ALM Properties, Inc.
Page printed from: Corporate Counsel
Select 'Print' in your browser menu to print this document.
Silicon Valley Reacts to Obama's Patent Proposals
President Barack Obama's patent reform package got a lukewarm reception in Silicon Valley on Tuesday morning, with several lawyers there saying most of the proposals have kicked around for a while and questioning whether the more far-reaching ones had much chance of enactment.
Lawyers who defend patent cases said they were pleased to see the president weigh in against so-called patent trolls, but others suggested the president was responding to pressure from the region's tech giants.
Among other things, Obama's five executive actions called for improved oversight by the U.S. Patent and Trademark Office, as well as increasing transparency in patent ownership. But putting the burden of responsibility on the patent office for sniffing out bogus claims prompted some skepticism among several IP litigators, who noted that examiners are already overburdened in 2012 there were 576,763 new applications for patents, with just 8,000 officers. The government's spending on the approval process can't possibly match the resources that companies can later devote to challenging the results, said Ronald Laurie, who owns IP consulting firm Inflexion Point Strategy LLC in Palo Alto.
The White House also sought to limit intervention by the International Trade Commission in patent disputes.
More meaningful changes will hinge on action by Congress. The legislative recommendations have a lot more "bite" to them, noted Fabio Marino, a partner in the Menlo Park office of McDermott Will & Emery. Yet it took many years to sign into law the 2011 Leahy-Smith America Invents Act, which brought the first major reforms to the patent system in six decades. The conventional wisdom, noted Sidley Austin IP litigator Vernon Winters, is that Congress will face competing pressures from Big Tech and Big Pharma in trying to enact any new legislation.
Most lawyers were focused on two proposals that would require congressional approval: adding "loser pays" fee-shifting to patent cases, and giving judges more power to sanction abusive litigation tactics. Edward Reines, a partner in the Redwood Shores office of Weil, Gotshal & Manges, speculated that although fee-shifting might prove controversial, it seemed to have potential for reforming behavior. "Right now, there's too much incentive for a defendant to accept a decent settlement, and that sort of feeds the tiger."
Erich Spangenberg, owner of IP Navigation Group, which has helped monetize the patents of more than 600 clients since 2003, said he welcomed many of the changes, with some caveats. "Whatever the rules are, the rules are we'll follow them," Spangenberg said. "But don't kid yourself: This is not about protecting the innovator. It's doing a whole lot to protect the big guy."
The announcement was met with measured enthusiasm in Silicon Valley legal departments. Tech giants like Apple Inc. and Google Inc. have long been pressing Congress for reforms that would reduce the number of suits leveled against them each year. "We welcome the administration's steps to improve patent quality and prevent litigation abuse, and we look forward to working with leaders from both parties on further legislative improvements that are critical to economic growth," Kent Walker, Google's senior vice president and general counsel, said in a statement. Facebook's deputy GC for IP, Samuel O'Rourke, declined to comment via a company spokesman.
Colleen Chien, an assistant professor at Santa Clara University School of Law who recently completed an industry survey of reforms most desired by in-house lawyers, suspected that, overall, they would be pleased at the momentum. In an email, she called the fixes "measured and narrowly tailored" and said that while they wouldn't please some critics, "they are a lot more likely to be acceptable by those who have been critical of past systemic reform efforts.
"In short, I think they are likely to help, not hurt, and to pass political muster. That's not bad," Chien said.
This article originally appeared in The Recorder.