Skip to comments.Patents, long the tech world's currency, come under attack
Posted on 04/21/2002 3:53:23 PM PDT by bvw
The patent office has been criticized for allowing a ticket of patents to grow in recent years.
In today's economy, driven as much by ideas as by actual products, patents are more critical than ever. Just ask iSurfTV, a four-year-old electronic-programming provider that still hasn't signed any cable companies as customers, because those companies fear Gemstar-TV Guide (which holds nearly 200 patents on its television guides) will sue them. The startup expects several of its 80 filed patents to be approved this year, but it has already eaten more than $13 million in venture funding.
Startups hoping to capitalize on their innovations face the fear of patent challenges constantly, and the problem has gotten only worse, as companies race to patent new technologies before their competitors do. Some are concerned that the U.S. Patent and Trademark Office (PTO) has responded to the increased level of patent activity by granting patents that are too far-reaching, leading to what they say is unfair market dominance by large companies that can afford to file broad patents and fight to protect them. In response, the Federal Trade Commission (FTC) and the Department of Justice Antitrust Division are cosponsoring a series of hearings in Washington, D.C., and Berkeley, California, called "Competition and Intellectual Property Law and Policy in the Knowledge-Based Economy."
"If the patent review process is too permissive, . . . competition through entry and expansion by others may be impeded," said FTC chairman Timothy Muris, in calling the hearings last fall. They will extend through May and will ask nearly 200 experts, professors, lawyers, businesspeople, and inventors to testify.
The PTO has been criticized for allowing a thicket of patents to grow in recent years. The application approval rate actually remained steady at around 57 percent between 1990 and 2000, but since the number of patent applications filed increased by almost 80 percent, the number of patents granted has risen considerably. Since 1991, agency financing has come entirely from patent-application fees. In theory, this means the agency can grow only by increasing fees--which can be cost-prohibitive to individual inventors and startups--or by keeping its acceptance level high to encourage a high volume of applications.
That makes it difficult for startups to keep up with the patent flow. Joshua Lerner, a Harvard Business School professor, told the committee in February, "The reforms of the patent system and the consequent growth of patent litigation have created a substantial 'innovation tax.'" He believes the high cost of filing patents and defending against patent-heavy corporations diverts money and resources away from research and product development (see Patent Value).
Data collected by John Barton, a professor at Stanford University Law School, shows that the number of intellectual property lawyers per $1 billion dollars spent on research and development has nearly doubled in the last 30 years. More recently, Internet and biotech companies have spent millions entangled in patent lawsuits. In 1999, Amazon.com filed a lawsuit against Barnesandnoble.com for its one-step purchasing technique. The case was recently settled after years of wrangling, as were several lawsuits between Affymetrix, a biotech company that wielded its "lab-on-a-chip" patents, and several competitors. Patent entanglement played a key role in one litigant, Incyte Genomics, backing out of the DNA array business.
Such activities, which narrow the market, may raise the eyebrows of antitrust officials, but PTO officials dismiss the criticisms. "The issuance of patents has not impeded the development of new technologies and resulting industries, despite initial protests that issuance of a patent would decimate innovation and competition," said PTO director James Rogan in his testimony in February. Not everyone is convinced: in March, a member of the House Science Committee, Lynn Rivers (D: Michigan), introduced legislation that, if passed, would establish safeguards to ensure that patents on certain genetic and genomic-based discoveries do not impede academic research.
The PTO occasionally does revise its guidelines in response to public pressure and Federal Circuit Court decisions. Last year, for example, debate over whether genes could be patented prompted the agency to clarify its guidelines and allow gene patents only when a specific use could be shown for a genetic sequence.
Some critics, including Stanford University Law School professor Lawrence Lessig, have called for a temporary moratorium on all software and Internet-related patents. Others, including Mr. Lerner, advocate opening the patent-review system to the public, thus lifting some of the burden from the shoulders of overworked PTO patent examiners. That has already begun on a limited basis: a 1999 law mandates that the PTO post on its Web site all patents that are also being filed internationally, allowing opposition to an application to be voiced during the review process.
Changes at the PTO happen slowly, so there's little chance that the FTC hearings will prompt any specific directives or legislation. But the hearings are giving government-wide visibility to what had previously been perceived as a private-sector problem. As a result, they may open the door to congressional review of PTO procedures, which could lead in turn to more stringent reviews of patent applications while new technologies are fleshed out.
"It's a classic Washington problem," says Mr. Lerner. "There's a small group of people who benefit a lot from the system and have a lot to gain from keeping it as it is. There are also a lot of people that are getting hurt by it, but each is hurt only a little bit, so there's little incentive for any one person to mount an effort to fix it." The lone inventor--or bootstrapped startup--likely hopes the hearings will jump-start that effort.
Additional reporting by Stephan Herrera.
As of today, 4/21/02 the Patent Office now under Pres.Bush
for the SECOND year, continues to fight cold fusion and other energy researchers
and hold up cold fusion patents.
THIS IS WRONG.
Please help. Like the CONGRESS,
the patent officials do not care that we are at war.
Please FREEP the WH, Congress, and the Patent Office, about this.
Energy is KEY to US security.
They also hold up patents on perpetual motion machines.
Physists say that cold fusion doesn't work. So far, no one has managed to duplicate cold fusion. Until it actually works, I don't think that the PTO will issue a patent for cold fusion.
The Navy report released this month confirms cold fusion.
Most of those attacking cold fusion have other reasons.
If you are serious, and most pathologic critics are not,
the NAVY reports is here
I am searching for the URL for the recent meeting which happened last week.
And the surplus gets siphoned into the black hole that is the general budget.
Would that be the vast right-wing conspiracy we've heard so much about?
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