Former US Patent Office Director Freaked Out That Business Methods & Software Are Less Patentable Than Before

from the chill-out,-david dept

Bloomberg has an interesting article noting how the US Patent Office is (rightfully!) rejecting lots of software and business method patent applications these days, thanks to the Supreme Court's excellent ruling in the Alice case.

Fewer than 5 percent of applications for business-method patents are getting approved by the patent office, according to data from law firm Kilpatrick Townsend & Stockton and LexisNexis PatentAdvisor. (A typical approval rate is 25 percent to 45 percent.) When asked how many business-method patents they’ve approved in the past year or two, patent examiners often say “the answer is zero,” according to Kate Gaudry, a Kilpatrick Townsend patent lawyer. “Some of them are saying, ‘My hands are tied.’ ” The number of business-method patent applications has fallen in half since 2014, as patent owners seek different classifications or give up altogether.

Courts are doing similar work:

Courts have invalidated more than 370 software patents under the new standard, according to data compiled by law firm Fenwick & West. District and appellate courts have thrown out two of three patents brought before them since Alice Corp. v. CLS Bank.

Now, for those of us who were paying attention to what a mess things were before this is an undeniably good situation. Bad patent applications and bad patents are getting rejected. We don't need broad patents on software and business methods. Let people build stuff and compete in the marketplace. This is good for innovation.

But, of course, if you're former US Patent and Trademark Office boss David Kappos -- who presided over a massive increase in patenting, which the Government Accountability Office recently noted was mainly due to basically no quality standards being used -- this is a bad thing. Perhaps he takes it personally that the current patent situation really puts an exclamation point on the fact that he helped usher in hundreds of thousands of anti-innovation weapons that could be used to shake down actual innovators. So he has to lash out at this change where you can't just willy nilly patent obvious software and business method ideas:

He says the invalidation of patents is “out of control” and has “definitely gone too far,” citing a case awaiting an appellate ruling in which a patent has been invalidated for software enabling video game developers to more easily manipulate the movements of characters’ mouths to match dialogue. “Important software innovations that are highly technical are being deemed unpatentable,” Kappos says. “You can get software patents allowed in both China and Europe that aren’t allowable in the U.S. anymore.”

So? That's actually a good thing for innovation. It means more people can build on and improve on that work and there can be more competition, which leads to more rapid innovation. Why is Kappos so against that? We're seeing amazing new innovations happening all the time and it's not because of patents. If Kappos got away from all the patent lawyers he spends his time with and spoke to actual engineers who are doing the innovating, he'd find they don't care about patents. They're excited about patents being rejected because it means they can focus on building cool and innovative stuff again.

Filed Under: business method patents, david kappos, patents, software patents, uspto

Obama To Appoint Pharma Patent Lawyer, Who Has Fought Against Any Patent Reform, To Head Patent Office

from the because-of-course dept

Late last year, as the White House still hadn't found a successor to David Kappos to run the US Patent and Trademark Office (USPTO), the head of the Silicon Valley USPTO office, Michelle Lee (a former Google patent lawyer) was appointed the interim director -- freaking out a bunch of patent maximalists, who like to argue (sometimes in our comments) that it's all a plot to undermine the patent system from the inside. Lee actually gave a great speech at Stanford last week, in which she laid out many of her views that are hardly anti-patent, but which at least recognize that there are other keys to innovation beyond patents. Basically, she presents herself as a moderate, recognizing that there are important nuances here:

As many of you know, I’m a longtime user of the patent system. I’ve been a scientist in a laboratory. I’ve represented inventors and innovative businesses, patent plaintiffs, and patent licensors. I am now the head of the agency charged with examining and issuing patents.

That said, I’ve also been on the other side of countless demand letters and lawsuits from patent holders, and have spent a good part of my career representing patent defendants and licensees—including against so-called “patent trolls.” In fact, I’ve even argued on behalf of clients that some patents should be invalidated.

Now, I wouldn’t call myself “anti-patent,” nor would I call myself “pro-patent,” whatever those labels mean. But let me be clear: I am, without reservation, “pro-patent system.”

What do I mean by "pro-patent system"? It means that I believe that a strong patent system is essential to fostering the innovation that drives our economy. I recognize that our patent system is not something that exists in the state of nature, but is the result of policy decisions made by Congress and the Courts that weigh the costs of patent exclusivity against its benefits. We are constantly reexamining those policy decisions, to make sure the benefits continue to outweigh the costs.

I believe that, for the most part, the benefits do outweigh the costs, but we need to be clear about what those benefits and costs are, and about the realities underlying innovation today. Patents are not the only drivers of innovation. The first entity to bring a product to market has a first-mover advantage that provides an incentive to innovate on its own, even if no patents are ever sought or granted. Some firms opt for an open source model, where they benefit from the network effects of the widespread adoption of a technology they developed. We also know that reputation and branding—with or without trademark protections—play a large role in facilitating innovation. And, of course, there are a large number of innovations protected by trade secrets or by copyrights, not by patents.

And yet, patents still play a critical role in promoting innovation. Patent exclusivity—that is, the right of a patent owner to exclude others from using the patented invention—provides a unique route for inventions to find their way to the marketplace. Even with a patent, an inventor requires access to capital, developing a prototype, finding channels of distribution, and more before he—or increasingly, she—can get it to the market. Exclusivity protects the competitive position of a new entrant to the marketplace, which in turn attracts investment. And that plays an essential role in giving inventors and investors the confidence to take the necessary risks to launch products and start businesses.

There's a lot more in there that's worth reading. I can't recall ever seeing a head of the patent office open to even recognizing that patents are not the be-all and end-all of innovation. I can't recall ever seeing a head of the patent office even willing to admit that there could be costs to the patent system that need to be weighed against the benefits. For the most part, they've tended to just want to expand the patent system on the assumptions that "patent = good; more patents = better." So this kind of speech was actually both surprising and refreshing.

And, of course, just days later, it appears that President Obama is poised to appoint a long-time pharma industry patent-maximalist who has spent years fighting against patent reform, to take over as the director of the USPTO. One can hope that, just as Lee didn't turn out to be a total patent hater, but rather a moderate who was trying to find a middle ground, that the same will be true with Phil Johnson, the former executive from pharma giant Johnson and Johnson -- but I have my doubts.

In December, Johnson testified before the Senate on behalf of the 21st Century Patent Coalition, a group of companies who opposed a bill that would have made it easier for defendants to challenge low-quality patents, and to recover legal costs in the face of frivolous patent lawsuits. (Johnson’s group ultimately prevailed last month when Senate Democrats killed the bill altogether.) Johnson has also opposed previous patent reform initiatives, describing them as “almost everything an infringer could ever want.”

Last year, President Obama came out surprisingly strongly against patent trolls and in favor of comprehensive patent reform. Of course, after lots of negotiations on reform proposals, a combination of trial lawyers and big pharma -- from where Johnson came -- stepped in to kill the whole process dead. That certainly does not bode well for patent reform under the likely next director of the USPTO.

Filed Under: barack obama, david kappos, michelle lee, patent reform, patents, phil johnson, uspto
Companies: johnson & johnson

Yes, President Obama's Patent Office Started Approving Basically All Patent Applications Again

from the and-so-it-goes dept

Want to know why there are bad patents? Because there's no such thing as a true "final rejection" of a patent (i.e., you can always keep refiling and try, try, trying again and again until it's approved) and because the former head of the Patent Office, David Kappos, saw it as his main challenge to get rid of the giant backlog in getting patents approved. And thus, soon after Kappos took over the USPTO, we noted that patent approval rates started shooting upwards. Over the previous six years or so, the approval rate had been in a gradual decline, with it really starting to drop off around 2004, just as the Supreme Court started hitting back on a bunch of bad patent rulings, and making it clearer that, no, not "everything under the sun" should be patentable. However, Kappos never appeared to view patent quality as important, merely patent quantity and ending the backlog -- and thus, the patent office started to take an approve anything mentality.

Some argued that Kappos had magically made the office "more efficient" and that's why the approval rate started to shoot back up. However, we questioned how you could spend less time reviewing patents without also decreasing the quality of those reviews (and thus the quality of the patents approved). And, indeed, a study released last year made it clear that the approval rate had little to do with improved efficiency, but rather was due to drastically lowered standards.

The same folks who were behind that study have just released some new figures, including 2013, and it shows that the true patent approval rates have continued to go up. Basically, in 2013, the true allowance rate for patent applications was 92% (much higher than the USPTO's officially reported number of 54%). The discrepancy is because the USPTO's number counts "rejections" for patents as if the patent was truly rejected, and doesn't look at how many patents actually make it through the full process. Thus, the fact that patent applicants can keep trying and trying until they get approved is massively hidden by the USPTO's bogus number. This new number is much more accurate, and shows a pretty clear change in how the USPTO viewed patent approvals once President Obama got into office and installed David Kappos in that position (chart via Vox.com): Of course, as Tim Lee notes in the link above, Kappos is now out at the USPTO (and instead is lobbying for some firms pushing to block meaningful copyright reform, of course). The interim director of the Patent Office is Michelle Lee, who used to work as Google's top patent lawyer -- leading to at least some hope that she might bring some sanity back to the USPTO's willy nilly approval system.

Filed Under: approval rates, david kappos, michelle lee, patents, uspto

Is The US IP System Really 'The Envy Of The World'?

from the no dept

Outgoing director of the US Patent and Trademark Office famously likes to claim that the US patent, trademark and copyright systems are the "envy of the world." Here's just one recent example:

The fact is, the explosion of innovation—and follow-on litigation—that we see across consumer electronics hardware and software is a direct reflection of how our patent system wires us for innovation. It's both natural and reasonable that in a fast-growing, competitive market, innovators would seek to protect their breakthroughs using our patent system. While our IP system is not perfect, it is the envy of the world. It’s the strongest in the world, by far. That strength encourages investment and provides assurances to entrepreneurs as they enter the U.S. and global markets. At the same time, our focus on quality in the patent examination process overall ensures that patents are granted for true innovation, and not otherwise.

There are all sorts of fallacies or outright questionable statements in that one paragraph, but the popular IP blog, IPKat, decided to put that "envy of the world" argument to the test... and found that its readers don't agree. At all.

Do you envy the US its patent system? (300 responses)

Yes, it's brilliant 19 (6%)
Maybe, if the America Invents Act works out 28 (9%)
No way! 253 (84%)

Do you envy the US its trade mark system? (170 responses)

Sure, it's great for owners, competitors and consumers 23 (13%)
I might if I could only understand the Lanham Act 41 (24%)
Never! It's convoluted, complex and contradictory 106 (62%)

Do you envy the US its copyright system? (162 responses)

You bet! Google could not have been created anywhere else 18 (11%)
I might if there was some consensus as to what it actually is 56 (34%)
Not in this life or for many years beyond it! 88 (54%)

Yes, this is an internet poll, so reasonably-sized grains of salt should be applied. However, it was taken on a popular IP focused blog, so you would think that if the US's system was really envied, the IP practitioners who read the blog would speak up positively.

It makes you wonder: are the US systems for copyright, patents and trademarks actually envied anywhere around the world, except, perhaps, by lawyers who might profit off them?

Filed Under: copyright, david kappos, envy, patents, trademark, us

Copyright Maximalists Try To Regroup And Figure Out How To 'Fight Back' Against The Public

from the that's-not-going-to-go-over-too-well dept

One of the more stunning things about the defeat of SOPA/PIPA and what appears to be the likely defeat of ACTA, is how the traditional copyright maximalists still haven't figured out what has happened or what it means. It seems positively unfathomable to them that the public got fed up with their shenanigans and said "enough is enough." That's why their first reaction was to blame companies and lobbyists -- because that's the only way they function. Now they're trying to figure out how to fight back.

Last week, at the Fordham IP conference, which is a yearly gathering of mostly IP-maximalists, it seems that this attitude was on display in full force. Rebecca Tushnet's recap of some of the sessions is really quite stunning -- including a comment from a Fordham professor who apparently claimed that democracy was a bad thing because the public went against strict IP rights. As Tushnet noted:

Hugh Hansen suggesting that democracy was a really bad thing because citizens think short term and elites give us rights, and that’s why IP can only be protected without democracy, or as he put it, with "filters." (If by “us” you mean white men holding property. I do not believe I am exaggerating: he pointed to revolutionary Virginia as the great model for providing rights and the rest of American history as decline as things were turned over to the greedy proles. I obviously beg to differ, and this November the Commonwealth will indeed let me vote. I understand that Hansen likes to provoke, but the ugliness of his claims should not go unremarked.)

Of course, this kind of elitist attitude seemed to permeate the event. Jamie Love alerted us to the news that European IP professor Mihaly Fiscor compared ACTA protests to Nazi rallies -- thus invoking Godwin's Law and ensuring that any reasoned debate will not be allowed.

One thing became clear: there is not even the slightest concern that perhaps the public has a point. No, sir. It must be that they're too clueless or uninformed to know what's best for them. Back in Tushnet's post above, she describes how Steve Metalitz -- a maximalist lawyer whose fingerprints appear on lots of ridiculous proposals, including ACTA -- said that the problem is that people don't know enough to know that they have to respect copyright for our own economic well-being. Hugh Hansen, the same guy who is apparently anti-democracy, went with the old trope that should automatically disqualify you from being taken seriously in these debates, by saying that "consumers will only be moral if they're taught that copying is wrong. Copying is just like shoplifting." The thing is, that line has been "copied" so many times, I guess we can conclude that Hugh Hansen is one immoral bastard. Of course, reality tells us that copying is nothing like shoplifting. But, I guess, if you want to close off any real conversation, you toss out ridiculous statements that are so laughable that no one takes you seriously.

Even David Kappos, the head of the US Patent Office -- and someone who should know better -- made a condescending comment about how "the adults in the room know" that everyone has to pay up for patent, or they're going to get sued. As Tushnet notes in response, things change once the people realize that the system is broken:

I couldn’t help but think in response to Kappos about what a lawyer might have said pre-NYT v. Sullivan etc.: “the adults in the room know that if you say negative things about public officials you’re going to get sued.” Sounds sort of like wisdom, but this conference isn’t just practice pointers, or at least I hope it isn’t; maybe it’s an adult thing to give up on a better world, but I don’t think so.

Of course, it doesn't stop at just this one event. When I was in London last week, I learned of meeting to figure out how to respond to the "unprecedented attacks on IP rights." In the article about it, they highlight all of the awful things that the darn public has done lately:

Already this year, we have seen the blackout of websitesincluding Wikipedia that led to the shelving of the SOPA and PIPA legislation in the United States, and an organised attack on the Anti-Counterfeiting Trade Agreement in Europe, which has led to a delay in ratification and its possible abandonment.

In India, organisations like UNITAID haveprotested efforts to strengthen patent protection through free trade agreements, arguing they threaten affordable access to medicines in developing nations.

The panelists will discuss why IP owners, governments and others involved in the IP system need to address the more active and organised voices in civil society with communication, case studies and events.

Once again, it's not even considered possible that all of these actions were because of legitimate complaints. There isn't even the suggestion that perhaps some of this push back was due to massive and sustained overreach from the maximalists. Nope. It's all those stupid people in the public who need to be told by "the adults in the room" what's best for them, and any of their voices need to be "countered."

Either way, one thing seems clear: the usual maximalists aren't about to stop pushing for maximalism and actually listen to the concerns of the public. Instead, they're about to go on the offensive, looking to tar and feather those who bring actual facts and evidence to the table.

Filed Under: acta, david kappos, fordham ip conference, maximalist

Patent Office Wants To Open Up Shop In Silicon Valley... But Doesn't Want The Press To Know

from the why-not? dept

Well, this is odd. Cathy Gellis points us to the news that US Patent and Trademark Office director David Kappos was out in Silicon Valley recently and convened an event that involved inventors, executives, intellectual property lawyers and politicians -- all discussing the idea of having the USPTO open a satellite office in Silicon Valley. You know who was missing from the meeting? The press. Apparently journalists were explicitly barred from attending, which reasonably upset some attendees.

�Why would you exclude the press from this?� said Neil Smith, an IP partner at Ropers Majeski Kohn & Bentley, who attended the event. �He didn�t say anything untoward or particularly controversial. I didn�t hear anything they would want to keep away from the press.�

It really does seem kind of strange. Why would they be so afraid of the press being there? Personally, I think it would be a very good thing for the USPTO to open up an office here, as they might spend a bit more time with Silicon Valley folks who are intimately familiar with the problems of the patent system.

Filed Under: david kappos, press, silicon valley, uspto

USPTO Director Admits Patents Do Not Equal Innovation; So Why Is He Pushing For More Patents?

from the questions-to-ponder dept

We've been pretty disappointed with David Kappos as the head of the US Patent Office. He came into the office with plenty of praise from people who insisted that he also recognized the serious problems with the patent system, and would try to fix them. Instead, to date, he's simply massively ramped up the number of patents approved. I had hoped to go see Kappos speak this past weekend at SXSW, but unfortunately his talk was scheduled at the same time as one of my own panels. Thankfully, Greg Ferenstein was able to sit down with Kappos, and was able to get Kappos to open up on some important issues, including admitting that patents are not the same as innovation "by any stretch" -- and that the USPTO was really spending a lot of effort to understand how to measure innovation, rather than just patents.

Ferenstein also got Kappos to talk about some of the work that economist Stuart Graham is working on. We were one of the very few publications to mention that the USPTO had hired Graham last year, noting that Graham seemed like a good hire, with a background in looking at what the data actually said about the impact of intellectual property on development, something that's been missing in many policy debates. It appears that Graham is continuing to do that kind of work for the USPTO and that Kappos is paying attention to what Graham is uncovering. While Kappos still seems focused on getting more patents through (and also apparently wants to stop copyright infringement -- which is outside of his basic mandate, so I'm a bit confused as to how that came up...), it's nice to see that he's at least open to more realistic views of what's going on.

Filed Under: david kappos, innovation, patents

USPTO Refuses To Respond To Senators' Questions On Legality Of ACTA

from the trust-us... dept

The effort the administration is going through to avoid discussing ACTA is really quite stunning. Two US Senators, Bernie Sanders and Sherrod Brown, asked USPTO Director David Kappos to respond to specific questions about the legality of certain issues in ACTA. Kappos has now "responded" by not actually responding. He sent a letter back that did not actually address any of the issues raised, but merely said "our USPTO issue experts will continue to work with USTR as they finalize the results achieved in Tokyo." That's not a response. That's a dodge. You can read the entire letter after the jump.

Filed Under: acta, bernie sanders, david kappos, legality, sherrod brown

Dear CNN: Patents Are Not A Proxy For Innovation

from the get-real dept

We've seen it over and over again in the press. They love to assume that the number of patents being filed is a proxy for innovation. There's just one (large) problem with that. Multiple studies have shown no connection between patents and innovation. But, don't tell that to the reporters at CNN who are fretting about how the "recession" has taken its latest victim: US Innovation. This is ridiculous on so many levels that even patent system defenders are disagreeing with CNN. First, CNN bases this on a minuscule 2.3% decline in patent filings, despite a massive growth in patent filings over the past fifteen years.

But, more importantly, there is no indication whatsoever that this means anything in terms of US innovation. No one at CNN seemed to think it was even worth trying to actually back up that claim with any evidence whatsoever. If innovation were really declining in the US, you would think there would be some sort of tangible evidence of it, but CNN and reporter David Goldman never bother to even look for it. Tragically, USPTO boss David Kappos -- who should know better -- perpetuates the myth that the two are directly connected. In commenting on the decline in patent applications, he notes:

"That's unfortunate because [patent filings] are a reflection of innovation," said David Kappos, director of the Patent Office. "Innovation creates so many jobs and so much opportunity for our country. It is absolutely key to our long-term success in the global economy."

But, of course, there is no indication that this tiny drop in applications is reflective of anything at all when it comes to innovation. It could be a whole variety of factors, from firms recognizing what a waste it is to patent certain things, to companies deciding not to waste money on patents during a recession, to the various court rulings that have finally put a tiny pushback on what is considered "patentable." But none of that suggests any limit on US innovation or ingenuity. And, it's even more ridiculous to claim, as Kappos appears to do in that quote, that this drop in patent applications could represent a decrease in jobs and opportunity. That statement is even more laughable, since Kappos must know that the number of jobs created is not even remotely related to the number of patents granted or held (just ask some patent hoarding firms that hold many patents but employ just one or two people). What a shame that Kappos would repeat such myths. As boss of the PTO, perhaps he feels it's his mission to overstate the importance of the organization, but his claims should have at least some basis in reality.

But, of course, a good explanation for why this is happening is explained (though, not by the CNN reporter who appears to miss it entirely) later in the article: the USPTO is entirely funded by patent application fees. Thus, it has every incentive to get more people to file, and to play up the prestige and value of a patent, even when the evidence is to the contrary. So, now it appears that CNN becomes the PR arm of the Patent Office, rather than actually looking to find out what's going on.

Filed Under: david kappos, innovation, jobs, patents