ACG’s Marla Grossman featured in IPWatchdog’s “What Mattered in 2018: Industry Insiders Reflect on the Biggest Moments in IP”

In May 2018, Intellectual Property Owners Association (IPO) and the American Intellectual Property Law Association (AIPLA) – two of the largest IP bar associations – adopted a joint legislative proposal to address concerns regarding current patent subject matter eligibility jurisprudence. Since that time, several other IP and patent bar associations have lent their support for the joint proposal, including the New York Intellectual Property Law Association (NYIPLA), the Boston Patent Law Association (BPLA), the Philadelphia IP Law Association (PIPLA) and the National Association of Patent Practitioners (NAPP).   Agreement by these patent and IP bar associations on a single legislative proposal on patent subject matter eligibility was a significant step toward addressing this important policy matter.

Director Iancu’s announcement at the September 2018 IPO Annual Meeting that the PTO is working on revised patent eligibility guidelines designed to keep patent eligibility issues and conditions-for-patentability issues “in their own distinct lanes.” Director Iancu noted that the PTO has “thousands of examiners who struggle with these issues on a daily basis. Our examiners need additional guidance now. And so do patent applicants, patent owners, and the public. Whether through legislation or otherwise, there is a growing consensus that the issue must be promptly addressed.”  Thus, the PTO is contemplating revised guidance to help categorize the exceptions to subject matter eligibility, to name them, and to instruct examiners on how to apply them.  According to Director Iancu, the contemplated guidance would do two primary things: First, it would categorize the exceptions based on a synthesis of the case law to date. And second, if a claim does recite a categorized exception, it would instruct examiners to decide if it is “directed to” that exception by determining whether such exception is integrated into a practical application. These two welcome clarifications by the PTO are intended to instill greater predictability into the relevant analysis while remaining true to the case law that gave rise to these judicial exceptions in the first place.

The roundtable discussion hosted earlier this month by Senator Tillis and Senator Coons on patent subject matter.   The roundtable addressed the status of the case law on 35 U.S.C. § 101, the need for legislative reform, and the merits of different legislative approaches.  This event signaled congressional realization that despite the positive steps by PTO Director Iancu to revise patent eligibility guideline, congressional action is still necessary.

Director Iancu’s speech at the Eastern District of Texas Bar Association Inaugural Texas Dinner on October 18, 2018. The PTO director courageously used his bully pulpit to urge policies that encourage inventors and entrepreneurs, focus on the benefits of the patent system, and do not over-emphasize the risks to the system.  He explained that in certain stakeholders’ efforts to eliminate so-called “trolls,” (a term that still defies a commonly agreed-on definition), we have over-corrected.  Director Iancu clearly and cogently argued against the false narrative that patents hinder innovation, and urged a restoration of balance in our patent system.

The PTO’s final rule published Oct. 11, 2018 that would replace the current broadest reasonable interpretation (BRI) claim construction standard for interpreting claims in inter partes review, post grant review, and covered business method patent proceedings with the Phillips standard, which is applied in federal courts and the U.S International Trade Commission (ITC). This rule appropriately responds to concerns that current PTAB procedures and the  application of BRI standards were unfairly biased against patent owners. Specifically, the new rule would require the PTAB to construe unexpired and proposed claims “in accordance with the ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent.” The proposed rule would also require the PTAB to consider prior claim construction determinations made by federal courts or the ITC. The PTO’s proposed rule is consistent with the reasonable position that the PTO should construe claims according to the standard used “in a civil action to invalidate a patent under 35 U.S.C. § 282 and would significantly reduce uncertainty in this area of the law.

The Enterprise System failure at the PTO in August 2018. The system failure, which affected the PTO’s Electronic Filing System (EFS), the Public and Private Patent Application Retrieval (PAIR) systems and the Electronic Patent Assignment (ePAS) among others, adversely impacted filers, examiners, and the rest of the agency since significant resources had to be redirected internally to manage the problem.  If there is a silver lining, it is that the outage reinforced the PTO’s recognition of the need to update and modernize its aging enterprise IT infrastructure.  This is a task that will benefit from insights provided by external consultants and contractors who bring specialized analysis and recent modernization experience.

The enactment into law of the Music Modernization Act (MMA) in October 2018, after unanimous passage in both the House of Representatives and the Senate.  Specifically, this legislation helps creators across the music industry to make a living through their creativity by: (1) improving compensation to songwriters and streamlining how their music is licensed; (2) enabling legacy artists (who recorded music before 1972) to be paid royalties when their music is played on digital radio; and (3) providing a consistent legal process to enable studio professionals—including record producers and engineers—to receive royalties for their contributions to music that they helped create.   This legislation represents the most comprehensive reform of music law in over twenty years and demonstrates how IP stakeholders with very different business models and priorities can come together to support and pass complex IP legislation.

Marla Grossman is a partner at American Continental Group, where she helps her clients with strategic public policy planning and representation before the White House, US federal agencies, and Congress. Grossman’s particular areas of expertise include intellectual property, technology, competition and trade policy. With decades of experience inside the beltway, including as counsel to the Senate Judiciary Committee, Marla is a true powerhouse on the intellectual property scene.