April 25, 2005 8:53 AM PDT

Microsoft, Oracle call for patent reform

CAMBRIDGE, Md.--America's current patent system is seriously flawed and must be repaired by Congress soon, some large software companies are warning.

Microsoft wants patent law rewritten to make it easier to challenge patents after they're granted and to curb what it views as "abusive litigation," said Brad Smith, the software company's general counsel.

"We need that system to continue in a healthy way," Smith said at a weekend conference here organized by the Association for Competitive Technology. "We need to ensure that high-quality patents are approved and low-quality patents are not."

Smith's comments, directed at the dozens of congressional staffers in the audience, represented Microsoft's latest critique of a patent system that has caused it to spend $100 million a year defending itself against 35 to 40 lawsuits at any one time. Microsoft has gone on the legislative offensive after a jury awarded Eolas Technologies $565 million in damages--which has been partially reversed--in a patent dispute over Internet Explorer.

Congress is listening. The Senate Judiciary committee is meeting Monday to consider patent reform legislation. Among those scheduled to testify: Segway inventor Dean Kamen, and lawyers for Intel and Micron Technologies. Meanwhile, the European Parliament is debating whether to permit U.S.-style software patents, a move that's opposed by free software advocates.

Smith's comments found support from Sanjay Prasad, Oracle's chief patent counsel.

He said that courts have been awarding damages for infringement that are out of line with the patent's real value. "No reasonable business person would ever agree to" pay those sums in licensing fees, Prasad said at the ACT conference on Saturday. "There's a large distortion between the value provided realistically, and how that comes out in court."

The influential U.S. Chamber of Commerce is backing patent reform. Post-grant review and opposition "creates another filter through which bad patents can be challenged," said Brad Huther, the former president of the International Intellectual Property Institute who's now directing the chamber's intellectual property efforts.

But Huther warned that Congress may not act swiftly. "This is not a problem that's going to be solved in a matter of years."

6 comments

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How about this...
no more software patents. No patents equals no lawsuits or patent violations. It also eases the load on the patent office. Stops the frivilous patent filing's. Stops a lot of things.
Posted by System Tyrant (1453 comments )
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Hilarious
The 2 biggest patent ****** in the industry have not yet sucked enough money out of their wrongfully granted patents, and now want more moeny.
Posted by pcLoadLetter (395 comments )
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18 ways to fix the patent system ...
Easy :

- When a patent attack is lost, the patent owner should *by default* pay the defendant fees instead of the defendant being forced to litigate again. This would help a good faith defendant finance the fight (and it would stop most frivolous patent lawsuits while not hurting valid ones)
- Patent examiners should be real professionals in the field, able to distinguish the gems among trivial claims (for that to happen, they need to be paid more, not from public funds, but from those who apply for patent protection). There should be enough examiners, and they should have better ways to find prior art.
- the USPTO (and similar offices all around the world) should be legally accountable when they accept frivolous patents. All patent registrations should include provisional fees to fund their defense and any rewards they would pay (not paid by taxes). If honest applicant find the fee too high, they would pressure the Office so that the stop accepting those bogus patents.
- When a patent lawsuit arises, a careful patent review (including prior art submitted by the would-be defendant) by the issuing body should be mandatory, before the court can proceed. This proposal works best together with the previous one.
- Patent application should not be kept secret until accepted
- Participation in a technical committee should automatically void patents issued later on the standards created by said committee (prevent "midnight patent")
- Hiding relevant prior patent application while participating in a technical committee should automatically void said patents (prevent "Rambus DDR" patents)
- Just like trademarks, patents should become unenforceable if the holder fail to warn known potential infringers (prevent GIF style late claims)
- A patent not used by it's inventor should loose it's offensive power after a short period of time (can't attack others for using something you patented but you're not using).
- More difficult : create different classes of patents depending on their merit & the applicable field (different protection length)
- patent examiners should be given the power to set the patent's length based on the state of the particular industry
- When a patent holder have claims on more than one patent against a defendant, he should be forced to merge all the claims about all of his patents at once, instead of being allowed to launch lawsuits one after another to keep the battle going for many years (prolonged uncertainty for the defendant can prove more damaging than the monetary outcome).
- New classes of patents should be created such as "defensive only" (simpler, lower cost, used to prevent a competitor from patenting the invention to later deny/restrict your right to use it), "Non discriminatory" (same, public and fixed rules apply to all licensees), "Parent Patent" ("child" patents can't have more restrictive terms. Among others, it prevents the "embrace and extend" strategy).
- Modify patent transmission rules so that the remaining validity period for the buyer is half the period awarded to the original inventor (recursive, limit patent farming).
- Modify patent transmission rules so that patent not used (no product, either directly or by a licensee, excluding the buyer) can not be used offensively (limit patent farming).
- outlaw "evergreening" (last minute "new uses" for patents about to expire, you can "google" this)
- Software patents should be either eliminated or severely restricted since the appropriate protection for software exists in copyrights laws.
- "composite" patents that simply put two already known techniques together should not be accepted. Only the way to "glue" them should be acceptable, if non trivial / not obvious / not overly broad.

If only half of these proposals was implemented, the system would return to sanity, but it's unlikely since patents are an anticompetitive tool used mostly to ensure the issuing country's domination in the field rather than the neutral inventor rewarding system it's supposed to be.

Note : I already posted this list on CNET, and added to it some suggestions from constructive replies ...
Posted by My-Self (242 comments )
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Re: 18 ways to fix the patent system ... (registering to prevent patenting)
> - New classes of patents should be created
> such as "defensive only" (simpler, lower cost,
> used to prevent a competitor from patenting
> the invention to later deny/restrict your
> right to use it), ...

It seems to me that all that's needed to achieve this particular goal is a repository of "prior art". No change in law is needed here. Just a non profit organization to keep the data, testify on when it was received, and make it available. WikiMedia can be a good candidate. They made a great job on the Wikipedia. A similar repository of technical info that records all submisions and change history can serve this purpose and more. It can also collect past info on prior art to assist in preventing litigation (or help in having wrongly issued patents revoked). A wiki system is appropriate here, because the fact that info on it is proof that it was known and published by the time someone typed it and clicked "submit".

Of course changes in law can help proving "prior art" more easy, but just for registering "prior art there's no need for a change in law.
Posted by hadaso (468 comments )
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see <a class="jive-link-external" href="http://www.piausa.org" target="_newWindow">http://www.piausa.org</a> for an opposing view on patent reform
Posted by dinnertime (11 comments )
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