Congressional Committee Calls On GAO To Investigate Whether Patent Office Director Is Putting Thumb On The Scale Of Patent Reviews

from the very,-very-interesting dept

The chair and ranking member of the House IP subcommittee that covers intellectual property is now asking the Government Accountability Office (GAO) to investigate whether or not the Director of the Patent Office is pressuring the important Patent Trial and Appeal Board (PTAB) to make certain decisions on the validity of patents. There's a lot of important background here, but it's all kind of fascinating how two big legal issues are coalescing in this result, in which the USPTO's own legal arguments may reveal how the Director has been unfairly influencing decisions. The two key points to understand are (1) the Inter Partes Review (IPR) process, and (2) questions about the constitutionality of certain appointments -- both of which are issues that we've covered for years, that seem deep in the weeds, but turn out to be quite important.

First, we've got the IPR process. This was an effort that was put in place with the America Invents Act (AIA) back in 2012. It was a recognition (FINALLY) that the Patent Office was approving way too many bad and overly broad patents, that were then being abused to shake down companies. The fact that the USPTO was approving so many awful patents was a built in bug (or feature?) of the way the patent system works.

The process for getting a patent is not truly adversarial. You have the party seeking the patent, and the examiner. Yet examiners were often judged on how many applications they dealt with, rather than the quality of the patents they approved. So there's no party arguing for why something does not deserve a patent. In theory, the examiner might do that, but the incentive structure there is broken as well. There is something called a "final" rejection from a patent examiner, but it's not actually final, since the party seeking the patent can continue to file renewed requests/appeals forever. And with the Patent Office getting heat for having too long a backlog, sooner or later, there are strong incentives for the examiner to just approve a patent to get it off his or her docket.

Rather than fix the many inherent problems in this setup, the AIA introduced a compromise that was better than nothing. It would create this special PTAB, which anyone could use to challenge a previously granted patent. At that point (usually once someone started threatening or suing over a patent) then finally, there would be a more careful review, with an adversarial process, to examine whether or not the patent should have been granted in the first place. Patent trolls and their friends have hated the whole IPR process since it began and have tried a variety of ways to challenge it. In 2018, the biggest legal challenge to the whole IPR process was rejected by the Supreme Court, who said that of course the PTO can invalidate the patents it never should have granted.

But that hasn't stopped the efforts by trolls and friends to invalidate the IPR process. The latest attempt is in the US v. Arthrex case, in which it is argued that the "judges" on the PTAB are unconstitutional for violating the Constitution's appointments clause. That case was heard by the Supreme Court a few months ago and a ruling should be coming soon.

And that takes us to the other deep in the weeds issue we've talked about for over a decade: whether or not appointments to various quasi-legal tribunals within the executive branch violate the Constitution's appointments clause. The Appointments Clause says certain "principle officers" of the government, including judges, need to be nominated by the President and approved by the Senate. There have been questions for years about whether or not certain roles that were appointed by various department heads violated this clause. Back in 2012, for example, a court said that the Copyright Royalty Board nominations were unconstitutional (though the court then immediately worked around that issue with a sort of wink and a nudge).

So, now the question at the heart of Arthrex is whether or not the PTAB judges are constitutionally appointed, since they're appointed not by the President with the consent of the Senate, but directly by the director of the Patent Office. And, in that case, the US government (defending the constitutionality of the PTAB judges) claimed that they were not principal judges, but rather "inferior officers" who could be appointed by the PTO director. That's all very interesting, but a key argument made by the government in defending that was that the PTO Director controls the PTAB judges, including how they decide cases.

And while that may be necessary to prove that their appointments were constitutional under the Appointments clause, it rang some alarm bells because it sure as hell suggested that the PTAB might be deciding whether or not patents are valid not based on the evidence before it but based on what the PTO director wanted. And that would be a big problem.

And, so that finally gets us to the latest bit of news, in which Reps. Hank Johnson and Darrell Issa, a bipartisan sort of odd-couple who head up the IP subcommittee are asking the GAO to look into whether or not the USPTO director is actually pressuring the PTAB judges into deciding the validity of patents one way or the other:

Recently, the Supreme Court granted certiorari in United States v. Arthrex, Inc., an appeal from a Federal Circuit decision that determined that APJs were “primary officers of the United States” and, thus, unconstitutionally appointed without Senate confirmation. In that appeal, the government’s position is that APJs are instead “inferior officers” who do not require Senate confirmation because they are subject to significant oversight and control by the Director of the USPTO, who is a Senate-confirmed political appointee. The government argues that this control includes, for example, the ability of the Director to dictate the outcome of PTAB cases by controlling which APJs decide which cases (i.e., APJs who will decide each case as the Director wishes) and by providing policy directives that APJs are obligated to follow.

If the government’s arguments are accurate, PTAB cases may have been decided based on factors outside of the evidentiary record and public legal authority (e.g., statutes, regulations, court precedents) available to the parties. This possibility raises potential due process concerns and would be inconsistent with the intent of Congress in enacting the AIA.

There is then a long list of fairly specific requests for the GAO to investigate that could raise some eyebrows. Here are just a few:

The policies, written or unwritten, that exist at the USPTO to effectuate each of the above mechanisms, as well as the statutory or other legal authority that forms the basis for each of the above mechanisms.

How APJs understand the role of the Director in the decisions they reach in AIA cases, including APJs’ awareness of the above mechanisms and associated policies and the number of APJs who have been subject to one or more of them. Also, the impact that the exercise of these mechanisms and policies have had on the decision-making of APJs in AIA cases.

Whether any APJs have objected or dissented, or attempted to object or dissent, to the above mechanisms and policies, or the exercise of those mechanisms and policies in specific AIA cases. If so, the results of those objections and the processes that were made available to APJs to object or dissent. Also, how APJs understand the extent to which they may object or dissent.

How often the Director, or a designate thereof, has directly influenced or changed a decision in a specific AIA case (i.e., inter partes review, post-grant review, or covered business method review). Also, the way those decisions were influenced or changed by the Director, and the mechanisms that were used to influence or change those decisions.

Whether specific notice was provided to the parties in those cases indicating that the Director, or designate thereof, was influencing or changing a decision in the case, and the information included in any such notice. Also, whether the decisions themselves document that influence or change, and explain the reasoning or justification for it.

In other words... either the Patent Office director is unfairly controlling or strongly influencing PTAB IPR decisions or the Patent Office lied to the Supreme Court. The most charitable explanation, of course, is that the PTO director could step in and order certain decisions, but has chosen not to. But even that would be worrisome and problematic. None of this looks particularly good for the PTO.

Filed Under: appointments, darrell issa, gao, hank johnson, inter partes review, ipr, patents, ptab, uspto

New Bill Calls For An End To PACER Fees, Complete Overhaul Of The Outdated System

from the pass-this-pls dept

The perennial make-PACER-free legislation has arrived. If you're not familiar with PACER, count yourself among the lucky ones. PACER performs an essential task: it provides electronic access to federal court dockets and documents. That's all it does and it barely does it.

PACER charges taxpayers (who've already paid taxes to fund the federal court system) $0.10/page for EVERYTHING. Dockets? $0.10/page. (And that "page" is very loosely defined.) Every document is $0.10/page, as though the court system was running a copier and chewing up expensive toner. So is every search result page, even those that fail to find any responsive results. The user interface would barely have been considered "friendly" 30 years ago, never mind in the year of our lord two thousand twenty. Paying $0.10/page for everything while attempting to navigate an counterintuitive interface draped over something that looks like it's being hosted by Angelfire is no one's idea of a nostalgic good time.

Legislation attempting to make PACER access free was initiated in 2018. And again in 2019. We're still paying for access, thanks to the inability of legislators to get these passed. Maybe this is the year it happens, what with a bunch of courtroom precedent being built up suggesting some illegal use of PACER fees by the US Courts system. We'll see. Here's what's on tap for this year's legislative session:

Representatives Hank Johnson (D-Ga.) and Doug Collins (R-Ga.) are hoping to drastically change all of the above with their bipartisan reform effort, the Open Courts Act (OCA).

The bill would make online access to federal court records free to the public. It also contains language that would effectively improve upon PACER’s current and wildly out-of-date search functionality, increase third-party accessibility to the entire system, and upgrade and maintain the database using modern data standards.

This is a good bill. It aims for something more than just free access. (To be honest, that would at least offset the frustration of subjecting yourself to PACER's hideous charms in an attempt to talk it out of some filings.) Free access is a necessity. At this point, the presumed openness of the court still hides behind a paywall, separating citizens from courtroom documents under the naive theory that it's impossible to give something away if it costs money to produce. (And that assumption ignores the tax dollars already earmarked for running the court system.)

This bill would also drag the PACER system (presumably kicking and screaming) into the future… or at least a much more recent past. The 1995-esque front end would be updated, along with all the other stuff that doesn't work well… which is pretty much everything.

It would be a bit more future-proofed. The bill [PDF] demands transparent coding that will incorporate "non-proprietary, full text searchable, platform-independent" elements. This means documents will finally be searchable by the text they contain, rather than limited to locating documents by finding the right docket and going from there. And this will hopefully fix another problem with PACER: search issues baked into the system by jurisdiction divisions. Each federal court has its own login page and, while it's possible to search all jurisdictions, it's far more likely you'll be dimed to death by useless searches before you find what you need.

But who's going to pay for this, I hear the US Courts system asking? Well, like any other FTP service, it will be mostly supported by whales.

On its own terms, the OCA would take two to three years to modernize the overall CM/ECF so that all court documents are searchable, readily accessible and machine-readable regardless of an end user’s browser setup. During this period, so-called institutional “power users” would still be subject to PACER fees–if they charge over $25,000 annually.

But not forever.

After that, fees would vanish entirely.

Will this be the bill that sticks? Maybe. Courts are finding the PACER system questionable -- not just the barrier it places between the public and court documents, but the uses of the fees as well, very little of which has actually been spent on improving PACER itself. If there's something almost everyone agrees with, it's that PACER sucks. Being asked to pay for the dubious privilege of using a barely working system is the insult piled on top of the $0.10/page injury.

Filed Under: court records, doug collins, hank johnson, pacer, transparency

Congress Now Pushing 'Bring Back The Patent Trolls' Bill

from the oh-come-on dept

Back in April we warned about a truly terrible plan by some in Congress to obliterate the last few years of the Supreme Court fixing our broken patent system, and flinging the doors wide open to patenting genes, medical diagnostics, and software (all of which the Supreme Court has mostly rejected as abusive and monopolizing nature). One had hoped that after having explained to them how disastrous such a bill would be, that its backers might think carefully in crafting the final bill. Instead, Senators Tom Tillis and Chris Coons, along with Reps. Hank Johnson and Steve Sivers instead decided to double down with a bill that would massively stifle innovation.

They claim it's to "restore predictability and stability" in our patent system, but that's laughable. It is to massively increase the universe of patent-eligibility to include a wide range of things that almost anyone who understands innovation would consider it insane to allow patents to restrict. It would literally obliterate the three key Supreme Court cases that rejected patents on genes, medical diagnostics, and most software, and open the door to patenting "laws of nature," "abstract ideas" and "natural phenomenon." Really. It specifically says that:

No implicit or other judicially created exceptions to subject matter eligibility, including “abstract ideas,” “laws of nature,” or “natural phenomena,” shall be used to determine patent eligibility under section 101, and all cases establishing or interpreting those exceptions to eligibility are hereby abrogated.

It would also bring us back to a world in which the default is everything is patentable:

The provisions of section 101 shall be construed in favor of eligibility.

No one doing actual innovation would support this. The only people who could possibly support this are patent lawyers and patent trolls. It will reopen the floodgates of bad patents and patent trolling, flooding the courts with bogus lawsuits on broad and vague patents against actual innovators. It is a dangerous bill that Congress must reject. We lived through nearly two decades of patent trolls destroying innovation while Congress twiddled its thumbs and did almost nothing to stop it. The Supreme Court finally stepped in (again and again and again) to stop the nonsense -- and now these elected officials want to bring us back to such a world?

Filed Under: chris coons, gene patents, hank johnson, inventions, medical diagnostics, originality, patent trolls, patents, section 101, software patents, steve sivers, supreme court, tom tillis

Congress Pushing A Terrible Bill To Massively Expand Patent Trolling

from the this-would-be-bad dept

For most of the history of Techdirt, we've talked about what an incredible mess the US patent system has been. There are many, many reasons for this, but a big one was that for decades, the appeals court that handles all patent cases, the Court of Appeals for the Federal Circuit (or CAFC), kept expanding what it considered to be patentable subject matter, and the Supreme Court completely ignored the issue. This culminated, ridiculously, in the State Street decision, which massively expanded what was considered patentable software (before that there was software covered by patents, but it was very, very limited). What made this situation truly hellish for innovators, is that (1) the software world was exploding with all different kinds of apps, and (2) almost no software was documented in the very few areas where patent examiners look for prior art: mainly, other patent applications and scientific journals. There was no need to document software in those places, because (1) when most people recognized software shouldn't be patented, very few even tried, and (2) why would you?

That resulted in a perfect storm in which patent trolls rushed in to fill the void. Tons upon tons of ridiculously broad patents were filed (or older ones were dug up and "repurposed" for use in trolling). Then it just became a shakedown game of numbers. Find companies doing something vaguely like what's broadly and oddly described in your patent, tell them they're infringing -- and offer to "settle" for less than the cost to win in court.

The tide started to change over the last decade and a half or so, in part because of a few changes to the law, but more importantly, the Supreme Court started to wake up to the fact that the CAFC had gone rogue and had massively rewritten patent law. And then over a period of about a decade, case by case by case, the Supreme Court smacked down CAFC. Two of the biggest such smackdowns came in the Mayo Labs ruling in 2012 which rejected medical diagnostic patents, and the Alice ruling in 2014, which rejected patents on software that performs "generic functions" (which is basically all software).

Both of these cases focused on Section 101 of the Patent Act, which defines what actually is patentable subject matter. It's short and sweet:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

In both of the cases mentioned above, the Supreme Court noted simply that 101 doesn't cover "laws of nature, natural phenomena, and abstract ideas" as decided in an earlier case that CAFC had ignored for two decades, Diamond v. Diehr. In the Mayo case, the court noted that medical diagnostics was trying to patent laws of nature. In the Alice case, "abstract ideas."

Since then, both cases have been incredibly useful in killing off a ton of truly awful patents. And the patent trolls and their friends have been really angry about this. And now it appears they've finally got a plan to reopen the patent trolling floodgates. And, they've got bipartisan members of both the House and the Senate to push a plan for them. In the Senate, Thom Tills and Chris Coons have announced plans to introduce a horrific bill to rewrite Section 101 in a manner that can only be called "Make Patent Trolls And Bogus Litigation Great Again." A House version is being introduced by Reps. Hank Johnson and Steve Stivers.

The biggest part of the bill is to remove the requirement that a patent be for an invention that is "new and useful." Yes, you read that right. The most fundamental part of a patent is that it's to encourage people to invent something that is new and useful, and these elected officials want to do away with that. Then, they want to massively limit what is not patent eligible, demanding very narrowly defined areas, like "fundamental scientific principles" and "products that exist solely and exclusively in nature," rather than what we now have, which is "laws of nature." On the software side, they want to say that only "pure mathematical formulas" and "mental activities" would be excluded, but abstract ideas implemented in software? PATENT AWAY!

And, of course, the bill is explicit, that with this new list of narrowly defined exclusions, it would literally wipe away those big Supreme Court wins that have helped open up innovation and slowed down patent trolls.

This would be absolutely terrible for innovation.

Alex Moss, from EFF, has gone through and detailed just how massive a change this proposal would create and what a disaster it would be for companies that actually innovate (as opposed to those that just shake innovators down for money.) On the removal of "new and useful" from 101:

Removing the requirement that inventions actually be new and useful upends a fundamental Constitutional principle of patent law. The Constitution grants Congress the power to issue an “exclusive right,” such as a patent, only “[t]o promote the progress of science and useful arts.” The patent system’s entire purpose, in other words, is to encourage technological progress. Allowing patents on things that are neither new nor useful undermines the purpose of the Intellectual Property Clause.

Section 101’s purpose is to weed out patent applications that cannot possibly be inventive. The “existing statutory utility requirements” do not, and cannot, accomplish this. That’s because other parts of U.S. patent laws do not include a specific “utility” requirement. Section 102 and 103 set out requirements for determining whether an invention is obvious in view of pre-existing knowledge in the field—what is known as “prior art”—but courts and the Patent Office apply those requirements extremely narrowly.

It’s especially difficult to invalidate bad software patents under Sections 102 and 103. Because courts and the Patent Office didn’t start granting patents on software alone until the mid-1990s, there is a dearth of patents and patent applications that could be used to invalidate software patents under Sections 102 and 103. And because the code for most software products is not public, it isn’t readily available to others in court challenges.

So, yeah, that would be bad.

At this point, this is just a proposal, rather than an actual bill, but they promise to introduce it later this year. Patent trolls and some larger organizations that live off of patent licensing are likely going to push hard for this bill. It's basically a full employment act for patent lawyers. What it's not is a recipe for innovation. It is the reverse. Of course, because some people laughably believe that a patent itself is a sign of innovation, too many people incorrectly believe that "stronger" patent laws mean more innovation. That's not how it works. Patent trolling scares off actual innovators, makes innovation much more costly, and blocks important innovations from the marketplace.

Already the quotes from the Senators and Representatives demonstrate the kind of innovation-ignorant arguments we're likely to see in support of this bill. Coons falsely claims that "today US patent law discourages innovation in some of the most critical areas of technology, including artificial intelligence, medical diagnostics, and personalized medicine." This is laughable. There are massive innovations happening in all three of those fields. And part of that is because of decisions like Mayo and Alice opening up those fields and limiting some of the worst patent trolling.

Tills claims that this is to "reform our nation's complicated patent process." It's not that complicated. And removing the requirements for "new and useful" and making most software patentable again is going to create a huge mess of a patent thicket that will be a massive drain on innovation. That's complicated.

Hopefully, reason will prevail and these elected officials will learn just how much harm they're about to do to the sectors of the economy that are actually innovating -- with less fear of bogus patents and widespread patent trolling. Bringing that back would be a total disaster for innovation.

Filed Under: abstract ideas, chris choons, hank johnson, medical diagnostic patents, new and useful, patent eligible subject matter, patent trolling, patents, software patents, steve stivers, thom tills, useful

Tons Of Amendments Proposed For SOPA

from the sit-back-and-relax,-this-is-going-to-take-a-while dept

The "markup" process for SOPA is going to begin shortly (at 10am ET/7am PT), and it's going to be quite a circus. This is when various amendments can be proposed and debated. You can watch it stream live, if they can keep the stream up (they had trouble during the SOPA hearings). On top of that, I'm planning to live tweet as much as I can via my Twitter account -- assuming Twitter doesn't tell me I've "hit the limit of tweets for the day" (as it did during the hearings as well). I also have a few meetings here and there, so I'll have to disappear from time to time depending on how long the markup goes. But I still intend to cover as much as I can.

Normally, this process doesn't take a huge amount of time... but this time around there are a huge number of amendments, and reports are that it may take two days to get through everything. I've heard anywhere from 55 to 60 amendments are being proposed, each one of which needs to be discussed and voted on. We got our hands on an "amendments roster" (embedded below) that shows 55 amendments. It's possible that more have been added. However, there are plenty of interesting amendments already here -- and it suggests, at the very least, that some unexpected members of the Judiciary Committee retain serious concerns about SOPA, even after Lamar Smith's watered down version was released.

Here are just a few of the interesting amendments:

• Zoe Lofgren has an amendment that says a DNS operator should have no obligation to block a website if doing so would impair the security or integrity of the domain name system or the operator's system or network. I'm sure opponents will say this makes the blocking toothless, but what they're really saying is they don't care if censoring websites they don't like harms the security of the internet.
• Darrell Issa tries to completely dump the DNS blocking section, as well as the requirements for search engines to block links. This would be a huge step forward... which is why Smith will never let it happen.
• Lofgren wants to make sure the anti-circumvention rule isn't able to be used to block tools used to get around foreign censorship. Considering our own State Department is funding such tools... this seems important. But it does lead to a bizarre situation where it could be legal to create circumvention tools for foreigners, but not for your own country. The whole circumvention stuff is ridiculous.
• Lofgren also wants to make sure that those defined as "foreign infringing sites" actually violate copyright law, rather than "facilitate" infringement. Defenders of SOPA insist it's just about enforcement, not about broadening copyright law itself. But when you extend enforcement to things that don't directly break the law...
• Jared Polis wants an amendment saying that the US government won't spend any money "protecting the intellectual property rights of pornography." Interesting.
• Polis also wants to dump the anti-circumvention provisions entirely. Good for him. Anti-circumvention has been a disaster under the DMCA. Expanding it here would just be crazy.
• Jim Sensenbrenner wants to do away with the private right of action entirely. Also a good idea. At least someone recognizes that this is a lawyer's dream tool. The private right of action will be massively abused. It wasn't clear where Sensenbrenner stood on the overall bill, but nice to see that he's clearly concerned with the likely abuse of section 103. He has another amendment that "replaces" the private right of action with the ability serve an order on payment providers and ad networks -- but limits the authority to enforce this to the Attorney General. I'm not sure this is that much better, but it'll be interesting to hear the details.
• Lofgren tries to narrow the definition of what's "dedicated to theft of US property." This needs to be narrowed. While it's narrower than it was in the original, it's still way too broad.
• Jason Chaffetz has an amendment that says if a company files an action based on Section 103 (trying to get ads or payment processors cut off) and the court disagrees... the company who files has to pay all fees of all the parties. Similarly, Ben Quayle, has an amendment that says anyone who knowingly misrepresents that a site is "dedicated to theft of us property," they'll be required to pay attorneys fees and court costs, and another amendment that just says that the losing party pays. Good to see more members worried about how the private right of action can be abused.
• There are a bunch of amendments clarifying that ad networks, payment processors and search engines should only get immunity in very specific cases for voluntarily cutting off sites, rather than the broad immunity currently in the bill.
• Chaffetz and Polis both have amendments concerning the "study" on the impact. Chaffetz, quite rightly, says that key parts of section 102's DNS blocking should not go into effect until after a study is done assessing the impact on internet security. Polis also wants a report on the impact of DNS blocking, as well as the impact on "employment, economic growth and the availability of capital."
• Polis wants to add in DMCA-like safe harbors to the felony streaming provisions, and also make it so first time offenses remain a misdemeanor.
• Hank Johnson includes one of my favorite clauses, and one I think should be on almost every bill: the provisions of the bill expire after five years. Why more bills don't have such provisions, I don't understand.
• Polis takes on the issue of massively expanding the diplomatic corp. with diplomats whose sole job it is to push ever more draconian copyright law on foreign nations, by saying they should be required to "consider fair use, consumers and licensees as part of their duties." What? Consider consumers? When would Congress ever do that?
• And, of course, Issa seeks to substitute his own OPEN bill. That would definitely be a big step forward towards getting rid of the problems of SOPA, but there's no way that amendment passes.

There are a bunch more, but those were just some of the interesting ones... We'll try to have a wrap up after it's all over. Chances are most of these amendments won't pass, but perhaps a few of them will at least get a reasonable hearing.

Filed Under: amendments, ben quayle, darrell issa, hank johnson, jared polis, jason chaffetz, jim sensenbrenner, lamar smith, sopa, zoe lofgren