Court Says USPTO Can Change Patent Rules

bizwriter writes "Many large companies have been closely monitoring the Tafas v. Doll lawsuit over whether the US Patent and Trademark Office has the power to change the patent application process in significant ways, so as to restrict the scope of patents and the chances of getting one. The US Court of Appeals for the Federal Circuit has finally spoken, with a split court ruling that the USPTO does have the necessary authority. The case stems from a court challenge to four new rules the USPTO put in place in 2007. A number of tech companies including Microsoft, IBM, Oracle, Apple, and Intel have supported the rule changes, which would strengthen their positions and make it more difficult for small companies to create, protect, and bring to market disruptive technology. These companies didn't have it all their way, as the appeals court said that one of the four rules conflicts with existing patent law and sent the other three back to a lower court for further review. If the decision is sustained by a full review of all 12 Federal Circuit appeals judges, it could be a blow to biotech and pharmaceutical companies, which depend on being able to obtain large numbers of patents. Expect further appeals on this one, and for the only beneficiaries in the short run to be the lawyers."

Comments

Bias against big firms?

[bencoder]

"which would strengthen their positions and make it more difficult for small companies to create, protect, and bring to market disruptive technology."

What? There is nothing like this in the article itself. And how exactly does a limit of 5 unique patents per invention strengthen their positions? From my perspective patents only serve to stifle progress in this age of accelerating change. I can understand why they helped back when things moved slower, but that's not the case anymore.

Re:Bias against big firms?

[Arancaytar]

Concurred. This pro-patent analysis seems very unreasonable in a time where patent lawsuits are mostly crazy monkey trials where an unproductive, greedy company seeks to prevent people from innovating by protecting things that have long become common knowledge or accepted practice.

Thanks to the accelerated rate of innovation enabled by technology, there is a turning point where the damage done by keeping the lid on an invention outweighs the incentive.

Nowadays, ideas are becoming cheaper, whereas implementing them to enable new ideas is a costly and risky investment. The result is people trying to patent what boils down to day-dreams and doodles (approximately "adding a scroll-bar to a window to allow that window to contain more text than it has space for"), not in order to actually accomplish anything with them, but in order to prevent other people from putting these ideas into practice without a cut of the profit.

Re:Bias against big firms?

[Theaetetus]

This pro-patent analysis seems very unreasonable in a time where patent lawsuits are mostly crazy monkey trials where an unproductive, greedy company seeks to prevent people from innovating by protecting things that have long become common knowledge or accepted practice.

Confirmation bias. We only ever hear about plane crashes, too.

Re:Bias against big firms?

[Zordak]

Okay, I'm a bona fide registered patent attorney, and I actually litigate against trolls. It is maddening to see them make some of their more credibility-stretching arguments to a court. Bad patents are my great nemesis. But the truth is, these were very, very bad rules, and everybody knew it. I know it's popular to knock the patent office on Slashdot, and yes, some bad patents have issued (I've litigated against some of them), but these rules are not the answer.

The first problem is the limit on continuations, which was flagrantly in violation of statute. That's the one that got struck down, and without it, the others are not so meaningful. Actually, leaving continuations while limiting RCEs actually just creates MORE delay. So this doesn't fix the pendency problem. The second problem is an inventor often doesn't know what the patentable part of his invention is when he first files. I always tell my clients to give me very, very detailed disclosures, because chances are what you think is your invention turns out to not be patentable, or turns out to be only one of several patentable aspects of your disclosure. So most of my applications will have fewer than the 5/25 claim limit, but sometimes you need more flexibility, because you don't know which patents are going to survive examination, and it's much better to just cancel a claim and fall back on an existing alternative than to have to amend a claim.

As for anti-business bias, I write patents for both really big companies you definitely know (and quite possibly hate) and little individual inventors. Guess who loses under these rules? The little guy, every time. This basically shuts down the ability of any little guys to take an idea to market and make money, because the ONLY competitive advantage they have against the big guys is their patents. This means that little guys will never disclose their ideas to big guys, because in most cases, your patent is the only protection you have against them just taking your idea and doing what they want with it.

So yes, there are bad patents. Yes, there are trolls. Yes, I despise them as much as you do. In fact, I wrote a comment for the law review when I was in law school about the problem of patent trolls. My analysis was that the only way to shut down trolls without stifling legitimate inventors was to strengthen the obviousness standard, and specifically, to let go of the rigid adherence to the "Teaching, Suggestion, or Motivation" test. Just when I was ready to submit it for publication, the Supreme Court came out with KSR and adopted my exact reasoning (if only I'd sent them my paper, maybe I could have claimed credit). These rules do nothing to further innovation. They were the product of inept bureaucrats (including a director of the USPTO who was not even statutorily qualified for the position) trying desperately to pin their own failures on the patent bar by making it look like so-called "abuse of continuations" was the real problem. The truth is, only a very small percentage of applicants are doing anything remotely abusive with continuation practice. The real problem was Dudas and his cronies at the USPTO. These guys were appointed as political payoff, and they ran the place like payoff political appointees (i.e., ineptly). They railroaded these rules through, totally ignoring comments and concerns from the patent bar, applied them retroactively to existing applications, ignored statute, and then presented them in a sham unveiling where they solicited questions from participants, then ignored all of the questions submitted and at the end, instead answered a bunch of pre-canned softball questions they had carefully crafted themselves (hint to inept bureaucrats: it looks suspicious when you have power point slides for supposedly answering questions in real time). The whole thing was shady, abusive, and dishonest.

Re:Bias against big firms?

[Temujin_12]

I am not a bona fide registered patent attorney, but it seems to me that requiring a certain level of investment towards the development of the entity behind a patent (relative to what the investment capability of the filer is) would go a long way towards making the business of being a patent troll unprofitable. Once it's unprofitable to be a patent troll, they'll go away.

This would basically make the patent system a two-way street. If the government is going to grant you a patent and help you protect it (by providing the legal system, courts, etc.), you'd better make it worth their while by investing in the idea which in turn puts money back into the economy. Make patents less of an enumeration of ideas and more like a business proposal made to a bank.

Re:Bias against big firms?

[Austerity Empowers]

Confirmation bias. We only ever hear about plane crashes, too.

Possibly, but in both large tech companies I have worked for (one of which used to be well known for huge, world changing inventions), I have been in a position to monitor patent submissions.

They're largely crap. My present company is the worst offender (but fortunately patents only in self defense, so far) but both produce a tremendous amount of bullshit patents.

It's very rare that I see an idea novel enough and essential enough to warrant a patent. Usually I see an attempt to mine the area, harming only people for whom a single lawsuit could bankrupt them, but ignoring equal or larger predators because it'd be too expensive to bother. This is to say, they exist for anti-competitive purposes.

Don't get me wrong, I know that the verbage in the summary about "small businesses" is code for "patent trolls", and I'm not trying to make the case that abuse is rampant only amongst big businesses. The entire system is not serving the intended purpose anymore, it's being used to prevent, restrict or channel innovation, to the detriment of the society which created the system.

Re:Bias against big firms?

[darkmeridian]

Small pharmaceutical companies usually discover the novel compounds that may have medicinal value. However, it is the big companies that can perform human testing and bring it to market. Small companies may find it difficult to cover all medicinal uses for their products with only five patents. For instance, Viagra was designed for heart problems but turned out to be useful for erectile dysfunction. With these limitations, it is theoretically easier for big companies to bully small companies into giving up their invention without paying full price for it.

That is the argument for it, anyway. Who knows?

Hmmmm

[Anonymous Coward]

Maybe it does help the larger IT companies more than smaller ones in the sense that the larger ones have the resources to submit more patents, but it only restricts the small ones (or anyone) from making lots of separate claims within each patent. This should make each individual patent easier to follow. That's good, right? You can still patent your small company's disruptive technology but you're effectively encouraged to focus on actually patenting that and not laying claim to everything under the sun and moon while you're doing it.

Details on the rules

[langelgjm]

A somewhat better description of the rules can be found here.

They include things like limiting the number of claims to 25 (some patents include hundreds of claims, I believe; these are the heart of the patent, as they define what exactly might be infringed); and setting a limit on the number of requests for reexamination (I think that currently, you can just refile indefinitely, and that many applicants do just that, hoping that eventually an examiner will give up and accept their patent application).

Re:Details on the rules

[Theaetetus]

A somewhat better description of the rules can be found here.

They include things like limiting the number of claims to 25 (some patents include hundreds of claims, I believe; these are the heart of the patent, as they define what exactly might be infringed); and setting a limit on the number of requests for reexamination (I think that currently, you can just refile indefinitely, and that many applicants do just that, hoping that eventually an examiner will give up and accept their patent application).

For the former, it's not as big an issue in high technology, but it's a much bigger issue in pharmaceuticals and biotechnology, where a 100-claim set is actually reasonable, due to the numbers of species or minor changes to a drug that they're claiming as dependent claims.

For the latter, one slight note I'd add is that the requests for continuing examination still have to move prosecution along... You can't just keep saying "my invention is A", have the examiner say "A is not novel", and file a continuation saying "my invention is A", unless you want it rubber stamped. Instead, it's more about narrowing the claims until you get to "Okay, my invention is A and B, when you use it to do C and D".

This is a poor substitute

[gravesb]

for Congress re-writing the law in a comprehensive matter. If Congress does so, courts have to defer to the new laws. With the USPTO doing it, every rule change will be heavily scrutinized by courts, and it will take years of start and stop rule making to come up with an ad hoc, disjointed rule set. But at least someone is doing something.

Re:This is a poor substitute

[langelgjm]

On the other hand, if Congress tries to rewrite it, every industry lobbyist will be pushing their own agenda at Congress. And I would tend to think that the USPTO has a better idea of what needs to be done in terms of reform than Congress.

Re:This is a poor substitute

[cvd6262]

True. My first reaction was like the GP: The Constitution grants congress the authority to protect intellectual property ("inventions"). I don't see the Patent Office mentioned anywhere therein. While it makes sense that an office would be creating for the application of congressional rules, granting that office the authority to change the rules is tantamount to dereliction of duty.

But then, like you, I looked back at the last dozen-or-so congresses and realized I don't have much faith in them upholding the Constitution either. Whether it's unlawful search and seizure or bills of attainder, I'm pretty sure most of our elected officials flunked high school government.

There is one difference between having congress set the rules and allowing the USPTO do it: We can vote out the congress.

Re:This is a poor substitute

[cvd6262]

Good point. I mean it. It's too bad you posted AC. Someone with mod points might not see it.

Re:Which?

[compro01]

There is only one federal circuit. There's also 11 other circuits (numbered 1-11), plus the DC circuit.

Re:TFA is biased and maybe disingenuous

[jonwil]

whats needed is to make it illegal to patent any DNA sequence found in nature (be it plant, animal or human). If the company has cooked up a sequence in a lab (ala Monsanto), yeah sure, give them a patent on it.
Further to this though there would be a complete ban on any patent covering any part of the human genome. So when we start doing genetic manipulation and gene therapy on humans in the future, we dont have a situation where someone has gene therapy and then gets sued for having kids and passing on the gene therapy to them or something like that.

I think you mean publication bias

[cvd6262]

Though both may operate in the GP's comment.

In psychology and cognitive science, confirmation bias is a tendency to search for or interpret new information in a way that confirms one's preconceptions and to avoid information and interpretations which contradict prior beliefs.

Publication bias arises from the tendency for researchers, editors, and pharmaceutical companies to handle experimental results that are positive (they found something) differently from results that are negative (found that something did not happen) or inconclusive.

A plane landing safely doesn't make the news while a crash does. This may skew our perception of air travel. The same for patent trolls: A relatively small number of malefactors get more press than all the useful ways patent law works.

Re:OT: Your sig

[Zordak]

Because you can sue a lawyer for negligently giving you bad legal advice, especially if he creates the impression that he represents you. Yes, there are people in the world who really are stupid enough to think that a random post on Slashdot is legitimate legal advice (or at least claim they did, trying to strike it rich). So when you sue me, exhibit A is my .sig.

Re:OT: Your sig

[fizzup]

You should know that putting it in your .sig is not sufficient. I have signatures disabled in my post viewing preferences. I find most of them to be without value. You should add your disclaimer to anything you write, because I didn't even know that your post was not advice.

Re:Delegation, not dereliction

[cvd6262]

I can accept that.

Will you agree there are some authorities that congress should not delegate away? IMHO, governance of property rights is only of those authorities.

Here in NY, we have a great deal of regulating offices that the state legislature created (as you point out, they were well authorized to do so), but now these offices exist without state oversight, yet they wield power greater than the elected officials who created them.

Child protective services offices in many states operate under this lack of oversight.

Support your small business!

[Brandybuck]

A number of tech companies including Microsoft, IBM, Oracle, Apple, and Intel have supported the rule changes, which would strengthen their positions and make it more difficult for small companies to create, protect, and bring to market disruptive technology.

If you want to support small companies and get more disruptive technologies to the market, ABOLISH PATENTS! Sheesh.

Handing out exclusive monopolies doesn't help small business, it props up big business and hinders innovation. The proponents say it foster innovation, but it only fosters getting to the first rung of the ladder. Once you have a monopoly on the first rung, everyone has to pay royalties to get to the second and third. Big businesses love patents, because they beat down their small business competitors, and prevent new ones from rising. (Actually, big businesses love most regulations, for exactly the same reason).

Re:OT: Your sig

[SydShamino]

I turned signatures off nearly a decade ago. I just can't see a trivial user preference like that being crucial for a legal case.

Of course, I can't see a slashdot post from a lawyer as crucial for a legal case, either.

Re:OT: Your sig

[Zordak]

True, it's not perfect. But the totally effective thing to do would be to get a signed non-engagement letter from every Slashdot user and AC, co-signed by their own attorney for best results, clearly indicating that I don't represent them. Sometimes you just go with "good enough." Some people have .sigs off, but most don't. And sometimes, if I want to be extra careful, I will add an extra inline disclaimer.