Obama helps fix the US Patent system

Patent, intellectual property

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We have two really important pieces of good news for the US patent system today. The first is that the US PTO is finally going to adopt the same principle as the rest of the world and allow (no encourage!) public comment on patent applications. The second is that they chose Joel Spolsky one of the most clueful people in the business to build the site.

The US Patent system has been badly broken since the Reagan administration decided to turn it into a profit center. It is broken for genuine inventors, it is broken for legitimate plaintiffs in patent disputes and it is completely broken for defendants.

The only group that is actually served by the current system is patent trolls. I work as an expert witness in patent disputes a typical case involves a patent application that was originally filled before 1990 that essentially claims ‘do something people have done for decades on the Web’. Such a patent would of course be highly novel given that the Web did not exist in any form until 1989 and was only announced to the public in 1992. Until the patent system was reformed during the Clinton administration, an application could be amended to add in extra claims after filing. So in the typical case the claims at issue have been added into a prior application on an unrelated invention after the ‘inventor’ read about the Web in a newspaper.

In theory the defense should be able to win a case like this pretty easily. In practice it costs at least $2 million to bring a defense to the point where these issues are considered. Damages in these disputes may be a hundred million dollars or more.

The backdating loophole has been closed but the fundamental problem remains, the US still issues far too many patents that are too broad or obviously not novel. Patent examiners do their best but the system simply does not give them enough time to do a proper job. I paid less than $1000 each in patent office fees to file two patents in 2010. At $100 an hour (cheap for a lawyer) the USPTO examiner has less than ten hours to read, understand and write a report on the application and to handle all the subsequent correspondence. I typically spend 20-30 hours on a similar exercise.

The system is set up to fail, the question is how it will fail. Examiners can process applications quickly by accepting almost anything that is not a perpetual motion machine or they can take longer than the time allowed and let a backlog build up. During the dotcom bubble the USPTO took the first approach. More recently it has switched to the second. Both of my applications have been waiting on a first office action for over two years. That is two years in which I have been unable to market the idea or collect any royalties. One of my issued patents took five years.

One of the main reasons for that backlog is that companies are still applying for patents on every idea no matter how ridiculous or stupid it might appear. There is a beggar-thy-neighbor aspect to this. If my company does not apply for a patent a competitor will.

Not only is the US patent system set up for failure, it operates in a unique way. In every other country the patent process involves a period of public review. This takes the responsibility for vetting applications away from a lawyer who is often not an expert in the field in question to the public reviewers. When I worked for a chemical manufacturer in the UK, there was a patent bulletin circulated each week alerting the research staff to the patent applications made by competitors.

The USPTO has been fighting a losing battle against prior publication for the past twenty years. First they resisted publishing applications before patents were issued, then they agreed to publish applications but stated that they would ignore any communication from the public that purported to show prior art. The new site will put the USPTO ahead of other patent offices in this respect. There remain a few oddities that make the US Patent system broken in unique ways but these are minor in comparison.

This change may reduce my income as an expert witness but opens up a new opportunity providing clients with documented prior art to challenge spurious applications. It is unlikely to be as profitable but I would rather help create new mess than clean up an unnecessary one.

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