Friday, October 30, 2009

Patent Reform: selling tomatoes as cantaloupes from a carrot box?

The "selling" of patent reform is much like the above selling of tomatoes as cantaloupes from a carrot box.

Current wisdom suggests the Senate patent reform package will fly in 2009, including a "one window" post-grant review (PGR, opposition) package arising from the perceived need for a mechanism to address the perceived "patent quality" problem. The difficulty is that the "patent quality" problem is based on a bogus analysis.

From 4 CHI.-KENT J. INTELL. PROP. 108 (2004):

In recent proposals for patent reform made by the Federal Trade Commission and by the National Academy
of Sciences, there has been discussion of the possibility that the grant rate of patents by the United States
Patent and Trademark Office [USPTO] is high compared to that of other industrialized countries, including
that of Japan and those of Europe. This discussion began with papers of Quillen and Webster that
suggested that the grant rate might be as high as 97% and more reasonably is at least 85%. Although the
actual grant rate at the USPTO is typically in the range 62% to 68%, Quillen and Webster suggested the
higher numbers based on an analysis of continuing applications (including continuations, divisionals, and
continuations-in-part). The present paper suggests that the analysis of Quillen and Webster is flawed both
legally and methodologically
, and that recent work by Clarke, which places the corrected grant rate at less
than 75%, is more accurate.

The unjustified belief in the 97% grant rate infected the academic community and was willingly accepted by the IT people as a device to push their agenda:

More on the 97% grant rate that never was

The 97% patent grant rate lives on in law reviews

Patent reform 2008 as a house of mirrors?

BIO report shows absence of data for patent reform, but misses key references

The IT people wanted apportionment of damages, which is not going to happen in 2009.
Utilizing the distraction of patent quality (a totally ironic vehicle in view of the many questionable
patents by IBM, Microsoft, etc.), the IT people got the image of the thing they portrayed rather
than the true objective (damages reform). That's a risk when one sells tomatoes as cantaloupes.

The sad thing is that unneeded stuff like PGR is going to inflict serious burdens on the
smaller players in the IP arena.

From an article by Kristina Peterson:

Most big technology companies think the process [PGR] would strengthen the patents that make it through.

The review would be "essential to maintaining high-quality patents because it allows the validity of questionable patents to be tested," said Horacio Gutierrez, deputy general counsel of Microsoft Corp. (MSFT).

Similarly, International Business Machines Corp. (IBM) called the process "a low-cost alternative to litigation" in a statement.

But small companies and research universities fear that deep-pocketed businesses will use the review to stall innovative products from hitting the market. And the uncertainty created by the process will make it hard for start- ups to secure funding if their patents are up for repeated attacks, say critics including the National Venture Capital Association.


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