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Joshua Landau @PatentJosh
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Golden: how have these impacts been seen at small vs midsize vs large firms, on universities. #ftchearings
. @ProfDSchwartz: one enhancement in data would be looking at distinctions between types of NPE; also original owner vs acquirer/speculator. #ftchearings
. @ProfDSchwartz availability biases in data. Most lawsuits settle. Most settlements are confidential. So we don’t have the whole story on data. Anecdotes that infringers less likely to offer a settlement recently - maybe underlying negotiating position changed. #ftchearings
. @ProfDSchwartz we also don’t know much about pre-litigation activity (ie demands). Hard to research because we don’t have data but be cautious in extrapolations because of that limited data. #ftchearings
.@ProfDSchwartz lots of change in patent law. Congress, CAFC, SCOTUS, USPTO - lots of cooks in a small kitchen in a short period of time. Patent system takes a while to respond - need to let things settle for a while to see what the impacts are. #ftchearings
Prof Neel Sukhatme (from my alma mater, GULC!): empirical analysis of TC heartland short and long term. Venue matters to patent litigants. Move from EDTX to DDel. Texas was seen as forum shopping/selling. #ftchearings
Sukhatme: TCH changed from pure plaintiff desire for venue to giving defendants some choice over venue. Do we get better results? Empirical results suggest firms are happy with TCH shift. #ftchearings
. @colleen_chien interested in non-PAE NPE shifts in venue. Burden on small business assertions unable to assert in home court that reduces suits? Doesn’t appear to be but wanted to see if others had seen it. #ftchearings
Miller: new project looking at home court bias in patent litigation. (Interesting: anecdotally, yes.) #ftchearings
Miller: post TCH a decrease in plaintiff home court filings, but not an increase in defendant home court. Effectively neutral site adjudications. #ftchearings
. @colleen_chien estimation was that small plaintiffs wouldn’t be hurt since they didn’t tend to file in opportunistic venues. Miller points out that often small entities are really litigating against their neighbors anyway. #ftchearings
Sukhatme: no expectation of impact on small entities because EDTex was mostly about larger PAEs. #ftchearings
Moving now to PTAB impacts on litigation. #ftchearings
. @ProfDSchwartz fair and balanced post-grant review proceeding is appropriate and necessary. Some concern about delay caused by IPR on cases. #ftchearings
My thought is that IPR creates bimodal change in litigation time that average doesn’t capture - some cases much shorter due to invalidation, some lengthened. #ftchearings
. @ProfDSchwartz delay makes it harder for small entities to enforce. #ftchearings
. @ProfDSchwartz not too many PGRs yet due to ineligibility of pre-AIA patents; will PGR substitute for IPR?

(Generally speaking I think not, given the prevalence of patent assertion at end of life, far past PGR window.) #ftchearings
. @colleen_chien two views on IPR: awesome we get to invalidate vs nothing’s changing because we’ve adapted by asserting more patents so you can’t invalidate them all and PTAB outcomes give court info. #ftchearings
. @colleen_chien is IPR a good thing? Or just more expensive?

Sukhatme: why multiple petitions? Petitioners? Parallel in court?

Fun story: this isn’t a new concern. Reference to that exact issue in a Jefferson letter. (Yes, I’m going to write about it.) #ftchearings
Golden: while understandable, disappointing that IPR has been as expensive as it has been. Not a truly cheap alternative to litigation. #ftchearings
Golden: small claims patent court maybe? Give a quick review in exchange for limiting some remedies. #ftchearings
. @colleen_chien what can we learn from opposition? Amendment is routine in opposition. (But usually opposed patents don’t have past damages concerns which are a major driver of lack of amendment in IPR.) #ftchearings
. @colleen_chien open Q for research: has more detailed complaint practice sped up or cheapened litigation? #ftchearings
Golden: might also be seeing impacts from Octane on willingness to file, which might be difficult to disentangle from form 18 change. #ftchearings
. @ProfDSchwartz form pleadings change doesn’t speed up or cheapen bc of increased motions to dismiss.

(I’m unsure this is accurate; while those are more frequent, it’s mostly a shift from the contentions stage to pleadings stage, which does tend to speed.) #ftchearings
. @ftc thoughts on merits of a loser pays system in the US?

Golden:
Octane seems to have had some impact. To what extent has fee-shifting discouraged weak suits? #ftchearings
Golden discusses general loser pays concerns (capitalization of plaintiffs, etc.) #ftchearings
Closing statements. Miller: lots of changes and interactions - lets let things play out so we see what steady state is. #ftchearings
. @colleen_chien many metrics show these reforms have been success in limiting PAE issues. VC feelings on patent system are improved - companies have more ability to handle these issues. But still exists - eg user demands/suits still happen. #ftchearings
. @colleen_chien calibrating these changes is important to make sure patent system hits the right balance. #ftchearings
Golden: number of sensible tweaks to system have been seen. New issues will arise - numerosity of patents/applications vs limited resources of PTO and ability of manufacturers to navigate sea of patents. #ftchearings
#ftchearings I don’t think that’s a new issue: clearance is already impossible in some spaces. patentprogress.org/2018/07/31/fre…
. @ProfDSchwartz predictability’s important. But not just in rule, but also in system not changing continuously. Need to stop changing rules constantly to see how things work out. (Cc: @uspto Director Iancu.). #ftchearings
Sukhatme: much has improved substantively in this timespan. stability and predictability hasn’t. #ftchearings
@realtahiramin presenting on overpatenting in drugs. 247 separate patent applications on Humira - 50% of which were filed after expiration of the first patent. #ftchearings
. @realtahiramin orange book patents increasingly less likely to have claims invalidated in IPR. #ftchearings
. @realtahiramin solutions: revisit standard for inventiveness, eliminate continuations at PTO. Maintain and improve IPR; pre-grant opposition system akin to that used in TMs. #ftchearings
. @realtahiramin update orange book procedures/transparency; maybe some patent dance improvements. #ftchearings
. @HansSauerAtBIO up now: intro to BIO. most members small and not on market. Product development fails a lot. Most of drug dev pipeline is in emerging companies, many partnered with larger companies. #ftchearings
. @HansSauerAtBIO About 10% of new chemicals approved.

(But whoooooole lot of patents aren’t new chemicals, they’re dosage/method/similar followons.) #ftchearings
This whole @HansSauerAtBIO presentation is driving home how completely different the biotech patent experience is from essentially every other industry. #ftchearings
Two interpretations of . @HansSauerAtBIO graphic: either generics are getting more aggressive at challenging, or branded pharma patents are getting easier to want to challenge. #ftchearings
.@HansSauerAtBIO “number of patents used to shield against generic competition” has increased significantly. #ftchearings
. @HansSauerAtBIO graphic showing that time from drug to generic competition has been very consistent around 13 years of exclusivity. #ftchearings
. @MSchruers CCIA companies some of the largest users of patent system - huge investments in R&D/patents; trusted brands (trademarks); and major software and content firms (copyright.)

Basically, we care a lot about IP. Want a system that encourages innovation.#ftchearings
. @MSchruers changes in recent years have improved conditions in patent system (not fixed, but improved).

Objections frequently not well founded.

More remains to be done. #ftchearings
. @MSchruers IPR and Alice were warranted - but also overdue. Alice has had positive impact on R&D in software (higher growth post-Alice than any other area of industry.) #ftchearings
. @MSchruers similar increase in unicorn IPOs post Alice.

IPR also helpful - cost of patent litigation has declined faster than any other area of IP lit post-IPR, and estimates of over $2 billion just in litigation savings from IPR adjudication. #ftchearings
. @MSchruers reversing course on Alice and IPR would harm the benefits of these reforms. #ftchearings
. @MSchruers narrative courts have gone after patents. But while some cases have done that (Alice), there are other cases - SCA Hygiene, Halo, Berkheimer - that go the other way. Narrative that case law has been all kill patents is inaccurate. #ftchearings
. @MSchruers independent research on secondary markets showing patent values havent dropped. #ftchearings
. @MSchruers pointing out the flaws in the @USChamber rankings now. (patentprogress.org/2018/02/12/cha…) #ftchearings
. @MSchruers end result: system has stopped bleeding, but there’s still a real problem there and we can do more. #ftchearings
. @aipla fair and balanced laws on IP.

(I have some questions about whether that’s really accurate given their support for getting rid of 101.) #ftchearings
. @aipla now defends the Chamber’s report. Except they’re concerned about the drop, not about the fact that it’s completely baseless.

Just sad, @aipla. #ftchearings
The criticism isn’t that the drop isn’t a bad thing, it’s that the drop is based on falsities. #ftchearings
. @aipla court “distorted patent eligibility determinations.” #ftchearings
. @aipla court caused significant uncertainty.

(True... if you’re in business methods or med diagnostics. Not really true elsewhere.) #ftchearings
. @aipla Talking about their 101 proposal and how it provides a clear test.

Which is true. It’s “is it a patent application? Okay it’s patentable.” #ftchearings
. @aipla now repeating the serial challenges nonsense. #ftchearings
. @aipla complaining about eBay suddenly forcing patent owners to abide by the same exact requirements on injunctions that every other area of law does. #ftchearings
Now we’re on to the @USChamber - IP and physical assets should be treated the same.

I feel like I might know quite a few people who’ve actually studied the area who would strongly disagree. #ftchearings
. @USChamber is now on to a completely ahistorical reading of the
constitution. #ftchearings
. @USChamber saying that IP rights don’t confer market power and are actually pro competitive. (They’re not, we just tolerate their anti-competitive aspects for their presumed benefits.) #ftchearings
. @uschamber still hasn’t addressed how they can say with a straight face they “5-15% of cases end with all claims being patentable” when 40% of them end with the PTAB deciding that there isn’t even a reasonable likelihood that *1* claim is invalid. #ftchearings
. @USChamber saying IPR was an over correction (even though we are at 2008 levels of patent assertion/abuse.) #ftchearings
. @USChamber saying that changes dampen enthusiasm to invest - but we heard this morning from @colleen_chien that these reforms have made VC feel much more comfortable investing since they won’t be threatened with abusive litigation. #ftchearings
Role of patent system in promoting innovation? @USChamber believe that system stimulates innovative work but only as strong as the rights are.

(Ie stronger rights, stronger system, which is nonsense.) #ftchearings
I think @USChamber is now suggesting that the entire fix could be on the front end.

There’s work there, but the idea that we can do it all at the examination end is crazy. No one wants to spend 100k on examination. #ftchearings
. @realtahiramin making the point that innovation and invention/patents are not the same thing. #ftchearings
. @realtahiramin pointing out that things like design can be innovation but not necessarily invention.

@design_law I see you. #ftchearings
. @HansSauerAtBIO how do we use patents and why important? important for licensing and transfer of assets. (Which, uh, pretty sure we have ways to do that without patents.). Investment, access to capital. Uncertainties baked into model, so IP certainty needed. #ftchearings
(Of course there’s non-patent exclusivities in his industry so there’s other routes to certainty.) #ftchearings
. @MSchruers points out that uncertainty over overpatenting has its own impacts on investment, while availability of patents relatively minimal positive association in tech sphere. #ftchearings
. @aipla talking about patents as requirement for VC but, to extent it’s true, arguable whether strength of patent right matters there so much as whether patent is serving as a signaling function. #ftchearings
. @ftc making point that competition matters - does patent law help or hinder entry? #ftchearings
The “certainty” mantra all too frequently fails to think about the need for certainty to the public about patent scope. #ftchearings
. @aipla TC Heartland, Lexmark, Akamai upended things, but Alice/Mayo most significant. #ftchearings
. @aipla misstating the patent bargain, saying you disclose and you get some protection.

Just not accurate. Sometimes you disclose and it turns out you didn’t come up with anything patentable. You’re not entitled to a patent. #ftchearings
. @aipla saying maybe we won’t see filings continue.

There were ~600,000 applications last year. I think they’re continuing. #ftchearings
. @aipla suggesting there’s evidence that 101 is a significant bar for many applicants (incl in AI).

Would love to see that evidence because all the evidence I’ve seen shows the opposite. #ftchearings
. @MSchruers important to have clear substantive boundaries/roles for forms of IP. Competition law for non-competition issues as an analogy. 101 jurisprudence in part doing this role. #ftchearings
. @MSchruers points out that PTO has discretion to deny on serial petitions, and that most patents only see 1 IPR. #ftchearings
. @MSchruers way the system has changed is important but need to look at how system has stayed the same. If NPEs were a problem a decade ago and data shows we’re in the same place as a decade ago... #ftchearings
. @USChamber distinguishing between large inventors and garage inventors without pointing out that almost all patents are issued to the former. #ftchearings
. @HansSauerAtBIO - written description, non-stat double patenting - sometimes we forget impact on issued patents. Problem is no reason to think that a freshly issued patent should be considered reliable given how frequently they’re invalidated w/o change of law. #ftchearings
A reminder that the patents Hans characterizes as a “crapshoot” are, for his industry, invalidated at a very low rate. #ftchearings
.@HansSauerAtBIO saying PTAB isn’t a cheaper alternative to district court because the courts don’t stay ANDA litigation - which sounds like a court problem, not an IPR problem. #ftchearings
Also partly because of the structure of ANDA cases. #ftchearings
Ooh “kill rates” appearance, fill out your “overblown PTAB rhetoric” bingo card. #ftchearings
. @realtahiramin making the point that complaints about serial invalidity proceedings ignore the fact that there are multiple (or dozens or hundreds) of attempts to obtain a patent up front. #ftchearings
. @MSchruers h-w may be different but for tech, IPR provides a cost-effective means for an expert tribunal to make a decision (rather than a lay judge or a jury). Significant cost savings over litigation - not free but a real improvement. #ftchearings
Shorter @uschamber “we support a quick and cheap way to confirm a patent is valid as long as it never invalidated anything.” #ftchearings
. @aipla “threat of redundancy changes calculus about whether and when to bring a litigation”. Making unsupported allegations about how repeated petitions are a real concern. (Reminder-90% of patents are 1 or 2 petitions and those simultaneously.) #ftchearings
. @MSchruers lot of value in certainty for all stakeholders. This includes PTO examination, PTAB.

(But all stakeholders includes public, competitors.) #ftchearings
. @HansSauerAtBIO too much patent reform too quickly. Take a breather and work through substance of AIA and 101. Not sure 101 can be developed by courts. Wants to see PTAB use same standards as courts. (Me too. Preponderance in the courts!)

#ftchearings
. @realtahiramin more quality from PTO - look at obviousness post-KSR, make sure granted patents really are inventive, not just combinations of known things.

(As I wrote this morning, TJefferson would agree.) #ftchearings
. @USChamber important that US lead on creation of global system that empowers innovators everywhere.

(Yes, but I suspect he and I disagree on what system would do that.) #ftchearings
Last panel! Richard Gilbert, @JamesBessen , @MichaelFrakes2 and Anne Layne-Farrar. #ftchearings
That’s right. As @ftc just said, our reward for a full day of policy panels is... a panel full of economists. #ftchearings
Apparently I have tweeted enough today to trigger Twitter’s spam protection. So I’ve missed a bit here, but we appear to be talking about antitrust focus on short term consumer welfare which might not be ideal for dynamic competition incentives. #ftchearings
@JamesBessen increase in concentration is in large part driven by investment in proprietary IP/tech (eg Walmart logistics investments.) #ftchearings
@JamesBessen sounds good (investment->productivity) but maybe not good for everyone. #ftchearings
@JamesBessen diffusion gap - these new technologies aren’t diffusing down from the top but being held closely, distinct from past. #ftchearings
@JamesBessen we overfocus on initial innovation (eg, the first power loom) but often ignore follow on innovations that drive huge amounts of productivity growth. 2x for initial, 40x for the sequential innovations. #ftchearings
@JamesBessen patents, esp in software, seem to reduce follow on innovations and PAE litigation reduce R&D expenditures. #ftchearings
@MichaelFrakes2 question is:
Do patent rights actually fulfill their function of promoting progress? #ftchearings
. @MichaelFrakes2 we have evidence from the 19th century, but, might be different from modern situation. #ftchearings
. @MichaelFrakes2 study on human gene patent effect on follow on innovations in that area coming soon. No meaningful impact of patents (positive or negative) on follow on innovation. #ftchearings
. @MichaelFrakes2 another study looking at follow on innovation after invalidation of a patent. Find that in computers, comms, medical devices you see some positive impact on follow on innovation, but not in many other areas. #ftchearings
Farrar: “privateers”. PAEs that have a kickback to original portfolio owner. Yarrrrrrrrrr. #ftchearings
Farrar: theory is that they raise rivals costs (antitrust issue) and acquire/assert low quality patents for nuisance (patent issue.) #ftchearings
Farrar: empirical evidence is that they don’t seem to be acquiring low quality patents. They look like most litigated patents, and often better than standard PAE patents. #ftchearings
Farrar: but more likely to be litigated, later than normal patents (though possibly because of reassignment, or maybe to raise damages.) #ftchearings
Gilbert: lots of antitrust remedies that were supposed to address innovation concerns... didn’t. #ftchearings
Q: effects of nuisance litigation on innovation? Farrar: not sure if there’s empirical work on this. She is skeptical of impact. #ftchearings
Farrar: prevalence of nuisance litigation in economy? Going to be some everywhere.

(Is that right? Patent has unique issues - cost of litigation comparatively high and relatively easy to bring the case. We don’t see similar nuisance product liability suits, do we?) #ftchearings
. @JamesBessen there is empirical evidence about PAE litigation; hard to disentangle nuisance litigation because how do you determine “nuisance”?#ftchearings
. @JamesBessen comparison of loss/settlement of PAE suit to in targeted, showing reduction of R&D spending particularly by small firms. #ftchearings
Farrar and Bessen discussing the specifics of papers I haven’t read here for a bit. #ftchearings
Gilbert: Earlier we heard the world would fall apart without strong IP rights. But we have good evidence from papers focusing on post-eBay world showing no real negative impact. #ftchearings
Farrar: inverted U between strength of IP right and innovation incentives. Too strong is bad. Too weak is bad. #ftchearings
. @JamesBessen when we see a whole business model based on ill-defined patents, probably a sign we need to put resources and rethink what we do. #ftchearings
. @MichaelFrakes2 need to set the right patentability standard and then need to make sure the right entity applies. #ftchearings
. @MichaelFrakes2 time to revisit @marklemley’s rational ignorance now that we have more empirical data and maybe we can figure out if we should (and how much we should) invest in added examination early on. #ftchearings
Re rational ignorance, if we double the cost of patent fees, it’d be an additional ~2.8 billion per year. We’d need to see appx 700k/lawsuit in savings on average to justify that.

That’s... maybe not a crazy amount to think we’d see, given the cost of suits? #ftchearings
Q: Alice impact on innovation in software? @JamesBessen conceivable - Alice was not related to real innovations. Most of it could be wiped out under strict 103. But to extent Alice patents were being abused, sure. #ftchearings
Gilbert: sequential innovation. Desirability of an ecosystem and lowering barriers to entry is desirable. No one wants to do away with IP entirely but the extreme of maximizing IP rights to maximize innovation is wrong. #ftchearings
@JamesBessen scope/vagueness issues also. Ability of inventor to overscope a patent detrimental like in software. #ftchearings
Farrar: 1870s shift from trade secret to patent in chemical industry due to ease of reverse engineering.

... not sure what lesson to draw here for software and Alice. #ftchearings
. @ftc empirical work tends to say “impacts vary by industry.” #ftchearings
So should we talk about designing IP by industry?
@MichaelFrakes2 don’t have to be all or nothing. Patents alongside trade secret.

(Also we already have this to some extent. Eg enablement and written description is hugely different in chem and bio vs high tech.) #ftchearings
. @MichaelFrakes2 mentions the constraints imposed by TRIPS on industry-specific rules.

(You’re not wrong, TRIPS/WTO is an issue for technology-specific patent laws.) #ftchearings
. @ftc asks about non-patent mechanisms for inducing innovation and evidence if they work.

(I better hear the words Open Source here...) #ftchearings
Lots on prizes and medals, but dear reader I did not hear anyone mention one of the largest modern sources of innovation (and one that intentionally tries to avoid IP claiming). #ftchearings
The economists have officially melted my brain and the hearings my thumbs so I will sign off here. Thanks for following along! #ftchearings
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