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The View from the Bench

A Conversation with Paul Michel ’66, Retired Chief Judge of the U.S. Court of Appeals for the Federal Circuit

After graduating from the Law School, Chief Judge Paul Redmond Michel ’66 joined the Philadelphia district attorney's office working under then District Attorney Arlen Specter. He left that office to join the Department of Justice, first as an assistant Watergate special prosecutor from 1974 to 1975 and then assistant counsel for the U.S. Senate Select Committee on Intelligence (Church Committee) from 1975 to 1976. He served as deputy chief of the Public Integrity Section and lead prosecutor in the Koreagate scandal from 1976 to 1978, before becoming associate deputy U.S. attorney general from 1978 to 1981. In 1981 Michel became counsel and administrative assistant to Senator Arlen Specter. President Reagan nominated Michel to the Federal Circuit Court of Appeals in 1988, and he became Chief Judge  in 2004. He retired from the bench in 2010.

Michel wrote over 800 opinions and is  widely recognized as a seminal figure in patent law, over which the Federal Circuit has nationwide jurisdiction. Recognizing that he “helped shape the landscape of patent law in the U.S. and handed down some of the court's most important judgments,” Intellectual Asset Management magazine inducted Michel into its IP Hall of Fame in 2010.

UVALawyer: You retired in order to speak out some more on various issues affecting patent law and regulation in general?

Judge Michel: I left the court in 2010, mainly in order to be free to speak out about policy issues, political issues, controversial issues. I loved being a judge, and I originally expected to stay until I became very ancient and finally expired. But I changed my mind because there seemed to be a vacuum of independent discussion that was neutral and fact-based. All the patent disputes on Capitol Hill were protecting some very specific interest, which is legitimate enough, but no one was looking at it from the standpoint of what’s good for the system, what’s good for the country, and what’s good for the future.

So I decided to leave the court in order to be free to speak out on patent reform issues and other matters. For example, the courts are a critical part of the infrastructure of the country. They have been badly neglected for more than a decade. They are severely over-stressed and understaffed, and that’s creating huge problems for commercial actors, individuals, and organizations.

I decided it was time to become an advocate again, not for individual clients, but for institutions, like the courts, and the patent office, and other agencies of government.

UVAL: Is yours a lonely voice?

Judge Michel: Well, I don’t feel lonely, but it’s difficult to get heard if you don’t represent some huge industry or technology or some very powerful financial sector.

UVAL: In a perfect world, how would you improve  the Patent Office?

Judge Michel: We have to make it faster, more predictable, more careful, and less expensive, all of which are entirely doable. We used to have such a system. We just let it go. It’s like maintaining roads and bridges and levies and dams. Eventually, they degrade and get worse and worse. So we know how to do it right. It’s a question of whether we want to make a priority out of restoring the Patent Office and the courts. It would do a world of good in ten different ways, and it’s not very expensive or too hard to do.

So why aren’t we doing it? Well, people aren’t making a priority out of it. It’s the same thing with the courts. Why are the courts always 100 judges short? Because it’s too low a priority at the White House to promptly nominate people, and it’s too low a priority at the Senate to expeditiously confirm or reject nominees. It used to be done in a matter of weeks.

UVAL: Like your appointment, for example.

Judge Michel: Well, that’s right. I was nominated in December, had a hearing in February, and was confirmed in March. If you go back a few years before that, the entire process took just about a month, sometimes weeks.

UVAL: How are you trying to teach the public about  the patent system?

Judge Michel: I’m trying to organize two different think tanks, one of which will focus primarily on the friction points in the system and how to change the procedures to make them more efficient, less expensive, and more predictable. A second one at a university will do economic research, partly to prove the importance to job creation of a well functioning patent system and court system. Many people intuitively understand that, but there is not a lot of economic data to prove it irrefutably.

My goal is to try to break out of the confines of the patent community to engage the interest of the larger corporate community, investment community, and media.

UVAL: What’s the most persistent challenge  to your efforts? Inertia?

Judge Michel: Yes. People just aren’t focused on this. There’s a great story told over and over  by many members of Congress. They say when the chief patent lawyer of XYZ Company comes in to see them, they say the Patent Office needs more money and the patent law needs reform. When that same company’s CEO comes to see them, all they talk about is taxes and regulation. They never say anything about the court system, the Patent Office, or the patent system. So there’s just not enough attention at the higher levels within companies or in the federal government. I’m trying to raise the consciousness, raise the awareness, raise the focus.

UVAL: And the Patent Office, as a government entity, is the ultimate regulator?

Judge Michel: Yes, of course. [Laughs] It’s a job-creating, technology-advancing, export-generating engine. It’s entirely beneficial if it’s run right.

UVAL: How much money is needed to fund a fully functioning Patent Office?

Judge Michel: About a billion dollars. Same thing for the courts. It would cost so little, it’s not even a rounding error, but they don’t do it. A lot of congressmen resent judges because they don’t have to run for office. They don’t have to raise money. They don’t have to run around doing town meetings and other things like that. And, of course, judges have to decide cases. Sometimes they invalidate congressional enactments, and other times they interpret them in a way that some faction in Congress doesn’t like, so you’re always making somebody mad. There’s a lot of resentment as a result of that, and that makes it very hard to get Congress to treat the judiciary properly.

It’s not only a question of adequate staffing. The computer systems in the Patent Office and in the judiciary are hugely out of date and completely inadequate. The courts suffer in other ways as well. For example, I was appointed in 1988, and retired in 2010, 22 years. During that time, the purchasing power of my salary went down 24 percent, so I lost ground every single year I was a judge. The salary isn’t adequate to attract the best legal talent in America, particularly from the private sector. For people already in government, the salary is okay, but for anybody in the private sector in a good law firm, it’s a huge pay cut to become a federal judge. It’s the most prestigious position a lawyer can get, yet it’s viewed as unaffordable by a huge portion of the private sector. I think that’s a disgrace.

In England, judges are paid the equivalent of $380,000, which is more than twice what American judges are paid.

UVAL: What about the individual inventor who has a great idea to improve a smartphone and tries to develop it. Would Apple make that as hard as possible?

Judge Michel: I don’t think so. I think it actually works the other way around. It’s the equalizer, the equivalent of the Colt .45 in the Westerns where the little guy can compete effectively against the big guy if he has a valid patent that he can enforce in the courts in some reasonable timeframe and at some reasonable cost.

The companies that later became Apple and Google were tiny, embryonic things in the beginning, relying on venture capital and the patent system. Then they grew like crazy and invented all these new things, which seems to prove the value of the patent system.

Same thing with Silicon Valley and the other giant multinational Silicon Valley companies. They’re making record profits. The patent system has not strangled them. Anybody who thinks that is deluded. They’re making more money than they ever dreamed of making. They don’t know what to do with all of it. So I don’t see that the patent system is strangling innovation or strangling companies. What it’s doing is incentivizing more investments, which is exactly what we need.

UVAL: Have you seen one of those landscape maps that illustrate patent thickets?

Judge Michel: No, but I don’t agree that there are thickets, you see. This is one of the buzzwords meant to prevent careful thinking. You can design around patents, or you can license patents, or you can do a combination. But the idea that you’re blocked and helpless is just not true. Another buzzword is royalty stacking, that if some device potentially involves 100 patents and if they all get paid so much money, the damages would be more than the total value of the product. But there’s no such case. It’s a theoretical argument made up by people who want to get quoted in the press or get something published.

UVAL: Google’s purchase of Motorola mobility apparently was to buy their 15,000 patents for a defensive position. Does that sound right to you?

Judge Michel: No, it doesn’t make much sense to me because most of those suits aren’t brought by companies that would be subject to cross-licensing resolutions. They’re brought by companies that invest in patents and litigating patents, and aren’t interested in cross licensing. You can have all the patents you want. It doesn’t do you any good when you’re sued by a so-called non-practicing entity. The idea that somebody won’t sue you because you could counter sue them doesn’t make any sense to me.

If you’re infringing my patent, I’m going to sue you. The fact that you may have some patents and you can countersue me is beside the point. You might sue me. I might sue you. We might both win, and the net flow of dollars depends on the details of the case. No one needs to buy vast portfolios to defend themselves. If you can show the other  patent is invalid, you win. If you can show there was no real damage, you win. If you can show that you didn’t infringe it, you win.

So it’s a very exaggerated idea that companies are helpless unless they have vast arrays of patents that they can use “defensively.” There is something to it, but like all these other notions, it is hugely exaggerated and totally out of proportion, and leads to bad decision making.

UVAL: So the patent system is a flexible, powerful way to spur innovation?

Judge Michel: It’s sharing of technology. It’s incentivizing investment. It’s recouping prior investment. It’s stimulating design around new technological breakthroughs. That’s what worked like a charm for more than a century, until the last 10 or 15 years.

UVAL: You have been a public servant your entire career?

Judge Michel: I spent 44 consecutive years in public service, right after graduating from the University of Virginia Law School until I retired at the end of May 2010. I never had a job in the private sector. I never was in a law firm. I had an unusual series of jobs that turned into a career. I followed what I think is a wonderful tradition at the University that goes all the way back to Thomas Jefferson. I look more to people like Senator Robb [’73] or Senator Warner  [’53] who had gone to the Law School and then went on to extensive public service careers to the great benefit of the country.

I wanted to do the same thing. And I felt like I was very much encouraged by the faculty to move in that direction, even though it was a little unusual. The faculty and the whole experience of my three years in Charlottesville prepared me very well to undertake that sort of public career. In a way, I’m still pursuing a public career. I’m just not on the public payroll.

UVAL: Public servants are often underappreciated, and you chose a career that earned a great deal less money than if you had gone into the private sector.

Judge Michel: I’m the only successful middle-aged lawyer I know who doesn’t own a home, who doesn’t own any stock, who really doesn’t have any assets at all. And that was the consequence of 44 straight years of rather modest government salaries. Not everybody is prepared to do that, so you do lose a lot of talent if you have inadequate compensation.

But it’s what I wanted to do. Everybody in the country is your client, in a way. I would not do it differently. I never had a boring day, and I never had a day when I felt like I wasn’t working on things of broad importance to lots of people, whether in the Watergate investigations, or as a young prosecutor in Philadelphia, or working on the Senate Intelligence Committee with the Church committee, working in the Department of Justice.

It was a great adventure and a great journey. I loved every day of it. And as I say, I would have kept doing it if there hadn’t been this unusual opportunity to fill a vacuum of neutral independent voices about these public controversies.

But you might be interested to know, and my very alert wife reminded me of this, that I grew up in Philadelphia. I’m a Pennsylvania boy. I have three brothers. I was the first to go to the University of Virginia and my experience was so good that both my younger brothers, despite being Pennsylvanians, went to the University at the graduate school level, one in public policy. He went directly to the White House on the recommendation of his dean, and has been a serial CEO in the private sector ever since. And the youngest brother went to the architecture school and, being the smartest of the four boys, never left Charlottesville.

So the University of Virginia became a magnet for my whole family. One of my daughters went there. My sister-in-law went there. My nephew goes there. We’ve been adopted by the University and its various schools.

UVAL: Did you follow the resignation and reinstatement of President Teresa Sullivan?

Judge Michel: Oh, sure. We followed that hour by hour.

I think the University of Virginia is very resilient. I don’t feel pessimistic about the University any more than the country in general, or the patent system, or the Patent Office, or the court system. In the long run, they will all flourish and radiate immense good in every direction. That doesn’t mean we won’t have some hard times in the short run. People have to get a sense of balance and proportion and proper priorities.

We can get it right. We’re not stupid people, and we can learn from mistakes. We can readjust skewed priorities. We can change incentives and reward systems of various kinds. And I think we will. If we do that collectively, we have a fabulous future.