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The Fate of Intellectual Property Under Trump

Through protecting his brand and rights of publicity, Trump has accumulated more experience with IP than any other president. He owns more than 100 trademarks and has not shied from enforcing them. He’s also expressed concern about theft of trade secrets by China, referencing a study by the ITC that claims putting a stop to it would create two million jobs in the US. 1

Yet, Trump has said very little about IP, so after reporting the few facts known we can offer only informed speculation and discussion of new and preexisting reform ideas that face better prospects under Trump than they would’ve under Clinton.

The Trump Team Is Pro-IP Overall

IP runs in Trump’s family. His uncle, John G. Trump, was an MIT professor, physicist, and inventor.2 Trump’s eldest son, Donald Trump Jr., has a lot of experience with patent litigation. He was involved in a large number of suits filed by MacroSolve over a single software patent. He also wrote an article arguing that some NPEs (e.g., MacroSolve) are legitimate innovators who deserve their day in court.3 In addition, Trump’s daughter, Ivanka, has her own clothing line and is now witnessing a rush on her trademarks by squatters in China and other foreign countries.

The most pro-IP people on Trump’s team appear to be domestic advisor Ken Blackwell and chief strategist Stephen Bannon. In 2014, Blackwell authored The Conservative Case Against Patent Reform.4 As editor of Breitbart News, Bannon published articles arguing for a stronger patent system, including one by James Edwards declaring inter partes review a “killing field for patents.”5

Vice President Mike Pence also appears to be fairly pro-patent. As Governor of Indiana, he supported the effort by the state and its academic institutions to license out its patents. As a Congressman, he served on the House Judiciary Subcommittee on Courts, the Internet, and Intellectual Property, where he argued against diversion of PTO fee revenue and expressed reservations about patent reform though he ultimately voted for the America Invents Act.

The IP views of Trump’s new Secretary of Commerce, billionaire investor Wilbur Ross, are largely unknown or unformed. He has, however, expressed a need for zero tolerance for theft of intellectual property.6

Trump’s tech advisor, Peter Thiel, is the co-founder of PayPal and a well-known venture capitalist who’s invested billions in biotech and other high-tech industries.7 When it comes to NPEs, however, he may not be a big supporter of patent rights. In an interview, he referred to a particular NPE as a “parasitic tax on the tech industry.”8

Although not part of Trump’s team per se, it’s worth mentioning here that Issa (R-Calif.) is the IP point man in Congress. As chair of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, he has the most direct influence on PTO operations and all reform bills must meet his approval. Issa holds of dozens of patents on vehicle anti-theft devices and is generally pro-patent. However, he favors legislation to curb patent litigation abuse,9 which does not bode well for forum shoppers.

New PTO Director? Rader Throws His Hat Into the Ring

Reports in January indicated that Trump was keeping Michelle K. Lee on as Director, but now it appears that is a temporary measure. In February, Issa indicated that Lee may be moved to another role in the government, such as one involving trade or technology policy.10

In addition, the position is listed as “vacant” on the leadership page of the Commerce website.11 And the PTO, citing “unusual circumstances, requested an extension of time to answer a FOIA inquiry into whether Lee is and will remain Director. 12.

Meanwhile, a few potential candidates for the position have tossed their hats into the ring.13 The candidate with the most name recognition is Randall Rader, the gregarious former chief judge of the Federal Circuit. Rader is a longtime champion of patent rights and a critic of the high patent kill rates in inter partes review. If appointed, said Rader, he’ll work to “make patents great again.”14

The other well-known candidate is Phil Johnson who retired last month as chief of IP at the healthcare giant Johnson & Johnson. Like Rader, Johnson is known as a strong supporter of patent rights. 15 He was reported to be Obama’s initial pick for Director in 2014 but lost out after the tech industry’s campaign for Lee.16

Supposing we end up with a Director more pro-patent than Lee, what could that Director do? One thing is to exercise rule-making authority to tweak PTO operation to, among other things, make it friendlier to patentees facing challenges in post-grant procedures such as inter partes review (IPR). For example, the Director could alter the Board’s practice of construing claims broadly during IPR. This and other IPR reforms are discussed further below.

The Director could also influence case law through PTO amicus briefs, which are likely to become more frequent and strategic if Rader or Johnson is appointed. In addition, the Director could influence legislation through PTO interactions with Congress. The Director could also enhance cooperation with foreign patent offices to share examination results, which could help shorten application pendency and keep down PTO operating costs. This list is non-exhaustive.

The End of Fee Diversion May Be Nigh

The Commerce Department has long diverted revenue generated by PTO fees to other concerns under the Department’s purview. Fee diversion was reduced but not eliminated by the America Invents Act. In 2013, for example, $120 million was diverted, which prevented the PTO from hiring additional examiners, updating its IT systems, and fully funding its satellite offices. 17

But there is reason to believe fee diversion may soon be sent to its final resting place. As mentioned above, when Pence served in Congress he argued against fee diversion. Never before has the issue been a preexisting concern of someone so high up in an administration. Furthermore, the case against fee diversion is easy to make as it operates in effect as a tax on inventors, which seems to be one of the most perverse taxes possible. Also, consensus should be readily achievable as the issue trips over no fault lines that divide the parties.

Reform of Inter Partes Review

The high kill rates in inter parties review have inspired calls for reform. Elimination of inter partes review (IPR) in its entirety is a long shot, but Senate bill S. 632, the STRONG Patents Act, proposes four moderate reforms that strike us as viable. Even if the bill goes nowhere, they could be implemented by the new Director.

One reform in S. 632 is to change the standard the Board uses when construing claims in IPR. Currently, the Board gives claims their broadest reasonable interpretation (BRI), which results in claims being construed more broadly in IPR than they are in federal court. This practice was recently approved in Cuozzo 18 where the Supreme Court deferred to the PTO’s long-standing practice of applying the same standard to patents during post-grant procedures that it applies to applications during examination.

Use of BRI during post-grant procedures makes less sense now than it did in the past. In the past, a stronger case could be made that the practice was efficient. Specifically, when post-grant procedures had less effect on the patent system as a whole and when it accounted for a smaller fraction of the Board’s total workload, it was more cost-justified to apply the familiar BRI standard instead of developing the procedures and devoting the effort to make the tougher judgment calls involved in applying a more nuanced standard. But post-grant procedures have gone from being a backwater to being a prime arbiter of the fate of the most important patents – those that are litigated.

Furthermore, in substance IPR is more akin to a validity attack in federal court than it is to examination. As in federal court, inter partes review is adversarial, and the patent in question has already survived an examiner’s scrutiny. Nowadays, when a patentee files suit, the defendant (or a party who expects to be a defendant) very often petitions for inter partes review and the co-pending suit is usually stayed. In these cases, the patents end up being subject to a broad construction for validity purposes (in IPR) but to a narrower construction for infringement purposes (in the copending suit).

Should the Board and the parties in an IPR devote as much effort to claim construction courts and parties devote to it in litigation?  It can be argued that devoting so much effort to claim construction would defeat the purpose of IPR – to provide a quick and efficient means to test the validity of patents. There should, however, be a middle ground whereby the Board construes claims under a standard closer to one used by courts but through a quicker and dirtier process that entails less input from and advocacy by the parties.

The second reform is to heighten the petitioner’s burden to prove invalidity from a preponderance of the evidence to the clear and convincing evidence standard used in federal court. If a robust assumption of validity is warranted in federal court, either because litigation is adversarial or because the patent in question passed an examiner’s scrutiny, why wouldn’t an equally robust assumption be warranted in IPR? In any event, we should not lose site of the big picture: because so many litigated patents are challenged in IPR, it has in effect largely eliminated the assumption long enjoyed by patents that they are valid absent clear and convincing evidence otherwise.

The third reform is to make it easier to amend patents in IPR. Currently, the Board allows amendments in only a tiny number of IPRs. That the Board generally forbids amendment seems a bit unfair given that the PTO previously granted the patent after a lengthy and costly examination in which the PTO failed to find or to assert the prior art asserted in the IPR. Forbidding amendment in IPR also seems backwards as it entails treating patents less favorably than applications.

The fourth reform is to require that the Board panels that reaches final decision differ from the one that decided to institute the IPR. Given the high kill rate for instituted claims that reach final decision, once a panel decides to institute the game is largely over. Insofar as different panels are apt to reach different conclusions on validity, then employing different panels for institution and final decision helps ensure that a patent’s fate turns on something besides the luck of the panel draw.

Should Very Obscure References Qualify as Effective Prior Art?

Patent law has long maintained the fiction that the person of ordinary skill in the art is omniscient in the sense that he is aware of all relevant prior art in existence anywhere in the world at the time the application was filed. Accordingly, in litigation and inter partes review, novelty and non-obviousness are assessed in light of the most technologically relevant prior art that a challenger can dig up, regardless of whether anyone who wanted to solve the problem solved by the patentee would’ve actually consulted that art.

For example, in In re Hall the Federal Circuit held that a copy of a doctoral thesis in a single library in Germany counted as a publication available against the patent.19 Similarly, in Titanium Metals v. Banner, the patentee claimed a titanium alloy having “good corrosion resistance in hot brine environments.” The Federal Circuit held that the claim was anticipated by a 1970 article in the journal Russian Metallurgy, which contained a graph with a data point that could, on close inspection, be recognized as representing a species within the claimed genus. It did not matter to the court that the article was concealed behind the Iron curtain or that its authors were unaware of the corrosion resistance.20

It has long been assumed that the fiction of omniscience is justified, but nowhere are the reasons for it elaborated. It may be time to determine whether the fiction is really warranted or whether it can be circumscribed.21 The problem with it is that it ignores the basic underlying rationale for patents – to enable the public to reap the benefits of inventions that it would not reap but for the promise of patent protection. The reality is that if a reference is highly obscure – in the sense that it’s very unlikely that anyone who was aiming to solve the same technological problem would’ve consulted the reference – then the reference in no way supplies the public with the benefit that the patentee supplied.

The notion that obscure prior art shouldn’t deep-six a patent is not as unprecedented as it may seem. Consider 102(g), under which prior invention doesn’t count as prior art if the prior invention was abandoned or suppressed. In other words, prior invention cannot defeat a patent under 102(g) if the prior invention did not inure to the public’s benefit.

The doctrine of inherency is to similar effect. Under the doctrine, prior art can invalidate a patent even if it does not explicitly teach the invention. The law of inherency has long been considered a muddle but there is one (and only one) way to make sense of the case outcomes on inherency: ask whether the prior art allowed the public to reap the benefit that the patented invention supplies.22 The case law shows that, if the reference allowed the public to reap the benefit, the prior art invalidates the patent. Otherwise the patent remains valid and the anticipation is characterized as merely accidental.

It may be time to extend the underlying principle of public benefit to encompass references so obscure that no one seeking what the inventors sought would’ve consulted them. This reform could be implemented by the courts, but legislation may be necessary to see it happen within our lifetime.  This reform will be discussed in more detail in an upcoming article on PatentAttorney.com.

Trump and the Political Will to Fight Digital Piracy

America’s comparative advantage lies not in competing on wages but in creativity and innovation. We supply the brunt of the world’s software, popular music, TV, movies, and videogames.23 We suspect the new Administration would be open to more aggressive anti-piracy measures. Trump has articulated a protectionist agenda and has promised to alter arrangements in which the US gets the short end of the stick. Anti-piracy measures fit this agenda because piracy comes largely at the expense of American creators whereas most mass piracy operations and the majority of illegal downloaders are in foreign countries.

Although the media doesn’t cover the issue like it did when Napster debuted in the late 1990s, digital piracy is not just alive and well but increasing.24 Today, almost any song, TV show or movie can be readily downloaded for free or very close to it – at essentially zero risk of being charged with copyright infringement. Absent new measures, piracy is likely to increase as more and more of the world gets the bandwidth to readily download and share movies and other large files.

In most cases, to download a copyrighted work all one has to do is type the name of the work and the word “torrent” into Google and up will come a list of sites from which the work can be downloaded at no charge or after paying a small price for unlimited access to the site. The same goes for many if not most videogames and software programs. Those not available on torrent sites are sometimes available on darknet sites, which can be accessed through a particular browser that makes it nearly impossible for anyone to identify the user’s identity or location.

The fact that most software and works of entertainment are readily available for free on the net is widely known but falls a hair short of being common knowledge. Perhaps the main reason it’s not quite common knowledge is that the prices the creative industries charge for legitimate access – e.g., to rent movies on Amazon.com or buy songs on iTunes – are low enough that the majority25 of people in first world countries never bother to spend the extra minutes it takes to download works for free.

But here’s the rub: the prices for legitimate access are not themselves legitimate; they’re artificially low. That is, they are as low as they are because, if they were higher, more people would choose to download illegally. The price an industry can charge depends on how consumers would react if faced with a higher price. Today, the option to download illegally tacitly determines the prices the market will bear – from Amazon.com’s $3.99 per movie, to Netflix’s $8-$10 per month for unlimiting viewing, to iTunes’ $1 or so per song, to Spotify’s $0-$10 per month for unlimited listening.

In the mid 1990s, a typical music consumer would pay about $20 for a CD and end up liking and listening to, let’s say, four songs on it, which implies an average value to the consumer of at least $5 per song consumed, or $8 per song in 2017 dollars. How do you think consumers today would respond if all legitimate sellers of music started charging $8 per song?

The larger point here is that the harm to creative industries from piracy comes not only from the illegal downloading that actually occurs but also from prices having to be kept so low that the majority of people in first-world countries will pay them rather than bother to download illegally.

Piracy also distorts the creative process by biasing it toward activity that can’t be pirated (such as live performances) and to the creation of works pirated at lower levels. In Nashville, the conventional wisdom is that musicians have the best chance of making a living in the industry if they pursue country or Christian music. Hence some Nashville musicians package themselves for those genres even though they don’t prefer or self-identify with them. We suspect these two genres hold out better career prospects because fewer of their fans download illegally. Statistically speaking, their fans are more likely to live in rural areas and less likely to have fast internet service or to be tech savvy. In addition, one would expect most Christian music fans to be disinclined to stiff Christian artists through illegal downloading.

Studies reinforce the common sense notion that piracy cuts into industry revenue. In the graph below, the red line shows album sales before and after Napster’s debut in 1999. 26 Note the overall upward trend until Napster’s debut. Note also the blue line, which suggests the upward trend would have continued but for Napster and subsequent piracy operations.

Although the creative industries still go after mass pirates and the US-based internet service providers who abet them, the industries seem resigned when it comes to the larger cultural and political fight against piracy. But if there ever was a time to get some fire in the belly, now seems like the time. The Trump Administration is likely to be more amenable to the fight than any previous administration previous and any in the foreseeable future.

Rampant piracy is not inevitable. Curtailing it is simply a matter of political will. Imagine if we fought piracy with even half of the intensity, resources and technology that we devote to the fight against terrorism. Imagine if the government started aggressively hacking piracy sites, tracking pirates, imposing sanctions on countries that harbor pirates, and reforming copyright law to impose liability on advertisers who fund piracy sites and on pirates who currently avoid liability by distributing files through a peer-to-peer system that enables pirates to coordinate file exchanges between the computers of site users such that the files are neither stored on nor pass through pirate servers.

Today, those who run mass piracy operations are rarely prosecuted or convicted and when they are the penalty is lax compared to the penalty for a less harmful but more traditional crime such as robbing a store. Suppose a thief busts out a store window to swipe a few necklaces in the storefront display and is later apprehended and prosecuted. Although the harm from this crime is relatively modest – e.g., on the order of a few thousand dollars to replace the window and necklaces – the thief could serve years for the crime.

Compare the robbery example to the harm caused by The Pirate Bay, the largest piracy site, with millions of files and users and in near continuous operation since 2003 until today. Over the years, this site must’ve caused tens of millions of dollars in lost sales, perhaps hundreds of millions. Yet, in 2009 its three founders were convicted and the one who served the most time served only seven months. 27 Granted, they were convicted in Sweden, but had they been convicted here the penalties still would’ve been extremely lenient relative to the harm caused.

Why are the penalties for piracy so lenient compared to penalties for much less harmful traditional crimes? Probably because the harm from piracy, unlike the harm from robbing a store, is indirect, diffuse, cumulative, statistical in nature, and invisible insofar as it results in works never coming into existence – in a word, abstract. But abstractness is not a good reason to go easy on pirates. On the contrary, it’s a good reason to assume that we are psychologically inclined to go too easy on them and that we should therefore revise the penalty in accord with reason and the logic of deterrence.

In addition to increasing the penalty for mass piracy, it’s also important – much more important than most people think – to go after some small-timers, i.e., users who participate in piracy at the consumer level by downloading pirated content for personal use. Going after small-timers is important for three reasons.

First, if we go after enough small-timers to make some headlines, it will probably generate a lot of deterrence bang for the deterrence buck. Cognitive psychologists have long known that people respond to low probability risks in a binary fashion. If a low probability risk is salient enough to appear on our radar, we treat it as if it’s more probable than it is. Conversely, if a low probability risk isn’t salient enough to appear on our radar, we do the opposite: we ignore the risk entirely and in effect treat its probability as zero.

This quirk of human psychology creates an opportunity to deter a substantial amount of illegal downloading with a relatively small investment in prosecutions or lawsuits. If we go after enough small-timers to make headlines, we can thereby create a blip on the radar of the other 100 million or so Americans who consume pirated content.28 Today, this quirk may be having the opposite effect as the legal risk to small-timers approximates zero or otherwise falls short of being salient enough to appear on their radar. Indeed, according to a recent survey, 31% of Americans think it’s legal to download pirated content!29

The second reason it’s important to pursue some small-timers is that it would beef up the cultural norm against piracy. Today the norm is frail and far from universally shared. Enforced laws affect norms. When an activity is banned and the ban is enforced, more people come to view the activity as something good citizens shouldn’t mess with.

The third reason to go after some small-timers is that it has become harder to go after the preferred target, those who mastermind mass piracy operations. Today most pirates are located outside the US and/or use peer-to-peer. Absent new counter-measures, we are left with no choice but to either go after some small-timers or sit back and let America derive less and less from its greatest comparative advantage.

The Doctrine of Equivalents Isn’t Very Important

Of every 100 findings of direct infringement by U.S. courts, only about 10 are findings of direct infringement under the doctrine of equivalents.1

This number sheds light on the importance of DOE claim scope relative to literal claim scope. Some applicants may spend a lot of time and energy on the DOE and the nuances of the Festo case and its progeny, or go to lengths to avoid amending claims in ways that could curb DOE protection. When that translates into giving short shrift to the literal language of claims, it’s the tail wagging the dog. Applicants should bear in mind that when a patent is found infringed, nine out of ten times it’s found literally infringed.

 

IPR Statistics Revisited: Yep, It’s A Patent Killing Field

Some view Inter Partes Review (IPR) as a patent killing field. Yet, the statistics published by the PTO seem to suggest that the patent kill rate in IPR is modest, and other commentators suggest that it’s roughly comparable to the kill rate in district court. The truth is closer to the killing field. Whether this will change under Trump remains to be seen, but there are reasons to believe it might.

There are four reasons why the killing field view is more accurate. First, the PTO’s reported numbers are somewhat misleading. When reporting IPR numbers, the PTO reports on petitions “completed to date.” This little fact, as others have noticed, makes the kill rate seem lower than it is.

Second, not only are the kill rates under 102 and 103 higher in IPR than in district court, but also those who suggest the kill rates are roughly comparable compare apples to oranges. In IPR, only printed publications can be used to attack patents. In district court, challengers can also attack with the other categories of prior art: prior public use or sale, public knowledge, derivation or incorrect inventorship, and invention by another. In district court, these other categories account for about 40% of kills under 102.

Third, although the institution rate has dropped since the early days of IPR, some of the drop is attributable not to a decrease in the Board’s willingness to institute any given claim but to an increase in the willingness of patentees to settle IPRs before the institution decision.

The fourth reason that the killing field view is more accurate concerns the rate at which parallel litigation is stayed, which does not speak to the kill rate but does speak to the overall power that IPR confers on patent challengers. Some commentators report a grant rate for stays that is misleadingly low because it’s based on all motions to stay filed on the ground of a co-pending IPR. It’s somewhat common for an accused infringer to file one motion before institution and one after and have the first fail and the second succeed. When calculated per motion filed, the grant rate is only around 50% to 60%. But when calculated per case, which is more meaningful, the grant rate is closer to 82%.

PTO Numbers Are Misleading

Below is a diagram from the PTO report on AIA Trial Statistics, current through 2016. It shows the disposition of IPR petitions completed to date. Take a quick look at the light blue hexagon at the top and the red and yellow hexagons at the bottom.

The light blue hexagon shows the total number of petitions filed from the inception of IPR through 2016. The red hexagon shows the number of trials in which all instituted claims were held unpatentable and also states it as percentage of total petitions filed. The yellow hexagon shows the number of trials in which some instituted claims were held unpatentable and likewise states it as a percentage of total petitions filed.

Add the 23% in the red hexagon to the 5% in the yellow hexagon and we get 28% as the percentage of petitions in which the Board invalidated at least one claim. In addition, as shown in two of the gray hexagons, patentees requested adverse judgment after institution in 191 IPRs and before institution in 26 IPRs, resulting in another 5% of kills, for a total kill rate of 33% (28% + 5%).

The real kill rate, however, exceeds 33%. The reason is that after a petition is filed it takes about 18 months to get to trial and decision. Accordingly, the trial numbers in the red and yellow hexagons relate to petitions filed 18 or more months prior to the last day of 2016. Yet, in calculating the percentages in the red and yellow hexagons, the PTO divided by the number of all petitions filed as of the last day of 2016, instead of by the number of petitions filed as of 18 or more months prior to the last day of 2016.1 Similarly, the requests for adverse judgment in the gray hexagons relate to petitions filed at various times prior to the end of 2016.

One study that accounts for the delay until final decision is the Report on Patent Trial and Appeal Board Contested Proceedings (2016), prepared by Fitzpatrick, Cella, Harper & Scinto. This study looked at a set of IPRs consisting of those denied institution for substantive reasons through 2014 plus those that reached final written decision or request for adverse judgment through 2015. Among this set of IPRs, 60% of claims challenged in petitions were killed either directly by the Board or by way of request for adverse judgment by the patentee.

The Fitzpatrick study states the kill rate as a percentage of claims rather than as a percentage of IPR petitions. Arguably, the latter is more meaningful because the broader and more valuable claims in a challenged patent are more likely to be killed. For example, suppose all 20 claims in a patent are challenged. The two broadest claims cover a swath of infringers, while the remaining 18 claims cover few or no infringers. The two broadest claims are killed; the other 18 survive. In substance, this largely or entirely amounts to a loss for the patentee, but if we look only at the percentage of claims killed, it appears to be a 90% victory for the patentee.

On the other hand, the numbers in the red and yellow hexagons above tell us that, when the Board holds claims unpatentable, it holds all of the instituted claims unpatentable 82% of the time (23% / 28%). Similarly, a study by Brian Love and Shawn Ambwani found, that among IPRs reaching final decision, 77% of all instituted claims are either held unpatentable or disclaimed.2 If the norm when killing instituted claims is to kill them all, then stating the kill rate as a percentage of claims falls only a bit short of stating it as a percentage of petitions.

In any event, other data in the PTO report on AIA Trial Statistics suggests that the kill rate for petitions is about four percentage points higher than the kill rate for claims. If we adjust by adding 4% to the 60% from the Fitzpatrick study, we get an estimated kill rate per petition of about 64%. That is, in about 64% of petitions, one or more of the claims will not survive.

Kill Rates in IPR Greatly Kill Rates in District Court

The Fitzpatrick study finds that, of challenged claims that reach a decision on the merits, 49.6% are invalidated under 103 and 41.1% under 102. (Note that some claims are invalidated under both.) The study notes further that, in district court cases in which validity is adjudicated, 27.8% of claims are invalidated under 103 and 31.1% under 102. (Again, some claims are invalidated under both.) According to these numbers, the potency of 103 is much greater in IPR than in district court, while the potency of 102 is modestly greater.

In IPR, however, the only category of prior art available is printed publications. In district court, available prior art also includes prior public use or sale under 102(b), public knowledge under 102(a), derivation or incorrect inventorship under 102(f), and (for pre-AIA patents) invention by another under 102(g).

It is remarkable that, although printed publications are the only type of art available in IPR, the kill rate under 102 is nonetheless about a third higher than in district court. In district court, printed publications account for about 60% of invalidations under 102; the other art categories account for the remaining 40%.3

If we take 60% of the 31.1% kill rate under 102 in district court, we get a kill rate under 102 printed publications in district court of only 18.7%. Now, we can compare apples to apples and see that the 18.7% kill rate for printed publications in district court is dwarfed by the 41.1% kill rate for printed publications in IPR. (Note that in IPR attack under 103 is likewise limited to printed publications, but this limitation is far less significant for 103 because the vast majority of 103 attacks have always been based on printed publications.)

The Drop in the Institution Rate Is Due in Part to Rise in Settlement

A patentee may request adverse judgment or settle by dismissing a co-pending infringement suit against the petitioner or by entering into a covenant not to sue. These measures occur in the shadow of what the patentee believes the Board would likely hold were it to rule on the challenged claims. When IPR first started, its institution and kill rates were very high and IPR quickly developed a reputation as a killing field.4

In what appears to be a reaction, patentees became more willing to settle. In 2014 there were more than five times as many settlements before institution as there were in 2013. In 2015 there were, compared to 2014, more than two and half times as many settlements before institution and 82% more after.5 Accordingly, some of the decrease in the institution rate is due not to a decrease in the Board’s propensity to institute any given claim but to an increase in the settlement rate.

The institution rate dropped in part because some of the IPRs the Board would have instituted settled before they could be instituted. According to the PTO’s AIA Trial Statistics, among IPRs that reached the institution decision, the Board instituted 86.5% of challenged claims in FY2013, 74.3% in FY2014, and 65.3% in FY2015. We can estimate the upper limit of the extent to which pre-institution settlement accounts for the decreases in institution across those years by (1) seeing what the institution rates would have been had all of the IPRs that settled pre-institution instead been instituted and by (2) comparing the changes in the counterfactual institution rates from year to year to the changes in the reported institution rates from year to year.

The counterfactual institution rates come out to 87.8% in FY2013, 77.5% in FY2014, and 71.6% in FY2015. When we compare these to the reported rates, it appears that pre-institution settlement accounts for only as much as one-sixth of the decrease in institution from FY2013 to FY2014. Pre-institution settlement, however, accounts for as much as two-thirds of the decrease in institution from FY2014 to FY2015. That is, the difference between the counterfactual rates for FY2014 and FY2015 is only one third as large as the difference between the reported rates for FY2014 and FY2015.

Patentees may settle to preserve the validity of the claims challenged in the IPR. In addition, when the IPR challenges fewer than all of the claims in the patent, the patentee may settle to minimize the effect on the unchallenged claims. The patentee may also settle to minimize the effect on related patents.

By settling before the patentee’s preliminary response, which comes due about three months before the institution decision, the patentee can avoid taking a position on the prior art or on claim construction. By settling before the institution decision, the patentee can avoid a decision by the Board to institute that suggests in and of itself, or that includes language that suggests, that the claims are invalid. The patentee can also avoid claim construction by the Board that could conflict with the construction the patentee may want to advance in a future infringement suit.

To be sure, however, settlement in view of the threat posed by IPR amounts to some degree of loss for the patentee. Although settling officially preserves the validity of the patent, the fact that the patentee chose to settle puts other infringers and licensees on notice that the patent is vulnerable. Furthermore, the IPR file, a public record, sets forth the prior art to attack it with. And of course when a patentee settles an IPR by dismissing a co-pending suit against the petitioner, the patentee foregoes some or all of what it would have gained had it maintained the suit.

Co-Pending Suits Are Usually Stayed

Some commentators report a grant rate for stays that is based on all stay motions filed before and after institution of a co-pending IPR. When based on all filed stay motions, the grant rate appears to be around 60% or so. Motions filed after institution, however, are more likely to succeed. When the grant rate is based on stay granted per case, which is more meaningful, the grant rate is higher.

According to Love and Ambwani, in 80% of instituted IPRs the challenged patent was being asserted in litigation between the patentee and the petitioner. Among the co-pending suits in which a motion(s) to stay was filed and ruled on, stay was granted 82% of the time. (About 10% of the motions were never ruled on because either the case first settled or it was stayed for some reason other than the IPR.)

Note, however, that there was variation across the district courts. Love and Ambwani found that the Eastern District of Texas granted stay in view of IPR in only 56% of cases. Another source reports that the E.D.Tex. grants stay in view of IPR in only 50% of cases.6

 

In the 13 years that inter partes reexamination was available, only 1,919 were ever filed. In contrast, in the four and a half years that IPR has been available, over 5,600 have been filed. The popularity of IPR with patent challengers is no surprise given the statistics above.

Can we expect changes under the Trump administration that tilt the scales back to patentees? After all, it can be argued that investment in technology may be diverted to countries more likely to uphold patents. One could point out, for example, that China recently embraced software patents and that in 2016 the Chinese patent office received nearly twice as many patent applications as the USPTO.7

Although Trump’s views on patents are unknown as of yet, a new report from Shearman & Sterling suggests that experiences with his own IP (at least in the context of branding) and the views of those who have his ear, many of whom are staunch supporters of patents, would tend to make him pro-patent.8 There is, however, no reason to believe that patents are a priority for Trump at this point in time.

AIPLA Survey of Costs of Patent Litigation and Inter Partes Review

Every other year the American Intellectual Property Law Association conducts an economic survey, which provides the best average estimates of the costs of patent infringement litigation in federal court, among other things. Here we summarize some portions of the 2015 Report of the Economic Survey, the most recent available. For the first time, the AIPLA Report also includes the costs for Inter Partes Reviews, which are set forth below after the table.

The Report is based on responses from 1,366 individuals who had first-hand knowledge of the costs either as a seller of legal services or as a buyer. About 18% of the respondents were corporate IP department attorneys and IP department heads. The rest were private attorneys.

For litigation, the Report shows the costs for four different amounts in controversy/at risk. It also shows the costs for two stages, namely, through the end of discovery and through completion of the litigation (e.g., through trial and appeal if there was one). The costs are comprehensive and include those of outside and local counsel, associates, paralegal services, travel and living expenses, fees and costs for court reporters, copies, couriers, exhibit preparation, analytical testing, expert witnesses, translators, surveys, jury advisors, and similar expenses.

It is worth bearing in mind that, in general, the costs reported below for litigation and for Inter Partes Review will be somewhat lower for small IP firms. As the Report points out, the median hourly billing rates for IP attorneys at large firms (101 attorneys or more) and mid-sized firms (31 attorneys or more) were $437 and $400, respectively. The median rates for firms of smaller sizes ranged from $300 to $350.

 

Median Costs of Patent Litigation

 <$1M at Risk$1M-$10M at Risk$10M-$25M at Risk>$25M at Risk
Through discovery$400K$950K$1.9M$3M
Through trial, appeal$600K$2M$3.1M$5M

 

The median costs for Inter Partes Review were dramatically lower:

  • Through filing petition                          $80K
  • Through end of motion practice        $200K
  • Through PTAB hearing                        $275K
  • Through appeal                                     $350K

 

The AIPLA Report includes additional information about costs not presented here. For example, the Report includes the costs of:

  • Patent litigation in major metropolitan areas, including the DC area
  • Litigation to defend against patent suits brought by non-practicing entities (NPEs)
  • ANDA/Hatch-Waxman patent litigation
  • Patent suits before the International Trade Commission under Section 337
  • Copyright infringement litigation
  • Trade secret litigation
  • Trademark infringement litigation
  • Trademark opposition and cancellation proceedings

The Report further includes typical charges for various legal services for patents, trademarks and copyrights. For patents, it includes, among other things, the charges for opinions of validity/invalidity, opinions of infringement/noninfringement, patentability searches, drafting, filing and prosecution of applications of various types and technologies, appeals to the Board, and ex parte re-exams.

Useful Patent Statistics

The arts of prosecuting, litigating, monetizing and teaching patents can progress only so far without benefit of empirical, quantitative data. To that end, we’re gathering up the most useful patent statistics available today. Most of them are little known, because they come from a wide variety of scattered sources where they are typically presented in raw form or in some other user unfriendly manner.

We’ll be expanding and updating our collection of patent statistics on a weekly basis. The section below, Featured Statistics, is a preview of things to come. As the collection grows, we will organize the statistics by topic and subtopic.

Featured Statistics

Invalidity

From 2005 to 2013, U.S. patents litigated to final decision were invalidated under the following grounds at the following rates:

  • 1.7% under § 102(a) earlier public knowledge or publication
  • 3.9% under § 102(b) time-bar publication or patent
  • 1.4% under § 102(b) public use
  • 1.7% under § 102(b) on sale
  • 1.0% under § 102(e) earlier-filed US patent of another
  • 0.5% under § 102(f) derivation or incorrect inventorship
  • 0.7% under § 102(g) prior invention by another (novelty)
  • 8.7% under § 103 obviousness
  • 2.6% under § 112(1) inadequate written description
  • 1.5% under § 112(1) lack of enablement
  • 0.5% under § 112(1) best mode (no longer a ground for invalidity)
  • 3.9% under § 112(2) claim indefiniteness
  • 0.2% for double patenting
  • 0.4% for improper broadening of reissue

Some comments about these numbers are in order.

First, the dataset on which they are based consists of 3316 case decisions from 2005 to 2013, which were coded as to rulings on 40 legal issues by the University of Houston Law Center. The dataset includes all Federal Circuit rulings (including summary affirmances under Rule 36) and all reported lower rulings from district courts and the ITC. See U.S. Patent Litigation Statistics, Institute for Intellectual Property and Information Law, University of Houston Law Center, at patstats.org (visited Jan. 2017)

Second, note that, under all parts of 102(b) combined, 7% of patents are invalidated under 102(b), which makes it four times more likely than 102(a) to invalidate a litigated patent.

Third, more patents are invalidated under 102 (10.9%, all 102 sections combined) than under 103 (8.7%), which belies the notion that non-obviousness is the primary gatekeeper of patent law.

Fourth, indefiniteness under 112(2) has become more important. At an invalidation rate of 3.9%, it now accounts for almost as many invalidations as written description and enablement combined (4.1% combined)! From 2005 to 2009, claims were invalidated under 112(2) in only about 9.4 cases per year; from 2010 to 2013 that number doubled to about 20.8 cases per year. In light of recent academic work and Supreme Court decisions expressing concern about indefiniteness, we suspect the importance of 112(2) has only grown since 2013.

Fifth, for cases from 2010-2013, the dataset identifies each case for which each ground of invalidity was decided. This data shows that, when enablement and written description are both adjudicated, they rise and fall together. That is, in the 23 cases from 2010-13 in which both enablement and written description were decided, the outcome for both was the same: either both requirements were found satisfied or both were found unsatisfied. This tends to corroborate Ariad’s position in Ariad Pharmaceuticals v. Eli Lilly, 598 F.3d 1336 (Fed. Cir. 2010) (en banc), in which Ariad argued there is no substantive difference between enablement and written description.

Defenses

The numbers below are based on the University of Houston’s dataset of 3316 cases decided 2005-2013, discussed above in the section on Invalidity.

Enforeeability

Inequitable Conduct. In 3.6% of the cases, the patent was held unenforceable due to inequitable conduct. When the issue was litigated to decision, the accused infringer won only about 26.5% of the time.

Note that the rate at which the issue was litigated to decision fell over the years. From 2005 to 2011, it was litigated to decision about 53 times per year on average. From 2012 to 2013, it was litigated to decision only about 35 times per year on average. We suspect the rate has fallen a bit since 2013.

Patent Misuse. Patent misuse was decided in 33 (or 1.0%) of the cases. Of the 33 cases, the accused infringer won only 1 (or 3.0%) on this ground.

Procedural Defenses

Laches. Laches was decided in 94 (or 2.8%) of the cases. Of the 94 cases, the accused infringer won 22 (or 23%) on this ground.

Equitable Estoppel. Equitable estoppel was decided in 61 (or 1.8%) of the cases. Of the 61 cases, the accused infringer won 17 (or 28%) on this ground.

Failure to Mark. Failure to mark was decided in 44 (or 1.3%) of the cases. Of the 44 cases, the accused infringer won 29 (or 66%) on this ground.

Infringement Defenses

Preexisting License. Whether the accused infringer had licensed the patent in question was decided in 54 (or 1.6%) of the cases. Of the 54 cases, the accused infringer won 28 (or 52%) on this ground.

Exhaustion. Whether first sales had exhausted the patentee rights was decided in 81 (or 2.4%) of the cases. Of the 54 cases, the accused infringer won 48 (or 59%) on this ground.

Exemption under 271(e). Whether the accused infringer was exempt under the FDA safe harbor provision of 271(e) was decided in 15 (0.45%) of the cases. Of the 15 cases, the accused infringer won 7 (or 47%) on this ground.

Exemption for Experimental Use. The common law defense of experimental use was not decided in any of the cases. It may therefore behoove patent law professors to remove experimental use from their syllabi.

Doctrine of Equivalents

Of every 100 findings of direct infringement by U.S. courts, only about 10 are findings of direct infringement under the doctrine of equivalents.

This number sheds light on the importance of DOE scope relative to literal scope. Some applicants may spend a lot of time and energy on the DOE and the nuances of the Festo case and its progeny, or go to lengths to avoid amending claims in ways that could curb DOE protection. When that translates into giving short shrift to the literal language of claims, it’s the tail wagging the dog. Applicants should bear in mind that when a patent is found infringed, nine out of ten times it’s found literally infringed.

Note also that findings of direct infringement likewise dominate findings of indirect infringement. For every 100 findings of infringement, 81 are findings of direct infringement (literal or DOE), whereas 19 are findings of indirect infringement (primarily inducement under 271b or contributory infringement under 271c). Whether the accused infringer induced infringement under 271(b) was litigated to decision in 222 (or 6.7%) of 3316 cases from 2005-2013. Of the 222 cases, the patentee won 95 (or 42.8%). Whether the accused infringer contributed to infringement under 271(c) was litigated to decision in 140 (or 4.2%) of the cases. Of the 140 cases, the patentee won 58 (or 41.4%).

The numbers above are based on the University of Houston dataset discussed above in the section on Invalidity.

Patent Litigation Win Rate by Venue

From 2000-2010, the national average rate at which patent cases settled was 75.5%. 15% of patent cases went to final judgment. The overall win rate for patentees was 32.5%. Win rate, however, varies dramatically by venue. For example, the patentee win rate in the Northern District of Texas (which decided 405 cases) was almost five times higher than it was in the Northern District of Georgia (which decided 457 cases)! Listed below are the venues with the six highest and six lowest patentee win rates.

Top Six Patentee Win Rates
  • N. District of Texas                   55.1%
  • M. District of Florida               46.3%
  • District of Nevada                    46.2%
  • District of Delaware                 45.3%
  • District of Oregon                     45.2%
  • E. District of Texas                   40.3%
Bottom Six Patentee Win Rates
  • W. District of Wisconsin          24.0%
  • District of New Jersey               21.0%
  • W. District of Washington       20.0%
  • E. District of New York              17.6%
  • E. District of Wisconsin              17.1%
  • N. District of Georgia                  11.5%

These numbers come from a study by Professor Mark Lemley, in which he examined a dataset of 21,667 patent cases decided between 2000 and 2010 and reported the win rates for all venues that decided 25 or more cases over that 10-year period. To see the complete list of win rates, See Mark A. Lemley, Where to File Your Patent Case, 38 AIPLA Quarterly Journal 1 (Fall 2010).

Lemley also reports the average times to trial. The two quickest venues were the Western District of Wisconsin (0.67 years) and the Eastern District of Virginia (0.96 years). The two slowest venues were the Eastern District of Michigan (3.41 years) and the Eastern District of Wisconsin (3.51 years).

The national average rate at which patent cases went to trial was 2.8%. The rate was highest in the District of Delaware (11.8%) and the Eastern District of Texas (8.0%). It was lowest in the Southern District of Ohio (0.5%) and the District of Columbia (0.0%).

Jury Trial vs. Bench Trial

Over the last 5 years, patentees won 73% of jury trials and 53% of bench trials. The median jury award was 16X higher than the median bench award! See the PWC study entitled 2016 Patent Litigation Study: Are we at an inflection point? (May 2016).

Given the numbers reported in this study and also in the study discussed below under Declaratory Judgment, we predict that the percentage of trials heard by juries (75% over the last 5 years) will grow even higher.

Declaratory Judgment

If a patent suit will be decided by a jury, the patentee greatly increases its odds of winning if it files suit first, i.e., before the accused infringer files for declaratory judgment. According to a study by then Professor Moore, in cases decided by juries, when patentees file suit they win 65% of the time, but when accused infringers file declaratory judgment actions patentees win only 42% of the time. See Kimberly A. Moore, Judges, Juries, and Patent Cases-An Empirical Peek Inside the Black Box, 99 Mich. L. Rev. 365 (2000).

The first thought that arises in response to this is that suits initiated by accused infringers must tend to differ on the merits from suits filed by patentees. But here’s the rub: in bench trials, win rates do not vary with who files first. According to the study, the win rate in bench trials (about 50% for patentees) remained the same regardless of who filed first. The reason for this surprising finding is unclear. Perhaps jurors tend to believe (somewhat incorrigibly) that whoever filed the suit is the deserving party.

Injunctions & Enhanced Damages

From 2005 to 2013, patentees obtained preliminary injunctions in about 4.1% of patent cases. This figure is not much changed from years past. One study of preliminary injunctions issued in 1990-91 showed that patentees obtain them in about 5% of cases.

Patentee requests for permanent injunction were ruled on in 253 cases from the date of eBay v. MercExchange 547 U.S. 388 (2006) through 2013. Patentees won 74.7% of those requests.

From 2005 to 2013, damages were enhanced for willfulness in only about 3.2% of cases. Patentees won attorneys fees in about 3.3% of cases; accused infringers won them in about 3.6% of cases.

The 5% figure for older preliminary injunction cases comes from Jean O. Lanjouw and Joshua Lerner, Preliminary Injunctive Relief: theory and evidence from patent litigation, NBER Working Paper No. 5689 (NBER 1996). The figure for permanent injunctions is based on a supplementary dataset reported by the University of Houston. The other figures are based on the University of Houston’s dataset of 3316 cases decided 2005-2013 , discussed above in the section on Invalidity.

Foreign Owners of U.S. Patents

Foreign owners of U.S. patents are about five times less likely than domestic owners of U.S. patents to sue for infringement of their U.S. patents. Original source: Jean O. Lanjouw and Mark Schankerman, Stylized Facts of Patent Litigation: value, scope and ownership, NBER Working Paper No. 6297 (NBER 1997); Chapter: Patent Litigation – Enforcement of Patent Rights in the United States, Patents in the Knowledge-Based Economy (Nat’l Academy of Sciences 2003).

These studies are based on old patent cases, namely, those from 1975 to 1991. But assuming it’s still true that foreign owners of U.S. patents are less likely to sue, the question remains as to why. The study authors suggest that it might be harder for foreign patentees to detect infringement and also that their costs of litigation might be higher. I would add that many foreign patentees face greater uncertainty about both the costs and the benefits of U.S. litigation. Also, they may simply be less inclined to litigate for cultural reasons – Japan comes to mind.

  1. See also Michael E. Sander, By The Numbers: Is the PTO Underreporting the Rate They Institute IPRs and CBMs? Patentlyo (May 16, 2016).
  2. See Brian J. Love and Shawn Ambwani, Essay: Inter Partes Review: An Early Look at the Numbers, 81 University of Chicago Law Review Dialogue 93 (2014).This study was limited to an early subset of IPRs – those terminated by March 31, 2014.
  3. This 40% is derived from data on 3316 cases decided from 2005 to 2013, which were coded according to rulings on 40 legal issues. For the raw data, see U.S. Patent Litigation Statistics, Institute for Intellectual Property and Information Law, University of Houston Law Center, at www.patstats.org (last visited Jan. 2017).
  4. See Michelle Carniaux and Michael E. Sander, Riding the PTAB Wave: An Empirical Study of the Surge of Petitions Filed in the Patent Trial and Appeal Board, available at SSRN (April 1, 2015) (note Fig. 5 and Fig. 7, showing high institution rates and kill rates early on).
  5. See USPTO AIA Trial Statistics, as of December 31, 2014 and as of December 31, 2015.
  6. See Statistics for Orders for Motions to Stay in View of Pending IPR or CBM as of April 10, 2014, available at Kenyon.com (Jan. 2017).
  7. See Glyn Moody, China Files A Million Patents In A Year, As Government Plans To Increase Patentability Of Software, TechDirt.com (Dec. 1, 2016).
  8. See Jeff John Roberts, What Trump Means for the U.S. Patent System, Fortune.com (Jan 24, 2017).
  9. See Michaela Ross, Talking Tech with Rep. Darrell Issa, BNA.com (Jan. 30, 2017).
  10. See Ryan Davis, Rep. Issa Says Lee Still Running USPTO But May Be Moved, Law360.com (Feb.14, 2017).
  11. See https://www.commerce.gov/directory/leadership, last visited March 6, 2017.
  12. Ryan Davis, USPTO Stays Mum on Chief due to “Unusual Circumstances”, Law360 (February 27, 2017).
  13. See Scott Graham, New Names Surface for PTO Director, law.com (Jan. 10, 2017) (naming four potential candidates: former Judge Randall Rader; Philip Johnson, former IP chief at Johnson & Johnson; Michael McKeon, partner at Fish & Richardson; and David Carlson, senior partner at Seed Intellectual Property Law Firm).
  14. See Interview with Former Chief Judge Randall Rader, Intellectual Asset Management (IAM) Blog, (Feb. 2, 2017).
  15. See Gene Quinn, Phil Johnson – An Outstanding Choice for USPTO Director, IPWatchdog.com (Aug. 3, 2014).
  16. See Scott Graham, Who Will Head the Patent and Trademark Office Under Trump? Law.com (Dec. 13, 2016).
  17. See www.ipo.org/wp-content/uploads/2016/11/User-Fees-Withheld-1991-2015.pdf; www.uspto.gov/about/advisory/ppac/PPAC_2013_AnnualReport.pdf
  18. See Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016).
  19. See In re Hall, 781 F.2d 897 (Fed. Cir. 1986).
  20. See Titanium Metals Corp.v. Banner, 778 F.2d 775 (Fed. Cir. 1985).
  21. See also Daralyn J. Durie and Mark A. Lemley, A Realistic Approach to the Obviousness of Inventions, 50 Wm. & Mary L. Rev. 989 (2008).
  22. See Dan L. Burk and Mark A. Lemley, Inherency, 47 Wm. & Mary L. Rev. 371 (2005).
  23. More movies per year may be produced in India (Bollywood), but in terms of what most of the world consumes, Hollywood is still well in the lead.
  24. See, e.g., Robert Steele, If You Think Piracy Is Decreasing, You Haven’t Looked at the Data… (July 16, 2015), available at DigitalMusicNews.com.
  25. In a recent survey, one third of Americans surveyed admitted to consuming pirated works. See Todd Spangler, Piracy Survey: 39% of U.S. Consumers Don’t Care That Studios Lose Money From Illegal Sharing (Jan. 17, 2017), available at Variety.com.
  26. This graph is closely based on a graph from Stan J. Liebowitz, Economists Examine File-Sharing and Music Sales, available online and in the book The Industrial Organization of Digital Goods and Electronic Markets (MIT Press 2005).
  27. See Wikipedia entry for The Pirate Bay Trial, visited March 3, 2017.
  28. See Spangler, Piracy Survey, above.
  29. See Todd Spangler, Piracy Survey: 39% of U.S. Consumers Don’t Care That Studios Lose Money From Illegal Sharing (Jan. 17, 2017), available at Variety.com.
  30. See also Michael E. Sander, By The Numbers: Is the PTO Underreporting the Rate They Institute IPRs and CBMs? Patentlyo (May 16, 2016).
  31. See Brian J. Love and Shawn Ambwani, Essay: Inter Partes Review: An Early Look at the Numbers, 81 University of Chicago Law Review Dialogue 93 (2014).This study was limited to an early subset of IPRs – those terminated by March 31, 2014.
  32. This 40% is derived from data on 3316 cases decided from 2005 to 2013, which were coded according to rulings on 40 legal issues. For the raw data, see U.S. Patent Litigation Statistics, Institute for Intellectual Property and Information Law, University of Houston Law Center, at www.patstats.org (last visited Jan. 2017).
  33. See Michelle Carniaux and Michael E. Sander, Riding the PTAB Wave: An Empirical Study of the Surge of Petitions Filed in the Patent Trial and Appeal Board, available at SSRN (April 1, 2015) (note Fig. 5 and Fig. 7, showing high institution rates and kill rates early on).
  34. See USPTO AIA Trial Statistics, as of December 31, 2014 and as of December 31, 2015.
  35. See Statistics for Orders for Motions to Stay in View of Pending IPR or CBM as of April 10, 2014, available at Kenyon.com (Jan. 2017).
  36. See Glyn Moody, China Files A Million Patents In A Year, As Government Plans To Increase Patentability Of Software, TechDirt.com (Dec. 1, 2016).
  37. See Jeff John Roberts, What Trump Means for the U.S. Patent System, Fortune.com (Jan 24, 2017).
  38. See Michaela Ross, Talking Tech with Rep. Darrell Issa, BNA.com (Jan. 30, 2017).
  39. See Ryan Davis, Rep. Issa Says Lee Still Running USPTO But May Be Moved, Law360.com (Feb.14, 2017).
  40. See https://www.commerce.gov/directory/leadership, last visited March 6, 2017.
  41. Ryan Davis, USPTO Stays Mum on Chief due to “Unusual Circumstances”, Law360 (February 27, 2017).
  42. See Scott Graham, New Names Surface for PTO Director, law.com (Jan. 10, 2017) (naming four potential candidates: former Judge Randall Rader; Philip Johnson, former IP chief at Johnson & Johnson; Michael McKeon, partner at Fish & Richardson; and David Carlson, senior partner at Seed Intellectual Property Law Firm).
  43. See Interview with Former Chief Judge Randall Rader, Intellectual Asset Management (IAM) Blog, (Feb. 2, 2017).
  44. See Gene Quinn, Phil Johnson – An Outstanding Choice for USPTO Director, IPWatchdog.com (Aug. 3, 2014).
  45. See Scott Graham, Who Will Head the Patent and Trademark Office Under Trump? Law.com (Dec. 13, 2016).
  46. See www.ipo.org/wp-content/uploads/2016/11/User-Fees-Withheld-1991-2015.pdf; www.uspto.gov/about/advisory/ppac/PPAC_2013_AnnualReport.pdf
  47. See Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016).
  48. See In re Hall, 781 F.2d 897 (Fed. Cir. 1986).
  49. See Titanium Metals Corp.v. Banner, 778 F.2d 775 (Fed. Cir. 1985).
  50. See also Daralyn J. Durie and Mark A. Lemley, A Realistic Approach to the Obviousness of Inventions, 50 Wm. & Mary L. Rev. 989 (2008).
  51. See Dan L. Burk and Mark A. Lemley, Inherency, 47 Wm. & Mary L. Rev. 371 (2005).
  52. More movies per year may be produced in India (Bollywood), but in terms of what most of the world consumes, Hollywood is still well in the lead.
  53. See, e.g., Robert Steele, If You Think Piracy Is Decreasing, You Haven’t Looked at the Data… (July 16, 2015), available at DigitalMusicNews.com.
  54. In a recent survey, one third of Americans surveyed admitted to consuming pirated works. See Todd Spangler, Piracy Survey: 39% of U.S. Consumers Don’t Care That Studios Lose Money From Illegal Sharing (Jan. 17, 2017), available at Variety.com.
  55. This graph is closely based on a graph from Stan J. Liebowitz, Economists Examine File-Sharing and Music Sales, available online and in the book The Industrial Organization of Digital Goods and Electronic Markets (MIT Press 2005).
  56. See Wikipedia entry for The Pirate Bay Trial, visited March 3, 2017.
  57. See Spangler, Piracy Survey, above.
  58. See Todd Spangler, Piracy Survey: 39% of U.S. Consumers Don’t Care That Studios Lose Money From Illegal Sharing (Jan. 17, 2017), available at Variety.com.