Bumper Crop

Image Aside, Patent Law is the Mother of Invention.
No Really

By Mark Eyerly

"Patent attorneys are those people that do not have enough charisma to practice tax law!"

A t least that's the snide aside that one intellectual property blogger (and patent attorney) says he heard from one of his law school professors who tried to steer him from the profession.

Why so little respect for an area of the law that is at the heart of the global economy and has become an evergreen topic of debate in the halls of Congress and beyond? Is it because, as Peter Detkin EE '82, L'85, says, people once thought it was a field so specialized that one had to be "a high priest" to understand it? (See accompanying story.)

Eric Marandett, L'92 – who fell into patent practice as an outgrowth of his litigation work and is considered by Intellectual Asset Management magazine one of the 250 best patent litigators in the world – was at first a bit tepid about his new specialty. "I kind of liked it," he admits.

Today, Detkin, as founder and vice-chairman of Intellectual Ventures, and Marandett, as a practice group leader with Choate Hall & Stewart LLP, where he represents biotech, pharmaceutical and technology companies in high stakes patent litigation, are among the leading thinkers in the occasionally obtuse world of patent law. Marandett divides his time evenly representing patent plaintiffs and defendants; Detkin has prosecuted patents before the Patent and Trademark Office, represented licensees and licensors, and now is a principal in an entity whose primary asset is its patent portfolio.

Patent law reform is a hot topic. Bipartisan legislation approved by the Senate and making its way through the House "would make the first significant reforms to the nation's patent system in nearly 60 years," says the office of its lead sponsor, Sen. Patrick Leahy (D-Vt.). Changes provided by the America Invents Act include adopting the European model of "first to file" instead of the current "first to invent"; creating a nine-month window to challenge a patent after it is issued; empowering judges to enforce consistency in damages awarded for patent infringements; and banning patents on strategies to reduce tax liabilities.

But opponents of the legislation, such as one contributor to the blog at TheHill.com, call it "business as usual in Congress, favoring big banks and other special interests. Contrary to claims of supporters, this bill will stifle innovation, kill jobs, and further backlog the patent office."

M arandett and Detkin say the claims on both sides of the debate are a bit overstated.

"I don't think the patent system is broken, but there are some distortions in it," Marandett says. "The Patent Office is overwhelmed and while the courts do a pretty good job of straightening things out, the judicial process is not as linear or smooth as it needs to be."

"People have complained that patent law could not keep up with innovation since the invention of the steam engine. Patent law is not broken; it's adaptable," Detkin adds.

"Overall the bill is definitely a step in the right direction," continues Detkin, "but there are sections in the current version that will do more harm than good." In particular, he points to a controversial provision that critics argue will make it easier for banks and large financial institutions to infringe on business method patents.

One problem everyone agrees on is volume. In 2010 the U.S. Patent and Trademark Office granted 219,614 invention patents, a 31.2 percent increase above 2009; there is a backlog of some 700,000 patent applications and it now takes an average of three years and 10 months for a patent application to be accepted or rejected.

Detkin and Marandett think the most important legislative change would be allowing the patent office to retain all of the fees generated by its work. "Fee diversion is a big issue," Detkin explains. "Patent applications are multiyear efforts, but the patent office depends on an annual budget allocation from Congress.

With that kind of regimen it can't forecast, staff up or build the infrastructure it needs to meet growing demand."

In fact, Marandett argues that better funding for the patent office will do more to streamline the patent process than will another feature of the America Invents Act, one that has drawn the most attention and controversy: movement of U.S. patent law from its traditional "first to invent" standard to the European practice of "first to file." Proponents of first to file cite the efficiencies of a standard that is easier to prove and one that is consistent with Europe. "A first to file standard would make the entire process cleaner and reduce the case load on the court system," Marandaett says. "It's much easier to prove you were the first to file than you were the first to come up with the idea."

Critics claim first to file places the interests of corporations and government bureaucracy ahead of small inventors and start-ups, who will be at risk of having established companies steal their ideas by using their greater resources to win a first-to-file race.

Of the 219,614 invention patents awarded in 2010, only 16,049, or 13.2 percent, went to independent inventors; overall, about 30 percent of U.S. patent holders are individual inventors.

How do small inventors capitalize on their inventions? In a 2005 paper, Penn Law Professors R. Polk Wagner and Gideon Parchomovsky wrote that "for patents, the whole is greater than the sum of its parts: the true value of patents lies not in their individual worth, but in their aggregation into a collection of related patents, a patent portfolio." That thinking is a key part of Detkin's business strategy at Intellectual Ventures; "patent aggregators ... can offer small inventors better access to important commercial partners and can also enhance their bargaining power," he wrote in a 2007 essay that appeared in the John Marshall Review.

Patent, often considered the most complicated aspect of IP law, still might not be the first career choice of many law students, but it promises to continue to be one of the most intriguing specialties of the coming decade, Marandett says. "Our economy is going to move in the direction where technical innovation is vital; it will be a driver of economic growth. The patent system will be critical to our global competiveness." PLJ