An End of an Era?

The patent-o-sphere has been justifiably consumed with talk of fee-shifting in patent litigation for the past few weeks. 

First, there was a legislative proposal to make at least some losing patent plaintiffs pay for the prevailing defendant’s attorneys, resulting in a mad rush to file patent infringement lawsuits before the proposed effective date of the not yet enacted legislation. The sudden glut of infringement suits raised many eyebrows.

The Supreme Court soon had everyone talking about the current statute instead of proposed amendments to the statute. In particular, the Court addressed the meaning of the section of the Patent Act authorizing courts to award the prevailing party an award of attorneys fees in “exceptional” patent infringement cases. While much discussed by now, the Court’s expansion of fee awards to prevailing defendants probably did not go as far as the current congressional proposals.

All of the talk of litigation fees could tend to feel far away to those of us drafting patent applications. After all, an application that we file today may not issue for years, and even then most likely will never be litigated. 

To the contrary, these developments merit our serious attention. Ultimately, the value of the property we are tasked with obtaining depends, at least in part, upon the ability to enforce those property rights in court. No patent attorney has a crystal ball to know how a technology or a business market will evolve, but we have abundant evidence as to how patent law is evolving; the Supreme Court and Congress merely provided the most recent data points in the larger trend of the evolution of patent standards. 

Patent standards are rising. We cannot always predict the ways those legal standards will evolve between now and when a patent issues or is enforced, but we can draft applications that are thorough, well-reasoned, and clear without undue limitations. That may seem like a facile assertion that patent attorneys should do our jobs better in response to changes in the law, but writing patent applications with clarity and precision has not always been synonymous with application quality. A time existed — and existed not too long ago — when a patent application with creative ambiguity might have far more value than a patent application with clarity and precision.

The recent developments in Congress and the Court merely demonstrate, once again, that the era of expansive patent rights that rewarded creative ambiguity at best and obfuscation at worst has approached its end. While most patent application drafters never aspired to the worst of the old era, our best efforts for today and tomorrow will read and look different than what our best efforts used to be. Continuing to work and write in the ways we grew to know over the past decades will no longer pay the dividends we grew to expect. Now is the time to draft applications for the next era, not the era that is drawing to a close.

Patents applications are getting smaller

Apparently, the death of the jumbo patent application has not been overestimated. PatentlyO breaks down some numbers based upon the number of claims filed, and they confirm that as a percentage of filings, the number of US applications with more than twenty claims have continued to decrease. According to the bar graph, in 2005 something like 32% of US applications were filed with more than twenty claims, but in 2013 only about 23% of US applications were filed with more than twenty claims. PatentlyO attributes the reduction, logically enough, to the increase in fees for claims beyond twenty and the “active restriction practice” of the Patent Office. 

I would note two other factors that may be resulting in more sharply focused patent application filings. 

First, international prosecution will, in general, be more straightforward and economical for more focused applications than for larger applications, so to the degree international rights have grown in importance over the past decade or so, there is a further incentive to file fewer claims in the US.

Second, although the graph does not show a large change for 2013, the move to a first-to-file patent system in the US incentivizes more rapid patent application filings. While not a shocking observation, drafting and adequately supporting more claims can be expected to take longer than drafting and adequately supporting fewer claims.

While large applications with many claims will continue to have their uses and values, the value proposition will likely continue to favor smaller and more focused applications.

Waiting on the Supreme Court

Well, the Supreme Court definitely is taking an interest in patent law. Last week the Court agreed to take two more patent cases. In addition to prior cases involving when successful patent infringement defendants can recover their attorney's fees and and when software can be patented, the Supreme Court now will hear cases involving how clearly a patent's claims must define the covered invention and whether patent claims can be infringed by multiple parties acting together.

Both new cases, as well as the previously accepted cases, present areas of legal uncertainty that could benefit from clarity. Whether the Court provides clarity or confusion will not be known until at least summer, when the decisions are expected, but what are innovators to do in the meantime?

To begin, patent attorneys and our clients should realize that in agreeing to take these patent cases the Court has not (yet) created new legal uncertainty. To varying degrees, the questions under consideration this Court term have been questions in the minds of patent attorneys for years. We should be used to dealing with precisely this type of uncertainty, even if previously the Supreme Court had not shown a spotlight on these particular legal questions. 

Ultimately, we will get answers on some important questions in patent law. The Court may very well answer those questions in ways that some of us dislike, or in ways that create new questions, but but at least we will get some direction. As we have seen recently, the Federal Circuit has struggled to provide clear direction for some of these issues, so hopefully the Supreme Court can at least deliver clear majority opinions.

In the meantime, the only thing that we know now that we did not know a year ago is that the Supreme Court will give us direction within the next six months or so. In our first-to-file patent system, six months will probably be too long to wait to file patent applications for today's inventions. For most of us, our best option will be to carry on, albeit while attempting to provide flexibility in the future and acknowledging the possibility of Court decisions that negatively impacts the work we are doing now.

Essentially, we wait.