Drug Patents & Patent Pools – by “Daniel S”

The deep issues of the Patent system are clearest, perhaps, in the realm of chemical drugs. While pharmaceutical companies are few and require great funding (the main defense of drug patents is related to the high cost of drug research and development), they still operate as multinational businesses. Notice both words: multinational businesses, meaning that they seek to minimize their expenditures and maximize their profits on a worldwide level. But the inequality between the First World and the Developing World is terrifyingly deep (and getting deeper) and five thousand dollars needed for a year of HIV medication is a number that doesn’t mean the same in San Francisco as in the Sub-Saharan Africa. In trying to define quality of life, one often speaks of needs, and there should certainly be a line drawn between consumer products and human needs. The idea of patent pools has been forwarded as a solution to the inequality of consumption. Patent pools assemble the research of “originator” companies and allow smaller pharmaceutical companies to produce their drugs and sell them at lower costs while still paying royalties to the originator. Ideally, this means that prices vary according from country to country (situation to situation), which is an adjustment to, if not the Law, the markets and situations of specific places.

Patent Trolling 2.0 – by “Benjamin G”

According to this NPR article, 86% of wild canola plants in North Dakota contain genetically modified genes. This isn’t a problem for the environment; the pesticide-resistant plants are no more fit in the wild. They basically behave like normal canola unless someone sprays pesticides on them. On the other hand, it is a huge problem for patent law.

Monsanto, the company that developed Roundup Ready Canola, holds a patent on it, and 86% of North Dakota’s wild canola fields are infringing that patent. Patent liability doesn’t require intent, or even knowledge; if you are using a composition of matter that someone else patented, you can be sued. Percy Schmeiser found that out the hard way when Monsanto took him to court for planting Roundup Ready Canola on his farm in 1998.

In 1997 Schmeiser found that some of his crops were resistant to Roundup. He didn’t intentionally plant Monsanto’s product – some seeds might have fallen off a truck or blown on to his property from a neighboring farm. Discovering this happy accident, Schmeiser saved the seeds from those plants and replanted his fields the following year using the resistant seeds. Monsanto sued him for patent infringement and won; luckily for Schmeiser the court found that, since he hadn’t used Roundup on his crops he had received no benefit from the infringement and so owed no damages.

The specific facts of the Schmeiser case are a bit more complicated than that and it happened in Canada, so the legal details of the decision are not important. The main issue, however, is very relevant. U.S. statute and case law explicitly permits patenting living things. And it is one of the defining attributes of a living thing that it can reproduce itself. What happens when a patented organism comes into your posession literally on its own volition? As I said, it’s no defense to show you didn’t know you were infringing a copyright.

Monsanto is certainly not a nice company, but they seem to be just protecting their core business. There are other people out there who are not so benevolent, and the current patent law presents a serious liability issue. We have patent trolls in the tech industry- is it so far fetched to imagine one of them patenting a computer virus? Suppose it actually helps your computer run more efficiently, but is impossible to detect. The troll could come in and sue you for copyright infringement and collect damages for all the benefits you gained from his program.

If it can happen in software, why not in biology? Surely someone could create and patent a new organism whose main goal was to spread itself as widely as possible and implicate as many people as possible in patent infringement. He would of course have to be clever about how he worded his patent application, but I have no doubt it could be done. Depending on how good his organism was, pretty soon he could sue anyone he wanted.

Patents grant their owners a temporary monopoly on their inventions. When we allow patents on things that you can “use” without your knowledge, though, we open the door to people forcing you to pay for goods you didn’t want in the first place. I’m not really sure what the best solution to this problem is. I do think organisms should be patentable, so I guess I would have to take a look at the strict liability aspect of the law. In copyright, for example, if you can prove you never knew about the copyrighted work then you are not liable for infringement. There may be a good reason why patent law is different, though – I just don’t know what it is.

The non-obviousness of the non-obvious clause – by “Lynn W”

In critiquing patent law, it helps to return to the original rationale for protection. As Merrill and Elliott’s patent primer states, “A utility patent is an exclusive right of limited duration over a new, non-obvious invention capable of practical application…The right—to prevent others from making, using, selling, offering for sale, or importing the patent holder’s invention—is granted in return for publication of the invention.”

Unfortunately, it is not exactly obvious what constitutes new, non-obvious, and useful. In addition to reading about the “absurdity” of headline-making patents such as Google Doodles and Amazon’s one-click payment feature, I did a quick search through Google Patents and found countless other inventions that not only seem bafflingly unoriginal, but also appear to be useless. Here are some of my favorites (with existing patents that inspired their creation following in parenthesis):

Kissing shield game for “teaching safe affection” (inspired by the “plastic garbage bag holder and sealer,” “sanitary face mask,” “inflatable art frame,” “arrangement for separating an area of operation or treatment in the oral cavity,” and “surgical face mask”)

Rock, paper, scissors card game (inspired by “board game,” “game comprising a pack of cards,” “card game,” and “card game deck and methods of play”)

Giant gummy bear whose “primary object is to provide a giant gummy bear that will overcome the shortcomings of prior art devices” (inspired by 16 patents including “life-like toy animal” and “toy ball”)

Nose pick offering a novel “ornamental design” (inspired by “novelty trophy and base,” “combined lottery ticket scraper and key ring,” “nasal cleaning insert”)

Generally, I think these examples of un-new and un-non-obvious patented items can be separated into two categories, both of which would be better off without the patent.

The first category is that of patents that are not particularly innovative, but are widely useful. I would put Amazon’s one-click payment system into this category. Amazon CEO Jeff Bezos claims that the patent was a necessity because “We don’t want to be another Netscape.” When Barnes & Nobles tried to use the same system, Amazon sued it for infringement. But – would a one-click Barnes & Nobles really have stolen market share from Amazon when Amazon’s main competitive advantage against the book retailer is price? And even if Walmart – the ultimate low-price retailer – were to copy the one-click model, would that have stopped Amazon from creating the system in the first place?

My guess is no, simply because like any rational retailer, Amazon strives to improve user experience in any way possible to drive up sales. The competitive advantage exists the moment that Amazon adds a new feature for its users, and it continues to improve the customer’s Amazon experience even when the same feature gets adopted by other retailers. The patent simply reinforces and strengthens the competitive advantage – but at a cost to the user, who can only enjoy an expedited shopping experience with one Internet retailer. Besides, all Barnes & Nobles had to do to avoid infringement was to use a two-click system, which hardly seems different from the one-click innovation. It thus remains questionable whether or not the patent really helped Amazon sustain a competitive advantage in the online shopping checkout domain.

The second category is that of patents that are not particularly innovative or useful. Like the kissing shield game. Is this invention really worth the time and labor that goes toward filing and processing a patent? The costs are even greater when you consider the hefty legal fees that many naive inventors are pay in order to patent products that have no profit potential. Of course, once in a while you get an idea like the Pet Rock that generates millions in revenue, but as of 2005, only 3,000 patents in the U.S. were commercially viable out of a total of 1.5 million. There must be a better way to filter out the excess.

At the end of the day, it’s important to remember that the ultimate purpose of a patent is to benefit the public by fostering greater creativity through the means of benefiting the inventor. A study by Bessen & Hunt in 2004 found that software patents have actually resulted in lower R&D intensity and thereby, less creativity. Meanwhile, the vast majority of patents are clearly not providing any monetary benefit to the inventor. Bezos was right when he called for “fewer patents, of higher average quality, with shorter lifetimes.” One way to begin is to offer a better definition of the new, non-obvious, and useful.

Fixing the USPTO for America’s businesses – by “Alexander F”

“Believe it or not, in our patent office — now, this is embarrassing — this is an institution responsible for protecting and promoting innovation — our patent office receives more than 80 percent of patent applications electronically, then manually prints them out, scans them, and enters them into an outdated case management system.  This is one of the reasons why the average processing time for a patent is roughly three years.  Imminently solvable; hasn’t been solved yet.”

— President Barack Obama, Forum on Modernizing Government, White House, January 14, 2010

While growing tides of patent reform may be starting to roll in through congress, one of the biggest problems facing the state of patents in America has yet to be addressed: the efficiency of the US Patent and Trademark Office.

As it currently stands, the USPTO is in a state of tremendous disorder. It has a backlog of over 1.2 million patent applications. That is up from a backlog of 770,000 applications in the middle of 2009. This growth has been unprecedented, and sadly the USPTO has been unable to keep pace with this exploding growth.

The efficiency of this government agency has long been a joke of attorneys, due in part to the technological gaps that the President noted above, but also due to a long and continuing tradition of underfunding and understaffing. In mid-June of last year, the USPTO had in its employment 6,285 patent examiners. This staff can only process about 450,000 applications each year, which has made it impossible to handle the growling load of patents sitting in their back yard.

The Patent office itself aims for an 18-month turn around for each of the applications it receives, yet the average processing time currently is estimated to be around 3.5 years, with more complex applications taking even longer. At this rate, the USPTO is only going to sink deeper and deeper into a hole of patent filing backlogs without a ladder to climb out.

So what needs to be done?

Congress seems more worried about the lawsuits surrounding patent filings, acknowledged by the current patent reform bill in the works that notably lacks any solutions to this backlog of gross inefficiency. I feel that while their intentions are good, they have their priorities in the wrong place. Right now, we, as a nation, are trying to pull ourselves out of the financial sinkhole of 2008, and we’re actually getting there, slowly but surely. In the grand plan for economic improvement, much attention has been given to the encouragement of small-business growth and how to best achieve that. The fact is, many small businesses rely heavily upon their ability to secure patent rights for new and exciting ideas before deciding to bring their ideas to the market. While the legal battles around patent violations may have gotten a little ridiculous, and congress should step in, these battles affect the few, while small business growth effects the nation.

Those 1.2 million backlogged patents provide an incredible amount of wealth for the American economy and these small business. It is foreseeable then that by processing these applications more efficiently, the economy as a whole may feel a boost from small business finally securing patents for their exciting innovations. Companies will begin. Jobs will be created. Markets will re-expand.

Thus, I believe that the focus of patent reform right now needs to drive towards improved efficiency and funding. It needs a larger staff and resource system that can support the demand being placed on the system. It needs the tools to make the processing of applications not only digital, but also easy to submit, maintain, and find. It needs to become a component of the bureaucratic American government that is no longer a laughing stock of nation. Congress needs to help the USPTO get back on its feet, evolve into the digital age, and help America recover and thrive once more.

Ready, Set, File! – by “Reynolds H”

On March 4th, United States Senate Judiciary Committee bipartisan leaders released the details of legislation aimed at reforming US patent laws. The new bill makes significant steps toward resolving longstanding conflict in efforts to revamp US law for patent quality and efficiency, and make it more compatible with international laws. The new bill, referred to as the “managers’ amendment“, is being said to provide a much needed boost to innovation. However, the bill must go to the full Senate for a vote, and must be passed in the House of Representatives as well.

The “Managers’ Amendment”  includes nearly all of the improvements to the patent laws that were part of the  Patent Reform Act of 2009, and contains changes to greater balance all users of the patent system. One of the reforms is particularly intriguing, the transition to a first-to-file system. 

Currently, the USPTO runs under a “first-to-invent” system, which as the name suggest, gives rightful ownership of the patent to the first inventor of the innovation.  Under this system there is the potential for the person who invented the innovation first, but failed to file it with the USPTO to be retroactively awarded the patent, thereby possibly leaving the person who filed the patent first to be stripped of it.  This system creates many situations where patents must be disputed between two parties (or more).  The complications of the first-to-invent system are outlined in this example provided by Wikipedia:

Assume Tom conceives of a new mousetrap on January 1, 2006. Tom works diligently from January 1, 2006, to February 1, 2006, to prepare a patent application, and Tom files his patent application on February 1, 2006. Thus, Tom constructively reduced his invention to practice on February 1, 2006. Assume Jerry conceives of the same mousetrap on January 10, 2006, and diligently files a patent application on the new mousetrap on January 20, 2006. Under the first-to-invent system, Tom is entitled to the patent on the mousetrap, because he conceived the mousetrap before Jerry and still worked diligently to reduce it to practice by filing. Actual and constructive reduction to practice should be distinguished. Filing a diligently prepared application constitutes constructive reduction to practice only and can be antedated by evidence of an actual reduction to practice.  If both Tom and Jerry claimed the same invention, the USPTO would institute an interference proceeding between Tom and Jerry to review evidence of conception, reduction to practice and diligence.

As a further extension of the example, assume Tweety conceived of the same mousetrap on December 31, 1990. Tweety never told anyone about the mousetrap and did not work on reducing the mousetrap to practice for many years due to financial reasons. Tweety finally actually reduced the mousetrap to practice on February 15, 2006. Because Tweety did not diligently work to reduce the invention to practice in the period before others’ conception of the same invention, he is not entitled to a patent over Tom or Jerry.

Proponents believe that this transition will serve to rid the confusions of patent ownership leading to interference proceeding, which take away from both USPTO funds as well as degrade the overall efficiency of the US patent system.  Under this first-to-file system, the argument of who initially invented the innovation is moot, thereby allowing USPTO funds and time to be diverted towards further review of the influx of patents. The trainstion also enters the US into the same system that many of the worlds leading nations (UK and Japan), which relieves a major complication to a transition to a more internationalized patent system.  

However, there are plenty of potential drawbacks to this system transition.  Having a firs-to-file system gives incentive for inventors to file patents for innovations which may not be at a quality high enough to deserve a patent.  From a practical standpoint, if emphasis is placed on the speed at which a patent can be filed, the overall quality of the innovation may decrease as a factor of speed. The bill has not been passed yet, so only time will tell if the pros outweigh the cons, hopefully it doesnt turn patent seeking into one big rat race.