Commerce Secretary, New USPTO Head Suggesting They Want More Patents, Approved Faster

from the that-doesn't-seem-good dept

Two separate stories concerning statements from those in charge of the patent system suggest that the new administration isn't about to help fix the problems in the patent system, but is eagerly looking to make them worse. It starts with new USPTO Director David Kappos, who some thought would recognize problems with the patent system from his years dealing with those problems at IBM. While IBM is a massive patent stockpiler, over the past few years it's at least indicated some recognition that the system is broken. But... his recent remarks suggest he wants to reverse the trend of patent examiners rejecting so many patents:

On the subject of quality, there has been speculation in the IP community that examiners are being encouraged to reject applications because a lower allowance rate equals higher quality. Let's be clear: patent quality does not equal rejection.

I don't think I could disagree any more strongly. Patent quality absolutely means keeping out bad patents -- something the USPTO has failed at for years. Considering the massive monopoly power handed out by a patent, one should only be granted in the rarest of cases -- when real quality, and a real need for the patent can be shown. After a lot of criticism about the way that patent system was run for the past few decades (where "when in doubt, approve" was the norm) since about 2004, the USPTO has finally started to become more aggressive in rejecting patents. Having the USPTO switch back in the other direction would be a massive mistake.

Meanwhile, an even more worrisome issue is that Kappos' boss, Gary Locke, the US Secretary of Commerce, seems to buy into all sorts of disproved myths about the patent system. It doesn't help that the journalists at the Milwaukee Journal Sentinel seem to believe them too. Check out this quote, for example:

And economists concur that patents are the best known indicator of innovation.

Um, actually, a rather large number of economists do not concur at all on that statement (and note that two of those are Nobel Laureates), and can stack up study after study after study that suggests the opposite. But why let facts get in the way of an old myth?

The real problem, which becomes evident in reading the article is that since the USPTO is funded based on patent application fees, it has every incentive in the world, as an institution, to approve more patents. The more patents it approves, the more applications it gets, which means more money as well. This isn't to say that the individual examiners don't take their jobs seriously, and approve stuff just to get the fees. Obviously, they're not directly a part of that calculus. But the incentives put in place at higher levels are to bring in more fees to better fund the USPTO. Of course, if it functioned as originally intended, and only narrowly approved patents that were clearly shown to be a new and non-obvious invention that promoted the progress, the staff and the budget could be cut down significantly. But since when has a gov't agency ever willingly looked for ways to cut its own budget?

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USPTO Getting Paupers To Hand Over Thousands On The Dream Of Patent Wealth

from the here-we-go... dept

Patently-O has the somewhat horrifying story of the USPTO cashing the maintenance check for a patent holder, but then letting the patent expire because the check was $10 short. The guy apparently owed $1,040, but sent a check that was only $1,030 (and he used the wrong form and sent it to the wrong dept., but...) and the USPTO still cashed it, but declared the patent abandoned for not having paid the full maintenance fee. The guy only discovered this a few years later when he called the USPTO to get ready to send in his next maintenance check. Anyway, the article notes that CAFC smacked down the USPTO for this practice.

You can read all the gory details at the link above, but what struck me about this was two things. First, the guy paid the $1,030 to maintain this patent (and it doesn't appear he did much with the patent during that time) and then was ready to dump another chunk of change into maintaining it, but when he found out that the USPTO (yes, arbitrarily and somewhat dickishly) had declared the patent abandoned, suddenly said that it should be reinstated because he was:

"not an attorney but a pauper disabled living on a fixed income (SSI) who cannot pay $200 to petition your office."

This is the real shame here. This myth that all you need is a patent to be a success leads a pauper living on social security to spend thousands of dollars on a patent, which the USPTO gladly soaks up. What a scam. The US government is taking in folks like this guy, convincing him that all he needs to live out his dreams is to get a patent, knowing quite well that a patent by itself is pretty meaningless.

But the guy believes in the dream, as seen from the fact that he sued the USPTO for $1 billion, claiming that was the value of his patent "in the U.S. and world market." So here we have a guy, who is living off of a tiny Social Security check, throwing away thousands of dollars on a patent that he's not doing anything with, believing that it's somehow worth $1 billion. Doesn't that seem highly problematic to people?

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Remind Me: Why Do We Let Patent Lawsuits Go On Even As USPTO Has Doubts About The Patents?

from the shouldn't-things-wait? dept

While plenty of people are familiar with the fact that NTP got $612.5 million from RIM in a patent dispute a few years back (which drew tremendous scrutiny into the realm of patents), one of the most interesting details that many people didn't follow was that at the same time as the lawsuit was going on, the US Patent Office was re-examining those same patents, and issuing rejections of the very same patents. Despite the USPTO even rushing to announce its problems with the patents way ahead of schedule, the judge chose not to wait for the final rejections and pressured RIM into paying up.

This sort of thing happens all the time.

For example, just weeks after TiVo was practically dancing in the streets over its latest wins over EchoStar in a patent dispute over basic DVR functionality, the USPTO has given an initial rejection on some of the claims at issue in the case. While TiVo is quick to downplay this as just the first step in a long process (which it gets to respond to), it's being a bit misleading in suggesting that this sort of thing happens all the time. Sure -- it happens a lot, but to questionable patents. It seems that, if the USPTO has agreed to review a patent and clearly the examiners have serous questions about the patentability of certain claims, shouldn't any lawsuits that hinge on those patents be put on hold?

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Patents On Common Beans Rejected 10 Years Too Late

from the nice-one,-USPTO dept

This one's a bit old, but Boing Boing just pointed us to the incredible story of a guy named Larry Proctor who was able to get the USPTO to patent some yellow beans he picked up in Mexico. Yes. Really. You can read the patent (5,894,079) here. Thankfully, it was (finally) invalidated last year, but was around for about nine years -- during which time the patent holder basically was able to put a tax on imports of such beans to the US from Mexico:

Yet Proctor actively enforced his patent. At one point, the patent-holder's US$0.6-claim on every pound of yellow beans sold in the United States caused a steep decline in exports of such beans from Mexico to the USA, according to Mexican government sources.

The Boing Boing link points to the story of the USPTO rejecting the patent, but there actually is an update. Just a few weeks ago CAFC also ruled the patent as invalid, noting that Larry Proctor didn't actually do anything special, other than plant some beans he'd picked up. But, none of that stopped 10 years of being able to tax or ban every shipment of these beans into the US. Even beyond the question of why it took 10 years to dump this patent, you have to wonder how a patent on a bean got approved in the first place. Another proud moment by the USPTO.

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USPTO Fast Tracks Michael Jackson Patent Tribute

from the a-true-sense-of-urgency dept

theodp writes "They may drag their feet on things like the three-and-a-half-year-old Amazon 1-Click Patent Reexam, but the USPTO can put on their fast-shoes when they want to. For evidence of the agency's sense of urgency, just look at how quickly they put together an Exhibit of Michael Jackson's Patent and Trademarks. If you can't make it out to the USPTO Museum (and store) by Labor Day, you can check out Michael's expired-due-to-nonpayment-of-fees patent for a Method and Means for Creating Anti-Gravity Illusion online, and also see it in action in the video for Smooth Criminal (@7:16). BTW, Jackson's co-inventors also designed Michael's suit for his L.A. funeral."

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Great Timing: USPTO Gives Amazon Patent For 'Reliable Ratings'

from the that-would-be-an-oops... dept

theodp writes "Do bad patents bring bad karma? Less than 24 hours after a hacker identified as 'Weev' claimed he exploited a feature for reporting inappropriate content to wreak havoc on Amazon's product ratings (Amazon blamed a "glitch"), the USPTO issued Amazon.com a patent for the Automatic Identification of Unreliable User Ratings, an 'invention' which - you guessed it - purportedly prevents Amazon's product ratings from being gamed by providing a feature for reporting inappropriate content ('Section 244 also contains a link 254 to a display (not shown) where customer CCC can report that item review 222 contains scandalous or inappropriate material')."

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How Nordstrom's And The USPTO Have Destroyed One Small Business

from the good-going dept

Jim Harper has the story of how the combination of a screwup at the US Patent & Trademark Office (USPTO) and a bunch of overly aggressive lawyers at Nordstrom's have made life incredibly difficult for a small business that has done everything right. That business, an "organic" lifestyle clothing company, filed for a trademark on those clothes using their company name: Beckons. After this small business filed for the trademark, but before that information was published, the big department store Nordstrom's filed for a trademark on the word "Beckon" for women's clothing. This happens at times, but the small company was there first, and the proper response from the USPTO is to reject the latter registration.

That didn't happen.

The USPTO flat-out screwed up and approved Nordstrom's application for publication (effectively moving the process forward). That meant that the small Beckons company had to spend thousands of dollars opposing Nordstrom's trademark registration. Thousands of dollars they shouldn't have had to spend if the USPTO had done its job right in the first place. Now, again, at this point, the facts are pretty straightforward, and even though the USPTO screwed up initially, the next step should be that the USPTO admits its mistake and everything moves on again.

But that's when Nordstrom's lawyers apparently got involved. Rather than recognizing the obvious truth (they have no claim on the mark Beckon and should give it up), they went into attack mode -- and tried to have the original Beckons trademark canceled, arguing that it really only was used for "yoga clothing" as opposed to a wider array of apparel. The case went to the appeals board -- meaning more legal costs for the small company. It was at this point, that the USPTO actually realized their original mistake, transferred Nordstrom's trademark app back to the original approver -- where it was rejected as being too similar to the Beckons clothing line. Again, at this point, despite the massive legal costs and mistakes and overly aggressive lawyers, you'd hope the matter would be done with.

No such luck.

Nordstrom's lawyers filed another complaint against the original Beckons trademark, claiming that they had abandoned their rights to the mark, once again sending everything to the Appeals Board (more legal bills!) only to have the filing dismissed, after it was realized that Nordstorm's original request to cancel the Beckons trademark was still out. And, in fact, that attempt to cancel the trademark is still active, but is in a long queue of cases to hit the Appeals Board -- meaning that the small company behind Beckons still has plenty more to spend on legal bills, and plenty of uncertainty concerning the simple trademark they filed for a few years ago.

While we often rail against problems with patent and copyright law, the purpose behind trademark law is entirely different It's a consumer or fraud protection law -- designed to make sure consumers aren't tricked into believing one product is associated with another company. Yes, it's all too often abused, but the small clothing company behind Beckons was doing exactly the right thing... and a mistake and some aggressive lawyering seem to have left them in a bad spot. The USPTO should fix things and Nordstrom's should drop its ridiculous vindictive legal attack against the much smaller company.

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NTP Can't Leave Well Enough Alone Concerning RIM

from the the-money-wasn't-enough? dept

In one of the biggest travesties of the patent system, over two years ago, RIM agreed to pay NTP $612.5 million for patent infringement, even though the USPTO had been rejecting NTP's patents on re-exam. The patents were highly questionable: extremely broad patents covering pretty basic concepts about making email "wireless." Beyond combining two existing ideas in a rather obvious way, there was a fair amount of prior art as well. Yet, under pressure from both the judge and its own shareholders, RIM decided it was worth paying out over half a billion dollars rather than dealing with the potential uncertainty of an injunction forcing it to shut down its service.

You would think that this would have kept NTP happy. After all, NTP was basically built out of the ashes of a company that had failed in the marketplace. It was unable to come up with a product that anyone wanted. RIM, on the other hand, had done the real innovation of figuring out what customers actually wanted, and packaging it in an appealing manner. All that was left at NTP was a bunch of lawyers, who now had $612.5 million for failing in the marketplace.

But NTP won't stop. It's kept suing a bunch of other companies. However, the courts have put its latest lawsuits on hold while the USPTO continues to review the legitimacy of NTP's patents (why RIM wasn't allowed the same consideration has never been explained).

So now NTP is taking another strategy: claiming that RIM unfairly influenced the Patent Office's re-exam of its patents. Yes, the company already won the lawsuit and $612.5 million, but is still claiming that the other side cheated. Of course, there's not much "there" there in the accusations. Basically, RIM had representatives who tried to find out what was happening at the USPTO and what the process was for the re-exam. As various patent attorneys outline towards the end of the article, it doesn't appear that RIM did anything wrong here, but NTP is doing whatever it can to try to bloody RIM, even given the fact that it won the lawsuit. What we're seeing here is a case of extreme rent-seeking, where NTP will do pretty much anything to try to keep milking its highly questionable patents, diverting hundreds of millions away from innovation and into the pockets of folks who failed in the marketplace.

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Patent Boss Admits That The Patent Office Keeps Getting Flooded By More And More Bad Patents

from the gee...-I-wonder-why... dept

The head of the US Patent Office, Jon Dudas, the same guy who was just hyping up a educational curriculum for children falsely claiming that any inventor "needs" to get a patent, is now complaining that the Patent Office is being overwhelmed with really crappy patent applications. You think? Lerner and Jaffe pointed this out years ago and it's not difficult to see why. With the USPTO approving tons of bad patents, and the courts all too often siding with the patent holder and expanding what's patentable, combined with people who have done nothing getting hundreds of millions just for holding a piece of paper, is it really any surprise that the incentive structure would push people to file for as many bogus patents as possible, in hopes of getting them through the obviously questionable process?

When you set up a system that rewards people for not actually innovating in the market (but just speculating on paper), then of course, you're going to get more of that activity. When you set up a system that rewards those people to massive levels, well out of proportion with their contribution to any product, then of course you're going to get more of that activity. When you set up a system that gives people a full monopoly right that can be used to set up a toll booth on the natural path of innovation, then of course you're going to get more of that activity. When the cost of getting a patent is so much smaller than the potential payoff of suing others with it, then of course you're going to get more of that activity. The fact that Dudas is just noticing this now, while still pushing for changes that will make the problem worse is a real problem. Patents were only supposed to be used in special cases. The fact that they've become the norm, rather than the exception is a problem, and it doesn't seem like anyone is seriously looking into fixing that.

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Shouldn't The USPTO's Education Curriculum Be Accurate?

from the one-would-think-that's-the-point dept

I started my still-ongoing series of posts on intellectual property as a counter to the incredibly one-sided brain-washing educational campaigns put together by companies that only seemed to talk about how wonderful intellectual property was, never once mentioning the downsides or abuses. You can kind of understand this from companies who make their living off of intellectual property -- but it still seems quite questionable that any educational institution would accept and use such a biased "lesson plan." So, if the USPTO came out with its own lesson plan, you'd expect it to be a bit more balanced, right? Not so. The USPTO has created its own curriculum to try to teach kids "respect" for intellectual property law and it seems to be just as bad as the corporate backed lessons. Perhaps that's no surprise, as the USPTO gets its funds from patent application fees, so it has incentive to keep more applications coming in.

Even the way that USPTO boss Jon Dudas explains the program is problematic: "If you own something that is valuable, you want to protect it." That is not, and has never been, the purpose of the patent system. It's not about ownership and it's not about "protecting." It's about encouraging innovation. Simply by setting up this program as teaching kids about "protecting" something valuable they "own" is inaccurate. That's rather surprising, given that you would think the head of the USPTO would know what the patent system's purpose is. The website that hosts the curriculum has a short trailer video that has a clear false statement at the beginning, claiming "an invention needs to be protected by a patent." That would be quite a shock to Benjamin Franklin, who famously said of inventions: "That, as we enjoy great advantages from the inventions of others, we should be glad of an opportunity to serve others by any invention of ours; and this we should do freely and generously," before questioning the value of patents. Somehow, I get the feeling that statement didn't make it into the USPTO's lesson plan.

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Court Tells USPTO It Can't Limit Continuation Patents

from the so-much-for-that-plan dept

Back in November, a court blocked the Patent Office from phasing in new rules that would limit continuations on patents. The practice, which has been widely abused by some patent holders to expand the scope of an existing patent to cover newer technologies, has been a problem for quite some time. So, in an effort to shore things up, the USPTO decided on its own to limit how many continuations a patent holder could file on a single patent. The block in November was temporary, while the court reviewed the overall question of whether these new limits were legal -- and now the decision has been released saying that the USPTO has no right to make such changes. The decision actually does make sense. While excessive continuations can be a serious problem, the USPTO shouldn't be allowed to run off and make its own rules. The blanket limitation on continuations was (yet again) an attempt to deal with a symptom rather than take on the root causes of problems in the patent system. So, while it may have helped in the short term, it wouldn't have done much overall, and it's better not to have the USPTO randomly making up its own rules.

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Patent Office Rejects Blackboard E-Learning Patent One Month After It Wins Lawsuit

from the interesting-timing dept

One of the more annoying things in patent lawsuits is watching the USPTO reject patents soon after a lawsuit concludes -- and having the judges in those lawsuits refuse to wait for the USPTO to weigh in. This is especially troublesome considering that so many patent re-exams result in rejected claims. It would only make sense for judges to wait until the Patent Office has had a chance to review the patent. As if to highlight that, late last week, the USPTO rejected all claims on a rather infamous "e-learning" patent held by Blackboard Inc. This comes just slightly over a month after Blackboard won a lawsuit using that very patent. It was known during the trial that the Patent Office had agreed to review it, but apparently, the judge didn't want to wait.

Of course, Blackboard quickly came out with a statement saying this doesn't matter, it's already won the case, and it still expects an injunction to be issued preventing Desire2Learn from offering e-learning software. Blackboard is correct that this is just an initial rejection (meaning there are still responses and additional rounds to go), but it still seems rather weak to put out a statement saying that everyone should just ignore the rather significant questions the USPTO has just raised about the patent in question.

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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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Amazon's One-Click Patent Fix Rejected Again... for Now

from the back-and-forth dept

The back and forth over Amazon's infamous one-click patent has gone "back" again. Back in October we noted that, after many years and a few false starts, the USPTO had rejected a bunch of the patent's claims. However, as we noted at the time, the process was far from over. Patent reviews are a ridiculously complex process that take a hell of a lot longer than they should, and involve a lot of back-and-forth, often with many "non-final" rulings that go back and forth before anything is finally established. In fact, Amazon word-smithed the patent and tried to get the patent office to reinstate the claims. Luckily, however, the USPTO isn't buying it and is rejecting the rewritten claims... though, it's still not final. And people wonder why the patent office is overworked and why many people are pushing for a more efficient process to review patents.

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NTP's Latest Patent Shakedown Must Wait For USPTO; Why Wasn't RIM Given The Same Consideration?

from the innovation-at-work dept

Even if you just have a passing interest in the topic of patents, you've probably heard of the RIM-NTP case. That's where NTP, a company that ended up with some excessively broad and obvious patents after the inventor was unable to build a product anyone actually wanted to buy, sued RIM, the makers of the wildly successful Blackberry device, claiming patent infringement. The attention the case got caused the US Patent Office to look closely at the patents, and very publicly state that it was rejecting NTP's patents, as they never should have been issued in the first place. However, rather than waiting for the official patent review process to work itself out, the judge in the case pressured the two sides to settle, forcing RIM to cough up $612.5 million for no good reason. It never made sense that the judge refused to wait for the Patent Office to finish its review -- especially since the office had been so public in questioning the validity of the patents.

NTP took its winnings and immediately started looking for others to sue while the patents were still valid. It started with Palm, makers of the Treo. However, in that case, the judge realized what was going on and put the case on hold until the USPTO could make a final decision on the validity of the patents. Not willing to standstill, NTP sued all the national US mobile operators (Sprint, Verizon Wireless, AT&T and T-Mobile) for selling devices like the Blackberry and the Treo. Once again, though, it looks as though a judge realizes that it's ridiculous for such a case to go forward when the USPTO has expressed so much skepticism towards the patents. Against Monopoly lets us know that the judge for the Sprint, Verizon and AT&T case has also put the case on hold until the USPTO is done. What no one wants to explain, however, is why RIM wasn't afforded the same opportunity?

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Court Stops Patent Office From Limiting Continuations

from the not-so-fast-there dept

The practice of filing for continuations, or modifications, on patent applications can make sense in some cases, but it's widely abused by people who file a broad, overly vague patent on a hot area, and then continually update it as they see where the market is heading. Then, by the time they finally get a patent it covers a lot of the actual innovation (usually done by others) after the patent was filed and which had little to do with the original patent. Earlier this year, the US Patent Office, recognizing this problem (years too late) decided to start limiting continuation filings and announced that the change would go into effect November 1st. Not surprisingly, supporters of stronger patent laws were aghast and filed a lawsuit to stop the changes from going into effect. A judge has now blocked the USPTO from implementing the new rules. This isn't a permanent block on the rules -- it's just an injunction while the court decides whether or not the rules make sense. Obviously, those who are fans of monopoly-based business models want to be able to continually modify patents, but the fact that it's been abused so often means that limits on such things makes a lot of sense -- so much sense it's almost surprising the Patent Office supported it. Now we'll see if they're ever allowed to actually implement those rules.

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US Patent Office Making Some Changes To The Rules

from the good-for-them dept

With Congress debating patent reform and the Supreme Court correcting the mistakes of lower courts when it comes to patent laws, it seems that the US Patent and Trademark Office is finally starting to realize that there's widespread dissatisfaction with how it's going about things. Perhaps it's starting to realize that the purpose of the USPTO isn't to grant patents, but to promote innovation. To that end, it's making some minor, but still important, changes to the rules for patent examiners, hoping to improve the quality of patents being approved. The latest change is to try to cut down on overly broad patents and patents where the actual invention isn't entirely clear, by forcing applicants to only include a single invention in a claim. This way the examiners know what the invention is that they're actually supposed to be examining. The fact that this wasn't in place before (along with the suggestion that patent examiners weren't entirely sure what they were examining) should say something about the state of our patent system.

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Inventors And Patent Attorneys Sue USPTO Over Supposedly Unqualified Appointment

from the good-or-bad? dept

Nick writes "Looks like a group of patent lawyers and inventors are suing the US Secretary of Commerce to block the appointment of an "unqualified" person to the spot of Deputy Director of the USPTO, claiming its an abuse of the Secretary's discretion. There are two ways to look at this: either it's a noble attempt to ensure the right people are in place to oversee the patent and trademark office and to keep out political hacks, or (as Techdirt might see it) an attempt by patent people to keep their business protected from outsiders. Whether or not this person's appointment should be blocked based on her background as a legislative adviser on IP issues seems debatable, but she apparently has never drafted a patent or trademark application before, which allegedly doesn't jive with the requirement that the Deputy Director have 'professional experience and background in patent or trademark law.' The suit does ask the District Court in DC to clarify exactly what qualifies as patent or trademark background, so maybe some good will come out of it. But it also begs the question: is the backlog and confusion in the patent office the result of bad management there or the result of a community of insulated patent specialists that want to assert their importance in the new info economy?"

Nick's analysis is pretty thorough, so there's not much for us to add. We have no doubt that there have been some bad appointees to the USPTO, but it's not clear this lawsuit is the way to go about fixing these problems. The people bringing the lawsuit definitely do note the rise in bad patents being granted, though it's hard to blame that on an appointee from two months ago. This does highlight that this particular appointment does seem more politically motivated than based on real knowledge and experience with the patent system -- but it's not at all clear how having a patent attorney who has experience drafting patents would necessarily make the system any better. In fact, just as it has been a problem for the Federal Circuit Court of Appeals, those who come out of a background of being patent attorneys tend to favor more patents, rather than better patents (not always true, but there's enough evidence suggesting that it's pretty common). Since the goal of the USPTO should be to foster innovation, shouldn't the criteria not be experience with patents and trademarks, but experience with actual innovation and the economic impact of innovation?

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