Yves here. This is a useful, high level recap of what ails the US patent system and what elements need fixing for it to protect bona fide inventors, as opposed to crafty lawyers and patent-writers.
By Michael J. Meurer, Professor of Law, Boston University and Janet Freilich, Associate Professor of Law, Fordham University. Originally published at The Conversation
Over his career Thomas Edison garnered more U.S. patents than anyone in his time. Edison profited from his patents, but he was also exposed to the dark side of the patent system. He had to contend with lawsuits by other patentees who sought – and sometimes won – a piece of his success. While the patent system is designed to spur innovation like Edison’s, it also hampers it.
Easy copying and imitation discourage innovation, because why make the effort if someone else will profit from it? The patent system works by enabling inventors to block unauthorized use of patented technology.
Most technologies are developed by many inventors over many years, a process called “cumulative” innovation. Too often, however, early inventors get a patent on a small and perhaps insignificant piece of the technological puzzle, yet their patent covers the entire puzzle. Inventors who solve subsequent parts of the puzzle may need to pay royalties to the patentee, even if their contributions are larger.
As legal experts who focus on technology law and policy, we suggest that the problem boils down to two issues: too many patents and too little accurate information about them.
Too Many Patents
The U.S. is awash in patents. Over 350,000 U.S. patents were granted in 2019, four times the per capita rate in 1980. From the perspective of research managers at big firms, patents are cheap and easy to get. For example, in the early 2000s Bill Gates decided that Microsoft was patent-poor, and within a few years the company increased annual patent applications by 50%.
Patents are easy to get because the standards of patentability are low and because the burden is on the U.S. Patent and Trademark Office to prove an invention is not patentable. Patent examination is slow. It often takes three years or more. Despite increased staffing, the backlog of patent applications has continued to grow, and examiners spend on average only 20 hours reviewing each application. The patent examiner is required to read and understand the invention in an application, determine whether the invention meets the claims of the application, search existing technology to see if the invention already exists and write a response to the application.
Helter-skelter examination causes errors – many patents are too broad, or they cover obvious inventions. To draw attention to problems caused by the flood of low-quality patents, billionaire entrepreneur Mark Cuban endowed a chair at the Electronic Frontier Foundation dedicated to elimination of “stupid patents.”
Innovative firms that succeed in assembling many pieces of a technology puzzle into a finished product must consult with a patent lawyer to learn whether their new technology is covered by one or more patents owned by others. Ideally an innovator will get permission to use patented technology, usually for a fee, or redesign its technology to steer clear of relevant patents.
In practice this patent “clearance” process is difficult, costly and sometimes impossible. For technologies like smartphones, a patent attorney likely would need to review hundreds of patents, including many patents that are not granted until long after the new product is launched. Failure to license relevant patents creates a risk of litigation and the threat the new technology could be forced out of the marketplace.
Apple secured a patent on slide-to-unlock despite earlier work that set the stage for the feature. Angelo Su/Flickr, CC BY-NC-ND
As a result, smartphone patent litigation is far too common. Apple – a smartphone pioneer – has participated in scores of lawsuits around the globe as both a defendant and plaintiff. As a plaintiff, Apple sometimes uses its patents opportunistically to hinder innovation by its rivals.
For example, Apple sued Samsung using a patent that claimed the slide-to-unlock feature on a phone as Apple’s invention. Despite strong evidence that inventors before Apple had already accomplished the key steps to implement this feature, Apple convinced the courts that their version of this feature was patentable, and after seven years Samsung agreed to pay license fees to Apple to settle the case.
Economic research suggests that these litigation costs and license fees burden innovative firms to such a degree that on balance the patent system discourages innovation. In other words, innovative firms gain a benefit from their patents on their new technology, but that benefit is more than offset by the many patents owned by others that might be asserted against the new technology.
Too Little Information
When an inventor gets a patent, she is supposed to reveal the secret sauce behind the invention in the patent, a public document. This allows scientists and engineers to learn about the invention and use that information to improve the technology.
Or at least, that’s the theory. In practice, many inventors make shoddy disclosures. Experiments reported in patents are sometimes fictional and often rely on dubious methodology. For instance, patent law permits an inventor to disclose the fictional finding that a drug treats cancer as evidence that she deserves a patent on that drug.
Inventors applying for patents are allowed to include predicted experimental results. The intent is to allow for earlier disclosure and to help smaller companies secure funding. But when evidence in patents is wrong, other innovators can be misled. Further, if other innovators want to figure out if the patented drug really treats cancer – or any other disease – they need a license from the patentee.
Edison was the victim of a broad light bulb patent that covered one of his subsequent inventions. Edison Electric Light Company
Sometimes key pieces of evidence are missing entirely from patents. This happens when a patent covers aspects of a technology that the patentee didn’t actually invent. Imagine discovering that paper is a mediocre incandescent conductor in light bulbs and using that discovery to get a patent covering thousands of other conductors, including ones that, unbeknownst to you, work much better. Later innovators might want to figure out whether other substances are better conductors than paper, but they can’t even start experiments without a license.
This happened to Edison. He was sued for patent infringementafter discovering a far better conductor than that discovered by the patentee – but because the patent was written broadly, it nevertheless covered Edison’s invention.
There is also too little information about the boundaries of patents. When an inventor gets a patent, she is also supposed to provide clear boundary information – what a patent application covers and what it doesn’t – to the public about her patent rights. The patent system fails to ensure this, however.
The boundary information in patent applications is hidden for 18 months until the application is published, and even longer if the boundaries change later during examination. Once the patent is granted, lawyers, judges and the public often have difficulty reaching agreement on the meaning of boundary language that may be intentionally vague or ambiguous.
How to Fix the System
Inventors who come up with new chemicals, including pharmaceuticals, tend to benefit from the patent system. Unfortunately, the system appears to impose a net cost on most other technologies, especially in high-tech industries.
Opportunistic patent owners, often called patent trolls, surprise inventors with patent claims about inventions that are minor or distantly related to the technology that is the target of the suit. Economics research shows such trolling activity slows innovation.
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The patent system can be improved to deliver a net gain to all inventors even without being drastically reworked. A good start would be to rigorously enforce existing standards about information disclosure. Courts should push inventors to clearly describe and explain their inventions.
The flood of patents on minor technical advances could be ended if patent fees were increased and if the nonobviousness standard, which screens out minor advances, was made stronger. Reducing the number of patents and increasing the amount of information about each patent would go a long way toward making the patent system work the way it was intended.
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Decades ago, I worked for a large multinational that saw patenting everything it could as an important part of it’s business (and, even longer back, it had good reasons to).
The team of developers I was on was asked to look at what could be patented in the work we did.
People came up with really silly things, and to our surprise, most of them were taken by the patent lawers who then run with it.
I submitted an algorithm, that most of my colleagues agreed on was genuinely new, and the most innovative thing there. And the patent lawyers said “but anyone could do that, we can’t patent it”.
There you go.
Consider yourself lucky. There were several patentable ideas I came up with in my consulting career but only one that I know3 of actually got patented. An the company sued several other companies resulting in my spending many days in lawyers offices being deposed. Not fun.
I submitted an algorithm, that most of my colleagues agreed on was genuinely new, and the most innovative thing there. And the patent lawyers said “but anyone could do that, we can’t patent it”.
One possibility is that they were saying “anyone could do that and we’d have no way of knowing, we can’t patent it.” For example, if the algorithm is something done entirely in a server on the backend, like you upload a photo of a cat and receive a score for how fluffy the cat is, maybe it’s done via the n-dimensional fluffiness manifold algorithm, or maybe it’s an intern in a basement rating cats… A competitor could provide a fluffy-scoring web service, and you’d never know if they were using an intern or the algorithm, so even if you got a patent, you couldn’t tell whether they were infringing it, at least until you went through expensive discovery during a lawsuit.
There are a lot of patents that are simply not commercially valuable for reasons like that. They’re more like vanity patents – something to hang on the wall, but not something you’d try to use.
All the patents given there were vanity/defensive stuff.
My algo was a special case-solution of a bag problem (which is NP-complete normally), so would be easy to identify when something similar was used. It was more that algorithms aren’t patentable – but say business process, which is algorithm too is.
Imho what’s being fought over, or a big part of it, is the right to profit (in perpetuity) from one’s invention. Said profit isn’t only about monetary gain for the inventor, but also comes in the form of, at least for inventions that achieve blowout commercial success, recognition, fame, prestige etc. To be sure, it’s innately human to desire recognition (and its associated spoils) for one’s efforts, i’m not disputing this. In fact, in a utopian society, invention would be its own reward, and the fruits of the labour of the inventor would be contributed to the common good, but alas, we don’t live in such a society. I sincerely believe that somewhere in the world there are some inventors who are driven by this altruistic impulse, but unfortunately the brutal reality of the “market” quickly knocks the idealistic wind out of them as they realise that the world is full of people who’d profit obscenely from their efforts, with no scruples whatsoever.
Patent laws, like many other laws, are the reflection of the level of evolution in a society in which they’re deemed necessary. A convoluted, bloated legal system where the bulk of institutional resources are dedicated to drafting new laws to keep the worst social impulses in check, is the mark of a corrupt, unevolved society.
Someone may gain perpetual fame from inventing and patenting something, but patents (at least “utility patents” in the U.S.) only protect intellectual property for 20 years.
I couldn’t agree more. One needs look at previous examples of people who invented life saving stuff and refused to patent it, rather choosing to make it available to all.
We’re governed by psychopaths. That is what Thatcher and co ensured. I see it at work every day.
Patent anecdote:the Singer sewing machine revolutionize the global garment industry and made Isaac Merritt Simger rich enough to marry off 2 of his 20 or so children by 8 or so women to European princes. One. Winnaretta, Princesses de Polignac, became an important patron of the arts in Paris).
There were actually several inventors of the sewing machine, two others being Elias Howe and Walter Hunt (who also invented the safety pin. Singer’s control of the sewing machine was owed to Edward Clark, his patent lawyer, who was a full partner in Singer’s company.
And it was Clark’s fortune which allowed Martin Peretz, who had married a descendant of Clark, to buy and ruin The New Republic.
Which inevitably reminds me of this classic 1960s quote: “This film is respectfully dedicated to the memory of Mr. Elias Howe, who, in 1846, invented the sewing machine.”
The term “patent thicket” was apparently devised to describe the sewing machine situation, with as man as 8 patent holders part of the scrim,
Scrum.
The single biggest problem I saw as patent lawyer is that judges do not reliably enforce the law. In particular, they usually do not punish expert witnesses who are lying. If they have impressive credentials, they can and do say anything. And if you make an issue of it, judges act as if it is irrelevant. .
US patents at the moment probably do more harm to the US than good. There is the “evergreening” process where a corporation will make a minor tweak to say, a drug, and then claim a whole new patent to extend it to forever. But the nadir of patents probably happened back in 2012 when Apple was awarded a patent (no. D670,286 ) for rectangular devices with rounded corners. And then a jury awarded Apple $1 billion in a case against Samsung for them violating this patent. It took five years and a decision by the US Supreme Court to reverse this-
https://www.theverge.com/2012/11/7/3614506/apple-patents-rectangle-with-rounded-corners
https://morningconsult.com/opinions/apple-v-samsung-scotus-sided-reason-rounded-corners/
Interesting that Thomas Edison gets a mention. Pioneering the way for Silicon Valley, he stole more than a few things in his career to profit off it and not only stuff from Tesla but tried to seize control of the budding film industry in California. His agents even stole the classic 1902 film – George Melies’s “A Trip to the Moon” so that he could pirate it no end.
US patents at the moment probably do more harm to the US than good
GMO vegetables, FTW…
But the nadir of patents probably happened back in 2012 when Apple was awarded a patent (no. D670,286 ) for rectangular devices with rounded corners. And then a jury awarded Apple $1 billion in a case against Samsung for them violating this patent. It took five years and a decision by the US Supreme Court to reverse this-
With all due respect, that is all incorrect.
(i) Apple’s patent was not “rectangular devices with rounded corners”, but a design patent on the specific look and feel of the iPad – which included rounded corners with specific radii among other features. The “rounded corners” quote actually comes from related litigation in Germany over the Galaxy Tab 10.1, in which Apple listed almost a dozen different features of the patent, one of which was “the specific rounded corners”. Uninformed journalists leaped on that as thinking the patent was only about rounded corners and used that to spread a bunch of FUD about the patent system… ignoring the fact that the same court found that the Galaxy Tab 10.1N, which had the same exact rounded corners, didn’t infringe the design patent because it had a different bezel (https://www.bbc.com/news/technology-15773944). But teasing out that nuance required almost 10 seconds of work, which is why you won’t see it in most articles about the patent system.
(ii) The Supreme Court didn’t invalidate the patent, or say that rounded corners (in conjunction with a host of other features) are not patentable in a design patent. Instead, the issue was about damages. The statute for infringement of a design patent (35 USC 289) says that the patent owner is entitled to 100% of an infringer’s profits (this is different than utility patents, where the patent owner is entitled to a reasonable royalty). SCOTUS reduced that to say that the patent owner is entitled to 100% of the infringer’s profits that are attributable to the infringement – in other words, when someone buys a Samsung Galaxy that infringes Apple’s design patent for $600, how much of that $600 are they paying for the design as opposed to the functionality of a portable tablet device? For example, if they could’ve bought a different model with a different design for $500, then the design might be worth $100 on its own… Or if those other models were also $600, then maybe the design wasn’t worth anything as a premium. Looked at another way, a Gucci bag and a Filene’s bag will both carry your stuff, but people will pay a premium for the former because of the design, the prestige, etc.
But none of this has anything to do with rounded corners.
Disclaimer: I am a patent attorney, I am not your patent attorney, none of this is legal advice, etc. I have also been interviewed by Yves on other IP issues.
Lets talk about small business and individual inventors, such that they exist anymore.
The right to patent is enshrined in the US constitution. I believe this is there according the the philosophy to distribute power into many hands. What is missing in recent history are more small inventors, whose role is being usurped by academia, who often enjoy government support small business does not. Small business is usually disqualified from R&D grants, or, effectively the same thing, is relegated to second status, required to pay matching funds. My suggestion is to repeal the Bahy Doyle act that turned universities into patent mills, and return academics to their useful function as curators and conservators of knowledge. This will put a lot of stuff into the public domain and thereby raise the bar to innovation. Academic institutions garner huge grants, even to infringe on patents, unfairly competing with small business. Small business is nonetheless responsible for most new jobs and innovation,
Mark Twain said that a country without a strong patent system is like a crab, and, can only crawl sideways.
I believe the patent system has a larger problem.
Owing to its early fixation on mechanical devices, patent law has yet to effectively address intellectual property protection of processes and software.
These issues have generated a great deal of thought among the team, with which I work. My colleagues and I develop algorithms based on information theory. This interest keeps us abreast of new developments in the field and of a new insights and theory that unify it (information theory) with and bring it fully into physics. The field of Constructor Theory (originally proposed by physicist David Deutsch), supplies a powerful logical basis to defend genuine process and software patents as valid.
Constructor Theory resolves/eliminates the arbitrary distinction between physical (machine) patents and information or knowledge driven patents and does so based on the most fundamental and successful explanations that we have of how the world actually works.
It does nothing for “discovery” patents such as attempts to patent existing biology or molecules. These never made sense to me.
The short video on its main website provides a good introduction:
http://constructortheory.org
Constructor Theory brings: information, Information Theory, Computer Theory (Turing’s Universal Computer/Machine), and knowledge (epistemology) fully into physics.
Consider a new chemical catalyst that affects a useful transformation, clearly something patentable. Interestingly, chemical catalysts remain unchanged after they affect the transformation and one can typically recover them and use them again.
In Constructor Theory, knowledge equates to a catalyst. Its application can affect physical changes or transformations in the world, yet it remains unchanged and one can use it again.
All patents summarize knowledge that affects physical changes in the world (or ought to). A requirement that only specific kinds of intermediary constructors (machines, chemicals, code, …) that apply this knowledge becomes an arbitrary line of qualification.
You can follow where this goes.
I would note that IP abuse is not just limited to patent.
Both copyright and trademark have expanded in scope, and in the case of copyright duration, for no public benefit as well.
While IP has a value, “To promote the progress of science and useful arts,” the entire regime has descended into destructive rent seeking, which reduces progress and increases inequality, because IP holders continue to get ever larger subsidies.
Note that unlike copyright, patent term has never really been expanded (there have been a few minor shifts to comply with international treaties or to reflect the examination backlog). This is because with copyright, you have all the money and lobbyists from the MPAA and RIAA on one side arguing for longer terms, and the public with no money arguing for shorter; but with patents, you’ve got (for example) Apple arguing for longer terms for their own patents but shorter for Microsoft’s, and Microsoft arguing the opposite. There’s equal pressure (and lobbying money) for both shorter terms and longer terms, and as a result, it has never really changed.
Plus, patents have one of the best tools for shortening term – maintenance fees during the life of the patent that get more and more expensive, the older it is. Most patents get abandoned long before they hit their expiration date, because of those expenses, particularly in fast moving industries like software and electronics (it’s slower in pharma, but they also tend to spend years and years in clinical trials before they can ever start selling product).
The same could be applied elsewhere – renewal fees for copyrights that increase based on how old the work is. That would encourage publishers to release their rights if the work was no longer commercially valuable. But again, there’s no money on the public domain side that would encourage this in Congress.
Actually, in a number of areas, particularly medical, and more particularly pharma, patents have been extended, thought separate exclusivity provisions, and “Evergreening.”
So, this article kind of skims the surface of the issues. Yes, there is an influx of applications, yes there is not enough information known about the applications. But both of those points could be rectified IF the USPTO was able to freely operate without an appropriation from Congress to spend the money it collects. The USPTO is the only governmental agency that is 100% user funded. Because of this Congress siphons USPTO funds for other non-related government activities. User demand (applications) have increased, fees collected (the amount as well) has increased and the excess goes into a treasury fund but the government does not allow the USPTO additional revenue. Since 1992, 1 billion in funds have been taken from the USPTO. USPTO almost ran out of money in 2010 when the government was going to take 200 mil. Then the government has the audacity to complain about the IT infrastructure at the USPTO being outdated and slow. The USPTO is given permission to use just enough money to operate but nothing to update. Last time I visited admins in the USPTO in 2018 they were still using graph paper transferred to excels to schedule Judges. MIND BLOWN how backwards they are there.
Also, technically the burden of proof is on the inventor submitting the application. They submit a declaration (affidavit) saying that they are the true and original inventors and have submitted any prior art (other tech) known to them. Then there is a period of time for the public to examine the application where any one can submit proof against the application. The trick is you need to know to look for it. People subscribe to patent publications for this reason. Yes there are a ton of junk patents because the system is flawed by restrictions, however those are usually very easy to overcome and usually get dismissed.
To combat the inequity in patent filings the USPTO has partnered with pro bono services across the US to provide small inventors access to the system. Again, you just need to know where to look for resources. Plus the fees for small entities/individuals is like 1/3 of large corporations. The USPTO holds a ton of free trainings for independent inventors. They do as much as they can to make it equitable. It’s the income and education restrictions that usually stop people. Most times, individual inventors restrict themselves with limited thinking so they don’t even begin the process because they think its not worth it. Then a company comes along and files their idea and they are all like WAIIIIITTTTAH! – I could go on and on about what is wrong with the system but it always starts with money.
The Junior Examiner who rejected my device had rejected 43 of his first 45 patents examined.
This article sounds like it was written by people not actively engaged with the USPTO.
I just abandoned three patent applications. There are NO other devices which accomplished what these devices do. The examiners took multiple existing technologies/materials and said it was “obvious” to put these disparate components together to achieve my invention.
These were devices which had commercial interest, had been a finalist in a design competiion and would have saved lives. I have obtained about 7-9 patents so this is not uninformed complaining. It is informed complaining. F—k the USPTO- I am done with “innovation”.
Patents contain the technical information describing much of the basis for our society. The degradation of the US patent system and the quality of patents, as described in the post, hides crucial technology in haystacks of paper, obscure language, occult disclosures, and long lists of trivial claims. Short of building a huge library building and stuffing it with paper, the shear verbal and visual bulk of the millions of patents must be stored and worked with as computer files, and databases — which is fine for the present but will prove problematic in a near future time when we will need to recover the technical information they contain.
I am not sure raising patent fees would have the salubrious effects Schankerman claims. I cannot follow the economic model he presents. I have trouble right at the beginning where an ‘idea’ is defined as a pair: social value; R&D cost. The discussion began by citing Amazon’s patent on “one-click checkout”, which in my opinion has little social value or associated R&D cost and a tremendous value in holding off competitors who rightly fear a loss or a Pyrrhic victory battling with Amazon in court. I do not believe Schankerman’s economic model accounts for strategic value. Instead of raising the patent fees, I believe the burden of proof that a patent is non-obvious, has utility, and functions as described should be shifted onto the those applying for the patent. I also believe the US Patent Office needs an injection of funding, revised practices, and an increase in the number of and overhaul of the training and guidance given its staff. Any patent monopoly right the Government might consider worthy of granting deserves much more review than 20 hours and many of the patent applications deserve summary rejection. I have no idea how an actionable law might be drafted, but if one could be drafted — patent trolling should be made illegal and penalized.
if patents today, can be considered an financial equivalent of harrasment, then there should be an open.source #metoo to dissect it and force patent departments to reject such patents post-haste..
i remember paula james (PJ) from groklaw.net detailing the apple v. samsung case filled with priors…
https://www.qwant.com/?q=site%3Agroklaw.net+apple+samsung
Adam Smith:
“The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.”
Patents allow companies to become monopoly suppliers, and engage in some good old 18th century price gouging.
This does maximise profit as Adam Smith observed.