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Thomas Reddy

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How would you reform the US patent system?

In the US, the number of annual patent applications has steadily incresed, with a dramatic leap in the past two decades.

http://www.uspto.gov/web/offices/ac/ido/oeip/taf/us_stat.htm
1963 - 90K patent applications - 48K patents granted
1971 - 111K patent applications - 81K patents granted
1981 - 113K patent applications - 71K patents granted
1991 - 177K patent applications - 106K patents granted
2001 - 345K patent applications - 183k patents granted
2011 - 535K patent applications - 247K patents granted

This has lead to two major issues with the Patent application process. First, the system becomes slow and clogged. It can take multiple years and cost fantastic sums of money in legal fees in order to get a legitimate patent granted. Second, patent examiners by necessity will need to spend less time examining each patent. However, because patent applicant has the ability to respond and make alterations to the patent as a result of the patent examiner's decisions, the patent examiner can be forced to spend an exorbitant amount of time on a single patent, often leading to a granted patent, where one shouldn't have been granted.

To some extent, this hampers inovation, because individuals with legitimately innovative ideas are scared off from filing for patents. It also creates a market of bad patents, which entrepreneurial individuals can purchase and then attempt to enforce against companies... These people are often referred to as Patent Trolls.

My question is this: Assuming you believe Patents to be a worthwhile legal construct, how would you alter the Patent System in the US to improve it's efficiency and help spark innovation? What principles are guiding you to make that suggestion?

One potential solution is a peer review patent system: http://www.uspto.gov/patents/init_events/peerpriorartpilotindex.jsp

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  • Apr 28 2012: Actually, there is one very effective way to reform our patent system: stop the bounty hunters! In our system, if the patentee (or the legal representative) wins AND can convince the 'trier of fact' (Judge or jury) that the accused infringer infringed 'willfully', the patentee may request the Judge to grant up to treble damages! Now this is in addition to full compensatory damages! The intended effect is to discourage other infringers, i.e., its a social policy issue. The actual effect is a no-holds-barred witch hunt on the part of the patentee ... and their attorneys (who usually pocket a very sizable share in the take). The solution is simple: convert this windfall into a fine, to be paid to the US Government! The result will be more cash into the IRS (or, better yet, let it be earmarked for the USPTO to pay for more examiners!). Furthermore, I predict that, over time, the enthusiasm of the patentee and their counsel to establish willfulness will diminish significantly, resulting in lower costs and faster resolution of patent litigation. I also predict that, even with a lowered motivation to scrounge through vast numbers of irrelevant emails and the like, competent patentee counsel will still be effective in establishing willfulness in the types of clear-cut cases this social policy was intended to redress.

    Couldn't be simpler: speed, pay the Man; willfully infringe, pay the Man.
    • Apr 28 2012: How would you go about enforcement of patents? In that system only large institutional organizations could afford the attorneys fees out of pocket to pay for the enforcement. There is no incentive for the law firm to take up the fight (since there wouldn't be a contingency fee).

      Or are you just talking about the treble damages aspect?
      • Apr 28 2012: TR: I don't agree that, necessarily, there will be no incentive for lawyers to take on cases in the (rather doubtful) event that Congress converts the treble-damages penalty from bounty to fine. However, arguendo, let's assume that it does. Then, patent litigation will 'now' be not that different from any other litigation, since the lawyer(s) will still get paid for doing their job representing their clients, i.e., it will still be a normal part of their profession. Even lawyers still need to eat.

        One reasonable approach to balancing the scales, Big Guy vs. Little Guy, would be to change to 'loser pays' -- if Big Guy loses, it pays costs and attorney fees of Little Guy. One other approach that I favor would be for state Bars (or, in some states the highest Court) to recognize representation of sole inventors and small startups as 'pro bono'. Yet another approach, which will be absolutely anathema to litigators, would be for Congress to empower an accused infringer to elect mandatory, binding arbitration in lieu of the courts, WITH well constrained discovery procedures to maximize probability of finding the most relevant evidence while minimizing the opportunity to abuse the process scrounging through 'dust bins'. My experience in arbitration has convinced me that a properly constituted panel will do at least as well as a Judge/jury, and often better; it is also faster (more available panels) and cheaper (no appeals) for both parties.

        With a bit more time for thought, more options will probably materialize. The really BIG ELEPHANT in the room, however, is the large pool of litigators most, if not all, of whom will strenuously resist such threats to their 'livelihoods'. Can we expect ANY Congress to stand up to the resulting lobbying pressure? Personally, I find encouraging the recent shift to first-to-file, which wiped out the very lucrative legal field of interference practice -- just a relative few lawyers/firms but HUGE incomes. I commend Rep. Smith!
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      Apr 28 2012: Thanks for this Jeffrey..I can see that would be a lucrative witch hunt as many indepedent minds all over the world addressed to a similar problem, might come up with the same solution...might even have come up with it before the patented product.

      Witch hunt works the other way too...big corporations with more money and power than start ups .can steal a patented work product and get away with it.

      So clearly, we need to start over with the patent system.

      Can it be done piece meal? If so, what in your opinion would be the most lucrative first steps?
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    Apr 28 2012: patent system is the easiest to fix. get rid of it in its entirety. problem solved in a jiffy.
  • Apr 29 2012: "cost fantastic sums of money in legal fees in order to get a legitimate patent granted"

    ...just another cause of the wide and widening divide between the rich and everyone else.

    The cost should be the first thing addressed, and if it cannot (if it can't be made easy for people with no money to file patents), and the patent system inherently serves as a barrier to upward mobility, then perhaps it should be scrapped altogether.
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    Apr 27 2012: The idea of patents is to encourage investment in innovation and discovery that benefits mankind by offering the public service of patent registration and of patent protection through the courts. It's actually quite ancient.

    The problems and issues are numerous and consequential:

    (1) owners milk patents dry through manipulations of the FDA that hinder availabilty of newer and better products.

    (2) what % of what is patented benefit makind to a point that warrants the public service of registration and protection by the courts? Is it enough just to evidence uniqueness/originality? shouldn't there be a higher standard for what is patentable?

    (3) should people be allowed to buy the patent to something with tremendous potential benefit to humanity ad keep it off the market just to protect and allow a run out of an existing patent?

    (4) haven't patents gone too far in the GM world especially of monsanto seeds and of biology based discoveries?

    (5) instead of affording patent protection to just anything that is original..should we be encouraging and somehow furthering innovation and discovery that is crowd sourced with a view toputting it mmediately in the public domain?

    (6) should we have a system that makes it more profitable for companies to put truly important discoveries immediately into the public domain?

    Tricky to tinker with something that is rooted in common law but who ever imagined so many harmful dysfunctions from something that was created out of presumed public benefit?