Can the U.S. patent system be saved?

Most observers hold out little hope for a process that favors deep pockets, even with recent reforms.

By Gina Smith, Computerworld |  IT Management, patents

Other issues abound, experts say. Craig Opperman, a Silicon Valley patent attorney at DLA Piper, points out that the U.S. legal system doesn't force the losing party in a suit to pay the winning party's legal fees. As a result, litigation is cheap and easy for companies who can afford it.

Also, he says, "It is very inexpensive, relative to Europe, for example, to get a patent."

Ewing trains patent agents around the globe as part of his work for the World Intellectual Property Organization. He explains that "attorneys' fees are typically higher in Europe, and patent holders must pay annuity fees for each European country in which they want to keep their patent active. Any one of these fees tends to be equal to or higher than the U.S. fee."

In other words, if the cost of a patent in any one of the EU countries is equivalent to the U.S. cost, then one must multiply that by the number of countries in which the patent is being applied.

Overall, these lower U.S. fees result in more and more patents here, overwhelming an already overtaxed patent examination system and resulting in some substandard patents that end up being overturned later.

Companies have always bought and sold patents, and it's legal to do so, of course. What's new here is the buying and selling of thousands of patents in a single transaction, a situation that potentially locks out smaller competitors and innovators in any given field -- and the AIA does nothing to prevent that.

This is to the advantage of tech companies that, as Ewing points out, fiercely complain about costs of litigation but then want to retain the right to arm themselves -- by buying massive numbers of patents -- to attack competitors.

Take Rovi. This firm owns over 1,000 patents related to on-screen cable TV program guides, the great majority of which it acquired. As a result, it is extremely difficult, if not impossible, to build a non-infringing TV guide, says Avancept's Ewing.

Another problem, Opperman adds, is intense lobbying on the part of large tech companies in order to weaken how courts calculate patent damages in cases against them. That way, they pay less when they lose.

Lobbying by high-tech firms could, ultimately, erode the enforceability of U.S. patents, Opperman says. "I fear that a decade from now U.S. high tech will come to rue the erosion they [lobby for], as offshore manufacturers take advantage of a weakened patent system and their own cheap labor pools to take U.S. market share away from U.S. innovators," he says.

So what's the answer?


Originally published on Computerworld |  Click here to read the original story.
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