may result in too little innovation.”  Of course this conclusion also rests upon weak empirical ground.

 

Dennis Crouch

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

212 thoughts on “Has the Academy Led Patent Law Astray?

  1. Worth repeating on top.

    Greg stated:

    Trespassers are to be evicted. Balancing hardships to decide whether they should just be made to pay a “reasonable” rent is absurd. Get them off the property first, and then if they want to rent the place, let them come back as negotiators on even terms, and find a real market price, not a judge’s best guess at a fair market price.

    When the courts take off their “injunction is so harsh” blinders and realize that making the aggrieved whole is the equitable aim, and that an injunction is actually as close as possible to making a patent holder whole, then the courts will be aligning equity and law.

    1. Yes, by all means, kick someone out of their home when some of the leaves from one of their many trees “trespass” into a neighbor’s yard. Than you can figure how much it would cost to rake the leaves and have them removed.

      1. Huh? No one is talking about kicking someone out of their home. We are talking about kicking someone out of my home, when they have not been invited in.

        1. When my “smart” home has 100,000 patented elements, and the “trespass” is one of them, the character of the trespass is somewhat…..attenuated.

          1. Is that one trespass essential to the functioning of the other 99,999 non-trespassory elements?

            If not, then I guess I do not see what is the big deal about being evicted from the one. Just design around it.

            If so, then I do not see why it is somehow unjust to be evicted. You are evidently deriving a great deal of value from that trespass. You should be willing to negotiate accordingly. It is unseemly to call down the power of the government to impose a “reasonable” rent for you, untethered from any actual market experience.

              1. Mr. Snyder, your reply is non-responsive.

                Of course, this is because you are (once again) riding your own personal emotions into a battle for which you do not understand the terrain.

                Everyone by now “gets” how you feel.

                It is just that your feelings do not reflect the actual law or the legal understanding of the situation.

                Let me note as well that your typical plea for “equity” does not save you here, as the truly equitable position – the reason for equity – is to make the transgressed whole.

                Your position is merely one of the squatter, feeling that the trespass law in and of itself should not apply to you.

                1. sometimes I wonder about your mental capacity anon

                  you deny that any hardship to any infringer should be weighed at all, and I analogize that a single infringement out of 100,000 cannot be cause to immediately cease all sales up and down the chain, regardless of cost to producer or consumer, and you come back with your usual drivel about the terrain.

                  Ya know, NOBODY knows the terrain we are on right now my friend. Uncharted territory.

                2. Yay – the “mental capacity” meaningless reply.

                  Peddle your infringer rights stuff after you take note of the law, and here, of the purpose of equity.

      1. True enough. Eviction is a legal remedy, not an equitable remedy, and therefore one is not obliged (or even allowed) to take into account the equities of a situation when enforcing an eviction as a remedy to trespass.

        Still and all, the analogy of patent infringement to trespass to lands strikes me as a fairly intuitive and sound analogy. Other than the law/equity distinction (which is mostly a question of vocabulary), is there a reason not to treat the two in similar fashion? Or, to put the question another way, is there a good reason why Congress should not revise the law to specify that an injunction following a verdict of infringement “shall” issue instead of “may” issue?

        1. Greg,

          I think the permissive language is used (and consequently mis-used by the court) for the benefit of the patent holder, who – at the discretion of the patent holder herself – may want to negotiate and reach a deal to allow the former transgressor “access.”

          Mandating an injunction may then seem heavy-handed.

          Of course, the courts (in a fit of their “nanny-ism”) think that they rather than the patent holder “knows best.”

          (definitely related to nose of wax addictions, by the way)

    1. Do you kiss your mother with that mouth?

      Remember, folks: “anon” believes that “PC is the worst thing ever.”

      But he’s totally not a hypocrite who loves to put on a dress and play Miss Manners whenever it suits him.

      Nobody could have predicted ….

      LOL

      1. MM thinks that PCness is “manners”

        lololololololololololololololololololol

        no wait,

        lolololololololololololololololololololol

        clueless boomers.

        1. No kidding, eh 6.

          He just doesn’t get it.

          (and of course, his “swagger” is something that we all should “just enjoy”)

          Right Ned? Prof?

          Yay ecosystem!

          😉

          1. He just doesn’t get it.

            LOL

            Go ahead and explain your deep serious views about
            “PC” to everyone, “anon.” Be sure to account for the whining of your c0h0rts that PC is what keeps them from being able to express their toxic r@ cist and mis0 gynist cr@p in public without criticism or shunning (criticism and shunning, of course, being exactly like hanging or having a cross burned on your front lawn).

            Go for it, “anon”! You’re a super serious person! Make everybody’s day.

            1. “PC is what keeps them from being able to express their toxic r@ cist and mis0 gynist cr@p in public without criticism or shunning”

              MM thinks that PCness stops people from “expressing ‘toxic’ raycyst and misogynist ‘crap'”.

              LOLOLOLOLOLOLOLOLOLOLOL

              Clueless boomers. At least the young lefties and the young righties are somewhat united in their desire to purge the blight that is the clueless boomers from society.

              1. He really is clueless and seems (purposefully?) to not understand the difference between a reaction to someone’s expression and a desire to legally constrain the expression in the first instance.

  2. After we’re finished talking about the “depropertization” of the patent system, I hope we have some time to talk about the gaping aholization of the patent bar and the folks who sat around and whined like babies when the system was exploding right in front of everybody’s faces or — worse — directly advocated for more of the same while failing — intentionally — to make even the most feeble efforts to address the contrary (and winning) arguments.

    Is anyone aware of Prof Barnett’s position on Prometheus v. Mayo? I can make a guess but I haven’t bothered to look too deeply yet.

    That was the case where Prometheus advocated for a system where one could become an infringer of a patent merely by practicing a public domain data gathering method and thinking a new thought about the meaning of the data gathering method.

    Pretty much every one of the people whining and crying here today about smaller patent rights were out there when Mayo was being decided, either in the comments in this blog or right up top posting their editorials, lining up behind Prometheus. All that was accomplished was to demonstrate two things: (1) that there is literally nothing that the patent maximalists will do or say to expand patent rights and (2) that the maximalists have absolutely no clue about what a sane patent system looks like.

    The whirlwind is going to continue to be reaped for some time. As I already pointed out, the experiment was already performed. It was a disaster. But the bottom feeders who were cashing in the most really miss that cash. Boy do they miss that cash. Listen to ’em whine.

      1. What’s been on display since forever, “anon”, is your endless ineptitude and ap0logetics for the worst patent attorneys and the worst case decision ever written.

        If ever there was a time to keep the tightest lid possible on the grifters and con artists who love to infest the patent swamp, it would be now.

        But of course “anon” is going to keep pushing for More Patents, All the Time, Easier to Enforce. It’s all he really knows how to do and, heck, what does he have to worry about? He can just represent himself (assuming anyone believes that he’s a lawyer and not the guy who opens the registered mail in some Texas firm’s mail room LOL).

        1. I make no apologies for anyone.

          Once again you (willfully) confuse taking a shot at your “logic” and argument with somehow something else.

          (that’s called dissembling, by the way)

      2. Accuse Others Of That Which Malcolm (Is/Does

        This playground-grade script of yours was always a p.o.s. and never made much sense but lately it’s become even more absurd.

        I’m pointing out the relevant historical facts. You wish to bury those facts because they are reflect poorly on you and your c0horts. We all get that. We all understand why you want to do that.

        But note that I’m not “accusing” anyone of doing what I just described. I’m accusing people of failing to do exactly what I’ve been diligently doing here for years. The idea that habitually dissembling self-interested shills who profit directly from patent maximalism should be put in charge of writing the history of what went down before and after State Street is amusing, to be sure. But it ain’t going to happen on my watch.

    1. to make even the most feeble efforts to address the contrary (and winning) arguments.

      What does that even mean?

      (as you yourself have failed to make even the most feeble effort to address any of the numerous counterpoints presented directly to you on these boards)

      1. “to make even the most feeble efforts to address the contrary (and winning) arguments.”

        What does that even mean?

        How nice of you to ask. It refers to the petulant refusal to address the elementary logic that says when you claim “old step plus new thought” you are protecting the ineligible new thought, at least in the context of the public who is freely practicing the prior art “old step”.

        The fact that you ask this question in 2017 is just more evidence of the head-in-the-sand born-yesterday tactics of the patent maximalists. You guys really are incredibly dense.

          1. I’ve even named the proper patent doctrine for you: inherency.

            Funny then how that very same dcotrine gives you fits over the single most prolific (and affordable – another point that you fail to address and dissemble about) form of innovation today.

            Inherency: the back bone of that Grand Hall experiment.

            Ah yes, good times.

            1. inherency.

              Typing the word “inherency” is not a “counterpoint” to the straightforward and salient “old step + new thought” problem tbat was presented so plainly by Prometheus and addressed succinctly by the Supremes in their never-going-to-be-overturned 9-0 opinion. It’s not even close. It’s just dust-kicking.

  3. Sometimes it’s necessary to put things simply: when the patent system is expanded such that grants now protect logic, information and other absractions, the inevitable result is that the relationship of the patent grant to tangible property diminishes.

    Straightforward stuff. Of course, it requires folks to first acknowledge that this expansion of patent rights into uncharted realms actually happened. And that requires honesty and a modicum of intelligence. Good luck to everybody, but especially the patent maximalists who seem to really really struggle with the basics.

      1. Poof – your dissembling is dispatched yet again.

        This will come as a huge shock to you but bizarre non-sequiturs are profoundly ineffective arguments. Nothing has “poofed”. The ashes of your credibility might have shifted a bit but that’s almost certainly due to gas.

        1. Funny then how you never have an answer to that direct and rather simple question.

          Maybe you want to focus on that instead of trying so much to project your inadequacies…

          1. Funny then how you never have an answer

            Funny how you choose to dissemble. But it’s a longstanding habit with you.

            I’ve addressed your silly question probably a dozen times, which was 12 times more responses than it deserved. Dennis knows it. David knows it. Jason knows it. Everybody knows it.

            1. Funny how you choose to dissemble. But it’s a longstanding habit with you.

              Yay – more standard number one Malcolm meme of Accuse Others Of That Which Malcolm Does.

              Entirely predictable.
              Entirely trite.

              You need a different game, Malcolm.

  4. I have just noticed the presence of an unstated misconception underlying the “patent thicket” model. The misconception is that innovation lies in the direction of the thicket. On the contrary, the idea of a patent system is to encourage diversity and new solutions to problems. It is not a bug, but a feature of a robust patent system. A patent thicket is a good thing because the incumbents will cover that territory while entrepreneurs blaze a new trail. Depropertization has dual adverse effects on innovation. 1) It steers more and more capital toward the subject matter of the thicket. 2) It punishes entrepreneurs if they blaze a new trail by throwing open any newly discovered subject matter to all comers.

    This misconception leads advocates to saddle opponents of the theory with the task of obtaining empirical data on the discoveries that lay outside the thicket. We don’t have an alternate universe where we can go observe all the wonderful things that would have been created but for the depropertization in the real world. We don’t know what those discoveries would be, but we know they would come if there were incentive to look for them. That is what entrepreneurs do.

    If we continue with this scheme of a patent system without property rights, then we will reap an unimaginative plodding forward by the incumbents (accompanied by bureaucratic efforts to stimulate anointed industries). If we again recognize patents as property rights, we will invigorate the entrepreneurial engine of innovation.

    1. A patent thicket is a good thing

      By definition, it’s not a good thing.

      My goodness but the maximalists are really reaching these days. Something must be in the air. Perhaps it’s the cr@ck that our mentally ill president elect appears to be smoking?

      1. Actually Malcolm, he is pointing out a flaw in the “by definition” that you are so slavishly adhering to.

        He has an interesting point: it is said that necessity is the mother of invention, and if – by the necessity of constraints to certain paths being blocked by patent, other new and inventive paths are indeed made to be more desirable.

        The other day Greg remarked that he believed that the stuff of innovation was boundless. If indeed so – and human experience lends support to such – then placing hurdles IS a good thing.

        1. Greg remarked that he believed that the stuff of innovation was boundless

          Greg has also demonstrated on more than one occasion that he has no idea how subject matter eligibility works, or why. And he has stated that in twenty years we’ll have robots judging courts cases. So I could really care less what Greg says until he demonstrates that he’s got a clue. He seems like a relatively smart guy (way smarter relative to you, anyway) so I have hope for him.

          The “point” that you think is “interesting” is absurd. There is no “flaw” in the definition of “patent thicket”. The definition is the definition and it describes a situation where there are so many patents in a given area that the cost of innovating around them, not to mention the cost of simply figuring out whether it’s even possible to innovate around them or whether you even need to innovate around them, becomes so great that innovation in that area is, in fact, chilled.

          The classic thicket situation is where a tool has been developed that makes it much easier to explore a conceptual space and gather information than before. The patent that describes the structure of that tool and/or the new tangible physical transformation effected by that tool is the proper driver of innovation. We should all be encouraging more patents like that, and more innovation “around” that kind of patent. We should all be discouraging the granting of a zillion “use this tool to do what the tool does in these zillion sub-species of situations” because those patents do more to encourage scrivening and litigation than “innovation.” The greater the potential for the tool and the easier it is to sit around and dream up different specific applications, the greater this problem becomes. This has always been obvious issue to anyone familiar with the basic workings of any patent system but, more recently, it’s become a reality that can only be denied by ideologues who see patents as not only the best but the only solution to every potentially solvable technical problem. And we all know where those ideologues come from, don’t we? Oh wait — we’re not supposed to talk about them. This an academic bashing thread.

          LOL

          1. And yet, you do not integrate into the discussion the points I have presented to you: e.g., if your concern is “use,” try out the Act of 1952’s 35 USC 100(b), and if your concern rather is machines or manufactures (such as machine components), try out 35 USC 101.

            The direct words of Congress – you know, the actual branch of the government authorized by the Constitution to write the statutory law that is patent law.

          2. how subject matter eligibility works, or why

            Regardless of your feelings, subject matter eligibility has zero to do with the immediate comment.

            Above, you accused me of using a non sequitor. While you here Do That Which You Accuse Me Of.

            As noted, your number one meme is again being (over) played.

            Maybe come up with something original and on point

        2. “new and inventive paths are indeed made to be more desirable.”

          Exactly. And that’s why we have Alice. Patents on Ends rather than Paths do not promote any progress.

          1. Is that what Alice stands for in your understanding? I would be a lot better pleased with Alice if I were convinced of that. Certainly that seems to be the direction in which the CAFC is training the sprouts off of Alice (e.g., Amaranth).

            That is the holding of Morse, and a fine and sensible holding it was. More properly, however, a matter for 112(a) than 101, however.

            1. Take a random sample of 50 “do it on a computer” claims and figure out how many of the claims recite actual code and we can talk about who is and who isn’t “claiming the means.” That, of course, doesn’t address the other major unspoken issue underlying the Alice opinion but it does provide some perspective.

      2. I’m not sure what a patent “thicket” is except for lots of patents. Patents encourage innovation so I’m not sure why lots of patents isn’t also a good thing.

        1. Patents encourage innovation so I’m not sure why lots of patents isn’t also a good thing.

          “Laws prohibiting ignorant ideas encourage the expression of less ignorant ideas so I’m not sure why lots of laws banning the expression of ignorant ideas isn’t a good thing.”

          Also, nobody is saying that “lots of patents” is a “bad thing” per se. We’ve had “lots of patents” for a long time. What’s deemed to be “bad” by some of us is a rapid explosion in certain types of patents that lie on the fringes (at best) of the sort of the “innovation” that the system was designed to promote, and which are being granted without anything approaching a sensible examination.

      1. Bad choice. iwasthere, as you picked an example that show US interference negating the technological edge that had been provided (think about how the Japaneses knockoffs were able to gain their foothold).

        1. I thought we were talking about how a patent thicket – leads to the necessity of innovation? Further elaborating, the Xerox story I was referring too, was the last time the ‘patent system is broken’ surge of the infringing class. My point being, that many complained and testified on the Hill per the broken system – and the ‘impossible to compete’ with xerox’s mountain of patents concerning xerography. ‘We must have compulsory license’ type trust busting, they said. Then along comes the innovation of digital printing and scanning – > Boom! the core xerox patent holdings and business were crushed. To be sure, there are many other lessons to draw from the Xerox saga. Not least of which is a willingness to sell a new product against your old line product. Meh, maybe it’s part of the natural business life cycle.

          1. the ‘impossible to compete’ with xerox’s mountain of patents concerning xerography

            Just curious: how much of that mountain was devoted to patents on using xerox machines to copy text on paper, wherein said text on paper related to “real estate availability data” and stuff along those lines? Or patents on using a xerox machine “on a plane” or using a xerox machine to copy a paper with text “wherein said text related to data that was obtained over a phone”? Or patents on using a xerox machine “wherein a plurality of copies was obtained, and wherein said copies were distributed to a plurality of individuals at different locations”? Or patents on using a xerox machine “wherein use of the machine requires a code” or “wherein use of the machine requires payment”? Was it like 95% of the Xerox portfolio or more like 0.001%?

            Refresh everyone’s memory, please since you seem to be an expert on this topic.

  5. Accepting the H2H definition that the article author by “depropertization”means a system that moves toward favoring monetary damages over injunctive relief, that of course is vet long historical trend for personal property, as opposed to real property [land]. But in patent law that is due almost entirely to the Supreme Court decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). Importantly for this article, that decision did NOT stop the obtaining of injunctions for patent infringement against product competitors of manufacturers or sellers of actual products. [The kind of patent suits that were far more predominant in prior years.] What that decision did was to end the automatic obtaining of injunctions in every case. Especially by organizations solely in the business of buying patents of others to sue on. One can debate the economic changes and merits of the latter, but the former was essentially changed.
    Furthermore, there is another major change in this area of equal or greater economic impact. In past years the Fed. Cir. had rarely challenged jury infringement damages decisions. In recent years the Fed. Cir. has increasingly scrutinized, and reversed in appeals, the damage calculation methodology, the jury instructions, and the expertise requirements for the testifying damages experts. Thus, requiring the D.C. judges to do so.

    1. Paul, historically the reason for injunctions in patent cases was to prevent ongoing infringement. In fact, historically, the reason for injunctions in any case is to prevent ongoing infringement of a legal right.

      Specific performance is a form of injunction to prevent contract breach, or to prevent further contract breach. There are policy advocates that suggest that we should eliminate the specific performance remedy in favor of efficient breach. These circumstances occur when the cost to perform exceeds the damages of the other party, making the cost of breach less than the cost of performance. Essentially, the same policy arguments are being made in favor of efficient infringement.

      It is interesting to note that the Supreme Court in eBay already ruled that a patent owner cannot be denied injunctions simply because they are an NPE licensing entity. Further, the concurrence of Roberts, Scalia and Ginsburg indicated that ongoing infringement would automatically satisfy the first two prongs of the four-part test. (“(1) whether the plaintiff would face irreparable injury if the injunction did not issue; (2) whether the plain-tiff has an adequate remedy at law; (3) whether granting the injunction is in the public interest; and (4) whether the balance of the hardships tips in the plaintiff’s favor.”) Thus the real problem for patent owners is the balance of hardship showing, which is effectively denies the patent owner remedy in any case where a reasonable royalty compensates.

      But is that true? The problem with this is that the denial of an injunction allows the infringer to infringe with impunity because the only remedy available to the patent owner is a reasonable royalty. This forces the patent owner to bring litigation a great expense to all parties, including to the court system. Thus, for the big picture point of view, the patent owner is severely damaged by being denied a right to the injunction because it forces litigation in order to collect a reasonable royalty. Thus, I would think, that injunction should apply in the ordinary case where the patent owner wins on validity and infringement even in the case of an NPE. The availability of injunctions would force settlements prior to litigation in order to avoid litigation expenses unless the infringer in a strong case for invalidity or noninfringement.

      I do not know if anybody has done this analysis, but eBay may have had the perverse result of increasing litigation.

      1. It is interesting to note that the author fully agrees with my position here. See for example, discussion at page 32.

        I was struck by the fact that in his discussion of the prior articles of Lemley and others about stacking, hold up and the like reflected a relatively inexperienced view the patent system. I personally have been the Chief Patent Counsel of a major corporation, and I know how things operate in reality. For example, the vast majority of patents in a particular field are held by competitors. Corporations deal with competitors through crosslicensing. Thus the only patents they that are available for either stacking or holdups are patents held by independent operators. These are relatively few, and can be identified by proper clearance studies.

        Thus there is no real excuse to deny a patent owner’s request for an injunction based upon stacking/holdup. If a business operates without doing clearance studies, it is builds into its pricing model an expected cost for obtaining licenses for unknown patents. Thus there is no real, genuine, reason to deny a patent owner injunction because of some theoretical holdup problem. There might be if it can be shown that the patent owner waited for the industry to develop before he began to enforce. But otherwise, the price set by the market for licenses should be the measure that any infringer should pay, and refusal to pay what everybody else pays thereby forcing the patent owner to sue should be rewarded with an injunction.

        1. There might be if it can be shown that the patent owner waited for the industry to develop before he began to enforce.

          Does that ever happen? In what field?

          LOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOL

          What a farce. Don’t touch the elephant, folks!

          1. That is not the “boogeyman” you want to make it out to be Malcolm, seeing as required by law, patents are published and available to any such person setting out to “develop the industry.”

            In fact, using a bigger stick against those unwilling to keep up with what the patent system produces is more in line with the mandate of “promote” (which does include the meaning of “promote” as in promotion, or spreading the word, in addition to the more accustomed sense of “improvement”).

            Then again, this is not a new point, and has long been on the table of discussion.

            1. as required by law, patents are published and available to any such person

              In the US, applicants can still file applications with nonpublication requests.

              And the patent maximalists — yes, the same ones — fought against the publication of patent applications and today they continue to whine about the publication of patent applications and they continue to whine about poor old Gil Hyatt. If they had their way, there would be a giant gold bust of Lemelson in Patent Max square.

              The hypocricy stinks, “anon”, and the stink is on you.

              1. You mistake the (valuable) option of non-publication of an application with the required publication of a granted patent.

                There is no “hypocrisy” in what I actually stated – there IS the typical dissembling though in your reply.

                “Go figure Folks”

                1. (and the value comes from actually understanding what the patent deal of Quid Pro Quo stands for)

                  Just in case you cared.

                2. You mistake the (valuable) option of non-publication of an application with the required publication of a granted patent.

                  No, not at all. I just hadn’t finished typing my second comment in response.

                  the (valuable) option of non-publication

                  Again, you’re just proving my point. The option of non-publication of applications filed by innovators of patent worthy inventions isn’t of justifiable value to the patent system.

                3. the value comes from actually understanding what the patent deal of Quid Pro Quo stands for)

                  I understand exactly what it stands for.

                  In part, that’s why I understand subject matter eligiblity issues and you are absolutely clueless about them.

                4. You still haven’t finished…

                  Maybe you should take note that the Quid Pro Quo does not include the mere chance of a patent in exchange for the sharing of the patent application, but instead is the grant of a patent for that sharing.

                  It’s kind of an important distinction to be aware of, especially as you initiated this discussion by attempting to dissemble on that very distinction.

                5. You still haven’t finished…

                  The excuse of the dog ate your homework is sounding better for you all the time, Malcolm.

            2. patents are published and available to any such person

              Except that in the s 0 ftie w 0 ftie field of “logic on a computer” patents, which is one of the most problematic fields of all (which everybody knows but many are loathe to admit), neither “the law” nor the PTO nor the CAFC has taken any substantial steps to put formal requirements in place that would make the searching of claims easier, the examination of such claims remotely credible, and the scope of such claims readily ascertainable by an ordinary person.

              You are aware, aren’t you, of the kinds of jaw-droppingly ridiculous claim construction arguments that “do it on a computer” patentees make over and over again during examination and in district courts? Right? I mean, you do follow all this stuff very closely, listening to oral arguments every month etc. Right? Because you’re a real expert. Right?

              Admittedly, we have taken a very very tiny step towards making the system more capable of expunging the gigantic reams of jnk patents a bit more cheaply (i.e., IPRs, which are seriously h@ndic@pped by failing to include eligibility challenges) but we have long way to go.

              Everyone in favor of a stronger patent system should be in favor of expanding IPRs to include eligibility challenges. It only makes perfect sense, which is exactly why the patent maximalists’ eyeballs will explode just reading about the possibility.

                1. Expanding IPRs to include subject matter eligibility challenges would have zero impact on any alleged “constitutional frailty.”

                  It would, of course, have a huge impact on the amount of junk that could be and should be readily tanked, and that would lead to a whole lot of crying by the eternally whining maximalists. But that’s pretty easy to deal with, really.

                2. Maybe you should contact your congressman

                  I’ve already done that. I’ve probably already contacted yours, too. If not, it will happen shortly. And it will keep happening.

    2. Injunction’s force the market to set the price by the parties. Your logic is running down the ‘hold out’ fallacy.

  6. The Academy willfully ignored (and continues to ignore) the stark constitutional issues implicated by the complicated public rights exception, and what it might mean for the future of the nation’s patent system now given that we have (1) large (and expanding), sophisticated, and well-funded Art I administrative patent court, and (2) the high Court’s tacit approval that the validity of an issued patent is indeed a matter of public rights.

    In particular, the Academcy all but ignored MCM and Cooper during the pendency of those cert petitions (and in some instances demeaned them) as a means of diminishing the importance and significance of the questions presented in those petitions.

    Lemley, in particular, was quick to identify patents as public rights in his 2012 UVA law review article, where he further identified patent rights as analogous to franchises or privileges.

    And yet sophisticated patent professionals (profs and practitioners alike) continue to discus patents as “property rights.”

    But they aren’t property rights. They are public rights, and the Academy doesn’t want you to understand what this really means.

    The Academy has become overly politicized, polarized, and perhaps – due to corporate research grants and the like – compromised. The truly important issues aren’t being discussed.

    1. he high Court’s tacit approval that the validity of an issued patent is indeed a matter of public rights.

      Once again, anony, not so.

      A denial of cert carries no such presumption as you would wish.

      How many times must you be told?

      1. Do you expect a grant in any forthcoming petitions?

        If not, then patents remain public rights per at least the CAFC’s MCM opinion.

        1. Exactly. While a denial of certiorari has no precedential value per se, in the present instance these denials leave in place the existing CAFC precedents, which hold that patents are public rights. I am not thrilled about that (if for no other reason than “public rights” doctrine is a confused mess that serves more to obscure than illuminate applicable legal principles), but the law is what the Art. III courts say it is. Until and unless Congress or the SCotUS say otherwise, the CAFC’s last word on this point remains the law of the land.

      2. PS I will also mention that the leftist now pseudo Marxist group think mania is a very real thing, particularly among younger patent academics.

        Any sign of ideological dissent is feared for the potential negative consequences regarding tenure, positions at more traditionally prestigious institutions, etc.

        I doubt that few within the patent academy are willing to ideologically challenge someone like Lemley as his ability to alter career prospects is probably quite real.

        Of course, you have George Mason with Mossoff and others, but it is a lone outpost.

        1. I agree anony regarding the denial of cert. It is not a holding, and they could still reverse, but it means at least that they are on the border for the decision.

          Also, I couldn’t agree more regarding Lemley and his influence over academia. He has also gotten a lot of these professors their jobs. Lemley is unethical and should be taken down based on his unethical conduct.

          I think the author of this blog post got his job due to Lemley and Michael also got his job from Lemley.

    2. Yes, almost all legal academics just completely ignored all the alleged APA Constitutional issues raised all the way from the Fed. Cir. to 4? cert petitions to the Sup. Ct., and several of us had complained about that here, from both sides. But another perfectly plausible explanation is simply that they all thought that those arguments against this Federal legislation would not be taken seriously by either the Fed. Cir. or the Sup. Ct.. Which they were not.

      1. Both MCM and Cooper were relisted after summer conference.

        If recollection serves, they were the only patent related petitions to survive the summer conference.

        They were in fact taken very seriously.

        There were ignored by the Academy for reasons unrelated to sufficiency of their arguments.

        (Ahem, politics, policy, and IPR worship)

          1. Ned – in light of the contentious 5-4 nature of the Stern opinion, you might be right. Additionally, Scalia joined the majority only in part, signaling a potential split amongst the conservatives.

            Are you aware of additional challenges in the pipeline? There must be one or two floating around waiting for the 9th Justice.

          2. Ned,

            My working theory is that you were not the right one to be champion of patents as property, showing an inability to grasp the rather plain property notion of sticks in a bundle of property rights.

    3. yet sophisticated patent professionals (profs and practitioners alike) continue to discus patents as “property rights.”

      Patent rights share many features with traditional property. That’s why people discuss them as property rights. Also, the term “public rights” refers to a legal doctrine that is relatively obscure, that is evolving all the time, and whose precise meaning at any given point is subject to debate.

      But this isn’t debatable: patent rights are intangible. They are created out of thin air and upon creation they potentially affect the ability of everyone in the country to freely use their own actual tangible property. There is no “fair use” exception. The PTO could turn up the spigots to 15 tomorrow and grant thousands upon thousands of ineligible invalid patents that would turn millions of innocent entities into infringers. It’s a real problem to think about, especially when ment@lly ill and incompetent people are turning up in the highest government offices.

      the Academy doesn’t want you to understand what this really means.

      Seems like it’s you who doesn’t want us to understand “what this really means.” And you’re probably the fifth commenter to show up here and drivel this silly innuendo and scamper off.

      So go ahead and tell everyboy. YOu’re a very serious person. Tell us all what “it really means” and why we should soooooooooooo s00per concerned by it. And while you do so, try to remember that we don’t all live in your precious bubble. The floor is yours. Go ahead.

      LOL

      1. Sure, it’s simple. A public right belongs to the executive and legislative branches. By labeling patent validity as a public right, Congress now has the blessing of the judiciary to remove patent validity from the Article III courts.

        In other words, the CAFC has judicially empowered Congress to make the PTAB a one stop shop for all things patent validity. Article III participation is now voluntary, and will continue only at congressional discretion.

        That strikes me as fairly important, but not important enough for the Academy, apparently, leaving anonymous posters on Pat-O and elsewhere to ring the bell.

        1. the CAFC has judicially empowered Congress to make the PTAB a one stop shop for all things patent validity. Article III participation is now voluntary, and will continue only at congressional discretion.

          That strikes me as fairly important

          It’s a great thing, for sure, given the huge numbers of junky poorly examined patents out there in the s 0 f t ie w 0 ftie arts that need to be expunged from the system. Again, the best improvement would be to expand IPR’s to include eligibility challenges. That should happen immediately.

          but not important enough for the Academy

          This is the silly part. What’s the standard? X number of articles within X number of months? Write your own article if you think the issue of public rights and patents hasn’t been discussed enough. Gosh knows it’s been discussed in the blogosphere pretty much endlessly, up, down and sideways.

          Maybe there are bigger issues to discuss. Try to remember: patent reform was a response to a patent system that was exploding into absolute chaos before our eyes. We’re going to be cleaning up the mess for a long time. When patents return to the state where they are covering actual tangible goods and methods for changing the physical world, maybe the time would be ripe for “the academy” to discuss the relationship of patents to traditional property again. Right now it seems kind of silly given the problems facing the system.

          1. If the Academy has the time and resources to publish every little excruciating detail about patent lit in the ED TX then it has the time and resources to explain via scholarship the interrelationship between the PTAB and public rights.

            It willfully chooses not to, as any such exposition does not comport with the policy agenda largely set out by Lemley and his cohorts.

            This isn’t “research for research’s sake” – it’s an “all’s fair” approach to identifying what is supposedly academically important to the patent bar. The playbook of the social activist. Blah. Blah. Chivalry and honor are antiquated concepts to be used against those who rely upon them.

            Keep calling it a property right when the 2nd most powerful federal court in the US has repeatedly called it a public right.

            Meanwhile, the PTAB’s sphere of influence continues to grow.

            But at least we have Newman’s dissents!

            1. Keep calling it a property right when the 2nd most powerful federal court in the US has repeatedly called it a public right.

              If it is indeed a public right (no matter the actual words of Congress), then should not the government pay for the enforcement actions of that public right….?

              😉

  7. All the evidence says that patents have been a boom to innovation. No paper or discussion about patents is complete without a lengthy discussion of the Google bucks that have gone into burning the patent system down.

    There are real economist that study this. The bizarre academics that endless yap on this blog are far removed from reality.

    Moreover, the rate of innovation is a public good. The corporations don’t care about the rate only that they stay on top. So, Google has no motive to innovate only to own any innovation. But, our Lemley types don’t ever write about this, ’cause, ’cause them there thickets are so strong they cannot see through them.

    What a joke the law school professors are. Worst than worthless. Unethical scoundrels at best.

    1. NW: All the evidence says that patents have been a boom to innovation.

      There is no serious movement afoot in academia or anyone else to eliminate patents, nor is there any doubt that rewarding innovation with some kind of “patent right” is won’t promote — or isn’t suitable for promoting — some kind of innovation. The issues are (1) what kind and degree of innovation is worth protecting with a patent, and (2) what limits should be placed on that protection?

      the rate of innovation is a public good.

      That’s not the issue being discussed.

      The corporations

      The corporations! The corporations! The corporations! Are you anti-corporation? Go ahead and tell the Big L I E: corporations don’t innovate. Right? They only steal. Right? Go ahead and just say so. Lots of other self-interested shills like yourself love to recite that script. At the same time, they encourage their fellow shills to follow along with what those corporations are innovating so they can apply their micromental powers to disgusting grifting schemes. All this is as transparent as glass to anybody who’s been breathing oxygen for the last twenty years.

      Look, I’m as repulsed by the activities, wealth and power of giant corporations as anybody. But making it easier for wealthy b 0ttom feeders like you to leech off them is the worst possible answer to that problem. Do I really need to explain why that’s the case?

    2. Serious question: could you point me to the papers or studies concluding that patents are a boom to innovation? There is a lot of talk on both sides of this issue and I’m very interested in reading any actual economic studies or analyses that have been conducted. Thank you very much.

  8. Barnett[‘s] conclusion also rests upon weak empirical ground.

    This is fair as far as it goes, but that is just as much as to say that all assertions that the patent system is either too strong or too weak are poorly supported. These are empirical assertions of an experimentally intractable nature. The way you know whether the contemporary degree of patent protection is either too strong or too weak (or just right) would be to set up two parallel planet Earth’s, one with the present mishmash of national patent regimes and the other with a proposed alterantive set. Then you could see which one had the better technology at the end of the experiment.

    We cannot do that experiment, however, so we are stuck making guesses about the sweet spot on patent protection based on theory. As theories go, however, the Barnett excerpts look plausible and reasonable.

    1. all assertions that the patent system is either too strong or too weak are poorly supported.

      The problem is that that the patent maximalists in particular never define what exactly it is that they mean by “strong.”

      The system that the patent maximalists want is one that would be mocked — and has been mocked and rightfully so — by decent reasonable people from all walks of life. That’s not a “strong” patent system. It’s just a system that the patent maximalists can benefit from.

      There is plenty of evidence — assuming that you haven’t turned off your ability to identify data and use reason to process it — to support the conclusion that opening the patent gates to literally everything under the sun that you can describe as a “process” or “machine” is an efficient way to completely destroy not only the credibility of the system but the actual ability of the system to function for its intended purpose. How do we know that? Because that experiment was performed. And everybody is still paying for it except for the fabulously wealthy grifters who managed to shove huge piles of other people’s cash in their pockets before the gates started closing.

      And now we have to listen to those rich people whine and cry for those good old days. That was also totally predictable.

      1. We have a word for when previously useful structures grow out of control, consuming more and more space and resources until they threaten the life of the system.

        PS, NPE’s have no use for injunctions, except as levers to extract higher settlements, obviously. If you want a viable secondary market for patents as liquid assets, the use of injunctions must be limited to appropriate circumstances.

        1. NPE’s have no use for injunctions, except as levers to extract higher settlements, obviously.

          O.k. And?

          I agree with this assertion, but I am not clear how it serves to establish any conclusion worth asserting. If the patent is valid, then it is patent holder’s right to exclude. I agree that the patent holder can probably extract a higher license fee if there is an injunction than if there is a compulsory license imposed, but why should we care about that? This is a dispute for the parties themselves to settle, not for the rest of us.

          If you want a viable secondary market for patents as liquid assets, the use of injunctions must be limited to appropriate circumstances.

          I am afraid that I am not following the logic here. If you find the time, I would be obliged if you could unpack your reasoning a bit.

          1. “why should we care about that?”

            Could it be that allowing those that do not practice to exclude others from practicing may not promote progress?

            1. I can believe that the courts are equipped to decide that broad policy strokes do or do not promote progress. I am extremely skeptical, however, that courts are equipped to decide whether a given injunction will or will not “promote the progress of the useful arts.”

              Now that Congress has settled the policy question (inventors are entitled to exclude others from practicing the claimed inventions), it strikes me as incredibly unwise for courts to try to decide each individual case on the basis of whether this particular remedy in this particular case is likely to promote the progress of the art. Such a determination is far beyond their ken. Progress is better promoted by broad and intelligible rules that give researches and investors clear forward guidance than by case-by-case adjustments to the patent law by judges whose science education stopped just past “you need to water the houseplants or they will die.”

              1. …not to mention the (very real) difference between statutory law and common law, and which branch – explicitly – was granted sole authority for writing the statutory law that is patent law…

                😉

              2. Greg, I think Congress is fully within its power to regulate patent remedies under the commerce clause. For example, Congress denies exclusion orders regarding imports except if there is a domestic industry.

                1. As (also) mentioned previously, Ned, Congress could do a lot of things under the commerce clause – but those things would not be patents, or tied to the patent clause.

                  The reasoning should be self-evident.

                2. You beat me to it, anon.

                  Whatever they call it, just toss it under general welfare, then no need to worry about whether or not the invention is commercialized…

          2. Greg the comment is made toward those who lament e-bay, because those same people are generally pro NPE and the existence of too-easy injunctions is a net negative for NPE’s.

            Yes, I could be more clear on the relationship between injunctions and a healthy secondary market.

            It’s this: increasingly, technical products are multi-component offerings; sometimes thousands of patents are implicated in a single offering. Industry (and consumers for that matter) would not stand for a situation where automatic injunctions (or thereabouts) would add gross uncertainty and manifest disruption to commerce, especially if that power to disrupt was coming from paper holding entities using as a lever to ramp royalties.

            In other words, impact to the public interest and imbalance of hardship would tend to quash the perceived legitimacy of NPE’s on a long-term basis and curtail the over-all economic prospects for high-tech industry.

            To be sure, I am 100% in favor of NPE’s rights to acquire and enforce patents because I believe a healthy secondary market for any property serves important purposes in valuation and influencing optimal directions for investment. Markets, where there are conditions for them to operate freely, are by far the best decision making vehicles available.

            Side note: I think “patent troll” should mean litigation abusers and have no connection to NPE’s, but that’s just an unfortunate collateral cost to the widespread abuse that caused the term to enter the everyday lexicon in the first place.

              1. Let me remind you anon: it was hassling of mom and pops by the thousands that got the term into the lexicon.

                Nobody but direct beneficiaries cares about what Big Corp thinks because it’s white noise by now.

            1. I think “patent troll” should mean litigation abusers and have no connection to NPE’s…

              For whatever little my opinion is worth, I share your inclination to make this distinction.

              1. This forum is widely read and your little opinion probably carries more weight here than lots of other places.

                Also FWIW, I enjoy your thoughtful posts Greg.

                1. Thanks, Martin. I enjoy your work as well.

                  Meanwhile, other than Dennis, we appear to be the only humans in this forum, surrounded by a host of screwball monsters. We need to stick together for that reason alone. :)

          3. “but why should we care about that? This is a dispute for the parties themselves to settle, not for the rest of us.”

            Because by allowing for it to be injunctions left and right as “the system” then you take the dispute out of the (at least one of the) party’s hands in many instances.

        2. Martin, the availability of injunctions forces settlements thereby avoiding litigation. The lack of availability of injunctions allows efficient infringement thereby forcing litigation.

          1. I agree with this. I would also add that bright-line rules encourage settlement and multi-factor balancing tests encourage litigation. When the Ebay court replaced the CAFC’s (bright line) preference for automatic injunctions with the standard issue four-factor test from outside of patent law, it simply made it harder to predict the outcome of any given infringement suit. The harder the outcome is to predict, the more worthwhile it is to prolong litigation.

            1. The patent injunction test was always the so called 4 factor test – all the way back to Justice Story. The reason equity took jurisdiction in the first place – was because – patents were in the nature of property rights – and things like, convoyed sales, and other business/engineering/invention opportunities, the right to contract, motives, etc. , etc. are not able to be quantified with money by a Court. What has changed is the level of hubris by Federal Judges – who think they can!

              1. There certainly are aspects to which dollar signs can be attached.

                Just as suredly that there are aspects to which dollar signs remain highly uncertain.

                Understanding both – and perhaps even more importantly, understanding that the first notion in equity is to make the aggrieved whole, and that the normally “most severe” injunction is actually ideally suited to making a patent holder whole (both dealing with the exclusive-ability of the patent holder to decide whom to exclude), a more full and complete understanding of the legal principles would strengthen the use of the equitable tool of injunctions.

                Some seem to want to balance a scale as if infringers’ “hardships” have some type of “right” not to be incurred (when they are the trespassers).

                Kind of like if I invade your home and take up residence, then complain that kicking me out would be too harsh.

              2. Sure, if we want to quibble about vocabulary, I grant your point. The four factors were always applicable, but the CAFC had crafted an understanding of first two prongs (irreparable injury and adequate remedy at law) that made it all but a foregone conclusion that one was going to get an injunction if a valid patent is infringed. In other words, the four factors were there, but two of them came with thumbs on the scale. The SCotUS took away those thumbs, and the result is less clarity. Just like Ned, I have no empirical evidence that the dearth of clarity comes with an increase of litigation, but I would be surprised if Ebay has not caused an increase in litigation duration.

                Trespassers are to be evicted. Balancing hardships to decide whether they should just be made to pay a “reasonable” rent is absurd. Get them off the property first, and then if they want to rent the place, let them come back as negotiators on even terms, and find a real market price, not a judge’s best guess at a fair market price.

          2. Ned I don’t think efficient infringement really is practical unless done at a tiny scale. Full blown patent litigation is millions of dollars and years of uncertainty, with prejudgment interest alone (should one lose) set at 6X of the current typical rate of return.

            I do see the possibility of infringers forcing a defacto mandatory licensing regime, but litigation is not the smoothest way toward a good licensing deal once the costs/risks of that mechanism are calculated.

            Do you (or anyone) have any clear examples of efficient infringement in action?

            1. Mr. Snyder, your feelings are noted (as also noted how far from reality those feelings fall).

              Maybe if you were not reacting to the situation from your own personal state of emotional scarring, you might hold a more objective view.

            2. Martin, there are many cases that I have been involved with where this is true, but I cannot talk about any of those for obvious reasons. But David Kappos and Judge Michel publicly terminated a licensing business explaining that they did so because no one would take out a license without litigation regardless of validity and infringement.

              1. Ned, I KNOW FOR A FACT that your assertion of the dubious maxim that no one would take out a license without litigation regardless of validity and infringement is total hogwash.

                There must me thousands upon thousands upon thousands of licenses in existence that were taken to avoid the possibility of litigation, regardless of merit.

                You have got to be kidding me. Anyone with half a brain will stay as far away from patent litigation as humanly possible, and if a modest license does that, you can bet it will happen.

                1. Martin, those who cannot afford litigation stay away from it. Also, if the cost of litigation is a fraction of the royalties demanded or that can be expected to be paid, then firms now wait until sued.

                2. Ned there are 28 million small businesses in the USA. Virtually none of them can afford a single full blown patent litigation. When patentees show up looking for low cost licenses, people pay up and move on. Wake up.

                3. Prof Couch I have read any number of 285 opinions and other papers noting the common troll model of settling for nuisance money, in the $3K t0 $10K range, and that to settle actually filed litigation. I think that exact fact pattern was noted in the recent AlphaCap Ventures v. Gust (SDNY) case for every named defendant except Gust.

                  You can expect that for every defendant filed-on, there were several (or more) who settled pre-filing.

                  No rational small business owner would think twice about paying $5K or $10K to avoid any kind of lawsuit, let alone a patent suit. They may hate it (and the patent/legal system for fostering it), but they do it.

                  I have personal knowledge of this happening, and I’m certain it happens often.

                4. Yea $10K is a hit to small business. Try it every month forever (for basic IP insurance coverage) and on top, add some to amortize seven figures worth of patent system related wastage. Without a doubt, the US Patent system has been the single greatest obstacle to our growth and ability to add jobs.

                5. Your (very personal) feelings are noted, Mr. Snyder.

                  Maybe you should avoided all those costs, realized that when you were first approached that – gasp – someone bothered to share their innovation, while you kept yours under wraps, and either innovated something new yourself, paid the proper price to the person who innovated and shared, or just did without.

                  Instead, you have exponentially “justified” your feelings based on the faulty premise that “the patent system must have been wrong.”

                  You have gone deep along the path of the dark side.

      2. And everybody is still paying for it except for the fabulously wealthy grifters who managed to shove huge piles of other people’s cash in their pockets before the gates started closing.

        And now we have to listen to those rich people whine and cry” (emphasis added)

        Your 0bsess10n with making this some type of class-ISM looks duplicitous when you are also de facto against the form of innovation most accessible to the non-wealthy (software).

        You are not guarding that field of rye very well – perhaps the watering with your tears is providing too much salt…

      3. “The problem is that that the patent maximalists in particular never define what exactly it is that they mean by “strong.””

        They mean one wherein inventors (i.e. patentees at least) have a lot of power. Generally power handed to them by entitlement.

        That’s exactly the definition you’re looking for.

    2. Greg,

      I think the experiment is in progress on this Earth. In addition to the PTO, we have the EPO, JPO, and SIPO (China). According to Gene Quinn (lost the cite), Chinese patents, once weak, are now stronger than in the U.S. So, in a few years’ time, one should be able to see the effects (after taking into account a number of confounding variables, of course).

      1. Er, Chinese people get U.S. patents and Americans get PRC Chinese patents. It is not the case that Chinese patents incentivize Chinese inventors while U.S. patents incentivize U.S. inventors.

        You cannot just look at (e.g.) E.U. biotech industry and say “their patent system must be better than ours because their industry progresses more quickly.” EU industry is built on U.S. patents.

        1. Some numbers to put that in perspective: In 2015, the PTO issued 325,000 patents of which 9,000 were Chinese (PRC) origin – about 3%. From SIPO-English, in January (only numbers I can find) 2015, SIPO issued 24,000 patents of which 1,550 were US origin – about 6%.

          It seems as if the SIPO patent system is encouraging more innovation in the U.S. than the reverse.

          1. Possibly. It seems to me that it is a mistake to take the number of patents as a proxy for amount of innovation. My point is merely that Chinese innovators do not innovate only because of the hope of reward in the Chinese market. They also innovate because of the hope of a reward in the U.S. market. Therefore, you cannot look at the rate of innovation in China and draw any conclusions about the effect of the Chinese patent system on Chinese innovation. The whole world’s patent systems are essentially one patent system, and innovation responds to the sum total more than to the individual national laws.

            1. Except for the friction effects (that happen in the real world), Greg, you almost have a point.

              And let’s not forgot that patent law itself is just not the same, sovereign to sovereign….

  9. those arguing for dramatic changes to the patent system did so with “little to no supporting evidence.”

    What a pile of cryb@by bal 0ney. The system has been literally imploding before everyone’s eyes in real time for many, many years before the latest reforms. Does Barnett believe that the system could survive a doubling in the number of ju nky “do it on a computer” patents every three years without major systematic changes? That’s where we were headed.

    Prior to academia, Prof. Barnett practiced corporate law as a senior associate

    Of course he did.

    Also: zilch0 technical background : Prof. Barnett received a M.Phil. from Cambridge University

    Go figure. But he totally understands how “innovation” works! Sure he does. He knows way more than, say, those little del00ded people with their dirty hands spending years of their lives sweating away developing and testing new things, sometimes for (gasp!) altruistic reasons or simple satisfaction. If only every micr0men tal thought and infinitly tiny point of novelty that occurred to those people could be protected with a patent! And if only we could all use the courts to threaten to shut down anyone who came within an inch of crossing that nanometer wide line. Then life would be a shiny paradise … for lawyers, anyway. And people who defend lawyers.

    shifting the pricing of technology assets from the relatively inf0rmed marketplace to relatively uninf0rmed judges and regulators

    This kind of sil liness completely ignores the actual historical events that led to the present patent reforms. First, there was no “shifting”. Judges and regulators have always had a huge hand in determining the pricing of “technology assets” and they always will. Why is that? Because the marketplace is regulated by laws. This is triply true when the market in question is the market for abstract “rights” that rely absolutely on quasi-jurists and jurists at the stage of creation and enforcement.

    Also, a little news flash: most judges and regulators, along with most reasonable people, are perfectly capable of understanding what a reasonable price looks like. It’s manifestly not reasonable, for example, for a “new” design for the corner of a folder icon that is displayed on a screen to be priced higher than what most American families, including their extended families, will make over five centuries. When such trends arise, it’s long past time for reform.

    Likewise with g@rb@ge “innovations” like using email (an old technology) and a programmable computer (an old technology) to communicate, e.g., an updated list of, say, movie preferences. When companies are being hauled into East Texas to pay an ext0 rtion fee to some lawyer who figured out that he could “make it rich off the Internet” by plastering the patent system with this kind of information content claims, it’s looong past time for reform.

    What Barnett is apparently blissfully unaware of is that there are hundreds of thousands of g@rb@ge patents out there like these. This kind of junk was being asserted (and is still being asserted!) by wealthy grifters and c0n artists (including patent attorneys) to shake down every and any target who can (or could) afford to pay the ext 0rtion fee. Who ultimately ends up paying for this game? Everybody … but the people who can least afford it will pay the most, and benefit the least.

    As for this: too little innovation

    The patent system continues to support “innovation” just fine (most likely too excessively, even with the present reforms) and we know that’s true because patents continue to be filed and granted and licensed at historically unprecedented levels. And patent attorneys (the good ones, anyway) continue to be paid very, very well indeed to help those “innovators” out.

    The big l 0 sers from the reforms are precisely the very same l 0 sers who were targeted by the ref0rms: i.e., patentees and speculators on patents which protect abstractions such as logic “on a computer” and abstract data processing in the biotech area, i.e., “determine and infer” diagnostic jnk where old data gathering methods are “enhanced” by the addition of “new meaning” to the obtained data. There is zero evidence — NONE — and there will never be any evidence — to support the claim that the failure to grant absurdly disproportionate patent rights on these types of ineligible “innovations” will have any effect whatsoever on the rate at which innovation in those areas occur. A main feature of the AIA, for example, was the introduction of a relatively expensive (but still far oo expensive!) means of expunging the system of the kind of jnk I described above.

    But the patent maximalists will never, ever stop whining about it all this because … well, it’s all they really know how they do. It’s all they ever do! Heck, allowing the kind of jnk I referred to above allows a certain class of philosophers and patent lawyers the opportunity to “get in on the patent action”, which surely must be the best thing ever for everyone. After all, those philosophers and lawyers told us so …

    1. You have shown zero appreciation of how innovation works, Malcolm, and thus have zero basis to throw stones at another.

      1. how innovation works

        Except that I’ve innovated more than you ever will if you live another five hundred years.

        Nice try, though. You’re a very serious person, “anon”! The “wrong about everything” aspect of your being really doesn’t show up too much, as far as you know.

        1. Except that I’ve innovated more than you ever will if you live another five hundred years.

          No. You have not.

          But thanks anyway.

    2. Again, MM, I agree. The central problem since the rise of the Rich era of subject matter expansionism is the corresponding need to defang patent rights.

      The solution to the present situation is to recognize the Rich era as a dreadful mistake, permanently do away with it by statute if necessary, and then restore reliability of patent rights.

      Instead, the powers that backed Rich are now whining loudly and calling for a repeal of 101.

      Well, vested interests will go to war to protect their own. History is replete with thousands of examples.

      1. “The solution to the present situation is to recognize the Rich era as a dreadful mistake, permanently do away with it by statute if necessary, and then restore reliability of patent rights.”

        Indeed so Ned. But you guys suffering from lose of reliability of rights right now will just have to wait until the political will builds to fix the underlying disease rather than treat the symptoms.

          1. Idk anon, in my experience (and in most other people’s it looks like from the grant rates), it appears that most everyone can still get “a patent” for their invention. All that happens in practice seems to be that the over-generosity of our peripheral claiming system is somewhat checked. Maybe in a rare off-chance situation someone actually cannot get a patent, but that’s super rare. However, you are right in so far as a lot of patents granted under the old paradigm would likely fall in the mean time. Perhaps in response to the changing of 101 back to what it was supposed to be, or whichever other corrective measure the legislature or judiciary enacts, they should help patentees preserve their patent rights by throwing them back into the office or something, at their request.

            Because to tell you the truth anon, what’s become more than clear to me over my time learning about the patent system, nigh half, if not most issues in patents aren’t even actually over 101, 102, 112 etc. What they boil down to is the manner in which the invention was claimed (as in, the ATTEMPT to put the invention into words, for legal administration, often by attorneys), generally the vagueness and sometimes over generous nature of the peripheral claiming system that patent attorneys somehow talked their way into getting the federal gubmit to allow them.

            1. By the by, merely “getting” a patent is nearly meaningless if one cannot enforce that patent.

              When the job is done right the first time, and patents are not rubber stamped (either Accept Accept Accept or Reject Reject Reject), then your musings above might – just might – carry some weight.

              nigh half, if not most issues in patents aren’t even actually over 101, 102, 112 etc. What they boil down to is the manner in which the invention was claimed

              I doubt that very seriously – it looks as if you are about to launch yourself (as you do on occasion) into one of your “Cu1t of the Claims” diatribes.

              1. “When the job is done right the first time, and patents are not rubber stamped (either Accept Accept Accept or Reject Reject Reject), then your musings above might – just might – carry some weight.”

                I think it likely is in the vast majority of cases anon.

              2. “I doubt that very seriously”

                Come on, you and I know very good and well that it is by far largely a call around the “edges” of a claim where the dispute happens. Even if those edge areas were intentionally drafted in to the claim. Or, even if they were unintentionally present. Chop off the edges and there never would have been an issue in the first place to even btch about.

                1. LOL – your “just chop off the edges” fails because infringers are ALWAYS pushing those edges.

                  Your answer here then reflects getting rid of the wolf at the back door by throwing him a nice juicy steak.

                  The FULL merits of a claimed invention deserve protection – edges and all.

      2. Except as amply pointed out to you Ned, there was no subject matter expansion.

        You run away from any inte11ectually honest discussion of that counter point…

  10. 99% of technologists and entrepreneurs have no idea that “empirical” studies are given deference over the Constitution in our highest courts. Let’s all agree to promote striking the invention provision from the Constitution, since these empirical studies have proven it antiquated. That is the only intellectually honest approach. Why should professor Barnett have to prove these points empirically, when the supreme law of the land unequivocally backs his thesis?

    1. That may have been a bit obtuse for some readers. The Constitution is unequivocal in Article 1 Section 8 that inventors have the exclusive right to their discoveries. It is not the right to sell an invention for a “fair” price. No expert or judge has the omniscience to figure out what the “fair” price is. The founders and authors of the patent statutes were wise enough to not interfere with that negotiation. But if the empirical data truly proves they were wrong, then the only solution is get rid of patents, not water them down. But that approach would alert entrepreneurs and the public, resulting in robust opposition and closer scrutiny of the empirical data driving such a radical reform.

      1. The Constitution is unequivocal in Article 1 Section 8 that inventors have the exclusive right to their discoveries.

        Er, Art. I, §8, cl. 8 says that “[t]he Congress shall have the power… [t]o… secur[e] for limited times to… inventors the exclusive right to their… discoveries,” (emphasis added). That is hardly unequivocal. Congress is authorized to award patents, not obligated. Nor is the text inconsistent with the idea of prices controls. I am not in favor of price controls, but “unequivocal” is far too strong a characterization of what the Constitution says on the point.

        No expert or judge has the omniscience to figure out what the “fair” price is. The founders and authors of the patent statutes were wise enough to not interfere with that negotiation.

        Too true. The founders did not insist on intruding into that negotiation, and wisely so. Still and all, they did not forbid the Congress from butting in and setting prices floors and/or caps where Congress deems appropriate. I think that such intrusion would be unwise, but it is not beyond Congress’ powers.

        [I]f the empirical data truly proves they were wrong, then the only solution is get rid of patents, not water them down.

        This is an elegant example of what logicians call the bifurcated fallacy. There is really no other alternative between “free and unfettered markets” and “abolish patents altogether”?

        But that approach would alert entrepreneurs and the public, resulting in robust opposition and closer scrutiny of the empirical data driving such a radical reform.

        I often wonder how much notice the public would take if we were to abolish patents altogether. I would be against such an outcome, and therefore I would be gratified to discover a deep well of public outrage against such an outcome. I have to say, however, that my quotidian experience is that most people give very little thought to patents, and would scarcely notice if they were abolished.

        1. I’ll backtrack on unequivocal. I think there is room for the all or nothing doctrine fitting within the Constitution. Any patent legislation must SECURE the exclusive right. A system that does not secure a right is not authorized. And in fact it does not work. Look at Apple v Samsung, no injunction, no damages paid. Now almost 5 years since the jury verdict. If Apple cannot enforce a patent on a $100M litigation budget, no small business can innovate without a clean property title. And the “empirical data” still says we need more reform. There is no viable middle ground. I think the empirical evidence is clear since the Ebay decision, for those that wish to look.

          1. Any patent legislation must SECURE the exclusive right.

            Fine, but that tells us nothing one way or another about price controls. It is perfectly consistent with the constitutional text to say “this guy here, Dr. X; she invented technology K, so she is the only one who is allowed to sell K in the U.S. for the next fifteen years. Still and all, she is not allowed to charge more than $150/unit of K when she sells it.”

            Dr. X’s right to K is now “secure” (i.e., the law prevents anyone else from exploiting K without her leave), even as Dr. K is still subject to a price control.

            And the “empirical data” still say[] we need more reform.

            I agree that we need “reform,” although it would be hard to disagree with so vague a goal as “reform.” Had you a specific reform in mind?

            There is no viable middle ground.

            Between what and what?

            I think the empirical evidence is clear since the Ebay decision, for those that wish to look.

            What evidence do you mean? I am not a fan of Ebay, but I would be hard pressed to think of “empirical” evidence to show that Ebay reached the wrong legal result.

            The purpose of a patent system is to foster innovation. If it is fostering innovation, then it is working fine, and if it is not fostering innovation then it is not working. What sort of empirical evidence could one adduce that the system has been fostering innovation less well with Ebay than it would have if Ebay had gone the other way?

            1. Here’s some empirical evidence. All of our smartphones look like iPhones and the primary user input is via touchscreen keyboards. This field has stagnated, cause statutes and appellate jurisprudence has denied Apple the exclusive rights to their invention.

              But I do agree with you, certain hypotheses cannot be proven with empirical evidence.

              1. Steve Jobs got cancer and died, and so did Apple’s vitality.

                What else ya got?

                How about rockets that fly backwards and land on their tails?

                John Glenn’s younger self could not have dreamed it.

              2. Martin, you missed my point. Apple is the innovator here. The rest of the industry has stagnated, because it us more profitsble to mimic Apple’s user interface rather than come up with a better one. I would likely not be typing this reply on a Samsung qwerty touchscreen if Apple had effective property rights. I don’t know what that user interface would be, but it would have to be innovative. I am oversimplifying a bit, but exclusive use of the design and certain gestures would have created barriers to push competitors to develop diverse new technologies outside the scope of the Apple patents.

            2. Regarding price controls, that is not quite the issue. The patent owner is not only given the price, he is also compelled to grant the license. Secondly, Congress has not enacted any price controls with regard to patents.

              1. That is an interesting point. I confess that I had not considered whether Ebay‘s de facto compulsory licenses are consistent with the IP clause’s requirements that patent and copyright law “secure” rights to authors/inventors. I wonder if anyone ever made that argument in Ebay (or, come to that, in New York Times Co. v. Tasini, 533 U.S. 483 (2001)).

                The only quibble that nags me regarding your argument is that a law is valid so long as it falls within any of Congress’ enumerated powers. In other words, it is not enough to say “Congress cannot allow for compulsory licenses under the IP clause.” You have to go on and decide whether there might be some other power under which Congress could support compulsory licenses.

                It seems to me that Congress might arguably have the power to authorize compulsory licenses under Congress’ commerce clause power. Maybe the constitutional argument about the scope of the IP clause is correct as far as it goes, but irrelevant to the ultimate conclusion?

            3. ‘Price controls’ seriously are people talking about this? To be sure, the government has march in rights, and can only be sued in claims court for a royalty – so there is a mechanism within our framework – to ‘take a license.’ But price controls? How about an opt in small patent claims court?

              1. ‘Price controls’ seriously are people talking about this?

                No, not really. Just like the discussion of the death penalty for infringement, the discussion about whether Congress has the power to impose ceilings on what a patentee may charge are purely academic. There is no real movement toward either price controls or capital sanctions for infringement.

                We were just entertaining ourselves with speculative discussion.

          2. Invention Rights, and if Congress chose not to provide for a patent system, certainly the states could award patents like they did upon the founding of this country, and for some time thereafter. In fact, I think the states could form a compact by which they would recognize each other’s patents so that the state patents would effectively become national patents.

            Obviously, there may be some problem in this “compact” to the extent that it could adversely interstate commerce. But I think that is the reason in the first place that they put the patent system at the national level because Congress had the exclusive power to regulate interstate commerce.

              1. Anon, states cannot do what? And why?

                The states granted patents before and after the founding of this country. It is only because Congress chose to occupy the field that the Supreme Court held that state patents would interfere with Congress’s policy choices.

                1. Say that sentence again, Ned – especially the last part, and then modify your “version” to more accurately reflect that the Constitutional clause (whether Congress implements that power or not) is what causes the loss of ability for the States to “join the field.”

                2. How does the X amendment come into your thoughts on this point?

                  The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

                  Patents are a power delegated to the United States. Does that imply that the power no longer remains with the states (even if Congress were to choose not to exercise the power)?

                3. Greg,

                  Like certain others, Ned will have no response to your comment (in part because your comment mirrors the one above it and has the dreaded and feared author of “anon”

                  😉

                4. Greg, the simple words of the constitution preserve State power in matters not delegated to Congress. But is the converse true, that States have no power in matters delated to Congress? The US raises armies. The states, militia and police forces. The coexistence of each seems to suggest that the mere existence of a power at the Federal level is not enough to preempt State power. Thus Sears (link to supreme.justia.com) only held that the patent statutes occupied the field and preempted.

                  “These laws, like other laws of the United States enacted pursuant to constitutional authority, are the supreme law of the land. See Sperry v. Florida, 373 U. S. 379 (1963). When state law touches upon the area of these federal statutes, it is “familiar doctrine” that the federal policy “may not be set at naught, or its benefits denied” by the state law. Sola Elec. Co. v. Jefferson Elec. Co., 317 U. S. 173, 317 U. S. 176 (1942). This is true, of course, even if the state law is enacted in the exercise of otherwise undoubted state power.”

                  Sears at 229.

                  At the time of the founding, States issued patents and continued to do so for some time. Such patents could not affect interstate commerce, which is why we needed a Federal system as well. But if there were no Federal patent laws? Then, no preemption.

            1. Ned, that is incorrect. States cannot create a patent system, in the same way in which a State cannot create an immigration system, or enter into treaties.

        2. Any patent legislation must SECURE the exclusive right.

          False. The Constitution puts a maximum limit on what Congress has the power to do with respect to patents; it’s not a required minimum.

          Besides, it says right there that the right is for “limited times.” There are a zillion ways to limit that time, and you wouldn’t like most of them.

          Please cut it with the zombie argument about what the Constitution mandates vis a vis patents. Next thing you know you’ll be telling everyone that the Constitution can’t be used to limit the subject matter of patents. That’s always a fun one.

          1. MM, assuming that the Constitution is a limit on the remedies Congress can authorize for patent owners – exclusive rights. I suppose that it would be beyond the power of Congress to authorize the death penalty to pirates.

            Perhaps another remedy that might get infringers attention would be the slow walk out of the Empire while being denied food and water. But some might argue, that would be “cruel and unusual.”

            1. I suppose that it would be beyond the power of Congress to authorize the death penalty to pirates.

              Really? Why so? I would not be in favor of such a policy, but it seems to me that “necessary and proper” could stretch to capital punishment for infringement if Congress so chose.

              The test from McCullough v. Maryland, 17 U.S. 316, 421 (1819) asserts “Let the [1] end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are [2] plainly adapted to that end, which are [3] not prohibited, but consist with the letter and spirit of the Constitution, are Constitutional.” As evidenced by the insertions placed in the quote, I see three prongs to this test. Taking them in turn:

              (1) Ends be legitimate and within the scope of the constitution: Obviously if the constitution says that Congress may create a patent system to reward inventors, then patents to reward inventor’s are a “legitimate” and “constitutional” end.

              (2) Means appropriate and adapted to the end: Capital punishment for those found to infringe would create an incentive not to infringe, so the means are therefore “adapted” to the end of providing inventors the promised exclusivity.

              (3) Not prohibited by the constitution: This is the controversial point. There is plenty of commentary to the effect that capital punishment is itself unconstitutional. I take no strong position on this point. If, however, capital punishment is not unconstitutional for other crimes, then it is not unconstitutional for patent infringement.

              In short, I do not see that capital punishment would be any less permissible as a punishment for patent infringement than it would be for murder. I happen to be strongly opposed to the idea of making patent infringement a capital crime. I would consider such an outcome unproductive and morally abhorrent. There are lots of things, however, that are unproductive and/or abhorrent (most wars, for example) that are still entirely within the scope of the powers conferred by the constitution.

              1. Greg, at a minimum, I would think that only willful infringement could be punished with death penalty. But do you know of any death penalty for any crime that does not involve intentional taking of life of another? (Other than treason.)

                1. Recently, no? Historically? “By 1776, most of the colonies had roughly comparable death statutes which covered arson, piracy, treason, murder, sodomy, burglary, robbery, rape, horse-stealing, slave rebellion, and often counterfeiting.”

                  In other words, there is no constitutional obstacle in principle (unless perhaps the evolving standards of the VIII amendment) to applying the death penalty in cases far less serious than murder or treason. That we choose not to impose capital punishment in circumstances less serious than murder or treason merely bespeaks our moral objections to a wider application of the death penalty—not a constitutional obstacle, as such.

        3. Greg: most people give very little thought to patents, and would scarcely notice if they were abolished.

          That’s true of a lot of things that most people can’t afford or have no use for. Most people are too busy trying to figure out how to pay next month’s rent and eat to worry about whether some microfraction of already wealthy people are getting big enough buckets of cash for their silly “do it on a computer” patent.

      2. The Constitution is unequivocal in Article 1 Section 8 that inventors have the exclusive right to their discoveries.

        Another zombie that never seems to go away. At least on this blog someone will come along to squash it down. Elsewhere the zombies multiply and breed like mushrooms in the rain. Sad.

  11. Dennis – a huge portion of the “academy” is bought and paid for through anti-patent corporate sponsorships, endowments for programs, chairs, etc., cleverly hidden to obscure their agenda. There is no reason to trust any of it, anymore than one can now trust the original tobacco sponsored research. Of the 40+ names that signed the proposed patent “deform” bill some years back, more than 1/3 had ties to large serial infringers, with of course, “Professor” Lemley being the biggest paid for name on the list. He and his minions are fond of putting their names on these faux academic studies without revealing their representation of their large infringing clients (Google for example).

    1. JNG is a patent tr0ll and self-promoter who was publically torn down by a District Court judge for being a disengenuous hack.

      The last time this was pointed out, he threw a hilarious tantrum where he accused his critics of being “jealous.”

      Among other bizarre beliefs, he appears to believe he is the inventor of the “proxy server.” Basically just a rotten human being and, while not the least trustworthy of the self-promoting patent maximalists out there, he’s definitely not worth trusting unless you trust him to pick your pocket. Ask him to explain subject matter eligibility to you and see what happens. He’s a very serious person!

      LOL

    2. huge portion of the “academy” is bought and paid for through anti-patent corporate sponsorships, endowments for programs, chairs, etc., cleverly hidden to obscure their agenda. There is no reason to trust any of it

      But you can totally trust the patent maximalists! They just shill for themselves and they’d never, ever mislead anyone about anything.

      serial infringers

      Leeches come up with the funniest names for their favorite sharks.

      Remember folks: the ideal world from the patent maximalist perspective is one where we’re all “serial infringers”, especially if we dare to take incredible risks like programming a computer or starting a business that incorporates the Internet or a smartphone in some manner. We should all just “get used to” the threat and buy some insurance. Doesn’t that sound awesome?

  12. I don’t think “depropertization” is a standardized term, so Prof. Crouch might add the definition to his excerpt: a system that moves toward favoring monetary damages over injunctive relief.

  13. 43 pages will have to take a back seat to my plans for the day, but from the abstract:

    These repeated assertions are inconsistent with the continuing robust output, declining prices and rapid innovation observed in the most patent-intensive technology markets during the more than three decades that have elapsed since 1982. Recent empirical studies relating to each of these assertions have found little to no supporting evidence over a variety of markets and periods.

    That certainly does NOT sound like “Of course this conclusion also rests upon weak empirical ground.” – which, “conveniently” is the charge being levied by Barnett against the other academics.

    Anyone else see the parallel of attacking something with the charge against which that person himself “has”…?

    (by the by, this is a somewhat standard propaganda tactic, used in part by that WWII German master of propaganda)

    1. …and perhaps the better question is not “has…,” but rather “why has…”

      There has been a LOT of emotive/philosophical/”policy” arguments by academic “friends of the courts” made to try to change statutory law in the branch of the government lacking express authority to change this particular branch of statutory law.

      Why has that been, and why has that been so quietly accepted as “appropriate?”**

      **by other pundits, including the academics themselves

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