Peer To Patent System May Become Model For Patent Offices 01/12/2008 by Liza Porteus Viana, Intellectual Property Watch Leave a Comment Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)By Liza Porteus Viana for Intellectual Property Watch A pilot patent peer review system in the United States could serve as a model for patent offices around the globe. New York Law School, in cooperation with the US Patent and Trademark Office, is in its second year of Peer To Patent, an innovative initiative that opens the patent examination process to public participation. The online system allows the public to supply prior art to assess the claims of pending patent applications. The goal is to provide patent examiners with as much information as possible, and ultimately increase the quality of approved patents. The first year of the Peer To Patent pilot focussed on technology and software patents; the second, which began in July, will increase focus on business-method patents. The best prior art for business methods usually is not found in patent literature, but rather in databases USPTO patent examiners may not know about or have access to. Many businesses also like to keep their methods and techniques under tight wraps. “Business method patents are somewhat unique in the inventions that are set forth,” such as accounting, insurance and tax reporting methods, US Patent Commissioner John Doll told Intellectual Property Watch. “This gives the public who understands this part of commerce the opportunity to submit that part of prior art.” So far, 88 applications have gone through the system. Out of the 46 applications that have made it to the USPTO for initial review, examiners cited seven pieces of prior art submitted via Peer to Patent. Eight other applications used prior art found by both the examiner and peer reviewers. Investment firm Goldman Sachs submitted for review a business-method patent application for an electronic system that creates a network of buyers and sellers of commodities that allows users to operate within all the federal banking guidelines. Innovators are encouraged to submit up to 25 patent applications in year two – up from 15 the previous year. The system is beneficial to innovators, since higher quality applications and resources available to examiners, means stronger patents issued. The poorer the quality of the patent, the greater the likelihood it will end up in court. The litigation process is costly, as the out-of-court settlements often are, as well. “There’s a rather significant concern of folks that there are a lot of patents issued that really don’t deserve to be patents,” said Manny Schecter, associate general counsel of intellectual property law at IBM, one of the main sponsors. “Commercial entities are spending billions of dollars a year to defend themselves from infringement from patents that are asserted against them and the patents turn out to be invalid, so there’s sort of this drain on the economy.” The biggest challenge, explained Project Manager Chris Wong, is to increase participation; this year, they will reach out to licensing executives and others who have an interest in business-method patenting. “Year one, we really focused on whether peer to patent was really valuable. We’ve shown that it’s valuable,” Wong said. “We’re not making the hard sell on Peer to Patent anymore, as much as saying ‘you should still participate’ and ‘how do we get more people involved in this?'” International Interest Other countries have taken the cue from the United States. The Japan Patent Office (JPO) over the summer launched its own version of a review system, called Community Patent Review. The CPR – administered by Japan’s Institute of Intellectual Property (IIP) – has reviewed 39 patent applications; none have seen any office action yet. The review of patent applications is scheduled to finish next month, according to IIP researcher Takashi Ishihara. After that, researchers will analyse the results and report on its success. Before launching CPR, Japan consulted with New York Law School (NYLS) on how Peer to Patent operates, outreach activity, and ways to evaluate the trial. “There are no big obstacles so far in the trial,” Ishihara said. “If anything, we hope that more active reviewers participate in the CPR.” NYLS is also in discussions with the United Kingdom Intellectual Property Office (UKIPO) to conduct a similar pilot. The final signoff on the arrangement is expected any day. The European Patent Office knows about Peer to Patent, but so far, hasn’t signaled a great interest in starting its own. Mark Webbink, executive director of the NYLS Center for Patent Innovations, said there are “early-stage discussions” going on with some other patent offices on a peer review system. But those talks are very premature and are mainly focused, at this point, on educating other offices about what it does. “There are clearly other national patent offices who are interested in pursuing the same sort of approach,” Webbink said. “It has always been part of the premise of the programme – that we should be reaching out beyond the US patent office to other international patent offices, because they all are challenged by similar issues around some of the new technologies – being able to find all of the prior art.” While few are criticising Peer to Patent for its aspirations – anything that can help improve the patent examination process is welcomed – there are some who are sceptical of just how much help it will be. Michael J. Meurer, law professor at Boston University School of Law, supports the experiment and hopes it improves the process, but is concerned that the less-than-glamorous work required by the application reviewers will result in a dropoff in interest. “Many people” share this concern, he said. He also said the system “is not responsive to the most serious problem that the patent system faces” – that is, people are unsure exactly what property rights are being claimed, and many patents are interpreted too broadly. An examiner may read an application narrowly, look at the prior art and decide it’s not relevant, but a court might later read the claim broadly. He also thinks more penalties should be associated with shoddy applications. The patent system should work more like a property system, said Meurer, author of the book, “Do Patents Work? The empirical evidence that today’s patents fail as property and discourage innovation, and how they might be fixed.” “When I own a piece of land, you could check the deed, which is publicly available, you might drive by my property – because the law of real property is pretty stable and predictable, you’ll be able to figure out what property, what land I own,” he said. “Then if you want to make an investment that involves land, you could operate on neighbouring property, make investments that don’t interfere with my rights, or you could purchase rights from me.” Meurer added: “The patent system in many cases does both of those things poorly.” Intern Paul Volodarsky contributed to this story. Liza Porteus Viana may be reached at firstname.lastname@example.org. 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