Although "home remedies" to address the patent system’s ailments abound from all interested quarters, we appear to have lost sight of the simple notion that you cannot hope to fix a problem until you can quantify the problem you want to fix. If we are serious about curing this disease then one of the first steps needs to be the creation of a metric to diagnose the ailment and monitor the impact of our course of treatment.
Why is the need for such a measuring stick so hard to recognize when it comes to fixing the patent system? Perhaps it is because the symptoms of poor patent quality are not as readily apparent as they are in other pursuits. It's evident that a poor-quality motor will cause your car to malfunction, a poor piece of financial advice will lead to a lighter wallet and low-quality health care can lead to immediate and devastating consequences. Yet the improper issuance of a dubious patent seems more remote. There are few who would dispute that a problem exists, but it is one that appears to lack immediate, personal consequences.
It is foolish to assume we are not affected by poor-quality patents. Left untreated, the economic prognosis for poor patent quality includes needless litigation, increased costs for producers and consumers, and barriers to new innovations. According to one report, poor patent quality costs more than $21 billion per year in the U.S., or more than 7 percent of U.S. R&D expenditures. If we consult the financial caretakers trying to cure the economy of its critical illness brought on by the sub-prime mortgage fiasco, they would undoubtedly warn us that in a global economy we are more intimately connected to all economic decisions, and even those decisions that may initially appear remote—like improvidently granted patents or mortgages—eventually take their toll on us all in very real ways.
I do not mean to suggest that the issue of patent quality has been ignored. In fact, the issue receives much attention, and many worthwhile projects and academic studies have focused on the need to improve patent quality. One such endeavor is the Peer to Patent project, led by Professor Beth Noveck of New York Law School in cooperation with the USPTO and sponsored by many companies, including my employer. The project enables members of the public with relevant technical expertise to assist patent examiners in reviewing patent applications to ensure that the best prior art is considered as part of the examination. Moreover, there are a great number of companies that offer products and services to assist in the valuation and better management of patent portfolios. For instance, Ocean Tomo, a company that manages patent auctions, utilizes sophisticated proprietary valuation algorithms to provide bidders with an indication of the likely value of a patent. These types of tools and algorithms, however, generally focus on the economic value of a patent as opposed to its intrinsic legal quality.
The legal quality of a patent—that is, how well it complies with the statutory requirements for patentability—does not necessarily translate to its economic value. It is possible to craft a patent of exceedingly high legal quality for an invention with little practical use. For example, a well-prepared and thoroughly examined patent on an improved 8-track cassette player would be a patent having high legal quality but low economic value. Unfortunately, owing to the uncertainty of patent litigation and the current inability to reliably assess the legal quality of patents, there have also been patents of dubious legal quality that have nonetheless provided significant economic returns to their owners.
Into this breach comes the Patent Quality Index (PQI) project—sponsored by my employer, IBM, and led by Professor Ron Mann of Columbia University Law School and Professor Toshiya Watanabe of the University of Tokyo. The project seeks to identify characteristics of specific elements of a patent, along with related documents, that can be correlated with high or low quality as measured by whether or not the patents have been found valid or invalid in litigation. In so doing, the project aims to create a usable metric for determining the objective legal quality of each patent and en masse with respect to the patent system.
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Add CommentMy name appears on a number of patents issued to the electronics company I worked for, and I reviewed many patents submitted by other engineers. The company paid a bonus for a reasonable disclosure submission. My opinion is that too much engineering time was spent on "novel way to lay bricks" patents at the expense of developing useful products in a timely manner.
Reply | Report Abuse | Link to thisI am an independent inventor.
Reply | Report Abuse | Link to thisI have yet to see any patent reform effort that considers the problems independent inventors have with the patent system or with the large companies. Yet, few honest people would deny that independent inventors continue to be a vital force driving innovation.
We hear a great deal of complaining about how the independents abuse large companies. Some do. But the reverse is also true.
A case in point:
After failing to get venture capital, I tried to sell my first patent. I demonstrated technology using that patent (a computer application) to 19 different companies. No one was interested in buying it. I demonstrated it to one company four different times. In less than two years after my demos, two very large companies---both of which are household names---put my technology in their products. I did not receive a dime. When I complained, one company was nice, but claimed no infringment. The other replied with a vicious threat. A litigator told me it would cost $300,000 just to launch a court case and probably a couple of million more to pursue it. (This was more than ten years ago.) I did not have the money. But while trying to weigh my options, a company that had never seen a demo bought the patent. It has been worth a couple of hundred million dollars to them. I got a few hundred thousand, and was very glad to get it. I have since been granted other patents, most of which I have also sold.
I doubt that my story is unique.
One lesson here is that big money usually wins. Is anyone surprised?
What is needed for independent inventors is a system wherein they could file a document permitting anyone to use their invention simply by paying a modest royalty. It would also be agreed that damages against infringers would be limited IF they had paid for a legal search of existing patents and applications prior to releasing their product.
So far as more efficient and improved examination is concerned, I also have some suggestions, which are probably not new:
First, stop Congress from grabbing the USPTO's revenue, and use that money to staff up the Office, and to give real pay raises.
Second, the USPTO has a list of inventors and their addresses. Pay any who will comment on applications filed in their fields.
Third, be quite sure that new Examiners whose first language is not English (and there are many) have truly excellent English skills.
Yes, the USPTO is not what it should be. Unfortunately, they are head and shoulders above the Patent offices in China and India. I have dealt with each.
What happens when someone buys the patent but sits on it to stall it?
Reply | Report Abuse | Link to thisWhat happens when someone buys a patent from you but sits on it to stall it?
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