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The Politicization Of The US Patent System

The Washington Post story, How patent reform’s fraught politics have left USPTO still without a boss (July 30), is a vivid account of how patent reform has divided the US economy, preempting a possible replacement for David Kappos who stepped down 18 months ago. The division is even bigger than portrayed. Universities have lined up en masse to oppose reform, while main street businesses that merely use technology argue for reform. Reminiscent of the partisan divide that has paralyzed US politics, this struggle crosses party lines and extends well beyond the usual inter-industry debates. Framed in terms of combating patent trolls through technical legal fixes, there lurks a broader economic concern – to what extent ordinary retailers, bank, restaurants, local banks, motels, realtors, and travel agents should bear the burden of defending against patents as a cost of doing business.


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    With US Patent Overhaul Dead, Agencies Ponder Changes As Industry Debates Role Of ‘Trolls’

    Published on 8 December 2008 @ 9:11 am

    Intellectual Property Watch

    By Drew Clark for Intellectual Property Watch
    WASHINGTON, DC – With major legislative changes to the United States patent system unfinished as the 110th Congress prepares to dissolve, Executive- and Judicial-branch agencies on Friday jostled for authority over future patent policy.

    Speaking at a Federal Trade Commission (FTC) hearing on “The Evolving Intellectual Property Marketplace,” FTC Chairman William Kovacic set the stage for what he said would be the “first in a series of events” to revisit the agency’s work five years ago on the impact patents have on competition policy.

    Kovacic said that “coming up with good solutions to IP policy requires a genuinely multidisciplinary” approach, and that the FTC is well-suited to the task because of its ability to educate, convene and take appropriate enforcement actions.

    Later in the day, the chief judge of the Federal Circuit Court of Appeals, which has jurisdiction over all patent appeals, said that neither Congress nor the executive branch should be actively involved in overhauling intellectual property.

    Rather, said Chief Judge Paul R Michel, “We will probably make more progress in the courts through case law” than by asking the US Patent and Trademark Office (USPTO) or Congress to wade deep into intellectual property conflicts.

    “Everyone should make their own choice about who is the right actor to make fine balancing decisions,” continued Michel, adding that “this is what courts do all the time, probably way better than Congress.”

    The 2003 FTC report [pdf], To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, A Report by the Federal Trade Commission, highlighted significant differences in the way in which the information technology and biotechnology industries utilise patents.

    The 2003 report was produced as a result of a series of workshops held by the FTC and the Department of Justice Antitrust Division with the cooperation of the USPTO.

    Because of the breakthrough nature of pharmaceutical inventions, patents play a more obviously positive role in that field than they do in information technology. Because the information technology industry is more driven by incremental invention, the report found, it worried more about the role that “patent thickets” and “patent trolls” – individuals who use the element of surprise to extract payments for the use of a patent – can use litigation to forestall marketplace innovation.

    The report presaged the current divisions between the industries over the now-dead legislation that would have overhauled the patent system. The push toward patent legislation has been driven by many high-tech companies, including Cisco, which manufactures internet routers.

    The pharmaceutical industry has been determinedly opposed to patents changes, as have other technology players like Qualcomm and Intellectual Ventures, which seek a licensing model rather than a manufacturing model for exploiting the value of patents.

    Cisco Vice President Mallun Yen said that the number of patent lawsuits against the company has quadrupled over the past five years. “The patent system overvalues patents, particularly weak ones, and thereby suppresses innovation,” she said.

    Yen disagreed with Peter N Detkin, founder and vice chairman of Intellectual Ventures, who attempted to recast the patent debate as one between big players, like Cisco and IBM, against individual inventors.

    Detkin said these small inventors do not want to commercial their inventions. Instead, they want to reap the appropriate reward and go back to inventing.

    As an example, Detkin cited an inventor who figured out a way to accelerate router speeds by 10 percent. That inventor didn’t want to compete against Cisco in the marketplace, but wanted to licence its technology to Cisco, he said.

    Yen countered that Cisco routinely buys start-ups solely for their intellectual property. These small companies are generally founded by inventors as a means of commercialising their invention.

    The more disconcerting practice, she said, is when inventors – or patent attorneys who purchase them because of their potential litigation value – seek to extract more value from Cisco than would be represented by their invention.

    Others on the panel agreed with Yen. Commercially developing a patent takes 20 times the resources that it does to invent, said Daniel P McCurdy, chairman of PatentFreedom, a new company seeking to provide better patent data to inventors and intellectual property lawyers.

    “It is not in the public interest to have” powerful intellectual property tools such as the ability to enjoin a competitor from introducing a product because of marginal inventions, said McCurdy. “If all you have is an idea, you have no knowledge to teach” other inventors and practitioners.

    All panellists agreed, however, that the global patent marketplace had changed considerably since 2002-2003, in particular by the trend that Intellectual Ventures had pioneered by seeking to make the marketplace for patents more liquid. The panellists also agreed that more data about private licensing of intellectual property is necessary to help make the marketplace friction-free.

    Following the hearing, the Coalition for 21st Century Patent Reform issued a statement saying that a series of recent landmark Supreme Court and Federal Circuit patent decisions are still being digested by the intellectual property community. “It is clear that there is a need to gain a better understand of the new patent landscape before proposing changes” to current law, coalition Chairman Gary Griswold said in a statement. He said that the FTC hearing demonstrated the “significant changes in the patent system” since its 2003 report. The coalition opposes significant changes to patent law.

    Drew Clark is the editor of BroadbandCensus.com, a free service offering information about local broadband speeds, prices, availability, reliability and competition. A Washington-based telecom, media and technology journalist, Clark may be reached at drew@drewclark.com.

     

    Comments

    1. dinnerbell says:

      please see http://www.piausa.org/ for a different/opposing view on patent reform


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    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website. By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website.

    By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    1. You agree that you are fully responsible for the content that you post. You will not knowingly post content that violates the copyright, trademark, patent or other intellectual property right of any third party or which you know is under a confidentiality obligation preventing its publication and that you will request removal of the same should you discover that you have violated this provision. Likewise, you may not post content that is libelous, defamatory, obscene, abusive, that violates a third party's right to privacy, that otherwise violates any applicable local, state, national or international law, that amounts to spamming or that is otherwise inappropriate. You may not post content that degrades others on the basis of gender, race, class, ethnicity, national origin, religion, sexual preference, disability or other classification. Epithets and other language intended to intimidate or to incite violence are also prohibited. Furthermore, you may not impersonate others.

    2. You understand and agree that Intellectual Property Watch is not responsible for any content posted by you or third parties. You further understand that IP Watch does not monitor the content posted. Nevertheless, IP Watch may monitor the any user-generated content as it chooses and reserves the right to remove, edit or otherwise alter content that it deems inappropriate for any reason whatever without consent nor notice. We further reserve the right, in our sole discretion, to remove a user's privilege to post content on our site. IP Watch is not in any manner endorsing the content of the discussion forums and cannot and will not vouch for its reliability or otherwise accept liability for it.

    3. By submitting any contribution to IP Watch, you warrant that your contribution is your own original work and that you have the right to make it available to IP Watch for all purposes and you agree to indemnify IP Watch, its directors, employees and agents against all damages, legal fees and others expenses that may be incurred by IP Watch as a result of your breach of warranty or of these terms.

    4. You further agree not to publish any personal information about yourself or anyone else (for example telephone number or home address). If you add a comment to a blog, be aware that your email address will be apparent.

    5. IP Watch will not be liable for any loss including but not limited to the following (whether such losses are foreseen, known or otherwise): loss of data, loss of revenue or anticipated profit, loss of business, loss of opportunity, loss of goodwill or injury to reputation, losses suffered by third parties, any indirect, consequential or exemplary damages.

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    7. You acknowledge and agree that you use and/or rely on any information obtained through the discussion forums at your own risk.

    8. For any content that you post, you hereby grant to IP Watch the royalty-free, irrevocable, perpetual, exclusive and fully sub-licensable license to use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute, perform and display such content in whole or in part, world-wide and to incorporate it in other works, in any form, media or technology now known or later developed.

    9. These terms and your posts and contributions shall be governed and interpreted in accordance with the laws of Switzerland (without giving effect to conflict of laws principles thereof) and any dispute exclusively settled by the Courts of the Canton of Geneva.

     

     
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