The Wall Street Journal Gets It Half Right

    By Kevin E. Noonan --

Claude Barfield and John E. Calfee of the American Enterprise Institute opined on the Op-Ed page of The Wall Street Journal last Monday, discussing the wisdom (or lack of it) in patent "reform" bills pending in Congress.  While generally consistent with an informed appreciation of the benefits of the patent system, the piece is also littered with the type of patent myths and half-truths that have become all too familiar to anyone acquainted with the treatment of patent issues in the popular press.

First, the good news.  The authors caution Congress against using the blunt instrument of legislation where fine-tuning by the Patent Office and the Courts may lead to a better result.  This is the case, according to Barfield (at left) and Calfee (at right), with regard to patent damages, where they assert the Federal Circuit is coming to a more nuanced appreciation of how to properly apportion damages in patent cases.  They also cite Patent Office rules in biotechnology that have focused on enhancing the quality of the disclosure necessary to support claims to biological materials.  And they correctly identify Congressional raiding of Patent Office users' fees as the real culprit behind the difficulties the Office is currently experiencing with the backlog of pending applications.

They argue that Congress should concentrate its efforts on proposals that have broad support, such as adopting a "first to file" system and a post-grant opposition procedure.  However, while commending the proposed opposition procedure for having provisions limiting the timing of such oppositions (to prevent them from being oppressive to patentees), they ignore provisions requiring Europe and Japan to adopt a "grace period" like our own for a patentee's own disclosure before "first to file" is adopted.

In some instances, they just get it wrong.  They castigate the Federal Circuit for being too pro-patent, forgetting the erosion of the doctrine of equivalents under the Court (to the extent that provoked Supreme Court oversight to, one presumes, the Federal Circuit's regret) and the evolution of increasingly stringent application of the written description requirement in biotechnology inventions.  Their biggest gaffe is to characterize reexamination of WARF's human embryonic stem cell patents as taking steps to "revoke three embryonic stem-cell patents because they duplicated already published research and similar patents."  The fact of the reexaminations is true; the rest closely approaches fantasy (see "It's Time to Stop the Hypocrisy over Stem Cell Patents").

There is one point made by the authors that rings particularly true in the week after the GSK decision.  Writing about the provisions of patent "reform" legislation that would retroactively validate Patent Office authority to engage in substantive rulemaking, they write that such efforts "are notably ill-considered, particularly [the] one to grant new substantive rule-making authority to the USPTO.  Given the current disarray within the agency and its continuing struggle to master the challenges of emerging technologies, giving it even greater authority just now would be extremely unwise."

For additional information on this topic, please see:

• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Patent 'Reform' Bill Passes House of Representatives," September 9, 2007
• "San Francisco Chronicle Opines on Patent Reform," August 6, 2007
• "Patent Reform Bill to Be Delayed?" June 12, 2007
• "Senate Judiciary Committee Holds Hearing on Patent Reform," June 10, 2007