A better idea for patent reform

April 9, 2013
News reports say the U.S. Patent Office recently was quite busy because of a change in patent law that took effect March 16

News reports say the U. S. Patent Office recently was quite busy because of a change in patent law that took effect March 16. After that day, the USPTO switched to a first-to-file rule, which gives priority to patent seekers who are first to file their idea. This contrasts with the previous practice in which the USPTO would grant patents to inventors who could prove they were first to come up with an idea, even if someone had applied before them.

The shift is said to harmonize U.­S. laws with those in the rest of the world. But judging by the mad rush to file before the change in policy, the new rules seem to be about as welcome as a cop at a pickpocket convention.

Critics say small companies will be disadvantaged under this scheme because they will be forced to file for patents quickly, before they can ascertain an idea’s commercial merit. That, or risk losing the IP rights to (typically larger) firms with pockets deep enough to bankroll applications on marginal work. But the more-compelling reason for the dash to the USPTO before the deadline seems to be a change in how examiners view prior art during evaluations. Now, examiners will consider as prior art patent applications in other countries that have been published in foreign languages. Before, they analyzed only applications in English. The change is expected to increase the difficulty of proving an idea is patent-worthy.

In other words, fewer ideas will probably pass muster under the new policy. But I’d argue that a reduction in new patents is a boon for society. The reason is that many patents issued today cover processes, particularly business processes, rather than machines or other physical entities. The jury is still out on whether patents on business processes do more good than harm.

An example of the current debate comes from a recent court case over whether patents should be granted for business methods whose main innovation is the use of a computer. A company called Alice Corp. in Australia holds patents for a computerized system involved in exchanging financial obligations. It is now defending one of its patents in court, arguing, “it’s patentable if the computer plays a significant role in the invention.”

The problem is that computerizing a process is a pretty basic idea. Many technology companies worry that patents on ideas this simple prevent a lot of legitimate innovation. Google, Dell Inc., and Facebook are all in this camp. These companies filed a brief criticizing an appeals panel’s earlier decision on Alice, claiming ideas like Alice’s are too simple to deserve patent protection. “The real work comes later, when others undertake the innovative task of developing concrete applications,” the companies wrote.

If you can patent an idea for a system whose only claim to fame is its computerized aspect, no wonder that the cost of patent litigation in many industries now exceeds the profits companies generate from licensing patents.

But there is one business process patent I wouldn’t mind seeing. The vagueness of patent law as it stands makes you wish someone would patent a process for granting patents.

— Leland Teschler, Editor

© 2013 Penton Media, Inc.

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