Patent Chaos

You would think one thing you can count on in our information economy would be that, once you have obtained a patent and fended off challengers, your IP would be legally protected. That is until a legal scholar points out that two thirds of patent appeals judges appointed since 2000 were appointed in an unconstitutional way…and then the Justice Department basically says, “Oops. Our bad.”

Here’s what happened. In 1999 Congress passed legislation (the “Intellectual Property and Communications Reform Act of 1999,”) that changed the way patent appeals judges were appointed. Then in late 2007, the aforementioned legal scholar, John F. Duffy, published a paper showing that this method of appointment appears to be unconstitutional. It is likely that most patent appeals since 2000 had at least one judge appointed under the new system.

No one is entirely certain what will happen now. On the face of it it appears that any patent appeal heard after 2000 could be challenged. In April Translogic asked the Supreme Court to rule on a case that would be the first legal challenge based on Duffy’s analysis. Until then (and perhaps even after that as the Translogic case may be too narrow to set precedent), everything is up in the air.

When the news first broke, we asked a friend of ours who routinely works with patents at a large, well known technology company if he thought this was a big deal, to which he replied, “Sounds like a huge potential impact.” Still, we can not imagine that it is in anyone’s interest to let what was, essentially, an honest mistake about an esoteric issue invalidate billions of dollars worth of patents. No one is claiming that the patent appeals judges were incompetent, just that the appointment process was not correct. We would hope the Justice Department would get a legislative solution to Congress to fix this in the near future. That said, we are wondering if this issue will become conflated with the perennial bugbear of patent reform.

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