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Cautionary Tales of Patent Reform August 19th, 2008
Solveig Singleton
The Wall Street Journal recently ran has an important article by Stuart Weinberg, "Caught in the Crossfire." It describes the difficulties that small firms face in licensing patents to large firms. The fuss about bad patents and so called "patent trolls"--firms that own patents, but do neither research nor production, and that make their money from suing other firms--has lead legislators and courts to consider steps to make it easier to challenge and less disastrous to infringe patents. But the result is significantly less protection for small firms that do invent and then license.
 
"Caught in the Crossfire," describes the efforts of one firm, which was in the midst of negotiations to license its patents to Microsoft, when Microsoft initiated proceedings at the patent office questioning the validity of all its patents. Whatever the merit of the technology at issue, clearly this sort of proceeding has a bad flavor. Large firms can afford to exploit legal procedures in ways that small firms cannot, and although to some extent this kind of game is inevitable, small firms are key to the innovation process, and the patent process ought not to be designed in such a way that their rights can be routinely eroded in this way. Maybe the judicial process can screen against bad faith challenges, but maybe not.
 
Now, perhaps the patents are, after all, "bad" ones that ought never to have been granted. But if the end result is that these patents are invalidated, that is still not a happy ending. A lot of people who relied on the patent process as a step on their way to operating and funding an innovative research start-up will have lost their dream, and had a very expensive education. This is a waste of perfectly good venture capital.  
 
Following the arguments of Mark Lemley that the vast majority of bad patents don't matter, most patent reforms have been focussed late in the patent process, ignoring questions about the troubles internal to the patent office itself. But late-process procedural reforms allowing the challenge to patents after they have been granted seem particularly likely to be used to rob small inventors or to impede competitors. It may be time to rethink the "more lawyers are better" approach to the problem of the bad patent, and focus on measuring and improving quality at the patent office itself.

Posted in  Intellectual Property  Technology  || 0 Comments »
Author: Solveig Singleton || Location: Washington, DC, USA

 

  
 
August 19th, 2008

Cautionary Tales of Patent Reform

Posted in  Intellectual Property  Technology 
Author: Solveig Singleton || Location: Washington, DC, USA

The Wall Street Journal recently ran has an important article by Stuart Weinberg, "Caught in the Crossfire." It describes the difficulties that small firms face in licensing patents to large firms. The fuss about bad patents and so called "patent trolls"--firms that own patents, but do neither research nor production, and that make their money from suing other firms--has lead legislators and courts to consider steps to make it easier to challenge and less disastrous to infringe patents. But the result is significantly less protection for small firms that do invent and then license.
 
"Caught in the Crossfire," describes the efforts of one firm, which was in the midst of negotiations to license its patents to Microsoft, when Microsoft initiated proceedings at the patent office questioning the validity of all its patents. Whatever the merit of the technology at issue, clearly this sort of proceeding has a bad flavor. Large firms can afford to exploit legal procedures in ways that small firms cannot, and although to some extent this kind of game is inevitable, small firms are key to the innovation process, and the patent process ought not to be designed in such a way that their rights can be routinely eroded in this way. Maybe the judicial process can screen against bad faith challenges, but maybe not.
 
Now, perhaps the patents are, after all, "bad" ones that ought never to have been granted. But if the end result is that these patents are invalidated, that is still not a happy ending. A lot of people who relied on the patent process as a step on their way to operating and funding an innovative research start-up will have lost their dream, and had a very expensive education. This is a waste of perfectly good venture capital.  
 
Following the arguments of Mark Lemley that the vast majority of bad patents don't matter, most patent reforms have been focussed late in the patent process, ignoring questions about the troubles internal to the patent office itself. But late-process procedural reforms allowing the challenge to patents after they have been granted seem particularly likely to be used to rob small inventors or to impede competitors. It may be time to rethink the "more lawyers are better" approach to the problem of the bad patent, and focus on measuring and improving quality at the patent office itself.