President Obama's Patent Plan May Have More Teeth Than You Realize

from the it's-not-quite-that-weak dept

When we wrote about President Obama's plan to deal with patent trolls, we noted a few areas where it was a bit weak and could be improved. In particular, the lack of an independent invention defense and using independent invention as evidence of obviousness would be quite useful in stopping abuses of the patent system. However, I'm a bit confused by Christopher Mims' complaints about Obama's patent plan being useless against patent trolls. I think Mims is a bit confused. He claims that there are two real problems with the patent system, and this plan addresses neither: (1) the patent office is understaffed and there's a backlog of patents and (2) the fact that we grant software patents at all.

I'd argue that Mims is seeing symptoms of the broken patent system, and suggesting that they are the problems, and I think he underestimates how some of the proposals may fix the "problems" he sees. First, on the question of an understaffed patent office, that's clearly a symptom, not the cause. The real problem is that the patent office has been issuing a ton of ridiculous patents: patents that are broad and covering obvious things. Furthermore, the courts have been awarding huge sums in litigation on those patents. The end result: more people applying for more patents, hoping to get their own lottery ticket. If you take away the broad patents and you make it easier to invalidate bad patents that already exist, combined with potential fees for suing over bad patents, you diminish (greatly) the value of the lottery ticket. End result? Fewer patent applications, less backlog, and no need to focus on hiring. The whole "patent office is understaffed!" claim is a red herring. It's the result of a patent system that has been encouraging a growth in patents, rather than a growth in innovation.

As for the software patent issue, I know that lots of people are sympathetic to this claim, but as we've argued for years, it's not that easy. If you outlaw "software patents," patent lawyers will rewrite those patents to look like they're not "software patents." And that's because there is no real definition of "software patents." Mims dismisses the stuff about rejecting functional claiming by saying that it's just some vague notion of stopping "broad" claims. But that's not true. He should read Mark Lemley's paper on functional claims. If the USPTO was properly recognizing and rejecting functional claims, it would have the impact of basically getting rid of many of the worst kinds of software patents, because they're really about functional claims. That's the real problem with most software patents. Get rid of functional claims and much of the "software patents" problem is dealt with.

Furthermore, it also has the benefit of stopping similar problems in hardware patents. Because while there's been a lot of focus on software patents, there's been a growing problem on the hardware side as well, and it's only going to get worse as we enter a new era of hardware startups and disruption. And, of course, getting rid of functional claims also, means fewer bogus patent applications as the lottery ticket aspect dies down as well... and, once again, that solves the "problem" of not enough patent examiners.

So, no, the proposals from the White House aren't perfect and don't solve everything. But, I wouldn't dismiss the suggestions out of hand either. If the USPTO actually did its job and rejected functional claims, the potential impact could be huge.

Filed Under: backlog, functional claiming, patents, staffing, uspto

Patent Office Back To Approving Pretty Much Anything

from the you-get-a-patent!-you-get-a-patent!-you-get-a-patent! dept

In the late '90s and early '00s, the US Patent Office saw a massive jump in patent grants -- including tons of really, really bad patents, that have been tied up in huge, expensive lawsuits for years, wasting tons of judicial time and (more importantly) wasting a ridiculous amount of resources that could have (and should have) been going to actual innovation. Some of the research into what was going on showed that the incentive structure at the patent office was totally screwed up. Basically, the incentive was "when in doubt, approve." Why? Because patent examiners were judged on how efficient they were -- meaning how many patents they were able to complete their analysis of in the short amount of time they had. So here's the problem: if you approve a patent, you're done. If you reject a patent, the inventor (well, the lawyers) get an unlimited number of times to change the examiners mind, resubmitting modified applications. In other words, they can bury patent examiners in paperwork, dragging down their efficiency numbers. This isn't to imply that any patent examiner purposely decides to approve junk patents, but that it's impossible to ignore the incentive problem here.

Combine that with some ridiculously bad court rulings, that made things (software, business methods) that people previously considered unpatentable "fair game," along with some insanely large rewards in patent infringement lawsuits, and you had a recipe for disaster. Multiple studies showed that the cost of legal fights over patents greatly outweighed the actual value of those patents. And it was becoming a dangerous snowball: the more bad patents approved, the more bad patent lawsuits, the more bad patents filed, etc. What was interesting was that around 2004, as the debate on this started getting so much attention, the USPTO realized it had a problem and started adjusting things so that incentives were a bit more aligned. And, lo and behold, a lot more patents started getting rejected, and the approval rate went down. Many patent system supporters chided those of us who complained about the incentive structure by saying "see? everything's fine now, since the patent office knows to reject bad patents."

Not so fast.

Last year, the new bosses at the patent office decided that the number one problem was "backlog." No doubt about it, there is a huge backlog and the time it takes to get a patent is very, very long. But rather than realize that the way to decrease the backlog is to reject all bad patents (thus making it less lucrative to file bad patent applications), it appears to have gone back to the old system: implicitly setting up the system so that "when in doubt, approve," is the norm -- just to get through the backlog.

The numbers don't lie, and the always excellent PatentlyO blog has the numbers and the graphs to show that we haven't just increased the rate of patent approvals, we've shot way up, beyond anything seen previously -- making it look like the "correction" from the past few years was just an anomaly. Not only that, but the rate of patent approvals on a monthly basis seems to be increasing, which doesn't bode well for the future either:

Of course, the unfortunate reality is that this won't actually solve the backlog problem at all. You would think, with all the engineering/operations brains at the Patent Office, that they would understand that this will only make the backlog worse. Approving junk patents only makes it more lucrative to file ever more ridiculous patent applications, which only increases the backlog. In rushing through more patents, it only encourages a bigger and bigger backlog. In treating the symptoms, rather than the actual disease, we're making the disease much, much worse.

Filed Under: approvals, backlog, patents
Companies: uspto

Patent Office Proposes Speed Lane (And Slow Lane) For Patents; Treating The Symptom, Not The Disease

from the that-won't-solve-anything dept

One of the big complaints with the US Patent and Trademark Office is the insane length that it takes these days to get a patent approved. It can be many years at this point. The USPTO has set a goal to help deal with that problem, but so far all we've seen are things like getting examiners to approve more patents. That doesn't help at all. The real problem isn't the patent approval process, it's the patent system itself. The whole setup of the patent system is wrong. If it worked as intended, and was used as a tool to promote innovation, you would see just a small number of patents approved. Right now, it lets through tons of patents that have no impact on progress whatsoever, except perhaps to hinder it. But because of massive abuse of the system, the response has been to flood the system with even more patent applications. The system of having random patent examiners determine what is and what is not both new and non-obvious doesn't scale.

The latest plan from the PTO isn't going to help matters either. The idea is to set up a speed lane and a slow lane for patents. The speed lane means that you pay more and your patent gets reviewed faster (within a year). The middle lane is the same as it is today... except (oops) you now get pushed down a bit because of all the big spenders in the fast lane above you. Then there's the slow lane, which is cheap, but don't expect to see your patent for ages. Apparently they might add some setup with the slow lane that also separates payments out, so you can submit the patent, but later decide to not follow through on it, without having to pay as much. It sounds sort of like a parallel to today's provisional patent system.

Of course, none of this will help. It just means that companies with more money to spend will jump to the fast lane, clogging that fast lane, and lengthening the wait times for those who don't want to spend that much money. It's difficult to see how that helps. The real issue is vastly cutting back on what is considered patentable. Move way from having companies feeling the need to patent anything and everything and get them back to focusing on competing in the marketplace. If there must be a patent system, let it be limited to the rare cases where there is actual proof that the gov't granted monopoly makes sense (if those exist) and where there's no likelihood of independent invention coming up with the same thing at about the same time (a key point that should determine obviousness).

Filed Under: backlog, patents, review

USPTO Ramping Up Patent Approvals

from the this-is-not-a-good-thing dept

A bunch of folks sent over a silly and somewhat uninformed article claiming that the US Patent Office was aiming to block small businesses from filing patents by increasing the costs of patent applications so that only large companies could afford it. It's not worth wasting much time on that article, other than to say it's just wrong. The fee plans include an option to let small businesses and individual inventors qualify for cheaper fees -- which is actually something that I think is a problem. And, more importantly, the fee for filing a patent is a tiny fraction of the cost of getting a patent. The argument that the USPTO is looking to make it more difficult for small businesses to file for patents is incredibly uninformed. In fact, lately, the USPTO has been bending over backwards to make things easier for small businesses.

But, the article does mention, correctly, that the USPTO has been on a mission to decrease the amount of time it takes to review a patent. Now, the USPTO has been saying this for quite some time, and usually it's followed by talk of plans to hire more patent examiners. Of course, that's the wrong way to go about things. That's because the patent system doesn't scale, while the rate of innovation actually is scaling. The real way to decrease the time it takes to review a patent is to stop approving bogus patents. Seriously.

Unfortunately, it looks like the new USPTO, under David Kappos, may be going in the opposite direction.

In the late 90s into the early 2000s, the rate of patent approvals was quite high, leading to more patents being filed and more questionable lawsuits. After Lerner and Jaffe published their book Innovation and its Discontents, which highlighted the massive problems of the patent system -- including that examiners had more incentives to approve patents than deny them, the USPTO finally began to shift a little, and it actually began to get more difficult for patent approvals. Add to that a series of miraculously smart Supreme Court rulings on patent issues (with KSR's decision redefining how "obviousness" is measured being a small, but useful, step in the right direction), suddenly patent approval ratings dropped -- dropping from around 70% to around 50% in just a few years.

However, is all that being reversed? Patently-O recently pointed out that the USPTO appears to be approving patents at a much higher rate again, and there's lots of speculation as to why. Many assume that, as was noted in the original link above, Kappos and his boss, Commerce Secretary Gary Locke, are focused on reducing backlog. And so the incentives and pressure within the USPTO is to just approve patents to get them out of the way. If true, this is incredibly short-sighted and will backfire. The end result is that more bad patents get approved, and when bad patents get approved it increases bad lawsuits, followed by bad rulings for huge sums of money... leading more people to file for more bad patents hoping to win the same kind of jackpot.

There is, also, the more cynical argument, which is that since the USPTO is funded by fees, and as it is always looking to increase its budget (what organization doesn't?), it approves more patents to get more applications in, knowing that it can get more money that way. I'd like to hope this isn't the case, but either way, the pace of approvals is troubling.

Filed Under: approvals, backlog, patents

Backlog At The Copyright Office Highlights Massive Problem With The System

from the it-doesn't-scale dept

As you hopefully know, you don't need to register to get a copyright these days (and haven't since 1976), but you can still register, and need to do so if you want to sue someone else for damages. So, professional creators still register copyright on pretty much everything they do -- though the process is still a bit unclear even to the experts. At the recent copyright conference at Santa Clara University, one of the more amusing moments was when someone asked about registering blog posts and how that could/should be done -- and a bunch of the world's foremost experts in copyright law (including multiple representatives from the Copyright Office) effectively threw up their hands and said they had no clue what actually needed to be registered and how. It resulted in a lot of rather awkward laughter from folks in the room.

Of course, unlike the Patent Office, where there's at least some review, the Copyright Office registration process is about as close to a rubber stamp as can be. Yet, it appears that the rubber stamp has gotten a little slow. The Washington Post has a nice article about the growing backlog at the office, causing delays in processing time to reach nearly 18 months. The main cause of the delay? A complex computer system that was supposed to speed things up. Somehow, that doesn't seem surprising.

Of course, there are a few oddities in the article. First, the Copyright Office claims it can't just staff up to deal with the backlog because it takes a year to train someone. That seems a bit excessive for what's pretty close to a rubber stamp process. Second, the article totally glosses over an important little tidbit:

The delays do not appear to be hampering the business of the major publishing houses or those willing to spend $685 for a "special handling fee" that expedites registration.

That seems rather important, because you could easily make the argument that the Copyright Office has every incentive in the world to let that backlog and its $45 applications pile up to encourage "serious" professionals to file the expedited $685 option.

Third, because it's a newspaper article, it has to include a heart-wrenching story of someone impacted by this, and so we get:

Marissa Ditkowsky, a Long Island teenager, has been checking her mailbox for 15 months for the copyright registration for three songs she wrote, recorded and sent on a compact disc to the federal government.

"We lost a whole year," said her mother, Alita, who wants to launch her guitar-strumming daughter on a music career. At 14, Marissa is too young to appear on "American Idol." Instead, she wants to sing her songs during open-mike nights at local clubs and make a professional demo she can shop to music companies.

But Alita Ditkowsky does not want her daughter to perform without a copyright, because she fears that Marissa's songs are so good, someone else will steal them. She said she learned that lesson years ago while trying to get a job at an advertising agency.

"They asked me to write an ad for the Schick electric shaver," Ditkowsky said. "So one day in my car, I hear this radio spot I had wrote for the Schick electric shaver. It was my commercial, word for word. They used it, didn't pay me for it, didn't even hire me. But legally, I had no recourse."

Yikes. She should be a lot more worried about obscurity than anyone taking her songs. Keeping her daughter away from performing open mic nights just because they haven't received the registration seems silly and incredibly counterproductive. She would still hold the copyright on the songs, she would just be limited in what she could sue over until the registration is official. Claiming that she would have "no recourse" is incorrect. The "lost year" is their own fault, not the fault of the Copyright Office.

Either way, this whole thing highlights yet another problem of any gov't granted monopoly system: the wasteful bureaucracy involved -- even in just rubber stamping things. Such bureaucracies simply don't scale as activity increases, and since we live in this world where the Copyright industry has continually tried to "educate" the public about the vast importance of securing copyrights on everything, it's no surprise that the Copyright Office is overwhelmed -- even with the computer system problems.

Filed Under: backlog, copyright, copyright office