EFF: New Places, New Faces in Patents: 2017 in Review

New Places, New Faces in Patents: 2017 in Review

This year was once again active in terms of patent law and policy. Throughout it all, EFF worked to protect end user and innovator rights. We pushed for a rule that would end the Eastern District of Texas’ unwarranted dominance as a forum for patent litigation. We also defended processes at the Patent Office that give it the opportunity to correct mistakes (many, many mistakes) made in issuing patents. And we fought to prevent new patent owner tactics that would increase consumer costs.

New Places

First, because of recent developments both at the Supreme Court and at the U.S. Court of Appeals for the Federal Circuit, this year we finally saw a shift away from the dominance of the Eastern District of Texas as the primary forum for patent litigation. The Supreme Court issued its highly anticipated decision in TC Heartland v. Kraft Foods, finding that patent cases are subject to a special statute when determining where they can be filed. This decision reversed a rule, announced by the Federal Circuit in 1990, that allowed patent owners to file in practically any far-flung corner of the country (enter the Eastern District, stage right). EFF filed an amicus brief urging the Supreme Court to recognize the problems created by the Federal Circuit.

Following close on the heels of TC Heartland was a second, arguably more important decision from the Federal Circuit in In re Cray. While TC Heartland determined what statute controlled patent venue, In re Cray clarified that the statute did not have the broad scope a court in the Eastern District of Texas was trying to give it.

Together, these two decisions are having an impact: Lex Machina reports 22% of patent cases were filed in the Eastern District of Texas this year (down from 44% and 37% in 2015 and 2016, respectively). When looking on a quarterly basis, the effect of these two cases is more pronounced. In the first quarter of 2017 (before TC Heartland and In re Cray were decided), 33% of cases were filed in the Eastern District. So far in the fourth quarter, only 12% of cases were filed there.

Where patent issues will be heard is also at issue in another Supreme Court case: Oil States v. Greene’s Energy. There, the Supreme Court has been asked whether Congress could, under the Constitution, designate the Patent Office as a forum to decide certain issues related to patent validity. EFF has supported the Patent Office procedures, which allow technical judges to decide on technical issues, and create a streamlined procedure that avoids many of the pitfalls of litigation. Many patent owners, on the other hand, do not like them as they see the Patent Office as improperly invalidating patents (a claim which is dubious at best, in our opinion). A decision that rejects the Patent Office procedures would be a significant setback in the fight against stupid patents that never should have been awarded. The Supreme Court heard oral argument in late November, and a decision is expected in the new year.

New Faces

We also saw some new faces in patents. Michelle Lee, the Director of the Patent Office, stepped down and Andrei Iancu, a partner at the law firm of Irell & Manella, was nominated to fill the position. (As of the time of writing this post, he was yet to be confirmed.) We do not know what the presumptive new director will do in the future, but EFF will continue to represent the public interest at the Patent Office when we can.

New patent owners also appeared. Specifically, significant controversy arose after Allergan, a large billion-dollar pharmaceutical company, paid a Native American tribe to take ownership of its patents. The deal saw the Tribe assert sovereign immunity in order to try to prevent the Patent Office from reviewing the patents to see whether they were properly issued. The move generated significant outcry, proposed legislation, and Congressional hearings. Whether the move will ultimately be successful is still to be determined.

New Year

Looking forward, we expect to see a continued push for stronger patent rights from those with vested interests in making it difficult to challenge bad patents. EFF will continue to fight for a more balanced policy that appropriately recognizes the public’s interests. 

This article is part of our Year In Review series. Read other articles about the fight for digital rights in 2017.

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