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Unhappy new year for the US patent market?

IP Nav’s Erich Spangenberg’s predictions for 2015 will make gloomy reading for IP practitioners – he says patent reform will pass, IPRs will become even more popular, patent lawsuits will fall, GAAP write-downs are on their way and big IP law firms will make cuts

Patent practitioners returning to work after the holidays are now looking ahead to what 2015 will bring. Their sense of good will and cheer built up over the holidays may soon disappear: Erich Spangenberg, owner of IP Nav, has depressing news for them.

People of a more pro-patent bent were not happy in 2014, with inter partes review becoming an increasingly popular threat to the validity of patents and the Supreme Court’s Alice decision casting any patent seen to be directed to an abstract idea in doubt.

In a blog post detailing his outlook for 2015, Spangenberg said he does not think “we’re at the low tide mark and things will improve in the patent market in 2015”.

He made five predictions for the year:

1. Patent reform will be enacted and include fee shifting.

2. Inter partes review (IPR) filings will increase.

3. The number of patent lawsuit filings will continue to decline.

4. Significant GAAP write-downs are coming.

5. Major cuts are coming at big law firms focused on IP litigation.

Reform a sure thing?

With Republicans now controlling Congress, the expectation is building that patent reform will pass this year after stalling in 2014. Spangenberg advises patent practitioners to “accept it and learn to deal with it”.

He said: “The only question in my mind is whether patent reform will get wrapped into broader tort reform. If it does, it will slow things down. My expectation is that until there is a change in the Oval Office, Congress will not tie patent reform and tort reform together.

“On the legislative front, look for new patent legislation to be signed into law in the first half of 2015. It came close in 2014 – it will happen in 2015.”

This will be warmly received by those advocating for reform. Others have suggested that it would be a good idea to wait to see the impact of the last reforms and the Supreme Court’s recent decisions play out first. “It is naive to expect that reason, reliable data, potential harm, and unintended consequences will slow down reform,” cautioned Spangenberg.

The House of Representatives will lead the way and the Senate will follow with a more limited bill, predicted Spangenberg. He said the main elements of the bill will likely include: mandatory or presumptive fee shifting, more detailed complaint requirements, “transparency” on ownership and financial interests, and enhanced IPR provisions.

“While I’m fine with the concept of these changes, the bill will undoubtedly be poorly drafted and simply lead to more disputes,” said Spangenberg.

He said that judicial “patent reform” will likely continue as well. “The Supreme Court already has a couple of cases due for decision and at least the one (on district court claim construction) has the potential to lead to further lack of clarity in patent litigation,” he said.

A gloomy prognosis was given for business method patents as well. “More significantly, I believe we’re only a single vote change away on the Supreme Court and Federal Circuit from effectively eliminating business method patents. A resignation and a new appointment at either court, or a change of heart by one judge, could have massive implications for the patent market,” he said.

All of the blog post is well worth a read for Spangenberg’s commentary on his other four predictions, including why IPR will increase “but not for the reason you think”.

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