Wednesday 16 October 2019

Patent Eligible Subject Matter Reform in the United States: The Pendulum Will Swing Too Far (again)?

In the United States, the law of patent eligible subject matter has become a big mess.  There are many different ways to frame how we got to this point.  One narrative tracks the concern with so-called patent trolls and the issuance of poor patents by the USPTO.  For sure, many have had concerns about the enforcement of patents and there have been a number of issued poor quality patents by the USPTO.  Part of the problem with the reform effort may have been that there were just too many proposals adopted to confront the issues.  In a perfect world, I suppose that a proposal would be enacted and then we would gather data and try to assess its impact.  We essentially made many policy changes creating perhaps an even larger mess with different problems--perhaps to the detriment of innovation.  Indeed, perhaps the changes to patent eligible subject matter law by Alice and Mayo may have gone too far—in light of other changes to the U.S. patent system designed to curb troubling enforcement and poor patent quality.  

One of the main current problems seems to be the application of the Alice/Mayo test and the failure to achieve consistency in its application.  Unfortunately, one casualty of Alice/Mayo may be collegiality amongst U.S. Court of Appeals for the Federal Circuit judges and the institution itself—the recent opinion, American Axle & Manufacturing v. Neapco Holdings, issued on October 3, 2019 is an interesting example.  Basically, Judge Moore writing the dissent is accusing Judge Dyk, author of the majority opinion, for engaging in judicial activism among other things.  I believe that most think that judges should “call it as they see it.”  However, the problem may be the test itself—it’s just too difficult to apply with consistency and that a reasonable application could result in problems, particularly if there is an underdeveloped record.  For sure, the attempt to utilize patent eligible subject matter as a way to eliminate cases early has been eroded by some panels of the Federal Circuit.  Does this mean that the main value of the test has been lost?  Should we stick to obviousness as the gatekeeper of patentability?  Can Congress actually fix this without overshooting eligibility resulting in more and different problems?  What about the concern with drug pricing?  Is the current test for patent eligible subject matter unfixable?  Do we need to think harder about different patent eligible subject matter rules for different industries?  Does it look like the Federal Circuit is properly using doctrines as policy levers across different industries?  I do think we would likely agree that keeping the Federal Circuit is a good idea (there are some that disagree).  

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