Perspective: Patent reform--or else

Squatters, trolls and terrorists.

Those are some of the more colorful characterizations of people accused of abusing the patent system in the United States. Corporate chiefs have groaned about the rise of patent terrorism, where their products are threatened by injunctions from companies who have scooped up patents for the purpose of litigating and reaching a lucrative settlement.

On the flip side, small businesses and individuals are expressing similar concern about comparable practices carried out by large corporations themselves, often, these critics complain, with the intent to keep competition down.

Certainly it seems that more creative liberties are being taken with intellectual property these days. Intellectual Ventures is an example of a company that is putting a new twist in the business of innovation. In a recent interview with CNET News.com, founder Nathan Myhrvold talked about his approach to investing in innovation by bringing great minds together to solve tough problems and create patents.

Certainly it seems that more creative liberties are being taken with intellectual property these days.

What has people concerned, though, is that apparently another function of Intellectual Ventures is to buy up patents (trolling) and then offer rights to use the patents to corporate investors such as Nokia, Intel and Microsoft, as well as reserve the right to license them to competitors. The practice has precedents and is perfectly legal, but it still raises concerns as to potential consequences.

If organizations are funded specifically to amass large pools of patents at the behest of investors' interests, without disclosure, the clandestine practice could become a significant competitive threat. If concerns are valid, there will certainly be more companies like Intellectual Ventures popping up to act as agents of corporations with common interests--to dominate their markets or fend off competitors already employing this tool.

This opens up a bit of a quandary--mainly, should a government-granted property right be completely open to free market uses? Or should the entity that grants the rights under patents have some level of authority over how the right is used or transferred? It's easy to see why the questions surrounding patent reform are complex and go so deep into the fundamental operation of our economy.

The ongoing lament from business circles about the degradation of both the quality of patents and their protection seems to be reaching a crescendo, with the House and Senate both now considering extensive measures to reform the system.

Part of the complexity in any measure of reform is that the intellectual property system established in the United States benefits many different levels of society: big corporations, small business, individual inventors and even consumers as a whole. It's often suggested that changes to certain provisions of the patent system can tip favor toward one or another of these classes of participants.

For instance, it's not uncommon for a reform suggested by a large corporation such as Intel or IBM to be picked apart by organizations of small inventors to demonstrate that the change could be utilized by greedy corporations to marginalize the rights of the little guy--such as diminishing the strength of injunctive relief as a consequence of patent infringement.

Patents are being filed at a higher rate than the growth of the office charged to properly scrutinize and legitimize inventors' ideas.

But even amid the ongoing flap about the numerous problems with the system, some are saying that we are succumbing to intellectual hype and the problems are overblown--that a few high-profile cases skew perception that patent abuse is rampant.

I'd contend that the increased activity and new practices in the market for intellectual rights are concerns and should be examined. However, the more immediate and pressing issue for lawmakers lies with patents themselves and the function of the Patent Office. In this, there is a majority concurrence: The United States Patent and Trademark Office needs more resources to keep up. We are in the midst of an innovation boom, and patents are being filed at a higher rate than the growth of the office charged to properly scrutinize and legitimize inventors' ideas.

Certainly, a small number of aggressive companies will take advantage of the system to game it for profit--shaking down large companies for license fees of patents they've trolled. This will continue with or without reform. But is changing patent laws in direct attempts to effect reduced litigation and anti-innovative, anti-competitive behavior the best way to go?

It makes more sense to address the fundamental issues with patents that can exacerbate issues with their use--mainly, the quality of the patents and the process that validates them. Holding reforms that address core issues ahead of those that treat the symptoms will more likely yield a beneficial system for all.

Biography
Dave Mock is vice president of Instream Partners. He's also the author of "Tapping into Wireless" and "The Qualcomm Equation."

More Perspectives

Patent nonsense

In the end who decides what is patentable?

Big companies? The public? The courts? The consumer? Other countries?

My prediction is that the Congress will make matters worse before they make it better. Another prediction is that the protection of large companies like IBM, Intel and Microsoft has become a national security and economic obsession within the U.S. and that Congress will move to make that issue clearer in any legislation.

At the end of the day ... fair play will finish a distant last to economic necessity, security concerns and class-warfare.

[hadaso]

We are NOT in the midst of an innovation boom

We are in the midst of an innovation boom! Most of what seems as innovation and perhaps is defined as innovation by the rules that govern the granting of patent rights should probably not be considered innovation nowadays.

The patent system was created centuries ago at a time when the putting together of things in a new way to do something in a different way was quite rare, and only a few talented people did these things. Meanwhile time have passed, and in our times puting things together in new ways is routine. Just putting together things in a new way that is "non-obvious" or was never done before is not enough to grant exclusive rights anymore. There are people who do it several times a day in their jobs. It is not a rare occasion. It is the daily routine of many people to solve difficult problems by puting things together in new innovative ways. But the patent system still grants exclusive rights on these things as if they are rare occasions and not just routine jobs. Just like a retailer at the end of the days goes to the bank to deposit the day's profits, the programmer can go to the patent office at the end of each working day, and file for patents on several new soulutions to some problems that are innovative and nonobvious, and are probably deserving to be patented under the current system's criteria.

It's not that there's an "innovation boom". It's just that in an age when there are tools that enable "routine innovation", the criteria for granting monopoly on ideas should not be the same criteria that were used before these tools were available. It's not about higher or lower quality, and not about shifting balances. It's about an outdated concept. What is routine should not be called innovative, even if new knowledge is created, and even if it is created in "non-obvious" ways.

I fully agree.

You've just framed one of the largest problems with the current patent system in a very intelligent way. Thank you.

Maybe the problem all along has been the highly subjective nature of the word "non-obvious." I like your term of "routine innovation"; maybe patent law should be reworded to say that such "routine innovations" are not patentable.

Still, the author of this article is right--if the USPTO doesn't get more qualified patent reviewers, especially in the software arena, changing the law will mean little.

At least Congress seems to be looking at the issues. However, I prefer to expect the worst and hope for the best, so we'll see.

everyone innovates so there is no innovation?

this is ridiculous.

Innovation is not the same as inventing or solving problems.

Innovation involves overcoming SOCIAL pressures, not just twisting a screwdriver in a new way or writing a piece of C++ code in a different way that someobody else.

[steveth22]

Good balance, Thank You

I'm sick of seeing stories that are written by:

1) Big Companies with Giant Legal Departments
that just want to keep the status quo going
wherein they patent every obvious idea as
fast as they can.

-or-

2) Script kiddies who think that innovation,
software, music, movies, books, text, images
sounds, and anything else they can download
from an illegal IRC channel should be "free".

Patents are a crucial part of the innovation, and without them many small companies and individual inventors would never bother to share their invention with the world in any way (unlike the Script Kiddies, real people need real jobs and pay real bills).

Big companies (this goes especially for new drugs, which cost a minimum of $100M to create) would often not be able to justify the cost of bringing a new invention to the mass market because their product would be cloned quickly thus eliminating any upside potential. (And yes, those companies need "astronomical" returns in order to justify the astronomical risks, or they won't take them, and we'll be left with no new major innovations).

The patent system has a lot of problems and is in a lot of ways very broken right now, but the solution is to fix the problem, not pretend it doesn't exist, and not to solve the problem by creating a bigger one.

[Craig Landrum]

Kill Software Patents

A book author puts words and phrases together to make
something new out of known pieces. The resulting work is
protected using a Copyright - not a patent.

A programmer puts computer instructions together to make
something new out of known pieces. The resulting work should
be adequately protectable using a Copyright - not a patent.

I believe the appropriateness of a patent can be closely related
to the expense of duplicating the patented idea. If you patent a
new type of camera chip, it would take a great deal of money to
reexpress the embodiment of that patent. However, if you
patent a new sorting algorithm, it would take a programmer
about 10 minutes to reexpress it - and therein lies the basic
problem with software patents - because software is so easy to
write and there are numerous ways to do the same thing,
programmers rarely research whether a technique has been
done before or has been patented, and therefore it is almost
inevitable that a programmer infringe on *somebody's* patent,
leading to the proliferation of trolling and litigation. However,
for patented ideas that require real time and money to recreate,
someone is much more likely to research existing patents before
actually building something.

If we absolutely MUST have software patents, lets make the term
of the patent reflect the ease with which a programmer could
recreate the idea - say six months or a year - or alternatively,
have a fixed license fee (some ridiculously low $$ value) for all
software patents so if a programmer finds out that his program
is infringing, they can simply pay the license fee and move on.


Craig Landrum, CTO
Mindwrap, Inc.

Simple Solution

Patents are there to protect the interests of the inventor. This is good.
The thing that offends people is companies and people getting filthy rich over 2 minutes of thinking and 2 hours of applying for a patent.

Just adapt the period of validity of a patent to the cost made to develop the technology.
Amazon's one-click shopping patent: validity one month.
Viagra; validity 10 years.

And make it impossible to patent an algorithm or idea. Accept only one implementation of the idea as patentable, so others can implement the same idea by other means.