02.03.16

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Patent Invalidation Statistics and Cost of Patent Litigation (Even If Bogus) Show That Patent Scope and Examination Standards a Problem in Europe, Not Just the US

Posted in America, Europe, Patents at 5:13 am by Dr. Roy Schestowitz

The huge cost (even to innocent parties) of patent maximalism motivated by self-importance and greed

Pig's bank

Summary: Far too many bogus patents (patents that should not be granted in the first place) and spurious patent lawsuits that end up in favour of the defendant serve to show the external cost (or externality) when it comes to low-quality patent systems that strive to grant a lot of patents irrespective of merit

LAST year we wrote quite a lot about software patents in Europe, including in Germany’s courts, where Apple had been trying to block Android/Linux (Germany is strategic for many such lawsuits). Well, according to this interesting new piece from IP Kat, “German Federal Patent Court (partially) invalidates 80% of litigated patents” and here are the numbers for software patents: “For software and telecommunications patents, the invalidation rate is even higher at 88% (58% totally invalid, 30% partially invalid, 12% maintained). Patentees fare slightly, but only slightly, better on appeal, as the win rate for appeals against decisions invalidating a patent is higher (60%) than the win rate for appeals against decisions maintaining a patent (40%).”

“It’s a very big deal when patents are ruled invalid in courts because it means that patent offices simply failed to do their job properly and as a result many companies may have to spend a lot of money that they’ll never redeem (even when acquitted).”Many people read this piece within hours and many comments there alluded to the EPO. People have strong feelings about this. It’s a very big deal when patents are ruled invalid in courts because it means that patent offices simply failed to do their job properly and as a result many companies may have to spend a lot of money that they’ll never redeem (even when acquitted). This is a serious injustice. It also serves to show the real cost of patent offices that associate the number of patents with “innovation” (and thus embark on a patents gold rush).

As revealed by a patent maximalists’ blog the other day, patents are now being found invalid in the courts only upon appeal (i.e. even more legal charges) because examiners granted too easily (or pressured to grant by management, if the example of the EPO’s Grant Philpott was to be generalised). The same blog also spoke about patent trolls with software patents. We wrote a great deal about NewEgg’s defense from such trolls in recent years (NewEgg deserves kudos for its policy on this matter). To quote the blog: “In the appeal, the Federal Circuit noted that – this time, NewEgg was the one with an unreasonable position — demanding a “de novo review of the district court’s findings” despite recent Supreme Court precedent to the contrary. However, the Federal Circuit followed its usual practice of requiring each party to bear its own costs of the appeal.”

“The patent offices need to come under an examination.”So once again it’s an appeal and no legal fees will be reimbursed. The cost of fraudulent patent lawsuits (invalid patents) is passed to the defendant, which even if proven innocent still loses (a lot of money). What kind of justice is this? The UPC can potentially bring a lot more of this to Europe and given the statistics above (from Germany) we shouldn’t have to tolerate it. The patent offices need to come under an examination. Currently they just don’t have any effective form of oversight; quality is hardly imposed from the outside, except perhaps the Supreme Court, the EPC (old), and so on. Why are so many bogus patents granted in the first place? Some of the evidence we had showed for that the EPO threatens to sue us over, some remains in tact.

Consider this new analysis from a patent lawyers’ site. It is titled “Monsanto Patent On Virus-Resistant Melon Revoked” and it says: “The patent application was filed with the EPO on 21 December 2006 and the grant of the patent became effective on 4 May 2011. The patent has since been opposed by, inter alia, numerous NGOs.”

Do NGOs and persistent political pressure need to act as oversight for greedy offices where there’s insatiable aspiration to increase the number of patents, even if by unethically broadening patent scope (e.g. to forms of life)?

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