Evolutionary Tales: Times of the Best and Worst

And so it is in our own times, as in those of Dickens and other eras, that we see dramatic twists and turns, even in IP law. Perhaps never in the history of the IP law system has its role been subject to more attention and scrutiny everywhere—by the Supreme Court, Congress, users of the system, alleged abusers, and the public at large. Even the long view that IP law substantially contributes to our nation’s economy as a driver of investment in innovation is increasingly subject to challenge in some circles. Depending on your perspective on the many pending issues in IP law, this may be your own best of times or worst of times.

Let’s test that beginning with patent eligibility. If you are a high tech company whose products rely on computer methods or a diagnostic laboratory where diagnostic testing methods use laws of nature often discovered by others, these may be the best of times when considering how the courts now apply Supreme Court precedent on patent eligibility found in Mayo and Alice. But, if you are a start-up, joint venture, university researcher, life science innovator, or owner of a large portfolio of patents whose intangible value was considered substantial prior to Mayo and Alice, these are truly the worst of times. We may wonder, then, is this the age of wisdom or foolishness in patent eligibility, and to the extent patent law requires fixing, is anyone—the courts, Congress, the executive branch—willing to suffer the protestations that would follow in putting the future of the patent system ahead of the politics of the times? The ABA-IPL Section spent two years tackling the challenges in putting together a balanced proposal that we think puts the future of the patent system first (see Highlights of the 2016-17 Association Year, p. 6).

What about patent venue? Need we say any more than “TC Heartland”? That case is the best of times for frequent, unhappy defendants in the Eastern District of Texas. But it certainly is the worst of times for nonpracticing entities—and not just for those who have been characterized with the pejorative patent troll moniker. Will our system now require most patent suits to be brought on the home turf of those who are alleged to be tortfeasors—patent infringers? And is that wisdom or foolishness? In an amicus brief that our Section prepared for the American Bar Association (ABA), our Section took no position on the wisdom of the concentration of patent cases in the Eastern District of Texas, but we did take a position that was consistent with the outcome in the US Supreme Court, simply because as a matter of proper statutory construction Congress had said so (see p.8). We think we sided with the rule of law.

Then we entered the era of inter partes reviews (IPRs). The IPR system is the best of times for alleged tortfeasors accused of patent infringement. They can avoid a jury and a clear and convincing standard in district court, potentially run up costs in a parallel proceeding (or even a series of parallel proceedings brought by multiple defendants), stay district court proceedings, face a potentially narrow estoppel risk (if Shaw and its progeny are rightly decided), and make the risk of an eventual defeat in a patent infringement case substantially less in the United States than in China and Europe today. IPRs are the worst of times, though, for first-to-market patent holders of all stripes. Is the America Invents Act system as implemented by the US Patent and Trademark Office wisdom or foolishness? One might wonder if we have entered an “epoch of incredulity,” while another would contend that this is the age of wisdom.

In patent law, laches, exhaustion, Octane Fitness, willfulness, eBay, potential legislation telling courts how to manage their cases, and other issues in patent evolution pose more best and worst of times scenarios.

But patent law is not alone. If you’re a trademark lawyer, how concerned are you that the Slants and Washington Redskins cases, and the invocation of First Amendment law, will further impact the previously well-understood application of basic principles of trademark law? Has the introduction of political correctness in trademark law been a function of wisdom or foolishness? And what about trademark damages: to what extent should plaintiffs be entitled to lost profits, and to what extent should defendants be able to limit damages to actual damages? Best of times or worst of times?

To be sure, copyright law is part of this best and worst drama. Will we have a Register who can operate independently of the Library of Congress? Will the Copyright Office be autonomous? Will it end up in the executive branch, and what lies ahead if that happens? Will the Copyright Office eventually obtain the financial resources to modernize, and at last update itself to the digital age? One thing seems certain: continuation as is would be the worst of times by all users but the best of times for invested government interests.

And finally the good times appear to be rolling for trade secret owners and practitioners. But just wait. Even though the Defend Trade Secrets Act may be too new to have revealed significant defects, a few voices are already questioning whether it will live up to its hype.

As members of our Section, you have the opportunity to help shape the times ahead and to make them more the best of times from your perspective. We welcome your active participation in our efforts—to join your own voice with the powerful voice of our Section and the ABA. We don’t know how the tale will unfold, if wisdom will prevail, or if this will be a time of foolishness. But one thing is certain: every player in this drama counts. So we invite you to be an active part of the story by adding your talents to those who have labored over all the above issues during the last few years. Thank you for your membership and participation.