Has the US patent system gone too far?
Reformers push to limit what is protected.
By James Turner | Correspondent for The Christian Science Monitor/ March 12, 2009 edition
John Kehe/Staff
When Samuel Hopkins came up with a method for improving the production of potash, it was probably just the kind of invention that President George Washington had in mind when he created the US patent system. Hopkins, who in 1790 received the first American patent ever issued, had discovered a way to increase the production of a critical resource used to make glass, soap, and soil fertilizer.
It’s unclear, however, how Washington would feel about America’s 6,368,227th patent.
Issued to Steven Olson, it protects a “method of swinging on a swing … in which a user positioned on a standard swing suspended by two chains from a substantially horizontal tree branch induces side to side motion by pulling alternately on one chain and then the other.”
To critics of the current US Patent and Trademark Office (PTO), this kind of patent demonstrates everything that’s wrong with the patent system today.
“We have too many patents being granted,” according to Daniel Ravicher, who is the Legal Director for the Software Freedom Law Center. “There still remains this belief that the more patents we have, the better society is. A more sophisticated and reasonable belief is that there have to be some patents, but we need to assure that they are legitimately worthy.”
Traditionally, patents were only granted on tangible things, such as physical devices and chemical processes. But a series of court rulings in the 1980s opened the door to patents on more abstract processes, such as business plans and software code.
They also lowered the standards used to approve patents, says Mr. Ravicher. What followed were a flood of patents, covering everything from the idea of buying products online with a single mouse click (Amazon owns that one) to the aforementioned tree-swing patent.
As long as large corporations held the patents, things remained fairly peaceful. There has always been a kind of uneasy “mutually assured destruction” standoff among giants such as IBM and Microsoft, each holding patents that could be used against the other.
But as certain high-tech firms failed, many of their patents were acquired by intellectual-property holding companies, whose only business was to use these patents to make money. In other cases, independent inventors have patented what some consider blatantly obvious ideas.
Since these so-called “patent trolls” don’t produce anything themselves, they have nothing to be countersued over.
Consider the case of Cygnus Systems, who sued Google, Apple, and Microsoft in late 2008. Its patent, which Cygnus applied for in 1998, deals with the common software feature of displaying a thumbnail image of a document stored on a computer. Critics of the Cygnus patent have found numerous examples they claim represent prior art (examples of the technology that existed before the patent), some dating back into the 1980s. But the patent was granted, and is now being used to threaten some of the largest corporations in the world with expensive lawsuits.
“We believe that companies that don’t make a significant contribution, in terms of innovation, have exploited the existing patent system to play hold-up games with those who are, in effect, innovating in the marketplace,” says Rob Tiller, assistant counsel and vice president for intellectual property for softwaremaker Red Hat.
Part of the problem is that the current system is overloaded. Patent examiners work under essentially a quota system, and in most cases only have about 10 to 20 hours to review each application.
“The flood of patent applications has overwhelmed the resources of the patent office,” says Mr. Tiller. “I think that there have been many grants of patents that a fuller, more careful review would probably show should not [have been] granted.” Unscrupulous submitters can game the system by loading up a single application with a hundred claims, or resubmitting one over and over, says Ravicher.
Congress has made multiple attempts to clear the patent logjam. Last week, both houses submitted legislation that would change patents from a “first to invent” to “first to file” test (an arguably more efficient standard preferred by many other countries because it saves patent officers from the hassle of confirming that an applicant came up with the idea first). The bills would also create a 12-month post-issue period, during which patents could be challenged. Patent-reform advocates such as Ravicher don’t see the bills making much of an impact.
Last October brought one of the most significant and still evolving changes to the patent landscape. In a case known as In re Bilski, a court rejected a patent for a business method of hedging investment risks. In its decision, the US Court of Appeals for the Federal Circuit restricted patents to two specific areas: an improvement “tied to a particular machine” and a method that “transforms a particular article into a different state or thing.” This standard creates a lot of uncertainty for companies innovating in less tangible industries.
“It’s a pretty sweeping decision, which seems to, in most reasonable minds, eliminate most software and business method patents,” says Ravicher. “And in fact we’re seeing decisions now coming from the PTO ‘post-Bilski’ that uphold that belief – that they are now rejecting patents on pure software and business methods.”
Even if this is the new standard, each existing patent must be challenged individually, meaning that it could take years or decades to clear out the patent system.
Meanwhile, companies will continue to run afoul of old patents, ones that would fail to meet the new criteria. And patent-rights advocate Herbert Wamsley, executive director of the Intellectual Property Owners Association, makes the point that there will need to be further refinement through future court decisions about exactly what does and doesn’t fall into the patentable category.
The PTO has taken one step to reduce the workload on examiners. Its new “Peer to Patent” program allows anyone who is interested to look at patent applications and make comments (including claims of prior art) before the patent goes to the examiner. “The limiting factor for the Peer to Patent model is that the applicant has to willingly participate,” says Ravicher. The pilot program of 400 patents shows some initial success. Of the first 23 applications considered under Peer to Patent, nine were weeded out based on prior-art claims filed through the program.
Mr. Wamsley points out there may be a silver lining to the country’s current economic problems, at least for the patent office. “A lot of people are expecting that the number of patent applications to decline this year, and that may help the PTO get control of its workload.”
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Comments
2. Peter | 03.12.09
The biggest abuse, I believe, has been made possible by the Supreme Court decision to allow the patenting of life forms. More than most, Monsanto has used this method to seize the rights to native species of farm crops so that small farmers can no longer use them.
3. Sven Henstrom | 03.13.09
The Olson patent was issued before the famous KSR decision came down. In KSR, the court allowed the Patent Office to more easily find claims of a patent application “obvious.” Most patent attorneys are finding that the Patent Office now freely rejects patent applications as “obvious.”
4. moelarry | 03.13.09
dissembling and distortions. Ravicher is not qualified.
please see http://truereform.piausa.org/ for a different/opposing view on patent reform
5. janie | 03.13.09
Nothing will change as long as attorney’s pockets are being lined with the status quo. The existing system is a huge benefit to lawyers and nobody else so it won’t be changed. Next!
6. Mike | 03.14.09
It is interesting that the author (Mr. Turner) cites the “first-to-discover vs. first-to-file” issue as a cause of frivoluous patents. This is eroneous reasoning. The European system of “first-to-file” gives a significant advantage to large coorporations (such as Monsanto) that are able to file increasingly expensive claims. U.S. inventors and patent attorneys should fight to retain the existing “first-to-discover” rules and retain the original yoeman aspect of the U.S. patent system intended by our founding fathers to make the system accessible to all. The breakdowns reported are due to the lax stewardship of the U.S. Patent office, not the existing system.
8. Patriot | 03.15.09
Patent reviewers are lower paid government workers and not necessarily the brightest or the best read nowadays. So cant expect them to understand a patent or decide if it is obvious.
Why not just have the following solutions?
1. A cap on total IP royalties to 20% of retail price of product.
2. Making patents free and automatic to inventors - just like copyrights are free and automatic to authors of creative works.
3. Create an Open Patents Space, where anyone may put their patents into this domain. If anyone wants to use patents from this space they must also put their patents into this space. Anyone who has contributed to this space can bring suit against anyone that is using an open patent, but has not put their patents into this space.
9. Lawrence B. Ebert | 03.15.09
Of the allusion to George Washington (”it was probably just the kind of invention that President George Washington had in mind when he created the US patent system.”), the U.S. Constitution gives Congress power over patents, and Congress created the patent system in 1790.
Of the allusion to the swing patent (US 6,368,227) this patent got issued to a child (Steven Olson) through the efforts of his patent attorney father (Peter Olson, reg. no. 35,308). There was a re-exam (90/006,289) which produced cancellation of the claims on July 1, 2003, long before the Supreme Court decision in KSR. This whole episode was a gimmick for a child.
Of Ravicher, one recalls his ill-fated effort on the WARF patents, wherein his references were found not enabled (meaning basically, science fiction) and the declarations he used were found conclusionary. See also
http://ipbiz.blogspot.com/2008/03/warf-smokes-pubpat-ftcr-in-last-two-re.html
Of peer-to-patent:
http://ipbiz.blogspot.com/2009/03/bean-counting-of-peer-to-patent-hits.html
10. Brian Gilder | 03.16.09
I didn’t know much about patents until I recently got involved in patenting my invention which is an ultra low cost solar water heater for 3rd world countries that can be seen on http://www.gildergeyser.com
Having gotten quite a good understanding of how patents work I’d like to agree and disagree with the article.
I agree that nowdays people are getting patents for rediculous things and that it has gone well beyond what it should have, but at the same time just because a patent is granted by the patent office, it doesn’t mean that it would be defencible in a court of law. In the example of the swing, if a person wanted to manufacture such a swing and the patent holder took him to court, the defendant would only have to prove that the concept of the swing was in the public domain long before the patent was granted which shouldn’t be too difficult.
The swing is definitely an example of a patent that is not enforcible in a court of law and therefore it isn’t worth the paper it’s written on, let alone whatever patent filing costs were paid.
Having said that there are certain patents that could be considered vital for national security that are being stiffled by the patent owners to protect their own interest (eg patent on large format Ni-Mh batteries for electric cars being held by a company controlled by a big oil company). In these situations I believe that the law should state that where such a patent is being stiffled by the patent owner against the interests of society as a whole, an exception should be made and others should be allowed to manufacture such a product. If they didn’t want the patent holder to be unreasonably prejudiced they could insist that a “reasonable” royalty be paid to the patent holder (let’s say 8% of the sales price).
11. Viking | 03.16.09
A minor nit-pick with the article. Patent #6368227 is not America’s 6368227th patent nor was Mr. Hopkins’ the first. There were close to 10,000 (so-called X patents) issued before the current numbering system started. There are also a somewhat uncertain number of patents issued with fractional numbers (e.g. 3262124 1/2). For more information see
http://www.patentstation.com/mdm/p142.htm#xpat
12. Ron Scheurer | 03.17.09
Why not use reverse psychology to reverse the absurd trend of granting patent rights and copyrights on just about any innovation that comes along. If we shared information and ideas freely, there would not be so much stealing, lying, and spying in the world. Cooperations instead of competitions would make for an interesting change of the social pace.
13. Lawrence B. Ebert | 03.17.09
Of Viking’s comment, –nor was Mr. Hopkins’ the first. –, Hopkins’ patent WAS the first. Viking is correct that the current numbering system did not start in 1790.
Of Gilder’s slight revision of George Scott and The Formula [Having said that there are certain patents that could be considered vital for national security that are being stiffled by the patent owners to protect their own interest (eg patent on large format Ni-Mh batteries for electric cars being held by a company controlled by a big oil company). ], one notes
#1. Claims in a valid patent go into the public domain at the end of the patent lifetime. Disclosure in published applications that don’t mature into patents can go into the public domain sooner.
#2. The inverse of Gilder’s scenario actually happened circa 1900 when electric car interests controlled the Selden car patent, and tried to suppress gasoline car makers, such as Henry Ford. The real issue wasn’t electric vs. gas, but simply price fixing.
#3. There is a statute that allows the US government to alter patent rights when in the national interest. The statute goes back to World War I, and got recent play during the CIPRO/anthrax business as to Bayer, but was not invoked at that time. The patent pool with Wright/Curtiss was a direct result of government intervention, and actually hampered the ability of smaller innovators to enter the market. [See L. B. Ebert, The Impact of World War I on Present Day Patent Issues, Intellectual Property Today, p. 35 (February, 2005)]
14. Fleming | 03.18.09
@ Patriot: Your 3rd point is not feasible, since not everyone can produce a patent (to use another). And all patents are not created equals.
@ Brian Gilder: I think what you mean by “stifled” patents are trade secrets. Why businesses should share their trade secrets which are vital to their core business to get 8 percent royalties? Unless it has a big R&D department that can keep producing patents, I see no economic reasons for them to do so.
On the opposite side of patent, copyright and the likes is the open source system most prominent in IT world. Although it’s free for those who make free products, the system still rampants with design flawed products and struggle to find a financially-sounded mechanism. Free is not always good and people need cash at the end of the day.
15. Huang Di | 03.22.09
“Large corporations are threatened with expansive lawsuits” … One would argue that is because they are ALREADY TOO LARGE; and the “MAD effect” only applies to precisely those large corporations …
I think the article’s author needs to be reminded that Benjamin Franklin DID NOT work for a “large corporation”, exactly like Albert Einstein, Bill Gates, Linus Torvalds, Henry Ford … and countless INVENTORS, at the time they made their discoveries …
Patents are an incentive for the DISCOVERERS to discover more… who’s REALLY incentive’d when a large corporation gets a 25-year monopoly ?
Asides that, the “first to file” dogma is quite helpful for preventing claims by millenias-old civilizations … (India & China’s history of technology ?)
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1. Inventor | 03.12.09
I have written patents and stuck to the guidelines the PTO gives you. I always operated under the assumption that they would not grant the patents unless they fulfilled the novelty requirements. They should enforce the rules they have already, somebody is doing a a bad job.