Where We've Come From and Where We're Going With Intellectual Property
Where We've Come From and Where We're Going With Intellectual Property
IP expert and former U.S. Patent and Trademark Office Director Q. Todd Dickinson addresses the evolution and future of IP policy, including under President Trump.
Todd Dickinson has spent his career capturing experience in nearly every imaginable intellectual property (IP) role, culminating in his induction to the IP Hall of Fame in 2012. He served as Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office (PTO) under President Clinton. He was Chief IP Counsel at General Electric and Sun Company, and later served as Executive Director of the American Intellectual Property Law Association. Dickinson has also practiced IP law at outside law firms and currently heads Polsinelli’s IP Public Policy practice. Shortly after the January 2017 inauguration of President Trump, Dickinson joined Stout Managing Directors David Haas and Scott Weingust to discuss his thoughts on the evolution of IP policy since his time at the PTO. Dickinson also shared his thoughts on the future of IP policy and attempted to provide his assessment of how President Trump might tackle various IP issues during his term of office.
The Journal: Thank you for joining us today. We usually start with a couple of background questions so our readers can get to know you. Can you tell us a little bit about your background, where you grew up, and some of the things that kept you active and occupied during your childhood?
Todd Dickinson: Sure. I grew up in a suburb of Pittsburgh, Pennsylvania, called Mount Lebanon. My folks were from Pittsburgh, too, so it was a hometown in a lot of ways. My father worked his whole career for Alcoa.
One of the things that forecast my interest in intellectual property was that I was a chemistry geek in high school. I got one of those big Gilbert’s chemistry sets when I was in grade school, back when you could really use them. You could study real chemical reactions and even blow things up, have a lot of fun.
The Journal: Todd, you have an incredibly long and diverse set of IP experiences and accomplishments. Among other things, you were Under Secretary of Commerce for IP and Director of the PTO under President Clinton. You worked in-house as Chief IP Counsel at General Electric and Sun Company. You worked at various law firms, including now at Polsinelli. We’re curious which of those activities you have enjoyed the most, and why.
Dickinson: I think the most enjoyable and most gratifying in many ways was being Under Secretary of Commerce for IP and Director of the PTO. My time there at the Patent Office was a golden time in many ways in IP, and I was fortunate to be there then.
I’ve also been interested and involved in political activity my whole life. This position allowed me not only to bring my two great passions together, but it also provided a real opportunity for public service. So that was a key piece of it. You try to do the best job you can and try to leave it better for your successors than you found it.
The Journal: What are the accomplishments that you’re most proud of from your time as Under Secretary?
Dickinson: Several of them. I think I helped restore the confidence of stakeholders in the PTO, which was at a low point then. I signed off on and broke ground for the new PTO campus in Alexandria, Virginia. That was a huge undertaking. We also had to deal with two of the more fascinating substantive topics, which still resonate today: business method and software patents that came out of the State Street Bank1 decision and patentability issues dealing with biotech subject matter, in particular whether gene sequences or parts of them were patentable. These were both very hot topics.
Additionally, Vice President Gore was in charge of something called “Reinventing Government,” and we were one of the first test agencies for that process. The primary goal was to convert the PTO to a performance-based organization, which more aligned the PTO with the way private business works. That also informed the American Inventor’s Protection Act, the last major patent reform bill before the Leahy-Smith America Invents Act (AIA), and which introduced major new processes such as inter partes reexaminations.
The Journal: How has U.S. IP policy evolved since your time as director of the PTO under President Clinton?
Dickinson: Later this year, it’ll be 20 years since I first came to the PTO as special assistant to the secretary. Even back then, we used to say that intellectual property had never been more important to the economy. And that’s only continued, largely reflecting the knowledge-based economy in which we live. One major example of the impact are the huge productivity increases in the United States, which have largely been caused by increases in innovation.
However, these new technology issues gave rise to collateral issues, which led people to question how the patent system was responding and whether we should consider further reforms. In due course, the National Academies of Sciences (NAS) initiated its so-called “Millennium Study” of the patent system in 2000. The NAS, and a related study by the Federal Trade Commission (FTC) and U.S. Department of Justice, came out with a series of recommendations. That, in turn, led to a long period of legislative negotiation about which direction the patent system should take, which culminated in passage of the AIA during the early years of the Obama administration. I was very proud to have been very involved in that long, but ultimately successful, project.
That said, we are still having debates around issues like how litigation is managed, to further deal with the so-called NPE [non-practicing entity] issue, which hasn’t gone to bed yet. However, these issues seem to be fading in priority for a variety of reasons.
The Journal: What do you consider to be the biggest concerns regarding U.S. patent law today?
Dickinson: I would suggest that currently the biggest concern is the breadth of Section 101 of the Patent Act, and the way that the U.S. Supreme Court continues to reinterpret the question of patent eligibility under that provision. In response, there seems to be a broader consensus that the Court is sort of looking through the wrong end of the telescope, and there needs to be a legislative fix to more clearly define and narrow exceptions to patent eligibility.
A second major concern that has arisen is the way the PTO has administered the AIA, specifically its new post-grant trial provisions and the way the Patent Trial and Appeal Board (PTAB) has been implementing them. A number of concerns about the potentially negative impact of that process on the system and the stakeholders’ confidence in it have arisen and need to be worked through. I think it’s generally been used in the ways it was intended to be used, which is to try to clean up and give the opportunity to improve the quality of patents. But there’s a pretty significant view that the PTAB may have gone too far in its interpretations, and in terms of how that body views its job.
The Journal: How does that contrast with IP policy evolution in other parts of the world?
Dickinson: That’s an interesting question. When I came in, in the mid-’90s, we had just finished negotiating five or six global intellectual property treaties starting with GATT [General Agreement on Tariffs and Trade] from the Uruguay Round and yielding TRIPS [Agreement on Trade-Related Aspects of Intellectual Property Rights]. We had two copyright treaties dealing with the Internet. I was honored to be the chief U.S. negotiator for a trademark treaty that was negotiated and a patent formalities treaty. So there was a lot of activity internationally, dealing with IP, particularly as a result of the global shift toward knowledge-based economies and the arrival of the Internet.
One big issue, perhaps the biggest, remained: the substantive harmonization of international patent laws. There was a good faith attempt made, unfortunately scuttled by the U.S., but it has hung out there and continues to be debated. I spent a lot of my time in the PTO, and then in the other jobs I’ve had, dealing with just that question.
Progress in that area is almost glacial. What’s amazing, however, is how easily we can identify the major issues. And we can also probably identify what it takes to get from here to there. And yet the powers that be still can’t move that ball forward.
One reason is because of the World Intellectual Property Organization (WIPO), the fulcrum around which those treaties were negotiated. Over time, however, WIPO has become somewhat dysfunctional regarding issues like this. For example, developing countries have resisted moving forward because they view patent law harmonization as only advancing the interests of developed countries.
Then there was a multi-lateral attempt outside of WIPO by several B+ countries to negotiate among themselves for a version of that treaty. That got relatively far along and then fizzled out at the end of the George W. Bush administration, frankly on a lack of political will by some of our allies.
The Journal: From the IP law harmonization perspective, which areas do you think still remain the most disparate from country to country?
Dickinson: We used to say it was the patent eligibility question; that software wasn’t patentable here and gene sequences weren’t patentable there. The irony in many ways is that the situation has flipped. You can probably get a better software patent in Europe now than you can in the United States. The way eligibility is analyzed in Europe is a lot cleaner and clearer than in the United States under the Supreme Court’s Alice2 decision. You can probably get a better biotechnology patent in several other countries.
In China, we’ve seen patent eligibility increase significantly and filings increase even more so. The most recent example of their commitment to enforcement is that they are about to set up new IP courts.
In Europe, countries are on the verge of establishing a Unitary Patent for the 25 Member States of the European Union and a Unified Patent Court across Europe for the first time.
If we don’t pay more attention here in the United States, these developments could make us not quite the gold standard that we once were.
The Journal: How would you describe China’s changes in attitudes and actions related to IP protection, and where do you think it’s headed in the future?
Dickinson: We spent a lot of time in the United States over the years trying to persuade China of the importance of intellectual property, specifically its enforcement. That was because China was for a long time, and maybe still is in some ways, one of the bigger IP enforcement problems globally. But what’s happened more recently is that they have gotten the message in many ways that intellectual property is important to their economy too, so they’ve set about significantly enhancing their system.
They’ve even put incentives in place that are kind of interesting. They’ve gone so far as to say, if you’re a prisoner and you innovate something in prison, you can get your sentence reduced a little bit if you invent something that’s patentable, which is kind of fascinating.
And they’ve changed their laws so that you can enforce things better in China now. In particular for us, the studies have shown that foreigners are not disadvantaged, and in some ways they’re advantaged in China. As that process continues to develop, they will have recognized what we knew for a long time in the United States – that having a strong, robust, enforceable intellectual property system is absolutely critical to economic development. And as the Chinese have gotten that message, we’ve kind of lost that message in some ways. And so we’ll see what happens – particularly with this new administration.
The Journal: Speaking of the new administration, what expectations or predictions do you have regarding patent policy under the Trump administration?
Dickinson: Again, a fascinating question. Contrary to Hillary Clinton’s campaign, Trump had not developed a lot of IP policy positions during the campaign. His campaign was focusing on other things.
Then the election comes, and it’s a surprise to most everyone. So Trump is playing catch-up in many ways. It’s hard to say what the Trump administration positions will be based on what we know so far. Some of the tea leaves we’re reading are interesting, though. Not that they necessarily conflict each other, but they may lead in different directions. The only time that President Trump discussed IP was on the issue of Chinese enforcement, and he took a very strong position on it. But during his campaign, and once in office, he was also very harsh and very critical toward what he called the Big Tech community – the Amazons and Apples of the world, which are frequently the target of foreign abuse.
Big Tech had a lot of sway in the Obama administration. For example, President Obama’s Chief Technology Officer was from Google and the Director of the PTO was from Google. It’s hard to imagine the Trump administration being that engaged with by the Big Tech community and its policy priorities.
Conversely, President Trump at various times has talked about the importance of the pharmaceutical industry and biotechnology, and he has met with the leaders of the pharmaceutical industry. During the campaign, he was highly critical of drug pricing, which is often linked directly to intellectual property, but in his recent meeting he seemed much more supportive. So the jury is out. But there are just so many unknowns. The Director of the PTO is continuing, but no one knows for how long. Many things are a little hard to predict.”
Don’t forget we have a new Congress, as well. It wouldn’t surprise me if they reintroduced patent litigation reform similar to what they’ve introduced in the last two Congresses. That said, I’m not sure it’s going to go further than it did the last time because the supporters and opponents are much more well-balanced. The Obama administration did support it, but never in a specific bill. And they kind of gave lip service to it while saying they supported it. Will the Trump administration be for it or against it or neutral? We’ll see.
You’ve also got other issues coming along, like PTAB reform. Senator Chris Coons from Delaware, a former in-house counsel, is concerned about the direction of the PTAB and other issues of patent integrity. And he is considering introducing legislation on both the 101 issue and the PTAB. So that could be a possibility in Congress. And then you’ll have to see how the administration reacts to that.
The Journal: It appears that Trump will have an opportunity to put his thumbprint on the judiciary during his term of office, including at least one Supreme Court nomination, perhaps some Federal Circuit nominations if eligible judges elect their senior status, and certainly on the federal bench.
In his 2016 yearly report, Chief Justice John Roberts highlighted the large number of Federal Circuit affirmations without published opinions. Chief Justice Roberts suggested that this behavior results in a high burden being placed on trial judges. With that background, do you foresee any particular IP policy objectives being advanced through the upcoming judicial nomination process?
Dickinson: That’s an interesting way of framing it. I understand the Chief Justice’s concern about published opinions. The CAFC [U.S. Court of Appeals for the Federal Circuit] has often been viewed as kind of the neglected stepchild of the Supreme Court. But with regard to new nominations, let’s note that as it stands right now, of the 12 active CAFC judges, seven were appointed by President Obama. So that stamp is right there. Of Supreme Court justices, President Obama appointed two.
However, there are no openings on the CAFC at the moment, so whether there’ll be an appointment there or not, remains to be seen. Regarding the current very controversial opening on the Supreme Court, the nomination of Judge Neil Gorsuch is obviously interesting. However, don’t forget that circuit court judges in the regional circuits, like Judge Gorsuch, have not had any real responsibility for patents in particular. His record on IP has been well-scrubbed, and he had some interesting cases in trademarks and other types of IP, but not for patents. So it’s hard to get a read on what his views might be in that area. He does have an outspoken dislike for agency deference under the Chevron3 standard, so how that would translate to deferring to the PTO on issues like the PTAB might be very interesting if he is confirmed.
You’ve also started to see the Supreme Court be a little more critical and break up these nine-to-nothing decisions, forming interesting alliances. In the last big pure patent case – the Cuozzo4 opinion, which dealt with the PTAB and related appealability issues – you had the unique combination of Justice Sonia Sotomayor and Justice Samuel Alito, two very recent appointees, align themselves in a dissent. So it’s hard to say what the effect of that new justice might be at the Supreme Court level.
That said, while the Supreme Court took a large number of IP cases this term and last term, it looks like they’re kind of through with both Section 101 and the PTAB for the moment. They denied cert in a half dozen or so Section 101 cases and maybe a similar number of PTAB appeals. So it appears either they’ve had their fill for the moment, or perhaps they’re coming around to thinking that the CAFC’s got the ability, and is heading in the right direction, to deal with these issues.
So the near-term judicial process probably won’t shake up IP too much. But longer term, as the Federal Circuit evolves and as the district courts have more Trump appointees, I think that will be revealing.
There are plenty of folks – two people in particular, former Chief Judge Randall Rader and former Chief Judge Paul Michel, who are both Republicans – who I think can inform a Republican administration on the system in a positive way. And both have dealt with Chief Justice Roberts directly.
The CAFC was once thought to be facing a “tsunami” of increased work out of the PTO because of the PTAB process. But that tsunami has not really materialized. I think the CAFC does a great job, but they can still do even more work and have more capacity.
The Journal: We’ve seen a flurry of legislative and judicial activity in the IP world over the past several years. And you’ve mentioned some of these items already, from the AIA and the associated inter partes and post-grant reviews to the Defend Trade Secrets Act to various rulings regarding patent eligibility, damages, and standard essential patents. Looking at the big picture, do you think Congress and the courts are heading in the right direction on these issues?
Dickinson: Yes, I think they are generally “turning the battleship around,” if you will, so that in some areas, in particular procedurally, they are finally heading in the right direction. What is disappointing was that with regard to two issues, implementation of the AIA and patent eligibility under Section 101 of the Patent Act, there was such a sharp turn to a not-so-good direction that we still need work to do to bring it back around. However, many have observed in CFAC opinions regarding patent eligibility under Section 101 that interpretations of Alice5, in particular, have become more nuanced. Many also seem to be developing a greater skepticism of the PTAB processes and AIA interpretation.
Regarding the PTO’s implementation of the AIA, it’s important to remember that the PTAB and AIA have existed under only one presidential administration. So how a new director of the PTO feels about the PTAB process and the AIA could have an enormous effect on it. Will Congress try to change that? Will the courts try to change it? There’s been an awful lot of deference shown to the PTAB to this point, and I wonder if that will continue.
In many ways, the Obama Administration and Congress had been primarily responding to a component of the technology community – Big Tech – in the way they have interpreted or deferred to the PTO. One area that Big Tech would like some more changes made is in the litigation area, hoping to reduce the impact of NPEs. However, the courts have been dealing with most of those, such as attorney’s fees, damages calculations, perhaps venue, and so on. Thus, it looks a little bit like the steam is going out of these proposals in the new Congress and possibly the Trump administration.
Last term, Congress did do a very positive thing with the passage of the Defend Trade Secrets Act. That was critical, and not only because trade secrets are becoming more and more important. As the patentability question lingers out there, the idea of leaning more toward protecting your IP through trade secrets instead of patents reasserts itself.
The Journal: Which IP policies, practices, or interpretations still need fixing, and how would you suggest fixing them?
Dickinson: I’m going to sound a little bit like a broken record, but I’ll start with Section 101. I think that we could really use additional clarification, I suppose, by the Supreme Court, though they seem reluctant now, turning down every cert petition on that issue this term. It’s pretty clear now that software is patent-eligible. But how we interpret that eligibility, that’s where the jury’s still out. You’re seeing an awful lot of important technology that can’t be protected sufficiently.
In response, however, there seems to be something of a consensus that the Section 101 problem has to be fixed legislatively. And I’ve seen drafts of legislation, such as the IPO proposal, that are very interesting. And there have been commitments from some engaged senators, like Senator Coons, to work on that issue. So, I think clarifying Section 101 is very important and that we may be moving in that direction.
The other big Section 101 area of concern is biotech. We have the Mayo, Prometheus6 and Myriad7 decisions raising the question of patent eligibility in a very economically important industry, where this question may be life or death. And so I think that’s an even more important area to straighten out Section 101 interpretations – the biomedical side, the healthcare side.
With regard to the PTO and the PTAB, while many have commented on the high invalidation rates initially, I think that the PTAB read the political tea leaves right out of the box and knew that the motivation behind that statute was trouble with the quality of patents. And they chose to go very strongly in a certain direction.
As happens anytime you build a new system, however, there are going to be rough spots that need to be fixed or moderated, and we are starting to see this. One issue on the horizon is that we’re going to have to look at the Covered Business Method process because that sunsets by law in a few years.
One motivation for the AIA – the alleged troll problem – has significantly faded, at least with regard to so-called “pure trolls” whose business model is clearly extortionistic. I just don’t really see that nearly as much anymore. The recent FTC has recognized that, in its separation of NPEs into two categories, “portfolio” and the real-troublemakers, the “litigation” NPEs.
All of this debate about NPEs, however, has affected another business, patent monetization, and the ability to take technology through the patent system and develop businesses that can obtain value out of it. That industry is at a kind of a low point at the moment, and there’s a question if that business will be able to come back.
The Journal: Looking into your crystal ball, which industries and market applications do you think are most likely to face future IP challenges, and what will those challenges be?
Dickinson: The Internet of Things from a patentability standpoint is a very interesting question, because you’ve got this view that just adding the Internet to something that’s a known process doesn’t make it patentable. However, a lot of technology goes into developing those inventions. And, so we still may be stuck with the analytical boundary between eligibility or not as we deal with the Internet of Things. Hopefully, our experiences with software will generally inform that in a positive way as it evolves.
With regard to the security and privacy issues, those are very interesting questions, because we’re starting to see privacy and security coming very, very close to IP as policy issues.
There’s a lot of work yet to be done regarding privacy issues, both in our country and in other countries, where it’s an even bigger problem. And you see it reflected in all sorts of places from alleged foreign manipulation of activities during our most recent election down to whether or not you have to give up the software code on your Apple phone for legal purposes. Those are just fascinating issues, all of which link to IP.
With social media, you’re probably branching more into copyright questions, and particularly the boundary between the First Amendment and copyright protection, among other things. There are several cases that are wending their way through the courts now.
But social media will eventually lead to other big questions of how big data gets managed and manipulated. I think intellectual property will definitely have a role in terms of those policy issues.
With regard to 3D printing, that’s a very interesting, discrete issue. There’s obviously been a great deal of time spent trying to deal with copying on music recordings and films. However, that actually gets multiplied a little bit in the 3D printing context because of the kinds of things that are being made and copied.
Also, if you make a technical advance somehow in your copying, is that going to be patent eligible? We’ve even had the question arise as to whether computers can get patents or register copyrights. Theoretically, a computer could invent or create something. And if that’s the case, is that IP protectable? So far the question seems to be no, but you never know.
And with biopharma, IP is so critical to those industries that I think they will continue to be the monitors of the IP system and the questions that are coming along such as the interface between the Food and Drug Administration and IP relating to biologics. That’s still, I think, an evolving question.
Another “hot button” topic focuses on policy issues relating to drugs and pricing, which are impacted by IP issues. President Trump has raised concerns about drug pricing and has discussed negotiating with other countries like Canada with drug pricing regimes. Also, how is the “new” FTC going to address issues such as “pay for delay” between the generics and branded pharma? On one hand, you could see a “Trump” FTC being more friendly toward that. On the other hand, if Trump is serious about drug pricing, maybe not.
The Journal: Do you have any different or additional concerns about the future now that you are working at a law firm, as opposed to a government agency or in-house?
Dickinson: We’re continuing to see a relative downturn in pure patent litigation this past year, which looks like it’ll continue. There are several reasons for that, but one of the main ones is the AIA reforms that were put in place.
We have seen the slack in work being taken up not insignificantly by the PTAB and post-grant. If you take an average PTAB case, let’s just say might charge $500,000 on both sides combined, and the office has 3,000 of them now, that’s a $1.5 billion of lawyering, maybe more, that didn’t even exist four or five years ago. So a lot of firms are investing heavily in their post-grant practices, while not necessarily as profitable, but in some ways more interesting and sophisticated.
Also, the PTAB judges are appointed because of their professional and technical backgrounds. And in practice, they deal almost entirely in deciding technical issues. So we’re seeing a resurgence in the need for more technically trained attorneys.
We’re also starting to see a resurgence in patent prosecution, even though it’s been down these past few years. One of the reasons a lot of patents are being invalidated under recent jurisprudence is because they were written to old standards. As we get accustomed to the new standards, I think we can write our clients patents that meet those standards. So quality will improve, and confidence in the system should rise.
Another new development we don’t talk as much about but will impact law firm practices is the European system. Europe’s system is about to go through a revolutionary change now that England has decided that it’s going to sign onto the Unitary Patent and Unified Patent Court. We’ll have a whole new type of patent in Europe and a whole new court to decide the issues. So there will be a lot of new issues for patent attorneys and their clients to consider.
Also, there are those who say that you’ll be able to litigate better in Europe, with less onerous discovery rules and quicker resolutions, which could also contribute to a renaissance in terms of European patents. That’s good competition for us here in the United States to improve our system again. So from a U.S. perspective, that’s all for the good.
The Journal: Any takeaways you’d like to leave for our readers?
Dickinson: I think the key takeaway is that we may be at an inflection point in intellectual property, both in terms of substance and in terms of the public’s view of IP in the United States. I’m hoping that this inflection point returns us to a time when the importance of intellectual property was recognized and supported. Not only because it’s my life and my career, but because I genuinely believe it’s one of the most critical aspects of economic development and innovation incentivizing in the world. And I’m hopeful we’ll get back to that golden age.
- State Street Bank & Trust Co. v. Signature Financial Group, Inc. United States Court of Appeals for the Federal Circuit. July 23, 1998.
- Alice Corporation Pty. Ltd. v. CLS Bank International et al. Supreme Court of the United States. June 19, 2014.
- Chevron, U.S.A., Inc., Petitioner, v. Natural Resources Defense Council, Inc., et al. Supreme Court of the United States. June 25, 1984.
- Cuozzo Speed Technologies, LLC v. Lee, Under Secretary of Commerce for Intellectual Property and Director, Patent and Trademark Office. Supreme Court of the United States. June 20, 2016.
- Alice Corporation Pty. Ltd. v. CLS Bank International et al. Supreme Court of the United States. June 19, 2014.
- Mayo Collaborative Services, DBA Mayo Medical Laboratories et al. v. Prometheus Laboratories, Inc. Supreme Court of the United States. March 20, 2012.
- Association for Molecular Pathology et al. v. Myriad Genetics, Inc., et al. Supreme Court of the United States. June 13, 2013.