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Patent Reform Makes a Comeback

Patent Reform Makes a Comeback

Innovation over litigation

http://youtu.be/Il9nXHoprsU

Last year, the push for patent reform hit a roadblock in Congress when then-Senate Majority Leader Harry Reid refused to bring the Patent Abuse Reduction Act to the floor for a vote. In the war between industry advocates and trial lawyers, Reid chose the trial lawyers, and the patent trolls were off the hook.

The new Republican majority is looking to break that pattern of obstruction.

A new iteration of patent reform legislation is currently making its way through the Senate. A bill introduced on Wednesday would target firms that make their money not via innovation, but by filing bogus lawsuits against the innovators under the guise of protecting intellectual property. The bill, which is a product of negotiations between both parties, would place restrictions on “demand letters” sent by firms, end the practice of using shell corporations to hide who owns (or “owns”) a patent, and shift the responsibility for paying court costs if the suit is not “objectively reasonable.”

Patent reform is one of those unicorn-type issues that has bipartisan support, even if its backers sometimes disagree on the specifics.

Via The Hill:

Sen. Charles Schumer (D-N.Y.), who was involved in negotiations over the new legislation, said the bill “shifts the legal burden back onto those who would abuse the patent system in order to make a quick buck.”

“I’m hopeful we can move quickly and in a bipartisan way to get this bill passed in committee and on the Senate floor this summer,” he said. A hearing on the bill is already in the works.

The other lawmakers involved in drafting the bill were Sen. John Cornyn (R-Texas), Judiciary Committee Chairman Chuck Grassley (R-

Iowa) and ranking member Patrick Leahy (D-Vt.). The bill also has the support of other panel members, including Sens. Orrin Hatch (R-Utah), Mike Lee (R-Utah) and Amy Klobuchar (D-Minn.).

“As I look at the assembled people on the platform today, this is as close as you get to legislative shock and awe,” Cornyn said about the bipartisan co-sponsors.

The bill is backed by many powerful economic and trade organizations, but is still the target of attacks from trial lawyers and others who stand to profit from patent trolling.

This isn’t the first time Congress has attempted to stop patent trolls in their tracks—but firms have found their way around regulations:

The 2011 law prohibited patent holders from filing dozens of suits at once. But otherwise, it did not do much about trolls. The major Silicon Valley companies, who are major targets of patent trolls, were dissatisfied.

Since then, patent suits have risen sharply. And there were new tactics by some of the most aggressive firms. They began filing demand letters with nontech companies, including retailers, hotels and restaurants. The allegations included the claim that some feature on their websites, usually involving software they bought from a technology supplier, violated some patent.

“Those stories resonated,” said Aaron Cooper, a lawyer at Covington & Burling and a former chief counsel for intellectual property in the Senate Judiciary Committee. “Now, it wasn’t just companies in Silicon Valley. It was companies in every state.”

James Bessen, a patent expert at Boston University Law School, said, “The litigation problem got worse, and it spread into mainstream America. That’s why we’re seeing this now, only four years after we had major patent reform legislation.”

The patent trolls are just as inventive as the people they target; I don’t expect this bill to be a poison pill, but it does stand to close loopholes. We’ll keep you updated as the bill moves through Congress.

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Comments

Bruce Hayden | May 4, 2015 at 5:18 pm

Sorry Amy, but you apparently have no clue here about the legislation. There are two sides to everything, including IP transactions, where you have technology providers and technology consumers. This is a brazen attempt by technology consumers to reduce the royalties that they pay to technology providers. It is far cheaper for companies like Google to buy members of Congress (and the White House) than to pay the patent royalties they should pay.

If you look at the provisions, one by one, you can see how they are stacked against patent owners, and, in particular, patent owners who don’t have huge patent portfolios. The legislation requires significantly more information about how and which products infringe what patent claims before filing suit, and then greatly reduces discovery, which is where you find much of that information in the first place. Plaintiffs (i.e. patent rights owners) would need to post bonds in some cases before filing suit, would have to disclose beneficial ownership of the patents, and they would be personally liable, regardless of corporate structure (i.e. patent infringement defendants could easily reach through the corporate veil, making the beneficial owners personally liable for losing (and not just frivolous) patent infringement litigation). Noticeably, all these provisions only apply to those asserting patent claims, and not to those they are asserted against (which happen to be many of the biggest tech companies in the world).

Another thing to keep in mind here is that this legislation is aimed squarely at technological innovators. It is designed to reduce the cost to these international mega companies for ripping off the technology of the smaller companies that invented it. Making things worse, it is likely that these provisions will also greatly reduce the capital available to innovators (and, esp. the disclosure of beneficial ownership, which will scare off many angel investors).

    Estragon in reply to Bruce Hayden. | May 5, 2015 at 1:37 am

    The Devil always lurks in the details.

    And the disturbing modern trend is to anoint bills with lofty-sounding titles that often imply the opposite of what they will really do in practice.

Bruce Hayden | May 4, 2015 at 5:36 pm

BTW – you should be a bit more careful about the “experts” you cite. Aaron Cooper was Sen. Leahey’s Judiciary Committee’s chief counsel for IP, where he was instrumental in shoving the Leahy-Smith America DisInvents Act (AIA) through Congress. Those of us who fought against it, remember him less than fondly on how he stacked all of the Senate hearings in favor of passage (only those who supported the legislation were allowed to testify). The AIA, thanks to the work of Cooper, managed to convert the US from a First-to-Invent to a First-to-File (regardless of invention), mostly eliminated the traditional (1 year) patent grace period for filing, and drastically changed the definition of “novelty” (for one thing, the standard is now international, not just US, plus almost any disclosure outside of an NDA results in loss of novelty). Etc. Not surprisingly, there is a very great overlap between the companies supporting the new patent “reform” effort and those that supported the AIA – huge multinational tech companies.

As for Bessen, there is no patent “explosion” except for the obvious and inevitable increase in patent litigation that was a direct result of Cooper’s AIA, which eliminated the ability to sue more than one defendant at a time for patent infringement. If a patent owner would have sued 5 different firms together pre-AIA, they now have to sue all 5 separately. Which means, not surprisingly, an increase in the number of patent suits filed. BUT A REDUCTION IN THE NUMBER OF PATENT DEFENDANTS OVERALL. Of course, that AIA provision was expressly designed (and implemented under Cooper’s supervision) to make it harder and more expensive to sue for patent infringement. Sound familiar?

Bruce Hayden | May 4, 2015 at 5:43 pm

Finally, at least for awhile. What must be kept in mind here is that this is an exceptionally well financed attempt to reduce IP costs to IP rights users. Google, alone, a year or so ago was estimated to be spending roughly a hundred million a year on lobbying and the like. I have little doubt that they, along with the other companies involved, are making, or probably have already made, Aaron Cooper a millionaire. And word is that the type of papers like that one by Bessen are running about $50k per paper. We are talking some of the most egregious crony capitalism that we have ever experienced, the way that these companies are buying legislation that benefits their bottom line at such egregious levels.

jhkrischel | May 4, 2015 at 5:48 pm

Patent trolls, and those people who believe that treating “intellectual property” as some sort of permanent property, rather than a truly time limited *privilege*, are truly despicable.

For all the claims that patents are built for “the little guy”, the fact of the matter is that large corporations are the ones that can afford the overhead of patent wars, not small corporations.

    jhkrischel in reply to jhkrischel. | May 4, 2015 at 5:49 pm

    believe that = believe in

    Bruce Hayden in reply to jhkrischel. | May 4, 2015 at 6:36 pm

    One of the things that the proposed patent “reform” will do, at least indirectly, is make it all but impossible to sue for patent infringement on a contingency basis. Do you think that is good? If so, think about this – who needs to hire patent litigators on a contingency basis? The international tech companies like Google, etc. behind this legislation? Or, the companies from whom they have appropriated technology?

    Also note – for several decades now, patent term has been 20 years from original filing date. That means, of course, that divisionals and continuations have the same effective starting date, even if filed many years later. I have some patents I have been working on that will have a patent term of less than 10 years. And, notably, the 20 years includes much of the time that the patent office spends examining the patent applications. Oh – I should add, that the new legislation reduce the amount of patent term that can be recaptured if it is due to delays by the patent office.

      jhkrischel in reply to Bruce Hayden. | May 4, 2015 at 7:39 pm

      Yes, I think discouraging contingency litigation is good. Patent litigators have no incentive to improve their efficiency and lower their prices if there isn’t an actual market out there.

      As for appropriated technology, I fear that too many patents nowadays in the tech world really just count as business process, that shouldn’t be patentable, rather than true technological patent disclosure (http://pubs.acs.org/subscribe/archive/mdd/v03/i08/html/10patents.html). Frankly, I don’t think software patents should even exist.

      As for patent terms, I’d go back to the 14 years from issuance model.

      I think you’re right, this has become a fight between titans for the most part, and the day and age of the garage inventor making it big by designing the hula hoop is long gone. The business model that I think is in question is the one that is built off of simply patent litigation, without any intent, desire, or even theoretical capacity to implement anything. I mean, you patent and build a specific lens for mobile phone cameras, and someone comes along and effectively reverse engineers the thing and steals the specs and method from you, and you’ve got a real case. But you patent the idea of a better lens, but never build one, and simply use the patent as a tactic to anyone who actually does the work of designing, and building, a better lens without ever knowing anything about your broad patent…that doesn’t get too much sympathy from me.

      At the very least, I think that independent discovery, without reference to any materials from a patent disclosure, should be defensible against patent claims – newton vs. leibniz and all that.

        Hank Rearden in reply to jhkrischel. | May 4, 2015 at 9:18 pm

        So there is a need to actually design and build your invention? This is nonsensical. Many inventors lack the resources to build their great ideas. Under your reasoning, large corporations have an even GREATER advantage, as they are the ones who have the resources to develop products.

        This “use or lose” mentality is short sighted. Would you say the same thing about beachfront property that a family chooses not to use for 20 years and leaves it empty? Should that property be available for anyone who chooses to occupy simply because the owners elected not to make use of it?

        Patents are property — intellectual property. Depriving owners of the ability to truly “own” that property if they don’t build/use it will be disastrous to patent rights.

          jhkrischel in reply to Hank Rearden. | May 4, 2015 at 10:45 pm

          Well, yeah, if you don’t have detail enough to actually do a prototype, there’s no way to tell if your idea is purely speculative. I mean, if you’re not going to actually build an example of it, the design should be pretty much enough of a cookbook to actually do it.

          Beachfront property is real. “Intellectual property” is an imaginary and arbitrary construct.

          Ideas simply cannot be owned the same way property can be.

          Bruce Hayden in reply to Hank Rearden. | May 5, 2015 at 3:27 am

          The problem isn’t the money to build a prototype, but rather, having enough money to grow the company fast enough to survive before companies like Google, Microsoft, etc. jump in with their billions and squash you. If you can get a patent or so, and then if you can sue them (which you probably won’t be able to do with this legislation), you have a chance at either scaring them off, or recouping your losses. But with this legislation? Likely not – and that is one of the big purposes of the proposed legislation, to protect the huge international companies that make it a habit of jumping into growing markets, and spending enough to control and dominate them. Follow the money!!!

          Bruce Hayden in reply to Hank Rearden. | May 5, 2015 at 4:11 am

          Going on a bit from my last point. This legislation isn’t aimed at inventions where you build a prototype, and then slowly leverage that into a going business. These aren’t the markets that are typically worthwhile appropriating. And, notably to me, prototypes and patents are not what build million dollar, or, esp. here, billion dollar industries. There are millions of patents out there, but very few of them pay off. I tell clients that if they don’t have a viable marketing plan, etc., then getting a patent is usually not worth the effort or expense.

          What the companies pushing this legislation are looking for is the next great thing. Because for a great extent, that is how they got where they are. Google with their search engines. Microsoft with other people’s DOS, windows, spreadsheet, database, word processing, Internet browser. Etc. They spend a lot of time and money looking for the next great thing – a new market or technology that can grow as quickly as they did when they were young. And, absent a working prototype, it isn’t usually worth looking at. Indeed, what they often do is to wait to see actual working products. Then, if the market takes off, they either buy the companies, or jump in themselves. But, if they buy, part of the purchase price takes into account how easily they could jump in, and dominate the new market with their billions.

          From a technical/legal point of view, part of the problem with these technologies is that if you don’t have a working product (or, at least a working prototype), they are complex enough that a patent application claiming the technology is often not “enabling”. This is a legal requirement that a patent application (plus the prior art) teach a person reasonably skilled in the relevant art how to practice the invention without undue experimentation. This is not an issue with simple technologies. But, that isn’t what this legislation is about. Whenever you think about it, think about the examples I used above. How complex is a web search engine? Browser? Etc. Enough so that “paper” patents are likely to miss a lot of the important subtleties, which make them ultimately invalid or unenforceable.

        Bruce Hayden in reply to jhkrischel. | May 4, 2015 at 9:30 pm

        We actually haven’t had a 14 year patent term from issue since 1835. From 1836 to 1860, it was 21 years from issue, and from 1861 to 1995 it was 17 years from issue. It has been 20 years from priority date since 1995.

        There were several reasons to move from the 17 years from issue to 20 from priority. One was international compatibility. Another though was to effectively eliminate submarine patents. Around that time, Jerome Lemelson had a couple patents issue 40 years after his priority date. This means that he was able to cover technology (much of which he had not invented) up through 57 years after initially filing his applications. The way he did it was filing subsequent continuations and divisionals, one after another. As one was allowed, and was ready to be issued, he would file another. And, another. BTW – he died a very, very rich man, as a result of this, probably collecting hundreds of millions of dollars for technology that wasn’t invented until decades after his first patent applications were filed.

          jhkrischel in reply to Bruce Hayden. | May 4, 2015 at 10:50 pm

          Your example of Jerome Lemelson definitely seems solved by the “issued” issue, but I think we’ve got a lot of contemporary examples (software patents, etc) that exhibit the same ethical category of abusive behavior.

          I guess here’s the question – what reforms would you propose? Or do you see the current system as adequate?

        Bruce Hayden in reply to jhkrischel. | May 5, 2015 at 3:31 am

        The business model that I think is in question is the one that is built off of simply patent litigation, without any intent, desire, or even theoretical capacity to implement anything.

        That is how the proponents of this legislation are trying to portray it. But, that isn’t the reality in what it is likely to do. Notably, companies would be treated like trolls even if their only sin was to have been run out of business by the companies infringing their patents.

        Bruce Hayden in reply to jhkrischel. | May 5, 2015 at 3:41 am

        Let me add to my previous post. One of the big purposes that patents provide in start ups is to protect against late comers dominating the market through massive spending. We are talking companies with many billions that they can throw into a new market going after companies with little besides their patent applications, product, and business plan.

        So, when you go to a venture capitalist, an angel investor, etc., to fund your start up, one of the first things that they want to see is your IP situation, and, here, patents and pending patent applications. And one of the reasons that they look at such, is that if they invest in the company, and the company gets squashed by Google, Microsoft, etc., they will have the security of the patents to use against those companies. And, yes, that means that the IP portfolio is often the major asset of these start up companies. But, notably, these VCs or angel investors are considered “trolls” by the legislation, and would not be able to use the patents to recover some of their investment in such a case. Which, of course, means that they are that much less likely to loan the critical cash to start ups.

          jhkrischel in reply to Bruce Hayden. | May 6, 2015 at 12:10 am

          Google and Microsoft are probably poor examples to use to convince me, since I don’t believe that software should be patentable. Yes, they’ve got huge patent libraries, but they simply don’t fall into the category of patentable invention for me.

          Now, if there’s some small garage guy, who figured out the mechanics of a new button, patented it, and Microsoft or Google stole that idea, and embedded it into the Zune or Google Glass, I’d be strongly in favor of the patent holder getting their due. But let’s take a look at a specific Microsoft example:

          https://www.google.com.pa/patents/USD658671?dq=inassignee:%22Microsoft+Corporation%22&hl=en&sa=X&ei=cpNJVcayDs2NyAST5YGYCg&ved=0CCMQ6AEwAQ

          They patented an arrangement of quadrilaterals, ffs.

          Any random walk of Microsoft patents gives effectively the same thing – I would be surprised if *any* of their patent library actually has any real invention. It seems specifically designed not for innovation, BUT FOR LITIGATION.

          Now, if some start up company patents an arrangement of say, triangles, and Microsoft copies it in their next video game, I’m sorry, I’m not very sympathetic.

          Bruce Hayden in reply to Bruce Hayden. | May 6, 2015 at 5:20 am

          That Microsoft patent is a design patent, not a utility patent, so is probably not a good example.

        Bruce Hayden in reply to jhkrischel. | May 5, 2015 at 3:47 am

        I think you’re right, this has become a fight between titans for the most part, and the day and age of the garage inventor making it big by designing the hula hoop is long gone.

        This is, of course, not what is going on with this legislation. Rather, this is crony capitalism, with the “titans” on one side, with all the money, and no one on the other side with any political power. If you have two titans of industry battling it out, the proposed legislation is going to be fairly irrelevant. Maybe the pleading and discovery provisions, but that is about it. They won’t have to post bonds, and their board members and officers won’t be personally liable if they lose patent cases they file. The proposed legislation does essentially one thing, and one thing only, and that is to make it significantly harder, more perilous, and more costly to sue those titans of industry for patent infringement when they have appropriated technology invented by others.

        Hank Rearden in reply to jhkrischel. | May 5, 2015 at 2:04 pm

        Ah, ok, makes sense now. You just don’t understand the patent system and the specific requirements to obtain a patent — something very clear from your statement that “if don’t have detail enough to actually do a prototype, there’s no way to tell if your idea is purely speculative.” Under 35 USC 112, if you “don’t have detail,” your patent will be rejected for lack of written description.

        Further, your statement that “[b]eachfront property is real” and intellectual property is “an imaginary and arbitrary construct” is frightening. Patents, trademarks, copyrights, etc., are indeed “property” that may be owned, and they are certainly “real.” Under your reasoning, a large portion of corporate assets (likely in the trillions) would need to be written off as worthless.

        Try getting a patent. Maybe that will change your opinion.

          jhkrischel in reply to Hank Rearden. | May 5, 2015 at 11:36 pm

          No, intellectual property is *not* the same as real property. An idea can be replicated infinitely – real property cannot. This critical difference in essential nature makes the mapping of the word “property” particularly unfortunate.

          To be specific, “intellectual property” is really “government granted time limited monopoly on the usage of an idea”.

          Under 35 USC 112, you’re *supposed* to have sufficient detail. However, the patent troll companies techno-libertarians rail against often get past patent examiners with much less than sufficient detail – not to mention patenting the blatantly obvious: http://www.newscientist.com/article/dn2178-boy-takes-swing-at-us-patents.html#.VUmLp85DmIk

          On any specific patent, I might have an opinion that aligns with yours. But in general, I believe there is more abuse than use of the system. It has devolved into an inspiration of litigation, rather than an inspiration of innovation.

          Bruce Hayden in reply to Hank Rearden. | May 6, 2015 at 5:17 am

          Ok – let’s be realistic here. Theoretically, an inventor must describe his invention in such detail that a person reasonably skilled in the relevant art can practice the invention without undue experimentation. Patent examiners catch a lot of this, but not all of it. After all, they are somewhat expert in their area, but often never really practiced engineering, so don’t always detect inoperability and, therefore, lack of enablement. But, they don’t catch all of the relevant prior art either. I think that over time, maybe half of the patents asserted in litigation are found to be valid and infringed (sometimes more, sometimes fewer). Which is probably as good as you can expect. One of the grounds for invalidity, of course, is lack of enablement. Others include obviousness and lack of novelty, based on prior art. Etc.

          jhkrischel in reply to Hank Rearden. | May 6, 2015 at 7:53 pm

          Maybe if there was some sort of penalty for filing invalidated patents, that would help 🙂

          But seriously, developing a business based on knowing that about 50% of your patents will be invalidated, but you’ve bought enough of them so that you can make paying you off less expensive than fighting off the multiple lawsuits, is simply not promoting the useful arts.

          That all being said, I wonder what it would be like if there were no such thing as patents – I can surely guarantee that technological progress will still happen…maybe we don’t need any sort of government enforced monopoly to promote the useful arts?

          Does anyone have an example of any specific technology that wouldn’t have existed in the past 15 years without a patent? I’m sure there are other ways of providing renumeration to inventors besides the “here, buy my invention” method – patronage, or even just “here’s your full time job, go invent stuff for me”. I suppose at the very worst, everything would be reverse engineered and produced by the most efficient manufacturers – which might put a priority on going straight to those manufacturers rather than doing your own in house stuff…I guess maybe I’m not entirely convinced that this is even required anymore.

Hank Rearden | May 4, 2015 at 9:12 pm

This proposed reform is appalling. It will destroy patent rights of small business/individual inventors and is clearly the result of lobbying efforts by multibillion dollar corporations. Further, this proposed legislation discriminates between classes of patent owners: patent owners whose “primary businesses” is “assertion and enforcement of patents” vs. patent owners who have a different primary business purpose. How is this type of discrimination based on class of property owner permissible or constitutional?

It’s disappointing that so many who read these articles are convinced that there is such a “troll” problem. I suspect most of these people do not have patents and are unlikely to ever obtain a patent. However, for patent owners and inventors, this proposed reform is the death knell of patent rights and the ability to enforce those rights against large corporations that are infringing.

    jhkrischel in reply to Hank Rearden. | May 4, 2015 at 10:53 pm

    Perhaps if you spoke to a specific infringement example, we could find common ground.

    If your example was some sort of software patent, we’d likely strongly disagree. If your example was an actual *physical* process or construct, we might strongly agree.

    From the techno-libertarian side, who saw such silliness as SCO try to own all of linux, the troll problem was *very* real.

MouseTheLuckyDog | May 4, 2015 at 11:52 pm

Sadly, this will probably break more then it fixes.
SCOTUS has done more to fix patents with Bilski, Prometheus and Alice. along with the forced retirement of Rader.

The best thing that COngress could do is modify the patent process so that it simplifies the process for good patents, but weeds out more p[atents, especially really bad patents.

    Bruce Hayden in reply to MouseTheLuckyDog. | May 6, 2015 at 5:02 am

    I will respectfully disagree, esp. when it comes to Alice. It has essentially put into serious question most software patent applications. Entire art units are issuing essentially no patents right now, having to reject all of them as being drawn to nonstatutory subject matter. Except that the Supreme Court again failed to explain what it meant by “abstract”, and failed to explain why billions, if not trillions, of dollars of R&D shouldn’t be patentable, because it is closer (according to the Supreme Court) to mathematical equations and laws of nature than electrical circuitry. And they completely ignored the question we asked about black boxes – how does their ruling handle the situation where a patent claims functionality in a black box, which could be implemented in custom circuitry, by a processor executing code in memory, etc?

    The drafters of the 1952 patent act which gave us the current version of 35 USC 101 (statutory subject matter) would have been appalled at the Alice decision. How do we know that? Because one of them, Judge Giles Rich, made this clear, in any number of decisions he authored in this area, both for the CCPA and then the Federal Circuit. The intent was to make essentially anything under the sun patentable. And, yes, the Supreme Court has picked that up – but then ignored it, when stuck on the Benson line of cases, decided by Justices born in the 19th Century, when software was still young, and computers were found in large glass rooms. The laws of nature/mathematical equation/algorithm/abstract idea exception(s) is judge made law, mostly devoid of statutory basis. Sure, E=MCC shouldn’t be patentable, since it is a law of nature. BUT, is the software project that cost many millions to develop closer to that, or to other inventions, and, esp. to the electronics that can often be used to solve the same problems? It would have been nice if even one Justice had had a scientific/engineering background or degree. But, none do, and, as a result, we got the Alice decision a year ago.

      jhkrischel in reply to Bruce Hayden. | May 6, 2015 at 7:43 pm

      As a technical guy, let me make clear that software should be protected by copyright (you can’t steal my source code and use it directly), not patent (you can’t implement some function in code, or some defined public API). The insanity around technological patent wars between giants comes most directly from *not* implementing it this way.

      If anything, Alice is moving in the right direction, but not fast or firmly enough. There should be no software patents, ever. There should be no business process patents, ever. These are clearly abstract ideas, and the vast amount (if not 100%) of the effort that goes into software is about *implementation*, not invention.

      I think one of the larger, more philosophical problems we run into here, is the issue of independent discovery, though – as the world’s population has grown, and access to the tools of technology has increased, it’s hard to justify using patent law to punish someone who honestly and independently invented the same thing. One could almost make the claim that the fact of independent invention should immediately invalidate a patent as “obvious”, but again, the population growth means what might have never occurred in the 1900s, is actually quite common in the 2000s.

    Bruce Hayden in reply to MouseTheLuckyDog. | May 6, 2015 at 5:08 am

    Everyone wants what you want with the patent office. BUT, the reality is that it is unlikely. Why? Too many people have too much skin in the game. Too many stake holders. You have unionized government employees examining the patent applications. You have huge companies (e.g. traditionally IBM) that make billions on their patent portfolios, while others (e.g. Google) spend many millions on licensing technology that they did not invent. You have venture capitalists who use patents and patent applications as security when providing money to start ups. And, this isn’t just national – the U.S. has entered into patent treaties with most of the countries in the world.

The first thing we should ALWAYS remember is that the reason the United States essentially created effective intellectual property law in the first place was to bring MORE inventions and literature and art into the public domain by giving the inventors/authors/artists a defined period of exclusive rights.

The most egregious case of abuse of the principle is Disney, whose campaign contributions have extended the copyright on cartoons almost indefinitely. The artist died almost 50 years ago. It’s a perversion of the constitutional protection.

    Bruce Hayden in reply to Estragon. | May 6, 2015 at 4:19 am

    Can’t deny that. Know one of the guys who wrote it – the Mickey Mouse/Sony Bono Copyright Term Extension Act (or something like that). And, even he, I think, is at times embarrassed.

    The theory that I have always used against it, is that that extension did not increase the incentive to create, since we are talking the net present value of 20 years of extension 80 or so years down the road, which is a percent or two (haven’t done the calculations in a decade or so). BUT, those who already owned copyrights to valuable creative works (like Disney) got a freeby of all that new copyright term (and corresponding royalties) so many decades after creation (actually, they should probably net the millions in additional royalties against the lobbying cost of passing the legislation).

PersonFromPorlock | May 5, 2015 at 6:48 pm

As a frustrated ‘garage inventor’, let me make a few observations:

1. For most Americans, there is no patent system: we just don’t have ten or twenty thousand dollars lying around to finance an application for a patent that may never issue, and that in any case amounts to a license to try to outspend General Motors in court.

2. The patent laws as they’re written are almost certainly unconstitutional, in that they completely fail “To promote the Progress of Science and useful Arts, by securing for limited Times to … Inventors the exclusive Right to their … Discoveries” for almost all Americans.

3. Here is a suggestion: issue a patent immediately an application is made, and publish the application on line, on an official website that takes comments. At that point, the inventor is free to sell or assign the patent to anyone who wants it: in the real world, Internet kibitzers will immediately chime in with ‘it won’t work’ and ‘it’s been done’ comments, and any sensible would-be buyer or licensee will sit tight until the chorus has had its say. After a year or two, the patent will have been thoroughly vetted for originality and workability: genuine inventions will survive, old and impractical ones will fall by the wayside. The surviving patents will have economic value, the useless ones will become scrap paper.

Nothing in this process would keep a company from patenting an invention for its own internal use.

Making issuance the first step in determining the validity of a patent turns things on their head, but also speeds them up and lowers costs, while subjecting the invention to no less searching an examination on its way to market than it presently gets. The object of patent law is to secure rights to the invention to the inventor, and that can expeditiously be done in advance of determining if those rights are actually worth anything.

    Bruce Hayden in reply to PersonFromPorlock. | May 6, 2015 at 4:42 am

    1. I feel your pain. Though if you are paying that $20k for most inventions, you are getting ripped off. You are most likely paying for fancy offices and overhead. I think that $10k for most applications, and maybe that again during prosecution, is probably more reasonable.

    That said, I think that you need to ask yourself very carefully why you want a patent. For some, it is ego. And, you can hopefully put a price tag on that. For many though, if you don’t have a good business plan, it doesn’t make sense. For some though, it does, and those are primarily, in my mind, people who are either using their patents and patent applications as essentially collateral to raise money (e.g. from venture capitalists, etc.) or expect that the people that they are selling their invention to might think of ripping them off. But note that everyone seems to think that they will be able to do that, selling their invention to industry, and most can’t get to first base. And, yes, there are those who are trying to piggyback on someone else’s work.

    The thing that does help with either funding or taking your invention to industry (with that same proviso) is the use of provisional patent applications. They are not nearly as formal, don’t need much in terms of claims, can be done fairly quickly, etc. You have a year to file a utility application, and very often, you know whether you have a good chance at success by then. But, don’t go to Legalzoom.com, or whomever George Foreman is fronting for, if you are going to do it yourself. Better probably is to buy and read “Patent It Yourself” by David Pressman. And, then after the year, go to a licensed patent attorney or agent if your invention still looks good.

    2. I think you are going to lose on the unconstitutionality. The Supreme Court was fine with the Mickey Mouse copyright term extension act, which essentially rewarded Disney, etc. without any quid pro quo on Disney’s part, which arguably violated the same clause. 100 years is still considered a limited number of years. Point is that the courts defer a lot to Congress in this area, and expect that they would here too.

    3. Your scheme might work. Except, maybe, that most people just don’t care that much about most inventions, and most patents/patent applications. A lot of pretty silly inventions out there. Would enough people spend enough time and effort reviewing all of the pending applications? I have my serious doubts. And, yes, there is a patent industrial complex, that includes patent attorneys, a government agency (with its thousands of unionized government employees), and industry, esp. large companies that mostly like how things currently are.

      PersonFromPorlock in reply to Bruce Hayden. | May 6, 2015 at 1:51 pm

      My inventions are so modest (e.g., an improvement to a lawn tractor) that my desire is mainly to be able to approach existing manufacturers with them, in hopes of getting some payback for their being incorporated into existing product lines. However, this is no longer possible, because of the patent troll problem. Manufacturers simply will not talk to you unless you have at least an application in, if then.

      I don’t worry a lot about having ideas stolen, at least by American companies, because I don’t think most of them have the initiative to steal.

      I think I might be on better grounds on the constitutional issue than you do, because the ‘first to file’ standard leaves ‘the inventor’ right out of it. And that aside, the practical unavailability of the patent system to most inventors (because of cost) means that it doesn’t meet the standard set forth for it in the Constitution. ‘Some inventors’ is not ‘the Inventor’, who is really a synecdoche for ‘all inventors’.

      “Would enough people spend enough time and effort reviewing all of the pending applications?” is a good question. I think there are enough crepe-hangers in the world that there would be, or that private examiners-for-hire would make themselves available to would-be licensees. But because I also know that, as you point out, there’s a bunch of people with an interest in the present system, I don’t expect the question ever to be more than moot.

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