November 21, 2024 • 29 mins
As if the rocketing evolution of technology isn't presenting enough challenges to inventors under patent law, the Supreme Court has done its part, too.
I just finished reading Graham Moore's novel "The Last Days of Night," where titans of the late 1800s and early 1990s Thomas Edison, George Westinghouse, and Nikola Tesla "clashed with sparks flying over AC and DC electrical power systems," a corny description suggested by my AI editor.
Having read the book, it was fun to speak with modern day attorney Ryan N. Phelan of modern day Marshall Gerstein. Listen as this seasoned patent attorney walks me through:
- The intricate landscape of patent eligibility in the United States.
- Twin patent law decisions from the Supreme Court -- Mayo and Alice (the name of a singer-songwriter group if I ever heard one, or a sandwich shop).
- The proposed Patent Eligibility Restoration Act and how -- if passed -- it could unlock new opportunities for innovation amid the challenges posed by judicial exceptions.
*******
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If you have comments, ideas, or wish to participate, please drop me a note at Editor@LitigationConferences.com.
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Host of the Emerging Litigation Podcast
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Episode Transcript
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Speaker 1 (00:01):
Welcome to the Emerging Litigation Podcast.
This is a group project drivenby HB Litigation, now part of
Critical Legal Content and VLEXCompany's Fast Case and Law
Street Media.
I'm your host, tom Hagee,longtime litigation news editor
and publisher and currentlitigation enthusiast.
If you wish to reach me, pleasecheck the appropriate links in
(00:23):
the show notes.
This podcast is also acompanion to the Journal of
Emerging Issues and Litigation,for which I serve as
editor-in-chief, published byFastcase Full Court Press.
And now here's today's episode.
If you like what you hear,please give us a rating.
Today we're going to talk aboutprotecting inventions,
(00:45):
specifically through the patentprocess.
You might think that inventors,as I do, are wild-haired lab
dwellers, or maybe they're justhard-working professionals.
That's probably what they are.
They've been characterized in alot of ways like that.
Invention itself has enjoyed alot of characterizations and its
(01:05):
family ties have also beenexplored over the years,
commented on.
We all know the mother ofinvention is necessity.
That's credited to Plato andothers.
But who really knows?
Apparently, invention also hada father.
According to Galileo, doubt isthe father, so Doubt and
Necessity.
You know they got together andthen had a whole bunch of
(01:27):
inventions.
According to Susanna I thinkher name is pronounced Settler-
Anyway she's a playwright fromthe 17th century.
She said that Want is themistress of invention.
So once Necessity and Doubt hada baby, that baby went on to
have a mistress.
Apparently, agatha Christiealso a writer, of course.
(01:49):
We all know her she alsoweighed in on this.
She didn't think necessity wasthe mother of invention.
She said that invention comesfrom quote idleness, possibly
also from laziness to saveoneself trouble.
So, according to AgathaChristie, we invent to stay out
of jail.
A lot of us lazy slobs withnothing to do and who is that
(02:14):
really?
Those folks should be uppingtheir invention game.
There's a great book I happenedto just finish reading called
the Last Days of Night, writtenby Graham Moore, and the book is
about, among other things, theinvention and patenting what was
then the perfect light bulb,and whether the nation's power
grid was going to be AC, like itis today, or DC.
(02:36):
It's a historical fiction withcharacters including Nikola
Tesla, thomas Edison includingNikola Tesla, thomas Edison,
george Westinghouse and a younglawyer, who was in way over his
head at the time, named PaulCravas.
That's a famous name in legalcircles.
Tesla, who's featuredprominently in the book, said
(02:59):
that ideas are born when he'salone.
So be alone and you're going tocome up with ideas.
That's Nikola Tesla Words toLive by.
Now Mark Twain was not in thebook, but I recall anyway.
He once said that the greatestinventor of all time was the
accident, and there arecertainly a lot of inventions
(03:22):
that are said to have come fromaccident.
I think I talked about this onanother podcast.
I know some of them werevulcanized rubber.
That was supposed to be anaccident.
I think the microwave guy wastesting one thing.
I forget what it was, but maybesome kind of radar or something
, I don't know.
But he was testing one thingand he had a sandwich in his
pocket and sandwich heated up.
(03:43):
That can't be true, but I havea feeling it kind of is.
And wow, that sounds dangerous.
If the sandwich in your pocketis heating up, that can't be
good for you know, your body,for example.
And then there was another one.
What was it?
Velcro or penicillin?
There were some other ones, butwe all know those and I don't
(04:04):
even know if they're true.
So if they aren't true, pleasetell me, and I'll happily admit
that I'm wrong.
But this whole thing aboutcreation by accident, that's
something that Edison disagreedwith.
He said he never came up withanything that was worse than
anything accidentally.
Nothing came by accident, hesaid.
(04:31):
It all came by hard work.
In fact, he's famously quotedas saying invention is 1%
inspiration and 99% perspiration.
That adds up to 100% for thoseof you who have your scratch
pads out.
Then another inventor said thatinvention is 93% perspiration,
6% electricity, 4% evaporationand 2% butterscotch ripple.
That, of course, was WillyWonka, famously played by Gene
(04:52):
Wilder.
Willy Wonka wasn't real.
I feel like I need to throwthat in, but anyway.
Graham Moore, in writing aboutPaul Cravath, felt that it was
Cravath's belief that it wasn'tthe job of a litigator to
(05:12):
determine facts.
It was his job to construct astory from those facts by which
a clear moral conclusion wouldbe unavoidable.
That was the business of Paul'sstories.
Graham moore wrote to presentan undeniable view of the world
and then to vanish, and it goeson from there.
Uh, there's more to thatsentence.
Anyway, it's a great book.
(05:33):
I recommend it.
It's a love story.
Uh, it's a bunch of otherthings.
It's a litigation story and uh,of course, it touched on what
was patentable.
But more to the point, the bookdiscusses the battle between
Edison and Westinghouse overwhich electricity system would
become the standard in thecountry whether it was going to
be direct current or alternatingcurrent.
(05:56):
They call it the war of thecurrents.
Edison was a DC guy.
Tesla and Westinghouse promotedAC.
Dc guy Tesla and Westinghousepromoted AC.
So Edison developed his firstbulb in the late 1870s and it
was designed to run on DC.
So he began building a systemof wires all around the country
(06:16):
to produce and distributeelectricity so businesses and
homes could use his newinvention.
Westinghouse struggled to comeup with a patentable alternative
.
But when he did come up withhis own tweak, he faced a
barrage of lawsuits for medicine.
And that's where Paul Kravathcame in.
So he entered Tesla, who was ayoung engineer from Croatia.
(06:39):
He immigrated to America,started working for Edison.
He helped improve Edison's DCgenerators.
He was also trying to getEdison interested in AC motors,
which he'd been developing.
But Edison was alreadydedicated to DC and he said AC
had no future so he wasn'tinterested in that.
So he set out to prove as much.
(07:01):
One of the ways he tried toprove as much was using a
Westinghouse generator in thefirst electric chair.
It's a pretty grisly scene thatI won't go into, but it ended
up demonstrating that AC currentwasn't the killer that Edison
wanted everybody to believe.
That was his thing.
You put AC into homes andpeople will fry themselves.
(07:23):
You put AC into homes andpeople will fry themselves,
anyway.
Later Tesla would strike out onhis own.
He got a number of patents forhis AC technology and Paul
Krabath, who representedWestinghouse in the Edison
litigation, played a key role inWestinghouse's ultimate victory
In 1888, he facilitated Tesla'ssale of his patents to
(07:51):
Westinghouse, who would win thewar of the currents with their
AC generators that have lit usup ever since.
Come forward to the present ofpatent eligibility in the
country, particularly in thewake of some Supreme Court
(08:13):
decisions that have narrowed thescope of patentable subject
matter.
It sets out to clarify andstrengthen the standards for
eligibility, particularly inareas like software and
artificial intelligence andbiotechnology.
Addresses the concept of theabstract idea to provide more
(08:33):
specific guidance on whatconstitutes an abstract idea
that is not patentable.
He seeks to promote innovation,protect intellectual property,
balance innovation and thepublic interest.
So that's a big deal.
By addressing these issues, theproposed law would create a
(08:55):
more predictable and favorablepatent landscape for inventors
and businesses.
But that is really all I knowin general.
But that is really all I knowin general.
Fortunately for you, I got tointerview Ryan N Phelan, an
attorney, with Marshall Gerstein.
Ryan is a registered patentattorney who counsels and works
with clients in all areas of IPFocus on patents.
(09:19):
Ryan helps clients prepare andprosecute high-quality patent
applications and developstrategic patent portfolios for
innovative products and services.
He prepares legal opinions asto patentability, non-infrigment
, validity, innovative productsor services.
He's also a litigator who helpsclients protect market share
(09:41):
from competitors and defendclients from IP lawsuits against
competitors or non-practicingpatent entities.
Ryan plays a role similar towhat Paul Kravath played back in
the day.
He's a former technologyconsultant with Accenture
background in computer scienceand engineering.
He represents numerous startupsand Fortune 500 clients with
(10:04):
patent matters in tech areaslike artificial intelligence,
machine learning, medicaldevices, biometrics, data,
virtual reality, imaging,internet, e-commerce the whole
thing.
Read his bio.
Brian received his JD fromNorthwestern University School
of Law, cum laude.
He also has an MBA fromNorthwestern's.
(10:26):
With that, here's my interviewwith Ryan Phelan, an attorney
with Marshall Gerstein.
Hope you enjoy it.
Ryan Phelan, thank you verymuch for talking to me today.
Speaker 2 (10:37):
Thank you, tom, glad to be here.
Speaker 1 (10:38):
Good, we're talking about the patent eligibility
restoration bill, so what canyou tell us about it?
What problems is it trying tofix?
What are its goals?
Speaker 2 (10:46):
Sure, this is a bill that was entered by Senators
Tillerson and Kuhn, and it'strying to fix the patent
eligibility in the United Statesthat patent attorneys such as
myself figure out on aday-to-day basis, because the
law in this area has gotten alittle abstract, so to speak.
Speaker 1 (11:04):
Well, what do you mean by that?
What's the current state ofpatent eligibility law and how
does it impact innovation andeconomic growth?
Speaker 2 (11:13):
patent eligibility law and how does it impact
innovation and economic growth?
Sure, so there's some historythere.
It could take us all the wayback to around the mid-90s, when
a Supreme Court decision StateStreet Bank came out, stating
that highly functional claimsand I'm a computer scientist so
I tend to think in those termsbut highly functional claims
(11:36):
terms, but highly functionalclaims are in fact patentable
which kicked off a decade or 15years or so, with inventors and
patent attorneys and patentagents writing very functional
claims to cover computingtechnology.
And this makes sense because itwas in the day and age where
personal computers are startingto emerge and there were quite a
number of inventions dealingwith computing technology and
doing old things on computers ornew things on computers, and so
(11:59):
the law in that area started todevelop.
And then I'll fast forward to2014, where two cases came out.
One was Mayo and the otherAlice.
Alice seems to get the mostattention, especially in my
field, computer arts where theAlice case was the bookend to
the State Street Bank case, andthe Alice decision swung the
(12:21):
pendulum back with respect topatent eligibility, basically
carving out a few judicialexceptions and naming judicial
exceptions where the SupremeCourt started to recognize, or
at least, in that case,recognize that the claims at
issue were covering traditionalways that banks performed
(12:41):
banking operations.
In that particular case it wasa third-party mediation for
transfers of money and theSupreme Court basically said
that it was an abstract idea,which is a type of judicial
exception, and found andprovided an opinion that those
types of abstract ideals were nolonger patent eligible under
(13:02):
Section 101.
And that opened the door forinvalidating patents under a
Section 101 patent eligibilityin the US.
Speaker 1 (13:21):
So just for people who aren't patent attorneys,
what's the difference between?
Speaker 2 (13:23):
abstract ideas and other ideas.
Sure, the Section 101 is asection in the United States
Code, title 35, which deals withpatents, and that section
enumerates four categories ofinventions process, machine,
article, manufacturer orcomposition of matter and our
(13:45):
composition thereof.
One of those four things.
And unless your invention fitsinto one of those four broad
categories, then your inventionis said to be ineligible.
And what the courts have doneover the years have created some
judicial exceptions.
So they're created by thecourts and not by statute, not
by Congress, and they've saidthat certain things can't be
(14:08):
patent eligible, one of which, asimple example, is a
mathematical equation.
Einstein's E equals MC squaredis a mathematical equation.
Einstein's E equals MC squaredis a good example because that's
a natural law expressed withthe mathematical equation.
So if Einstein had wanted topatent that formula, he could
not, because it's something thatoccurs naturally, it's a
formula that exists in physics.
(14:29):
Other things, such as naturallyoccurring things found in
nature, can also not be patentedbecause they're simply not new,
they're not inventions, theyalready exist.
That kind of thinking betweenthe categories of inventions and
the judicial exceptions is whatis at play here.
What about Mayo?
So Alice came second, mayo camefirst.
(14:50):
They are different, typicallycomputer science, electrical
engineer practitioners willfocus on Alice, because that
case dealt with a hedge fundtype activity in the computing
space with computer components.
And then Mayo was a biotechrelated case.
That came first and theyhappened one after the other and
(15:11):
the Supreme Court was definingthese judicial exceptions
further, one in the biotechspace and the other in the
computing space, and they moreor less say similar things with
respect to patent eligibilityand from that date, around 2014,
they made Section 101 a veryhot area of the law.
(15:32):
Before that it was a very hotarea of the law.
Before that it was a verysleepy area of the law.
Speaker 1 (15:36):
To just elaborate on that a little bit as you go into
what the patent eligibilityrestoration bill does.
So just, you've described it,but what problem is it trying to
solve?
And then what are the benefitsfor inventors and businesses, et
cetera?
Speaker 2 (15:51):
Sure.
The problem that it's trying tosolve is I guess you could
define it in a couple of ways.
First, it's a lack of judicialinsight or additional cases
coming down from the SupremeCourt.
There's been many cases thathave been requested that the
Supreme Court take up on cert,but the Supreme Court has denied
(16:11):
those cases since that 2014date.
The Supreme Court has not takenup any substantial patent
eligibility case up since 2014.
So we're 10 years out from thatcase and there's been a lot of
frustration, at least on someconstituent side, regarding when
can we have more clarity withrespect to what happened in
(16:32):
2014,.
Respect to patent eligibilityand the current rule of the
Supreme Court case cannot changeunless the Supreme Court
provides additional guidancethrough additional decisions
either changing it or adding toit, or if Congress steps in and
basically changes it.
And this bill, to answer yourultimate question, is designed
(16:56):
to do just that to sweep awaythe judicial exceptions and
start afresh or anew withSection 101, patent eligibility.
It's like hitting the restartbutton for this area of the law.
Speaker 1 (17:11):
Okay.
So from a very ground levelperspective, this is like an
inventor or a business they'reeither not clear on what can be
patented in some cases, or theywant to challenge something.
Is that kind of the gist of it?
We've got an invention here,but is it eligible?
Is that sort of a ground level?
Speaker 2 (17:31):
Yeah, that's right.
So one of the questions that wethink about as patent attorneys
when we're reviewing a newinvention is how can we satisfy
patent eligibility?
The 2014 Alice decision andMayo decision, depending on
where that technology sitswhether it's computer or bio
will come to mind immediately,because it's one of the hurdles
that has to be overcome in orderfor the patent to issue.
Speaker 1 (17:55):
Gotcha Okay.
Do you see any potentialdrawbacks or potential
unintended consequences of thebill?
Speaker 2 (18:02):
So the bill is written in a way where it
captures some of the judicialexceptions.
In fact they call themeligibility exclusions and they
list five different eligibilityexclusions.
The first three of them aredirected towards and this is my
own categorization, not in thebill itself, but it's primarily
(18:25):
directed towardscomputer-related inventions.
These are exceptions A throughC and these the text of the
proposed bill.
And then the last two, d and E,are directed towards biotech,
and the text captures some ofthe traditional judicial
exceptions, although they doweave in some questions,
(18:46):
including and I'll just read youone of them One of the
exceptions in the abstract idea.
Space or the computer space is aprocess that is substantially
economic, financial, business,social, cultural or artistic,
even though not less than onestep in the process refers to a
machine or manufacturer, is notpatent eligible.
(19:09):
So that language is interestingbecause it uses the word
substantially, and so anytimeyou have in um statutory text
and ambiguous word likesubstantially, what does that
mean?
And um, that can be debated.
So the text does try to clarifythat later on.
(19:30):
That basically stating that ifit's something that can be
performed wholly, an abstractidea has to be performed solely
in the human mind and otherpoints of clarification.
But again, even that level oftext can be ambiguous and
subject to debate With respectto negatives of the text.
The real question is this text,even if passed and right now it
(19:54):
hasn't been passed by eitherSenate nor the House, but even
if it was would this providesufficient clarity or would we
be arguing about the same thingagain, going forward?
Speaker 1 (20:07):
Yeah, whenever I hear words like substantial or
reasonable, it just feels likewhoever's drafting something is
like yeah, lawyers and judgescan figure that out.
Speaker 2 (20:16):
That's exactly right.
Yeah, I think.
Perhaps I'm guessing, you know,maybe there's some kind of
compromise language that was putin there and, substantially, is
certainly one of those, and soperhaps, in one sense, it could
create more questions than italleviates, but I would say that
it does provide much moreclarity than what the current
(20:37):
Supreme Court case leaves uswith.
Since the Supreme Court casehas come out, there's been
judges across the country tryingto figure out the scope of 101.
The Patent Office has put outseveral guidances which are not
law.
They try to provide guidance tothe patent examination court so
they can use it practically toexamine patents and allow
(21:00):
patents.
This happened at least twicegenerally One time in once in
early 2019, and then a secondtime an update later in 2019.
And it recently came out withan AI eligibility guidance for
artificial intelligence-relatedinventions.
And it's always the same thing.
The USPTO, the US Patent Office,is constrained because they're
(21:23):
not a lawmaking body and so theyhave to use existing law, which
the problem still exists, giventhat we have to go back to the
2014 to get that Supreme Courtdecision.
So you're trying to make apractical solution but at the
same time, it doesn't have anylegal force of law behind it,
but we use practitioners such asmyself, examiners, courts,
(21:46):
everyone in the US practice oflaw for this particular Section
101, with a lot of ambiguity asto what in fact fact is patent
eligible.
And that's the thrust of thebill it's hoping to restore
clarity and get the patentsystem back on track with
respect to patent eligibility.
Speaker 1 (22:06):
Okay.
Do you think some of this ishappening because technology is
advancing so quickly?
Speaker 2 (22:16):
You could say that in one sense.
Certainly there aretechnologies that the Patent
Office is focusing on, ai beingone of them.
They've put out, like Imentioned, the AI eligibility
guidance recently this year intrack, and AI is certainly
advancing rapidly.
There's other technologiesadvancing rapidly, but Section
101 covers it is intended to beagnostic with respect to
(22:40):
technologies it's supposed to.
If your invention fits into oneof those four buckets that I
had mentioned earlier, then youshould be subject to a patent.
I would say that the Alice casewith respect to subject matter
eligibility, became the tailthat wagged the dog scenario
where I don't think before thecourts nor Congress expected
(23:01):
judicial exceptions become sucha large problem or a large
consideration, but it has.
This bill is designed to putSection 101 back to where it
needs to be and, on that lastpoint, many commentators, many
attorneys, including myself,have begun to think that Section
101 has started to bleed intothe other sections of Title 35,
(23:25):
including obviousness, wheresome courts and some decisions
taken from the Alice decisionhave started to have overlaps
between 101 and these otherareas of the law 102, which is
novelty, and 103, which is notobviousness, where some feel
that they should be separatebecause they're separate areas
(23:48):
of the law all I gotcha Okay.
Speaker 1 (23:57):
So it's less about technological advances than it
is about the Alice decisionthrough things in a different
direction.
Speaker 2 (24:00):
Yes, and that doesn't mean to.
It certainly has an impact ontechnological advances, but all
patents it'll have an impact on,some more than others.
Certainly those in the computerspace and in the biotechnology
space are targeted or impactedmore.
Mechanical inventions tend tobe less, but there has been some
(24:20):
cases, like the American axlecase, where mechanical invention
was at issue with respect topatent eligibility.
Speaker 1 (24:29):
Okay, how do you think courts would receive this?
Speaker 2 (24:33):
I think the courts would receive it as a welcomed
area of the wall.
It would give them somethingthat's more bright-lined than
the Alice decision, certainly,which is where they start in the
more recent federal circuitdecisions that have come after
that.
So the text is pretty sharp.
Decisions that have come afterthat.
(24:56):
So the text is pretty sharp.
It's other than the portionsthat I mentioned, such as
substantially using those typesof words.
It's compact and it allowscourt to look at a small
statutory set of terms andfigure out whether something's
patent eligible.
So I think it'll be welcomed bythe court.
Certainly there'll be courtdecisions from the federal
circuit that will define whatthese terms mean and give some
kind of.
Maybe after we build up 10cases, 20 cases, 30 cases,
(25:18):
you'll get a sense of what thatmeans and examples that come
from the cases and that'll taketime, but I think the district
courts will look at it as awelcome tool.
Speaker 1 (25:28):
Okay, you think the bill has a chance.
Speaker 2 (25:31):
I think it may.
This has been tried over theyears to introduce a bill that
will address patent eligibility,and each time it's been
recycled or updated and ithasn't been passed.
So I think there's just andthis is just my own feeling it
seems like everyone's waitingfor the Supreme Court to take up
a decision and add clarity sothat Congress doesn't have to
(25:54):
act.
Perhaps the courts can figurethis out for themselves, but
it's been such.
It's been a decade and that hasnot happened, and perhaps the
Supreme Court is indicating thatit doesn't want to handle this
and it's punning to Congress.
Speaker 1 (26:06):
Yeah, and, as you said, it will take a while
before if it passes.
When it passes, it'll take awhile before its effects to be
felt in the patent system,because you said courts are
going to have to rule and thingslike that.
Speaker 2 (26:18):
Yeah, that's right.
Even if this passed today ortomorrow, then new decisions
would pick it up and we wouldsee those decisions play out
within the probably immediatelymany, many decisions pending
right now where subject mattereligibility is at issue, many,
many decisions pending right nowwhere subject matter
eligibility is at issue Iimagine those current cases.
There'd be motion practicebased on the new law and it
(26:40):
would take time for the courtsto rule on those.
Within a year's time weprobably have, at least at the
district court level, somedecisions and then a few year or
two after that we'd see somestuff from the federal circuit.
Speaker 1 (26:52):
So if I'm a client of yours and I've got an invention
, I've got a business and we'veinvented something, what
guidance would you give me inlight of Alice and Mayo and in
light of this potential new law?
Speaker 2 (27:06):
Yeah, absolutely so.
If we were filing, let's say, acomputer-related invention, I
would look at or show you thethree abstract idea type
exceptions, eligibilityexceptions that are in the
statute, the first three.
The first one is, and going on,our E equals MC squared analogy
.
It says you can't patent amathematical formula that is not
(27:28):
part of the claimed inventionin a category described in
section A, and so the law carvesout these specific exclusions
for these judicial exceptionsand most of these, the three or
the traditional judicialexceptions recognized by the
courts or created by the courts.
So they're just, they'reputting in those well-known
(27:49):
exclusions, eligibilityexclusions, into the statute
itself and it basically sayingthese are the only ones that
we're going to recognize, and ittries to define shorter what
those are and what those aren't.
If I was advising you as aninventor, we would go through
these kind of one by one andmake sure that we're not
claiming any of these things ina way that says that we can.
Speaker 1 (28:13):
Gotcha All right.
Good, ryan Phelan, thank youvery much for talking with me
about this today.
Speaker 2 (28:17):
Happy to be here.
Tom, Appreciate it.
Speaker 1 (28:22):
That concludes this episode of the Emerging
Litigation Podcast, a coproduction of HB Litigation,
Critical Legal Content, VLEXFastcase and our friends at
Lostry Media.
I'm Tom Hagee, your host, whichwould explain why I'm talking.
Please feel free to reach outto me if you have ideas for a
future episode and don'thesitate to share this with
(28:44):
clients, colleagues, friends,animals you may have left at
home, teenagers youirresponsibly left unsupervised,
and certain classifications offruits and vegetables, and if
you feel so moved, please giveus a rating.
Those always help.
Thank you for listening.
Welcome to the Emerging Litigation Podcast.
This is a group project drivenby HB Litigation, now part of
Critical Legal Content and VLEXCompany's Fast Case and Law
Street Media.
I'm your host, tom Hagee,longtime litigation news editor
and publisher and currentlitigation enthusiast.
If you wish to reach me, pleasecheck the appropriate links in
(00:23):
the show notes.
This podcast is also acompanion to the Journal of
Emerging Issues and Litigation,for which I serve as
editor-in-chief, published byFastcase Full Court Press.
And now here's today's episode.
If you like what you hear,please give us a rating.
Today we're going to talk aboutprotecting inventions,
(00:45):
specifically through the patentprocess.
You might think that inventors,as I do, are wild-haired lab
dwellers, or maybe they're justhard-working professionals.
That's probably what they are.
They've been characterized in alot of ways like that.
Invention itself has enjoyed alot of characterizations and its
(01:05):
family ties have also beenexplored over the years,
commented on.
We all know the mother ofinvention is necessity.
That's credited to Plato andothers.
But who really knows?
Apparently, invention also hada father.
According to Galileo, doubt isthe father, so Doubt and
Necessity.
You know they got together andthen had a whole bunch of
(01:27):
inventions.
According to Susanna I thinkher name is pronounced Settler-
Anyway she's a playwright fromthe 17th century.
She said that Want is themistress of invention.
So once Necessity and Doubt hada baby, that baby went on to
have a mistress.
Apparently, agatha Christiealso a writer, of course.
(01:49):
We all know her she alsoweighed in on this.
She didn't think necessity wasthe mother of invention.
She said that invention comesfrom quote idleness, possibly
also from laziness to saveoneself trouble.
So, according to AgathaChristie, we invent to stay out
of jail.
A lot of us lazy slobs withnothing to do and who is that
(02:14):
really?
Those folks should be uppingtheir invention game.
There's a great book I happenedto just finish reading called
the Last Days of Night, writtenby Graham Moore, and the book is
about, among other things, theinvention and patenting what was
then the perfect light bulb,and whether the nation's power
grid was going to be AC, like itis today, or DC.
(02:36):
It's a historical fiction withcharacters including Nikola
Tesla, thomas Edison includingNikola Tesla, thomas Edison,
george Westinghouse and a younglawyer, who was in way over his
head at the time, named PaulCravas.
That's a famous name in legalcircles.
Tesla, who's featuredprominently in the book, said
(02:59):
that ideas are born when he'salone.
So be alone and you're going tocome up with ideas.
That's Nikola Tesla Words toLive by.
Now Mark Twain was not in thebook, but I recall anyway.
He once said that the greatestinventor of all time was the
accident, and there arecertainly a lot of inventions
(03:22):
that are said to have come fromaccident.
I think I talked about this onanother podcast.
I know some of them werevulcanized rubber.
That was supposed to be anaccident.
I think the microwave guy wastesting one thing.
I forget what it was, but maybesome kind of radar or something
, I don't know.
But he was testing one thingand he had a sandwich in his
pocket and sandwich heated up.
(03:43):
That can't be true, but I havea feeling it kind of is.
And wow, that sounds dangerous.
If the sandwich in your pocketis heating up, that can't be
good for you know, your body,for example.
And then there was another one.
What was it?
Velcro or penicillin?
There were some other ones, butwe all know those and I don't
(04:04):
even know if they're true.
So if they aren't true, pleasetell me, and I'll happily admit
that I'm wrong.
But this whole thing aboutcreation by accident, that's
something that Edison disagreedwith.
He said he never came up withanything that was worse than
anything accidentally.
Nothing came by accident, hesaid.
(04:31):
It all came by hard work.
In fact, he's famously quotedas saying invention is 1%
inspiration and 99% perspiration.
That adds up to 100% for thoseof you who have your scratch
pads out.
Then another inventor said thatinvention is 93% perspiration,
6% electricity, 4% evaporationand 2% butterscotch ripple.
That, of course, was WillyWonka, famously played by Gene
(04:52):
Wilder.
Willy Wonka wasn't real.
I feel like I need to throwthat in, but anyway.
Graham Moore, in writing aboutPaul Cravath, felt that it was
Cravath's belief that it wasn'tthe job of a litigator to
(05:12):
determine facts.
It was his job to construct astory from those facts by which
a clear moral conclusion wouldbe unavoidable.
That was the business of Paul'sstories.
Graham moore wrote to presentan undeniable view of the world
and then to vanish, and it goeson from there.
Uh, there's more to thatsentence.
Anyway, it's a great book.
(05:33):
I recommend it.
It's a love story.
Uh, it's a bunch of otherthings.
It's a litigation story and uh,of course, it touched on what
was patentable.
But more to the point, the bookdiscusses the battle between
Edison and Westinghouse overwhich electricity system would
become the standard in thecountry whether it was going to
be direct current or alternatingcurrent.
(05:56):
They call it the war of thecurrents.
Edison was a DC guy.
Tesla and Westinghouse promotedAC.
Dc guy Tesla and Westinghousepromoted AC.
So Edison developed his firstbulb in the late 1870s and it
was designed to run on DC.
So he began building a systemof wires all around the country
(06:16):
to produce and distributeelectricity so businesses and
homes could use his newinvention.
Westinghouse struggled to comeup with a patentable alternative
.
But when he did come up withhis own tweak, he faced a
barrage of lawsuits for medicine.
And that's where Paul Kravathcame in.
So he entered Tesla, who was ayoung engineer from Croatia.
(06:39):
He immigrated to America,started working for Edison.
He helped improve Edison's DCgenerators.
He was also trying to getEdison interested in AC motors,
which he'd been developing.
But Edison was alreadydedicated to DC and he said AC
had no future so he wasn'tinterested in that.
So he set out to prove as much.
(07:01):
One of the ways he tried toprove as much was using a
Westinghouse generator in thefirst electric chair.
It's a pretty grisly scene thatI won't go into, but it ended
up demonstrating that AC currentwasn't the killer that Edison
wanted everybody to believe.
That was his thing.
You put AC into homes andpeople will fry themselves.
(07:23):
You put AC into homes andpeople will fry themselves,
anyway.
Later Tesla would strike out onhis own.
He got a number of patents forhis AC technology and Paul
Krabath, who representedWestinghouse in the Edison
litigation, played a key role inWestinghouse's ultimate victory
In 1888, he facilitated Tesla'ssale of his patents to
(07:51):
Westinghouse, who would win thewar of the currents with their
AC generators that have lit usup ever since.
Come forward to the present ofpatent eligibility in the
country, particularly in thewake of some Supreme Court
(08:13):
decisions that have narrowed thescope of patentable subject
matter.
It sets out to clarify andstrengthen the standards for
eligibility, particularly inareas like software and
artificial intelligence andbiotechnology.
Addresses the concept of theabstract idea to provide more
(08:33):
specific guidance on whatconstitutes an abstract idea
that is not patentable.
He seeks to promote innovation,protect intellectual property,
balance innovation and thepublic interest.
So that's a big deal.
By addressing these issues, theproposed law would create a
(08:55):
more predictable and favorablepatent landscape for inventors
and businesses.
But that is really all I knowin general.
But that is really all I knowin general.
Fortunately for you, I got tointerview Ryan N Phelan, an
attorney, with Marshall Gerstein.
Ryan is a registered patentattorney who counsels and works
with clients in all areas of IPFocus on patents.
(09:19):
Ryan helps clients prepare andprosecute high-quality patent
applications and developstrategic patent portfolios for
innovative products and services.
He prepares legal opinions asto patentability, non-infrigment
, validity, innovative productsor services.
He's also a litigator who helpsclients protect market share
(09:41):
from competitors and defendclients from IP lawsuits against
competitors or non-practicingpatent entities.
Ryan plays a role similar towhat Paul Kravath played back in
the day.
He's a former technologyconsultant with Accenture
background in computer scienceand engineering.
He represents numerous startupsand Fortune 500 clients with
(10:04):
patent matters in tech areaslike artificial intelligence,
machine learning, medicaldevices, biometrics, data,
virtual reality, imaging,internet, e-commerce the whole
thing.
Read his bio.
Brian received his JD fromNorthwestern University School
of Law, cum laude.
He also has an MBA fromNorthwestern's.
(10:26):
With that, here's my interviewwith Ryan Phelan, an attorney
with Marshall Gerstein.
Hope you enjoy it.
Ryan Phelan, thank you verymuch for talking to me today.
Speaker 2 (10:37):
Thank you, tom, glad to be here.
Speaker 1 (10:38):
Good, we're talking about the patent eligibility
restoration bill, so what canyou tell us about it?
What problems is it trying tofix?
What are its goals?
Speaker 2 (10:46):
Sure, this is a bill that was entered by Senators
Tillerson and Kuhn, and it'strying to fix the patent
eligibility in the United Statesthat patent attorneys such as
myself figure out on aday-to-day basis, because the
law in this area has gotten alittle abstract, so to speak.
Speaker 1 (11:04):
Well, what do you mean by that?
What's the current state ofpatent eligibility law and how
does it impact innovation andeconomic growth?
Speaker 2 (11:13):
patent eligibility law and how does it impact
innovation and economic growth?
Sure, so there's some historythere.
It could take us all the wayback to around the mid-90s, when
a Supreme Court decision StateStreet Bank came out, stating
that highly functional claimsand I'm a computer scientist so
I tend to think in those termsbut highly functional claims
(11:36):
terms, but highly functionalclaims are in fact patentable
which kicked off a decade or 15years or so, with inventors and
patent attorneys and patentagents writing very functional
claims to cover computingtechnology.
And this makes sense because itwas in the day and age where
personal computers are startingto emerge and there were quite a
number of inventions dealingwith computing technology and
doing old things on computers ornew things on computers, and so
(11:59):
the law in that area started todevelop.
And then I'll fast forward to2014, where two cases came out.
One was Mayo and the otherAlice.
Alice seems to get the mostattention, especially in my
field, computer arts where theAlice case was the bookend to
the State Street Bank case, andthe Alice decision swung the
(12:21):
pendulum back with respect topatent eligibility, basically
carving out a few judicialexceptions and naming judicial
exceptions where the SupremeCourt started to recognize, or
at least, in that case,recognize that the claims at
issue were covering traditionalways that banks performed
(12:41):
banking operations.
In that particular case it wasa third-party mediation for
transfers of money and theSupreme Court basically said
that it was an abstract idea,which is a type of judicial
exception, and found andprovided an opinion that those
types of abstract ideals were nolonger patent eligible under
(13:02):
Section 101.
And that opened the door forinvalidating patents under a
Section 101 patent eligibilityin the US.
Speaker 1 (13:21):
So just for people who aren't patent attorneys,
what's the difference between?
Speaker 2 (13:23):
abstract ideas and other ideas.
Sure, the Section 101 is asection in the United States
Code, title 35, which deals withpatents, and that section
enumerates four categories ofinventions process, machine,
article, manufacturer orcomposition of matter and our
(13:45):
composition thereof.
One of those four things.
And unless your invention fitsinto one of those four broad
categories, then your inventionis said to be ineligible.
And what the courts have doneover the years have created some
judicial exceptions.
So they're created by thecourts and not by statute, not
by Congress, and they've saidthat certain things can't be
(14:08):
patent eligible, one of which, asimple example, is a
mathematical equation.
Einstein's E equals MC squaredis a mathematical equation.
Einstein's E equals MC squaredis a good example because that's
a natural law expressed withthe mathematical equation.
So if Einstein had wanted topatent that formula, he could
not, because it's something thatoccurs naturally, it's a
formula that exists in physics.
(14:29):
Other things, such as naturallyoccurring things found in
nature, can also not be patentedbecause they're simply not new,
they're not inventions, theyalready exist.
That kind of thinking betweenthe categories of inventions and
the judicial exceptions is whatis at play here.
What about Mayo?
So Alice came second, mayo camefirst.
(14:50):
They are different, typicallycomputer science, electrical
engineer practitioners willfocus on Alice, because that
case dealt with a hedge fundtype activity in the computing
space with computer components.
And then Mayo was a biotechrelated case.
That came first and theyhappened one after the other and
(15:11):
the Supreme Court was definingthese judicial exceptions
further, one in the biotechspace and the other in the
computing space, and they moreor less say similar things with
respect to patent eligibilityand from that date, around 2014,
they made Section 101 a veryhot area of the law.
(15:32):
Before that it was a very hotarea of the law.
Before that it was a verysleepy area of the law.
Speaker 1 (15:36):
To just elaborate on that a little bit as you go into
what the patent eligibilityrestoration bill does.
So just, you've described it,but what problem is it trying to
solve?
And then what are the benefitsfor inventors and businesses, et
cetera?
Speaker 2 (15:51):
Sure.
The problem that it's trying tosolve is I guess you could
define it in a couple of ways.
First, it's a lack of judicialinsight or additional cases
coming down from the SupremeCourt.
There's been many cases thathave been requested that the
Supreme Court take up on cert,but the Supreme Court has denied
(16:11):
those cases since that 2014date.
The Supreme Court has not takenup any substantial patent
eligibility case up since 2014.
So we're 10 years out from thatcase and there's been a lot of
frustration, at least on someconstituent side, regarding when
can we have more clarity withrespect to what happened in
(16:32):
2014,.
Respect to patent eligibilityand the current rule of the
Supreme Court case cannot changeunless the Supreme Court
provides additional guidancethrough additional decisions
either changing it or adding toit, or if Congress steps in and
basically changes it.
And this bill, to answer yourultimate question, is designed
(16:56):
to do just that to sweep awaythe judicial exceptions and
start afresh or anew withSection 101, patent eligibility.
It's like hitting the restartbutton for this area of the law.
Speaker 1 (17:11):
Okay.
So from a very ground levelperspective, this is like an
inventor or a business they'reeither not clear on what can be
patented in some cases, or theywant to challenge something.
Is that kind of the gist of it?
We've got an invention here,but is it eligible?
Is that sort of a ground level?
Speaker 2 (17:31):
Yeah, that's right.
So one of the questions that wethink about as patent attorneys
when we're reviewing a newinvention is how can we satisfy
patent eligibility?
The 2014 Alice decision andMayo decision, depending on
where that technology sitswhether it's computer or bio
will come to mind immediately,because it's one of the hurdles
that has to be overcome in orderfor the patent to issue.
Speaker 1 (17:55):
Gotcha Okay.
Do you see any potentialdrawbacks or potential
unintended consequences of thebill?
Speaker 2 (18:02):
So the bill is written in a way where it
captures some of the judicialexceptions.
In fact they call themeligibility exclusions and they
list five different eligibilityexclusions.
The first three of them aredirected towards and this is my
own categorization, not in thebill itself, but it's primarily
(18:25):
directed towardscomputer-related inventions.
These are exceptions A throughC and these the text of the
proposed bill.
And then the last two, d and E,are directed towards biotech,
and the text captures some ofthe traditional judicial
exceptions, although they doweave in some questions,
(18:46):
including and I'll just read youone of them One of the
exceptions in the abstract idea.
Space or the computer space is aprocess that is substantially
economic, financial, business,social, cultural or artistic,
even though not less than onestep in the process refers to a
machine or manufacturer, is notpatent eligible.
(19:09):
So that language is interestingbecause it uses the word
substantially, and so anytimeyou have in um statutory text
and ambiguous word likesubstantially, what does that
mean?
And um, that can be debated.
So the text does try to clarifythat later on.
(19:30):
That basically stating that ifit's something that can be
performed wholly, an abstractidea has to be performed solely
in the human mind and otherpoints of clarification.
But again, even that level oftext can be ambiguous and
subject to debate With respectto negatives of the text.
The real question is this text,even if passed and right now it
(19:54):
hasn't been passed by eitherSenate nor the House, but even
if it was would this providesufficient clarity or would we
be arguing about the same thingagain, going forward?
Speaker 1 (20:07):
Yeah, whenever I hear words like substantial or
reasonable, it just feels likewhoever's drafting something is
like yeah, lawyers and judgescan figure that out.
Speaker 2 (20:16):
That's exactly right.
Yeah, I think.
Perhaps I'm guessing, you know,maybe there's some kind of
compromise language that was putin there and, substantially, is
certainly one of those, and soperhaps, in one sense, it could
create more questions than italleviates, but I would say that
it does provide much moreclarity than what the current
(20:37):
Supreme Court case leaves uswith.
Since the Supreme Court casehas come out, there's been
judges across the country tryingto figure out the scope of 101.
The Patent Office has put outseveral guidances which are not
law.
They try to provide guidance tothe patent examination court so
they can use it practically toexamine patents and allow
(21:00):
patents.
This happened at least twicegenerally One time in once in
early 2019, and then a secondtime an update later in 2019.
And it recently came out withan AI eligibility guidance for
artificial intelligence-relatedinventions.
And it's always the same thing.
The USPTO, the US Patent Office,is constrained because they're
(21:23):
not a lawmaking body and so theyhave to use existing law, which
the problem still exists, giventhat we have to go back to the
2014 to get that Supreme Courtdecision.
So you're trying to make apractical solution but at the
same time, it doesn't have anylegal force of law behind it,
but we use practitioners such asmyself, examiners, courts,
(21:46):
everyone in the US practice oflaw for this particular Section
101, with a lot of ambiguity asto what in fact fact is patent
eligible.
And that's the thrust of thebill it's hoping to restore
clarity and get the patentsystem back on track with
respect to patent eligibility.
Speaker 1 (22:06):
Okay.
Do you think some of this ishappening because technology is
advancing so quickly?
Speaker 2 (22:16):
You could say that in one sense.
Certainly there aretechnologies that the Patent
Office is focusing on, ai beingone of them.
They've put out, like Imentioned, the AI eligibility
guidance recently this year intrack, and AI is certainly
advancing rapidly.
There's other technologiesadvancing rapidly, but Section
101 covers it is intended to beagnostic with respect to
(22:40):
technologies it's supposed to.
If your invention fits into oneof those four buckets that I
had mentioned earlier, then youshould be subject to a patent.
I would say that the Alice casewith respect to subject matter
eligibility, became the tailthat wagged the dog scenario
where I don't think before thecourts nor Congress expected
(23:01):
judicial exceptions become sucha large problem or a large
consideration, but it has.
This bill is designed to putSection 101 back to where it
needs to be and, on that lastpoint, many commentators, many
attorneys, including myself,have begun to think that Section
101 has started to bleed intothe other sections of Title 35,
(23:25):
including obviousness, wheresome courts and some decisions
taken from the Alice decisionhave started to have overlaps
between 101 and these otherareas of the law 102, which is
novelty, and 103, which is notobviousness, where some feel
that they should be separatebecause they're separate areas
(23:48):
of the law all I gotcha Okay.
Speaker 1 (23:57):
So it's less about technological advances than it
is about the Alice decisionthrough things in a different
direction.
Speaker 2 (24:00):
Yes, and that doesn't mean to.
It certainly has an impact ontechnological advances, but all
patents it'll have an impact on,some more than others.
Certainly those in the computerspace and in the biotechnology
space are targeted or impactedmore.
Mechanical inventions tend tobe less, but there has been some
(24:20):
cases, like the American axlecase, where mechanical invention
was at issue with respect topatent eligibility.
Speaker 1 (24:29):
Okay, how do you think courts would receive this?
Speaker 2 (24:33):
I think the courts would receive it as a welcomed
area of the wall.
It would give them somethingthat's more bright-lined than
the Alice decision, certainly,which is where they start in the
more recent federal circuitdecisions that have come after
that.
So the text is pretty sharp.
Decisions that have come afterthat.
(24:56):
So the text is pretty sharp.
It's other than the portionsthat I mentioned, such as
substantially using those typesof words.
It's compact and it allowscourt to look at a small
statutory set of terms andfigure out whether something's
patent eligible.
So I think it'll be welcomed bythe court.
Certainly there'll be courtdecisions from the federal
circuit that will define whatthese terms mean and give some
kind of.
Maybe after we build up 10cases, 20 cases, 30 cases,
(25:18):
you'll get a sense of what thatmeans and examples that come
from the cases and that'll taketime, but I think the district
courts will look at it as awelcome tool.
Speaker 1 (25:28):
Okay, you think the bill has a chance.
Speaker 2 (25:31):
I think it may.
This has been tried over theyears to introduce a bill that
will address patent eligibility,and each time it's been
recycled or updated and ithasn't been passed.
So I think there's just andthis is just my own feeling it
seems like everyone's waitingfor the Supreme Court to take up
a decision and add clarity sothat Congress doesn't have to
(25:54):
act.
Perhaps the courts can figurethis out for themselves, but
it's been such.
It's been a decade and that hasnot happened, and perhaps the
Supreme Court is indicating thatit doesn't want to handle this
and it's punning to Congress.
Speaker 1 (26:06):
Yeah, and, as you said, it will take a while
before if it passes.
When it passes, it'll take awhile before its effects to be
felt in the patent system,because you said courts are
going to have to rule and thingslike that.
Speaker 2 (26:18):
Yeah, that's right.
Even if this passed today ortomorrow, then new decisions
would pick it up and we wouldsee those decisions play out
within the probably immediatelymany, many decisions pending
right now where subject mattereligibility is at issue, many,
many decisions pending right nowwhere subject matter
eligibility is at issue Iimagine those current cases.
There'd be motion practicebased on the new law and it
(26:40):
would take time for the courtsto rule on those.
Within a year's time weprobably have, at least at the
district court level, somedecisions and then a few year or
two after that we'd see somestuff from the federal circuit.
Speaker 1 (26:52):
So if I'm a client of yours and I've got an invention
, I've got a business and we'veinvented something, what
guidance would you give me inlight of Alice and Mayo and in
light of this potential new law?
Speaker 2 (27:06):
Yeah, absolutely so.
If we were filing, let's say, acomputer-related invention, I
would look at or show you thethree abstract idea type
exceptions, eligibilityexceptions that are in the
statute, the first three.
The first one is, and going on,our E equals MC squared analogy
.
It says you can't patent amathematical formula that is not
(27:28):
part of the claimed inventionin a category described in
section A, and so the law carvesout these specific exclusions
for these judicial exceptionsand most of these, the three or
the traditional judicialexceptions recognized by the
courts or created by the courts.
So they're just, they'reputting in those well-known
(27:49):
exclusions, eligibilityexclusions, into the statute
itself and it basically sayingthese are the only ones that
we're going to recognize, and ittries to define shorter what
those are and what those aren't.
If I was advising you as aninventor, we would go through
these kind of one by one andmake sure that we're not
claiming any of these things ina way that says that we can.
Speaker 1 (28:13):
Gotcha All right.
Good, ryan Phelan, thank youvery much for talking with me
about this today.
Speaker 2 (28:17):
Happy to be here.
Tom, Appreciate it.
Speaker 1 (28:22):
That concludes this episode of the Emerging
Litigation Podcast, a coproduction of HB Litigation,
Critical Legal Content, VLEXFastcase and our friends at
Lostry Media.
I'm Tom Hagee, your host, whichwould explain why I'm talking.
Please feel free to reach outto me if you have ideas for a
future episode and don'thesitate to share this with
(28:44):
clients, colleagues, friends,animals you may have left at
home, teenagers youirresponsibly left unsupervised,
and certain classifications offruits and vegetables, and if
you feel so moved, please giveus a rating.
Those always help.
Thank you for listening.
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