Giachino (00:04.0980 - 00:42.0509)
Welcome to IP Protection Matters. I'm your host Renee Giachino. Today, we are joined by the Honorable Kathleen O'Malley. She's a Board Member of the Council for Innovation Promotion and a former judge on the US Court of Appeals for the Federal Circuit. Prior to that, the US District Court for the Northern District of Ohio.
Today, we'll be talking about intellectual property reform generally, but then we're going to dive into two bills that have been introduced in Congress as well with the hope to strengthen core intellectual property protections. Judge O'Malley, welcome to IP Protection Matters. Thanks for joining me.
O'Malley (00:42.0630 - 00:44.0189)
Thank you. Thanks for having me.
Giachino (00:44.0229 - 01:12.0529)
You have written in detail about these two important bills that have been under consideration in Congress, known as PERA and PREVAIL. If we can, let's just start a brief conversation about PERA, the Patent Eligibility Restoration Act. Can you give us a little bit of the cliff note version of what this law seeks to do and why you believe this is important for our economy and innovation leadership?
O'Malley (01:12.0669 - 01:42.0370)
The primary thing the law seeks to do is to really return the law to where it had been for years and years. Where it was understood that most things were patentable as long as they were new, innovative and they were actually invented by the person who sought to patent them. The Supreme Court has issued a number of decisions in recent years that has sort of upended that system.
Giachino (01:42.0809 - 02:17.0020)
As a former sitting judge, I think you are uniquely qualified to opine and discuss the impact of that series of Supreme Court cases on patent eligibility. We as Americans, we look to our courts to clarify the laws when necessary, and it seems that this has not been the case with patent law as these decisions have made it more unclear, unreliable and unpredictable. Can you speak to the urgency of Congress's action with respect to PERA? Then we'll dive in to PREVAIL.
O'Malley (02:17.0399 - 03:20.0460)
The eligibility issue is frankly a mess. The Supreme Court weighed in in a series of cases and decided that we needed to narrow what could be eligible. So instead of looking to the Patent Act itself and to see whether it qualifies under a whole host of provisions, which limit what you can patent, they created these exceptions to the patent law that were not in statute and were nowhere laid out. They were just court-made exceptions.
What they have done is raise real questions about, both in the pharmaceutical field and in the field of tech, what can be patentable and limits the incentive to actually make some changes in those scientific spaces and limits the incentive to invest in those kinds of changes.
Giachino (03:20.0850 - 03:55.0539)
I read an article recently. It was written some time ago. In fact, shortly after you left the Federal Court back in March of 2022. You commented asking have you ever seen all 12 active judges on a single circuit beg the Supreme Court for guidance and the Supreme Court says no. While you were on the bench, you and your colleagues must have sought guidance on cases of this nature. Share with us what your experience was.
O'Malley (03:55.0770 - 05:13.0970)
Certainly in the pharmaceutical space. So the question with the Mayo [Collaborative Services v. Prometheus Laboratories] decision was extremely problematic because it made it difficult, or as the Federal Circuit has said, virtually impossible to patent any kind of diagnostic methods. If you've ever been very ill or you've ever had a family member who has been very ill, you understand how important it is to be able to have new and improved methods for determining exactly what your illness is.
What happened is the Federal Circuit struggled with the question of can diagnostic patents ever be patentable, and ultimately concluded that the Supreme Court tests have said no. In a couple of the recent cases right before I left the bench, many of the judges pointed out how confusing the law was. How difficult it was to really come to the conclusion that all diagnostic method patents are essentially dead at the beginning. Dead on arrival. That is because the Supreme Court's decisions are so difficult to follow and seem to be so sweeping.
Giachino (05:14.0209 - 05:33.0850)
This is where we definitely need Congress to step back in. So let's talk for a minute about the PREVAIL Act, an acronym that a lot of folks are familiar with. It stands for Promoting and Respecting Economically Vital American Innovation Leadership. How does that proposed legislation differ from PERA?
O'Malley (05:34.0100 - 07:09.0839)
It is very different. PERA has to do with patent eligibility, and it's a substantive legal proposition that we're asking Congress to fix or to explain because the Supreme Court refuses to do so. PREVAIL is really aimed at patent office practices under what is called the AIA, the America Invents Act. When that law was passed, I think many people felt that it was going to actually have a beneficial effect and that it was logical, could be structured properly and could be implemented properly.
But the way it ultimately was implemented or at least was initially implemented, created a lot of concerns and created what some people believe is an out-of-control body, which is the Patent Trial and Appeal Board (PTAB). That body felt that its charge was just to invalidate already-issued patents and that they should make a strong effort to find every single challenge patent to be invalid.
I respect the PTAB judges. I have a lot of respect for them, but I believe that the way the statute has been interpreted has given them too much power and incentivized too many decisions where the patents have been deemed to be invalid after the fact.
Giachino (07:10.0529 - 07:36.0630)
Help me understand this. As I understand it, right now pretty much anyone can challenge a patent in the PTAB, even if they're not facing a lawsuit or the threat of a lawsuit. How will the PREVAIL Act solve this? Am I correct in understanding it has something to do with what we in the legal realm refer to as standing?
O'Malley (07:37.0070 - 09:12.0659)
Exactly. The standing provisions in PREVAIL are some of the key provisions because it's become clear with the notion that anyone could challenge a patent. Meaning that you didn't have to have a claim filed against you. You didn't have to even be afraid that a claim was going to be filed against you. You had to just decide you didn't like that particular patent. Now remember these patents have been issued. The examiners have already looked at them, passed judgment on them, deemed them to be patentable under the Patent Act and people have built their businesses around those determinations. Then out of the blue they can be challenged in the PTAB.
And part of the problem is there are supposed to be estoppel provisions that if you've already been sued in federal court and that occurred more than a year ago, the idea was you were supposed to stay in federal court because the federal court is completely capable of making infringement and validity determinations.
But what happened is you saw a bunch of instances in which people were sued and they essentially had surrogates that would then challenge the patent, because the individual who had been sued couldn't challenge the patent anymore because the deadline had passed. So they would just get someone else, anyone else, to challenge the patent. So that's why there is a belief that you need to have a standing requirement so that the other provisions of the statute can work as they were intended.
Giachino (09:13.0169 - 10:01.0200)
Our guest is the Honorable Kathleen O'Malley. She is a former judge on the US Court of Appeals for the Federal Circuit and also US District Court for the Northern District of Ohio. You mentioned how these businesses have been built around those determinations, and then I have read instances as well where something will go before a federal district court, perhaps even in front of you, and the district court will review the challenger's validity challenge to that patent and then issue a decision even before the PTAB completes its review. But then the PTAB still proceeds. So it definitely sounds duplicative, first and foremost. Will the PREVAIL Act resolve that as well do you think?
O'Malley (10:01.0750 - 10:52.0619)
It will resolve it to some extent. It is trying to avoid duplicative filings. The other problem at the PTAB is that you could have serial filings. In other words, one person could challenge the patent and survive and then someone else could challenge the patent. Or they could challenge different claims of the same patent.
So what the [PREVAIL] Act is trying to do is recognize that it's important to have two different forums. As I said, these PTAB judges themselves are very careful, very thoughtful. They're trying to do the right thing, but there needs to be a greater balance between respect for the court system, respect for the PTAB system, and, frankly, respect for the decisions that were made by the examiners back in the day.
Giachino (10:53.0250 - 11:50.0530)
Let’s go to today. Obviously some big news coming out of Congress as it relates even to these bills because these bills have garnered bipartisan support, namely through the leadership of US Senators Thom Tillis and Chris Coons and then on the other side of Congress with representatives Kevin Kiley and Scott Peters. In each of the houses of Congress, these people technically sit across the aisle from each other, but here we've got them coming together on both pieces of legislation.
What impact, if any, do you think that Senator Tillis's announcement this week that he's not going to seek reelection will have on these bills, particularly because in the past he has been very clear that patent eligibility reform is one of his top legislative priorities? Do you think this will get done before his term ends?
O'Malley (11:50.0820 - 13:17.0979)
That's a good question. Let me start with the fact that I was very saddened to hear that Senator Tillis was not going to seek re-election, especially given the circumstances for it. We need people in Congress who are willing to live by their principles. I felt that he was a very principled man despite the fact that I was appointed by Democratic presidents. He understood the importance of working across the aisle and of not just being a yes man for anyone. So I was very saddened to hear that he was leaving.
From a selfish standpoint, it's bad for the IP community because I think Senator Tillis and Senator Coons were showing us how IP is something that needs to go across lines and that everybody in this country needs to support strong intellectual property rights. We do have more people that have decided to come out and more sponsors that are supporting the PREVAIL Act. In other words, they're making it clear that this is not something [with] bipartisan support that is going to go away.
Giachino (13:18.0280 - 13:38.0559)
As we sit here and we finish our conversation today, I do want to ask one final question. It's something I always like to ask at the end of the discussion. Why should we, and I'm saying that very broadly, the American public, why should we care about IP protections? In other words, why does IP protection matter?
O'Malley (13:39.0570 - 15:41.0460)
That is a big issue. That's a big question. IP protection is really critical for many, many reasons. It's what our economy was built on. I could go all the way back to the Founding Fathers and trace how the Founding Fathers believed that intellectual property protection both inspired innovation across all spectrums, so from the rich to the poor, and made those innovators able to create a career and a life on innovation for its own right. That traces forward and it gave us the ability to compete in the world economy.
Today we have the strongest economy almost in large measure because our intellectual property protection is so strong. We are starting to cede those positions though. We are giving up on what we built our economy on. IP is also critical to our health and welfare. Because right now, we are the greatest place for innovation in the healthcare space. That could end with our disregard of intellectual property rights because again there's going to be no incentive to find those cures, to move forward with those diagnostic methods and to act in a way that is ultimately in our own best interests and the best interests of the rest of the world if there's no incentive and no protection.
It also goes to our security. I mean there are many, many innovations that protect us from the rest of the world in terms of someone who would be interested in attacking us, or going after us. And again to cede that is shortsighted.
Giachino (15:42.0210 - 16:05.0010)
I can't think of a better way to end our conversation. Judge O'Malley, thank you so much for sharing with us your important thoughts and comments, for everything that you have done in this arena, and for demonstrating the critical importance of the passage of the PERA and PREVAIL Acts and for Congress to move swiftly on those. We greatly appreciate your time today. Thank you so much. Have a wonderful afternoon.
O'Malley (16:05.0010 - 16:10.0239)
Thank you again for having me and thank you for caring about this issue.
Giachino (16:10.0659 - 16:13.0979)
Thank you for tuning in to IP Protection Matters.