Q&A: Stanford's Mark Lemley on the changing landscape for intellectual property law
Intellectual property expert Mark Lemley talks about the impact of court rulings on software patents and the tech industry's pressure on Congress for reform.
Professor Mark Lemley is an expert on patent, trade-secret, antitrust, and constitutional law.
If invention is the engine of the U.S. economy, driving the start of new companies—then intellectual property law is the fuel, helping to spur or impede the innovation that a well-designed patent system should produce. And at the center of it all is Mark Lemley.
An expert on patent, trade-secret, antitrust, and constitutional law matters, he is one of the true thought leaders in the field of intellectual property, with the vantage point of multiple worlds. He is a practicing IP attorney and a founding partner of Durie Tangri LLP, one of the nation's top IP firms. He is also a legal scholar and teacher, inspiring the next generation of IP lawyers and publishing some of the most important papers on the subject.
That creative tension has led Lemley to become an innovator himself. Frustrated by what he calls the "weather prognostication" of IP law, with various competing claims about IP data batted around, in 2006 he introduced some metrics to the field and launched the Stanford Intellectual Property Litigation Clearinghouse. A now massive database, the academic research project captured every electronically available patent litigation event and outcome since 2000, with the aim of bringing openness and transparency to IP law. In 2010, the project was spun out into a legal-tech company and renamed Lex Machina. Today, the company is in the middle of the big data boom that is aiding IP lawyers by giving them access to the information they need to do their jobs well. And the project is still faithful to its original goal—providing the information for free to academics and policymakers.
While much has been written lately about the troubles in the U.S. IP system, with complaints of an overgrown bureaucracy and corporate opportunism leading to its downfall, Lemley is optimistic. "We're still the most innovative country around, with tremendous entrepreneurialism. So it's far from doom and gloom."
The interview that follows is a condensed version of the Q&A from the fall issue of the Stanford Lawyer, conducted by A. Douglas Melamed, the Herman Phleger Visiting Professor at Stanford Law School who was senior vice president and general counsel of Intel Corporation from 2009 to 2014. To read the full discussion and more about Melamed, please go to http://stanfordlawyer.law.stanford.edu/2014/11/ip-law-and-innovation-with-mark-a-lemley-and-a-douglas-melamed/.
In an interview earlier this year, you said that the Supreme Court's Alice decision was "a real sea change" and that "a majority of software patents are invalid under Alice." Can you explain that?
The patentable subject matter doctrine, which is the subject of Alice, (Alice Corp. v. CLS Bank International) has been a sleeper doctrine for many years. We basically eliminated it for all intents and purposes in 1998 in a Federal Circuit case. It went away for 10 years and then it started to rear its head again in 2008. The U.S. Supreme Court had four patentable subject matter cases in four years, and in every one of those cases, the justices have unanimously agreed that the invention in front of them was not patentable subject matter. And in Alice, while they don't say "software is not patentable," what they say is that if your invention, whether it's in the form of a system or a method or anything else, is connected to an idea, and the only things you do to implement that idea are conventional computer steps, or conventional computer hardware, your idea is unpatentable.
A lot of the cases that are being litigated in the country right now in the software world are patents filed in the late 1990s and early 2000s, during a period when there was no limit on patentable subject matter, and certainly not under this new test. And so they have exactly that characteristic. They say, "I claim any computer programmed in any way to achieve this result, to solve this problem, to reach this particular outcome." And I think all of those claims are invalid under Alice.
We've seen now 15 post-Alice decisions in the software world; 13 of them have invalidated the patents in front of them and 2 have said, "Well, I'm not going to invalidate it under a motion to dismiss, so come back in summary judgment." And that's a pretty remarkable record for the four months since Alice.
I don't think it follows from that software is unpatentable, but I do think that the kinds of claims that people have been asserting and writing for some time, which are extremely broad and not tied to a particular program or particular algorithm, are quite vulnerable.
I would think the approach the Court took in Alice could be important outside the software context.
I think that's right. One of the things the Court says in the Alice decision is that this is a general test. It's not just about abstract ideas. You can do the same thing to products of nature, or to natural phenomena, facts about the world. In doing so, the Court adopts its 2012 decision in Mayo v. Prometheus, which most patent lawyers had hoped was an aberration, as the definitive test for patentability.
One other area it's going to significantly impact is medical diagnostics, which was the subject of Mayo. If you discover a correlation between an elevated level of a chemical in the body and a disease, or a vitamin deficiency, that discovery itself is not patentable. So understanding that discovery is not itself patentable, and if all I do after that is routine application of medicine, that also can't be patented. I've got to have an inventive concept that's different from the abstract concept or idea.
That's a tough test. And I think it's a tough test not just in software or medical diagnostics, but you can imagine, conceptually, applying that test in a wide variety of other areas. One of the cases involves DNA sequences; so discovering that this DNA sequence is associated with an increased risk of breast cancer, the Court says, "may be a really valuable scientific discovery, but it's not patentable. And you don't get to own the gene sequence if you've only done routine modifications to it."
There's a lot in the news about "patent trolls," something you and I have written about. And there's increasing pressure from tech business leaders for patent reform. Proposed legislation would require demand letters that companies send to accuse others of patent infringement be more transparent and precise in their language and would codify authority given to the Federal Trade Commission and state attorneys general to police the delivery of abusive letters. Would such legislation be important? Will we see patent reform from Congress?
Patent reform directed at patent trolls – companies that enforce patents as a business and don't actually make products – has been on the agenda in Congress for a decade now, but very little has actually happened. In significant part, that's because courts have been tackling the same problems Congress was hoping to address. With the changes that have happened in patent decisions in the last year, it may once again be time to wait on legislative reform and see if the courts can solve the problem. Two exceptions may be the threat-letter business model you mention, which has been addressed by a number of state legislatures already, and the cost of discovery in litigation. If we can reduce the cost of litigation, we can reduce the business model of coercing nuisance-value settlements based on bad patents.
There seem to be two competing paradigms in conversations about patent law and policy. There's the property rights notion, in which the rules are deduced from the concept of patents and property. And there is the idea of patents as instruments of government policy, in which the rules are chosen to further policy objectives. But those strike me as rhetorical framing devices that advocate use to advance their cause. What's really at stake in your opinion? Why are these battles so intense?
One of the reasons is that rhetoric has power. I find myself fairly strongly in the "patents are government regulation camp," not in the "patents are property camp." I wouldn't be so concerned about the patents are property story if I thought that everyone who said it understood and internalized that they are "kind of like property rights in some respects, but here are all the ways that they are different." They have no certain boundaries, they are contingent, they're granted right now instead of 300 years ago, so we haven't internalized them; there are new ones being granted every day, they interfere with what you can do with your own private property – all of these differences.
But we use these labels precisely because they serve to elide those distinctions and they allow us to sort of reason by analogy, even when that analogy is not a very good one.
I think that is a sensible explanation of why these framing devices are forceful. What you didn't say – and I think it's a striking omission – you didn't say that these battles are so pitched because there is a lot at stake and they are essentially battles between haves and have-nots.
Maybe, though I'm not sure. One of the things in the patent business is that it's not that obvious who the haves and the have-nots are. In general, the people who have patents might be more inclined to view them as property, because I think in doing so that usually makes us treat those rights more powerfully. So if by have, you mean have-patents, that might be right. But we've also got this interesting world in which the people who are most vocal in asserting patent rights are not the largest patent owners. The companies who actually invest the most money in the patent system, by and large, are not patent plaintiffs. There are exceptions—I think Apple is one. But Intel, Google, Microsoft have not classically been patent plaintiffs.
Is the notion that, if the government through the patent system gives big rewards to the winners, the races are run faster?
Yes, absolutely. And the fact that it's government regulation doesn't mean it's a bad thing. It could well be government regulation in a good cause – and I believe that the IP system is a good cause. But we think about it differently if we view it as government regulation rather than as property. Regulation requires justification for its existence. So it's not to say we shouldn't have an IP system; it's to say we should look at this government regulation, as we should with any government regulation, and do a cost-benefit analysis. Is it working? Is it giving us innovation?
If you call it property, that's now "rights rhetoric," so this is something I'm entitled to – whether or not it's benefiting society – because it's mine. And that worries me just because there's increasing evidence that it's not always good for society.