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Rethinking Patent Prosecution: Incentives Shaping the Current Prosecution Process

Episode Summary

This episode is audio of the Incentives Shaping the Current Prosecution Process panel from the Engelberg Center's Rethinking Patent Prosecution, Review, and Litigation event. It was recorded on March 28, 2024.

Episode Notes

Panel Two: Incentives Shaping the Current Prosecution Process

Bruce Wexler (moderator), Paul Hastings and NYU School of Law

Bob Stoll, Faegre Drinker Biddle & Reath LLP

Mark Vallone, IBM

Episode Transcription

Michael Weinberg  0:01  

Welcome to engelberg center live a collection of audio from events held by the engelberg center on innovation Law and Policy at NYU Law. This episode is audio of the incentives shaping the current prosecution process panel from the engelberg center is rethinking patent prosecution review and litigation events. It was recorded on March 28 2024.


And together, so I will Bruce, I will turn it over to you.


Bruce Wexler  0:30  

Thank you. Thank you, Michael. It's nice to see you all. I'm a global co chair of IP Paul Hastings. I'm also a former student. I mean, I was a former student here at NYU, and I teach a class here in patent law. So it's nice to be back with me here on the panel. We have Mark Malone To my far left chief patent counsel, Americas at IBM. He manages the company's patent procurement team in the Americas, and its patent portfolio management team and serves as a leader in the patent strategy and policy matters. He was previously lead IP counsel for IBM Cloud and IBM commerce. In acquisition. He's supported transactions, product clearances, patent procurement, advice and counsel on IP matters. He previously led patent procurement operations for IBM consulting and IBM Global markets. And he has a BS in computer science. So and then, to my immediate left is Bob Stoll. Bob is a partner with the vagary drinker, former United States Patent and Trademark Office Commissioner, and he has more than 35 years of experience in IP prosecution, to advise clients on protecting inventions, and foreign and domestic IP laws. Bob also advises clients about potential legislative and rule changes, helps them advocate before the administration in the legislature testifies in court as an expert witness. And he manages and as a commission, he managed 8000 employees at the USPTO and was responsible for the functioning. He's got a technical degree in chemical engineering. So the perspective that we're going to offer today versus what you've heard so far, is more from the application side and the patent office side, and how that might deal with some of the problems that we're talking about. Hopefully, we can eventually get a good framework for some solutions. I guess one thought maybe we should just start more broadly is the topic of this is the incentives. And what do you see as from from the sort of the stakeholder perspective, the applicant, the patent office? What do you see as sort of driving some of the problems, the incentives from the patent practitioners and the patent office, the examiners?


Mark Vallone  2:50  

Thanks, Bruce. So I'll just start off with the typical disclaimer that the views I give today are my own and not on behalf of IBM. So thanks. So incentives in terms of our patent quality, what we find with the patent


Bruce Wexler  3:08  

office, I mean, sort of what's driving the patent applicants in your mind towards the outcomes that we're seeing? What are the what what is the trends look like? That's creating these problems from the application side? Yeah,


Mark Vallone  3:19  

so I think a lot of it is clearly, applicants are confined by dollars, right. And so they're going to file the best applet patent applications they can within the budgets they have. The patent office is in a position where they have a whole diversity of applicants right from, from so solo inventors, to large corporations, all around different budgets, all have different goals. In terms of do I need a quick issuance? Is this a patent that or an application that I'm going to fight really hard for broad claim scope, and they have to deal with all of that. And so some applicants are going to come out, when they think they have an invention that's very valuable, they're maybe come out with very, very broad claims may be unduly broad. You have some that are looking for a quick click, and she wants to maybe go in with something very narrow. But the patent office has to deal with all of that, and all these different strategies have all of their different applicants. And that's quite an undertaking. I think it's important at the outset to say, and I know judge Chen was getting into some of this in his his introductory remarks, right? He was getting a lot of the patent office operations and why is what's coming out of the patent office in some respects, not the best quality and being invalidated at the P tab. It really is. It's a joint effort between applicants and the patent office. And so that's what I hope we really kind of get into quite a bit of today, Bruce, there are things applicants can do to help the patent office and help issue quality patents and other things that we can do on the on the patent office side. So it really is incumbent upon applicants to be We're working with examiner's to be clear with what what it is the claim scope that they want to get after and do a good upfront due diligence before filing a patent application. And I think some of that will help alleviate some of the problems that we see.


Bob Stoll  5:15  

I agree with everything Mark said, I also want to add in Where's Judge Chen, he's over there. You were a bit of a Debbie Downer this morning. I was actually surprised that I woke. I agree that the you put junk in, you sometimes get junk out. So I think first of all, things can be cured by money and time that that you know, money to buy better databases and more artificial intelligence to help the examiners to undertake the examination a little bit more time. But we as a society have made a decision about the relative costs of prosecuting applications, both from the outside and from the inside. First of all, we receive about 550,000 applications every year. I mean, that's a huge support of the system itself, people are not stopping their filings, because of a few errant problems that are out there. They're still filing their trade secrets maybe has increased some but not a lot. And, you know, it's it's pretty darn good system that people find the prior art usually, even judge chan acknowledged they do a good job at the Patent and Trademark Office. With the very limited time I think it's 20 to 22 hours from first action to disposal. And that's either allowance or abandonment. That's not a lot of time. But we've decided as a society, that that's what we're going to do with respect to our patent system, that we're going to undertake a degree of examination, but not give it the gold plate that some would expect. And that's because that go played would cost a lot of money. And when we're talking about cases at court, you know, it's less than 3%, I believe, of the patents that issue actually go through that. And that means that less than 3% are worth the paper. They're paint, they're they're printed on. I mean, it's just you and you don't know which ones. So I think you got to really understand that it's a shot in the dark, you don't know which patents are going to be the valuable ones, which ones are not going to be the valuable ones. And you do the best you can. But it's a balancing with respect to trying to put the effort in to do the best job without costing so much that it deters filing.


Bruce Wexler  7:50  

So let me let me kick you off that because you talked about volume at the patent office. And I actually that's one of the things that I struggle with a bit as a litigator, it both at the P tab, I litigate in the court. But for example, I have a case now where there was an there was an application filed, it was rejected, rejected, rejected, rejected, and prosecuted for 10 years, 10 years later, the claims that were rejected, or allowed over the same are no explanation for the change of position, no explanation. And you would say, Is that unusual? And the answer, I think is no. I mean, I have another case where the patent was prosecuted for 18 years as the art evolved, and the claims just sort of watched and changed. And I think that occurrence exists. I don't think it's over the course of my career. I've seen a lot of that. I know we have prosecution latches. And that can be a way to look at the length, but that's a rarely used system. And I think you know it, if you go to the P tab, the P tab will say could say well, that art was considered. It was considered early on and useful rejection was considered later on it was allowed. So the P tab is not going to do a quality control probably under the standards for P tab review. So I guess the question is like, and I go back, because I don't think, you know, I'm hopeful from Judge Chan's comments that we could get to a better place but I'm also a little disillusioned because I'm just gonna read what Judge Learned Hand said 100 years ago, in a famous quote, he said, courts have discounted upon the abuse again and again. But the ant like persistency of solicitors has overcome and I suppose will continue to overcome the patience of examiner's and there is apparently always been one outcome. And it's 100 years later, and we still have the same situation. Right. So I guess the question is this. What do you think about the fact that the patent office has this issue, which is a quality control issue? That's that's there. And it's being driven by I think the volume of applications, the duration of the prosecution, just the ability of the examiners to keep track of things. How do you see that from a prosecution perspective or from the Patent Office perspective, as a way to sort of fix that?


Judge Raymond Chen  10:16  



Bob Stoll  10:18  

I mean, it happens, I'm not going to refute that. Sometimes some examiner's get worn down into allowing things they probably shouldn't. I mean, you've got 8000 examiner's some of them are going to do that. But I don't think the majority do. What I would say from your aspect of it is get in there and interview that examiner, get in there and interview them frequently. Get in early, talk with them, help them understand, I always draft my applications as a technological solution to a problem. And that's the way the European system works. But I do think when you're drafting your application, you put it together, be clear, put proper boundaries in talk to the examiner get to know them, if you're filing for a company, with one examiner, it's likely you're going to have that same examiner many times. Because the company usually invents in the same areas, not always, but sometimes get the relationship going. So that you understand each other frequently, I think at the beginning of prosecution, they don't understand exactly what that real thrust is. And I think honing them in on that will really help. But also, it's incumbent upon applicant not to obfuscate the invention, which I see more frequently than I see your problem. I see applications coming in, where it's confusing, you don't understand what the limitations of the claim are. It's amazing what what comes in there. And also, we recognize that 50% of the applications are coming from outside the United States, sometimes with improper idiomatic English. And it's even more of a problem with with those. So put some money into the the prosecutors who are developing the applications and prosecuting the applications. And I think that will go a long way to helping the examiners do what they need to do, and they do need to do it better. But I think that's part of it. I


Mark Vallone  12:28  

agree with everything you said, Bob. So I'll elaborate on a few things, maybe add a few more. Totally agree on the interview point, I think it is absolutely essential that you build a rapport with the examiner, make sure the examiner understands the invention work together toward getting quality allowable claims, I think anymore, you see a lot of vendors coming at you with it, interview statistics and all kinds of other statistics that happened during prosecution where it's almost turned into Moneyball. If you've ever seen the movie, or read the book, just because I see an examiner, maybe you don't move the needle much in terms of having an interview with them per the statistics that shouldn't be dispositive of your decision whether or not to interview the examiner. It's a data point. But I think in general, we should be entering toward the side of building rapport with the examiner and trying to get a good quality showcase in terms of obfuscation, I've been a proponent of trying to drive claims that you can understand the invention just by reading the claims and not having to go and read the spec to actually understand what the claims mean. I think that will go a long way to the examiner, I understand the law allows you to be your own lexicographer, I think ask yourself should you be I think clarity of claims in that regard is really important. Would you support a glossary? I would support a glossary and in fact, but I would also say put the definition in the claim rather than the term. But I would support glossaries. Bruce, I would hope what you're seeing in terms of this length of prosecution is not what it used to be under pre AIA law, I think you probably would see less of that with AI cases, I would hope because your patent term is going to be eaten


Bruce Wexler  14:09  

up saying what right we think but not always. Yeah.


Mark Vallone  14:13  

Not always. It could be a little bit better. But you'd also


Bruce Wexler  14:17  

be different in tech and life science. It is that's that's there may be a very big distinction there too.


Mark Vallone  14:22  

And that's a fair point. Yeah, I don't tend to see that in my


Bruce Wexler  14:25  

10 years. 15 years later,


Bob Stoll  14:27  

it's not valid. You know, what,


Bruce Wexler  14:29  

what good is that phone? Nobody wants it. Right. Right. But then it's right. In the life sciences space. That's, that's critical time. So yeah. So you see that? A


Mark Vallone  14:39  

couple more points I'll make on that is, you know, my view is I don't know why you wouldn't go that many rounds to the examiner rather than just go to the P tab and get a decision. I think that's a bit odd of a practice to I think you would if if you're really not moving the needle with the exam or you want to you want to take it up to the P tab. And then a proposal came out of the US PTO thing it was part of their robust and reliable patents frm that came out I think in 2022. One thing they suggested in there was after so many office actions you change examiner's maybe something like that helps prevent the wear down that that you see. I know that was a proposal hasn't come into rulemaking yet. But you can tell the patent office is thinking about exactly this right and continuation practice and in an original practice,


Bruce Wexler  15:23  

what about a rule? This might be a little radical, but you know, how you have sort of latches six years and this presumptions that kick in, you have a statute of limitations of six years, I think, built into the patent searches six years seems to be a magic number to some extent, what if, for example, you could only claim priority back six years. And that would mean that you basically have six years of filings at most, to get all your inventions out through your patent that would cut down the exponential growth of continuation applications. It would cut down this sort of gamesmanship, to play it out for 1015 years. Is this an idea that's ever been floated? Or as it was? What do you think


Bob Stoll  16:08  

of everything has been floated? I mean, I don't think that the Federal Circuit has affirmed one prosecution, latches cases. That is post GATT, unless I'm mistaken. I don't think they've done any I've seen cases where it's clear to me that there is prosecution latches, the PTO requires a group director to be involved in rejecting under prosecution latches, I think that's symbol tech ex parte Hall and in reboot board, Daisy. But it's a it's a rare occurrence, where it's going to be a winning argument, particularly at the CFC. Has


Bruce Wexler  16:46  

anybody out there heard of any kind of limitation proposed about how far back you can claim priority? Just out of curiosity? It's it would be an interesting rule, it's never really been done.


Speaker 1  17:00  

Or case, said case, cases, where every time I tried to take it to the peak tab, the examiner reopens prosecution, because they know they're going to lose. And it's like a losing proposition. You know, in that case, I was thinking about, I think, the third time. But they knew the whole time, the reason they kept reopening was that


Bob Stoll  17:24  

I've taken examiner's to the Quas, which is the quality control person within that group, when they do start just switching references on me repeatedly and never getting the final.


Bruce Wexler  17:36  

Yeah, I mean, you don't have to have your patent within six years. You just got to get all your file I hear Yeah. Okay. Well, anyway,


Speaker 1  17:44  

what you got initially helps you decide what you're smaller than the one


Mark Vallone  17:54  

that's sort of the trade off, right is that you don't want a rule that is maybe has a broader consequences than intended. So here, you want to prevent the bad acts. But there are legitimate reasons why you may need to go past the six years that you would be foreclosing until it is definitely a balance. And


Bob Stoll  18:10  

some applications contain many multiples of interventions, and you don't have the bucks to go through and do all of them at once. So you do one at a time, and you build up your portfolio that way. I mean, but as long as there's publication, and I believe there should be universal publication, I think that that is putting the public on notice as to what possibly could be claimed at some time in the future. And I think that helps competitors to know what they need to do either to take a license or to invent around. And


Bruce Wexler  18:41  

let me pivot to one on one a topic that people you know, everybody has a lot of different thoughts on, I want to ask you about, you know, my perception of one on one is a little different in terms of how it got started. Because I I was there at the Federal Circuit when all this went down. And in my view, it came out of inrae allopath. In 1994. In reality that was 1990, you want to go back and read it, it's 33, F 3d One, five, to six. And in that case, Judge rich basically held that as long as you have any computer with any software, it's a machine. And it changes because the electronics change, and therefore it's patent eligible. And if you look at Chief Judge archers dissent, starting at page 1551, he predicted, he predicted State Street, he predicted statestreet, which then held business methods patent eligible, which then opened the floodgates to business method patents, which then 20 years later led to Alice, which is very similar to what in reality, Pat's dissent said. So to me, you had a big opening that lead to a big sort of big issue, which then lead to a rule to try to fix it, which then now everybody's sort of taking advantage of and sort of broadening out right so you have to have an initial rule that says everything's eligible. It leads to all kinds of problems. You fix it with a rule that comes back to a place. And then everybody uses that rule then to make more and more arguments about one on one to broaden it back to broaden out the the arguments themselves, leading to Life Sciences attacks. And, you know, all the issues that we're struggling with. So the question, I guess, is in that landscape, where you have applications that you find with IBM and the tech side, I'm sure it's a huge issue for you. And then you see it on the, you know, from the patent office side and the prosecution side. I mean, where do you see this going with some way to fix it, either on the prosecution side, or from the patent office side to make it better?


Mark Vallone  20:45  

IBM has been a public supporter of the patent eligibility Restoration Act. I think that Isabel will that will certainly help us restore clarity around 101. For those of you not familiar with it, it would exclusions to eligibility are expressly set forth in the bill. And it prevents any additional any additional judicial exceptions being made. And would overrule Alice mayo, Mariette and all that that, and the other cases that


Bruce Wexler  21:20  

have wouldn't have put us back to State Street,


Mark Vallone  21:22  

would that put us back to State Street? Well, there's an exclusion for substantial financial business, economic, cultural, social, and artistic inventions. So does it put us back to statestreet? Not if it falls within that exclusion? Right. So I think that's been addressed in the belt. I think that's certainly going to would move the needle over where we are today, right? I mean, to me, there's just the fundamental struggle with this is abstract idea has never really been defined. And then you look at the courthouse, and well, you need to have something more than an abstract idea. Okay, so I need to have something more than an undefined standard. It's it's an impossible test to figure out, which you can see has led to all kinds of inconsistency and decisions. And not only that you have a PTO test that differs from the test sets using the courts. I think the PTO guidance has been very helpful. But just because you get a you know, a patent application through the patent office to go to grant doesn't then mean you have something that's enforceable, because the courts are gonna use a different task. So it's a very, very challenging environment. So certainly, we would welcome certainty in that regard. And I think the bill will certainly help with that.


Bob Stoll  22:38  

First, I want to challenge you on one piece of that, I don't think statestreet changed the law at all. I can show you patents from the 1800s that are directed toward business methods. What happened was, basically the financial industry services, saw what happened and started filing on everything. The Patent Office had inadequate safeguards in place with this subject matter area, and no talent to be able to handle that particular subject matter and issued a throng of bad patents. And that's why the CBM was sunsetted, because it was for that particular area. I think 101 has been a curse on the patent system. And I think it's terrible. And I actually blame the CFC for a large part of this, that split decision in Alice was terrible. And the fact that director Jung Kook came out with guidelines, and then the court says we don't have to follow them. That's correct. But they don't have to not follow them, either. They could have affirmed what he was trying to do. And given us some sort of rule, I recognize that the Mary, add the Alice, all of those cases, even state right in them, that there could be very narrowly construed. I would hope that we could get a unified ChFC to differentiate from the facts of those clay cases and come out with something because I think it's going to be a hard lift for getting 101 legislation out anytime soon. It's been a long time now. I think David Kappos has been doing a phenomenal job trying to get it going. But I'm not sure we're going to so I think that the colleagues of Judge Chen, one of which I know extremely well should be getting together and trying to come up with a unified approach on case that maybe AI PLA gets sent over there. So


Bruce Wexler  24:47  

you don't see the House, Senate and President all banding together, working together nicely and cooperating to fix all of patent law that's not from Washington. I want actually asked about maybe some tools and quality control. We heard about that. And maybe we could talk a little bit about AI, we actually had in our notes, the same thing that Judge Chen was talking about is using the P tab as a feedback loop for the quality control function. And maybe you could just tell us, does the quality control function? Well, first of all, is there a quality control function of the patent office? Does it use the P tab? And how hard would it be to sort of move that into gathering data from P tab rulings to try to figure out, you know what they could do better in the prosecution side?


Bob Stoll  25:32  

The PTO has data on everything. I mean, it's amazing what they collect information on. So the answer is yes. And there is a quality control group. And that's all they do is the quality. And I think they review one out of 26 of every examiner's applications that they handle from soup to nuts from the search itself to the the actions taken. And most of them are pretty good. I mean, there are bad ones, there's no question there. But they look at it, they try to provide counseling for the examiners, when they see problems. And if they see similar problems, that they go out with missives to the examining core, to make them aware that they're seeing things being handled in improper manner, and they need to take some sort of corrective action. So it's there. And they do it.


Bruce Wexler  26:29  

Have you ever seen a quality control function from your side of it? Like, have you seen any impact of it? Or is it just sort of a mystery what


Mark Vallone  26:36  

it is more of a it is more of a mystery? If I go back to one on one issue, sometimes you get well, you know, we have these quality conferences. And here's sort of the latest guidance. So it is a bit sort of behind the scenes from our perspective. Yeah.


Bruce Wexler  26:48  

And what about, I guess the examiners do they don't do they have to have, they wouldn't be continuing legal education, because a lot of them aren't lawyers, but some equivalent where they have to sort of keep up with the law and learn about the trends and Amgen, Sanofi and you know, you get all these cases that are declaring all kinds of law that they would be applying right. So


Bob Stoll  27:08  

they have both technical CLE type things, companies like IBM invite examiner's out to see subject matter and how it's handled, not something that's currently under consideration at the PTO, but they do provide hands on experience for the examiners. A lot of companies do that. They also do get some legal education with respect to that remember, the NP E P, their Bible basically is replete with citation to court,


Bruce Wexler  27:39  

but it's is it mandatory?


Bob Stoll  27:41  

I mean, do you know? Yeah, it's man. I mean, yeah, that's it for these periodic when they you know,


Bruce Wexler  27:47  

they have to go for they have to go only but they do they have to go for mandatory sort of legal education. Yes. Okay. And


Mark Vallone  27:55  

to the PTO is credit they actually do outreach for technical training. So I will get emails from supervisory examiner's and certain art units and saying, Can we get some education in such and such space? Or, you know, where do you think the field is heading? Where Where should we get some technical education? And that's terrific. I wish the PTO would do more of that. I think a lot of companies are certainly willing to help provide training to examiner's


Bruce Wexler  28:21  

I guess that so you raise another question, which is sort of stakeholder involvement in the process. What can you comment on that there's IBM's involvement in improving the patent system or other stakeholders? Is there some room there for companies and private individuals to help bar associations, that kind of thing? Absolutely.


Mark Vallone  28:41  

So so the PTO has been very active in issuing Federal Register notices this year, provide comments, that's what they're that's what they're out there for, for stakeholders to provide feedback, whether you do that on your own, whether you do it through industry associations like IPO or AI PLA, BSA, what have you the patent office has been very good about looking for steep stakeholder feedback to try to get to the best rules that they possibly can do examiner training. It's all of that is is ways that applicants can help stakeholders can help. And what about


Bruce Wexler  29:15  

this idea with the IDS where you just have a large dump of information on the patent examiner? How does that work at the patent office? How what what are they other? What what can they do about that? Is there anything they can do about that to improve? Well,


Mark Vallone  29:29  

so I think first this goes back to this dual dual applicant. PTO responsibility for patent quality I don't think it behooves applicants to do a giant IDs dump on examiner's we should be trying to get the best prior art that we're aware of in front of the examiner as we can on the PTO side. You know that's something examiner's will have have have to deal with. I know we've talked about in pre discussions before As parents use of use of AI tools to maybe help through some of that, when you have a large IDs that you're dealing with, can we do we have a software or productivity tool based type of solution that can help us sift through what is the most important part that's cited in this ID so that we can sort of zero in on that, rather than have to sift through a myriad of references that come up? Some of the issues that we're seeing, I think, really could be solved through use of tools. We talked earlier. And I know Judge 10 mentioned it, and we've talked about it here. The examiners have a very limited amount of time. So how do we help them be the most productive that they possibly can within the amount of time that they have? We're seeing AI pop up in all areas of patent prep and prosecution right now. There's got to be solutions that will help from the examination side to is okay,


Bob Stoll  30:45  

we, the MPAP requires the applicant to only submit references that would be deemed by them to form the basis of a prime efficient case against any claim that's in the application. It's a different standard than Thera sense, which is but for, but that's what they're required to provide to the Patent and Trademark Office. I think it's laziness on the part of applicants for not reviewing all of the references. And, you know, I've seen submissions in the IDs that exceed 1000 references, many of them exceed 1000 references, I think there should be some parsing by the filer, I recognize they want to inoculate themselves against litigation in the future. But I think that they're mucking up the system, the examiner is required to, to review the references in the same manner that they would review the references that they themselves find, which usually means you quickly look at the title, maybe the abstract, and you make a determination as to whether you need to go deeper into it or not. And that really can be done very quickly. So what


Bruce Wexler  31:56  

about I mean, I guess maybe from your perspective, particularly as being conservative, because you don't want to be accused of withholding something. So how do you deal with? Yeah, that's


Mark Vallone  32:07  

certainly an issue. And I think that's why you see these large IDs is it's taking the conservative approach. And going back to some of the discussion we've already had, it's also a it's a cost factor. It's


Bob Stoll  32:17  

a cost. They're not reading them, either. They're just submitting them.


Bruce Wexler  32:21  

And is it is it still, like an old school approach, we have the form, you fill it out and just send over copies?


Bob Stoll  32:28  

You don't have copies of US patent?


Bruce Wexler  32:31  

Is there room, for example, now to do it differently with some sort of AI tool where instead of instead of filling out an IDS, you actually upload the references into a tool with an IDS and that that goes to the patent office, I like a form like


Mark Vallone  32:45  

that. Certainly room for tools to help improve in this space. Maybe


Bruce Wexler  32:49  

IBM can help with its


Mark Vallone  32:52  

we do have aI offerings. But certainly, there's certainly room for that. Okay,


Bruce Wexler  32:58  

yeah, cuz that could actually make it that I would think that great. It's it's kind of strange that today we're using a system for disclosing art that is the same that was being used for decades. And now you don't even give copies of the things they're supposed to read. It's just a very strange way of giving 1000 references or whatever. Right.


Mark Vallone  33:19  

Yeah. I mean, I think, you know, one of the issues too, that I thought was really interesting that the that the judge can raise earlier was love. The invalidating art at the at the P tab is his US patents? What? We should be getting that out much earlier in the process, right? It kind of strikes me that we're not. And maybe those tools, use of those tools on the front end would help with that. So that that art isn't making its first appearance during during a PCAP proceeding, right,


Bob Stoll  33:49  

maybe we could require a certified searching agency to do a search at the cost of the applicant to provide references that they find.


Mark Vallone  33:59  

It seems to me that that should be shifted to the front end,


Bob Stoll  34:02  

right. Me too.


Bruce Wexler  34:04  

All right. Now, if we take it to is there any universe you imagine where the patent prosecution process is so good, that you don't need a pee tip?


Mark Vallone  34:15  

I think that, and this goes back to it. It almost like we got to we have to find a way to make that not cost prohibitive because I think you close people out of the patent process, if you do that, as it stands today, right? There's a lot of upfront work that has to be done to make that work. And then I think you take out startups and solo inventors and it just becomes too costly of a situation.


Bob Stoll  34:37  

I agree. It's cost prohibitive to do that.


Bruce Wexler  34:42  

Good. I was waiting. Is it doable?


Judge Raymond Chen  34:52  

I would like to think it's doable, but it's probably not doable. We probably do need ultimately some kind of post grant administrative process. says, and I mean, certainly currently, it's proven itself to be true that we need it. I mean, that's like I said, the big reveal of all of this, despite the fact that the PTO has billions and billions of dollars in annual budget, I am not so convinced that all those extra billions over the past decade have actually resulted in an in any kind of step uptick of improvement in patent quality. And so that that's a big question. Now, Bob makes a good point that we as a society have rendered a value judgment that we want to keep the door open as wide as possible on the front end to allow as many people to file patent applications as possible. But still, in the end, that doesn't answer the question of, can the agency on the front end do better, even in light of all the time constraints, budgetary constraints that there may be? And I think there is, I don't think there is, there is quality review to a certain degree of patent examiner work. But there isn't an actual feedback loop of the results we're getting from the patent board. The Patent Office has all the information, they're doing all of the granting, and they're doing all of the invalidating, they're the ones that have all the information, I don't see any attempt or any expression of interest by that agency to actually try to use some of that back end information to prospectively improve the front end. So maybe I'm looking a little animated right now. But that's something I've been talking about, actually, from time to time at conferences like this. And I'm going to keep talking about until I get an explanation of why, oh, that's has no merit. And here's why. I mean, I'm still waiting. So hopefully other people can think about this question too, because I don't think we can just keep shrugging our shoulders and moping along and thinking, well, we just need to keep the door open. So it is what it is. I don't think it has to be that way. So we need a better search function, I think is what we've been talking about. And the IDS dumps are real. I see in these IPR appeals patents that we're looking at that have listed on the front page actually front several pages 800 900 1000 prior art references. And so if you just smell it off the page, there's gamesmanship happening here. Well, I'm almost done. I'm almost done, sir. And then we're talking about the 101 guidelines of the PTO.


Bob Stoll  37:34  

And aren't you gonna stand behind me, and


Judge Raymond Chen  37:37  

then the one guidelines of the PTO. In the end, the Federal Circuit has to follow the rule of law, we have to follow the Supreme Court precedent. And so of course, all of us looked at the guidelines. But the guidelines didn't really explain their reasoning at all, for the positions they took. And I understood those guidelines. from a certain perspective, it wasn't the perspective of, hey, we at the agency, we've come up with a creative different solution for how to comply with Supreme Court precedent. And here it is, and here's why we think it's right. The way I looked at those guidelines was, okay, I'm running a factory here with 8000 people on the on the floor. And none of these people are very few of them have law degrees, we have to simplify a very complicated issue. And we're just going to create these simplified flowcharts for are 8000 people on the ground to apply them. And there's going to be an error rate that we will tolerate. Because if we actually try to follow the law, it's going to be too hard, you're going to get too many disparate outcomes from examiner to examiner to examiner, because the law is somewhat impressionistic. So therefore, as factory manager, I'm going to simplify this down, dumb it down. And we're going to tolerate a certain error rate. And if if we can be really good on 102103 and 112, then chances that an invalid patent will go out on 101 is relatively minimal. And that's a world I can accept. Now, if that was the thinking behind those guidelines, then I can step back and say, okay, not crazy. If I see an invalid patent come my way on 101. I'm going to be forced to take it down. But in the larger scheme of things, it's not irrational to do that. However, if it was a solution to thinking about one on one law, I didn't see it in there. And as for the Federal Circuit, I've been I feel like I've been walking the earth, looking for the Holy Grail. I'm what I've been waiting For 10 years for someone to write a brief to me, or write a law review article, here's where the Federal Circuit is. Here's where the Supreme Court here's, here's where here's the better way to look at the Supreme Court case law. I haven't seen that brief yet. I haven't seen that article yet. I've seen briefs a Federal Circuit, Congress said anything under the sun made by man is eligible. We should keep the door open, it should be a course filter. All of that has been rejected by the Supreme Court, I can't follow that I can't use that. Give me something I can use, I challenge this room. What is an abstract idea? If you claim the result at the point of novelty in your claim, your claim is going to have a problem. Let me give you an example. This is something I wrote an opinion. Imagine if a company an electric vehicle company, files a patent application claim, because the CEO says we need an electric car that can go 1500 miles without a recharge. engineers get me that that's your stretch goal. But there was a patent lawyer in the room. And he files a patent application and says, Okay, we're claiming a motorized vehicle, electric car, it's got four doors, it's got four tires, it's got a steering wheel. And it has an electric battery configuration that configured in such a way so that the vehicle can go 1500 miles without a recharge period. And then I say in the opinion, I think the Supreme Court is going to have a real problem with that. Because at the point of novelty in that claim, you've done nothing more than claimed the result. You haven't shown that you're an inventor, where his where show me in the claim some language that proves to me that you actually spent some time somewhere to figure something out. You're not an inventor, this claim fails right up out of the gate. Yes, there's probably 112 problems, enablement, written description and all that. But 101 has a different function. It has a different gating function right out of the box, I don't even have to do a technical inquiry on written description or enablement. Because the way you draft your claim fails. That's the way the law currently is in the Federal Circuit. It's problematic because there's always going to be close cases, there's close cases on one or three, there's close cases on claim construction. We don't have that many dissents in 101. We've all had different dissents along the way, the past 10 years, expressing some hints to the Supreme Court. But we currently are where we are. People want to complain that the law is confusing. It's a mess, they don't understand it. You read five of our opinions, you can understand, we want a technical improvement in your claim, you're claiming something technical based. And it's specific enough and not so broad and result oriented, that it looks like you're claiming nothing more than the idea of an electric car that can go 1500 miles without a recharge.


Bruce Wexler  43:26  

I'm stepping down. No, no, no, I'm just kidding. Are you gonna say something? Because I had two things that I think could fix everything. I'll throw them out there. All right, the first point, the first point, which I believed, since 1994, is that that many errors of the law are filled with things that are gray and nobody could figure them out, figure them out, you know, towards I sat there in class and wanted to kill myself because I couldn't grapple with anything concrete in that course you have criminal lawyer, then we get to patent law, where it's all a bunch of scientists like us, and we're all very sort of, we can be a little neurotic, you know? And it's like we frazzle when there's no clear answer, and I think 101 is a place by its nature is in conflict with our desire for certainty. Because it's it's it's it's sort of the fundamental idea of what is the stuff of patent law, like copyright has idea, you know, the idea expression dichotomy. Well, the copyright people who are artists, they're all okay with that, that doesn't bother them. But the patent side, we get very nervous between application and idea, essentially, right? And so that's step one. Step two, the way I look at it is the gate. The course filter, is a filter for what gets through the gate into the rest of patent law. So what what gets through the gate for 102 for, for figuring out what's novel, what's obvious what's breath and In the most extreme example, in allopath, was if you have a song, and you claim it on some structure that plays the song, the structure is well known. It meets all the definitions of a machine. It's electronic, it does all these things. But the only thing that's new about it is the song, the music, you hand that to an examiner to go through the gate, the examiner is now judging music against old music, and trying to decide what's obvious or not. The Patent Office can't do that. They can't judge whether a guitar riff is non obvious over some other piece of music. So they have the burden of proof. Boom, the patent pops out. It's a patent on music, but it's in the guise of of a structure that was in reality that said, All of that's okay. And then statestreet came along and said, Let's just do business methods. And we'll mention that we do it on a computer. Because the 1800s they didn't have the computer to throw into the claim on the business bed, throw in a computer. It's okay under allah Pat. Now, there's tons and tons of patents on business methods. everybody freaks out. So then they create the law analysis to shut that down. And then of course, what do we do with that law? Now we apply to Life Sciences. Now we apply it to this, we apply to electric cars, we apply it, and everybody is now trying to figure it out. But the bottom line is, it's never been clear. And if you go back to the what was the Freeman Walter a belly test, the pre Alice, you can go way back. And the reason it was called the Freeman Walter belly test, is there was a freeman case. But that didn't work. So then it was a Walter case. And it became the Freeman Walter test. And then that didn't work. So then they had a belly, and they said, called the Freeman Walter a belly test. And then Bilski came along, that didn't work. And every time you set up a black and white rule, it breaks down. Because it's all about what should patent law be about? It's a philosophical question that one on one is trying to deal with. And I think that makes everybody very uncomfortable. So there's my answer. It's not a clear answer. It's just as gray as this one on one itself. But I would say I'm a big fan of one on one applied correctly, because I've seen the harm that occurs without it. And you could have a statute and you could try to fix it. But the statute I think, is going to look a lot like what it's supposed to look like, if you apply it the right way. And I would, you know, in the cases that the Federal Circuit, there may be cases you disagree with you don't, but they fought they should in a perfect model form book ends for what you could then apply just like every other area of the law, that isn't patent law. And I just don't think you know, everybody gets all crazy about it, but maybe I'm just not that bothered by it at all. I don't know why. Maybe I'm just more Zen about it. But for what it's worth, that's my take on one on one. I know we've gone over I don't know I hate to not end on your great comments. But if there's anything else you wanted to say or Yeah, no, but it's your room. It's obviously your room. Anything. I think we're over for lunch or so we're happy to talk out in the hall but thank you very much.


Michael Weinberg  48:10  

Thank you everyone. We are going to be on break at 1245 and lunch is available outside the engelberg center live podcast is a production of the engelberg center on innovation Law and Policy at NYU Law is released under a Creative Commons Attribution 4.0 International license. Our theme music is by Jessica Batke and is licensed under a Creative Commons Attribution 4.0 International license


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