Fireside Chat - Featuring Judge Paul Michel
The Honorable Paul Redmond Michel is a frequent speaker on IP subjects, having testified before Congress on patent reform legislation and serving as Special Advisor to the Patent Reform Task Force. In his years on the bench Judge Michel adjudicated thousands of appeals and wrote more than 800 opinions, hundreds of which were in patent cases. He is widely regarded as a seminal figure in patent law and recognizing that he “helped shape the landscape of patent law in the US and handed down some of the court's most important judgments,” Intellectual Asset Management
magazine inducted Michel into its IP Hall of Fame in 2010. Here, he discusses what can be done to get the patent system back into balance and what universities and AUTM Members can do to help.
You have the unique opportunity to address the hundreds of devoted technology transfer professionals that truly believe that innovations will change the world. What would you like to say to this group?
Technology transfer professionals are the crucial agents in converting upstream university research, often basic science, into product development and commercialization. You are the essential bridge between lab and factory: no bridge, no new products for the public. You have fulfilled the great promise of the Bayh-Dole Act, enacted 40 years ago this year. The country and the world have benefitted greatly. That you do not get all the credit you deserve just illustrates how uninformed many people, politicians and reporters are on such a vital subject. You deserve to be immensely proud of what you have created.
You have had a long and distinguished career and you have your choice of pursuits now that you have retired from the CAFC – why did you choose to invest your limited time to serve on the University of Virginia’s technology transfer board?
I agreed to join the Board of the University of Virginia's technology transfer office, which is presently called the Licensing and Venture Group, because the success of this kind of work is crucial to the nation's future prosperity, job-creation and security. I also wanted to learn more about how it is done on a first-hand basis. And try to help shape improvements in the effectiveness of the tech-transfer function. As a graduate of its law school, The University of Virginia was the appropriate institution for me to connect with. Although new to the Board, I am so impressed already with the quality of the Board members and the staff and their combined work product.
You have been the Chief Judge of the Federal Circuit, on boards of strategic start-ups trying to create new approaches to license IP, and the leader of efforts on Capitol Hill to help patent reform find a reasonable and pro-patent path forward. What role have you seen research institutions play in the current state of the patent system? What role should research institutions play?
Individual universities and their several associations have played an important and very constructive role of late in helping shape innovation and IP policy in this country. AUTM has been a particular stand-out. The AAU has also been at the center of these debates. Going forward, I hope individual tech-transfer offices will actively educate US Representatives and Senators and staff about their work, including hosting visits to university labs and tech-transfer offices. Universities are such major employers and obvious community and national treasures that politicians will be very responsive for those and many other reasons. Universities cannot depend solely on their Washington, DC representatives, as good as they surely are, but must realize the potential to educate policy-makers in-person on the campus.
Start-ups continue to take front and center as a pathway to commercialize research institution IP. As incubators of many start-ups, what can universities do to help protect the longevity of their technology in the face of very large, sophisticated companies with deep IP portfolios?
Universities must realize that the world of Intellectual Property, particularly patents, has been turned upside down by recent mandates from the Congress and the courts, especially the Supreme Court. For example, the high court's four decisions narrowing the scope of eligibility and generating massive uncertainty over what is and is not eligible created enormous challenges for officials involved in patenting. The Court also made injunctions almost impossible for start-ups to secure even after proving infringement and validity. On top of all that, the America Invents Act made invalidating patents easier at the Patent office than in a court of law. Even those patent owners that survive the Patent Trial and Appeal Board suffer added expense and usually several years delay as their infringement suits in court are usually stayed.
One response is to exercise added care in preparing applications so they can survive the present patent-killig gauntlet better. Greater attention to recent case law in drafting Specification disclosures and claims will pay off later. But the up-front cost in staff time will be substantial.
As to large market incumbents with large portfolios and vast cash resources, they will challenge every patent with commercial value at the PTAB, often with repeated petitions. Until Congress harmonizes PTAB procedure with those in court, wars of attrition will be launched and prosecuted by these giant companies. And validity attacks will be made in court as well. This is the "new normal." High quality preparations is the only effective defense, pending legislative correction of the AIA’s excesses.
Finally, tech-transfer staff need to track emerging trends to see where the courts are going next. Section 112 is a prime example. It has been ramped up in the past few years and that can be expected to continue.
The Senate Commerce Committee last year began what we thought was a very hopeful look at how to reform Section 101, the part of the patent law that determines whether certain discoveries are by their very nature patent eligible. But that legislative effort seems to have gotten bogged down. Why do you think that has happened, and is there a chance to resurrect this effort this year? What can the people in this room do to solve this legal quagmire?
It is true that eligibility reform legislation was drafted last year in the intellectual property sub-committee of Senate Judiciary but its progress has stalled. The opposition of the giant "big-tech" companies and their new lobby arm, The High Tech Inventors Alliance (HTIA) was a major factor. Opposition from the ACLU and some scientist was as well. They propagated a narrative that people's gene were going to become patentable and researchers would get sued. Like the "troll" narrative of the last decade, this one was largely false but was dramatic and effective propaganda. in short, the pro-reform forces were overwhelmed by better funded and organized interests.
It seems unlikely that such reform can get restarted this year. Perhaps 2021 or 2022 may offer some opportunities. But even then a vast campaign of educating Congress and the media will be required. AUTM can be a powerful ally if all its members can be mobilized to act, particularly at the campus level.
You have a long record with the Federal Circuit in hearing and deciding patent cases. As you look back on that time, what were some of the important rulings that you think you and your colleagues made that helped patent holders maintain the vital usage of their patents that leads to innovation?
The Federal Circuit's best cases such as e-bay upholding injunctions and Bilski with its clear test for eligibility were later upended by the Supreme Court which seems oblivious to the realities of the patenting industry. Of the major decisions that survived, Phillips and Vitronics on proper methods for construing claims stand out. Until the present decade, the Federal Circuit emphasized stable patent doctrine, but since then seems to have become more skeptical, some say hostile, to patent rights. Unless patents are dependable they cannot incentivize the massive investment needed to carry university research across the great distance to product development, then to commercialization that actually puts new medicines and products on store shelves.
In recent years, the Supreme Court has gotten more and more into deciding patent cases, and I think there are many in this room that would agree that some of their decisions have made patenting more complicated, rather than less, and have caused confusion among the invention community. Can you elaborate on some of those cases and what problems those decisions have caused or worsened?
In e-bay, the Supreme Court deprived start-ups and emerging businesses that are not yet in the market of the opportunity to get an injunction, the only leverage sufficient to get "efficient infringers" to stop infringing or to take a license. In Mayo and Alice, the high court made eligibility impossible to predict and much narrower than in rival nations in Europe and Asia, including China. In KSR, the Court made obviousness challenges subjective and unpredictable and thereby made issued patents less reliable than under Federal Circuit cases. There are many other examples of the high court distorting the patent statute and prior precedents, in effect taking policy as formulated by Congress and remaking it to fit the Justices' policy preferences. Congress should retake control of national innovation policy by enacting the STRONGER Act and eligibility reform measures.
What have been the implications of a muddied patent view in the US?
Under the recent assault on patent rights, the country is beginning to see capital investment flow out of real technology such as chips and into entertainment and out of the US to jurisdictions in Europe and Asia with more favorable patent regimes. The prospects for US economic growth, job-creation and technological leadership are sobering. With China surging ahead in the new technologies of the 21st century such as Artificial Intelligence, 5G telecommunications and genetic medicine, US national and economic security can be threatened."