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October 30, 2002 (227.02 1 1 FEDERAL TRADE COMMISSION 2 DEPARTMENT OF JUSTICE ANTITRUST DIVISION 3 ROUNDTABLE 4 5 6 7 8 9 COMPETITION, ECONOMIC, AND BUSINESS 10 PERSPECTIVES ON SUBSTANTIVE PATENT LAW ISSUES: 11 NON-OBVIOUSNESS AND OTHER PATENTABILITY CRITERIA 12 13 14 15 Wednesday, October 30, 2002 16 10:00 a.m. to 4:30 p.m. 17 18 19 20 21 Federal Trade Commission 22 600 Pennsylvania Avenue, N.W. 23 Room 432 24 Washington, D.C. 25 For The Record, Inc. Waldorf, Maryland (301) 870-8025 2 1 P R O C E E D I N G S 2 - - - - - 3 MR. WILLIAM COHEN: Good morning. Welcome to 4 today's panel on Competition, Economic, and Business 5 Perspectives on Substantive Law Issues. My name is 6 Bill Cohen, and I'm an Assistant General Counsel here 7 at the Federal Trade Commission, and to my left is 8 Susan DeSanti. She's the Deputy General Counsel for 9 Policy Studies. To my right is Hillary Greene, the 10 Project Director for Intellectual Property. 11 The hearing groups we began back in February 12 have now nearly come to their close. Today is the last 13 day directly focused on patent issues, and the hearings 14 will end with one more roundtable on November the 6th. 15 The Department of Justice will not be participating in 16 today's session of the Joint Hearings on Competition 17 and Intellectual Property Law and Policy in the 18 Knowledge-Based Economy. The Department will resume 19 its participation in these hearings at the November 6th 20 session. 21 Today's session will use the roundtable format. 22 We will spend our time entirely in discussion without 23 formal presentations. We're fortunate to have a truly 24 outstanding set of panelists who are willing to share 25 their insights with us. Full biographies are available For The Record, Inc. Waldorf, Maryland (301) 870-8025 3 1 in a booklet on the table out in front of the room. 2 What I'd like to do is just hit a few of the highlights 3 for each of you. I'll try to do this alphabetically. 4 Mark Banner -- right there, okay -- 5 concentrates on litigation of patent, trademark and 6 copyright cases at the law firm of Banner & Witcoff. 7 He is Chairman of the American Bar Association's 8 Intellectual Property Law Section. 9 Robert Barr, right here, two seats down from 10 Mr. Banner is the Vice President for Intellectual 11 Property and Worldwide Patent Counsel for Cisco Systems 12 in San Jose, California, where he's responsible for all 13 patent prosecution, licensing and litigation. He 14 started Cisco's patent program in 1994 and has since 15 built a portfolio of over 700 issued patents. 16 Margaret Boulware is a Shareholder in Jenkins & 17 Gilchrist in Houston, Texas. Her intellectual property 18 practice includes patents with an emphasis in chemistry 19 and biotechnology. She also has expertise in 20 trademark, copyright and licensing matters, 21 particularly in internet and e-commerce areas. She was 22 appointed by the Secretary of Commerce to serve as the 23 Chair of the Patent Public Advisory Committee, and she 24 is participating today on behalf of the American 25 Intellectual Property Law Association. For The Record, Inc. Waldorf, Maryland (301) 870-8025 4 1 Wesley Cohen at the far end here has just 2 joined the faculty of the Fuqua School of Business, 3 Duke University, as Professor of Economics and 4 Management after teaching at Carnegie Melon University 5 for 20 years. He is also a Research Associate of the 6 National Bureau of Economic Research. Professor 7 Cohen's research has mainly focused on the economic and 8 technological change in research and development. 9 John Duffy is an Associate Professor of Law at 10 the William & Mary School of law. He teaches and 11 writes in the fields of patents and administrative law. 12 He is a registered patent attorney and the co-author, 13 with Robert Merges, of a case book on patent law. Am I 14 correct, he's full professor? You have had a number of 15 promotions during the course of these long hearings. 16 Brian Kahin directs the Center for Information 17 Policy at the University of Maryland. He's a Visiting 18 Professor in the College of Information Studies with 19 affiliate faculty appointments in the School of Public 20 Affairs and the R. A. Smith School of Business. 21 Edmund Kitch, on this side, is the Joseph M. 22 Hartfield Professor of Law at the University of 23 Virginia School of Law. His scholarly and teaching 24 interests include agencies, corporations, securities, 25 antitrust, industrial and intellectual property, For The Record, Inc. Waldorf, Maryland (301) 870-8025 5 1 economic regulation and legal and economic history, and 2 he has written some seminal articles regarding the 3 patent system. 4 Steve Merrill has been Executive Director of 5 the National Academy's Board on Science, Technology and 6 Economic Policy, the STEP Board, since its formation in 7 1991. They have the sponsorship of a growing number of 8 federal government agencies, foundations, multinational 9 corporations in various sectors and international 10 institutions. He has developed the STEP program into 11 an important discussion forum and authoritative voice 12 on technology, research and development and other 13 microeconomic policies. 14 Gerald Mossinghoff is a former Assistant 15 Secretary of Commerce and Commissioner of Patents and 16 Trademarks and the former President of the 17 Pharmaceutical Research and Manufacturers of America. 18 He has served as United States Ambassador to the 19 Diplomatic Conference on Revision of the Paris 20 Convention and as Chairman of the General Assembly of 21 the United Nations World Intellectual Property 22 Organization. He is now Senior Counsel to Oblon, 23 Spivak, McClelland, Maier & Neustadt, and also serves 24 as a Visiting Professor of intellectual property at the 25 George Washington University Law School. For The Record, Inc. Waldorf, Maryland (301) 870-8025 6 1 Ron Myrick, back on this side, is the Chief 2 Intellectual Property Counsel for General Electric and 3 the President of Monogram Licensing, Inc. He is also 4 the President-Elect of the American Intellectual 5 Property Law Association and the Immediate Past 6 President of the Intellectual Property Owners 7 Association. 8 James Pooley is a Partner at Milbank, Tweed, 9 Hadley & McCloy's intellectual property group in the 10 Palo Alto office. Mr. Pooley specializes in the 11 litigation and trial of patents, trade secret and 12 complex technology-related litigation in state and 13 federal courts and before the International Trade 14 Commission. 15 And Robert Stoner is a Vice President of 16 Economists Inc. and a former Deputy Assistant Director 17 for Antitrust in the Bureau of Economics at the FTC. 18 He has testified in a number of antitrust cases and 19 before a variety of governmental agencies, and in 20 particular, has recently submitted testimony in an ITC 21 Section 337 proceeding involving patent licensing. 22 Many of our panelists are good enough to join 23 us for a second and in some instances even a third 24 time, I think. We're very, very grateful to have such 25 an outstanding panel. For The Record, Inc. Waldorf, Maryland (301) 870-8025 7 1 Last week we had a roundtable to address some 2 of the competitive issues raised by patent quality and 3 the procedures employed in prosecuting and litigating 4 patents. Today we're going to shift our emphasis over 5 to the implications for competition and innovation of 6 substantive patent doctrines. We will address four 7 topics, roughly two in the morning and two in the 8 afternoon, though we will break between noon and 2:00. 9 We will begin with some discussion of the goals 10 that underlie the patent system and the extent to which 11 consideration of those goals works its way into the 12 questions of substantive patent policy. 13 Then we will turn to non-obviousness, the 14 doctrines that some of our panelists have described as 15 the heart of the patent system. We will address some 16 of the issues that go to the theory of non-obviousness 17 and then some of the more practical issues being raised 18 in today's prosecution and litigation regarding those 19 doctrines. 20 In the afternoon, we will turn to doctrines 21 that focus directly on patent breadth. I expect some 22 discussion of enablement, written descriptions and best 23 mode, as well as the claim-broadening potential 24 associated with the use of continuations. And finally, 25 we will end with a discussion of patenting in the For The Record, Inc. Waldorf, Maryland (301) 870-8025 8 1 context of research and research tools, trying to 2 identify any special considerations that might 3 contribute to our understanding of competitive 4 implications. 5 During the day, Hillary and I will have some 6 questions for you to guide the discussion. When you 7 would like to speak, let me ask that you tilt your name 8 tent up on its side so that we know you would like to 9 be recognized, and then we will recognize you. With 10 that, let's begin with our first topic. 11 We are going to start by discussing economic 12 goals, and I guess the first question is a setup 13 question to get a broad view. What are the goals of 14 the patent system? To what extent do the courts and 15 the PTO, when considering policy choices, consider the 16 likely impact on innovation or economic welfare? Or 17 stated a little differently, what role does economic 18 analysis play in the patent system? 19 Does anybody want to start us off? Bob? 20 MR.
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