TCS Daily

The Trolls and the Goats

By Michael Rosen - May 12, 2006 12:00 AM

"Who's that tripping over my bridge?"

Thus spake the troll in the famous children's tale "The Three Billy Goats Gruff." Miffed that the goats were encroaching on his property, the troll threatened to gobble them up. But the trolls' adversaries had the last laugh. In the original (unsanitized) version of the tale, the largest of the three goats "flew at the troll, and poked his eyes out with his horns, and crushed him to bits, body and bones." (Try reading that to your three-year-old.)

Nowadays, many large companies, academics, and economists fear the presence of a new kind of "patent troll." The contemporary counterpart to the fairy-tale beast is generally described as an individual or entity owning a patent to a certain technology but not "practicing" it, i.e. not manufacturing products related to the technology.

The would-be goats disdain what they describe as the troll's restatement of his gripe: "Who's that infringing my patent?" For his part, the troll simply wants to defend his own property against trespassers and isn't afraid to do so by suing the goats for hundreds of millions of dollars. But, frustrated by the troll's costly and intimidating demeanor, the goats have been plotting a vengeful dismemberment. For months the skirmish has been splashed across the pages of business, scientific, and legal publications ranging from the Wall Street Journal to American Airlines' in-flight magazine.

But before engaging the gory details, it's first necessary to explain the controversy and how it fits into the current discussion of patent reform.

In the first installment of this series, I described the crucial need to fully fund the Patent and Trademark Office in order to ensure that patent applications are reviewed with sufficient scrutiny, thereby enhancing the quality of patents allowed to issue. This is a relatively uncontroversial suggestion but, as we shall see, it underpins far more tendentious debates.

One such debate concerns the fundamental role and obligations of a patent-holder -- and the nature of the rights bestowed upon her when her patent issues. Since the ratification of the Constitution -- which authorizes Congress "to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries" -- the patent laws have consistently required nothing of an inventor seeking a patent other than the full and complete disclosure of her invention.

In exchange for such disclosure, the inventor is entitled for a "limited time" -- currently 20 years from the date the application was filed -- to exclude others from practicing the patent. However, at no time in U.S. history have patentees been obliged to practice the patent. It is more or less a purely negative right.

The laws of intellectual property are sometimes too often analogized to those concerning real property. But in this instance, the analogy is apt: just as a landowner may prevent others from trespassing on the acreage to which he holds title, but need not do anything productive with his land, so too does a patent empower its owner to exclude use of her invention while not requiring her to make use of it.

The current controversy over trolls springs from this fundamental feature of our patent system. A single inventor not practicing her patent at all may nevertheless assert it against a major multinational corporation whose products she accuses of infringement. This is more or less what happened in the now-infamous BlackBerry case where NTP, a patent-holding company with no products or services to its name, won a $612 million settlement from RIM, the popular handheld's manufacturer.

The wrangling over the damages caused by the infringement is where the rubber meets the road: a damages dispute in a typical patent cases usually involves a hotly contested "battle of the experts" where each party's hired-gun consultant bestows upon the jury hundred-page reports and testimony concerning fifteen factors relevant to damages (a good summary is here). Several of these factors concern the patentee's use of the invention; simply put, the more significant the inventor's exercise of her patent, the greater the damages will be.

Yet besides jury-awarded damages, judges also consider whether to enter an injunction preventing the infringer from selling or manufacturing the accused product or service. And "consider" may be too strong of a word: under current precedent, the award of an injunction is nearly automatic. With some notable exceptions, courts almost always enter injunctions once infringement is found, regardless of whether the patentee practices her invention.

When it comes to patents, injunctions are no small matter. In fact, in many if not most instances they are more significant than damages since they often involve shutting down the defendant's core business. For example, the BlackBerry jury awarded NTP $23.1 million but because the judge entered an injunction, the parties ultimately settled for 25 times that amount.

It is precisely the nature of these injunctions that has the "goats" ready to disembowel the "trolls." Why, many large companies argue, should an individual or a small company not even using its invention be entitled to an injunction that permits them to hold a major company hostage for a princely ransom? Worse, the patent sometimes covers a tiny, insignificant piece of the accused product but the injunction covers the entire product. Why then, the goats wonder, should our system protect parties who contribute nothing to the economy but instead lie in wait for others to strike it big?

To redress this injustice, the anti-troll forces have proposed a judicial and legislative rejiggering of the patent system that would prevent "unworthy" entities from reaping the benefits of an injunction. This group includes the unlikely bedfellows of Yahoo!, IBM, Intel, Microsoft, Oracle, RIM, Lawrence Lessig's Electronic Frontier Foundation, and dozens of law professors including TCS's own Glenn Reynolds. Troll backers include the pharmaceutical and biotech industries, several law and economics professors, and giants like GE, Procter & Gamble, 3M, Du Pont, and Johnson and Johnson.

The goats' first proposal is quite simply to insert a greater amount of discretion into the judge's determination of whether an injunction is appropriate. Such judicial freedom would presumably diminish the number of injunctions entered.

While on the surface, this seems appealing, in reality it would yield far more uncertainty than currently exists; analyzing the appropriateness of an injunction on a case-by-case basis with only vague guidance will undermine the predictability that undergirds the patent system. And if anything, if ever there were a time to presumptively grant injunctive relief, it's precisely when a jury has already found a patent to be valid and infringed.

Instead, the categories of exceptions that generally short-circuit an injunction -- to protect public health, to promote national security, and in cases of "laches" (i.e. where the patentee waited too long before bringing suit) -- offer a superior (although not perfect) balance between discretion and certainty.

The second major caprine suggestion is to make injunctive relief unavailable to any entity not practicing its patent. This reform, say the goats, would rectify the currently inequitable, imbalanced situation in which the troll can mug a large, commercially successful company.

But it raises more concerns than it answers. What does it mean to "practice a patent"? Does a company have to actually manufacture the product itself? What if it licenses the patent to a manufacturer? And if that's alright, what if the factory is located overseas? If the goats mean to exclude corporations that develop technology but farm out production to others through licensing schemes, this could spell trouble for major companies like Qualcomm (which asserts that "the value of property should not depend on legal rules that are different for different owners.").

And what about large companies that do make products but that hold -- and assert -- patents in areas in which they do not (yet) produce anything? Even major corporations have been known to threaten others with patents unrelated to their core competencies.

Moreover, what about inventors or entities that try unsuccessfully to market or license their patents? Should their failures be held against them? And if not, what constitutes a sufficient attempt to practice a patent? A single unanswered phone call to a big company's customer service department? Unfortunately, the goats leave these questions unanswered.

In short, trolls may be mean and ugly but goats are stubborn and strong. Is it possible, then, to restore peace and balance to this real-world fairytale? I believe so. The next installment of this series will point toward some corrective options.

Michael M. Rosen, TCS Daily's IP columnist, practices intellectual property law in San Diego.



Waiting with bait breath
Have you ever had a favorite TV show or sports team and thought about how much it would suck if you died and didn't get to see the rest of the show's season or whether your team won the championship? This is exactly how I felt reading the last sentence of this article, except after two of these articles, I'm skeptical about whether Rosen's proposed reforms will be anything more significant than tweaking his billing rate or the font on his letterhead.

First, a factual correction. EFF is not Larry Lessig's. But that's really besides the point. EFF is pretty radical, against the notions of IP in general. It's like the Socialists being for biannual inspections of disgronificators on tractor trailers, entirely consistent with what they think, but insignificant.

What I really love about this article though is how Rosen takes the implementation details of an imaginable patent reform to address the trolling problem and turns those details into mountains that would derail the reform! Very reasonable people who play the IP game see patent trolling as a difficult problem to solve, and yet they still want to try to solve it! Meaning whatever the eventual pain of solving it seems fairer and less costly than the status quo.

For example, take the idea of having to demonstrate material progress toward marketing a product to keep a patent. Off the top of my non-lawyer head... if you have a patent, you might be required to file a report every two years which becomes part of the public record detailing who you've talked to about licensing, what investments you've made in production, number of people using products incorporating the invention, etc. Fail to report, lose the patent. Report no progress, perhaps the patent becomes challengeable either by application or lawsuit. It seems, for example, that back when the so-called "672" patent affecting the JPEG standard was pretty much licensed for free to that group, that a public recording at the patent office of the patent being incorporated into the standard and made available for all to use would have prevented the future unforeseen rent seeking by Forgent Networks against developers using the JPEG standard.

Patent reforms which differentiate among classes of inventions for granted monopoly periods and require inventors to actually make progress toward bringing inventions to market will be reasonable enough to gain traction. Deck chair rearrangement by the deck workers won't.

I would go further
Any agency not actively trying to commercialize a patent, loses the patent.

That is, unless the patent holder (or an agent of the holder) is actively trying to turn the patent into a saleable product, then the patent expires.

Prior Art
This is primarily an issue because in many industries the Patent Office is issuing patents for Prior Art even though they are specifically not supposed to be.

In IT, where I reside, they've issued a number of dubious patents. These have had exactly the effect the patent seekers wanted. They created a great deal of uncertainty around IT R&D investments in several key areas. Our fundamental problem, in IT, is that patents are being issued at all, not that companies are sitting on unused patents waiting sue. The Black Berry case is an example of this. That patent should never have been issued in the first place. An email system that interfaces to a hand held device... ho hum... never saw that coming... what a revolution in thought...

Here's an interesting option. This should be used on domain name trolls as well. Each patent should cost a non trivial amount of money to maintain each year. We could use the money thus collected to fund social insecurity.

Three Problems
I see three problems in current patent law. Prior art is one. An example of this is date windowing. In the 1990s, someone was granted a patent on this technique and forced several large companies to pay for a license. Date windowing has been in use since the 1950s, at least, but it was cheaper to pay for a license than to go to court.

A second problem is overly broad patents. A few years ago someone claimed that a patent he held covered all video streamed over the Internet even though his patent had nothing to do with TCP/IP.

A final problem is firms that buy patent portfolios in the hopes of finding one that can be used more broadly. Many of the famous patent cases are brought by a third party which aquired the patent, not by the original inventor. These are the real trolls and they usually paid pennies for the patents. Putting limits on them will not affect innovation since they have no relationship with the original inventor.

Goats Create Trolls and Complain When They Get Caught
More often than not, Goats are theives. Like 99% of incarcerated criminals, they just claim they didn't do it, claim it's not fair, then complain about the sentence. Let me wash their propaganda with a little reality.

I'm a patent attorney who represents many small businesses. These businesses, practically every single one, would LOVE to compete in the marketplace (the exception being where it is just too expensive for an independent inventor to make a product--for example, an independent inventor who invents a new type of transistor).

However, in almost every case where a small client attempts to get the attention of a large corporation, the reaction of large corporations is nearly uniform: "little company with little funding, don't you understand that WE are the dominant company in your market, and that WE have a vested interest in keeping your technology out (we will make just as much profit delivering our existing product as we would if we incorporated your innovation--maybe more profit if we had to pay a license fee).

If you so much as make a prototype of a product in our market, WE'll sue your little comapny with little funding for [insert frivilous action here--perhaps infringing BigCo patents]. Never mind if you LittleCo have done anything wrong, we know that the only fact that really matters is that you can't afford to fight our lawsuit.* Go away!

The result is as predictable as the rising of the sun: little company does not make the product and does not enter the market. Thus, if the technology is truly revolutionary and does make it to market, they have only one course of action to recover their investment for spending who knows how much time and mony researching and developing the innovation, and that's to file a lawsuit.

Now, I ask, who is the troll?

*Many business managers willingly/eagerly infringe patents, and view a lawsuit as the starting point in a licensing negotiation. Inevitably, the license fee after a jury verdict or injunction is a great many TIMES what the licensee originally asked for. Don't blame the little company for BigCos bad legal advice and for BigCos management that treats the law of invention with less respect than accounting law. Maybe the real solution would be a Sarbans'-Oxley for invention, that would put corporate officers held to willingly infringe patents in jail. The increase in certainty would get BigCos to negotiate in good faith to benefit from the research and development investment of others.

Efforts to Bring it to Market
There are at least four problems with the "annual reporting regarding market effort" proposal.

1. It could be deemed an admission of an actual infringement of an existing patent and get a little R&D company sued

2. Who determines HOW MUCH effort or progress is required? How is this measured for something that, presumably, hasn't been seen before?

3. Companies may have to disclose tradesecrets, and thus choose not to disclose their invention to society (the purpose behind the patent office).

4. It increases the costs to the inventor. The costs are already far too high, resulting in many great ideas never being disclosed to society--again, which is the precise reason we offer the patent rights to inventors in the first place. Increasing the costs and burdens on inventors would proctically end garrage inventing (which, brought us Apple, GE, ATT, etc).

Prior Art Problem Solved
The USPTO already has a mechanism for handling this:
File a Request for Reexamination (inter-partes Re-Rexam), and disclose the "old" prior art. If the "invention" isn't, then it'll be rejected and abandoned.

It's that easy.

Again, these are complaints made by companies that are mad they got caught refused to pay a license fee.

The Solution
1. Fund the USPTO.

2. Here's a novel idea: Hire experienced patent attorneys to examine patent applications, not inexperienced "engineering degrees" right our of college who in many cases do not even review patents in the same technology area related to their degree, and who sometimes don't even speak English.

Require each application to be reviewed by a team of examiners (2), who must agree on the points of novelty, and/or on the basis of rejection. Disagreements between them would be resolved by their supervisor.

Expensive, yes. But it would give the USPTO the frame it needs to support our high-tech economey, and remove the candy-cane fascad that hides a rusty, crumbling interior.

Re: Efforts to Bring it to Market
These are great questions Steve. I want to reiterate that I am very much in favor of the patent system. I actually have a patent pending for a software invention. I mosty certainly would not like to see software patents disallowed or other radical proposals come to fruition. I also recognize that the _practical_ value of a software patent for a small firm rests more as a marketing tool (stamp the patent number in your about box) and as a fundraising tool (investors will see more effort put forth in something that has been patented or patent pending). The problem we're trying to address here is the patent troll, who does nothing to commercialize and is usually sitting on what amounts to a "software" invention rather than a physical one. To your points:

1. Shipping a product incorporating the invention carries the same risk. Heck, doing anything carries a risk of infringement in the current environment.

2. Required effort is determined by statute or by regulation. Ideally, it would be tailored to the specific area the patent is in. Effort must be directed toward commercialization. Take an absurd patent like one-click. If Jeff Bezos just decided to file for it one day and not do anything to implement, instead waiting for someone else to and then opening license discussion with patent in hand after-the-fact, that would be what we're trying to prevent. For a software patent, the evidence of commercialization would be really simple: a download URL for a free/demo version or a purchase URL for the product.

3. This point makes more sense for drug patents than software patents. How do you possibly profit from a software patent and not end up disclosing it (however obfuscated)? For the patent pending I have, the invention is right up on the screen for all to see. Filing for the patent gives me prestige and some protection. Very different for drugs though.

4. This one I don't buy at all. Garage inventing would not end if there were no patents. The incentives and risks would change. But you can't convince me that the NTP patents were anything more than some lawyer setting a clever trap for someone who might come along later and infringe on the terribly obvious. We should be willing to tweak the system to stop that kind of nonsense without ending the system, but we also need to do more than assume that fully funding the patent office will take care of the problem. We need more varied recourses against bad patents, not just more of one recourse (examination).

That looks a lot like the cave troll from The Lord of the Rings: Fellowship of the Ring
Just kidding.

:) Go Yellow Jackets!

Patents and Landownership.
There is a difference between patents and landownership--landowners do not create land--they just buy it as part of a chain of custody that starts from someone who stole it; inventors create their invention. Through unconstrained "property rights" a landowner can wreck havoc on other landowners or make his land useless for future generations; an inventor unchecked only adds to what is available to future generations.

Good Suggestions

The Obvious Solution
1. Fund the PTO
2. Change the standard of obviousness.

Why the latter? Because too many patent applications are filed that have no invention. The only reason they are granted is that the PTO can find no reason to deny them. Without good prior art, the statute requires that the patent be granted. The result is many patents whose sole claim is to a combination that simply has not been seen before but which produces no new results.

When these "aggregation" patents are removed from the system, two things happen. First, there is more time to consider patents to real invention. Second, each granted patent is worth more because the standard is higher.

The difficulty with this proposal is how to implement the standard. The simple addition to the statute "Combinations that produce no new result beyond the functions of the combination elements shall be deemed obvious to one of skill in the art," would set the standard.

Over time with this standard, the quality would improve, the number of applications would drop and patents issuing would have true value.


Obvious Standard Needs Changing, but . . .
I'm not sure if you are a patent attorney, Anthony, but I see the problem with the obviousness standard differently (as one justice said "only God invents from nothing"). The same case states that "mere combinations"

obviousness based rejetions are not easily (or inexpensively) overcome. Examiners constantly use hingsight reasoning. I've had examiners use the same "old" applications against a client's two pending applications, and claim that against the first pending patent "widget A" from the old application teaches X, then claim that widget A from the old application teaches Y when rejecting the second application (X being inconsistent with Y). Examiners are not discouraged from taking these conflicting positions. I've seen examiners claim twelve (12!!) items in combination teach one element of one client's invention, and seen one examiner claim that a razor blade is a child's toy.

The result is that obviousness rejections are little more than a patent Examiner ink-blot test. Examiners do (rarely) let some bad applications through, but the far greater problem for my clients are the perfectly good applications that are rejected for irrelevant and superfulous reasons, and then must be abandoned because the average inventor does not have the resources to fight an Examiner on appeal. Society misses out on a great many products because of this.

One solution would be to refund inventors expenses, including attorney expenses, for appeals that result in overturning an Examiner's rejection. Another solution is to clearly define what is and isn't obvious (on most levels, I think the courts have done this), and to enforce these standards on Examiners at no cost to the inventor.

If patent attorneys know (or can predict with a reasonable degree of certainty) what the USPTO will accept, then we'd write allowable patent applications almost every time (and, counsel clients to not file for "X", when appropriate). Thus, the most serious problem with USPTO standards (particularly "obviousness") is that, well, they apparently aren't standard at all.

Standard is clear
No doubt more training of Examiners is needed. The obviousness standard is really not that difficult to apply. It is a standard based on evidence in the record rather than someone's subjective opinion. The flaw, as I pointed out, is that if no evidence is immediately available that indicates lack of patentability, then the Examiner must allow the case. Therefore, obviousness rejections are only as good as the database available and the ability of the Examiner to search and interpret the findings.

oh wow
I'm not sure where you get that data. . .

What's your patent background--I think you must bring some interesting point of view to this discusion, and I want to understand your point of view.

I've been a patent attorney for ten years, and have NO IDEA what you mean by saying that "an Examiner MUST allow a case." I can't imagine an Examiner agreeing with you (other than that their data bases are limited, which is true, but believe me when I say access to documentation is not a larege problem).

The problem with obviousness is precisely that it is purely subjective. The Examiner will ALWAYS claim that "something" is obviousness, and then claim the burden is on the applicant to prove patentability (inappropriate burden shifting, but what's the law to stand in the way of the opinion of an Examiner?).

The applicant can claim no prima face case has been shown (and in doing so risk POing the Examiner), but the Examiner can always (and nearly always does) find such arguments "unpersuasive." Remember--we are talking about recent college grads (usually C-average students, at that) who have the power of an administrative judge. Their hubrus knows no bounds.

If you know some magical methodology which requires an Examiner to allow an application, contact me and I'll hire you this evening.

Society misses out?
"but the far greater problem for my clients are the perfectly good applications that are rejected for irrelevant and superfulous reasons, and then must be abandoned because the average inventor does not have the resources to fight an Examiner on appeal. Society misses out on a great many products because of this."

Oh come on Steve, please be realistic about what the patent system really does for the apparently small inventors that you work with. An inventor who can't get a patent isn't going to abandon taking a commercially viable idea to market absent other downstream consequences. Sometimes, having a patent can make obtaining funding easier by checking the "defensability" box, but in the end, whether you have a patent or not, it comes down to whether it's profitable to invest in bringing the product to market. The patent may be a good marketing tool, and may be an effective weapon against a competitor if the market is lucrative enough to support filing a patent infringement lawsuit if needed.

But please, if you really think there are all sorts of products that never reach market because they couldn't get a patent, I have to suspect that you work with a large portfolio of patent trolls. Please offer a specific counterexample. I would love to be wrong about this (but I don't think I am).

getting a little emotional, aren't we?
Please keep the emotion and personal swipes down--particularly when we're off-topic (this is supposed to be about USPTO reform). Your accusation that most of my clients are trolls is as foundless as the proposition that that perhaps you work for a company that regularly knowingly steals the ideas of others. Clearly your smirches are based on the fact I have a different (and perhaps more credible) point of view.

Yes, many have given up because they couldn't afford to continue to pursue getting a patent. Far from a "check box" on a funding paper, patents are often the most valuable property a small company has until they get a product to the market. Even where your beloved box is concerned, if it's NOT checked, then the result more often than not is NO funding (although checking the box without due dilligence is a HUGE part of the problem). This is exactly my point: while obtaining a patent is not itself a gaurantee or even a strong indication of a great product, the absence of a patent often forces "the deal" off the table.

Without the patent, following a presentation, the businessman stands up, says thank you, and if the idea was good, calls his manufacturer--given no credit to, much less renumeration to, the inventor. What you are suggesting characterizes turn thousands of independent inventors as people who do little more than sketch an idea on a napkin and send it to a company with the caption "how much do you think this is worth." This isn't reality.

Clearly, I can't give you a specific example from my client list because that could waive my clinet's confidentiality--it would be foolish to entertain an ethics complaint to satisfy your curiosity. Perhaps you should read or listen to the oral arguments available at which do cite some (the Colorado case).

I know in the business world, everyone is honest and no one confiscates an idea and pretends it's their own--oops, that's in a land called Poliana. Of course, if this land really existed, there'd be little need for patents (or laws of any sort). Then again, just look how fast China's growing--maybe we do need to scrap our patent and copyright system.

The business reality is that ALL good ideas are stolen (some guys even brag that they are the best at swiping and copying products). The patent system's temporary monopoly is the only reliable system we have now for rewarding inventors and companies for the great many hours and thousands (or millions) of dollars spent in R&D.

I know of no company or inventor who has filed a patent with no intention of attempting to license it or pursue product placement. In the end, it's the goats who make the trolls. A reasonable search of any prior art would turn up the patents in question (don't just blindly check a box). Then, the company has a choice--have the USPTO reexamine the patent, seek a license, stay out of the market, or willfully infringe. Today, too many companies take the last option and play ostrich, and are then outraged at the consequences. Until companies, from CEOs on down, learn to live by the rules, they'll continue to thumb their nose at the patent law, and cry like children when that that law bloodies their nose.

software patents need to go
I second skwilinski. The patent system as a whole is fantastic. Even the trolls are just symptoms -- they are specialists and should be perfectly legal in our specialized economy.

Software patents, however, need to stop. There are many bad patents being given out, precious few that are good, and zero that I am convinced are a net benefit to the industry.

We do not need patents in software. They can only hurt -- and they are doing so. Improving the processes can at best reduce the damage. Kill this beast already. Save the Patent Office's few resources for industries where they actually help.

Standard is objective
The problem with obviousness is precisely that it is purely subjective" This is not true.

The reason the statute was passed in 1952 was to change the system from a subjective test to an objective test. By requiring the Examiner to find evidence of unpatentability (at least to make a prima facie case), the inquiry becomes objective. Either there is evidence of unpatentability or there isn't. The Examiner must create a factual record that is clear and specific as to why claims cannot be allowed. Otherwise, he must allow the case. Sometimes the Applicant and the Examiner differ on what a piece of evidence teaches, but that again is fact issue, decidable by an objective analysis.

The reason for the latter statement is simple. It is contained in the wording of the statute. See 102. A person is entitled to a patent unless...

there is evidence that proves he is not.

What subjective planet are you from?
Perhaps I should have said "The problem with obviousness is precisely that it is purely objective[ly] APPLIED" (at the Examiner level, and sometimes on the appeals levels).

Anyway, if you really believe that 35 USC 103 is objectively (and consistenlty) appplied, you are clearly NOT a patent attorney or agent. This sounds like the chunk-spewing propaganda of either the USPTO or some academic journal. "Obviousness" under 35 USC 103 is about as "objectively" applied as an ink-blot test to far-sighted drunk sanitarium patients who missed the morning dose, and applied about as consistently as lap dances at a Duke lacrosse party.

Sure the statute SAYS "a person is entitled to a patent unless . . . " but the client has to appeal to hope for rational decisions applied by rational persons (if you can even dream of calling the US Ct. of Appeals rational or consistent). Even Judges on the Court of Appeals call the "standards" irrational and admit that they are subjectively applied. See, for example, the Gentry case, Festos I-III, and especially Judge Newman in her opinion in In re Lee, 277 F3d. 1338, 1343, 61 USPQ2d 1430, (Fed Cir. 2002). There are many others.

Writing more pretty statues and assuming that they are applied by rational and intelligent folks has as much chance of success as the "rational application" of just about any other law being (think ADA, etc). New laws of patentability will not solve the problem and only create even more confusion.

Why? A rational or hopefully objective statute, even in the light of rational or objective case law (which, patent law is not), but that is subjectively applied, still has subjective effect at the Examiner level, necessitating the appeals and the costs I mentioned earlier (again, the very point I was trying to make earlier). Hiring rational and intelligent patent attorneys, and then well training them may actualy solve the problems.

Note: the eBay case just came out. It's rational, but it took an appeal to the Supreme Court to get there!

The poor inventor who got derailed by the pimply faced examiner.
I think you read a lot of emotion into my previous post that wasn't there. And I did not call your clients "patent trolls". I said if you really believed some of what you wrote to the extent you claim to believe it, then I have my suspicions. There is a subtle difference, and since this is not a courtroom where we advocate viciously against each other for our clients, you have to deal with subtle arguments ;-).

"Even where your beloved box is concerned, if it's NOT checked, then the result more often than not is NO funding (although checking the box without due dilligence is a HUGE part of the problem). This is exactly my point: while obtaining a patent is not itself a gaurantee or even a strong indication of a great product, the absence of a patent often forces "the deal" off the table."

(A) In previous posts, you blame this hypothetical businessman not having a patent (as if it is his inalienable right, and not a privilege granted by the state) on a vague, young, picky, undereducated patent examiner. See, this is the problem with arguing the politics of it like you're arguing a case. It might very well be that there is something uninventive with your client's invention or something wrong with your application, but you blame it on the PTO and blame them for the patent not being issued! Just about every reasonable person who is not a patent attorney and has an informed opinion of IP would agree that there are too many patents issued today! There is at least one too many: "One click". QED. There are patents which were licensed for free with no formal terms, then discovered and monetized at the end of their lives -- GIF and JPEG patents -- terrible bait and switches which cost hundreds of millions of dollars to people who really thought they were acting legally and ethically. So you're arguing against what we pretty much all agree on. Seems odd...

(B) Your statement itself about how funding works just is not true in the post-dot-com era. Whether it's 30/70 or 50/50 or 70/30, there are a couple of large camps of thinking on patents in the VC and angel communities. If you have a patent and your prospective investor is not impressed, time to find a new prospective investor. Just look to the other camp. Similarly, if you are without patent and your prospective investor is critical of that (and not just making an excuse, tough read when it's your baby), there are plenty of investors who are far more interested in whether you have a real sales model than if you have a patent. Perhaps they can help you develop the IP story, or perhaps the real risk there in your niche isn't too big in their opinion. But my point is that you overstate you case by a factor of 1000 saying that the public didn't get to see some great product because the evil, incompetent PTO didn't issue a patent. It's as silly an argument as claiming that the oil companies burried the 1000 mpg carbeurator in the late 60s.

Look, I'm pro-patent system, probably more than 99% of people in the software world. But if people like us can't call a spade a spade, and insist that we need more frivilous patents, we don't deserve to preserve any semblance of the system.

Theory vs. Practice
You confuse theory with practice. Yes, the standard is objective. Section 103(a) is written to be based on evidence not some subjective judgment (as it was prior to the 52 act). Yes, sometimes it is not applied well in practice. Sometimes rational people disagree as to how to interpret certain facts. But this does not mean the standard is not workable or unalterable.

So, the PTO needs to better train the Examiners and provide the funding to do so.

With a slightly changed standard, eventually fewer patents will issue for combinations that are not inventions. This will have the double positive effect of lowering the burden on the examining corp.

Yes. It is not applied well in practice. The solution is more training, more responsibilty/accountability at the USPTO, and more competent examiners.

Why require the patent holder to commercialize the product? What if the inventor has no money to do so? What if the inventor is merely trying to license the product? What if the inventor has TRIED to commercialize it, but is just a lousy salesman? And who decies what "actively trying" means? How much effort is required?

A better solution might be preventing injunctions where no product has been developed, and instead only requiring a reasonable license (again, who defines "reasonable"), but I still don't like it. The fact is, most patentees cannot even afford to enforce their patent, and thus for most patents, this is a non-issue. But even if injunctions are allowed, the patent holder makes NO MONEY if he has no product, and thus is typically NOT going to stop production of the infringers product (at least not permanently). He just wants a piece of the pie, and he is entitled to it. The Blackberry case is a good example. In the end, the service was never interrupted.


Maintenance Fees
Patents already DO cost a non-trivial amount to maintain, as substantial fees are due on the fourth, eighth, and twelfth years.

And the issue of bad patents issuing is a problem that can be solved by fixing the USPTO (better training and lower attrition). As to the Blackberry patent issue, if you saw it comming, are you rich? Many inventions seem "obvious" only AFTER the fact. The patent holder obviously thought of it first, or at least had the wherewithal to do something about the idea. Thus, you lose!


BoscoH obviously has never tried to get an investor interested in new product. Investors often DEMAND that a patent be obtained before they will invest in a new product. After all, what is the point of investing thousands of dollars to develop a marketable product, only to have some third party come along AFTER you have developed the market and proven the product, just to steal the idea and sell it for less? After all, the third party does not have to recoup the investment and initial marketing costs. The biggest costs of new products is often creating the market for them. People don't just line up to buy new things, you have to get them to agree that then NEED it first. That takes time and money, but once started, tends to grow somewhat on its own. It's the starting that is difficult.


I was unaware of the maintenance costs. If that's true, then bully for the patent office and trolls.

I worked for a military subcontractor in the late 80s early 90s. We had a device that did almost exactly what that patent covers that communicated over SINCGARS radios. Of course the whole package with batteries weighed about 60lbs. I guess we should have patented it.

We were even doing video with that rig. Not much of that yet... I'm off to the patent office.

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