Tuesday, August 07, 2007

Is the patent system "broke"?

Post-Grant Reviews in the U.S. Patent System - Design Choices and Expected Impact, Bronwyn H. Hall and Dietmar Harhoff [19 Berkeley Tech. L.J. 989 (2004)] cited to Cecil D. Quillen, Jr., The U.S. Patent System: Is It Broke? And Who Can Fix It If It Is?, within their footnote 30, which referenced text:

It is therefore not surprising that a number of experts have suggested that
the U.S. patent examination system does not currently impose a sufficiently
rigorous review of patent and non-patent prior art, resulting in the
issuing of patents of excessive breadth and insufficient quality, and that this
problem has worsened in recent years. There is some consensus among legal scholars and other researchers that the average standard being applied during the past decade is too low, n30

IPBiz observes that, now that the Quillen/Webster voodoo math is being put out to pasture, Hall and Haroff at least let us know we have legal scholars to blame for all the acceptance of a patent grant rate that was in excess of 100%.

Arti Rai also referenced the Quillen text with footnote 409 of ENGAGING FACTS AND POLICY: A MULTI-INSTITUTIONAL APPROACH TO PATENT SYSTEM REFORM, 103 Colum. L. Rev. 1035, which referenced text:

There is some evidence (although the evidence is surprisingly quite limited) suggesting that, prior to the creation of the Federal Circuit, divergent patent law in different circuits spurred forum shopping and uncertainty; this evidence was important in the Congressional decision to create the Federal Circuit. n409

from footnote 409: Cecil D. Quillen, Jr., The U.S. Patent System: Is it Broke? And Who Can Fix It if It Is?, Address before the Spring Meeting of the Association of General Counsel 17-19 (May 11, 2001)

As a separate, but not unrelated matter, Microsoft is, for the moment, off the hook in the Alcatel/Lucent matter. The Los Angeles Times reported:

On August 6, 2007, Senior U.S. District Judge Rudi M. Brewster of San Diego freed Microsoft from having to pay French telecommunications equipment maker Alcatel-Lucent one of the largest patent awards ever granted.

Overturning a jury's February verdict, the judge ruled that Alcatel didn't have the rights to one disputed patent and hadn't proved that Microsoft's programs were using the technology in another.

Scientific American (using Reuters) noted:

"Today's ruling by the judge reversing the jury's $1.52 billion verdict against Microsoft is a victory for consumers of digital music and a triumph for common sense in the patent system," said Brad Smith, Microsoft's general counsel.

Intellectual property lawyers said the jury's $1.5 billion ruling -- based on an award of 0.5 percent of global personal computer sales since around mid-2003 -- was bound to be lowered after a landmark U.S. Supreme Court ruling in April.

By a 7-1 vote, the justices overturned a ruling that Microsoft should be held liable for patent infringement on copies of the Windows operating system sold overseas.

"Some modification to the jury verdict was inevitable in light of the recent landmark Supreme Court decision," said Alan Fisch, an intellectual-property attorney at Kaye Scholer LLP in Washington.

Microsoft and Alcatel-Lucent are locked in a number of patent disputes, including a suit over the video-decoding technology in Microsoft's Xbox 360 video game console.

EETimes got more into the meat of the matter:

Brewster overturned the jury's finding that the so-called backup HQ encoder on Windows Media player violated Alcatel-Lucent's claim to U.S. patent 5,341,457, which governs the "perceptual coding of audio signals." Brewster, in his 43-page decision, noted that, "Even Lucent's expert... testified that he had never observed the HQ encoder running." [IPBiz: sort of reminds one of the "expert" for the defense in the amazon/barnes&noble case who said amazon's invention was NOT obvious to him.]

Brewster also found that Microsoft had licensed for $16 million the second patent at issue -- U.S. patent RE 39,080 -- from Fraunhofer Gesellschaft of Germany, which co-developed the technology in concert with Lucent's former corporate parent AT&T. RE 39,080 is for a "rate loop processor for perceptual encoder-decoder."

Finally, Brewster said the jury erred when it awarded damages and royalties using a formula based on the number of Windows-based computers Microsoft sold during the period of alleged infringements. Brewster said there was no evidence to indicate that "the patented features themselves produced any customer demand or value of the product."


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