Patent Re-Exams Improve Patent Quality; So Why Does Congress Want To Limit Them?

from the questions-that-should-be-answered dept

I've explained why I'm not comfortable with the proposed patent reform effort, as there are a number of changes in it that could potentially make the system much worse. One example, as the EFF highlighted last month, was that it would unnecessarily limit the ability of third parties to request a re-exam of a patent. Now the EFF is looking through some statistics and noting some rather shocking numbers about third-party-initiated patent re-exams. Contrary to what some supporters of the patent system claim, it appears that a large majority of these requests aren't just legitimate requests, but serve to have a patent's claims limited or rejected entirely. 92% of re-exam requests are granted, with 3 out of every 4 exams resulting in adjustments (or total rejections) of the patents. In other words, clearly, the process helps improve patent quality. So why would Congress want to remove that part?

However, a much bigger question should probably be: why is the Patent Office so bad at getting things right the first time around? If so many patents end up needing to be corrected on re-exam, it certainly sounds like patent examiners aren't doing a very good job. Given the already massive economic costs that result from bad patents, this should be a major concern.


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  1.  
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    eleete, Mar 18th, 2008 @ 7:31pm

    Agreed

    Wow, I agree totally, Congress ??
    e

     

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  2.  
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    Rubber Stamp Organization, Mar 18th, 2008 @ 8:29pm

    Questions for the ...

    Is it possible there is a financial incentive ?
    Where does the submittal fee go ?
    How is the USPO funded ?

     

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  3.  
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    Unknowing, Mar 18th, 2008 @ 11:44pm

    Surmising

    Just thinking aloud, but on your first point, Congress could easily be going ahead with this stupid law becuase of pressure from large corporations holding these general, far-reaching patents in order to get a tigher grip on their industry.

    As for the Patent office not doing its job properly, image, if you will, that you are an officer in charge of reviewing these patents. If a novel idea comes your way, something that seems like its good but could be a bit general, wouldn't you approve the patent as an incentive to the company to start making the product? Could it be that its a form of stimuli for the industry(s)? And then the review of the patent would change it for everyone to follow and create the generic version that everyone can enjoy for less?

    I probably would.

     

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  4.  
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    Mike (profile), Mar 19th, 2008 @ 12:01am

    Re: Surmising

    If a novel idea comes your way, something that seems like its good but could be a bit general, wouldn't you approve the patent as an incentive to the company to start making the product?

    Why? If it's a useful idea, why limit it to just the one company who applied for the patent? Why not let the market compete to offer the product, so that it's not limited to just one provider?

     

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  5.  
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    Anonymous Coward, Mar 19th, 2008 @ 12:09am

    Re: Re: Surmising

    Well, the way I see it is that if a company has an idea but is too afriad that they won't be able to hold the market for long, then applying for a patent will hold off competition until they get their feet under them (This obviously is directed towards smaller companies).

    Allowing the patent to be granted is the source of incentive for the company to go ahead, and then after a review by a third party, the technology gets opened to other companies to get started and the subesquent competition is always good for the consumer.

    Its an idealisic view, I know, but I like to think it would work most of the time. But, as you noted above Mike, the 3rd party review almost always works, so why not let the patent go ahead?

     

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  6.  
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    Mike (profile), Mar 19th, 2008 @ 12:21am

    Re: Re: Re: Surmising

    Well, the way I see it is that if a company has an idea but is too afriad that they won't be able to hold the market for long, then applying for a patent will hold off competition until they get their feet under them (This obviously is directed towards smaller companies).

    Allowing the patent to be granted is the source of incentive for the company to go ahead, and then after a review by a third party, the technology gets opened to other companies to get started and the subesquent competition is always good for the consumer.


    Unfortunately, the research shows little to no support of the idea that this kind of incentive works. There's almost no evidence that products wouldn't get made in the absence of patent protection (with the possible exception in the pharmaceutical industry). When there's a market demand, the market figures out a way to supply that demand -- with or without monopoly protection. So it's difficult to justify this.

    Not to mention the length of time between patent application and patent granting (especially these days). For many products, you're already on the market "patent pending," so not getting a patent doesn't change the likelihood of the product going to market. People don't sit and wait the 3 years for a patent to issue. They work to get the product out in the market.

    Its an idealisic view, I know, but I like to think it would work most of the time. But, as you noted above Mike, the 3rd party review almost always works, so why not let the patent go ahead?

    You're not taking into account the massive societal costs of doing it that way. You now have other firms that cannot/will not invest in innovation in that area, or firms who have to waste millions of dollars fighting bogus patent infringement lawsuits. Not to mention the length of time a typical patent review takes... It's a tremendous societal waste for almost no benefit.

     

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  7.  
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    Anonymous Coward, Mar 19th, 2008 @ 12:33am

    Re: Re: Re: Re: Surmising

    Well, I didn't see it that way, however it seems you have a few good points. I concede :-)

     

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  8.  
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    Dan Lewis, Mar 19th, 2008 @ 8:22am

    Spotlight fallacy

    "92% of re-exam requests are granted, with 3 out of every 4 exams resulting in adjustments (or total rejections) of the patents. In other words, clearly, the process helps improve patent quality. So why would Congress want to remove that part?

    However, a much bigger question should probably be: why is the Patent Office so bad at getting things right the first time around? If so many patents end up needing to be corrected on re-exam, it certainly sounds like patent examiners aren't doing a very good job."


    Uh, no, there is a bias here called the spotlight fallacy. Briefly, you can't estimate the performance of the patent office for all cases by measuring their performance in the worst cases.

    92% is the probability that a patent will be re-examined, given that a re-exam has been requested. 3 out of 4 is the probability that a patent will be adjusted or rejected given that a re-exam has been granted.

    You'd also need the probability that a patent re-exam is requested given that said patent was granted in the first place if you want to criticize the overturn rate of the patent examiners. If that data is out there it would vastly improve your point.

    On the other hand, it might turn out that the rate of bad patents issued, like the crime rate, is overexaggerated by media coverage. You never hear about the crime-free areas, you never hear about the good patents, because they are not newsworthy.

    Don't get me wrong, I think software and business method patents are extremely counterproductive, but I think the solution rests with the legislature rather than the patent examiner.

     

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  9.  
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    steve wren, Mar 19th, 2008 @ 8:40am

    EFF

    I wish the shills for large corporate thieves would stop whining about patents and put effort into developing innovative technologies to help us better compete with the Chinese. But then many of those companies can no longer innovate or were never truly very good at, relying more on superior capitol and antitrust behavior as we read about nowadays so often.

    As to the PTO statistics you cite, not so fast. Just because claims are narrower, does not mean the patentee no longer owns patents covering meaningful or even essential technologies. Sometimes the claims are broader than needed as a practical matter so narrowing may not have any bearing on protection. Your cries of a “substantial effect” are unsupported without further data and you fail to cite any instance where these 3rd party submissions have proved fruitful. It is interesting to note that you do not specify the probability that all claims were reversed. That of course would justify such a declaration of a “substantial effect”.

    As for the EFF, who funds them? Could it be that they are funded by the same corporate raiders who are so often found guilty of stealing others innovations? Are they truly an advocacy group, or just paid assassins? Are these really 3rd party submissions anyway? They should come out publicly and release the names of their principal funding sources, or sit down and shut up.
    Steve

     

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  10.  
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    Anonymous Coward, Mar 19th, 2008 @ 8:43am

    Congress wants to limit it because of this thing called an ostridge effect.

    See no Evil. Hear No Evil. Speak no evil.

    Do your due dillegence, and refuse to re-affirm the sponsor or co-sponsors of this bill. Don't vote them in during re-election!

     

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  11.  
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    DanC, Mar 19th, 2008 @ 9:49am

    Re: EFF

    I wish the shills for large corporate thieves would stop whining about patents and put effort into developing innovative technologies to help us better compete with the Chinese

    Except of course that almost every time one of them does develop innovative technologies to help compete with the Chinese, they wind up having to waste both time and money defending themselves over patent claims.

    With companies both large and small patenting every little detail concerning their R&D, it should come as no surprise that whenever one of them comes out with a profitable product, they are subsequently hit with patent lawsuits.

    Sometimes the claims are broader than needed as a practical matter

    And sometimes the claims are broader than needed in order to have a larger field to file lawsuits against, such as the infamous "JPEG Patent" held by Global Patent Holdings.

    Are they truly an advocacy group, or just paid assassins?

    So...immediately after saying that the article doesn't provide enough data to support the claim of "substantial effect", you enter into a rant over the EFF filled with unsubstantiated claims? Where's your data?

     

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  12.  
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    Mike (profile), Mar 19th, 2008 @ 9:57am

    Re: EFF

    put effort into developing innovative technologies to help us better compete with the Chinese.

    I would, but I'm afraid I'd get sued by a patent hoarder for infringement.

    But then many of those companies can no longer innovate or were never truly very good at, relying more on superior capitol and antitrust behavior as we read about nowadays so often.

    The only antitrust behavior I've seen lately is abusing a patent monopoly to stop others from innovating.

    As to the PTO statistics you cite, not so fast. Just because claims are narrower, does not mean the patentee no longer owns patents covering meaningful or even essential technologies.

    I didn't say otherwise.

    Sometimes the claims are broader than needed as a practical matter so narrowing may not have any bearing on protection.

    Again, I didn't say otherwise. But the very fact that the claims needed to be narrowed certainly suggests the PTO screwed up in the first place -- which was the key point.

    Your cries of a “substantial effect” are unsupported without further data and you fail to cite any instance where these 3rd party submissions have proved fruitful.

    If you want me to list a few, that's easy enough... But, it doesn't change the key point. I like how you set up a strawman that wasn't even the key point of this discussion to knock it down.

    The point remains: the PTO gets it wrong often enough.

    As for the EFF, who funds them?

    Ah, casting aspersions on the EFF. I don't think anyone who has seen what the EFF has done over the years could seriously suggest that the group is compromised in any way. But, you know, if you have no other arguments...

    Could it be that they are funded by the same corporate raiders who are so often found guilty of stealing others innovations?

    You cannot "steal" innovation, but that's a different discussion for a different time.

    Are they truly an advocacy group, or just paid assassins?

    And with that you lose all credibility. The EFF has shown for years that they do not follow a corporate agenda.

    Are these really 3rd party submissions anyway? They should come out publicly and release the names of their principal funding sources, or sit down and shut up.

    Ah, and as a last ditch effort, blame the messenger.

    Impressive effort, but not very compelling.

     

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  13.  
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    Dan Lewis, Mar 19th, 2008 @ 10:32am

    Re: EFF

    http://www.eff.org/about
    EFF is a donor-funded nonprofit, as five seconds with Google would have told you. Two-thirds of their budget is from individual donors. They are renowned for pursuing cases that affect the tech community for the better. They are currently suing AT&T for spying on Americans without a warrant, for example. Your profound ignorance on this issue does not bode well.

    I have seen you make this comment on another thread in my wanderings around the internet, dealing with patents:
    http://www.networkworld.com/community/node/26062

    And here's your story, Steve Wren. You are not exactly disinterested.
    http://money.cnn.com/2007/06/18/magazines/fsb/patent_reform.fsb/index.htm

    I call shenanigans. You're not engaging with the stories you criticize. You accuse people of bias without acknowledging your own biases. And your bent to conspiracy theories (here, and elsewhere, where you claim that patent trolling is an overblown red herring, when in fact software patents are stifling competition all over the industry, see SCO, RIM, JPEG, MP3, one-click, Microsoft FUD about Linux, and on and on, not to mention a well-documented pattern of get-rich-quick patent suits being filed in a certain East Texas courtroom) are not persuasive in the slightest.

    I would suggest taking this up in your own site and personal blog, then gathering a community of like-minded individuals around you, if you can. When you comment on articles like this one, make a relevant point, then link to your blog to discuss the issues in more depth.

    Unlike what you just did.

     

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  14.  
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    MLS, Mar 19th, 2008 @ 11:19am

    The simple answer to the question posited in the article is that reexamination is a cumbersome procedure and limited in terms of the scope of what can be considered during reexamination. Rather than take a dysfunctional system and change it by amendment, at least the Senate version of the proposed bill would replace the current reexamination procedure with a new one known as a Post Grant Review (PGR). While it too has some constraints over which reasonable minds can differ, it does have the salutory benefit of opening up considerably the type of evidence that can be used to assess patent validity.

     

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  15.  
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    AnonymousJM, Mar 24th, 2008 @ 6:21am

    With regards to a comment posted up above -- I’m not sure that Congress moving forward on this issue (ie: with the Patent Reform Act) is the result of pressure from “greedy” companies. Congress really needs to do something to alleviate the burgeoning issue of bogus patents. They are a total strain on the system, bogus patents kill innovation and ultimately foster an environment of paranoia – one can barely create anything without treading on another’s patent without even realizing it.

     

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