Wednesday, June 07, 2006

Patent Reform and its Discontents

IPFrontline has some commentary by Professor Field on the Jaffe/Lerner book. I had discussed the book at the Oregon/Washington IP meeting in Stevenson, WA in April 2005, and had prepared a manuscript for the Harvard Business Review, which HBR turned down.

More recently, I had posted:

The following letter had been sent to the Wall Street Journal on March 2, 2006, but not published:

The editorial "Patently Absurd" (A14, March 1, 2006) depicts an out-of-control Patent Office approving almost 90% of submitted applications and a powerless court system constrained by a "clear and convincing evidence" standard. In reality, patent grant rates have been steadily declining since 1999, when the rate was 70.8%; the rate was 62.5% in 2004. Efforts to fashion adjusted patent grant rates, initiated by Quillen and Webster and later relied upon by Jaffe and Lerner, have been shown to be flawed on both numerical and legal bases. If there were indeed a tide of questionable patents, the court system would readily invalidate them over prior work, under any evidentiary standard. Studies by Lunney have shown that invalidation of patent claims by the court system has declined over the last twenty years. In situations wherein there is published prior work, either dead-on to the later work or rendering the later work obvious, the procedure of re-examination is available to invalidate claims on a preponderance of evidence standard. The patents asserted against RIM, Microsoft, and eBay have been placed in the re-examination process. The patent system is about disclosure of inventions that meet the requirements of patent law, which disclosure increases the public knowledge base. It is up to businessmen to innovate, with attention to the disclosed knowledge. People who disregard public disclosures may suffer, but ignoring the work of others should be made perilous so that society can operate efficiently. (end of letter)

Of the Metabolite case, on the matter of "patenting" a law of nature, one notes some background information. First, the patent in question was allowed through the Bayh-Dole Act, and is the work of three university professors, two at Colorado (still alive and represented by a different university professor, from the Stanford Law School, who otherwise advocates patent reform) and one at Columbia (now deceased). It does indeed rely on a correlation, first identified by the professors and not accepted by the scientific community initially, rather than a law of nature. There was no evidence at trial that anyone else had discovered the correlation previously, and the current issue is on the indefiniteness of the claim. Second, the present two corporate litigants were previously in a posture of licensee and sublicensee, so this litigation has the appearance of a business deal gone bad.

One can debate whether this sort of patent claim is of the type that fosters innovation. However, it is becoming increasingly clear that the business community does not want to hear about its role in the problems: the failure to conduct negotiations that, if implemented, would decrease the involvement of the court system in the market and the failure to treat the patent system seriously (the RIM case being a notable example of something that could have turned out differently, but for some bad decisions on the front end).

Although one can certainly point to many sound byte examples of bad patents (which largely have been eliminated through re-exam), it is a sad day when the Wall Street Journal and the eBay brief rely on false figures of patent approval rates to advance their arguments.

Lawrence B. Ebert
March 21, 2006


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