By Kevin Noonan
It isn't often that you hear someone defend so-called "patent trolls." With the exception of publications directed towards the patent bar, most mainstream media are content to parrot the idea that anyone (other than a large manufacturing company) who asserts its patents in court is merely a "troll" trying to achieve the technological equivalent of a mugging.
Which is why an OpEd piece in none other than the February 21, 2007 issue of The Wall Street Journal is a refreshing bit of common sense. Written by Laura Peters, general counsel of Immersion Corp., the piece is directed towards Congressional attempts to "reform" the patent system. As readers of this space will appreciate, some of the proposed cures are worse than the purported disease, and Ms. Peters goes after two of them.
The first is the idea – made current by Federal Circuit Judge Kimberley Moore when Judge Moore was an academic – that patent continuation applications are somehow an improper attempt to "game" the patent system and obtain undeserved patents. Despite being supported by questionable statistics (which run contrary to many a practitioner's experience with the Patent Office bureaucracy), this idea motivated proposed rules changes last year that would have limited continuation application filings. The intellectual property community responded so negatively that the proposed rules are (thankfully) no longer imminent (see "Patent Applicants Beware: The Rules Are Changing (Again)" Part 1 and Part 2).
Ms. Peters points out the practical reasons why such proposals are wrongheaded. These include the fact that continuation applications are important, particularly to small companies with emerging technologies. She cites the costs of preparing many (rather than one) patent applications to cover all aspects of a new technology, and the practical reality that some aspects of the technology are underappreciated at the time the first patent application is filed but before the technology is fully developed. She points out that the consequence of restricting continuation practice would be to give a boon to the copyists, who could use the disclosed but unclaimed subject matter without fear of patent infringement liability, greatly reducing the technology's value.
Ms. Peters is also a skeptic about the U.S. adopting a European-style "opposition proceeding," seeing this as a way for large companies (with greater resources) to harass small companies without the attendant risk of infringement liability. She identifies the real beneficiaries of the "cheaper, faster" alternatives to litigation: large companies who do not need these advantages, and the losers: small companies who face the increased cost of defending against opponents. According to Ms. Peters, even without such opposition proceedings, small companies are forced to fight on two fronts, as accused infringers can use existing re-examination proceedings in concert with patent infringement litigation.
The real problem with all these proposals is that they increase the cost of patenting, and the extra burden falls most heavily on those companies least able to afford them: small, innovative start-ups. These are the companies that need to use their funds to invest in bringing their products to market. Without them, Ms. Peters notes, innovation will be the purview only of large companies with big budgets.
And we will be the losers. Taking as her examples Steve Jobs, Don Hewlett, and Andre Pavel, she reminds us that there is a reason (at least in America) that so many of our cutting-edge, groundbreaking technologies come from basement workshops and garages: large companies lack the flexibility to pursue innovation with the same vigor as smaller ones. It is these smaller companies that have transformed this country from the tired, aging rust-belt has-been of the 1980's to the economic lion it was at the turn of the century. And the U.S. patent system and ability to protect all this innovation with patents made this turnaround possible. We should be wary of misguided attempts to fix apocryphal problems, or the next time we might not be so lucky.