Congress has spent the past five years in an ongoing effort to reform the patent system. Reform proposals have come and gone; the debates between proponents and opponents of various amendments have been fierce and protracted.
The most recent iteration is found in the Patent Reform Act of 2009, S. 515, which recently passed the Senate Judiciary Committee despite significant concerns by various stakeholders and strong reservations by several members of the committee.
Patent reform has been aimed at resolving abuses of the patent examination process and of various doctrines that encouraged abuse of the patent litigation system. It has also included other changes not aimed at abuse of the patent system, including giving patents to the first person to file an application rather than the first to invent.
But the pharmaceutical and biotechnology industries have opposed virtually all elements of patent reform directed at abuse. Individual inventors have objected both to the first-to-file provisions and to the limitations directed at abuse of the patent system.
On the other side, the software, electronics, Internet and telecommunications industries generally line up behind reform, but they have expressed skepticism toward those few reforms that the pharmaceutical industry supported, such as restrictions on the defenses of inequitable conduct and best mode.
These disagreements demonstrate the conflicting needs of different industries in the patent system. The incentives necessary to promote innovation in the pharmaceutical industry are not necessarily those for software or to semiconductors. The incentives necessary to innovation by small entities may differ from those needed by large entities.
The business of innovation is dynamic. Not only do new technologies come into existence and old technologies fade into obscurity, but the innovation profile of industries varies from time to time. There are broad disparities among industries in the cost of research and development, the length of product cycles, the return on investment and even the cost of obtaining patents.
It is unrealistic to think that Congress can repeatedly tailor the patent statute to meet the needs, not only of existing innovators, but of innovators in emerging and as yet unforeseen industries.
Only a dynamically interpreted statute can hope to meet the needs of so many disparate industries. The key to accommodating competing interests lies in the courts.
The current patent statute already equips courts with a series of doctrinal "policy levers" that allow patents to be calibrated to the needs of particular industries. For example, a number of patent doctrines depend on the perspective of the "person having ordinary skill in the art." In order to obtain a valid patent, the claimed invention taken as a whole must not be obvious to one of ordinary skill in the art at the time it was made. Similarly, the inventor must fully disclose the invention so that "any person skilled in the art" can make and use the claimed invention.
Under these doctrines, patentability is specific to the particular art in which the invention is made. Thus courts measure patentability against a benchmark that varies by industry and by technology. There is overwhelming evidence that the results vary by industry, leading for example to fewer, but broader, valid software patents and more, but narrower, biotechnology patents.
Similarly, during the recent period in which Congress has tried and failed to reform the patent system, courts were actively involved in fixing many of the very same problems Congress was ultimately unable to resolve. Courts have reversed the rule that patentees were always entitled to injunctions after a finding of infringement, made it easier to sue to challenge the validity of a patent, made it harder to obtain a patent by strengthening the obviousness test and changed the standard for claiming that a defendant was a willful infringer.
LEAVE IT TO THE COURTSThe fact that courts proved capable of solving many of the problems on which new legislation has repeatedly foundered suggests that policy levers, not industry-specific legislation, may be the most effective way of dealing with problems in the patent system. Senator Patrick Leahy, D-Vt., recently remarked that Congress cannot leave reform to the courts because "Congress writes our laws." [NLJ, March 23.] But even though Congress undoubtedly makes the laws, frequently the best way to make those laws work is to write them so that the details of their application are delegated to the courts.
Even if the current bill were to become law, it would be at best a temporary measure calibrated to the current challenges facing current industries. New innovation will occur; new industries will arise. Those future industries will have their own unique innovation profiles, and the best course to accommodate such diverse industries is to encourage the courts to adapt general legislative directives to changing circumstances.
Dan L. Burk is Chancellor's Professor of Law at the University of California, Irvine School of Law. Mark Lemley is the William H. Neukom Professor of Law at Stanford Law School. Their book, The Patent Crisis and How the Courts Can Solve It , is forthcoming this month from the University of Chicago Press.
