By Kevin E. Noonan --
It appears that rising chorus of naysayers against S. 1145 is larger than we thought. After our post on Friday, Patent Docs has been contacted by two other groups who have organized a letter-writing campaign to Senate leaders beseeching them not to pass S. 1145, the so-called "patent reform" legislation.
One of these is a letter sent on October 23rd to Senate Majority Leader Sen. Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY). This letter has more than 430 signatories, including organizations such as the Institute of Electrical and Electronics Engineers (IEEE)-USA; American Seed Trade Association; United States Business & Industry Council; the Biotechnology Industry Organization (BIO); the Financial Services Industry Intellectual Property Law Association; and the Pharmaceutical Research and Manufacturers of America (PhRMA); and companies including Abbott; Allergan, Inc.; Alnylam Pharmaceuticals; American Solar, Inc.; ARYx Therapeutics; Amylin Pharmaceuticals; BASF Corporation; Biogen Idec, Inc.; Bayer Corporation; Beckman Coulter, Inc.; Boston Scientific Corporation; Cargill Incorporated; Caterpillar Inc.; Cephalon, Inc.; Carbide Derivative Technologies; CIMA Nanotech; Coca-Cola Company; Corning Incorporated; DuPont; Eli Lilly and Company; Firefly Energy Inc.; Gen-Probe Incorporated; Genzyme; Human Genome Sciences, Inc.; Johnson & Johnson; Invitrogen Corporation; Maxygen, Inc.; Millennium Pharmaceuticals Inc.; Monsanto Company; Novo Nordisk; Polestar Capital Associates; QUALCOMM Inc.; Rigel Pharmaceuticals; Syngenta Seeds, Inc.; Vical Incorporated; and ZymoGenetics, Inc.
The letter's message is clear: the bill "contains provisions that will create uncertainty and weaken the enforceability of validly issued patents." Specifically mentioned in this regard are the expanded apportionment of damages provisions, the post-grant opposition (characterized in the letter as "indefinite") (see "Draft Report on Senate Patent Reform Bill: Post-Grant Procedures"), venue restrictions, and the "burdensome and expensive mandatory search requirements." These and other provisions "pose serious negative consequences for continued innovation and American technological leadership in a competitive global economy." The letter also objects to shortcomings in the provisions on inequitable conduct, which merely "codifies the current inequitable conduct doctrine rather than to make broadly supported reforms to eliminate litigation abuse of the doctrine and gain increases in patent quality" (see "Draft Report on Senate Patent Reform Bill: Inequitable Conduct Provisions"). The letter asserts that there is "[n]o compelling case" for passing the bill in its present form, and that the "reform" provisions are the result of "claims of a crisis in the current patent system that does not exist, supported by selective assertions which do not hold up under scrutiny." Although the sentiments of some of the signatories may (or may have) changed depending on what amendments ultimately make it into the bill, the overwhelming message is a negative one: don't pass this bill!
The second letter (not yet sent), also addressed to Senators Reid and McConnell, has 105 signatories and is just as adamant that S. 1145 as it currently stands should not be passed. This letter cites deficiencies in almost all of the bills provisions, including first-to file, which:
will create a race to file at the USPTO, which will severely handicap smaller entities, due to their limited budgets. Such a system would also not provide adequate time for inventors to develop their concepts, resulting in a much lower quality of filed patent applications. Larger entities would have the advantages of larger budgets and in-house patent counsel, which individual inventors rarely have.
post-grant review, which
will allow literally anyone to challenge a granted patent for one year, and anyone with an economic interest to challenge a patent for its entire life, at a very low cost. Competitors can just keep filing inexpensive challenges until the inventor's finances are exhausted trying to defend their legitimately granted patent, forcing the inventors to abandon their honestly created inventions. It will create a scenario where the value of patents will be much less certain, which will severely impact the availability of private investment to help develop emerging technologies.
apportionment of damages, which:
will drastically reduce the damages that infringers will have to pay for willful infringement to a small fraction of what it is and has been for decades. Courts will be forced to try to determine what apportionment of damages should be awarded to the plaintiffs, which in many cases will reduce the penalties for infringement dramatically. The courts are ill equipped to determine these factors, in that it will require expert testimony as to how the damages should be apportioned, at great expense to the inventors attempting to defend their patents. Essentially a patent will become much less valuable to the inventor, due to insecurity about what the courts might decide is deemed an appropriate penalty for willful infringement.
mandatory 18-month publication rule, since:
the rest of the world will have more than a year to copy almost all American inventions before a patent has even been granted, again creating uncertainty for private investments in new technologies. The publication of the patent application on the Internet long before the patent has been granted will allow nearly anyone to be able to design around the invention, and then file their own applications that anticipates all of the inventors claims, effectively destroying much of the value of the inventor's patent, once it is finally allowed by the USPTO.
and the applicant "quality" submission requirement, which:
would significantly increase the cost of obtaining a patent, which will cause many independent inventors to abandon valuable inventions. The process of adequately developing and attempting to acquire a patent for an invention is already expensive of both time and money, as patent professionals are required to be able to determine what claims the applicant may be able to obtain with a patent. The AQS mandate would require the inventor and their patent attorney to attempt to play the role that has traditionally been the duty of the examiners, at great expense to the inventor. It would also cause a conflict of interest for the patent attorney, who is being required to provide a professional opinion that may be contrary to their client's best interests.
The letter asserts that the proposed changes are "being driven by the interests of a few large transnational corporations" and "will erode much of the value of U.S. Patents, especially for independent inventors and small businesses, which currently create about 40% of the new inventions, and consequently many new jobs in America." The Senate patent reform bill as written "will do serious and long term damage to the future of American innovative efforts, and will detract from the ability of the U.S. Economy to continue to prosper in a rapidly evolving global marketplace" by destroying the incentive for independent inventors and small businesses to disclose their inventions (the much-overlooked benefit of the patent system).
As with the U.S. Patent and Trademark Office's misguided (and preliminarily enjoined) "new rules" concerning continuation and claims practice, S. 1145 seems to be a case of the federal government ignoring the concerns of its citizens. This may be understandable for the Patent Office, since no one elected them and the officials in the executive branch who were elected have a track record of doing what they think is right without regard to consensus building or considering the views of their constituents when so informed (vocally, if not vociferously, in the case of the "new rules"). But Senators are elected, and the signatories of at least one of these letters come from every state. Perhaps the time is past for merely writing your Congressman. Maybe the time has come to inform them, as citizens, organizations, and businesses, that the consequences of passing this bill will be that we will actively work for their defeat in the next election, and mean it. This may be the only message that they can understand, since they don't seem to be listening no matter how many letters we send them.
Excellent summary !
How about some organized public event on the steps of US Congress ?
For example, "small american inventors burn their paper patents on the steps of US Capitol" covered by CNN (...just kidding, general american population has much more interest in e.g. Britney Spear's parental troubles than in US Patent Laws..)
Still, writing letters agaist patent "reform" has no visible effect on those elected representatives for precisely the reason stated above...
I am ready to sacrifice my paper patent with a signifying-nothing signature of some official dude named Dudas for public burning...
Anyone else ?
Posted by: small inventor | January 23, 2008 at 11:57 AM
Um no, it has no visible effect on them because they're not jackasses who stand to gain monetarily by the decision going one way or another so they have an unbiased view. Until you attempt to blackmail them into doing what you think is right. This, even when you know good and well that there are way too many patents being issued that, while they pass the PTO because of limited searching and bad disclosure of the prior art known previously to the applicant are nothing more than an obvious combination of the old (even by the old TSM test). They are then brought into court and waste the time and money of all involved, including the state.
In short, get your bs patents out of the system, cut the amount of prior art available by 80%+, make better prior art submissions so that your patent can be examined on the actual merits (and not just the ones found in 8 hrs of searching), and then maybe it'll be time to switch back.
K thx, bye bye.
P.S. Invent something worth $ and you have nothing to worry about. Don't, and well, I'm sorry, the penelty for wasting everyone's time just went up by a bit. QQ moar.
Posted by: examiner#6k | January 23, 2008 at 12:34 PM
According to some letter-writer, a first-to-file system ... "will create a race to file at the USPTO, which will severely handicap smaller entities, due to their limited budgets. Such a system would also not provide adequate time for inventors to develop their concepts, resulting in a much lower quality of filed patent applications. Larger entities would have the advantages of larger budgets and in-house patent counsel, which individual inventors rarely have."
Those are the dumbest arguments against a first-to-file system that I've ever heard. But then again, all the reasons against a first-to-file system are dumb.
I hope the bill passes. It'll be a good start to reforming the presently broken system that churns out tons of garbage that is not as easy to clean up as it should be.
Posted by: kuppy kuppy the humble puppy | January 23, 2008 at 01:18 PM
The statement that "the rest of the world will have more than a year to copy almost all American inventions before a patent has even been granted, again creating uncertainty for private investments in new technologies. The publication of the patent application on the Internet long before the patent has been granted will allow nearly anyone to be able to design around the invention, and then file their own applications that anticipates all of the inventors claims, effectively destroying much of the value of the inventor's patent, once it is finally allowed by the USPTO" makes no sense.
First, as it is, if you file a PCT, your app publishes at 18 months, as does your US app, unless you file only in the US and tell the USPTO not to publish. Most apps *are* filed elsewhere and thus publish, so getting rid of the non-publication exemption won't affect that many apps.
More to the point, what's wrong with letting competitors know what's coming down the pike and letting them get a head start on the design-around, by publishing *all* apps at 18 months? Design-arounds are one of the things the patent system is supposed to encourage. 18-month publication also kills submarine patents, which from an economic standpoint is more efficient than the old no-publication-until-grant scenario - competitors can avoid wastefully investing resources in infringing technologies, and instead invest in design arounds or in completely different technologies.
And what on earth does is meant by "and then file their own applications that anticipates all of the inventors claims"? If a competitor files later, after seeing someone else's published app, his disclosure can't anticipate an invention that the earlier filer legitimately claims in his earlier filed application. Best case for the later-filing competitor is he gets a patent on a non-obvious improvement on the invention in the earlier filed app, and the two enter into cross-licensing. But this particular statement sounds like it was written by someone who doesn't know what he's talking about.
Posted by: DJF | January 23, 2008 at 01:22 PM
Dear #6k:
Welcome to the site. As much as you believe passionately about the existence of "bs" patents (and you can participate in our "Identify a BS patent" any time you want to chime in), the problem with S.1145 is that it "solves" the wrong problem(s). It's like having a house with a broken sink; you're not happy when roofers show up (even if the roof will look better when they are done), since you'll be left with the broken sink (and have maybe spent all the capital you have for home repairs).
If you read the posts, the message is not that everything Congress is trying to do is wrong, it's that as a policical body they have been and continue to be influenced by people with particular points of view. The IT community is unhappy that a bright 17 year old with a computer and a modem can come up with the next killer app that will make web life easier, so when that person gets a patent, and a company buys it and asserts it, they are labeled trolls and evidence that the patent sky is falling.
It isn't, and this is how patenting has always been - not all inventors work for big companies, and US law permits small inventors to get protection for their inventions. Why should it be OK for the big companies to then predate the little guy with impunity? And just because s/he is a little guy doesn't mean s/he hasn't actually invented something.
So when we talk about "reforming" the patent system, especially through Congress, ignoring the political axes of the purported reformers is a little myopic for someone who is so quick to see the self interest mote in the eyes of those who oppose the so-called "reform."
And, keep in mind, patent attorneys will always make money unless Congress decides not to exercise its patent granting power. Indeed, some of the provisions proposed by the PTO and Congress will only increase the involvement of (and remuneration to) patent attorneys. Consider if you will that some of the naysayers actually care just as much as you do about patenting in the US, and the fact that they have a different opinion is just that. Of course, it could also mean that some of the naysayers have had a little more experience with the system than you have, or have at least had different experiences. But for future reference, as much as it feels good to rant, ad hominem attack is not only ineffective, it's pathetic. Make a logical argument and, who knows, maybe you'll convince somebody.
Thanks for the comment.
Posted by: Kevin E. Noonan | January 23, 2008 at 01:30 PM
Dear puppy:
Not all arguments are created equal. However, if you look at the first-to-file provision (we posted on it the other day), it isn't as simple as it sounds. For example, if passed it would not prevent a third party publication (not patent) from anticipating an applicant, even within the one year grace period. Since it is black letter law that a reference can anticipate by disclosing even one embodiment of an invention, while a claim must enable the practice of the invention throughout its entire scope, the effect will be to reduce one of the most important aspects of the patent system - full disclosure.
So even for those who think "first-to-file" is a net good, there can be arguments about how the bill implements it.
Thanks for the comment.
Posted by: Kevin E. Noonan | January 23, 2008 at 01:35 PM
Dear DJF:
I won't re-write the letter writers letter for her, but I think there is some sense in letting an applicant decide whether there is merit in keeping an application confidential. I can't envision every scenario, but suffice it to say the government has no problem suppressing such applications when it believes it in the country's best interest to do so. I think an inventor should have the same privilege.
Because we really don't have submarine patents any more. Lemelson and others were able to float under the radar for years because there were no term penalties for doing so. Now, every day an application is not prosecuted is a day of term lost. The PTO has internal metrics to be sure they minimize their own PTA, so that a patentee trying to do the submarine strategy would be left with very little term with which to do so.
I recognize that "very little" does not equal "none," but remember that, except for pharma (and I don't think this happens much in pharma) most inventions have short obsolescence horizons. Who would care if a patent granted in 2008 on a 1980's vintage cell phone - are there really that many components that are still in use? And more importantly, that have not been the subject of standard-setting bodies with patent licensing provisions? And don't forget the principle of prosecution laches.
The trouble is the proposed cure is in many cases worse than the disease. If we let interest group politics drive patent reform, I'm not sure what we are going to end up with, but is probably won't be good.
Thanks for the comment.
Posted by: Kevin E. Noonan | January 23, 2008 at 01:44 PM
examiner#6 wrote:
"Invent something worth $ and you have nothing to worry about"
Nothing to worry about ? Like what ? like not worring about some "Coalition" members using your invention in their China-manufactored products exported back to US and paying you absolutely nothing ? Because there is absolutely nothing you can do to stop them or at least force them to talk to small patent holders (after this BS "reform" becomes law) ?
As for BS patents, I totally agree !
To see a good selection of typical BS patents clogging US patent system you just need to type e.g. "IBM" or "Microsoft" in the "assignee name" search field
Don't you understand that those same corporations complaining about bad patents are the worst polluters of the US patent system?
You are not a patent examiner, are you ?
Probably some paid stooge for "Coalition"...
Posted by: small inventor | January 23, 2008 at 01:47 PM
Dear small:
Thanks for the comment. I have no idea whether Examiner #6 is an examiner (be interesting if he was) but since I asked him not to flame you, please resist the urge to flame him.
You have a point, of course, that bigger companies, many of them IT companies, seem to want to eat their cake and have it too (although it is probably more accurate to say "keep the cake for themselves and not share it with the little guys," but that is the point of the post - letting elected representatives know they can be defeated if they listen only to the big corporate donors. As Panglossian as it may be, I think the members of Congress (who don't as a rule know much about the minutiae of patent law) have been convinced there is a "crisis" that they can "address," thus showing how useful they can be. It's just getting above the din of making them understand the multifaceted politics of the problem, as you recognize in the substance of your post. We and others have posted on warnings from some commentators abroad that the proposed changes will weaked the US patent system and permit foreign goods to flood our markets - remember when the "personal music player" everyone had was a Sony Walkman? Today it is an Apple iPod - as an American, I am happy about that, and worried that the technology gains of the past 25 years will be wiped out by shortsighted, next-quarter profit thinking from US corporate MBAs who don't see the wave coming. That message needs to get to Congress.
Thanks for the comment.
Posted by: Kevin E. Noonan | January 23, 2008 at 02:03 PM
DJF writes in part:
First, as it is, if you file a PCT, your app publishes at 18 months, as does your US app, unless you file only in the US and tell the USPTO not to publish. Most apps *are* filed elsewhere and thus publish, so getting rid of the non-publication exemption won't affect that many apps.
~It is my impression that most of the world files patents in the US first if they want to aquire strong patent rights, and then use the one year grace period to go after PCT apps if it seems warranted, unless they don't happen to want to market their inventions in the US at all. 40% of US patents are filed by foreign inventors, last I heard. I would estimate that about 90% of American inventors file only in the US.~
More to the point, what's wrong with letting competitors know what's coming down the pike and letting them get a head start on the design-around, by publishing *all* apps at 18 months? Design-arounds are one of the things the patent system is supposed to encourage. 18-month publication also kills submarine patents, which from an economic standpoint is more efficient than the old no-publication-until-grant scenario - competitors can avoid wastefully investing resources in infringing technologies, and instead invest in design arounds or in completely different technologies.
~What happened to the American practice of allowing an inventor to try again if their patent app is not allowed? Since the pendancy for US patent apps is more than 30 months now, mandatory publication will completely eliminate that option. Do you really think this is a good idea, and if so, perhaps you could explain why? In the event that a patent is not possible, I will have spent more than $10,000 to completely destroy any possibility of pursuing the *invention* as a trade secret as well.~
And what on earth does is meant by "and then file their own applications that anticipates all of the inventors claims"? If a competitor files later, after seeing someone else's published app, his disclosure can't anticipate an invention that the earlier filer legitimately claims in his earlier filed application. Best case for the later-filing competitor is he gets a patent on a non-obvious improvement on the invention in the earlier filed app, and the two enter into cross-licensing. But this particular statement sounds like it was written by someone who doesn't know what he's talking about.
~So what happens if they file a PCT app based on my US app publication? Do you think they will disallow the PCT app just because they are such honorable and good people? I would be willing to bet the PCT patent would issue before mine, and what happens then? I am not an attorney, but I can see some *issues* that haven't been thought through by the folks that are trying to *fix* what they seem to think is a broken patent system. Once the publication is sent out on the Internet, who is to say who will just decide to just use it without so much as a bye your leave, and it will be impossible to even find them, let alone try to assert any patent rights once my US patent finally issues probably more than 2 years later. Cross-licensing reminds me rather a lot of the strategy commonly used in the Information Technology sector.~
Perhaps you think patents should go the way of Open Source access to whatever you want?~
Posted by: Stan | January 23, 2008 at 07:50 PM