I was greatly amused to read the comments of The Honorable Paul Michel, former Chief Judge of the United States Court of Appeals for the Federal Circuit,  to the  Subcommittee on Courts, Intellectual Property, and the Internet at the House of Representatives.  It appears the good judge is, perhaps, having second thoughts as to the promised benefits of so-called “patent reform” and the hilariously misnamed 2012 “America Invents Act” (aka, “AIA”).  Apparently I, Judge Michel, and perhaps Gene Quinn, are not the only ones to recognize these as fraudulent bills of good, sold to a gullible public and purchased Congress, to protect the established interests of those who, in reality, fear real innovation by others — and a patent system strong enough to protect such innovation.  Let’s take a look:

“The combination of how the Patent and Trademark Office’s Patent Trial and Appeal Board shaped and implemented procedures governing the AIA reviews, unintended consequences of a few design feature in the AIA itself, continuing, aggressive interventions by the Supreme Court, particularly on eligibility, and Rules and practice changes in the lower courts has totally changed perceptions of the current patent system. It is no longer viewed as reliable.”

No kidding.  Current CAFC and Supreme Court case law is opaque and makes a mockery of what the supposedly governing statutes actually say.  It is perhaps more reliable to predict the outcome of a case based on who the parties are, and where the suit was filed, than on the particular facts. (E.g., a fairly good heuristic is that Apple, Google, Amazon, Facebook and Silicon Valley companies in general will always win, plaintiff’s victories from the Eastern District of Texas will be reversed, patents can’t be infringed in Seattle, and the PTAB will find virtually any claim invalid.  You don’t even need to know the facts to make accurate predictions.)

“Our system dropped from its customary first place in the annual Chamber of Commerce global ranking to an embarrassing tenth place, tied with former Soviet Bloc country, Hungary.”

“Patent values have plummeted, by as much as 60% according to several studies by economists, based on public sales and licenses.”

“Start-ups, the source of most new technologies, most economic growth and most net new jobs, are shrinking in number. More now die each year in America than are born, for the first time ever.”

Well, what do you think is going to happen when, as a practical matter, a bright, energetic, creative young person with a great idea has no effective way of protecting that idea from those who, quite literally, know they can simply take it with no real adverse consequence?  Seriously, this is isn’t rocket science.

“Enforcement of valid and infringed patents, always very slow, and very expensive, has become much more so. Inter partes reviews have become less than Congressionally-intended “alternative to expensive court litigation” than the prelude to court action, adding some $500,000 per challenge and typically 2.5 years of delay, as suits are routinely stayed for the duration.”

Since when has the solution to undesired complexity, delay and expense been found in designing and implementing even more complex, time-consuming, expensive and arcane procedures?  Markman hearings, special “Patent Local Rules,”  various forms of post-issuance reviews, etc., however well intentioned, have the very real opposite effect of making patent enforcement almost hopelessly complex rather than swift, efficient, just and inexpensive. Indeed, the greatest and most effective form of “patent reform” might simply be to knock these self-impressed patent litigators and Federal Circuit judges off their pedestals, recognize patent law as simply just another area of law in general, and present the issues to a jury without delay, followed by a review, if appropriate, in the appropriate Circuit Court of Appeals.

“The net impact of these and related changes has convinced most investors that patents are now too unreliable as to validity, and too difficult to enforce, with excessive risk, delay and weak remedies.”

The Judge is absolutely right here.  I do not know why anyone these days would invest in getting patents unless there is cash to burn, or in recognition that misguided investors still see patents as a desirable check-list item when evaluating a company.  Anyone who actually relies on patents to keep competitors at bay (especially well-heeled and/or connected ones) is in for an unpleasant surprise.

However, it is in the following observations that I think Judge Michel makes his most salient points.  Unlike the bulk of us, he has seen these matters close up and, likely, has a better view than most as to the truth of the matter:

“In sum, I must report in candor to the Committee that the health of the American patent system is not good, but has declined sharply in just the past few years.”

“Why? With the best of intentions, the three stewards of the patent system, the Supreme Court, the Congress and the PTO, have worked so hard to root out invalid patents, stem frivolous suits, and curb abusers of the patent system that its efficacy has been diminished or destroyed for the majority of owners who are responsible actors. That seems an absurd and unnecessary price for America to pay. Abusers can be punished and deterred by surgical means and weakening the entire system is surely unnecessary and unwise.”

“How then did we arrive at this worrisome circumstance?”

“Three myths pervaded the policy debates even before and particularly since passage of the AIA:”

“The first myth is that most asserted patents are ‘bad.’ Not so.”

“The second myth is that most suits are frivolous. No so.”

“The third myth is that the courts are unwilling or unable to deal with the limited number of actual abusers of the patent system. Also not so.”

There you have it from a Chief Judge of the Federal Circuit who, better than most, was and is in a position to know, and who saw this stuff first hand.  I have never understood how patents can be “clearly invalid,” how cases can be clearly and objectively “baseless” and “frivolous,” and yet it somehow takes five to ten million dollars in attorneys’ fees to demonstrate these “clear” and “obvious” truths. Are the lawyers collecting these fees incompetent?

All in all, fascinating comments, and I thank Judge Michel for his candor and insight.  What a refreshing change from those who simply parrot “troll” and “patent abuse” when supposedly addressing a matter of importance to the future of our country.