A Succinct Description For Why Assuming Patent Validity Is A Problem

from the no-adversarial-process dept

Law professor Doug Lichtman has an op-ed in the NY Times, timed to the Supreme Court's hearing on the Microsoft/i4i case. As we've discussed, the focus is on what the standard should be for reviewing patents in the courts. We were disappointed that the US government supported keeping patents difficult to invalidate. Lichtman's op-ed does a nice job explaining why this makes no sense:
Patent examiners give most applications only a quick look, spending on average 16 hours to 17 hours per application — nowhere near the time needed to assess whether an invention is truly new and not obvious. Worse, those hours are typically spread over two to three years, and they are interspersed with work on hundreds of other open files.

These problems could in theory be fixed with more money. But resources aren’t the only issue. The extent and quality of Patent Office review is also limited by the fact that the process is not adversarial. Indeed, the only parties involved in Patent Office review are the applicant and the applicant’s lawyers — people with an obvious incentive to see the application move forward. Contrast that with litigation, where patent plaintiffs have to square off against very motivated patent defendants.
Those two issues cover exactly why it's a screwed up system where patents are automatically considered valid. The lack of time given to reviewing patents is often talked about, but the lack of an adversarial hearing is important as well. Obviously, defenders of the system today will point out that's what the court system is for. They argue that it's better for the courts to sort it out than to burden the Patent Office even further. But, if that's the case, then we should make it so the court system actually can invalidate bad patents more easily. Instead, the system works on an assumption of validity, with a very high bar ("clear and convincing," rather than the lower "preponderance of the evidence."). I still can't figure out how anyone defends this aspect of the current system. Moving the bar lower will only serve to get rid of bad patents. So the only argument I can see for defending the current system is that these people somehow believe that bad patents are important as well. And I'm left scratching my head as to who, outside of those who hold or profit from bad patents, could think that.

Anyway, the Supreme Court has, thankfully, released the transcript (pdf and embedded below) of today's hearing, and in typical Supreme Court fashion, it doesn't give away too much, but is still interesting. It seems like most of the Justices are pretty focused on the procedural issues and the specifics of Congress' intent, prior rulings, and whether or not the specific "preponderance of the evidence" standard is any more reasonable than "clear and convincing evidence." The one Justice who seems to grasp the deeper issues (again, not surprisingly if you're aware of his past), is Justice Breyer, who repeatedly brings up issues about bad patents and the harm they do. He seems to be fully aware of what's really at stake here, beyond a standard used by courts. Of course, none of that gives any indication how the case will eventually turn out. Also, Microsoft is at a bit of a disadvantage here, in that Chief Justice Roberts recused himself from this case, since he owns Microsoft stock. If the result comes out as a 4 to 4 tie, then i4i wins, and we're left with a bad standard, unless Congress finally makes its intent clear (unlikely).


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Coward, Apr 18th, 2011 @ 4:55pm

    I suspect most of the other justices "grasp the deeper issues" as well, but are more focuses on, y'know, the law and their roles as arbiters of the law.

     

    reply to this | link to this | view in thread ]

  2.  
    icon
    Atkray (profile), Apr 18th, 2011 @ 5:19pm

    Re:

    "the law and their roles as arbiters of the law."

    This article is referring to The Supreme Court of the United States, they abandoned any pretext of adhering to that role a long time ago.

     

    reply to this | link to this | view in thread ]

  3.  
    icon
    Mike Masnick (profile), Apr 18th, 2011 @ 5:25pm

    Re:

    Actually the US Casino's are actively trying to get the anti-online gambling laws overturned. Contrary to the tone in the above TD commentary.

    Seeing as most of them are not actually involved in the day to day issues, I'm not sure that's true. I'm sure they understand the legal issues. But the deeper issues? Not so much. That's pretty clear from the nature of the questions.

     

    reply to this | link to this | view in thread ]

  4.  
    icon
    Beta (profile), Apr 18th, 2011 @ 5:30pm

    Political Economics...

    It's easy to invent an adversarial arrangement within the Patent Office. Imagine if raises and promotions were based on how many applications a reviewer rejected (with sound justification). Even better, suppose the Office would grant the patent only if, say, four separate reviewers in a row approved the application (without knowing how many others had already approved it).

    As I was thing about that idea, I had to wonder why it isn't done that way already, and naturally my thoughts turned to economics. What incentive is there to rubber-stamp applications? The answer didn't come until I rephrased the question: what incentive is there to make the rubber stamp "APPROVED" instead of "REJECTED"? The official measure of a reviewer could very easily be the number of applications processed in a month-- it's easy to understand and keep track of, which is all a bureaucrat cares about. And REJECTION requires a reason, which requires facts, which require research and thinking, whereas APPROVAL requires only "sure, why not?".

    The hard part is figuring out an incentive to overcome all of that institutional inertia and change the incentive system...

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Coward, Apr 18th, 2011 @ 5:37pm

    I hold Mr. Lichtman in very high regard. His IP Colloquium presentations reflect a studied attempt to consider and discuss divergent points of view concerning current legal issues while remaining non-partisan. He seeks to facilitate education vs. indoctrination, a much welcome relief from the all too typical discussions of law.

    Obviously, his op-ed piece in the NYT is a statement of his personal view on a subject based upon information he presently has in hand. I daresay, however, that were he to more closely study the process of patent prosecution and the rules with which parties must comply, his views would change materially. Merely by way of example, if he was to explore the rules of disclosure and candor pertaining to the ex parte prosecution of patent applications, he would quickly come to the realization that those who may play fast and loose with the rules can be assured of two likely outcomes; namely, invalidation of a patent in its entirety and disbarment from practice before the USPTO.

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    Willton, Apr 18th, 2011 @ 6:55pm

    Re: Re:

    Seeing as most of them are not actually involved in the day to day issues, I'm not sure that's true. I'm sure they understand the legal issues. But the deeper issues? Not so much. That's pretty clear from the nature of the questions.

    Well, seeing as the "deeper issues" are not theirs to solve, I don't see why the Justices would bother directing questions to the attorneys regarding the "deeper issues". The High Court is charged with the duty to decide the dispute before them, not solve everyone's problems.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Willton, Apr 18th, 2011 @ 7:00pm

    Re: Political Economics...

    It's easy to invent an adversarial arrangement within the Patent Office. Imagine if raises and promotions were based on how many applications a reviewer rejected (with sound justification). Even better, suppose the Office would grant the patent only if, say, four separate reviewers in a row approved the application (without knowing how many others had already approved it).

    I take it you have no idea what kind of administrative nightmare that would entail.

    As I was thing about that idea, I had to wonder why it isn't done that way already, and naturally my thoughts turned to economics. What incentive is there to rubber-stamp applications? The answer didn't come until I rephrased the question: what incentive is there to make the rubber stamp "APPROVED" instead of "REJECTED"? The official measure of a reviewer could very easily be the number of applications processed in a month-- it's easy to understand and keep track of, which is all a bureaucrat cares about. And REJECTION requires a reason, which requires facts, which require research and thinking, whereas APPROVAL requires only "sure, why not?".

    Spoken like someone who truly has never encountered the patent prosecution system first-hand.

     

    reply to this | link to this | view in thread ]

  8.  
    icon
    Chris Rhodes (profile), Apr 18th, 2011 @ 7:12pm

    Re: Political Economics...

    Easier than that.

    New rule: Patent applications are placed out for public scrutiny (crowd-sourced, essentially) for X number of days before a patent examiner ever looks at them. Then the patent examiner takes the public comments on the application together with the applicant's comments to make their decision.

    No extra work required beyond sorting through the public comments, and it may save a lot of time when looking for prior art.

    Even easier solution: Abolish the patent system entirely. Slightly less likely though. ;)

     

    reply to this | link to this | view in thread ]

  9.  
    icon
    E. Zachary Knight (profile), Apr 18th, 2011 @ 7:29pm

    Re: Re: Political Economics...

    That is exactly what I was thinking. We already do this for Trademarks, why not for patents. That way, if someone applies for a patent, other interested parties can determine if they feel the application infringes on a patent they hold.

    It would also allow for the public to point out prior art that prevents a patent.

     

    reply to this | link to this | view in thread ]

  10.  
    icon
    Beta (profile), Apr 18th, 2011 @ 7:33pm

    Re: Re: Political Economics...

    I admit I don't know much about the inner workings of the Patent Office (the similarities between me and A.E. don't extend that far), but maybe you could enlighten me. How much worse would the administration of this scheme be than what already exists? And in light of what really happens in patent prosecution, was my second paragraph laughably naive because the reasons given for approval have to be better supported than the ones for rejection? (Notice that I didn't say the reasons for rejection have to be good or explicit in the present scheme, only that the reviewer who is using them to compete for a bonus has to come up with something.) Or because there is actually no pressure within the Patent Office to resolve lots of applications?

     

    reply to this | link to this | view in thread ]

  11.  
    icon
    David Collado (profile), Apr 18th, 2011 @ 8:00pm

    Peer To Patent

    PEER TO PATENT - A JOINT PROJECT BETWEEN THE NEW YORK LAW SCHOOL AND THE U.S. PATENT AND TRADEMARK OFFICE

    Help the US Patent and Trademark Office (USPTO) find the information relevant to assessing the claims of pending patent applications. Become a community reviewer and improve the quality of patents.

    http://www.peertopatent.org

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    Willton, Apr 18th, 2011 @ 8:13pm

    Re: Re: Re: Political Economics...

    I admit I don't know much about the inner workings of the Patent Office (the similarities between me and A.E. don't extend that far), but maybe you could enlighten me. How much worse would the administration of this scheme be than what already exists?

    Basically, given your premise of having 4 reviewers review each application before issuing an Office Action, it would likely increase the time needed for examination by a multiplier of 4. Office Actions and Notices of Allowance are already reviewed once by Supervisory Patent Examiners (or SPE's for short). Increase the number of reviewers reviewing the Examiner's work, and you increase the time it takes for the USPTO to do its job.

    Think about it: how many people review your work? If we increased the number of people who had to do so, how much longer do you think it would take for your work to get out the door?

    And in light of what really happens in patent prosecution, was my second paragraph laughably naive because the reasons given for approval have to be better supported than the ones for rejection?

    Under Director Kappos, reasons for allowance must be just as good as reasons for rejection. However, in the recent past, reasons for allowance had to be more rigorous than reasons for rejection. Under the Dufas- er, Dudas regime, examiners were discouraged from issuing Notices of Allowance because they would come under heavy scrutiny from their supervisors. However, their rejections never received such scrutiny. In such circumstances, examiners would reject-reject-reject in order to keep their supervisors at bay while coercing patent applicants to spend more money on responses and Requests for Continued Examination (which served as a "count" under the patent examiner's compensation system).

    That changed under the Kappos regime. Under Kappos, both rejections AND allowances are scrutinized for their efficacy. This discourages examiners from being lazy in their searches and their written actions. Accordingly, the disposal rate at the USPTO has risen, as allowances and abandonments rose considerably in 2010 in comparison to prior years.

    As for reasoning, examiners are encouraged to provide reasoning for all allowances "[i]f the examiner believes that the record of the prosecution as a whole does not make clear his or her reasons for allowing a claim or claims" (i.e., the reasons for allowance are not easily inferred from prior Office Actions and the applicant's responses thereto). And, of course, since allowances are reviewed by SPE's, the examiner's reasoning for allowance is also reviewed.

    And by the way, I suggest you back off your criticism of examiners. I know Mike makes a lot of hay denigrating their work, but he only cites less than 1% of the patents they issue per year. It is absolutely impossible for the USPTO to be infallible in their work, but for the most part the examining corp does a pretty good job. Obviously, I will have choice words for examiners with whom I have a fundamental disagreement, but they comprise a small percentage of those with whom I encounter regularly.

     

    reply to this | link to this | view in thread ]

  13.  
    identicon
    Willton, Apr 18th, 2011 @ 8:16pm

    Re: Re: Re: Political Economics...

    That is exactly what I was thinking. We already do this for Trademarks, why not for patents. That way, if someone applies for a patent, other interested parties can determine if they feel the application infringes on a patent they hold.

    It would also allow for the public to point out prior art that prevents a patent.


    Post-grant review is already a part of the patent reform bill circulating through Congress.

     

    reply to this | link to this | view in thread ]

  14.  
    icon
    CarlWeathersForPres (profile), Apr 18th, 2011 @ 8:38pm

    Well, there's no adversarial part, except for ex parte examinations or litigation, but other than that you're completely correct.

    My problem with the lowering this hypothetical bar is that we take patents out of the hands of examiners(i.e. people who read patents every day) and into the hands of either judges(with no technical degree) or lay jurors, and then everything is reviewed de novo anyway. And no matter what you do, your never going to reach the level of discovery that you'd get with a firm who has thrown 100k+ to find prior art.

    Really, in my opinion, the best solution is a 2 tiered system, if the prior art has been reviewed then it's the old standard and if it's new art then the case is reviewed under the preponderance of the evidence, and to eliminate the strategy of flooding an examiner with prior art to keep that standard charge a premium for extra searches or the court could declare, in dicta, that it would be inequitable conduct(which negates a patent) for providing prior art which has no relevance. Since I don't think this will happen, Mike will have fodder for a rant proclaiming all patents to be a evil in approximately 4-6 months.

    The other thing that the op-ed writer breezed over when looking at home much time patent examiners spend, most examiners have a specialty(such as brake pads), and typically have a pretty good grasp on what is out in the field and what is new(although there are limitations because you think you know most things).

     

    reply to this | link to this | view in thread ]

  15.  
    identicon
    Anonymous Coward, Apr 18th, 2011 @ 9:12pm

    Re: Re: Re: Re: Political Economics...

    Isn't this essentially what an ex parte examination is?

    From 37 CFR 2209:

    The reexamination statute and rules permit any person to file a request for an ex parte reexamination containing certain elements and the fee required under 37 CFR 1.20(c)(1). The Office initially determines if “a substantial new question of patentability” (35 U.S.C. 303(a)) is presented. If such a new question has been presented, reexamination will be ordered.

     

    reply to this | link to this | view in thread ]

  16.  
    icon
    The eejit (profile), Apr 19th, 2011 @ 12:37am

    Re: Re: Re:

    So, you would rather have ridiculously messy case law instead of as clear as possible to reduce confusion. Gotcha.

     

    reply to this | link to this | view in thread ]

  17.  
    icon
    Mike Masnick (profile), Apr 19th, 2011 @ 12:59am

    Re:

    Well, there's no adversarial part, except for ex parte examinations or litigation

    No adversarial part *during the approval of the patent*. Which is the point. When you get to the ex parte examinations and litigation, you have that MUCH higher than normal standard for the evidence, which is the whole point.

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    CarlWeathersForPres, Apr 19th, 2011 @ 7:34am

    Re: Re:

    So, what your saying is that we need to fully disclose all patent prosecution so outsiders can have input during the process, not just allow outsider to have input the second the process is over. Honestly, I see very little distinction and don't really understand the need to disclose to the public what they won't be able to use for 20 years at the time of filing.

    Everything that you (or others in the thread) are proposing can be done through ex parte, and will invalidate the patent after it's issued(which will in effect be the same as if it wasn't issued). Why does a span of a year really make that much difference, especially since nobody is diligent enough now to shoot down these patents after they're issued, what makes you think that if you allowed them to do it during prosecution people would change how they acted(and actually put in the time)?

     

    reply to this | link to this | view in thread ]

  19.  
    icon
    harbingerofdoom (profile), Apr 19th, 2011 @ 8:32am

    Re: Re: Re:

    and in resolving the dispute before them, they resolve other disputes before it can get to them again thus helping to solve some of the deeper issues.


    its basic cause and effect really....

     

    reply to this | link to this | view in thread ]

  20.  
    icon
    harbingerofdoom (profile), Apr 19th, 2011 @ 8:51am

    Re: Re: Re: Re: Political Economics...

    just a few rebuttal points for you.

    1. if any process to fix the current issues within the patent office cause longer times to process,then tough cookies... make them work faster/harder. that is in fact how a job works out in the big mean world.

    2. stop feeling picked on. no one says the USPTO is supposed to be infallible nor has anyone ever suggested it. but you are on a site that has a large focus on things that are messed up which affect technology. were you expecting stories about puppies kittens and fluffy bunnies here?
    your statement shows evidence that you are not clear exactly what the focus around here is...

     

    reply to this | link to this | view in thread ]

  21.  
    icon
    harbingerofdoom (profile), Apr 19th, 2011 @ 8:59am

    Re: Re: Re: Re: Political Economics...

    pfft and also forgot my other point i was going to make.

    the big issues are not all surrounding the method of patents being approved. im actually okay with the current approval process and believe that if congress actually wanted to, they could fix the entire issue by adding in legislation revolving around how to address contested patents that actually made sense. (obviously they dont want to or they are completely inept however. you decide which for yourself)

    but changing the entire process is going to have to involve looking at all the processes involved and that includes the approval process. you cannot fix something thats broken if you dont check to make sure you know where all the breaks are...

     

    reply to this | link to this | view in thread ]

  22.  
    identicon
    Anonymous Coward, Apr 19th, 2011 @ 9:10am

    Re: Re:

    So, I assume you were intending to respond to me, though you seem to have quoted something completely different.

    The nature of (most of) the questions deal with legal precedent and canons of construction. That's what the Supreme Court is supposed to look at when ruling on the law. That those Justices are not asking questions about what they would like to do if they were legislators or supreme dictators is does not make it "pretty clear" that they don't understand such issues, but is explainable by the fact that such issues are not (in most cases) supposed to guide their decision.

     

    reply to this | link to this | view in thread ]

  23.  
    identicon
    Gene Cavanaugh, Apr 19th, 2011 @ 10:25am

    Microsoft vs i4i

    Excellent article, and as an IP attorney, I agree.

    I will add, though, that one very important thing is the ability to unduly "broaden" patents, especially by using continuations (which shouldn't be allowed, anyway, but especially for the so-called "broadening" process).

    This process involves making a patent so dense and impenetrable that it complies with the "business golden rule", the one with the most gold wins. It screens out small innovators to perpetuate dying industries.

     

    reply to this | link to this | view in thread ]

  24.  
    icon
    Beta (profile), Apr 22nd, 2011 @ 4:23pm

    Re: Re: Re: Re: Political Economics...

    Willton, for the record, you know more about the inner workings of the U.S. Pat. Off. than I do or ever expect to. However, your impressive wealth of detail doesn't really address my argument.

    The point of spending a lot of human-hours reviewing an explanation and/or having more than one person evaluate it, is to reduce the rate of bad decisions (however you define them). I suggested that this could be done by one or, say, four, you said that it is done by two (maybe, if I'm reading your text right). Naturally it increases the cycle time. Apart from increasing the competence of the reviewers (something neither of us has touched on) the only other way to improve results is to push the errors in one direction or the other, either toward granting bad patents or toward rejecting good applications; that was what I was suggesting, so counterarguments about the cost of review are kind of beside the point.

    As for your description of the review process:
    "[Now] both rejections AND allowances are scrutinized for their efficacy. This discourages examiners from being lazy... Accordingly, the disposal rate at the USPTO has risen..

    This makes no sense to me and contradicts your own assertion: more scrutiny has led to faster conclusions? "Taking shortcuts" would be more accurate than "being lazy". And you still haven't explained what kind of evidence reviewers can provide to support an application. If an application really describes a novel invention, what can the reviewer say besides "I have no evidence that this has been thought of before, and I've looked." I suppose there could be research indicating that the invention is practical, useful or whatever, but that leads right into the next point: I have three reasons for thinking that the balance of error should be shifted to rejection of bad applications: 1) that error is much easier to rectify (reapplication is much easier than overturning a patent), 2) the injustice and harm of a bad patent seem much worse than that of an unfairly rejected application, and 3) there seem to be a lot of really bad patents in the news, and not all old ones. If you don't think these "few" rotten patents are an acceptable price to pay for barrels of decent ones, then you must concede that the review process is too easy to pass.

    Finally, I wasn't criticizing the examiners themselves. I have experience with, and sympathy for, technical experts in a big organization laboring under idiotic policies. The bad ones thrive, the good ones leave or play along, and the whole operation quickly finds equilibrium turning out garbage, regardless of how the low-level employees feel about it.

     

    reply to this | link to this | view in thread ]

  25.  
    identicon
    patent litigation, Apr 25th, 2011 @ 3:32pm

    It looks to me like i4i's got the upper hand in this patent litigation, and not only because of the U.S. arguing as amicus on its behalf. I've always thought i4i had the better arguments, not to mention the legal precedent and reliance issues on its side.

     

    reply to this | link to this | view in thread ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Follow Techdirt
A word from our sponsors...
Essential Reading
Techdirt Reading List
Techdirt Insider Chat
A word from our sponsors...
Recent Stories
A word from our sponsors...

Close

Email This