What Patent Attorney Fee Awards Really Look Like

This Essay provides an empirical account of attorney fee awards over the last decade of patent litigation. Given the current attention in legislative proposals and on the Supreme Court’s docket to more liberal fee shifting as a check on abusive patent litigation, a fuller descriptive understanding of the current regime is of utmost importance to forming sound patent-litigation policy. Following a brief overview of judicial experience in patent cases and trends in patent-case filing, this study presents analysis of over 200 attorney fee award orders from 2003–2013

On NPES, Holdups, and Underlying Faults in the Patent System

This piece offers commentary on two essays in the current volume of the Cornell Law Review: James Bessen and Michael J. Meurer’s The Direct Costs from NPE Disputes and David L. Schwartz and Jay P. Kesan’s Analyzing the Role of Non-Practicing Entities in the Patent System. Schwartz and Kesan’s essay critiques Bessen and Meurer and offers some further thoughts on the role of empirical work regarding non-practicing entities (NPEs). Before I begin my substantive comments on the two pieces, I must say that these two essays, which engage each other fulsomely, carefully, and respectfully, are models of how academic debate should be conducted. They provide great value to the reader in their thoughtful responses to each other’s arguments. The pieces are each individually made more useful to the reader concerned about patent policy because they take opposing positions on a number of issues but do so in a way that illuminates both commonalities and differences in their analyses and arguments. This type of policy debate is exactly what the numerous policy disputes and empirical questions in patent law need

Removing the Troll from the Thicket: The Case for Enhancing Patent Maintenance Fees in Relation to the Size of a Patent Owner\u27s Patent Portfolio

This Article proposes a novel solution to part of the problem that large patent portfolios can cause. Both so-called patent trolls and firms that commercialize the patents that they own can accumulate and then abuse large patent portfolios, even if most of the patents in the portfolio are of little value. Instead of suggesting reforms to better determine the value and boundaries of individual patents, as many others have already done, this Article proposes that the U.S. Patent and Trademark Office (PTO) multiply the amount owed to keep a patent in force (patent maintenance fees) based on the size of a patent holder\u27s overall patent portfolio. Patent owners themselves will primarily benefit from this reform, as they will have an incentive to determine the value of their patents and to let lapse those patents that are of low value. A second benefit is that it will require patent owners to disclose their practiced and non-practiced patents. The reform proposed in this Article helps alleviate problems in software and high-technology patenting without significant negative effect in other industries, such as pharmaceuticals or biotechnology. It is simple, and the PTO can easily adopt it, or Congress can enact it

Evaluating Market Reactions to Non-Practicing Entity Litigation

An ongoing debate in patent law involves the role “non-practicing entities,” sometimes called “patent trolls,” serve in the patent system. Some argue they serve as valuable market intermediaries, while others contend they are a drain on innovation and an impediment to a well-functioning patent system. This Article adds to the data available in this debate by conducting an event study that analyzes the market reaction to patent litigation filed by large “mass aggregator” non-practicing entities against large publicly traded companies. This study advances the literature by attempting to reproduce the results of previous event studies done in this area with newer market data and by subjecting the event study results to more rigorous statistical analysis. In contrast to a previous event study, the Authors found that the market reacted little, if at all, to the patent litigation filed by large non-practicing entities

Still Aiming at the Wrong Target: A Case for Business Method and Software Patents from a Business Perspective

In Part I, I briefly discuss the rise and recent fall of business method patents. Part II covers the scholarly literature discussing business method and software patents. In Part III, I explain the proxy argument that I have made elsewhere and show how it plays in the recent decisions surrounding the patent eligibility of business method and software inventions. I then explain why the analysis of business method and software patents in the literature uses the same proxy-type arguments to avoid more difficult questions of patentability and policy. Finally, I conclude by explaining how business method and software patents, if administered properly, are actually good for business

IP and Antitrust: Reformation and Harm

Antitrust and intellectual property (“IP”) law both seek to improve economic welfare by facilitating competition, and investment in innovation. At various times both antitrust and IP law have wandered off this course and have become more driven by special interests. Today, antitrust and IP are on very different roads to reform. Antitrust reform began in the late 1970s and is largely complete. Today, patent law has begun its own reform journey, but it is in a much earlier stage. The U.S. Supreme Court’s recent decision in Bilski v. Kappos did not reform patent law significantly, however, some of its language may lead to closer examination of some method patent applications. Unfortunately, the outlook for copyright reform is bleaker. An important component of antitrust reform has been the development of a concept of harm that effectuates the underlying policy of making markets more competitive. In its 1977 decision in Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., the Supreme Court largely ignored the language of an expansive antitrust damages provision that apparently gives private plaintiffs a remedy for every injury caused by an antitrust violation. Rather, the Court said, harm is cognizable only when it threatens to make markets less competitive. We propose a concept of “IP injury” that limits IP remedies to situations in which the IP holder has suffered or is likely to suffer harm sufficiently linked to the purpose of IP law, which is to incentivize innovation. As in antitrust, reformation in IP is more likely to come from the judiciary and not from Congress

Fair Use, Notice Failure, and the Limits of Copyright as Property

If we start with the assumption that copyright law creates a system of property rights, to what extent does this system give adequate notice to third parties regarding the scope of such rights, particularly given the prominent role played by the fair use doctrine? This essay argues that, although the fair use doctrine may provide adequate notice to sophisticated third parties, it fails to provide adequate notice to less sophisticated parties. Specifically, the fair use doctrine imposes nearly insuperable informational burdens upon the general public regarding the scope of the property entitlement and the corresponding duty to avoid infringement. Moreover, these burdens have only increased with changes in technology that enable more, and more varied, uses of copyrighted works. The traditional response to uncertainty in fair use has been to suggest ways of curing the notice failure by providing clearer rules about what is and is not permitted. This essay suggests, however, that these efforts to reinforce the property framework feel increasingly strained and fail to reflect how copyright law is actually experienced by the general public. Indeed, the extent of the notice failure is such that it may be time to stop treating copyright like a property right, at least for certain classes of users. The essay ends by suggesting a number of alternative frameworks that would seek to regulate public behavior regarding copyrighted works without imposing the unrealistic informational burdens required by a system of property rights

Scary Patents

The Federal Circuit, in In re Bilski, announced a new test for patentable subject matter, reversing a decades-long trend that had broadened patent subject matter to include business methods and software. To be patentable under Bilski, a process must (1) be tied to a particular machine or apparatus, or (2) transform a particular article into a different state or thing. The Supreme Court has granted cert. to review Bilski. Bilski gives little weight to the very statute it is interpreting or to the facts of the relevant Supreme Court cases. The court draws a test from selected language of those cases, while determinedly ignoring other language. Literally taken, the machine-or-transformation test would not achieve the goal of limiting the scope of abstract patents, such as broad business methods and software patents. The brain is a machine, so mental processes would meet the test. Since Turing, software simply transforms a computer into a different state, so all software would be patentable - if we took the test literally. As a thought experiment, the article discusses how the machine-or-transformation test would apply to such innovations as farming, the printing press, the number zero, or the computer. But Bilski\u27s approach, if not applied rigidly, could have a strong positive influence on the development of patent law. Many broad patents of suspect validity cast a shadow over new technologies. The machine-or-transformation test relies on vague terms and illusory distinctions. But the same is true of the central test for the scope of copyright protection. Although the idea/expression dichotomy is illusory, the analytical framework it provides has served well to adapt copyright to a broad range of subject matter and to new technologies. The machine-or-transformation test could do a similar job for patent law. Bilski\u27s emphasis on the policy that a patent should not preempt a broad area of technology could also supply a unifying principle to the recent case law on enablement, definiteness, and claim interpretation