Mark T. Banner
Section Chair 2002-03

The Court of Appeals for the Federal Circuit was created 20 years ago with the goal of bringing uniformity to the substantive body of patent law. The regional circuit courts of appeals had interpreted patent law in such diverse ways that in some circuits patents were never held to be valid whereas in others they were never held to be invalid. That, coupled with the Supreme Court’s reluctance to clarify the situation, led to a concerted effort by the business community and the patent bar to convince Congress to create a single court to handle appeals from district court patent infringement actions.

Uniformity in patent law interpretation was not the only goal. It was believed that uniformity in substantive legal principles would lead to greater predictability in the outcome of patent cases. This, it was argued, would foster greater confidence in the patent system and enhance willingness to make the business and economic investments that lie at the heart of the patent system’s abilities to spur innovation, to enhance technical growth, and to contribute to our nation’s industrial strength. The whole idea of the patent system is, after all, to make our Country stronger by increasing its economic and industrial power through a sound, positive national innovation policy.

By virtually every measure the Federal Circuit has been an astounding success. It has clarified and unified many diverse areas of patent law, contributed to the legal doctrine that, while not precisely characterized as patent law is nevertheless intricately related to it, and has avoided virtually all of the adverse consequences that had been predicted by some of its early opponents.

One area of substantive patent law where predictability is noticeably absent, and some may argue that uniformity is absent as well, deals with claim construction. Markman v. Westview Instruments, Inc., 517 U.S. 370, 116 S. Ct. 1384 (1996) has had a profound impact not only on the law but on the practical circumstances in the real world.

Various Federal Circuit judges have debated the statistics regarding the reversal rate in claim construction hearings, both in written decisions and in speeches before bar groups. Views about the reversal rate have varied among lawyers off the bench as well. One article suggests a reversal rate on claim construction as high as 47%.[1] Some observers argue that reversal rates are irrelevant because the real issue is what is the “correct” outcome, where “correct” is determined by application of the facts to the law. “What are the odds this Markman ruling will hold up?” is a question almost always on the minds, if not the lips, of clients, counsel, and the court.[2] The Federal Circuit almost always has the last word on claim construction, which so often is dispositive.

A thorough study and insightful law review article was recently done on this subject by Kimberly A. Moore, Associate Professor of Law at the George Mason University School of Law.[3] The article reviewed in exhaustive detail the holdings of the Federal Circuit on claim construction issues. It concluded that there was a 33% reversal rate on claim construction issues, and that where district courts were reversed on claim construction, the Federal Circuit either reversed or remanded the decision 81% of the time. Implicit in the analysis was the conclusion that such a reversal rate was too high for the legal and business community to have confidence in the predictability of outcome in patent infringement cases. If so, the value of patents is diminished. The author concluded that an appropriate partial remedy would be a change in the Federal Circuit practice so that claim construction rulings could be immediately appealable, at least in certain defined circumstances. To date the Federal Circuit has refused requests for immediate appeal of a Markman ruling, which while provided for under the rules is discretionary with the appellate court. Various judges of the Federal Circuit have made clear that they would rarely, if ever, accept such interlocutory appeals.

A more fundamental question, appropriate for a bar association consideration and debate, is whether the Markman decision was “right” in the first place. That is not to say whether it comports with the Seventh Amendment or follows precedent. We know that the Markman decision was “right” because it was a decision of the Supreme Court. It can be argued that the Supreme Court was “right” in Markman by definition.[4]

Rather, the question raised here is whether now, after the Markman decision and its progeny have had time to percolate through the courts, it is appropriate to reconsider the policy choices inherent in Markman and determine if they are the right policy for the Country; whether Markman strengthens the patent law and fosters the overall goal of industrial and economic strength. This is a question only the user community can address. It is the type of question best considered outside the context of a particular case and the adversarial system. Professor Moore goes a long way to spark this debate, and suggests one possible solution: immediate appeal of at least some claim construction decisions.

Other possibilities exist and should be considered. Some changes could be made by amending the statute; others could be made by the courts. Procedural changes in the Patent and Trademark Office (whether or not required by statute) could also be considered. Imaginative lawyers can (and have) devised many different possible “solutions” to the present state of unpredictability.

For example, should the standard of review used by the Federal Circuit for claim construction issues (de novo) be changed? Professor Moore discusses this as a tradeoff between accuracy and certainty, although it could be (and possibly should be) debated whether the Federal Circuit decisions on claim construction are more “accurate” than those of the district courts they review. The law could be changed so that claim construction would be subject to the “clearly erroneous ” standard of review– the same standard used when the Federal Circuit reviews findings of fact made by the district court judge. This could be accomplished by a statutory change to declare that the meaning of the claim is a question of fact. The statute could determine whether the issue is to be decided by a judge alone or, in the case of a jury trial, by the jury. This would subject it to the “clearly erroneous” standard (if decided by a judge) or the “substantial evidence” standard (if decided by a jury).

Another possibility would be to create, either formally by statute change or informally through judicial practice, special procedures for determining claim construction. These could include procedural approaches, such as have been adopted by the U.S. District Court for the Northern District of California.[5] Another approach could formalize the use of special technical masters for claim construction issues, either to advise the court on technical questions or perhaps render “advisory opinions.”  Perhaps new procedures in the PTO could be established for review of claim construction issues. Patent prosecution could be changed to provide greater guidance on claim construction.

In short, there is no end to the type of creative alternatives to the present situation that could be considered, evaluated, proposed, and discussed. There is no better time to do this than when the issue is not presently before the court, and when the issue is not the subject of immediate action in Congress. Rather these issues are best determined by patent counsel– inside and outside– in the context of a thorough, considered, and thoughtful debate. They are best reviewed in the manner suggested and example provided by Professor Moore– as an exercise in trying to find a better way of reaching the right result. It can only be done well with the support and participation of the membership of the intellectual property bar and its associations.

Ultimately, the task of answering the question posed by the headline (Is Markman Right) is not an invitation to argue whether the decision comported with precedent. The goal is not just to follow the law as it is; rather, the goal is to create the law as it should be.

Six Intellectual Property Bills To Be Signed Into Law

By Hayden W. Gregory

Section Legislative Consultant

The House and the Senate have approved and cleared the provisions of six intellectual property related bills for signing into law by the President. The provisions of these six bills, each of which had been previously passed by either the House or the Senate, were attached to the conference report to accompany H.R. 2215, the Department of Justice Reauthor-ization Act. The House of Representatives adopted the conference report on September 26, and the Senate gave its approval on October 3. The separate IP bills incorporated in the conference report and the section numbers of the conference report bill containing those provisions are:

S. 1754, which would authorize funding for the USPTO and mandate the development of a 5-year strategic plan for the Office (sections 13101-13104).

H.R. 1866, to overrule the decision in In re Portola Packaging and allow patent reexamination on the basis of prior art that was previously cited by or to the Office(13105).

H.R. 1886, to expand appeal rights by third party requesters in inter partes patent reexamination proceedings (section 13106).

S. 407, the Madrid Protocol Implementation Act (section 13101 et seq.) Please note that enactment of this implementing legislation does not bring the Madrid Protocol into force in the United States. The Protocol will not enter into force in the U.S. until the Senate ratifies the treaty.

S. 487, the "Technology, Education, and Copyright Harmonization Act of 2001," which contains copyright law amendments relating to distance education programs (section 13301).

S. 320, containing numerous technical amendments to patent, trademark, and copyright laws (section 13201 et seq.).

The texts of the IP provisions of the bill and of the explanatory provisions of the conference report relating to those provisions are posted on the IPL Section website.

 

Officers Attend Conference on Impact of Doha on TRIPs

Several Section officers participated in a conference titled “The Future of TRIPs: Impact of the Doha Health Declaration”, September 13 in Paris. Mark Dickson, Menlo Park, CA, Bill LaFuze, Houston, and Charles Baker, New York City, represented the Section.

The conference was sponsored by the International Chamber of Commerce (ICC) and the AIPLA.

The “Doha Health Declaration” refers to a statement issued by the World Trade Organization at a Ministerial Conference held in November 2001 in Doha, the capital of Qatar on the Persian Gulf.

The basic issue is the extent to which compulsory licensing of drugs may be used in developing and in least developed countries to deal with epidemics resulting from HIV/AIDS, tuberculosis and malaria. At Doha the ministers, including the U.S. Trade Representative , declared that TRIPs already recognized the right of member countries to grant compulsory licenses in such cases.

The remaining problem, recognized by the ministers in the Doha statement, arises when a member country has inadequate pharmaceutical manufacturing capacity, such that its granting a compulsory license within its borders would be ineffective. The Ministers therefore directed the Council for TRIPS to find an expeditious solution to this problem, and the purpose of the conference was to explore possible solutions. The speakers reviewed compulsory licenses in various countries, the perspectives of the industries involved, and the perspectives of the governments and the industries in developing countries.

One of the themes was that patents are not the problem, since patents related to malaria and tuberculosis expired long ago, and there are no patents on HIV/AIDS drugs in many of the countries where the disease is epidemic. Rather, the problem is (a) poverty so great that the sick cannot pay for drugs at any price and (b) the absence of infrastructure and education to deliver and administer the drugs. The U.S. therefore is not favoring any broad reopening of the TRIPS agreement, which might lead to reopening of collateral issues like geographic indications of origin in the trademark area. Rather the U.S. favors waivers on a case-by-case basis where it can be shown that drugs manufactured in one country would in fact be used to address an epidemic in another country that could not manufacture the drug.

The Officers will be preparing for the Council’s approval a letter from the Section to the U.S. Trade Representative. With Council approval, the Section will seek Blanket Authority from the ABA to submit the letter.

 

Yoncha L. Kundupoglu

Yoncha Kundupoglu is the Chair of the Membership Committee of the Section of Intellectual Property Law.

She practices law with the Atlanta office of Kilpatrick Stockton, where her practice is devoted to patent litigation in the areas of electronics, mechanical devices and now, biotechnology. She also counsels clients regarding IP matters.

Yoncha joined the Section as a student member in 1993 during her third year of law school and immediately began doing committee work because she wanted to meet the members of her new profession. She enjoyed studying IP law in school and wanted to remain on top of new legal developments, and even participate in driving some of those developments . She joined the Section because she believed that she would meet others who wanted those same things, and she has not been disappointed in that regard.

This is a very exciting time for IP professionals, according to Yoncha. Intellectual capital is being used in increasingly sophisticated ways to produce profit across a wider variety of industries, both new and old. This increased use has begun to present some very interesting and complex issues challenging the development of the law and societal values. As a result, IP practice will continue to be an exciting arena presenting a varied plate of interesting and intellectually challenging work.

Yoncha is also active in the ABA Section of Litigation, where she is a Membership Coordinator for the state of Georgia and co-chairs the Newsletter subcommittee of the Woman Advocates Committee. She enjoys meeting other litigators who do not practice solely in IP, and as well as other women in the IP and litigation arenas. She sees a definite benefit in increasing the interaction between the two sections.