Liveblog: TACD IP: Patent Reform

The next panel is on patent reform. [I'm posting this out of order because I couldn't get a connection during the session. I didn't format my notes then, and I'll post them in raw form here.] First is Josh Lerner of Harvard Business School.

change 1: created central patent court — had been significant divergence of results among different circuit courts
so central court fell in love with patents

change 2: patent office went from cost center to profit center
led to pressure to increase patent grants — also increased litigation

truth 1: there will always be mistakes
unrealistic to expect no “bad” patents

truth 2: there will always be more chaff than wheat
most innovations are worth little

truth 3: incentives matter
lower examination standards -> more applications -> fewer examiners/patent -> poorer examinations

truth 4: information flow is critical
examiners will always have limited information

needed reform: getting more information
opportunity to challenge before costly court system
current system is stacked against opposition

needed reform: address litigation
address issues with jury trials

currently:
congress: IT wants one thing, pharma wants another
USPTO: some progress, but limits to self-policing
courts: eBay, KSR, Bilski

why should you care: patents still relevant

Next is Dan Ravicher of the Public Patent Foundation.

everyone can agree that patent systems can be made better
i don’t care about the outcomes, as long as the processes are fair
who are the stakeholders: patent holders, patent attorneys, patent officials, public
we should always treat opponents with respect

reforms:
have a fair process

make quality job #1
not quantity
remove the examiner quota system
reform the continuation system
introduce more points where patents can be challenged (could go to pure registration system, with no assumption of validity upon suit [but wouldn't this create a massive amount of uncertainty?])

create fair use for patents
start negotiating point: remove injunctions as a remedy to infringement (just set a fair price for compulsory license — if infringer can’t pay, de facto injunction)
research: no research should be precluded
civil liberties

Next is Philippe Aigrain of Sopinspace.

standards of patentability

what won’t work: patentability reform just be first job
standard response: we don’t need to reform patentability standards
why this doesn’t work
USPTO adopted more extensive examination rituals — first year, sw patent grants dropped; but went up after that — because we can generate sw patent applications at will
Europe: 6-10 year backlog for category including sw patents
it’s in the interest of every innovator to understand standards of patentability

so how can we get generally understable standards of patentability?
Europe: some type of entities can’t be patented
US: history of software: committee during Carter admin was divided b/w copyright and no protection for software — but case law decided that subject matter restrictions were out

simplest approach to patent reform is to codify standard that information/processing can’t be patented — goes back to Jefferson’s stand that ideas can’t be patented

plan B: new examination ritual that leads to reject all patents on software, gene sequences, algorithms, data
already happening: US: Bilski; Europe: patent directive

Q&A

lerner: fair use is an interesting idea
compelling economic case for research exemption
less comfortable with human rights exemption — it’s amorphous

aigrain: sympathetic to fair use, but has to be carefully constructed
Europe has research exemption

ravicher: designing a fair use would be a deliberative process
if we have constitutional rights, we have to protect them
as long as the process is fair, it’ll be OK

questions:

Q: mentioned getting info into the patent system. often there’s a lot of information, but it’s of dubious quality.
lerner: it’s a needle in the haystack — examiner doesn’t know where to find the right pieces of information.
rules limit ability to bring up facts mentioned during patent examination during litigation — disinclines people to raise the info earlier.

ravicher: removing the quota system would also encourage people to raise the info, knowing that it might be considered.

love: alternatives to monopoly — in a system of liabilities rules, how to compensate for non-voluntary use?
ravicher: there are various arbitration systems, ways to compensate for loss, etc.
lerner: it may seem easy now, but later it may get more complicated.

karachelios: 1: society assumes that a system can set it owns boundaries. but it’s not that easy. 2: in case of doubt, grant or review? cultural context: if it’s profit center, grant it. if you think patent=innovation, then grant it. [systematic undervaluing of public domain, underestimating the costs of uncertainty, etc.]
ravicher: could create financial incentive for patentholders for bad patents — right to refund if your patent is held invalid.
aigrain: it’s not about old vs. new technologies, it’s about the nature of certain technologies.

Q: different purposes of patent system
ravicher: purpose is to enhance the state of technology available to the public. if the purpose is to incentivize innovation, system sucks. otherwise patents would be stronger.
lerner: sequential innovation — stronger patents != more innovation.
ravicher: sequential innovation depends on access. perspective should be on public access to technology, not the private right to control inventions.
aigrain: software copyright has enabled competition of approaches (proprietary vs. open) — patent gives only monopolies. orphan drugs aren’t just small or neglected diseases, but diseases where medicine is unpatentable.

Q: administrative reform: is patent examiner union a problem?
lerner: both labor & management have been incompetent.
ravicher: i have no solution.

rashmi rangnath: 1: what was bad about the patent bill from 110th congress? 2: what about peer to patent project?
lerner: damage calculation reform — opening pandora’s box of complexity and ambiguity. rather focus on patent quality.
ravicher: peer to patent is interesting, helpful to empower public to participate as early as possible. problem: even if we give examiners better info, if there’s other issues (e.g. not enough time), it won’t be helpful.

perens: people who’ve seen patent applications can’t participate in other projects — introduces issue of treble damages (for looking).
ravicher: the doctrine has changed somewhat but still has problems.