Administrative reform is a necessary step in the patent litigation process

Finally, the solution may lie in changing the focus of the entire system to leverage administrative expertise in deciding patent cases. Unlike other areas of law, like torts, in which legislatures are very active, patent law is characterized by an "overmatched judiciary and an absent legislature." 355 Reform of the patent system must be multi-institutional, focusing on the role that Congress, the administrative bureaucracy, and the courts play in implementing policy. The current system puts too much power in the hands of the CAFC as a promulgator of policy by not installing inferior institutions, such as the USPTO and the lower federal courts, while not providing the CAFC with the adequate support necessary for it to actually formulate policy. 356

The current patent system gives too much judicial discretion to courts, allowing them to run rampant in crafting legal doctrine. Some argue that complexity in patent law is no different than in other fields. 357 Even the Supreme Court has hinted that it prefers that patent law not be treated differently, [*586] but the question remains why patent law is different than other fields of law, like environmental law, where a federal administrative agency has plenary authority. 358 Unlike areas of law, such as securities, pharmaceuticals, transportation, and environmental, patent law remains an outlier in that it is a "highly technically complex regulatory field controlled entirely by courts." 359 Masur argues that the time has come to bring patent law's institutional arrangements in line with the rest of the administrative state by, inter alia, empowering the USPTO with greater rulemaking authority. 360

Courts--even specialized courts--may simply find themselves poorly equipped to understand deeply the intricacies of patent law and its application to new and emerging technologies. Scientifically untrained judges and their law clerks may lack the institutional and technical capability to weigh whether an invention is obvious to those of ordinary skill in the art. 361 Patent law involves two layers of technical competence: considering the economic consequences of setting the rule and an application of the rule to the technical facts of a case. 362 Specialized trial courts do not solve either problem; decision makers in these courts do not apply the right rule, or lack the technical competence to devise the rule in the first place. 363 Thus, instead of relying on the federal courts to decipher legal rules for patent cases, the task could instead be given to the very experts for whom the taxpayers pay to oversee the patent system: the USPTO or another administrative agency suitable for the job. 364

Patent law is different statutorily from other fields where courts can effectively implement policy. The Patent Act sets the broad, outer bounds for patentability and infringement, but the courts decide how those principles apply. 365 To do so, the courts have created and applied doctrines based on their understanding of how patent policy should be implemented. 366 But, courts devise such doctrines piecemeal without full consideration of how to properly balance patent rights versus innovation. Giving power to the courts would be appropriate if the Patent Act was already clear about what economic [*587] and societal judgments courts should make in determining validity. 367 But, the Patent Act is vague and has not been amended in over seventy-five years, meaning that it predates the immense technological innovation that has occurred since then, especially in the software and medical fields. 368 Courts simply have no guidance or expertise to weigh the often competing demands of encouraging innovation and protecting property rights.

Moreover, some scholars argue that patents should function differently across different industries, with some industries benefiting from broader benefits and others needing narrower ones to encourage innovation. 369 Dan L. Burk and Mark A. Lemley argue that courts already have the necessary tools, in the form of what they call "patent levers," to adjust patent scope depending on the industry. 370 But, the disparate nature of decision making--combined with the CAFC's failure to embrace its role as a patent policymaker as opposed to being solely an adjudicator--necessarily results in patent policy being left in disarray. Courts may have the tools at their disposal to properly make patent policy, but the CAFC and the district courts quite simply have not embraced their role in making the patent system work.

Other institutional actors are similarly ill-equipped to carry out policy. Congress could legislate to ensure divergent standards depending on the industry, but relying on a legislative solution in this circumstance is impractical and involves too much administrative cost and uncertainty. 371 Technology changes too often for Congress to keep up with it. 372 Additionally, most of the inquiries needed to dictate rules are fact-specific, requiring case-by-case application. 373 The problem of intense industry lobbying may also result in policy that better reflects special interest influence rather than sound economic policy on what actions actually encourage innovation. 374 Congress's foray into legislating patent law--the Biotechnological Process Patents Act of 1995, which codifies "that biotechnological processes that use or result in a novel and nonobvious product are always nonobvious"--illustrates the role that special interests play in the process. 375

[*588] Rather than the CAFC or Congress setting forth rules for guiding validity, the USPTO could instead use its rulemaking power to make more explicit how patent claims should be construed and how the results vary depending upon technology. 376 The USPTO has not exercised its limited rulemaking power, thus relegating the power to decide many questions concerning patent laws to the courts. 377 But, in order to understand whether an invention should be patentable requires a thorough understanding of not only the technology in question but also the economic markets involved to properly resolve the balance between innovation and protection. 378 Congress may also want to delegate to the agency the power to treat different classes of subject matter differently, by, for instance, allowing patents on software to last for shorter time periods than those on pharmaceutical products, which would address the different incentives in each industry regarding innovation. 379 USPTO examiners with thousands of hours of experience in surveying patents across a range of technologies would be most equipped to decide whether a patent is valid or at least provide better guidance via rulemaking on how claims in particular fields should be construed. Moreover, the USPTO is best equipped to keep up with modern technology and the evolution of claim interpretation.

Reform of the system in an administrative fashion mirrors what many other countries already do with respect to their patent jurisprudence. Rather than rely on specialized judges, most of whom do not have scientific training, reallocation of the task--at least on validity determinations--could be given to a federal agency. The courts would then be tasked with following these rules and would instead focus their energy on adjudicating infringement disputes rather than worrying about construing claims or making invalidity determinations. The results of the present analysis indicate that most mistakes concern either claim construction or validity determinations; courts do a pretty good job in infringement analysis, so a proposal where administrative agencies undertake more of the scientific analysis may be a better path. Cohen et al., for instance, propose a Patent Litigation Review Board that they argue would "discourage . . . weak patent infringement suits[,] . . . strengthen the hands of patentees[,] . . . flag weaknesses [in the [*589] patent,] . . . and . . . provide policymakers with more . . . information" to evaluate the patent system. 380

Adaptation of rulemaking comes at the expense of judicial discretion and flexibility. 381 But, what are the benefits of flexibility in this current situation that could not otherwise be realized by the PTO? One concern is that the time involved in rulemaking could necessitate delay in getting answers in patent disputes. Such a concern is not trivial and the current system of court action may give quicker answers, but those answers are not necessarily correct or consistent.

The administrative trend toward patent law reform has been set in motion by the U.S. Supreme Court's recent decision in Oil States Energy Services, LLC v. Greene's Energy Group, LLC. 382 In this case, the Court held that the inter partes review process undertaken by the USPTO is constitutional and does not violate either "Article III or the Seventh Amendment of the Constitution." 383 In inter partes review, parties can contest the validity of a patent, though there is not currently an administrative system where parties could resolve disputes entirely at the PTAB rather than through the courts. 384 In other words, if parties have infringement issues, they must still proceed through the court system, even though they could contest validity at the PTAB instead of the courts. 385 In total, as of February 2019, the PTAB had received over 8,000 PTAB petitions challenging patent validity under procedures instituted under the AIA. 386 In the coming years, how the district courts interact with this new system and whether parties choose to resolve validity disputes at the PTAB instead of the district courts will impact how the pilot program turns out. For instance, instead of filing before pilot judges, litigators may instead elect to file a petition before the PTAB. It is impossible to tell how much the inter partes process will cannibalize validity decision making in the district courts. 387 Some scholars have found that the [*590] majority of parties are substituting the PTAB process for district court litigation, at least when their claims concern validity. 388 The Oil States decision paves the way for altering the PTAB process to expand its reach. 389 The long-term viability of the pilot project may come down to how the program intersects with that process.

In all, a fundamental rebalancing of the system to place decision making back in the hands of experts would do much to balance out the entire system to get better results. As Arti K. Rai argues, "[i]f greater fact-finding and policy application expertise were vested at the administrative and trial court levels, the role of appellate review within the patent system could substantially be reconceived." 390 The USPTO is already beginning to take these steps. Although a full examination of the issue is beyond the scope of this Article, inter partes review--where a third party can challenge the validity of a patent before the PTO--may be a mechanism that should be used more frequently to gauge validity of patents in a consistent manner. This study's preliminary analysis of inter partes review reveals that many patents are declared invalid before the PTO, yet district courts continue to find that parties infringe them. Some courts even find the patents valid, contrary to the PTO's conclusion. The system needs to do better. A system where the USPTO shapes, as much as possible, the validity determinations would create greater consistency and predictability in patent law decision making. 391