Patent Quality Week: This One Weird Trick Could Solve Most Patent Quality Problems

from the it's-not-that-difficult,-guys dept

This week is the very first Patent Quality Week, in which a bunch of folks in the innovation space explore what it will take to improve patent quality. Unfortunately, for years, patent maximalists have tried to attack those of us who support a better patent system with somehow being totally against patents. They will regularly conflate arguments people have made to get rid of bad patents, and about how bad patents are abused to hinder, stifle, and slow down innovation, as if they mean that we hate all patents entirely. That's not true. So this week we'll be posting a variety of articles from different perspectives about how we can get better quality patents.

Almost exactly a decade ago, I laid out my plan for fixing the patent system, which included four separate proposals, all of which I still think are good. And so far, out of the four, only half of one has actually been put into practice (and is now under tremendous attack). That was the inter partes review process added by the America Invents Act, to make post-grant review of patents easier (though it did not come together with the other half of that suggestion, which is to drop the presumption that a patent, once granted, must be valid).

However, for this inaugural Patent Quality Week, I wanted to focus in on a separate prong of my plan to fix the patent system, which I think would massively improve patent quality practically overnight. It's this: recognize that independent invention is a sign that an invention is not patentable. This may require a bit of explanation. Going back many decades, US patent law has, officially if not actually, used what's known as the PHOSITA standard, which stands for "person having ordinary skill in the art." Specifically 35 US 103, on the conditions for patentability and non-obvious subject matter, says:

A patent for a claimed invention may not be obtained... if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.

This is a different standard than the one that most people talk about regarding patents: whether or not there is prior art. But prior art is covered by Section 102, not 103. Section 103 says that if an invention would be obvious to a PHOSITA, then the patent should not be granted.

Yet, very little is ever actually done to determine if a PHOSITA would find an invention obvious. The PTO's guidelines on this are more or less... just going back to the prior art determination. But it seems to be that there's a better way.

If you see a lot of independent invention of the same basic thing done around the same time by multiple parties, that alone should be evidence of obviousness. After all, the others submitting their patent applications (or, better yet, creating their products) are, by definition, PHOSITAs. And if they're all coming up with the same damn thing by themselves, then that certainly suggests that the inventions are not so novel that they require the incentive (and the monopoly) of a patent to have them created.

Indeed, history has shown time and time again that the biggest inventions occur more or less simultaneously to multiple people around the globe. It's a recognition of the notion that some ideas are just "right" for their time. It's not some stroke of individual genius. It's that other conditions have come up to make the next combination of ideas somewhat obvious to those having ordinary skill in the art.

Lots of people have suggested that we should have an independent invention defense to patent claims (that is, you can get out of a lawsuit if you show you had no idea of the original patent), but I think that doesn't go far enough. We should note that if there is such widespread invention within the same general timeframe, it's strong evidence that no patents should issue in that space, because they are obvious to those having ordinary skill in the art.

That one change to the patent system would completely change the system and massively improve patent quality. It would wipe out a wide range of silly minor improvements that anyone with knowledge in a space would come up with, and focus patents on actual breakthroughs that are not at all obvious.

Filed Under: independent invention, obviousness, patent quality week, patents, phosita, prior art

The Free Market Case For Patent Reform

from the let's-start-with-it's-not-property dept

A modest attempt at patent reform (mainly targeting egregious patent trolling practices) is making its way through Congress these days at the usual glacial pace. However, even if it does eventually make it through, there is still a tremendous amount left to do on patent reform. Derek Khanna, who famously wrote the wonderful House Republican Study Committee report urging major copyright reform -- which so upset Hollywood that favors were called in to get the entire report retracted and cost Khanna his job, has now tried to write a similar report on patent reform. This one is for Lincoln Labs -- a think tank trying to present more free market/libertarian ideas into the technology policy arena.

As Khanna notes in this new paper, it's unfortunate to see many conservative groups have come out against patent reform, often based on a misuse of the word "property."

Recently, several conservative organizations— many of whom receive funding from industries with vested interests—have tried to preempt any form of patent reform by arguing how patent reform would violate their “property rights.”

Nothing could be further from the truth: janitors do not have “property” in how to clean a building; Apple does not have “property” in rounded rectangles and “slide to unlock”; Amazon does not have “property” in one-click checkout; Priceline does not have “property” in the concept of reverse auctions; Microsoft does not have “property” in squiggly lines when you mistype a word; Smuckers doesn’t have “property” in peanut butter and jelly sandwiches, anymore than a known patent troll has a “property” in the entire practice of podcasting; certainly no one ought to have “property” in the concept of the hyperlink; and we should probably all agree that no one ought to have “property” in the idea of exercising a cat by using a laser pointer.

Instead, as we've noted for years, patents are a form of a monopoly right, and for those who claim to support the free market, you'd think they'd be very concerned about a slew of government granted monopolies (being granted at an ever increasing rate these days -- to the tune of hundreds of thousands a year).

Khanna also points out, rightly, that this massive rise in patent monopolies is a form of crony capitalism, used to keep out competition and to hold back free markets. He compares it to other highly regulated markets where it's quite obvious the regulations have little to do with the stated purpose, but now are designed mainly to protect those who already are in power.

As Khanna points out in the report, "more patents" does not equal "more innovation." If there are too many patents, it will only serve to clog the field and limit a vast amount of innovation. Thus he suggests there'a "curve" of patent optimality, and it's important to consider that in designing a patent system. While the chart is a bit of a broad generalization (especially since different areas of innovation appear to react differently to different levels of patenting), the point is rather important, because too many people simply assuming that more patents automatically means more innovation.

So how do we reform all of this to make the system work better? He has a bunch of suggestions (some of which are already being considered):

1. Increase patent quality requirements: There's a lot of detail in the report about how this can be done, and it's incredibly important. The incentive structure of the current patent system today encourages allowing crappy patents, which is why a huge number of patent applications are eventually approved. One important sub-suggestion in this arena is in fixing the "prior art" setup. Right now, patent examiners are not allowed to do crazy things like search the internet for prior art. Instead, they focus on older patents and journal articles. But in lots of areas, such as programming, that misses tons of prior art.
2. Make patent applications accessible and require them to actually teach: Patent system supporters will often tell you that the true purpose of the patent system is to "disclose" the invention so that others can use it (either by license during the patent term or by anyone after). But, for many (especially in the software field) that's a joke. The patents almost never reveal anything useful at all in those fields. Khanna suggests a higher standard such that the patents actually do need to be useful to others in the field. That would be tremendously helpful.
3. Reduce or eliminate business method and design patents: A large number of the worst patents are "business method" patents that are often just patenting common sense. There is no reason for this. Design patents are so similar to trademark law that most of the reasons for design patents can and should be covered by trademark law instead.
4. Create an independent invention defense: This is my own personal favorite and the most important fix in my own list of recommendations. The idea that someone who came up with an idea entirely on their own isn't allowed to make use of their own invention seems like a much bigger "property rights" violation than invalidating bad patents. This would solve many of the worst problems of the patent system today, since so many shakedown efforts have absolutely nothing to do with copying, but just multiple people coming up with similar concepts.
5. Loser pays: Also known as fee-shifting, this is a key component to patent reform that is currently on the table today to scare off frivolous patent suits that are just designed to shake people down.
6. Speed up the patent approval and rejection process: Unfortunately, the report doesn't have much in the way of details as to how this would be done -- but I would argue that if most of the other recommendations were put in place, this wouldn't be much of a problem, because there would be a lot fewer bogus patent applications to deal with.
7. Couple the US patent system with other systems to encourage innovation: The key idea here: look for things like the famous "x prizes" to incentive big bang innovations, rather than patents. This is an idea that's been out there for a while, and has support from a number of Nobel Prize winning economists. The UK just recently endorsed this idea as well. It's also pretty non-partisan, seeing as the biggest supporter of such an idea in Congress is Senator Bernie Sanders.

It's a really good report and well worth reading. It is lacking a couple of my own favorite suggestions, though. I still think we need to go beyond just an "independent inventor's defense" to the point that independent invention is seen as a sign of obviousness. Patents are only supposed to be granted if the invention is considered "non-obvious" to a person who is "skilled in the art." If we're seeing multiple people "skilled in the art" coming along and inventing the same damn thing, that certainly seems to suggest obviousness to me. Thus, if there is widespread independent invention within a short time frame, without any evidence of knowledge or copying, it should stand to reason that any such patents are invalid. This would clear out a ton of the problem patents.

It's unfortunate that some free market supporters have hijacked the story of patents to pretend that they're about the free market, when they're really about the opposite. Papers like Derek's hopefully move things back in the other direction.

Filed Under: derek khanna, independent invention, patent reform, patents

Mark Cuban Agrees: Independent Invention Is A Sign Of Obviousness; And Should Kill Patents

from the excellent dept

For years, we've talked about the idea of an independent inventor defense for those accused of patent infringement -- which, contrary to the claims of some patent attorneys, is totally feasible -- and that idea has received some traction. However, we've also argued that things should go even further, and that if there is evidence of multiple independent inventions of the same concepts that it is a sign of obviousness, and all such patents should be rejected -- since patents are not allowed on inventions that are considered "obvious" to those who are "skilled in the art." Unfortunately, we've seen less support for that specific idea -- but perhaps that's changing.

Mark Cuban recently gave an interview to TechCrunch in which he discusses his rationale for giving EFF $250,000 to create the "Mark Cuban Chair to Eliminate Stupid Patents." When asked about how he would fix the patent system, he names a few popular ideas, like getting rid of software patents, requiring that the invention be put into practice, but he also (repeatedly) talks up how independent invention should be a sign of obviousness. A few snippets:

I would also like to see a "cold room" exception. If you can show you invented the idea using completely independent thought, you don't violate the patent and the patent is invalidated.

Remember back in the 80s when AMD/Intel and others would clone each other and it was permissible because they came up with the features and functions completely independently? The same should apply to patents. If you didn't copy an idea, you came up with it on your own, then the idea should not have been patented in the first place. If multiple people come up with the same idea independently, that is the definition of obvious.

You should be given the right to your idea if you come up with it independently and any patents in place for that idea should be invalidated.

[...]

Independently derived ideas that are turned into products and can prove they are independently derived (Again, if multiple people come up with the same idea independent of each other, that should be as definite as it is obvious, and obvious cannot be patented), then it can not be patented, and all patents for those ideas are declared invalid.

It's great to see that this idea may finally be getting some traction, as it could have a big impact on fixing many of the most significant problems with today's patent system.

Filed Under: independent invention, mark cuban, obviousness, patents

Yes, An Independent Invention Defense For Patents Is Completely Feasible

from the you-can-prove-independence dept

Mike has been advocating an independent invention defense against patent infringement for quite some time now -- that is, in the absence of actual copying, a patent holder should not be able to sue a subsequent innovator. There are plenty of posts going over the rationale for such a defense, and I don't want to rehash those arguments when you can just click on those links above and read the originals.

What I do want to do is address one of the most common concerns with the independent invention defense: feasibility -- in particular, the concern that independence (or dependence) would be too difficult to prove. See, for example, some of the comments on the EFF's push for this:

"Independent arrival" is a vacuous notion, with possible noble intent, but difficult-to-impossible to prove. It would require mind-reading beyond current human abilities.

Or this one:

How on EARTH would a patent holder succeed in court if the defense could just claim ignorance?

The short answer is that we do this already. Patent holders can claim extra damages if they show that an infringement was "willful", and occasionally they succeed in proving this.

The long answer is that our legal system has been dealing with this problem for a long time. Someone shoots and kills someone else. The shooter claims self-defense. Or that it was an accident. Or insanity. You'd think that these defenses would "require mind-reading beyond current human abilities", but as it turns out, judges and juries have done an OK job at sorting it all out. Sometimes people get away with murder, but on the whole, murders have not skyrocketed because of self-defense claims.

One reason is that it's harder to lie in front of a jury than many people think it is, especially when the other side's lawyer can call you out on it.

The other reason is that there's evidence outside of what you tell the jury. If you murder someone, there are witnesses, security cameras, smoking guns, and friends that rat you out. If you're an inventor, you make notes and schematics. You communicate with co-workers and colleagues. You browse the Internet, leaving a browser history and IP log. And if you work for a large corporation, all of your communications and notes are likely logged and archived precisely because of the risk of litigation. That's a lot of evidence that could be used to prove, or disprove, independent invention. Just look at the Apple v. Samsung case, where the jury was able to rely on Samsung's own documents to conclude that Samsung had willfully copied Apple (whether such copying is really a problem is a different question).

Independent Invention and Reproducibility

A corollary of needing proof of dependence is an incentive for patentees to disclose their inventions in a manner that's actually useful to others. The law currently requires patentees to describe enough of their invention to enable someone else to reproduce it, but they certainly don't have any incentive to make it easy to reproduce. Trolls actually have an incentive to obfuscate what a patent covers and spring it on a business only after that business has sunk billions of dollars into developing their own product.

By contrast, if a patent holder can only enforce his patent against parties that actually copied the invention, the patent holder has a strong incentive to disclose in a way that makes copying easier. Perhaps patents would look less like this IBM patent for "[s]ystems and articles of manufacture for managing metadata associated with a data abstraction model abstractly describing data in a database" (ugh) and more like this Ruby on Rails tutorial, which helpfully includes screenshots and code samples. This improved disclosure would make it a lot easier to prove dependence. For example, if your patent includes code samples, an infringing product might contain code suspiciously similar to your own. Or if you included useful links, the infringer's browsing history might reveal frequent visits to those sites. And so on.

Focusing on the actual usefulness of a patent would also address another concern with an independent invention defense -- that trolls would spam businesses with patents to demonstrate that business had notice of the patents, and that businesses would avoid liability by forbidding their employees from reading patents altogether. If a patent plaintiff had to show not merely that the defendant knew about the patent, but that the patent was actually useful to the defendant, the trolls would be out of luck. Usefulness is not part of their strategy. Likewise, if patents were useful, many businesses would take advantage of them. Independent invention, like all invention, takes time and money. So long as it's cheaper to license than to independently invent, (smart) businesses will choose to license.

Dealing with Causation Problems

A related concern with proving independence is that nothing is truly independent. As Mike often points out, innovation isn't about creating something entirely out of the blue but it is about taking existing ideas and improving them. How then do you prove independence when the innovative process is so often about copying? And what if earlier patents did contribute to your invention, but the contribution was infinitesimal?

As it turns out, this is also a familiar problem for the legal system. It's very similar to questions of causation. Traditionally, a defendant was only liable if his actions caused the plaintiff harm -- that is, but for the defendant's actions, the harm would not have occurred. Likewise, you might say a later invention is dependent on a prior invention if the later wouldn't have been invented when it was but for the prior.

The but-for test has some obvious problems. Suppose two campers start fires on opposite ends of a forest at the same time, and both fires spiral out of control and burn down the forest. You can't say, but for the first fire, the forest wouldn't have burned down, because the second fire might have caused the same amount of damage. Or suppose a liquor store clerk sells alcohol to a minor, who is then caught by her morally uptight mother, who is in turn so mortified than she runs outside and is struck by a speeding driver. But for the sale of the alcohol, the mother would not have been hit, but it seems silly to blame the liquor store clerk for that.

The legal system basically addresses this problem by using open-ended language and granting discretion to judges and juries on edge cases. Thus, in the case of the forest fire, a jury could hold both campers responsible because each fire was a "substantial factor" in the burning of the forest. And in the case of the uptight mother, a jury could give the liquor store clerk a pass, because the liquor sale was not the "proximate cause" of the mother's injuries. Alternatively, the legal system may give judges and juries the discretion to recognize differing degrees of fault and adjust damages accordingly.

As with any system that defers to personal judgment, some decisions may seem arbitrary, but for the most part, causation problems have not crippled the legal system. And if such problems were encountered with an independent invention defense, the outcomes would probably be less arbitrary than in tort cases. For instance, there's often no objective basis for saying a driver is 60% at fault in an accident as opposed to 70%. But, in a patent case, records of profits, research expenditures, and the costs of alternatives provide evidence of how much a given patent actually mattered.

Making Patents Useful

Patent advocates might object that an independent invention defense would introduce greater uncertainty into the patent process, and that it would hurt small (independent) inventors more than large corporations. First, an independent invention defense, depending on how it's drafted, could potentially reduce uncertainty in other areas. For instance, how much one invention contributed to another is less subjective than asking whether the invention was "obvious". Second, most legal changes tend to introduce uncertainty, at least initially. And yes, smaller inventors will be affected more simply because they're less able to afford expensive lawyers. But sometimes uncertainty is necessary to achieve reasonable legal outcomes. Adding a self-defense exception to laws against murder introduces uncertainty as to how a case will turn out. But nearly everyone agrees that some right to self-defense should exist, even if the boundaries of that right are unclear.

Moreover, these objections are often less about any issues with the defense itself and more about objecting to any change that makes patents less valuable. Likewise, some Techdirt readers would object solely on the basis that independent invention falls short of simply abolishing all patents (or at least all software patents). All I can say to either position is that the independent invention defense reflects the view that patents are currently too powerful, but that maintaining some level of patent protection makes sense (or is more politically palatable than total abolition). It's in line with Judge Posner's thinking that patents are useful when inventors face high capital expenditures to create, but low barriers to copy -- an independent invention defense limits infringement to actual copying. It also addresses Tim Lee's concern that the boundaries of software patents aren't clearly marked -- an independent invention defense would protect programmers who inadvertently infringe on those patents. And it solves the one-size-fits-all problem with patent lengths -- more obvious patents will last only a short while before they're independently invented, while less obvious ones will last a bit longer.

As with all laws, the devil is in the details. An independent invention defense would have to be drafted carefully. But the basic legal concept isn't new. It's feasible, and it could go a long way towards curbing patent trolls.

Filed Under: independent invention, patents

So How Do We Fix The Patent System?

from the stop-with-the-bad-suggestions dept

There's been a lot of attention lately to the massive problems with the patent system. Finally the problem has gone mainstream, in part thanks to the excellent This American Life episode on problems with the patent system. That seems to have emboldened other mainstream publications to finally run articles pointing out problems with the patent system, including the NY Times, the Huffington Post and PC World.

Then there's the Economist, who actually was one of the first mainstream publications to highlight problems with the patent system, only to change its mind and argue for more bad patents. However, it's flipped again, and is arguing (once more) that the patent system is broken and needs fixing.

And this time, unlike many of the articles lately, The Economist actually puts forth some suggestions on how to fix the patent system:

First, patents in fields where innovation moves fast and is relatively cheap—like computing—should have shorter terms than those in areas where it is slower and more expensive—like pharmaceuticals. The divergent interests of patent-holders in different industries have held up reform, but there is no reason why they should not be treated differently: such distinctions are made in other areas of intellectual-property law. Second, the bar for obtaining a patent, particularly for software or business methods, should be much higher (as it is in other countries), and the process of re-evaluating bad patents should be more open and efficient. Finally, there should be greater disclosure requirements of the ownership of patent portfolios, and patent cases should be heard by specialised courts (as happens in other areas of law), rather than non-expert juries in advantageous jurisdictions in Texas. That would make life harder for trolls. These fixes would help America's patent system encourage innovation rather than litigation.

These are all pretty common suggestions that we've heard before. Unfortunately, while I think the overall article does a great job laying out the problem, these suggestions are the kinds of suggestions made by people who haven't spent that much time with the patent system (or who are somewhat unfamiliar with its history), and won't do much good.

Tim Lee beat me to the punch in debunking the whole "specialized court" notion, since that's actually a big part of the problem today. First, he notes that for all the talk of "bad" Texas courts and juries, the Texas jurisdictions have, unfortunately, become de facto "specialized" patent courts. And, on top of that, for the past 30 years or so, patent cases at the appeals level all go to a single appeals court, the Court of Appeals for the Federal Circuit (CAFC). This breaks one of the key parts of our court system, which has all those different circuits so that they can develop their own takes on laws, and the Supreme Court can help settle any disputes and circuit splits. With CAFC there are no more circuit splits, and in creating a specialized court, it made it easier for patent attorneys to influence the case law:

This had the unintended consequence of dramatically increasing the influence of the patent bar over patent law. Not only do Federal Circuit judges spend all their time hearing arguments from patent attorneys, but some of them are former patent attorneys themselves. In its first two decades, the Federal Circuit gradually shifted patent law in the pro-patent direction favored by most patent attorneys. Patents became easier to get and harder to invalidate. The courts allowed tougher punishments against infringers. And the Federal Circuit unilaterally eliminated traditional limits on patenting software and “business methods.”

Separately, he notes that the lack of circuit splits meant that CAFC totally rewrote patent law without the Supreme Court taking much notice, in the 90s. It only caught on in the last decade, and that's created quite a mess, since (as patent system supporters always argue) any changes the Supreme Court makes to roll back CAFC excesses "upset the apple cart" of "established" patent law.

But when the Federal Circuit became the only court ruling on patent cases, there were no more circuit splits and no more competing legal precedents. That might be why the Supreme Court seems to have barely noticed that the Federal Circuit was dramatically reshaping patent law in the 1990s. The high court reviewed only about a dozen Federal Circuit decisions between 1982 and 2004, and the ones it did review tended to be on narrow, technical issues. The Supreme Court finally began to give the Federal Circuit’s handiwork some serious scrutiny when Chief Justice John Roberts took the bench. And the justices did not like what they saw. In the Chief Justice’s first three terms, the high court heard five different patent cases, and all of them resulted in unanimous or near-unanimous reversals of pro-patent decisions by the Federal Circuit.

But a lot of the damage had already been done. Hundreds of thousands of low-quality patents had been approved under the permissive rules the Federal Circuit had developed during the 1990s. Those patents may be technically invalid under recent Supreme Court decisions, but that’s of little help to a small company that can’t afford to litigate the question.

Separately, I'd argue that the Economist's desire to set up different rules for different "types" of patents opens up another massive can of worms. First it opens up all sorts of definitional questions. What is a "software patent"? There's no such thing in the law, and setting up specific definitions would just drive patent attorneys to seek ways to fit any particular patent under the types of patents that have the most enforcement strength and length. Defining patents into different buckets just opens up more opportunities for lobbyists to seek to define patents in ways that benefit patent holders, rather than fixing the real problems of the patent system.

So if we want to offer solutions instead of just "complaining," here's how we would fix the patent system (short of just scrapping the damn thing).

First, we have to define the real problem. And it's actually not that hard to figure it out: bad or unnecessary patents that are used to stop others from innovating. Defenders of the patent system often talk up how it "protects" innovators. That's almost entirely false. The vast majority of the patent system hinders innovators by making it more difficult for them to innovate. So a few key ways to stop the worst of the patent system:

• Create an independent invention defense: We've been arguing this for years. If the patent system is supposed to protect innovators, the fact that it blocks even those who invented something entirely independently goes entirely against the principles of the patent system. Even in copyright law (generally seen as more strict than patent law) there's a defense based on independent creation. If you haven't copied someone's patents or were completely unaware of someone's patent, it's ridiculous to claim you were infringing on that patent.
  
  If you understood how infrequently patent disputes involve anyone actually copying a patent (or a patented invention), you'd realize how much of the problems of our patent system this would solve. Unfortunately, patent holders and the press (especially) frequently mislead on this point, claiming that patent infringement suits are about companies "copying" or "stealing" from the patent holder. That's almost never the case. Studies have shown over and over again, that even though you can get treble damages for showing someone willfully copied a patented invention, it's almost never asserted.
  
  
• Recognize that independent invention is a sign of lack of patentability: This one is a bit more controversial, but the point of the patent system is supposedly only to reward patents on inventions that are non-obvious to those skilled in the art. If multiple people, skilled in the art, are coming up with the same thing independently at the same time, it seems like pretty strong evidence that, in fact, the ideas were obvious to those skilled in the art. There has been a lot of work done lately showing that nearly all major inventions are independently invented at around the same time by multiple people. And there's a view that's gaining support that basically what fuels such innovation is not patents at all, but just that all the factors necessary for the "next step" are in place, and those skilled in the art can just take that last step.
  
  Thus, in such cases where there is independent invention, it shouldn't just be a defense against infringement, but it should be evidence that any such patent is invalid, as it doesn't qualify as non-obvious to those skilled in the art.
  
  
• Patent examiners should seek out input from those actually skilled in the art: Since the very standard for patentability is those skilled in the art, they should at least be able to weigh in on the patentability and obviousness of the solution in question. As it stands, patent examiners may be smart in a particular field, but since they don't actually work in that field, their knowledge is not always really up to date. I'm sure they try their best, but there's a difference between those who actually build stuff and those who don't.
  
  Patent system supporters hate this suggestion, and they often claim that "jealousy" will lead others to claim that an invention is obvious. There are easy ways to control for this however. We're not saying that if anyone says, "this is obvious," the patent is automatically rejected. Rather, we're saying that it's another source of data and input for the examiner to make a determination of obviousness. That is the person actually skilled in the art could present an explanation for why something is obvious, and the examiner can then take it into account, and use that as another bit of information.
  
  
• Drop the assumption of validity and allow for greater post grant review: This is the one that really upsets patent system supporters, as they would like to go in the other direction. But, really, the arguments for assuming patent validity are really, really weak. As we've discussed before, the patent system gives one entity a full government-granted monopoly based on one person spending an average of about 16 to 17 hours on a single patent, and only hearing from the side who wants the patent. They almost never hear an adversarial position during the review.
  
  That's kind of insane when you think about it. If we're going to approve patents on such a flimsy system, the least we can do is admit that they can be opened up for review much more easily. Hell, why not use the system described in the point above (creating a panel of actual people skilled in the art) to evaluate patent appeals on any patent in dispute. It doesn't even have to be done during the initial examination if we get rid of the assumption of validity and the difficult current process to get post-grant review.

Do all of that and you'll have a much more functional patent system that gets rid of a significant portion of the bad patents and will encourage much more innovation. You don't even have to separate out different kinds of patents. This setup would fix many of the problems across the board, while still allowing patents on truly important "breakthroughs" that wouldn't have happened without the patent system. The only reason I can think of to go against these ideas is if you want to profit from bad patents yourself.

Filed Under: independent invention, patent reform, patents

Did Congressional Debate Over Patent Reform Bill Open Up A Backdoor For An Independent Inventor Defense?

from the follow-me dept

I have to admit that I had almost entirely checked out on the House debate this week on patent reform. I've been writing about Congressional attempts at patent reform for nearly a decade now and, from the very first attempt onward, the proposals had serious problems -- and each year the bill would get more and more watered down, removing what few good pieces were in there, until we got the bill this year, which had little of substance. As we noted when the Senate approved it, the bill was pretty useless in that it didn't address any of the actual problems with the patent system. There was a flurry of activity this week as various Reps sought to make changes to the bill (and I've never been contacted by so many press reps or Congressional staffers wishing to get publicity for their boss's amendment than this week), but nearly all of those proposals failed.

The House has now approved its version of the bill and I can only imagine that it will be signed into law pretty quickly -- leading to all sorts of talk about how this is the first "overhaul" to patent law in almost sixty years, and blah blah blah. The truth is that there's very little in this bill that does much of anything. The people complaining about how it will destroy small businesses are being hyperbolic. The most controversial bit of the bill was the debate over switching from a "first to invent" system, as we have now, to a "first to file" system -- which most of the rest of the world has. I explained my opposition to this switch more than seven years ago, and my reasoning still stands: a first to file system encourages filing more patents faster with less effort to make sure the patents are good and accurate, which isn't good for an already overwhelmed patent system. That said, the actual impact of the change might not really be that big, as so many firms already file pretty quickly and given how rare it has been to have someone challenge a patent by claiming they had invented it first and deserved the patent. There are much bigger problems with the patent system (and this bill addresses pretty much none of them).

That said, there was one element of the Congressional debate on this clause that caught my eye. In order to avoid angry ranting about a "first to file" system, supporters of the bill conveniently changed the language to make it a "first inventor to file," rather than strictly a "first to file." They claimed that this helps avoid the "Constitutional" question. You see, supporters of keeping the system as "first to invent" have claimed that a "first to file" system is unconstitutional, because the Constitution's clause that allows a patent system to exist, famously reads:

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

Those who are claiming "first to file" is unconstitutional point out that the clause specifically says that you can only secure such rights to inventors, so if a non-inventor files first, then that violates this part of the constitution. Frankly, that seems like a stretch (and if taken literally, might call into question whether anyone but authors and inventors could hold copyrights or patents. That said, those in support of the "first inventor to file" setup made some interesting statements:

Rep. Jerrold Nadler (D-NY) said the bill still requires patent seekers to be inventors, and argued that the Constitution is not explicit on how Congress must ensure patent rights. Rep. Bob Goodlatte (R-Va.) agreed.

"This is first inventor to file," Goodlatte said. "You must be a bona fide inventor to qualify for this." Both Nadler and Goodlatte are on the Judiciary Committee.

Now that gets pretty interesting. Because, in the past, we've suggested that what the patent system really needs is an independent invention defense -- such that those who come up with things entirely independently of the patent in question are not guilty of infringement. One of the main arguments against that idea, when we've brought it up, is that there's "no such thing" as an independent invention, since once something's invented, anyone else coming up with the same thing is no longer the inventor. That is, they were defining inventor by being only the very first person to come up with it.

Now, I don't believe this is true. I think many people can invent the same things entirely independently, and history seems to support that conjecture. One of my major problems with the patent system is that, despite the claim that it's supposed to help inventors, it actually harms every single other inventor, except the one who gets the patent. That seems incredibly anti-inventor to me. If, as is common, you have a bunch of different folks working on a particular innovation, and all of them come up with more or less the same solution, why should only one get the monopoly? That directly harms everyone else by taking away their right to use their own invention!

So, now, however, we have Congress pretty clearly stating that multiple people can invent the same thing entirely independently. While not in the law, it is in the Congressional record. If we then look at the plain text of the Constitution, it makes me wonder if someone could craft a legal argument that the patent system, as is, now violates the rights of those independent inventors by excluding them from the right to make use of their own discoveries...

Filed Under: independent invention, patent reform, patents

Well Respected VC Firm Comes Out In Favor Of Independent Invention Defense Against Patent Infringement Lawsuits

from the good-news dept

Seeing as we were just talking about claims from a patent attorney that no legitimate VCs can be against software patents, it's good to see that one of the most respected VC firms in internet-related issues, Union Square Ventures has come out strongly in favor of an independent invention defense against patent infringement. This is great. I have no idea if I helped to make this come about, but a year ago, Union Square partner Fred Wilson had spoken out about how patents were harming his portfolio, and suggested some ways to fix the system (not including an independent invention defense). I responded with a post suggesting he consider an independent invention defense beyond his proposals, as it would really solve a lot of the problems. So it's really fantastic to see the firm take a stand on such an important issue -- proving once again what a lie it is to claim that VCs require patents. From Union Square partner Brad Burnham's post:

Almost a third of our portfolio is under attack by patent trolls. Is it possible that one third of the engineering teams in our portfolio unethically misappropriated technology from someone else and then made that the basis of their web services? No! That's not what is happening. Our companies are driven by imaginative and innovative engineering teams that are focused on creating social value by bringing innovative new services to market.

Our companies are being attacked by companies that were not even in the same market, very often by companies they did not even know existed....

I know of no case where the engineers in one of our companies were aware of the patents that are now being used to attack them. The moral rightness of this screams at me. If, as an engineer focused on solving a problem, I happened to come up with an idea that is in some way similar to yours, then that in itself should suggest that it was obvious and not patentable. Unfortunately, that does not really help. There, the burden of proof is still on the startup and it is still smarter to settle than to burn precious capital on a defense.

If, on the other hand, the troll was required to show the startup had some prior knowledge of their technology, the burden would be shifted to the attacker, and this blatant abuse would come to a grinding halt. If you believe as I do that innovation is key to social progress, please support patent reform. It is a complicated issue, but an independent invention defense is an obvious place to start.

It's really difficult to see how anyone can be intellectually honest with themselves and not be in favor of an independent invention defense. It's difficult to see how anyone could justify the idea that even if someone comes up with something totally independently, they can't use their own inventions.

Filed Under: brad burnham, fred wilson, independent invention, patents, venture capitalists
Companies: union square ventures

Calling For An Independent Invention Defense In Patents

from the an-idea-who's-time-has-come dept

For quite some time we've wondered why there's no independent invention defense to patent infringement. It's hard to come up with any justifiable reason for not only barring those who come up with an idea on their own from making use of such an invention, but also for potentially making them liable for millions of dollars in damages for just making use of something they came up with on their own. For years, I've been waiting to hear any justification for this -- either economic or moral -- and I've never heard anything that makes any sense at all. Patent attorney Stephan Kinsella has now written up a post that also calls for an independent inventor defense, noting how incredibly rare it is for a client to ever have actually been accused of copying an idea. He notes that about the only reason most are against this idea is that they realize it would put a lot of patent lawyers out of work.

Filed Under: defense, independent invention, obviousness, patents

Venture Capitalist Explains How Patents Can Be A Tax On Innovation

from the not-all-vcs-demand-them dept

Whenever we get into discussions on the massive downsides associated with patents, someone has to chime in with some ridiculousness about how "venture capitalists won't invest in companies without patents." There are a few easy responses to that -- including, if the VC you're talking to demands patents to invest, he or she is probably so clueless you're better off going elsewhere. That may sound flippant, but it's not. Patents have so little impact on the success of a startup that anyone focused on patents before investing has probably never helped lead a brand new startup to success. If they had, they'd know that it's execution that matters significantly more than any "patents."

Besides, over the years, we've seen more and more venture capitalists come to the realization that in many cases, patents do a lot more harm than good. We've written about a few venture capitalists who have come out about problems with patents -- and over the weekend Union Square Ventures' Fred Wilson (a friend, and Techdirt reader), wrote about just how much damage patents have done towards innovation -- specifically with some of his portfolio companies. Specifically, he's talking about having those companies sued by non-practicing entities (he uses the term "trolls" which we like to avoid). He also mentions -- in the comments -- how USV doesn't require companies to have patents, and he's invested in plenty of companies without patents.

At one point, Wilson writes:

I'm a fan of allowing market forces to work in most cases, but not in the area of patents.

But, of course, patents are not a proper market mechanism. They're the opposite of one. They're about the gov't creating monopolies. That's not "letting markets work." It's declaring that the first company to claim an invention gets to control the market, rather than letting the actual market decide which company can best execute in delivering the product to the market. A supporter of free markets shouldn't support the patent system. It's not a free market at all.

From there, though, Wilson kicks off a good discussion on how to deal with such things. He points out that it's often cheaper just to pay off the patent holders (and most companies do that), but that just encourages them to continue creating a "tax on innovation." So, instead, he wants to discuss what reforms can be put in place, with two initial suggestions:

1. If you sue someone for infringement and lose, you pay the defendants' legal costs.
2. "Use it or lose it." If you're not putting the patent into practice, you don't get to use it.

There are problems with both of these, unfortunately. The first is utterly dependent on the already screwed up judicial process for patent lawsuits (hello East Texas!). There are plenty of awful patent lawsuits where the patent holder wins. So, I'm not against this proposal as a way of making patent holders think twice about totally bogus lawsuits, but it's not going to stop a lot of suits. In fact, it may just encourage more suits in the hopes that hitting one "big one" pays for all the bad ones.

The second one is also a little troubling, because if a patent is valid (a huge if), you could potentially see a situation where it makes sense for the company to license it rather than develop it. Instead, however, I'd offer an alternative: if the patent holder is not developing a product based on the patent, then (a) the courts cannot issue any kind of injunction to stop the production of the product by others (which is the direction we're moving in thanks to the MercExchange decision) and (b) any damages should be greatly limited to the cost of a reasonable license plus a small penalty.

However, if Wilson is serious about looking for ways to fix the patent system, he should look to support an independent invention defense that would invalidate the patent. This one change would solve so many of the problems with the patent system. Since the patent system was designed to encourage independent invention, it shouldn't be discouraging it and denying those inventors who came up with an idea on their own the ability to commercialize their inventions. Furthermore, since patents are only supposed to be granted on inventions that are non-obvious to a person skilled in the art, the fact that multiple individuals came up with the same idea should be proof enough that the idea doesn't pass that test.

It's no secret that I'm not a fan of the patent system at all. There is so much evidence out there that patents do nothing to increase innovation and plenty of evidence to show how they actually stifle innovation, that I think the patent system actively works against its stated purpose ("to promote the progress of science and the useful arts"). However, if we must have such a system, then put in place an independent invention defense which also invalidates the patent, and we'd be a lot further towards a reasonable system -- especially since it's so rare to find patent infringement lawsuits that involve any actual copying.

Filed Under: fred wilson, independent invention, innovation, patent trolls, patents, tax

Lawyer Points Out That Simultaneous Invention Can Get Patents Tossed

from the well,-it's-a-start dept

For years, we've pointed out how ridiculous it is that our patent system doesn't include an independent invention defense. It seems rather against the concept of promoting innovation to say that someone who invented something entirely independently should be barred from using his own invention just because someone else invented the same thing slightly earlier. Considering just how many major discoveries are discovered independently by multiple people, this seems especially troublesome. In fact, various research papers have been written about why an independent invention defense makes a lot of sense.

However, beyond just a "defense" on patent claims, we've often pointed out that independent invention actually should represent pretty good evidence that an invention doesn't meet the criteria for "non-obviousness" to those skilled in the art that is required for a patent. After all, if multiple folks skilled in the art are all coming up with the same invention, it seems to be rather definitive proof that the concept was an "obvious" next step to those skilled in the art. Of course, whenever we bring this up, patent system defenders talk about what a ridiculous idea this is and how it would be a disaster in practice. Unfortunately for them, the actual research suggests it would actually be quite reasonable.

However, with so many patent attorneys insisting that it's ridiculous that simultaneous or independent invention would be used to prove obviousness, it's interesting to see a patent attorney over at Patently-O point out that it's perfectly reasonable to use simultaneous invention as proof of obviousness, even though he admits it's "seldom used." Hopefully, that's going to start changing. If the purpose of the patent system is only to protect "new and non-obvious" inventions -- it would seem like de facto evidence of obviousness that others are doing the same damn thing. If you have to keep the patent system at all, such a test for obviousness (rather than just in court cases, as is suggested here) would be a tremendously useful step in the right direction.

Filed Under: independent invention, obviousness, patents, simultaneous invention