As 2017 begins, here are some of the key issues to watch out for in the patent world this year:
Will design patent law be further remade?
Design patents made the news in 2016 as the Supreme Court issued (0) a landmark ruling in a long-simmering dispute between Apple and Samsung, and further developments are expected.
Unlike technical patents, design patents — which cover ornamental or decorative features of otherwise useful objects — are governed by a statute that, at least on its face, appears to award the patent owner all the profits earned by an entity that sells an infringing article of manufacture.
In Samsung’s case, Apple claimed hundreds of millions of dollars in damages for the Korean telecom giant’s infringement of several of its patents on icon and home screen design. Apple argued, and the lower courts agreed, that the relevant articles of manufacture were Samsung’s phones and tablets.
But the Supreme Court held that an article of manufacture could also be a component of a device, even if that component isn’t generally available for sale. In Apple’s case, the court erased the damages award and instructed the lower courts to determine the value of the infringing icons and screen design.
So in 2017, we will learn what the new standard is for determining design patent damages and evaluating components of larger devices.
Will legislative patent reform return?
After a quiet 2016 — an election year when little legislation of significance emerged from Washington — the incoming Trump administration and the 115th Congress are likely to revive currently stalled legislative efforts to weed out abuse from the patent system.
Whether Congress chooses to focus its attention on comprehensive packages such as the Innovation Act and the PATENT Act or on more piecemeal solutions such as Sen. Jeff Flake’s (R-AZ) VENUE Act or Sen. Chris Coons’ (D-DE) STRONG Patents Act remains to be seen.
There are conflicting indicators (1) emerging from the Trump transition team about whether and how patent reform will figure into the new administration’s agenda, creating a lot of uncertainty heading into the new year.
How will Patent Office trials continue to develop?
As noted in this space in August (2), the balance has shifted somewhat in so-called Patent Office trials — administrative proceedings established by the 2011 America Invents Act helps challengers more easily, cheaply, and quickly invalidate patents.
Over the past year, courts have been more willing than before to overturn decisions by Patent Office administrative judges, although they’ve still affirmed roughly four out of every five rulings.
One industry group tracking these developments has also discerned (3) a noticeable drop in the filings of such proceedings, observing that inter partes reviews (IPRs) have “declined steadily since 2015’s second quarter” and that covered business method proceedings have dropped, too. (The same group also found that patent infringement filings in district courts have also abated; the first quarter of 2016 saw the fewest such filings since late 2011.)
The waxing and waning of these numbers is of more than mere academic interest; it will also inform the legislative debate, as fewer filings ease the pressure on Congress to significantly reform the patent statute.
Will the hedge-fund assault on biotech patents continue?
As I reported here (4) in November, hedge fund manager Kyle Bass scored his first victory in an ongoing battle with branded pharmaceutical companies.
Bass, who heads the self-styled Coalition for Affordable Drugs, filed numerous IPRs against pharma giants Jazz, Acorda, Shire, Celgene, and Biogen shortly before unloading their stocks for a profit. The Patent Office rebuffed his efforts for all of 2015 and much of 2016, and he even faced a motion for sanctions.
But, finally, a few months ago, Bass broke the logjam and won invalidation of certain Shire and Celgene patents, and more are on the menu for 2017.
The biotech industry has fought back against this strategy, including by pushing for legislation that would impede hedge funds from challenging their patents or that would exempt life sciences patents from IPR altogether. Expect that battle, too, to play out in the coming year.
For a complete, in-person discussion of all of the above issues, please join us at AEI on January 17 (5) to learn more from a diverse panel of distinguished experts. The panelists will include people from a wide range of industries with a variety of perspectives on these issues.