A thought-provoking article by Charles Duhigg and Steve Lohr in Monday’s New York Times caught our eye for its detailed look into what some see as a flawed, if not broken, patent system, particularly when it comes to the ownership of broad technologies or basic software concepts. The authors explore various aspects of the patent process, and question whether patent litigation is stifling innovation in technology, especially among start-ups.
Created in a world that was eager to patent mechanical inventions, the nation’s patent system was never conceived to deal with ownership issues over software and indeed, initially the patent office refused to patent most software. That has changed thanks to several court cases, and now the patent office routinely grants patents for software that “are often so broad and so vague that they theoretically give inventors ownership over much more than a single invention.”
“There’s a real chaos,” said Judge Richard A. Posner, of the Seventh Circuit Court of Appeals, when interviewed by the Times. “The standards for granting patents are too loose.”
In fact, the number of patent applications in the U.S. – 535,188 in 2011 – is more than 50 percent higher than a decade ago. The Times reports that Google has received 2,700 patents since 2000, according to an analysis by M-CAM, a patent analysis firm, and that Apple has received more than 4,100 patents.
And while everyone agrees that companies have the right to protect their intellectual property, the article suggests that the marketplace for innovation has been tainted by companies using software patents not defensively, but as destructive weapons. Concomitant with their growing patent portfolios, the authors contend that companies are increasingly wielding the threat of patent litigation against competitors.
Whether that litigation involves technology giants such as Apple and Samsung or whether it is waged against small entrepreneurs, the number of patent lawsuits is on the rise. Patent actions filed in 2011 increased 22% over the number of filings in 2010, reaching 4,015 – the highest number of annual filings on record. Most recently, media attention has focused on the high profile lawsuits involving Apple and smartphone manufacturers HTC and Samsung, both of which are Google partners and together make up 39 percent of U.S. smartphone sales.
Despite signs that patent litigation may be slowing this year, IP practitioners still foresee a long-term trend of increased IP filings. The latest figures from the International Trade Commission (ITC) show that patent cases filed in fiscal year 2012 fell by 30 percent (to 48 versus the record 70 cases filed in fiscal year 2011), according to the Blog of Legal Times. The BLT points out that some of the decline can be attributed to a cooling off in the number of ITC filings involving Apple and Samsung, Motorola, and HTC, which peaked in 2011 and have since tapered off. Section 337 practitioners interviewed by the BLT, while surprised at the figures, are bullish on the long-term trend. Ruffin Cordell at Fish & Richardson said he would not read too much into the numbers and added, “In my experience, the commission seems as busy as they have ever been, and is deciding some of the most important cases in the country.”
Apple may make the headlines, but almost every major technology company is involved in ongoing patent litigation. In addition, while the giants of technology may be battling each other in court, tiny start-ups can get caught in the crosshairs, too. One result of this litigation, according to policy makers and academics “is that patent disputes are suffocating the culture of start-ups that has long fueled job growth and technological innovation.”
So, what’s to be done to fix a system that appears, at least to some, to be tilted toward large hi-tech companies with deep pockets, eager to protect their patent portfolios at any cost? Among the several ideas outlined in the article are proposals from Twitter and the law school faculty at the University of California, Berkeley.
In April, Twitter released a draft of its Innovator’s Patent Agreement, which promises that the company will not use its patents in offensive litigation without permission from the inventor. The patents will only be used for defensive purposes and furthermore, if the patents are sold, they can only be used as the inventor intended.
The UC, Berkeley law school professors have a similar proposal called the Defensive Patent License. Participating companies would contribute their patents to a common pool, shielding them from litigious aggressors and they would be allowed to participate as long as they did not file suit first as a plaintiff.
Judge Posner also suggests that the duration of patents on digital technologies is too long (they can be as long as 20 years) and that perhaps shortening the period of protection would help. “That would make a big difference,” he said. “After five years, these patents are mainly traps for the unwary.”
Posted by Marianne Purzycki