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Against Monopoly

defending the right to innovate

Patents (General)

Monopoly corrupts. Absolute monopoly corrupts absolutely.





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Ridiculous patent applications

I first saw this story when it appeared on Matt Yglesias Moneybox blog on May 22. It has since been taken down, but you can Google the subject ("Oklahoma State University tries to patent a steak") and see that similar stories have been picked up by a lot of echoes.

Originally Matt Yglesias was joining the rest of us who cite ridiculous examples of patents and copyrights. In this one, he found that Oklahoma State University had applied for a patent on a cut of steak, or more exactly, how it is butchered.

It is not clear whether the patent will be denied, but one can no longer be sure. As Matt asks, how would this not be like other business or software patents? Such stretches have not proved beyond the capacity of the Patent and Trademark office to overcome its renowned reluctance to seek fees and constituent support.

But the thought also occurred to me that the University is enjoying so much publicity that it should continue its application or appeal any adverse finding just for the public attention.

How to Improve Patent, Copyright, and Trademark Law

As I note in my article "Radical Patent Reform Is Not on the Way," Mises Daily (Oct. 1, 2009), there is a growing clamor for reform of patent (and copyright) law, due to the increasingly obvious injustices resulting from these intellectual property (IP) laws. However, the various recent proposals for reform merely tinker with details and leave the essential features of the patent system intact. Patent scope, terms, and penalties would still be essentially the same. In the second article of this two-part series, "Reducing the Cost of IP Law," Mises Daily (Jan. 20, 2010), I propose various reforms to the existing patent system--short of abolition--that would significantly reduce the costs and harm imposed by the patent system while not appreciably, or as significantly, reducing the innovation incentives and other purported benefits of the patent system. I list these changes below in generally descending order of importance, without elaboration, as they are discussed further in "Reducing the Cost of IP Law":

Patent Law

  • Reduce the Patent Term
  • Remove Patent Injunctions/Provide Compulsory Royalties
  • Add a Royalty Cap/Safe Harbor
  • Reduce the Scope of Patentable Subject Matter
  • Provide for Prior-Use and Independent-Inventor Defenses
  • Instantly Publish All Patent Applications
  • Eliminate Enhanced Damages
  • Add a Working/Reduction to Practice Requirement
  • Provide for Advisory Opinion Panels
  • Losing Patentee Pays
  • Expand Right to Seek Declaratory Judgments
  • Exclude IP from Trade Negotiations
  • Other Changes
    • Increase the threshold for obtaining a patent
    • Increase patent filing fees to make it more difficult to obtain a patent
    • Make it easier to challenge a patent's validity at all stages
    • Require patent applicants to specify exactly what part of their claimed invention is new and what part is "old" (e.g., by the use of European-style "characterized in that "claims)
    • Require patent applicants to do a search and provide an analysis showing why their claimed invention is new and nonobvious (patent attorneys really hate this one)
    • Limit the number of claims
    • Limit the number of continuation applications
    • Remove the presumption of validity that issued patents enjoy
    • Apportion damages to be proportional to the value of the patent

Copyright

  • Radically reduce the term, from life plus 70 years to, say, 10 years
  • Remove software from copyright coverage (it's functional, not expressive)
  • Require active registration and periodic re-registration (for a modest fee) and copyright notice to maintain copyright (today it is automatic, and it is often impossible to determine, much less locate, the owner), or otherwise make it easier to use "orphaned works"
  • Provide an easy way to dedicate works to the public domain to abandon the copyright the state grants authors
  • Eliminate manifestly unjust provisions of the Digital Millennium Copyright Act (DMCA), such as its criminalization of technology that can be used to circumvent digital protection systems
  • Expand the "fair use" defense and clarify it to remove ambiguity
  • Provide that incidental use (e.g., buildings or sculptures appearing in the background of films) is fair use
  • Reduce statutory damages

Trademark

  • Raise the bar for proving "consumer confusion"
  • Abolish "antidilution" protection
  • In fact, abolish the entire federal trademark law, as it is unconstitutional (the Constitution authorizes Congress to enact copyright and patent laws, but not trademark law)

[Mises; SK]

Patent filings down? It must be hurting U.S. 'innovation'....

This article from CNN is amazingly funny, and not in a good way -

Recession's latest victim: U.S. innovation

Patent filings fell in 2009 for the first time in 13 years, worrying Silicon Valley that it is losing its place as the leader in global innovation.

NEW YORK (CNNMoney.com) -- U.S. innovation slowed this year for the first time in 13 years as the recession cut into budgets, and costs to protect inventions rose.

The number of patent filings in the United States fell 2.3% in 2009 to 485,500 from 496,886 last year, according to a preliminary estimate by the U.S. Patent and Trademark Office. That makes 2009 the first year since 1996 in which businesses and inventors filed fewer patents year over year.

"That's unfortunate because [patent filings] are a reflection of innovation," said David Kappos, director of the Patent Office. "Innovation creates so many jobs and so much opportunity for our country. It is absolutely key to our long-term success in the global economy."

Most blame the recession for the drop in U.S. filings. As a result, many companies are opting to hold off on bringing new ideas to market until the economy improves substantially

Read the whole article here.

Patently-O's reaction:

"I tend to attribute huge rise in patenting activity over the past two decades more to a perceived strengthening of the patent right and less to an actual increase in innovations. In recent years, court decisions and threatened action from congress may have reduced the perceived potential value of the patent right -- thus lowering demand. Perhaps now, applicants are filing fewer 'junk' patents."

I suppose when there is an astronomical increase in patent applications for the past decade-plus, any minuscule decrease is supposed to be from a lack of 'innovation', as though patent applications should be expected to automatically increase exponentially every year - just like housing prices.

So-called 'performance reports' from the Patent office going back roughly 15 years can be found here.

Supreme Court hears crucial patent case today

Bloomberg.com cites this figure in its coverage which speaks volumes -

Applications for so-called business method patents have soared over the past decade, from 974 in fiscal 1997 to a peak of 14,364 in 2008, according to the U.S. Patent and Trademark Office.

Judge OKs Challenge to Human-Gene Patents

Wired.com has the scoop:

A federal judge ruled Monday that a lawsuit can move forward against the Patent and Trademark Office and the research company that was awarded exclusive rights to human genes known to detect early signs of breast and ovarian cancer.

The first-of-its-kind lawsuit by the American Civil Liberties Union and the Public Patent Foundation at the Benjamin Cardozo School of Law claims that the patents violate free speech by restricting research.

Three cheers for the judge!

More to read (along with documents and decision from the case) can be found HERE.

UPDATE: CourthouseNews.com has more interesting tidbits regarding the lawsuit HERE.

EE Times: Opinion: Engineers should stage a patent strike

Opinion: Engineers should stage a patent strike

Rick Merritt (04/20/2009 12:00 AM EDT)

It's time for engineers to stage an intellectual property strike.

Stop filing patents. Refuse to sign employment contracts that give your employer sole title to your inventions. Don't participate in any due diligence efforts on patent portfolios.

Engineers need to organize if this IP strike is to be effective. That will require creating a new organization.

Existing lobby groups on patent issues in the electronics industry represent the views of specific sets of companies, not engineers. Even the IEEE is so diversified in its base that it admits it has not been able to form a crisp consensus on issues like patent reform.

Don't get me wrong. I am not saying engineers should stop work in the midst of a recession of historic proportions. I stand with those who say we design ourselves out of downturns by creating compelling products. What I'm saying is, hands off anything to do with patents.

I admit this is an extreme position and one engineers are unlikely to take up, but that doesn't mean a patent strike is the wrong thing to do. In fact, it could be very right.

The patent system is broken, and someone needs to call attention to that fact to spark real change. As the creators of the technology, engineers have the power to command that attention, if they choose to use it.

This is a historic moment to send a message that the patent system needs fixing, because influential leaders are listening. Patent reform is front and center in Congress, and an administration that ran on change is poised to appoint a new director for the U.S. Patent and Trademark Office.

Patents are supposed to capture innovations in ways that compel engineers to read them. They are meant to spur designers to creative action, inspiring them to develop novel work-arounds or to license ideas that are too good to pass up.

Sadly, the reality today is just the opposite. Bad policies and practices have coalesced around patents. In this week's cover story, we call it mad patent disease [].

Corporate legal departments tell engineers which patents they can and can't read. Sometimes engineers are told not to read patents at all, lest they be accused of deliberately infringing someone's IP.

Meanwhile, businesspeople of all stripes pressure engineers to file patent applications for every idea. That has spawned a business of litigation and licensing that charges for portfolios by the pound. Companies now wield patents strategically to charge others for the freedom to innovate. In this sick world, patents don't spark innovation, they inhibit it.

Quantity has replaced quality, and that has created a mess. Legal departments settle infringement cases in part because they can't afford to pay anyone to provide informed opinions about all the patents asserted against them. Thus, portfolios that contain a lot of junk can still command a premium.

As the premiums rise, more people file more patents to defend against the madness or to get their share of the IP bucks. The result is a patent office up to its ears in a backlog approaching a million applications, sitting in a pile three years deep.

Patents should have a reasonable value for their owners and users. They should be available to all on a timely basis so they can encourage innovation, not stifle it.

Engineers need to speak up in a loud and clear voice about what's wrong. If they don't, I suspect the lawyers and corporate managers who have gotten us into today's mess will continue to build on the upside-down bubble market for patents they have created.

Government Accountants Give Patent Office Award!

The Association of Government Accountants (formerly the "Federal Government Accountants Association") has awarded the US Patent and Trademark Office its "Fiscal Year 2007 Performance and Accountability Report Award" (which looks oddly similar to the USPTO's own "red ribbon" patent grant) one of 17 federal agencies to get this award that year.

Not only does the USPTO prepare "a well structured, logically organized and easy-to-navigate report" it's very "productive" too. As it boasts on its website,

Highlights of USPTO accomplishments for the past year include ... Increased patent production by an additional 14 percent over 2007 by examining 448,003 applications the highest number in our history. Production has increased by 38.6 percent over the past four years, compared to a 21.3 percent increase in application filings during the same period.

It's sobering to think how much worse off the US would be in this recession without all this productivity.

For some more interesting patent statistics, see the World Patent Report: A Statistical Review (2008) for example, as of about 2006, there were about two million patent applications filed per years worldwide; about 750,000 patents issued (granted) every year; and about 6.1 million patents in force around the world.

(cross-posted at Mises.org)

Obama Transition Team Member on "Optimizing" the Patent System

As noted here here, one of Obama's transition "team members is Reed Hundt, who was Bill Clinton's FCC Chair from 1993 through 1997. Hundt is slated to work on the agency review team in charge of international trade and economics agencies." In a 2006 Forbes op-ed, Hundt had various suggestions for patent reform. They are not all terrible, but they continue to miss the point by struggling to find some way to make the system work better. Part of his proposal is to reduce the number of patents granted, increase fees, and increase funding of the USPTO. Writes Hundt: "First, we should slash the number of patents granted each year by 90%. In 2004 the U.S. Patent &Trademark Office issued 165,000 patents. Sixteen thousand is more like an optimal number." He proposes a $500k fee companies can pay for a "fast-track" one-year patent application review.

Typical bureaucratic hubris to think he knows the "optimal" number of patents--though technically he is right that 16,000 is "more like" an optimal number than is 165,000, since the optimal number is zero. This is not dissimilar to another recent proposal to improve patent quality and reduce the number of patents granted by radically increasing filing fees from the $1000 level to about $50,000. As Manuel Lora noted to me, this is like the Laffer Curve of Patents (see Rothbard's evisceration of the Laffer Curve). Such high fees would of course reduce the number of patents, but would also tend to benefit large corporations.

These guys ought to give up trying to fine-tune an inherently unjust system and just admit it ought to be scrapped. Hundt writes, "We have a horribly expensive system, with huge backlogs and a daunting litigation risk. No wonder the Chinese don't want to adopt it. Let's get rid of it and start from scratch." Well, he's half-right.

***

A few more responses to selected comments by Hundt:

Second, we need to spend more money on the system. The budget of the U.S. Patent & Trademark Office is $1.5 billion. That ought to be tripled to $4.5 billion . . .

Who do you mean, "we," kemosabe? Not if it requires taxpayer funding.

We don't want grossly overworked professionals trying to figure out whether specific algorithms used to refresh the pixels on a computer monitor screen ought to be patented.

No, we want bright young Clintonite master bureaucrats!

Fourth, all patent case awards should be forward looking and linked to lost sales. In other words, plaintiffs who win patent-infringement challenges should be able to enjoin only future competition.

I thought he was onto something with his first sentence, but then he shys away from radical reform by not urging the abolution of all patent injunctions.

Patent Attorneys Prove To Be Too Big A Lobby For Even The Most Modest Of Reforms

Behold the latest proof -

Patent lawyers started breathing again Wednesday, as the specter of new patent rules was chased away -- at least for a little while -- by a Virginia court.

U.S. District Judge James Cacheris granted pharmaceutical giant GlaxoSmithKline's motion for a preliminary injunction blocking the U.S. Patent and Trademark Office from implementing rules set to go into effect today.

The new rules would reduce the number of claims, which help define a patent, and the number of continuations, which are used to amend patent claims and contest those that are rejected. Claims would be limited to 25, and continuations to just three. The current rules imposed no limits.

"I won't be alone in being among the patent attorneys who are very pleased with the injunction that was granted today," said Neil Smith, a veteran IP lawyer at Sheppard, Mullin, Richter & Hampton in San Francisco. "Anyone who cares about the strength of patents and about innovation itself saw those rules as causing some real problems -- it's a good day for the patent system."

The patent office says the rule changes are meant to speed up the patent process and eliminate the enormous backlog of applications. But opponents say the changes could weaken patents by not allowing sufficient continuances to cover ever-evolving innovations. They also say the new rules would have unfairly been retroactive on pending applications.

Notice how patent attorneys engage in Orewllian Newspeak talking about the "strength of patents" and "innovation". Always have to read between the lines with them - much like politicians.

Read the whole article here.

Spinning The Utter Stupidity Of Our Patent System

After reading this article, I have a newfound respect for the art of the guys who hold advertising signs on street corners.

White is part of the competitive world of "human directionals," an industry term for people who twirl signs outside restaurants, barbershops and new real estate subdivisions.

Street corner advertising on human billboards has existed for centuries, but Southern California where the weather allows sign spinners to work year-round has endowed the job with style.

Local spinners have cooked up hundreds of moves. There's the Helicopter, in which a spinner does a backbend on one hand while spinning a sign above his head. In the Blender, a spinner twirls the sign behind his back. Spanking the Horse gets the most attention. The spinner puts the sign between his legs, slaps his own behind and giddy-ups.

Thanks to growing demand, the business has turned cutthroat. There's a frenzy of talent poaching. Spinners battle one another for plum assignments and the promise of wage hikes. Some of the more prominent compete for bragging rights by posting videos on YouTube and Google Video, complete with trash talking. One YouTube comment reads, "i don't know if you stole my tricks or i just do them better."

But the limits of my respect ended when I got to this section in the article -

Aarrow keeps dozens of moves in a "trick-tionary," which only a handful of people have seen, said co-founder Mike Kenny. The company records spinners' movements and sends them in batches to the U.S. Patent and Trademark Office. "We have to take our intellectual property pretty seriously," he said.

Got that folks? Even after the latest Supreme Court patent smackdown, the IP legal culture still fosters the idea that you can monopolize the way you twirl a piece of cardboard around your body. If try to do that yourself, you will be sued by the patent holder of this stunning new invention that pushes the boundaries of human progress.

Ah yes, we certainly need to "take our intellectual property seriously" don't we? Things like this will certainly help the public to do just that.

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French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

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