There’s (finally) been a lot of uproar lately about the increased activity of patent trolls and the number of patent litigation suits that are being brought to trial. I’ve been watching the issue, and I’m thoroughly convinced that the current patent system is broken.
A system that, as the White House recently wrote, “is meant to encourage innovation and invention” is instead being used by Patent Assertion Entities, a.k.a. patent trolls, to extort settlement and licensing fees. It’s clearly a cash grab, evidenced by the fact that patent trolls were responsible for 62% of the patent cases files in 2012, up from 19% in 2006. The problem is so big that, according to the same White House article referenced above, “some of the largest innovators in high-tech spend more money on patent litigation and acquisition than they do on research and development for new products.”
To be clear, this is a game played by those with deep pockets where the rich get richer and the poor are forced to pay up or go out of business. Who’s the big loser – the consumer, who either pays more for products and services to cover litigation and licensing costs or is denied access to innovative products and services that companies are unable to bring to market under threat of litigation.
Fortunately, the system is not broken beyond repair and can be reformed, which is important since a strong intellectual property protection system is one of the key ingredients to fostering innovation. Based on researching a few articles, here’s a collection of ideas I’ve gathered that could make a difference.
1. Allowing patents on ideas and methods is dumb
One of the bigger, if not the biggest, problem with the system is allowing method patents. Case in point, Apple was recently awarded a patent for a touchscreen dashboard. Haven’t these been around for years? How can Apple be awarded a patent for this? At best, this is an idea, not a patent. Ideas are a dime a dozen. Allowing people with money to patent them is the epitome of insanity.
2. Patents need to cover specific concepts
In addition to method patents, patents that are overly broad and generic need to be eliminated. One such example is patent number 6,385,222 for “System and methods for remotely accessing a selected group of items of interest from a database.” This is way too broad and covers nearly any application that could ever be created. What specific piece is innovative? Is there a specific technique used to access the data? Is there a specific technique used for performance? At best, this is just a collection of ideas. If there’s any innovation in the patent, it’s in how it was worded in order to get it approved by the patent office.
3. Patents need to contain innovation
Software patents tend to fit into this category. Many software patents don’t contain any real innovation. Most are common knowledge, meaning anyone with knowledge of software could independently replicate the “invention” without any knowledge of the patent. Software patents suffer from a couple of fundamental issues. First, since software can be created by anyone with access to a computer, creating code is cheap and easy to do. Unlike the time and effort it takes to get a new drug formula approved, granting a 17 year monopoly on software is not necessary to encourage people to innovate in this area. Second, software technology is moving too fast for patents to remain valid for longer than 2-3 years, if that. Granting software patents only serves to inhibit innovation and competition, not foster it.
4. A patent owner must be using the patent to assert claims
If the owner of the patent is not using it, then it cannot assert claims against it. This could accomplish two things. First, it keeps trolls from simply suing people who are innovating since the trolls don’t have any products or services that use the patents they are asserting. Second, it keeps companies from amassing patents because they have the money to pay for the patent process. If the company isn’t going to use the innovation, then they shouldn’t be able to patent it. Or if they do patent it, there is a timeframe they have to either use it or sell it to someone who will.
5. Hold patent trolls responsible
Last, but possibly most important, patent trolls need to be held responsible when their claims are denied or their patents are invalidated. At a minimum, they should be forced to cover the fees for the defense in cases they lose. In extreme cases, they should be prosecuted under existing anti-trust or criminal laws. Either way, the idea is to eliminate frivolous lawsuits and force the trolls to think twice before launching lawsuits indiscriminately in the hopes that someone will settle or something in their claims stick.
Trying to do all of these at once is not feasible. I would strongly recommend implementing reform in small steps in order to start pushing some reform through as quickly as possible. The bigger and more ambitious the bills, the longer things take to get through. I’m all about fast tracking at this point.
I’m encouraged by the first attempts being made through the introduction of the “Patent Litigation and Innovation Act of 2013″ introduced by Rep. Hakeem Jeffries, D-N.Y., in the House (H.R. 2639) and the “Patent Abuse Reduction Act of 2013″ introduced by Sen. John Cornyn, R-Texas, in the Senate (S. 1013). I’ll be watching the progress of these bills and hope that it is the beginning of a significant overhaul to our currently broken patent system.
If you’re interested in reading more about patent reform, here are a few articles that I used to research this article that you may find interesting:
- Taking on Patent Trolls to Protect American Innovation – Gene Sperling
What the White House wants to do to reform the patent system. You may be surprised at the quality of the ideas and recommendations being suggested.
- The Patent Quality Improvement Act – Nick Grossman
Good summary of a proposal called “The Patent Quality Improvement Act” that seeks to make it easier to defend oneself against patent claims. It also highlights why functional/method patents are bad. The money quote, we need to crackdown on the practice of “patenting the problem and not the solution.”
- Lodsys targets Rovio, EA, Square Enix and more with amended patent lawsuit – Sean Ludwig
Short article on a seemingly frivolous patent suit. Scroll down to the comments and read the one by Patrick Connor. Great statement on why patenting ideas is dumb.
- Apple vs HTC: a patent breakdown – Nilay Patel
In 2010, Apple filed a lawsuit against HTC for infringing on various patents for smartphones. 20+ patents were mentioned, and nearly all of them are method-based and quite obvious.
- Super-troll Intellectual Ventures files new lawsuits as White House moves to curb patent abuse – Jeff John Roberts
Yet another bad patent example – a method for authorizing a transaction card.
- Make Patent Trolls Pay in Court – Randall R. Rader, Colleen V. Chien and David Hricik
Good ideas on how to discourage patent trolls from filing suits in the first place – make them pay for the cost of defending patents in cases where they lose or their patents are invalidated.
- Prosecute the patent trolls! – Felix Salmon
Shows how existing laws could be used to either discourage or prosecute patent trolls for their actions.