Can a change in the party that controls Congress make a real difference in the effectiveness with which some of the thornier problems of public administration are visited, and revisited by the legislature every year? The summer of 2007 will tell. Some cynics might deny even the possibility of a well-functioning public administration, but surely the Democrats would not. What better place to try than the patent office, when so much economic growth now comes from companies at the cutting edge of technology?

Patent reform is high on the legislative agenda, with Sen. Leahy having introduced legislation supporting post-grant review (S. 1145). Earlier, Rep. Rick Boucher and Rep. Howard Berman had introduced the Patents Depend on Quality Act of 2006.

This bill requires that patent applications be published within 18 months of filing (as in Europe and Japan) and stipulates that a court may consider fairness in ruling whether to issue an injunction in response to an infringement claim. It also limits a firm's exposure to extra damages for "willfully" infringing a patent when the firm is not informed of how and what, specifically, it is infringing. More controversially, the bill also allows third parties to comment during a patent application process and establishes a procedure to review a patent after it has been granted.

Some computer-related enterprises like eBay and Microsoft support the additional procedures. Others, like Qualcomm, want to move more cautiously. Small inventors, biotech, and pharmaceutical firms like the system as it is. This kind of polarization can bring the process to a grinding halt--ironic, that some of those at the cutting edge should be institutionally conservative. But also understandable, if one makes it one's business to navigate the fecund swamps of technology, the last thing one needs is another quicksand. However, the spread of problematic business method, software, and financial patents to multiple economic sectors, should over time tend to strengthen all firms' common interest in finding win-win solutions. The trick is to fix the parts of the system that do not work without messing up those that do.

The post-grant oppositions are not a sure bet. The positive side is that the procedures seem to have worked reasonably well in defeating questionable patents in Europe. But third parties may be less likely to come up with prior art than proponents hope--even if they can become aware of every patent application's implications, they benefit competitors at their own expense by getting involved. And a post-grant opposition is unlikely to work well if the technology that supports the examiner's work in the first place is inadequate, or if measures of what it means for patents to be of sufficient quality or non-obvious are hollow. Often, lawyers benefit more than business by multiplying procedures, and the current legislation is thus viewed very skeptically by innovators who do rely on patents, such as those in biotech.

Changes that start further back in the PTO process are therefore well worth considering. For a start, supporting better technology to support the Office's search to discover whether a patent application is really a new idea would help.

Perhaps the area where there is the greatest room for improvement is the traditional weakness of the unelected public sector--accountability. With the patent office, one tends to get what one measures. Patent examiners get one point for the first "office action" and another for the second. This invites a tendency to deny the patent application, merited or not (one point), and then grant it, merited or not (second point). Granting a meritorious application the first time around? One loses the chance at a second point. Denying a weak application the second time around? One loses the chance to move on to another application and rack up more points. This is not the examiner's fault, but the fault of a system that values speed of processing over all else.

Likewise, the measurement of patent quality causes problems. The patent office consistently finds that their patents are measuring up quality-wise. This flatly contradicts the sense of many technologists. This should raise a red flag--what standard is the patent office looking to? How effective is it, for example, at measuring whether the patent office is finding older ideas, “prior art,” that relate to the patented claim but which are not themselves patented? The answer seems to be, not very.

The Patent and Trademark Office is not the only government office that could use some reform. But because of its role in delineating the rights that form and inform trades and investment in tech, its dysfunction matters more than some. Setting the standards for quality and productivity straight will help the courts straighten out even thornier tangles where it matters down the litigation road.

posted by Solveig Singleton @ 3:30 PM | Legislation and Legislators, Patents

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