Looking ahead: What’s in store for patent law in the new year

The former patent examiner, Albert Einstein, is credited with having told reporters, "I never think of the future, it comes soon enough." However, where events in the past year might lead seems to occupy our thoughts at this time of year. When asked for patent law predictions for 2019, these topics emerged. If you are among those who think about the future, continue reading for views on what it may hold.

U.S. patent eligibility will continue to create issues. After a year of noteworthy developments in both the courts and the U.S. Patent and Trademark Office (along with some activity legislatively), 2019 should again be busy. At the U.S. Court of Appeals for the Federal Circuit, Berkheimer and other, decisions called into question if patent eligibility was suitable for determination via early motion practice because of "conventionality" fact issues. Vanda Pharmaceuticals found patent-eligibility of a claim directed to a specific method for treating a patient suffering from schizophrenia with a particular drug, lending optimism in the pharmaceutical sector. However, certiorari petitions remain pending in both. Other Federal Circuit panels made broadly reasoned ineligibility decisions, suggesting that no amount of innovation present in a claim would matter if were "in the realm" of an abstract idea. The state of Section 101 law moved Judge Jay Plager to bemoan that it "renders it near impossible to know with any certainty whether the invention is or is not patent eligible," and Judge Alan Lourie called for "higher intervention, hopefully with ideas reflective of the best thinking that can be brought to bear on the subject." At the Patent Office, Director Andrei Iancu has signaled a goal of exercising restraint in Section 101 ineligibility and issued new examination guidance. In the legislative arena, the IPO/AIPLA and ABA-IPL Section proposed statutory language for a revised Section 101. Senators Thom Tillis and Christopher Coons reportedly invited them, industry stakeholders, and former Federal Circuit Chief Judge Paul Michel to Capitol Hill to discuss legislative changes to the definition of patent eligibility in December.

Look for efforts to craft a new Section 101 to increase in 2019, but open questions remain whether there is a compromise position and if Congress will act. Under Director Iancu, Patent Office is acting, however. In 2019, look for attention on whether the PTO and the courts are reaching the same outcomes on eligibility. District courts will be pressed by patent owners in light of Berkheimer to act based on evidence and will need to decide when fact questions exist.

Patent lawyers will be talking about administrative procedure. The Supreme Court recently granted certiorari in Kisor v. Wilkie, a case from the Federal Circuit -- but not a patent case. It comes from the Board of Veterans' Appeals. The high court will decide whether to overrule Auer v. Robbins, 519 U.S. 452 (1997), and Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945). Those cases direct courts to generally defer to an administrative agency's reasonable interpretation of its own regulations. Auer deference usually attracts the most attention among regulated business groups and in circles critical of a federal "administrative state." However, the PTO and the ITC are administrative agencies whose rules and subsequent interpretations draw patent litigators' attention -- particularly the Patent Trial and Appeal Board's rules.

Kisor potentially has broad implications for the PTO's interpretative power. It may make some strange bedfellows as stakeholders consider which decision-maker they prefer. Were the high court to overrule Auer, it will open the door for challenging some precedent based on PTO rules for the America Invents Act, and otherwise. It could also prompt challenges to Chevron deference, under which courts defer to an agency's interpretation of a statute it administers.

Standard-essential Patents. SEPs, particularly those with commitments to license on (Fair), Reasonable, and Non-discriminatory terms ("FRAND" commitments) will be in the spotlight. The Federal Circuit likely will have a chance to review decisions involving a number of issues: How to set FRAND royalty rates; is injunctive relief is generally available when a SEP-holder makes an unaccepted FRAND licensing offer; is not fulfilling a FRAND commitment a competition-law violation or infringement defense and, if so, when; do FRAND commitments apply to a party not practicing an entire standard and the related question, what is a SEP to which a FRAND commitment attaches, and others.

Disputes around the world involving large mobile handset and component manufacturers involving SEPs will keep them in the headlines. 5G network rollouts will add attention to SEP licensing with indications that complex pricing dynamics among licensors may emerge. With 5G technologies expected to be used beyond mobile handsets -- in cars, internet of things devices, robotic remote surgery, etc., look for new issues to arise: What SEPs are for their products, how the new licensing market may differ from current ones, injunctive remedies, and the involvement of government regulators for these new markets.

The policy debate about a "stronger patent system" will intensify. For many years, views in the U.S. that reform was needed have been influential with patent policy makers: "Hold up" from injunctive relief was unfair (pre-eBay), a cheap and fast way to dispose of claims asserting "bad patents" was needed (pre-AIA, Bilski and Alice), and that "patent troll" litigation was hindering innovation. Under the current administration, policy may shift. The Antitrust Division of the Department of Justice is signaling that injunctions for SEPs-holders should be more available: Withdrawing from a 2013 policy statement issued with the PTO on remedies for SEPs with FRAND commitments and the assistant attorney general commenting that "[s]ince injunctions against infringement frequently do serve the public interest in maintaining a patent system that incentivizes ... inventors ... enforcement agencies ... should not place a thumb on the scale against an injunction in the case of FRAND-encumbered patents." Director Iancu's remarks also indicate a shift: "[I]n our zeal to eliminate 'trolls' and 'the bad patents' they allegedly use to terrorize society, we have over-corrected and risk throwing out the baby with the bathwater. This must now end, and we must restore balance to our system." The U.S. Trade Representative imposed tariffs in 2018, in part, purportedly related to weak intellectual property protection. As the administration's policies begin to be implemented, look for the policy debate to heat up on "strengthening" patent rights in the U.S. and abroad.