LaFrance on Jaffe/Lerner on patent reform
MARY LaFRANCE reviews the Jaffe/Lerner book in an article entitled Patent medicine 'Innovation and Its Discontents' diagnoses a broken system.
Off the top, LaFrance misses the point of the patent system:
The theory underlying patent systems, both in the United States and abroad, is simple enough. If we want people to innovate, we should reward them for doing so. The best way to match the size of the reward to the value of the invention is to let the market decide. Thus, rather than awarding a flat sum -- say, $100 -- for every new invention disclosed to the public, the patent system awards a temporary monopoly -- lasting less than 20 years -- during which the inventor enjoys the exclusive right to market the invention. Although the vast majority of patented inventions turn out to be economically worthless, the few "gems" that emerge can generate tremendous profits for the patent owner.
IPBiz notes that the purpose of the patent system is to promote public disclosure.
LaFrance repeats many of the urban legends of the patent reform movement:
Why are so many bad patents being issued? (...) Under our current system, granting an application with little scrutiny takes less time than subjecting it to rigorous review. Although patent applicants are on their honor to disclose prior art of which they are aware, they have no obligation to actually research the prior art. The examiners are unable to perform more than a cursory search of their own, and they have little incentive since this would prolong the examination process. Third parties -- competitors and consumers -- are generally excluded from the patent examination process, even though these parties have the greatest incentive to discover the prior art and disclose it to the Patent Office in order to prevent bad patents from being issued.
The idea that patent examiners just pass patent applications to allowance because it is easier than studying them is both untrue and denigrating to examiners. Examiners do perform a prior art search. Competitors have an opportunity to submit prior art through the re-examination process. The infamous patent of Smucker on crustless sandwiches has been put through the re-examination process.
L. B. Ebert published text relevant to the LaFrance/Jaffe/Lerner argument on April 22, 2005 at the WSPLA/OPLA meeting:
--The issue of whether patent examiners are more easily rewarded for "pushing patents through the patent office" is a combination of myth, misunderstanding, and misinformation. Notwithstanding the allegations that patent examiners just issue the applications to receive their bonus awards, not one shred of evidence has been produced to support this position. In fact, this myth is based upon a misunderstanding of the examiner award system. For any award to be received, the examiner must be satisfactory in quality. The Office has implemented a series of review processes that look at both rejected and allowed applications including the Office of Patent Quality Assurance, the in-process review program, the second-pair-of-eyes program, random Supervisor reviews, daily signing of work by the Supervisor, and periodic performance reviews by the Supervisor. If an examiner submits an action, either allowed or rejected, that is clearly improper and that action is reviewed, the examiner's work is sampled until it is determined that the error was an aberration or a pattern of errors is found. Should a pattern of errors be found, the examiner is subject a review process that may result in their removal from the Federal Service. Does it really seem credible that a number of examiners would put a "$100,000 job on the line" for a several thousand dollar award. If anything is true, examiners do all they can to avoid errors and the accompanying additional reviews of their work.
Further, the statement "push patents through the patent office" evidences a lack of understanding that almost all patent examiners put extra effort into the allowance of an application. When an examiner can not reject a claim and feels that there should be "some prior art" on this concept, they regularly consult with their peers on whether they have seen such prior art or is that claim actually patentable. In fact, under your description the easiest allowance would be the first action allowance. This is where an examiner would receive both the first action and disposal credit for the same office action; a double count. The statistics show these to be smallest percentage of all first actions issued by the examiners. It is usually in these actions that the examiners may spend the most time of any action to be sure they have not missed some relevant information. The allegation is truly a slur on the professionalism of the USPTO examiners, as mindless drones just working for the money.
Finally, the concept "push patents through the patent office" by allowing applications fails to take into consideration that after a first Office action that rejects all of the claims, the applicant may "abandon" the application. Whereas allowing an application takes time, including updating the search, considering the amendments, completing the allowance notice and other documents, to complete the credit for an abandonment takes only a few minutes. Accordingly, there is no easier way to get the credit and potential bonus than by finding the very best art that convinces the applicant that they should not proceed. Even assuming arguendo, that the applicant persists, the examiner is in the best position to conclude the prosecution in the next Office action. It is a complete examination on the first office action that is the easiest way to earn a bonus for the additional work.
Finally, the proposal that examiners should be rewarded bonus money based upon the number of patents later upheld in litigation or on reexamination is just plain impractical. Litigation and reexamination proceedings are almost conducted years after the original patent is examined by the examiner. Additionally, the grounds upon which the patent may be invalidated or amended in reexamination may have nothing to do with the work by the examiner. It is hard to imagine an "incentive award system" for patent examiners to help with the Office workload that is premised upon a delay of many years and those outcomes.--
One can spot the Quillen/Webster theory in the following:
As a result of these defects in the examination process, the United States issues more questionable patents than any other patent office in the world. Compounding the deficiencies of our Patent Office is the fact that changes in the federal judicial system during the last quarter-century have made it much more difficult -- and expensive -- to challenge a patent once it has been issued. Getting bad patents is easy; challenging them is a David-versus-Goliath undertaking.
Of the deficiencies in the Quillen/Webster approach to patent grant rate, see 86 JPTOS 568 (2004), 4 CHI-KENT J. INTELL. PROP. 104 (2004), 4 CHI.-KENT J. INTELL. PROP. 186 (2005), and 88 JPTOS 239 (2006).
Curiously, LaFrance goes after big corporations (and patent lawyers) rather than patent trolls:
The authors convincingly argue that the big winners in this system are the major corporations that can afford to pursue dubious patent applications (and to use their patents to intimidate weaker competitors) as well as the patent lawyers who profit from the resulting court battles over patent validity. Even a bad patent can be a very powerful weapon, because the mere threat of an infringement suit can shut down a competitor that cannot afford the expense of defending itself. And an infringement suit can succeed even if the defendant did not copy, or even know about, the patented invention; a competitor that developed its technology independently can still be held liable for infringement if there are sufficient similarities between the two technologies.
Although Chisum pointed out long ago that patent reform was getting its traction from corporations, LaFrance writes:
Unfortunately, academics and consumers rarely have the ear of their representatives in the House and Senate, and until there is a groundswell of public support for major reform, the patent system is likely to remain a lucrative tool for corporations and their well-compensated legal counsel.
***
From the WSPLA paper of LBE in April 2005:
Adam B. Jaffe and Josh Lerner have stated that "Increasingly, the firm with best lawyers or the greatest willingness to risk litigation wins the innovation wars --rather than the company with the brightest scientists or the most original, valuable ideas." Jaffe and Lerner further assert "Whatever the solutions, when issues of US patent policy are considered by the courts, the Congress, and the executive branch, you can be sure that the opinions of patent lawyers and patent holders will be heard. While their arguments will often be couched in terms of the public interest, at bottom their focus will be on improving their own profits and livelihoods, not on designing a patent system to foster the overall rate of innovation."
footnote 43-->In a review of the Jaffe/Lerner book, Brad Stone (Newsweek Web, Oct. 13, 2004) wrote in Plain Text: Patent Problems: But [the Forgent lawsuit] is evidence of a system out of control. The patent process seems to incentivize pinstriped lawyers instead of white-smocked inventors.
**
Although LaFrance obliquely referred to the fee diversion issue, one notes it is more complex than she depicted:
A Senate Appropriations Committee Report proposes $1.771 billion for the USPTO in FY07, down from the President's proposed budget of $1.843 billion. The Report includes harsh language concerning the USPTO's failures in examiner hiring/retention and its need for better management. The Report states,"[T]he Inspector General has received repeated complaints that PTO has allowed or encouraged unfair personnel practices. The IG has identified these problems as one of the top 10 management challenges of the Department of Commerce. Even with increased funding, the problems at PTO are getting worse, evidence that what is needed is better management."
**
Although not identified in the article, the LaFrance in question is presumably a professor at UNLV, who teaches Intellectual Property Law. As such, there is an irony in an IP professor praising the work of Jaffe and Lerner when a certain other IP professor (at Franklin Pierce) urged IP people to criticize the work of Jaffe and Lerner. As further irony, this author submitted a paper to the journal IDEA (at Franklin Pierce) on the subject of Jaffe and Lerner, which submission was turned down for no particular reason.
**
For more on Chisum's take on patent reform, see the discussion of Donald S. Chisum, Reforming Patent Law Reform, 4 J. Marshall Rev. Intell. Prop. L. 336 (2005) on IPBiz.
Off the top, LaFrance misses the point of the patent system:
The theory underlying patent systems, both in the United States and abroad, is simple enough. If we want people to innovate, we should reward them for doing so. The best way to match the size of the reward to the value of the invention is to let the market decide. Thus, rather than awarding a flat sum -- say, $100 -- for every new invention disclosed to the public, the patent system awards a temporary monopoly -- lasting less than 20 years -- during which the inventor enjoys the exclusive right to market the invention. Although the vast majority of patented inventions turn out to be economically worthless, the few "gems" that emerge can generate tremendous profits for the patent owner.
IPBiz notes that the purpose of the patent system is to promote public disclosure.
LaFrance repeats many of the urban legends of the patent reform movement:
Why are so many bad patents being issued? (...) Under our current system, granting an application with little scrutiny takes less time than subjecting it to rigorous review. Although patent applicants are on their honor to disclose prior art of which they are aware, they have no obligation to actually research the prior art. The examiners are unable to perform more than a cursory search of their own, and they have little incentive since this would prolong the examination process. Third parties -- competitors and consumers -- are generally excluded from the patent examination process, even though these parties have the greatest incentive to discover the prior art and disclose it to the Patent Office in order to prevent bad patents from being issued.
The idea that patent examiners just pass patent applications to allowance because it is easier than studying them is both untrue and denigrating to examiners. Examiners do perform a prior art search. Competitors have an opportunity to submit prior art through the re-examination process. The infamous patent of Smucker on crustless sandwiches has been put through the re-examination process.
L. B. Ebert published text relevant to the LaFrance/Jaffe/Lerner argument on April 22, 2005 at the WSPLA/OPLA meeting:
--The issue of whether patent examiners are more easily rewarded for "pushing patents through the patent office" is a combination of myth, misunderstanding, and misinformation. Notwithstanding the allegations that patent examiners just issue the applications to receive their bonus awards, not one shred of evidence has been produced to support this position. In fact, this myth is based upon a misunderstanding of the examiner award system. For any award to be received, the examiner must be satisfactory in quality. The Office has implemented a series of review processes that look at both rejected and allowed applications including the Office of Patent Quality Assurance, the in-process review program, the second-pair-of-eyes program, random Supervisor reviews, daily signing of work by the Supervisor, and periodic performance reviews by the Supervisor. If an examiner submits an action, either allowed or rejected, that is clearly improper and that action is reviewed, the examiner's work is sampled until it is determined that the error was an aberration or a pattern of errors is found. Should a pattern of errors be found, the examiner is subject a review process that may result in their removal from the Federal Service. Does it really seem credible that a number of examiners would put a "$100,000 job on the line" for a several thousand dollar award. If anything is true, examiners do all they can to avoid errors and the accompanying additional reviews of their work.
Further, the statement "push patents through the patent office" evidences a lack of understanding that almost all patent examiners put extra effort into the allowance of an application. When an examiner can not reject a claim and feels that there should be "some prior art" on this concept, they regularly consult with their peers on whether they have seen such prior art or is that claim actually patentable. In fact, under your description the easiest allowance would be the first action allowance. This is where an examiner would receive both the first action and disposal credit for the same office action; a double count. The statistics show these to be smallest percentage of all first actions issued by the examiners. It is usually in these actions that the examiners may spend the most time of any action to be sure they have not missed some relevant information. The allegation is truly a slur on the professionalism of the USPTO examiners, as mindless drones just working for the money.
Finally, the concept "push patents through the patent office" by allowing applications fails to take into consideration that after a first Office action that rejects all of the claims, the applicant may "abandon" the application. Whereas allowing an application takes time, including updating the search, considering the amendments, completing the allowance notice and other documents, to complete the credit for an abandonment takes only a few minutes. Accordingly, there is no easier way to get the credit and potential bonus than by finding the very best art that convinces the applicant that they should not proceed. Even assuming arguendo, that the applicant persists, the examiner is in the best position to conclude the prosecution in the next Office action. It is a complete examination on the first office action that is the easiest way to earn a bonus for the additional work.
Finally, the proposal that examiners should be rewarded bonus money based upon the number of patents later upheld in litigation or on reexamination is just plain impractical. Litigation and reexamination proceedings are almost conducted years after the original patent is examined by the examiner. Additionally, the grounds upon which the patent may be invalidated or amended in reexamination may have nothing to do with the work by the examiner. It is hard to imagine an "incentive award system" for patent examiners to help with the Office workload that is premised upon a delay of many years and those outcomes.--
One can spot the Quillen/Webster theory in the following:
As a result of these defects in the examination process, the United States issues more questionable patents than any other patent office in the world. Compounding the deficiencies of our Patent Office is the fact that changes in the federal judicial system during the last quarter-century have made it much more difficult -- and expensive -- to challenge a patent once it has been issued. Getting bad patents is easy; challenging them is a David-versus-Goliath undertaking.
Of the deficiencies in the Quillen/Webster approach to patent grant rate, see 86 JPTOS 568 (2004), 4 CHI-KENT J. INTELL. PROP. 104 (2004), 4 CHI.-KENT J. INTELL. PROP. 186 (2005), and 88 JPTOS 239 (2006).
Curiously, LaFrance goes after big corporations (and patent lawyers) rather than patent trolls:
The authors convincingly argue that the big winners in this system are the major corporations that can afford to pursue dubious patent applications (and to use their patents to intimidate weaker competitors) as well as the patent lawyers who profit from the resulting court battles over patent validity. Even a bad patent can be a very powerful weapon, because the mere threat of an infringement suit can shut down a competitor that cannot afford the expense of defending itself. And an infringement suit can succeed even if the defendant did not copy, or even know about, the patented invention; a competitor that developed its technology independently can still be held liable for infringement if there are sufficient similarities between the two technologies.
Although Chisum pointed out long ago that patent reform was getting its traction from corporations, LaFrance writes:
Unfortunately, academics and consumers rarely have the ear of their representatives in the House and Senate, and until there is a groundswell of public support for major reform, the patent system is likely to remain a lucrative tool for corporations and their well-compensated legal counsel.
***
From the WSPLA paper of LBE in April 2005:
Adam B. Jaffe and Josh Lerner have stated that "Increasingly, the firm with best lawyers or the greatest willingness to risk litigation wins the innovation wars --rather than the company with the brightest scientists or the most original, valuable ideas." Jaffe and Lerner further assert "Whatever the solutions, when issues of US patent policy are considered by the courts, the Congress, and the executive branch, you can be sure that the opinions of patent lawyers and patent holders will be heard. While their arguments will often be couched in terms of the public interest, at bottom their focus will be on improving their own profits and livelihoods, not on designing a patent system to foster the overall rate of innovation."
footnote 43-->In a review of the Jaffe/Lerner book, Brad Stone (Newsweek Web, Oct. 13, 2004) wrote in Plain Text: Patent Problems: But [the Forgent lawsuit] is evidence of a system out of control. The patent process seems to incentivize pinstriped lawyers instead of white-smocked inventors.
**
Although LaFrance obliquely referred to the fee diversion issue, one notes it is more complex than she depicted:
A Senate Appropriations Committee Report proposes $1.771 billion for the USPTO in FY07, down from the President's proposed budget of $1.843 billion. The Report includes harsh language concerning the USPTO's failures in examiner hiring/retention and its need for better management. The Report states,"[T]he Inspector General has received repeated complaints that PTO has allowed or encouraged unfair personnel practices. The IG has identified these problems as one of the top 10 management challenges of the Department of Commerce. Even with increased funding, the problems at PTO are getting worse, evidence that what is needed is better management."
**
Although not identified in the article, the LaFrance in question is presumably a professor at UNLV, who teaches Intellectual Property Law. As such, there is an irony in an IP professor praising the work of Jaffe and Lerner when a certain other IP professor (at Franklin Pierce) urged IP people to criticize the work of Jaffe and Lerner. As further irony, this author submitted a paper to the journal IDEA (at Franklin Pierce) on the subject of Jaffe and Lerner, which submission was turned down for no particular reason.
**
For more on Chisum's take on patent reform, see the discussion of Donald S. Chisum, Reforming Patent Law Reform, 4 J. Marshall Rev. Intell. Prop. L. 336 (2005) on IPBiz.
posted by Lawrence B. Ebert at 2:18 PM
2 Comments:
The Mobile Press-Register, which published the LaFrance review, had an article on plagiarism:
WKRG-TV5 on Tuesday fired news reporter Glenn Austin, an award-winning veteran of the Channel 5 news team, in a matter that station management said involved an instance of plagiarism.
During the Mobile CBS affiliate's 10 p.m. newscast Tuesday, WKRG told its viewers that because of a breach of ethics, a news article about Santa Rosa County, Fla., banning sex offenders in public parks was posted on the station's Web site without properly crediting its source.
The article was authored by the Pensacola News Journal and published on the newspaper's Web site, according to WKRG management.
LaFrance used Jaffe and Lerner's "Innovation and its Discontents" in Law 733 Advanced Intellectual Property Seminar.
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