Techdirt. Stories filed under "validity" Easily digestible tech news... http://www.techdirt.com/ en-us Techdirt. Stories filed under "validity"http://www.techdirt.com/images/td-88x31.gifhttp://www.techdirt.com/ Mon, 20 Aug 2012 03:07:21 PDT Why Do We Assume Patents Are Valid When Patent Office's Own Numbers Show They Get Things Wrong All The Time? Mike Masnick http://www.techdirt.com/articles/20120816/01045920068/why-do-we-assume-patents-are-valid-when-patent-offices-own-numbers-show-they-get-things-wrong-all-time.shtml http://www.techdirt.com/articles/20120816/01045920068/why-do-we-assume-patents-are-valid-when-patent-offices-own-numbers-show-they-get-things-wrong-all-time.shtml presumed valid. Conceptually, this makes very little sense. Patents grant a pretty broad monopoly on "inventions" for an extended period of time... based entirely on approximately 18 hours that a patent examiner has to spend looking over the thing. Do we really think that a patent examiner gets things right most of the time? It seems that even the US Patent Office's own data shows that's simply not true. A friend pointed me to the USPTO's recently released data concerning re-exams (pdf and embedded below), which demonstrates in great detail why patents shouldn't be presumed valid. Basically, the data suggests that an awful lot of patents were handled poorly.

The document notes that 92% of re-exam requests are granted -- meaning that nearly all re-examination requests lead to a re-examination by the Patent Office. So, if most patents were well constructed in the first place, you would imagine that most of them would come through the re-examination process unscathed with no changes, right? Only if patent examiners were really bad at their jobs would a large percentage of patents need to be changed or rejected completely on re-exam. Given the "presumption of validity" that grants a monopoly, and the massive dollar amounts that patents sell for and are able to extract in settlements, you'd think that re-examined patents must normally confirm the original diagnosis. Hell, given that information, I'd hope that at least around 95% of patents, having passed the approval process, would be solid enough to survive the re-exam process untouched.

If the number was below 90%, I'd think the system was in trouble and needed some fixing. If it was below 70%, I'd think that we should be declaring the system a failure. If it was below 50%, I'd be questioning the entire basis of the patent system. So what is it?

Would you believe that only 22% of re-examined patents have all claims confirmed? 22%! That means that 78% of all patents that are granted a re-exam had serious problems with their original claims -- and remember, 92% of re-exam requests are granted. All these patents were initially approved and enjoyed the presumption of validity, which would may have cost companies millions (or more). This isn't just a failing grade. This is an epic disaster. It's true that 67% of the re-examined patents still are allowed with "claim changes", and only 11% are completely rejected, but those numbers are little comfort when we're told that we need to presume all of the claims in all patents are perfectly valid.

Now, some might claim that this number is perfectly fine, because only bad patents get re-exam requests. In fact, you could argue that perhaps these numbers show the system is working in that bad patents get re-exam requests and good patents remain valid. But there's little to no evidence to support that. Already, those who dislike patent re-exams are claiming that patent re-exams are abused with too many good patents getting re-examined. So it certainly appears that all sorts of patents get re-examined... and a very large percentage of them appear to turn out to have been mistakenly granted.

This highlights, in pretty stark contrast, just how broken and completely arbitrary the system is. For a system like this to be valid, it should be formalized and repeatable. It needs to be based on objective information, not the random subjective opinions of a particular examiner. Yet the data suggests that's exactly what's happening, meaning that we're handing out hundreds of thousands of monopolies based on the mere whims of patent examiners, who haven't been shown to be even remotely consistent, and who have very little time to actually examine what it is they're granting monopolies over.

How does anyone consider that to be a reasonable system?

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]]> simple-questions http://www.techdirt.com/comment_rss.php?sid=20120816/01045920068 Tue, 13 Sep 2011 01:05:00 PDT USPTO Rejects Two Rambus Patents... After It's Used Them To Win Patent Cases Against Companies Mike Masnick http://www.techdirt.com/articles/20110912/15173615914/uspto-rejects-two-rambus-patents-after-its-used-them-to-win-patent-cases-against-companies.shtml http://www.techdirt.com/articles/20110912/15173615914/uspto-rejects-two-rambus-patents-after-its-used-them-to-win-patent-cases-against-companies.shtml win ITC cases against Nvidia, HP and others, have been ruled invalid by the USPTO. Stories like this are why we wonder about the presumption of validity in patents, and also question why court judges and the ITC are still willing to decide cases, even after the UPSTO is re-examining them (a process that almost always leads to rejected claims). Of course, for Nvidia and HP, there's nothing they can do now. Even though the patents were later declared invalid, the fact that they already paid up (and any others who felt pressured into a license) isn't something that gets unwound. Of course, all this does is encourage more bogus patent infringement lawsuits, knowing that as long as you can get a judge to rule before the USPTO can review, you could be golden...

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]]> presumption-of-validity http://www.techdirt.com/comment_rss.php?sid=20110912/15173615914 Thu, 9 Jun 2011 10:19:00 PDT Score One For The Trolls: Supreme Court Says Congress Intended It To Be Very Difficult To Invalidate Patents Mike Masnick http://www.techdirt.com/articles/20110609/08150714635/score-one-trolls-supreme-court-says-congress-intended-it-to-be-very-difficult-to-invalidate-patents.shtml http://www.techdirt.com/articles/20110609/08150714635/score-one-trolls-supreme-court-says-congress-intended-it-to-be-very-difficult-to-invalidate-patents.shtml case over what the standard for invalidating a patent should be (either the super high bar of "clear and convincing evidence" or the slightly lower bar of "the preponderance of the evidence,") the Supreme Court has now decided that the higher bar is what Congress intended (pdf). This means that it's that much more difficult to invalidate bad patents. The Court's ruling is basically that the common law presumption of validity mostly (but not entirely) used this standard, and when Congress passed the 1952 Patent Act (really written by patent lawyers), it simply meant to codify what the common law had said on that issue. It was an 8-0 ruling (with Chief Justice Roberts not taking part due to Microsoft investments, I believe), though Justice Thomas had some reservations about the thinking, but not the final judgment. The opinion was written by Justice Sotomayor, who got a bit snarky at points:
"Squint as we may, we fail to see the qualifications that Microsoft purports to identify in our cases."
I recognize the general reasoning of the Court in the case. Basically, it looks like, historically, a higher standard was frequently used, and since Congress didn't specify a different standard, it seems to suggest they were fine with the standard. But I think to some extent that ignores reality. First of all, the 1952 Act was written by patent lawyers and it's not clear Congress even understood all of it, so it seems a bit rich to suggest that it purposely was trying to codify that standard. On top of that, the use of the patent system has changed dramatically over the past few decades, and the entire presumption of validity is increasingly in question given the massive number of ridiculously bad patents approved by the Patent Office. As it currently stands, USPTO examiners rush through applications, spending an average of about 18 hours on each application. To grant patents with so little review and then presume they're valid with a ridiculously high barrier to challenging that presumption seems economically stupid.

In what world does it make sense to grant innovation-limiting monopolies for nearly two decades based on 18 hours of review?

But, in the end, this is really Congress' problem to fix -- which means they won't. Congress could fix this quite easily by clarifying a lower standard to invalidate patents. This makes tremendous sense. The only patents it would impact are bad patents. And no one -- even patent supporters -- should want bad patents. But you know who does like bad patents? Those who have them and those who profit from them -- and those people are really loud in their support of not messing with the system that gives them so much in monopoly rents. So it seems highly unlikely that Congress will even bother to look at making this simple change to the patent system.

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]]> canada-celebrates http://www.techdirt.com/comment_rss.php?sid=20110609/08150714635 Mon, 18 Apr 2011 15:54:12 PDT A Succinct Description For Why Assuming Patent Validity Is A Problem Mike Masnick http://www.techdirt.com/articles/20110418/01432813935/succinct-description-why-assuming-patent-validity-is-problem.shtml http://www.techdirt.com/articles/20110418/01432813935/succinct-description-why-assuming-patent-validity-is-problem.shtml 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).

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]]> no-adversarial-process http://www.techdirt.com/comment_rss.php?sid=20110418/01432813935 Tue, 4 Jan 2011 09:34:04 PST How To Make The Patent System Even Worse: Make Patent Validity Incontestable Mike Masnick http://www.techdirt.com/articles/20110101/22320612481/how-to-make-patent-system-even-worse-make-patent-validity-incontestable.shtml http://www.techdirt.com/articles/20110101/22320612481/how-to-make-patent-system-even-worse-make-patent-validity-incontestable.shtml stats, you discover that 92% of re-exam requests are granted, and 3 out of every 4 such re-exams result in adjustments or total rejections. In other words, on the patents that are being asserted regularly (which are the ones where re-exams are requested), the majority of the time, the Patent Office admits it got the original patent wrong.

That would certainly suggest that it's not wise to consider a granted patent "valid."

In fact, that's much of what the current Microsoft v. i4i case -- which is on the Supreme Court docket -- is about. That lawsuit is to determine whether or not the standard used to judge patent validity is too high.

So it seems almost laughable, then, to hear a suggestion that things should move in the other direction. However, some of the patent systems loudest defenders are now proposing that patents should become incontestable after a period of five years, meaning that no one would be able to contest the validity of those patents, even if the evidence suggests the patent was granted in error. It's hard to fathom how this possibly makes sense. The only explanation given is that it would make patents more valuable -- as if they weren't valuable enough already. But, of course, that's laughable. It's based on either confusion about economics or the patent system itself. The point of the patent system is to "promote the progress." Focusing on making patents more valuable suggests these people believe the point of the patent system is to get more patents. But the two things are not the same. Making patents incontestable, especially in cases when a patent is not valid does not promote the progress. It does the opposite.

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