In "Innovation and Its Discontents," a surprisingly riveting account of what went wrong with the patent system, Harvard Business School professor Josh Lerner and Brandeis economist Adam Jaffe show that two congressional decisions made long ago are at the root of today's problems.
Twenty-five years ago, Congress created a specialized court to hear all patent appeals. Although Congress did not change patent law, the idea was to make the judicial interpretation of patent law more consistent.Yet the new Court of Appeals for the Federal Circuit quickly became a champion for its specialty. It made patents easier to get, easier to enforce, more powerful and available for virtually anything, including software and business methods.
Ten years later, Congress decreed that the Patent and Trademark Office should be entirely self-funded from user fees--"pay-as-you-go government." But this gave us a patent office with a financial interest in its own operations. With a third of its income from maintenance fees paid over the life of granted patents, the office was naturally motivated to grant more patents. Its stated mission became "to help customers get patents."
The system favors the customer from the start. A patent examination is basically a secret proceeding. The patent is granted, unless the examiner can show that a patent should not be granted. An inexperienced examiner with a newly minted bachelor's degree in science is often pitted against a high-paid patent attorney. And if you are still refused a patent, you can file a continuation application, restarting the process and maybe getting an easier examiner. Counting continuations, 85 percent to 95 percent of applications in the U.S. are eventually granted--a much higher rate than in Europe or Japan.
Addicted to patents
Patentees and their lawyers are now addicted to a high-volume stream of easy-to-get patents. Thickets of dense overlapping patents keep new entrants at bay, and more patents make patent lawyers more important. By suddenly deciding that methods of doing business were patentable in 1998, the Federal Circuit positioned patent lawyers close to the heart of the enterprise.
Nobody was lobbying for patents on business methods when the Federal Circuit decided the State Street case. The ruling, which determined that business methods could be patented in the United States, was of course followed by a surge in filings.
Why didn't Congress overturn this immensely controversial decision? The land rush that followed created an instant constituency, including the lawyers that found themselves exalted beyond their wildest dreams. Corporate patent departments, acting through their common trade association, adopted a unanimous resolution telling Congress to not to meddle with the decision.
How could this happen? How did an activist court single-handedly undo 600 years of history that confined patents to fields of technology--offering 20-year monopolies to such things as diaper services and frequent flyer miles? Aren't judges supposed to be bound by precedent?
But this is Washington. The judge who wrote the State Street decision was formerly a patent lawyer who, along with an attorney from the patent office, had been brought on as staffers to draft the Patent Act of 1952. In State Street, he claimed that Congress intended everything "made by man" to be patentable and therefore to abolish the rule against business method patents. He ought to know, right?
Did Congress really change the course of economic history just because a staffer slipped a dependent clause, "which may include everything under the sun made by man," into a committee report? What did Congress intend?
Fortuitously, the judge answers this question himself a few years later with an aptly titled article, "Congressional Intent--Or Who Wrote the Patent Act of 1952." But here he reveals that Congress had so little time for patent law that it merely intended to leave the crafting of the Act in the hands of the patent attorneys it trusted. In another article around the same time, he salutes the diaper service (a nontechnological method of doing business if there ever was one) as "one of the greatest inventions of our times," but self-evidently unpatentable. If Congress had intended to change the law in 1952, he momentarily forgot.
But by 1998, when State Street was decided, the Internet was booming, new business models were everywhere, and the adaptability of the patent system was on the line. Patents are good, so patents on business methods had to be good. And why limit patents to techies? Why discriminate against inventive business people?
Today, eBay faces not only a judgment of $25 million for its "Buy It Now" feature but an injunction from the Federal Circuit to shut it down entirely. Like many business method patents, the patents that threaten to kill "Buy It Now," were awarded to, yes, a patent lawyer. But why discriminate against inventive lawyers?
Many judges are duly skeptical of divining Congress's intention from staff-written committee reports. But all should be appalled when judges charged with interpreting federal law allow their interpretation to be distorted by personal memory, colored by the championing of their own professional community, and contradicted by their own words.
We want invention to promote innovation--not invention that rewrites history.
Biography
Brian Kahin is a senior fellow at the
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Brian Kahin's reference to continuations leads me to believe that he would appreciate and support this effort. i only wish that he was aware of the proposed rule and had included a thumbs up for it in his piece.
brigid quinn
deputy director, office of public affairs
u.s. patent and trademark office
I am glad to hear there are solutions being worked on.
Proposals to remove the Alaskan "bridges to nowhere" were brought up too. However they were shotdown in one budget document and brought up in another that passed later.
One issue that readers should be aware of is that continuations are one of a number of issues on which industry is divided. In biotech, where invention is closely linked to an process of scientific discovery and this research is costly, a reasonable case can be made for continuations. In IT, problems can be addressed in many different ways, and continuations are often used to track and capture the particular solutions of competitors and standards development organizations.
Getting a patent is no longer a "secret" process unless you request non-publication and decline to file foreign. Or you get a secrecy order. Doesn't happen much. Ever hear of Public PAIR? You can view the prosecution of tens of thousands of patent applications--and view the prosecution of patents--on-line for free. If that's his definition of a secretive process, I'd hate to see his definition of public.
Addicted to patents? Read the constitution and the history of the Patent Acts. It's a quid pro quo system. A limited monopoly on the right to exclude others from practicing your invention in exchange for revealing what your invention is. After the monopoly is up, the invention is in the public domain. The onus is on the Patent Office to provide evidence for *not* granting a patent. That's a bad thing?
Getting patents are costly. Attorney and patent agent fees by far outstrip most costs levied by the PTO. Sure, you can do it on your own. But expect problems, both in getting the patent, and especially in enforcing it in litigation.
As for the Federal Circuit--easier to get patents? In my opinion, not really, not consistently across all fields. And in some aspects, it seems they've made it harder to keep patents enforceable. But, just like the writer, I have no concrete, thorough data to back up my assertion. Or if he does, he doesn't cite them.
The patent office being autonomously self-funded would be a nice reality if Congress didn't help itself to its fees. Anyone who has prosecuted a patent application will tell you it's more often than not difficult to get a patent. First office actions--when the office gets to it--is almost always a rejection of all claims.
And what is the alternative? To have Congress control the budget by collecting the Office's fees and then allocating as it sees fit? Seems even more vulnerable to political pressures--which this Congress doesn't seem to shy from--than the alternative. Every inventor--and the public--should be furious every time Congress helps itself to the PTO's fees. That's less money that the Office has to do its job well.
There are faults in the patent system, but having a patent system isn't one of them.
The vast majority of software patents are simply used as ammo in Mexican standoffs to show you're prepared to shoot if anyone decides to get stupid.
Those that use vague patents offensively are the exception, not the norm.
Getting rid of the guns and bullets will only force companies to seek alternative IP protection measures.
What qualifies you to write an article about patent law and the patent system when you obviously know absolutely nothing about either?
Seriously, that whole column was riddled with incorrect statements. It would take me another column to refuse all of them, so let me just mention a couple so that you get the idea.
secret proceeding? No, tough guy, its actually totally public. You can get on public pair and look at patent prosecutions all day.
"anything under the sun made by man"? Mr. Kahin: The Federal Circuit judge didn't make this up, he got it from a supreme court opinion. You are familiar with the supreme court aren't you? listen, i agree that the scope of patent protection is too broad. but this message should be delivered by somebody that actually knows the law (i.e. not you, mr. kahin).
85 to 95 percent allowability rate? check the numbers, smart guy, you're wrong again.
I could go on and on. but i'm somewhat busy today.
I just want everybody who read Mr. Kahin's column to realize that it wasn't based on a single correct fact. Mr. Kahin: If you worked for me, I would fire you.
According to the author?s bio at CCIA he is not a patent attorney nor has he ever prosecuted, licensed, or litigated a patent. His only exposure has been academic and as a political appointee. He has no practical experience.
According to its web site the CCIA is a trade association controlled by large multinational firms. Small entities will tell you their goal is to deform our patent system, not reform it. It and they say what they are told to say as do many other such organizations which serve merely as lobbying fronts for their masters.
Sadly, some legislators and journalists have been duped by these slick firms and their well greased lawyers and lobbyists. Don?t be surprised to find the Washington lobbyist scandal spreading into the patent deform proceedings.
Which country has led the world in innovation for over 100 years? The US. That is the purpose of the patent system. It works. Don?t screw with it.
Sincerely,
Stephen Wren
actuary/inventor
StL, MO
stevewr@varianthlds.com
314-895-4604
Please permit me to respond to this piece.
According to the author?s bio at CCIA he is not a patent attorney nor has he ever prosecuted, licensed, or litigated a patent. His only exposure has been academic and as a political appointee. He has no practical experience.
According to its web site the CCIA is a trade association controlled by large multinational firms. Small entities will tell you their goal is to deform our patent system, not reform it. It and they say what they are told to say as do many other such organizations which serve merely as lobbying fronts for their masters.
Sadly, some legislators and journalists have been duped by these slick firms and their well greased lawyers and lobbyists. Don?t be surprised to find the Washington lobbyist scandal spreading into the patent deform proceedings.
Which country has led the world in innovation for over 100 years? The US. That is the purpose of the patent system. It works. Don?t screw with it.
Sincerely,
Stephen Wren
actuary/inventor
StL, MO
stevewr@varianthlds.com
314-895-4604
According to the author?s bio at CCIA he is not a patent attorney nor has he ever prosecuted, licensed, or litigated a patent. His only exposure has been academic and as a political appointee. He has no practical experience.
According to its web site the CCIA is a trade association controlled by large multinational firms. Small entities will tell you their goal is to deform our patent system, not reform it. It and they say what they are told to say as do many other such organizations which serve merely as lobbying fronts for their masters.
Sadly, some legislators and journalists have been duped by these slick firms and their well greased lawyers and lobbyists. Don?t be surprised to find the Washington lobbyist scandal spreading into the patent deform proceedings.
Which country has led the world in innovation for over 100 years? The US. That is the purpose of the patent system. It works. Don?t screw with it.
Sincerely,
Stephen Wren
actuary/inventor
StL, MO
stevewr@varianthlds.com
314-895-4604
- Patents , The Blocker
- by furball April 11, 2006 3:14 AM PDT
- I know nothing of the law, but I do know that if there is no limit on the amount of time that an Invention is kept protected by patents, then surely civilisation is being kept in the dark ages just to put more money in the pockets of the few and not helping anyone else. there are inventions that can help the climate and save trees, or improve transport ETC, but is being kept from being developed until there really is no option but to use them. I fully expect a lot of denial and verdal abuse for suggesting that the planet and the people come first. Maybe there should be a time limit on patents in which the inventors would have a reasonable time to set up thier business's and become established first, and let then let others take up the challenge of competition. thus enabling civilisation to move forwards.
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