So How Do We Fix The Patent System?
from the stop-with-the-bad-suggestions dept
Then there's the Economist, who actually was one of the first mainstream publications to highlight problems with the patent system, only to change its mind and argue for more bad patents. However, it's flipped again, and is arguing (once more) that the patent system is broken and needs fixing.
And this time, unlike many of the articles lately, The Economist actually puts forth some suggestions on how to fix the patent system:
First, patents in fields where innovation moves fast and is relatively cheap—like computing—should have shorter terms than those in areas where it is slower and more expensive—like pharmaceuticals. The divergent interests of patent-holders in different industries have held up reform, but there is no reason why they should not be treated differently: such distinctions are made in other areas of intellectual-property law. Second, the bar for obtaining a patent, particularly for software or business methods, should be much higher (as it is in other countries), and the process of re-evaluating bad patents should be more open and efficient. Finally, there should be greater disclosure requirements of the ownership of patent portfolios, and patent cases should be heard by specialised courts (as happens in other areas of law), rather than non-expert juries in advantageous jurisdictions in Texas. That would make life harder for trolls. These fixes would help America’s patent system encourage innovation rather than litigation.These are all pretty common suggestions that we've heard before. Unfortunately, while I think the overall article does a great job laying out the problem, these suggestions are the kinds of suggestions made by people who haven't spent that much time with the patent system (or who are somewhat unfamiliar with its history), and won't do much good.
Tim Lee beat me to the punch in debunking the whole "specialized court" notion, since that's actually a big part of the problem today. First, he notes that for all the talk of "bad" Texas courts and juries, the Texas jurisdictions have, unfortunately, become de facto "specialized" patent courts. And, on top of that, for the past 30 years or so, patent cases at the appeals level all go to a single appeals court, the Court of Appeals for the Federal Circuit (CAFC). This breaks one of the key parts of our court system, which has all those different circuits so that they can develop their own takes on laws, and the Supreme Court can help settle any disputes and circuit splits. With CAFC there are no more circuit splits, and in creating a specialized court, it made it easier for patent attorneys to influence the case law:
This had the unintended consequence of dramatically increasing the influence of the patent bar over patent law. Not only do Federal Circuit judges spend all their time hearing arguments from patent attorneys, but some of them are former patent attorneys themselves. In its first two decades, the Federal Circuit gradually shifted patent law in the pro-patent direction favored by most patent attorneys. Patents became easier to get and harder to invalidate. The courts allowed tougher punishments against infringers. And the Federal Circuit unilaterally eliminated traditional limits on patenting software and “business methods.”Separately, he notes that the lack of circuit splits meant that CAFC totally rewrote patent law without the Supreme Court taking much notice, in the 90s. It only caught on in the last decade, and that's created quite a mess, since (as patent system supporters always argue) any changes the Supreme Court makes to roll back CAFC excesses "upset the apple cart" of "established" patent law.
But when the Federal Circuit became the only court ruling on patent cases, there were no more circuit splits and no more competing legal precedents. That might be why the Supreme Court seems to have barely noticed that the Federal Circuit was dramatically reshaping patent law in the 1990s. The high court reviewed only about a dozen Federal Circuit decisions between 1982 and 2004, and the ones it did review tended to be on narrow, technical issues. The Supreme Court finally began to give the Federal Circuit’s handiwork some serious scrutiny when Chief Justice John Roberts took the bench. And the justices did not like what they saw. In the Chief Justice’s first three terms, the high court heard five different patent cases, and all of them resulted in unanimous or near-unanimous reversals of pro-patent decisions by the Federal Circuit.Separately, I'd argue that the Economist's desire to set up different rules for different "types" of patents opens up another massive can of worms. First it opens up all sorts of definitional questions. What is a "software patent"? There's no such thing in the law, and setting up specific definitions would just drive patent attorneys to seek ways to fit any particular patent under the types of patents that have the most enforcement strength and length. Defining patents into different buckets just opens up more opportunities for lobbyists to seek to define patents in ways that benefit patent holders, rather than fixing the real problems of the patent system.
But a lot of the damage had already been done. Hundreds of thousands of low-quality patents had been approved under the permissive rules the Federal Circuit had developed during the 1990s. Those patents may be technically invalid under recent Supreme Court decisions, but that’s of little help to a small company that can’t afford to litigate the question.
So if we want to offer solutions instead of just "complaining," here's how we would fix the patent system (short of just scrapping the damn thing).
First, we have to define the real problem. And it's actually not that hard to figure it out: bad or unnecessary patents that are used to stop others from innovating. Defenders of the patent system often talk up how it "protects" innovators. That's almost entirely false. The vast majority of the patent system hinders innovators by making it more difficult for them to innovate. So a few key ways to stop the worst of the patent system:
- Create an independent invention defense: We've been arguing this for years. If the patent system is supposed to protect innovators, the fact that it blocks even those who invented something entirely independently goes entirely against the principles of the patent system. Even in copyright law (generally seen as more strict than patent law) there's a defense based on independent creation. If you haven't copied someone's patents or were completely unaware of someone's patent, it's ridiculous to claim you were infringing on that patent.
If you understood how infrequently patent disputes involve anyone actually copying a patent (or a patented invention), you'd realize how much of the problems of our patent system this would solve. Unfortunately, patent holders and the press (especially) frequently mislead on this point, claiming that patent infringement suits are about companies "copying" or "stealing" from the patent holder. That's almost never the case. Studies have shown over and over again, that even though you can get treble damages for showing someone willfully copied a patented invention, it's almost never asserted.
- Recognize that independent invention is a sign of lack of patentability: This one is a bit more controversial, but the point of the patent system is supposedly only to reward patents on inventions that are non-obvious to those skilled in the art. If multiple people, skilled in the art, are coming up with the same thing independently at the same time, it seems like pretty strong evidence that, in fact, the ideas were obvious to those skilled in the art. There has been a lot of work done lately showing that nearly all major inventions are independently invented at around the same time by multiple people. And there's a view that's gaining support that basically what fuels such innovation is not patents at all, but just that all the factors necessary for the "next step" are in place, and those skilled in the art can just take that last step.
Thus, in such cases where there is independent invention, it shouldn't just be a defense against infringement, but it should be evidence that any such patent is invalid, as it doesn't qualify as non-obvious to those skilled in the art.
- Patent examiners should seek out input from those actually skilled in the art: Since the very standard for patentability is those skilled in the art, they should at least be able to weigh in on the patentability and obviousness of the solution in question. As it stands, patent examiners may be smart in a particular field, but since they don't actually work in that field, their knowledge is not always really up to date. I'm sure they try their best, but there's a difference between those who actually build stuff and those who don't.
Patent system supporters hate this suggestion, and they often claim that "jealousy" will lead others to claim that an invention is obvious. There are easy ways to control for this however. We're not saying that if anyone says, "this is obvious," the patent is automatically rejected. Rather, we're saying that it's another source of data and input for the examiner to make a determination of obviousness. That is the person actually skilled in the art could present an explanation for why something is obvious, and the examiner can then take it into account, and use that as another bit of information.
- Drop the assumption of validity and allow for greater post grant review: This is the one that really upsets patent system supporters, as they would like to go in the other direction. But, really, the arguments for assuming patent validity are really, really weak. As we've discussed before, the patent system gives one entity a full government-granted monopoly based on one person spending an average of about 16 to 17 hours on a single patent, and only hearing from the side who wants the patent. They almost never hear an adversarial position during the review.
That's kind of insane when you think about it. If we're going to approve patents on such a flimsy system, the least we can do is admit that they can be opened up for review much more easily. Hell, why not use the system described in the point above (creating a panel of actual people skilled in the art) to evaluate patent appeals on any patent in dispute. It doesn't even have to be done during the initial examination if we get rid of the assumption of validity and the difficult current process to get post-grant review.