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06.20.18

What Use Are 10 Million Patents That Are of Low Quality in a Patent Office Controlled by the Patent ‘Industry’?

Posted in America, Courtroom, Law, Patents at 1:36 am by Dr. Roy Schestowitz

“To technology companies, NPEs [patent trolls] are a drag on innovation, taxing them tens of billions of dollars every year while achieving no social purpose” –Mark Lemley and Robin Feldman

Mark Lemley
Image source: Stanford Law School

Summary: The patent maximalists are celebrating overgranting; the USPTO, failing to heed the warning from patent courts, continues issuing far too many patents and a new paper from Mark Lemley and Robin Feldman offers a dose of sobering reality

THIS post is not another rant about the EPO but purely about the USPTO, which is now being run by patent maximalists (see/recall the Director's selection, which seems to have involved nepotism). As the USPTO’s “CIO Watchdog” put it yesterday (amid pretty substantial rumours of endemic USPTO nepotism): “PTO is sending Patent SES (David Wiley) back to Patents and bringing another (Debbie Stephens) to serve as the DCIO for a couple of months, this sounds odd? Rumors are flying about a new CIO selection but nothing official. Wiley seemed to be well thought of, Stephens not sure?”

“A meaningless — symbolic at best — ‘milestone’ will be celebrated. 10 million patents!”Nobody in the media has been covering the spousal connections there; barely anyone bothered pointing out that the USPTO’s new Director headed a firm that used to work for Donald Trump before Trump nominated/appointed him. Either way, the news sites will be full of pieces like this one in the coming days. A meaningless — symbolic at best — ‘milestone’ will be celebrated. 10 million patents! As one site put it (the first we have seen on this):

The US Patent and Trademark Office (USPTO) has issued its 10 millionth patent.

The patent, Coherent Ladar Using Intra-Pixel Quadrature Detection, was the first to receive a new patent cover design, which was unveiled back in March.

The first patent was signed 228 years ago by George Washington in 1790. It was issued to Samuel Hopkins and was for a process of making potash, an ingredient used in fertilizer.

Commenting on the historic occasion, Wilbur Ross, secretary of commerce, said: “Innovation has been the lifeblood of this country since its founding.”

Wilbur Ross has been part of the so-called ‘swamp’ which put a Trump-connected patent maximalist in charge of the Office. And 228 years after it all started the USPTO issues patents at a laughable scale/pace which makes it rather clear that it issues a lot of patents wrongly. It has financial incentive to do so.

Examiners who try to do a good job and properly scrutinise applications receive “shaming” treatment from patent extremists like Anticipat, which now (yesterday) advises wrestling with patent examiners over rejections as if anything that renders patents void — like PTAB for the most part — is an abomination and wrong. Anticipat if just looking to profit from patent extremism. ‘Stalking’ examiners, too. Doxing next? Here’s what they wrote:

The Examiner Answer can be a very important stage of the ex parte appeal process. It is at this stage that Examiners may want to make up for weak Office Action positions and set themselves up for getting affirmed at the Board. Understanding the incentives and tactical options, however, can give the patent practitioner the upper hand.

The Examiner Answer is technically optional (“The primary examiner may, within such time as may be directed by the Director, furnish a written answer to the appeal brief.” 37 CFR 41.39). Examiners usually prepare them because of the disposal credits that they receive. Outside of this most obvious incentive, Examiners also have an opportunity to present their case most favorably to the Board panel that will decide the case. Sometimes these analyses can improperly go out of bounds. Since an appellant only gets 60 days to respond to an Examiner Answer (no extensions), a timely assessment of the Examiner Answer is critical.

Professor Lemley (whom patent extremists hate) and a co-author less familar to us, Robin Feldman, have meanwhile published this new paper. “My latest paper with Robin Feldman,” Lemley wrote, “surveys tens of thousands of companies about the patent licensing demands they receive (fewer than you think) and whether those patent licenses drive innovation (not often).”

From the abstract:

Patent reform is a hotly contested issue, occupying the attention of Congress, the Supreme Court, and many of the most innovative companies in the world. Most of that dispute centers on patent enforcement, and in particular on the role of non-practicing entities (NPEs) or “patent trolls” – companies that don’t themselves make products but sue those that do. To technology companies, NPEs are a drag on innovation, taxing them tens of billions of dollars every year while achieving no social purpose. To NPEs and their supporters, they are enabling the first inventor to get paid and creating a working market for the transfer of technology.

Which is it?

In this paper, we present the first full empirical of the effect of patent licensing demands on the economy. With the help of a National Science Foundation grant and experts in survey design, we sent our survey out to every US-based business with at least one employee and revenue of $1 million or more – over 45,000 companies. Our results provide important insights into the nature and limits of patent licensing demands and their role (or lack thereof) in driving innovation.

So the bottom line is, this whole Cult of Patents as we habitually call it does not actually help innovation; it mostly helps the patent ‘industry’, which conflates litigation with innovation. How about a saner patent system which actually seeks to maximise innovation rather than the number of granted patents?

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