[Congressional Record Volume 154, Number 177 (Thursday, November 20, 2008)]
[Senate]
[Pages S10723-S10725]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                INTELLECTUAL PROPERTY RIGHTS CHALLENGES

  Mr. LEAHY. Mr. President, I have long been a champion of the 
intellectual property rights enshrined in the Constitution, and have 
sponsored much of the significant legislation in that realm over the 
decades I have served in the Senate. On October 24, 2008, Judge Richard 
Linn of the Court of Appeals for the Federal Circuit, the court 
entrusted exclusively with Federal appeals involving patent issues, 
gave the keynote address before the American Intellectual Property Law 
Association's annual meeting. In that address, Judge Linn discusses the 
challenges facing the intellectual property system in the coming years, 
offers advice on moving forward as a nation to meet those challenges, 
and provides food for thought for anyone interested in this important 
part of our national economy.
  I ask unanimous consent that the statement of Judge Richard Linn from 
October 24, 2008, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                            Challenges Ahead

       I would like to thank the AIPLA for the invitation to speak 
     before you today. I am truly honored to speak before the 
     AIPLA, an organization I have belonged to since the late 
     60's. I see in the audience many of my friends and former 
     colleagues of the patent bar. I feel very much at home here, 
     and it is nice to be asked to speak before this distinguished 
     group.
       Before I begin, I would like to take a moment to personally 
     recognize someone who has played a unique role in the 
     progress of the U.S. patent system for over 40 years, someone 
     who has led this organization for the past decade and a half, 
     someone who has been a special friend to so many of us, and 
     someone who is now moving on to a well deserved retirement--
     Mike Kirk. Please join me in a round of applause to show our 
     appreciation for Mike and all that he has done.
       We all know that Mike has done some very special things for 
     the AIPLA. But the best thing he did was to bring his wife, 
     Mary Catherine, into our AIPLA family. I think she, too, 
     deserves to be recognized for all she has done.
       One measure of a leader is the caliber of the person 
     selected to replace him. And here again, the AIPLA has risen 
     to the challenge of Mike Kirk's departure in selecting one of 
     the few members of our profession who has the character, 
     knowledge, and recognized leadership skills to honor Mike's 
     legacy of accomplishment. That person is, of course, Q. Todd 
     Dickenson, and I think he deserves a vote of confidence with 
     a round of applause.
       The program lists my topic as ``Challenges Ahead.'' I 
     selected that topic intentionally to give me lots of latitude 
     in what I might say. If that phrase was a limitation in a 
     patent claim, the meaning would be hard to discern with 
     specificity and no doubt would generate considerable 
     litigation. In a way, it's the perfect topic. So, what is it 
     that I am going to talk about?
       John Whealan yesterday focused on recent history and ended 
     with a few comments on the future. Instead, I will focus on 
     some of the challenges I see for the future and will begin 
     with a few comments on the changes of the recent past.
       We hear a lot about change these days. Change in our 
     economy, global climate change, and of course, change in our 
     government. Change has been in the air for some time. It 
     seems like the only thing we have heard, or seen, or read in 
     the media for the past 20 months or so has been about change. 
     And intellectual property law has been no stranger to it in 
     the past few years. While one can debate the extent of the 
     changes and the reasons underlying them, there is no question 
     that the rights of patentees have been impacted in one way or 
     the other by a number of recent decisions. And while the pace 
     of change may slow down at least for a while, the fallout of 
     all of this change will directly impact all of us. This is 
     evident, for example, from an examination of three key 
     decisions: KSR v. Teleflex, dealing with the test for 
     obviousness; eBay v. MercExchange, dealing with the test for 
     injunctive relief; and In re Seagate, dealing with the 
     standard applicable to prove willful infringement. There have 
     been others, such as Medlmmune v. Genentech, which made it 
     easier to challenge patents in declaratory judgment 
     actions, and DSU v. JMS, requiring proof of specific 
     intent for induced infringement, but I will limit my 
     remarks to the holdings and possible implications of KSR, 
     eBay, and Seagate.
       In KSR, the Supreme Court reviewed the test for obviousness 
     under 35 U.S.C. Sec. 103. The Supreme Court began by 
     emphasizing that its 1966 decision in Graham v. John Deere 
     informed the obviousness inquiry. It went on to reject what 
     it perceived to be a rigid approach taken by our court in 
     applying the teaching, suggestion and motivation test. The 
     Supreme Court observed that ``when it first established the 
     requirement of demonstrating a teaching, suggestion, or 
     motivation to combine known elements in order to show that 
     the combination is obvious, the Court of Customs and Patent 
     Appeals captured a helpful insight.'' It then noted, however, 
     that helpful insights need not become rigid and mandatory 
     formulas, and ``when a court transforms a general principle 
     into a rigid rule that limits the obviousness inquiry, as the 
     Court of Appeals did here, it errs.''

[[Page S10724]]

       The Supreme Court summed up its position on obviousness in 
     observing that what is important is to use common sense and 
     to identify a reason that would have prompted a person of 
     ordinary skill in the relevant field to combine the elements 
     in the way the claimed new invention does. It added that any 
     need or problem known in the field of endeavor at the time of 
     invention and addressed by the patent can provide a reason 
     for combining the elements in the manner claimed.
       The court also made some interesting observations on the 
     propriety of summary judgment on issues of obviousness. The 
     court said that ``where, as here, the content of the prior 
     art, the scope of the patent claim, and the level of ordinary 
     skill in the art are not in material dispute, and the 
     obviousness of the claim is apparent in light of these 
     factors, summary judgment is appropriate.'' ``The obviousness 
     of the claim is apparent in light of these factors?'' What 
     does that mean? Does this mean obviousness is sort of like 
     obscenity--you know it when you see it? I'm not sure what it 
     means, but I am sure someone is going to ask me for an answer 
     to that question in a brief in the not too distant future.
       The net result of KSR is that defendants may have a renewed 
     interest in raising and pressing obviousness contentions, 
     despite the high ``clear and convincing'' standard that 
     applies to validity challenges. They can now argue that 
     ``reasons'' and common sense support a conclusion that the 
     claimed invention doesn't pass muster even when application 
     of a teaching, suggestion, and motivation test might 
     otherwise have failed. It also means that patentees will have 
     to be more prepared to gather up evidence to show secondary 
     considerations as a way to overcome expected challenges from 
     accused infringers. Finally, the Supreme Court's comments 
     about summary judgment will mean that patentees will have to 
     start thinking about how to assist courts in answering 
     questions about what the Supreme Court's comments on summary 
     judgment meant as to the way obviousness issues should be 
     presented to juries, if at all. For example, is it still 
     proper for a district court to present the ultimate question 
     of obviousness to the jury or is the district court required 
     to decide obviousness as a matter of law in every case, 
     leaving only the factual underpinnings for the jury? No 
     matter how all this is sorted out, KSR makes evident that 
     patentees are likely to face more challenges based on section 
     103. We are already seeing this in recent cases filed with 
     our court.
       In eBay, the Supreme Court rejected the categorical grant 
     of injunctive relief in patent cases and held that in those 
     cases, just as in other cases, a plaintiff seeking a 
     permanent injunction must demonstrate that it has suffered 
     irreparable injury; that remedies available at law are 
     inadequate; that the balance of hardships warrants injunctive 
     relief; and that the public interest would not be disserved 
     by a permanent injunction. What the Supreme Court did not 
     tell us is what happens after infringement is found and a 
     court determines that the equitable remedy of a permanent 
     injunction is not warranted. This is already presenting 
     patentees and the courts with interesting new challenges. 
     eBay also leaves open the question of whether there remains a 
     rebuttable presumption of irreparable harm in patent cases. 
     The bottom line for patentees is that they, like all other 
     plaintiffs, will have to tow the line and be prepared to make 
     a convincing showing on each of the four equitable factors. 
     This will present new challenges, particularly to non-
     practicing patentees and alters some of the leverage 
     patentees assumed they enjoyed before the eBay decision.
       In re Seagate presented our court with the opportunity to 
     pick up where Knorr-Bremse left off and to reconsider the 
     question of the duty of due care owed to patentees and the 
     standard for determining when infringement is willful and 
     subject to treble damages. The case came to us on a motion 
     for a writ of mandamus seeking to overturn an order from a 
     district court that would have given the patentee's counsel 
     virtually unfettered access to all attorney-client 
     communications and work-product of the accused infringer. 
     That order stemmed from the patentee's assertion of willful 
     infringement and the accused infringer's good faith reliance 
     on the advice of counsel. Because of the abuses we perceived 
     in the routine allegation of willful infringement and the 
     tension it produced between assertion by the accused 
     infringer of the attorney-client privilege and reliance on 
     the advice of counsel, we overruled the duty of due care 
     standard set out in Underwater Devices and held that proof of 
     willful infringement, permitting enhanced damages, requires 
     at least a showing of objective recklessness. Because we 
     abandoned the affirmative duty of due care, we also remarked 
     that in the context of willful infringement, there is no 
     affirmative obligation to obtain an opinion of counsel.
       Following Seagate, it can be anticipated that there will be 
     continuing debate over application of the objectively 
     reckless standard and the parameters of willful infringement. 
     The one thing that is no longer in debate, however, is that 
     patentees can no longer bank on a determination of 
     willfulness and enhanced damages merely because infringement 
     was found against an accused who had prior notice of the 
     patent.
       The net result of all of these decisions is that patentees 
     are likely to have to confront more obviousness challenges, 
     patentees are less likely to obtain enhanced damage awards 
     based on willfulness, and patentees will be more challenged 
     to obtain injunctive relief than just a few years ago. These 
     cases thus will cause patentees to reassess their strategies 
     and to revalue their patent portfolios.
       But patentees are not only struggling to cope with recent 
     decisions of the Supreme Court and the Federal Circuit. 
     Patentees continue to suffer needlessly from self-inflicted 
     wounds. These are the walking wounded, who regularly report 
     to the MASH units-the district courts-for help. And if they 
     don't get the help they need at the district court MASH unit, 
     they come to the general hospital-the Federal Circuit, to 
     cure all that ails them.
       What self-inflicted wounds am I talking about? There are 
     two in particular that I want to highlight. The first relates 
     to the continuing propensity of patentees, particularly in 
     the electrical and mechanical arts, to disclose in their 
     applications only one embodiment of the invention, while 
     arguing that the claims cover something broader than the one 
     disclosed embodiment might suggest. I have no idea why so 
     many patentees continue to limit the number of embodiments 
     disclosed when, in so many cases we hear, the entire 
     controversy is about the scope of a claim supported only by 
     a single disclosed embodiment. Patentees who desire broad 
     coverage and only disclose a single embodiment are 
     shooting themselves in the foot.
       Scientists and engineers are familiar with the concept that 
     an area cannot be defined by a single point or even two 
     points. To define an area requires at least three points. It 
     is surprising, then, that patent attorneys, who are trained 
     both in the law and in science or engineering, often forget 
     this three-point concept in drafting patent applications. 
     Careful prosecutors follow a general rule and include in 
     patent specifications not merely one embodiment of an 
     invention, but multiple embodiments to better illustrate the 
     full area of the discovery embraced by the claims. This is a 
     sound practice that helps to inform the public of the proper 
     scope of the claims and avoids uncertainty and interpretive 
     disputes. The uncertainty of single embodiment specifications 
     has brought us a steady stream of cases, and I urge all of 
     you not to shoot yourselves or your clients in the foot by 
     disclosing only one embodiment, particularly in mechanical 
     and electrical cases.
       The second example of a self-inflicted wound is the 
     continuing practice of adding terminology to claims, 
     particularly after an interview, to place the claims in 
     condition for allowance without explaining the reason for the 
     change or pointing out where in the specification support for 
     the added language can be found. Again, in case after case 
     before our court, we are called upon to construe the scope of 
     claim language which appears nowhere else but in the claims. 
     Without any support in the written description, we are left 
     to infer meaning from parts of the specification that often 
     do not directly relate to the limitation in question or from 
     the prosecution history of events leading up to the 
     amendment. These are often poor guides for interpretation and 
     frequently lead to protracted and costly litigation, not to 
     mention unpredictable outcomes. Here again, the wound is 
     self-inflicted and patentees are well advised to avoid 
     shooting themselves in the foot by leaving the meaning of 
     critical limitations to unguided inference.
       The message for those who regularly write and prosecute 
     patent applications for clients is that while the swinging of 
     the patent pendulum of court decisions is largely beyond any 
     patentee's ability to alter, there are things that are 
     entirely within your control, such as including multiple 
     embodiments in patent applications to make broad construction 
     of claim terms more likely and providing support or an 
     explanation for claim terms added during prosecution. Those 
     things you can control. And they will help your client avoid 
     going through life as a walking wounded patentee.
       I would like to turn now to some challenges I see for the 
     PTO. With a new administration soon to occupy the White 
     House, a change in leadership at the PTO can be expected 
     within the next year. The new leaders at the PTO will face 
     many difficult challenges. The past leadership has much to be 
     proud of. Director Dudas successfully oversaw the completion 
     of a modern new facility and the end to fee diversion. He and 
     his colleagues have upgraded technology resources for 
     examiners, have ramped up hiring, and have instituted 
     comprehensive training programs, to name just a few of their 
     many accomplishments. All of that is commendable.
       But it seems to me that what is needed now goes beyond 
     facilities or finances to the heart of the PTO's mission to 
     thoroughly, carefully, and promptly examine the applications 
     of those who seek the protection of patents and who rely on 
     the effective operation of our patent system. With the solid 
     foundation of the achievements of the current Director, the 
     PTO now needs the leadership of those with intimate knowledge 
     of patents and patent law. People who understand first-hand 
     the problems faced by users of the system and who have the 
     ability to comprehensively relate to the practicing bar. That 
     leadership is best found in the ranks of experienced 
     practitioners, many of whom are in this very room.
       The next group of leaders at the PTO will need to be 
     creative in finding new ways to improve not only productivity 
     but quality as

[[Page S10725]]

     well. The number of new applications that are projected over 
     the next several years is staggering. Technology will 
     continue to get more complicated. And the demands of managing 
     such a sizable organization will be rigorous. To keep pace 
     will take bold new measures to improve efficiency and 
     effectiveness of almost every aspect of PTO operations. That 
     may entail cooperative efforts with other patent offices 
     around the world to find ways to share search results. It may 
     entail establishing a program of deferred examination to give 
     applicants an opportunity to fully evaluate the need for 
     patent protection before the office is called upon to conduct 
     any examination. My point here is not to suggest specific 
     initiatives. It is not my place to tell the PTO how it should 
     operate. I only cite these as examples of the kinds of things 
     the new leadership of the PTO will need to seek out if it is 
     to avoid getting buried in the avalanche of new applications 
     looming on the horizon.
       I know the PTO has engaged in a vigorous effort to hire and 
     train new examiners. I have been privileged to speak at a 
     graduation ceremony for an impressive class of new examiners 
     from the PTO's new patent academy. But that's only half of 
     the equation. It serves no real purpose to hire new examiners 
     if an equal number of examiners--especially experienced 
     examiners--resign. The PTO will need to go back to basics and 
     creatively apply a new version of the Three R's we all 
     learned as kids. The rule for how to treat examiners couldn't 
     be simpler: Respect, Reward, and Retain. In this regard, it 
     may be time for the PTO to develop new standards of examiner 
     performance that mirror the standards of attorney performance 
     used by law firms and corporate law departments. Just as 
     attorney performance is not measured by billable hours alone, 
     examiner performance measured principally by the number of 
     disposals may not be the best approach. Counting disposals 
     may be a raw indicator of performance but does not recognize 
     the judgment, thoroughness, and legal skills provided by 
     first-rate examiners and expected by the public.
       Other patent offices around the world are involved not only 
     in giving birth to patents but in assessing questions of 
     validity raised over the life of a patent. That may explain 
     why examiners in many countries are treated differently than 
     U.S. examiners. It is not that U.S. examiners are less 
     competent or any less dedicated. Far from it. But if the 
     primary role of an examiner is limited to ex parte matters 
     that end on the day the patent issues, there will 
     understandably be a different interest on the part of the 
     public in what examiners do and who they are than if they 
     played an essential role in the determination of validity 
     challenges throughout the life of the patent. One way U.S. 
     examiners would have a greater opportunity to be recognized 
     in much the same way as their counterparts in other countries 
     is if the new leadership at the PTO decides to energize the 
     current reexamination system to make it the attractive 
     alternative to litigation it was originally intended to be. 
     This would require a much expanded corps of experienced 
     reexamination examiners and the implementation of streamlined 
     procedures to accelerate the processing of all reexamination 
     applications.
       While it is evident that the PTO will face unprecedented 
     challenges in the years ahead, the leaders and examiners I 
     know are capable, dedicated, and clearly up to the task. I 
     have every confidence that the PTO will meet the challenges 
     ahead and will continue to be a model for the rest of the 
     world.
       Many have said that this is the golden age of intellectual 
     property. In the years to come, we can expect to see 
     significant advances in energy technology, green technology, 
     nanotechnology, and a host of other things. The need for 
     effective protection for the discoveries of tomorrow's 
     scientists, engineers, and researchers will be greater than 
     ever before. And the changing legal landscape and the pace of 
     technological progress will present us all with new and 
     difficult challenges. The challenges ahead are many, but we 
     are all fortunate to have the chance to enjoy the 
     opportunities and to confront the challenges the golden age 
     of IP offers to each of us.
       I have enjoyed being with you and thank you for your 
     attention.

                          ____________________