Patent Judges Completely Out Of Touch With How Much Patents Hinder Technology Innovation

from the and-that's-sad dept

Last year, we were quite disappointed (but not surprised) to see former CAFC Judge Paul Michel argue publicly that we need many more patents to encourage innovation. He went so far as to suggest a tax credit for getting patents. He also argued that more patents would mean more technology jobs -- ignoring pretty much all of the research out there. CAFC, of course, is the appeals court that handles most patent appeals cases, and since its establishment has been a major part of the problem. You can trace the massive expansion of bogus patents to CAFC's views on patenting, expanding what was thought to be patentable, and generally doing tremendous harm to the important limits on such government granted monopolies.

Tim Lee recently got to talk to Michel following a talk he gave, and what becomes clear is that Michel is completely out of touch with how much of a problem patents are in the tech world today. Lee knows this subject better than probably anyone else, and when he tried to dig in on key points, it was obvious that Michel's knowledge of what actually is happening in the industry is based on myths and imagination, rather than reality. For example, when Michel pointed out that he's "a facts and figures guy" rather than one who focuses on "anecdotes and assumptions," Lee quickly points to James Bessen and Michael Meurer's comprehensive book on why patents hurt the tech industry. Michel does not appear to have actually read the book:
Some scholars have collected facts and figures. For example, a 2008 book by James Bessen and Michael Meurer attempted to compute the costs and benefits of the patent system to various industries. They found that benefits significantly exceeded costs for the pharmaceutical industry, but the costs of litigation exceeded the benefits of holding patents in many other industries. Their work suggests that the patent system has become a net disincentive to innovation in those industries. The problem was particularly severe in software.

Strangely, Michel singled out Bessen and Meurer's book as an example of a text that relied too much on anecdotes and not enough on data, declaring it "very disappointing." We pressed him on this. Michel conceded the problem was less that it was too anecdotal and more that he disagreed with the book's premise—that high litigation costs were a sign the patent system wasn't working.
Indeed, anyone who claims that the Bessen and Meurer book is about anecdotes either hasn't read it or is lying. It goes through so much data and so much evidence that, at times, it's a daunting read. But what Lee's discussion with Michel shows is that, while he insists he's not about "anecdotes and assumptions," that appears to be what he's entirely about. This comes to light quite clearly when Michel finally suggests that if software patents are so bad for innovation, that software companies can just "opt out":

Judge Michel seemed unaware of the depth of the software industry's dissatisfaction with the patent system. He suggested the patent system's critics were relatively marginal figures not representative of the views of the broader technology industry. And he didn't seem to understand the dynamics of the patent arms race currently affecting the software industry.

"If software is less dependent on patents, fine then. Let software use patents less as they choose," Michel said. "If other industries are terribly dependent on patents, then let's not wreck the system just because software people are unhappy."

I don't know if Michel has ever spent any time around the startup community, but the vast majority of entrepreneurs I talk to would absolutely love to "use patents less." But they can't. Because there are all sorts of patent lawyers and trolls who get patents on all sorts of crap and then sue these companies. You can't just opt out. How the hell do you opt out of getting sued by a bogus patent troll?

Lee notes that current CAFC chief judge Randall Rader was at the same event and complained about how unfortunate it was that "the patent system [is] coming under attack." We've written about Judge Rader before, and he seems equally out of touch -- simply refusing to believe that there are significant problems with the patent system. As Lee notes, these judges don't actually have the slightest clue what actually happens in the world of technology and innovation. Instead, their worldview is filtered through the very distorting lens of patent attorneys who profit off of the system:
Rader and Michel's perspectives are likely skewed by the fact they spent their time on the bench surrounded by patent lawyers (who by definition work with firms that have the resources to hire patent attorneys). For the typical software-producing firm, patent lawyers are simply too expensive. Most firms never get patents, and they typically settle patent claims rather than taking them to court. As a result, Judges Michel and Rader rarely hear from smaller firms for whom the patent system is nothing but a burden.
It would be nice if there were some way to teach judges about what's actually happening out in the world, rather than the very, very distorted view they get on the bench.

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  1. icon
    TtfnJohn (profile), 17 May 2012 @ 5:25pm

    Re: Out of touch? But that's not their job

    Judges are perfectly entitled to issue rulings in line with statue, precedent and the Common Law, the latter almost totally dealing with precedent in civil law. Even if that ruling appears to be a novelty to people not educated in civil and common law.

    In this case that's what this judge did which appears to be in line with the three above as no court has overturned the ruling extending patents to software. As flawed and troublesome as that is.

    Appellate courts and the legislative branch of the US Federal Government have had plenty of time to rewrite statue law to nullify the rulings that created patents on software and so called business methods but they haven't.

    As bad or worse, the same court he was a member of ruled that applicants didn't have to come up with a working model or, at least, details of what the working model would be. (Which doesn't always mean code in glorious MS Basic, but that would have been a distinct improvement over the situation as it now exists.)

    In essence they made it possible with that to patent vapour-ware. And a ton of it has been patented.

    Now, if the bobs of the world would explain to me how patenting vapour-ware helps innovation as it blocks people from doing that the vapour-ware claims to do when not a single line of code has been written and the patent is held by a non-practicing entity who have no intention to bring the "invention" to market it is often used for suing others who do have an on the market product which they allege violates the vapour.

    And, if the bob's of the world would tell me about the huge R&D costs of vapour-ware. Then compare that to the costs incurred by the practicing entity who, they claim, unknowingly violated their patent on their world changing vapour-ware. One innovated while the other sat on a nice set of legalese that described what didn't exist and would have never existed. Put another way, vapour-ware is a legal fiction that now has the power of law behind it as if it were real.

    For all of this mess, and the 30 years or so the courts and the US Federal legislature have had to clean this up none of them have. The judges involved, though, were, like it or not well within their rights to rule as they did.

    It's very hard to have a legislature overrule a court decision when those who stand to profit the most from the decision are also big donors and when the issue doesn't seem to engage many people.

    If Congress Critters had done what the court did, believe me, it would be far far worse than anything this too specialized court did in its rulings.

    Sadly, it's almost impossible to get a court ruling overturned at the best of times for utter and absolute stupidity which is how these look to everyone but bob now.

    Then again, we're getting familiar at the misfiring of bob's synapses and ability to read and understand things he doesn't like. He can't.

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