House Approves Bad Plan For Special Patent Judges

from the unintended-consequences dept

Tue, Feb 13th 2007 7:49pm — Mike Masnick

Last year, we pointed out why a proposed bill to spend government money better educating judges on patent issues may sound good upfront, but would likely have very bad unintended consequences. Obviously, there are a lot of problems with the patent system -- and often it does seem to have something to do with judges who don't understand the intricacies of what's going on. However, we've been through this before. In 1982 there was a lot of concern about patent litigation and jurisdiction shopping, as lawyers would rush to file lawsuits in specific regions where they were more likely to get favorable rulings. To deal with that, Congress created the Court of Appeals for the Federal Circuit (CAFC) which handles all patent-related appeals. Seems like a good idea, right? Except that by establishing such a specialized court, it didn't take long for the court to be dominated by former patent attorneys who view the patent system in a very different way than its originally intended purpose. They tend to prefer a much broader scope of patents -- and, indeed, CAFC helped make it okay for business models and software to be patented. They greatly expanded what could be patented, while also making the risks of violating a patent much greater. That, alone, is what has helped overwhelm the patent office with tons of patent applications.

Unfortunately, it looks like the House has now passed the bill allowing for this education regime which could create a very similar situation at the lower court levels. Judges will be "trained" on patent issues -- but it isn't explained what that training will include. It's likely, though, that it will come with that same bias towards more patents, rather than promoting innovation. The bill also pushes for "specially appointed clerks with patent expertise," which again probably means things like former patent examiners. There's nothing to counterbalance the one-sided education that these judges are likely to receive -- and since the bill also would let other judges hand off patent lawsuits to these "specially trained" judges, the end result may be a lot worse, rather than better. It certainly sounds like a good idea to better educate judges on patent issues -- but it's not hard to see that the education would be very one-sided, and the system would tilt even further in a dangerous, anti-innovation direction.

Part of the problem in this debate is that almost everyone looks to legal experts in this debate, rather than economic experts. Patent attorneys make money if there are more patents. They get more money in filing fees and in litigation, so more patents often are a good thing for them. Economists, on the other hand, are more likely to look at the overall system to see whether or not it really is a net negative or net positive. The patent system is designed to promote innovation. Taking a more expansive view of the entire system is what's needed -- but that's not the job of legal experts, who tend to focus more on specific cases. So, really, all this new bill would do is hand more power to the legal experts and assume that will solve the problem -- rather than recognizing that it only tips the scales further in the wrong direction.

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19 Comments

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andy, 13 Feb 2007 @ 9:23pm

Ugh..
depressing.
will we ever be free?
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evilwulfie, 13 Feb 2007 @ 10:48pm

nope
never again
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Anoymous of Course, 14 Feb 2007 @ 6:07am

Isn't that special training.
Perhaps they could train special innovation
detecting dogs?

The root cause isn't a deficit in the laws, it's
a lack of technical expertise.

"specially appointed clerks with patent expertise"
I'd rather they were working in the patent office
there are few enough now as it is.

Of course they tip the scales ever more towards
the lawyers. We have no separation between the
legal and judicial branches of government as long
as lawyers are in the legislature.
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Tyshaun, 14 Feb 2007 @ 10:17am

What!
Mike, Your article is full of a lot of conjecture...
It's likely, though, that it will come with that same bias towards more patents, rather than promoting innovation. The bill also pushes for "specially appointed clerks with patent expertise," which again probably means things like former patent examiners. There's nothing to counterbalance the one-sided education that these judges are likely to receive

Is this based on anything more than your dislike of the current system?

Part of the problem in this debate is that almost everyone looks to legal experts in this debate, rather than economic experts. Patent attorneys make money if there are more patents. They get more money in filing fees and in litigation, so more patents often are a good thing for them. Economists, on the other hand, are more likely to look at the overall system to see whether or not it really is a net negative or net positive.
Let me guess, your background is as an economist right? Economics is defined as the science that deals with the production, distribution, and consumption of wealth, and with the various related problems of labor, finance, taxation, etc. (Webster's New World). Nothing in the definition inherently implies that economists as a whole are against the current system, in fact I would assert (with nothing other than my assertion to back it up) that there are probably plenty that think the current system is acceptable because there are plenty of companies that get lots of economic advantage from it. In fact, I would be leery of any law that radically shifted the current system because the case studies seem to indicate a fair distribution on both ends of the spectrums (those who benefit from the current system as well as those who would benefit from an "innovation" centered system), which would indicate radical "tweeaks", not wholesale change.

The patent system is designed to promote innovation.

Of course it was, but part of the problem lies in article I, section 8 of the constitution (the part that gives congress the mandate to deal with patents and such):

"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries"

So yes, the intent of the patent system was innovation, but it seems like the section also implies that part of the system was the protection of those innovation. The problem with the current system is that the lawyers, as you pointed out, are emphasizing the protection part because that means profits. Any system that emphasizes the innovation and not the protection seems to be just as flawed and out of synch with the original intent of the framers as you argue the current system is.
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Mike (profile), 14 Feb 2007 @ 10:24am

Re: What!
Is this based on anything more than your dislike of the current system?

Isn't the rest of the post explaining what that's based on? It's based on history. It's what has happened in the past and is likely to happen again.

Let me guess, your background is as an economist right?

I've studied both economics and law -- though have a degree in neither. I was pre-law, but eventually decided not to go through with law school. My training in both subjects is about equally as strong. So... no.

Nothing in the definition inherently implies that economists as a whole are against the current system,

Nor did I say that economists as a whole were against the system. I was just saying that always asking patent attorneys to weigh in on the system is like only asking automobile execs about reasonable safety standards for cars.

Also, by the way, I don't think you can define economics from Websters. That's like saying you can determine the opinion of all politicians based on the Webster's definition for politician.

I would be leery of any law that radically shifted the current system because the case studies seem to indicate a fair distribution on both ends of the spectrums (those who benefit from the current system as well as those who would benefit from an "innovation" centered system), which would indicate radical "tweeaks", not wholesale change.

Which case studies are those?

Any system that emphasizes the innovation and not the protection seems to be just as flawed and out of synch with the original intent of the framers as you argue the current system is.

No. You are misreading the clause. It's stating that the only reason to protect the works is if it promotes innovation. It's not about both being equal, it's about one promoting the other. If the protection is not promoting innovation, then it goes against the purpose.
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Tyshaun, 14 Feb 2007 @ 10:55am

Re: Re: What!
OK Mike, so I'll chalk most of your other comments up to difference of opinion, but this one:

No. You are misreading the clause. It's stating that the only reason to protect the works is if it promotes innovation. It's not about both being equal, it's about one promoting the other. If the protection is not promoting innovation, then it goes against the purpose.

I disagree. Looks to me like the statement is saying (paraphrase) Congress is reponsible for fostering innovation...and that is done by enforcing patent protections. Maybe it's a strict interpretation versus a more liberal one? As an engineer it seems pretty clear that the paraphrase above is what was meant by the statement but I have been surprised by others interpretation of legal statements before.
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MyNameIsMatt, 14 Feb 2007 @ 11:30am

Re: Re: Re: What!
I think you're both right but starting from different points. The primary goal is that of promoting innovation, and the tool for doing that is patent protection. However, the time limited words are very important, and the non-deterministic definition of the whole statement is important. What are the thresholds for judging what is time limited, and are you overlooking the primary purpose of the article if you only judge patent protection based on the inventor's profits?

I'd say that you'd be missing the key argument of the constitutional article if you only accept the reasoning for patent protection as one based on inventor rights because the focus as a whole is on innovation and not the inventor. In that sense, I'm with Mike, but I don't think you're wrong for acknowledging that patent protection is the constitutional mechanism for doing that. From a historic view, the table has shifted from innovation as a whole to the inventor as an individual, which would be (IMO) against the founding purpose.
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Mike (profile), 14 Feb 2007 @ 11:49am

Re: Re: Re: What!
Looks to me like the statement is saying (paraphrase) Congress is reponsible for fostering innovation...and that is done by enforcing patent protections

Right. That is what it says. So if the patent protections DO NOT foster innovation... then it seems clear that it's going against the Constitutionally stated reasons for allowing patent protection.
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innovator, 14 Feb 2007 @ 1:35pm

Re: Re: Re: Re: What!
I just emailed a great idea to manufacturers of compact fluorescent light bulbs the other day. One of them will probably patent it. I'll never see a dime. I'm ok with that.

I invested nothing in my idea. Just a bit of thought. I dont deserve a patent on it. But I couldve got one. I will keep on creating ideas for the sheer joy of thinking. I will pursue those ideas and produce documentation and research. Maybe someone will do the courtesy of hiring me to develop one of the ideas further some day.

But Im thinking maybe I should patent something just so I can come on these forums and tote my credentials while scoffing at the patent system.

So I dont need monetary incentive to innovate. Don't other people? Maybe they do. But I'm sorry, I cant see the forest for the trees of bogus patents. Weed out that crap and maybe we can all think a bit more clearly. I will continue to invent and scoff.
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Tyshaun, 14 Feb 2007 @ 1:36pm

Re: Re: Re: Re: What!
Looks to me like the statement is saying (paraphrase) Congress is reponsible for fostering innovation...and that is done by enforcing patent protections Right. That is what it says. So if the patent protections DO NOT foster innovation... then it seems clear that it's going against the Constitutionally stated reasons for allowing patent protection.

I see your rationale, I guess I'm still troubled in making the uniform claim that all innovation is stifled under the current system. I think the current system lends itself to "revolutionary" innovation as opposed to "evolutionary" innovation. By that I mean that the current system does perfectly fine for someone developing something completely new and unlike anything previously developed, but falls short in fostering development of simple modifications to existing patents (I shouldn't say the patent system falls short as much as the legal system falls short of dealing with this properly).
It seems like the optimal solution may be changes in the law (not the patent system) to accomodate for "evolutionary" changes in products by making it possible to use a patent without explicit permission, but requiring payments comiserate with the fair market value of the patent for products the patent holder uses the patent in (this, btw, deals with patent trolls quite nicely because if they are sitting on a patent that they aren't using directly, and try to sue, the FMV of their patent is $0.00 because they aren't using it). I think this solution protects both mine and Mikes interpretation of the spirit of Article I, Section 8 and also deals with the modern problem of "evolutionary" progress being stifled.
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Mike (profile), 14 Feb 2007 @ 1:46pm

Re: Re: Re: Re: Re: What!
I guess I'm still troubled in making the uniform claim that all innovation is stifled under the current system

I have never claimed that all innovation is stifled by the system. I have simply said that I believe it's a net negative.

I think the current system lends itself to "revolutionary" innovation as opposed to "evolutionary" innovation.

I agree (and have said so). The problem is that if you look through history you'll find almost no examples of revolutionary innovation. Almost all innovation is evolutionary. So why are we supporting only one kind?

It seems like the optimal solution may be changes in the law (not the patent system) to accomodate for "evolutionary" changes in products by making it possible to use a patent without explicit permission, but requiring payments comiserate with the fair market value of the patent for products the patent holder uses the patent in

Why? Why should a company who does a better job satisfying a customer need have to pay off those that did a worse job?
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innovator, 14 Feb 2007 @ 1:51pm

Re: Re: Re: Re: Re: What!
Maybe we need patent obsolescence. Anyone who improves a patented invention can cause the nullification of the earlier invention. We already have some subjective tests for obviousness (or are supposed to anyway) so I dont see why we couldnt have subjective tests for whether something is an upgrade. The inventor of the upgraded item retains his patent only as long as someone else doesn't upgrade it. This provides additional incentive for evolutionary changes.

Perhaps you could make a formalized royalty system (fixed structure but different variables) with the added twist that hierarchies of upgrades would result in payments trickling up to the original invention, pyramid style. Obviously this would result in enormous legal wrangling, but whats the difference between that and now? Maybe the innovation would continue, in this case, and so it would be better.
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innovator, 14 Feb 2007 @ 1:55pm

Re: Re: Re: Re: Re: Re: What!
Why? Why should a company who does a better job satisfying a customer need have to pay off those that did a worse job?

That should be obvious--because the better job couldntve been done without the framework laid by those that did a bad job. Why bother asking that question. We are protecting a theoretical class of inventor with no guarantee that they are actually existing, or helped, or protected--those that have no business savvy whatsoever and would rather just tell everyone their invention and be compensated for it without having to do business. The system is contorted into fulfilling its role in facilitating the progress of science by saying that it does this--without regard to the fact that it could fulfill its role much better in any number of other ways
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Tyshaun, 14 Feb 2007 @ 2:17pm

Re: Re: Re: Re: Re: Re: What!
Why? Why should a company who does a better job satisfying a customer need have to pay off those that did a worse job?

Mike, as an advocate for innovation I think the answer would be obvious to you. If company A puts forth a sum of money to devlop some widget A then company B comes along, takes widget A and produces a more market savvy version, widget B, shouldn't company A expect compensation under the spirit of innovation outlined in the patent mandates of the constitution? Isn't the entire spirit of the patent system the underlying premise that if you innovate enough to get a patent you should expect that the government will offer you some degree of protection for your innovation so you have a reasonable opportunity to profit from the innovation without fear of someone else stealing your innovation (for some specified time window). Without the "guarantee" that patented items receive legal protection (or guaranteed compensation as I proposed), what company with half a brain would invest in R&D? If anything, patent systems without the type of protections outlined above will only lead to more patent trolling and the system becomes even less innovative.

A completely first-to-make-the-crowdpleaser system would work great if the material costs to develop a patent were nominal, but in some fields they aren't. Patents most times represent a significant outlay of money and time and part of the reason for protecting them is that people will simply stop developing new stuff that is expensive (like high end pharmaceuticals, expensive electronics, large software packages) and simply keep rehashing the same stuff again and again because it would be cheap.
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Science Historian, 14 Feb 2007 @ 2:31pm

Re: Re: Re: Re: Re: Re: What!
"I think the current system lends itself to 'revolutionary' innovation as opposed to 'evolutionary' innovation." -Tyshaun

"The problem is that if you look through history you'll find almost no examples of revolutionary innovation. Almost all innovation is evolutionary." -Mike

Mike is spot on here. "Revolutionary" is virtually non-existent with or without a patent system.
I'm neither a lawyer or an economist, but a scientist. Anyone remotely familiar with the history of science and technology recognizes that, with exceedingly rare exceptions, even the apparent "revolutions" come from multiple sources at the same time. Perhaps it's time for PBS to run James Burke's Connection again.
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Anonymous Coward, 14 Feb 2007 @ 2:37pm

Re: Re: Re: Re: Re: Re: Re: What!
And a significant portion of those revolutions arent even recognized at the time, and the inventor languishes in ignominity!
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Anonymous Coward, 14 Feb 2007 @ 2:46pm

Re: Re: Re: Re: Re: Re: Re: Re: What!
By the way guys, I have just now patented an approach for calculating the area under a curve by means of limits and a concept called an 'infinitesimal'. I forsee a great future licensing textbooks which teach this method as a manual means for calculation, as well as computer software which uses it in combination with other engineering and physical concepts to solve common problems.
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MyNameIsMatt, 14 Feb 2007 @ 4:02pm

return on investment
"Without the "guarantee" that patented items receive legal protection (or guaranteed compensation as I proposed), what company with half a brain would invest in R&D?"

Any patent system should recognize that the innovator hopes for a return on investment, but the important question isn't, "should they get protection?," but, "how much protection should they get?" I don't think anyone is advocating removing protection or making everything only protected for two weeks, but terms like life of creator + 70 years is ludicrous. If you can't make a return on investment in that time, then you shouldn't be in business. That if anything compels an innovator to innovate once and milk it.

Finding the right balance is key, but as Mike has highlighted in other posts, plenty of industries including ones today that bitch about piracy, have thrived and arguably done better without protection. Part of the challenge in this is understanding that industries change, and you can't define the transportation industry as the horse and carriage industry, or the fashion industry as the bell bottom industry.

Guaranteeing compensation for the innovator isn't part of the equation, although, you have to acknowledge that people innovate many times to receive compensation (in the form of money). However, you can cross a line between compensation (or guaranteed protection for an attempt at compensation) and stifling innovation.

Also, in your example of company B improving on company A, I think to Apple products. It's one thing to innovate, and it's another to copy. Most people will in reality just copy, and they push out products like the Zune, or a product that's similar to this last year's iPod when in reality everyone wants the new iPod, not your copy of the old one. Those who truly innovate will get the customers, and setting up a protectionist system that allows them to unduly restrict innovation is against the intent of the system, which makes not statements of actual guarantee of compensation.
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Mike (profile), 14 Feb 2007 @ 4:07pm

Re: Re: Re: Re: Re: Re: Re: What!
Mike, as an advocate for innovation I think the answer would be obvious to you. If company A puts forth a sum of money to devlop some widget A then company B comes along, takes widget A and produces a more market savvy version, widget B, shouldn't company A expect compensation under the spirit of innovation outlined in the patent mandates of the constitution?

Why? I'm sorry, but that makes no sense to me. The MARKET is what compensates companies. Demand from the market is what drives innovation. If one company does better in the market they get the rewards.

That's how it works. That's the basis of competition in a capitalist system. I don't see how rewarding the losing company for failing to meet the market's need sufficiently helps promote progress.

Without the "guarantee" that patented items receive legal protection (or guaranteed compensation as I proposed), what company with half a brain would invest in R&D?

Um. Any one who saw a need in the market and realized they could deliver it. It really is that simple. The market can reward those who innovate. If companies are too scared to invest in R&D then that's just an opportunity for someone else to come in and satisfy the market demand.

A completely first-to-make-the-crowdpleaser system would work great if the material costs to develop a patent were nominal, but in some fields they aren't. Patents most times represent a significant outlay of money and time and part of the reason for protecting them is that people will simply stop developing new stuff that is expensive (like high end pharmaceuticals, expensive electronics, large software packages) and simply keep rehashing the same stuff again and again because it would be cheap.

Except that's not what happens. I've pointed this out REPEATEDLY. Go look at countries without pharma patent protection, and see what happened. Prior to 1978, Italy had no patents on pharma, and yet had a huge pharma industry that developed plenty of new expensive to develop drugs. Why, because there was a market to do so. Also, by removing the patent hurdle, it made it cheaper to develop, since they didn't have to worry about all the hurdles patents put in their way.

What you say sounds good in theory, but falls down in practice. Looking at the way the pharmaceutical industry works these days should disabuse you of any notion that the patent system helps create incentives for new drugs. It doesn't. It helps create incentives for new patents. That's very different.
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