Patent Demand – A Simple Path to Patent Reform

[Read Tim Wilson’s Paper] Tim Wilson (Senior IP Counsel at SAS US) has been concerned about patent quality for some time. In part, the sheer number of patent applications being filed creates a host of problems. Wilson’s solution is to raise patent fees – he says the fees should go as high as $50,000 for large corporate applicants. The result – according to natural tendencies of supply and demand – is that fewer applications will be filed and fewer patents will issue. In all likelihood, however, those that are filed will be better applications covering higher quality inventions.

Wilson did not simply pull his $50,000 figure out of his ear. Using the powerful computing resources of SAS, Wilson calculated an estimated demand curve for patent applications using both (1) historical filing reactions to increases in PTO fees and (2) an assumption that the budgets of corporate patent departments is fairly inelastic. Wilson then created his Figure 5 – showing the demand curve for patent applications drawn with respect to the patent application fees.

Wilson’s approach is admittedly only an estimate, but his intuition has to be correct that a dramatic increase in PTO fees would lead to a dramatic decrease in PTO filings.

An average high technology patent contains a minor improvement on a small portion of a product and the patent application is typically written using outside counsel working for a flat fee of a few thousand dollars. Imagine what would happen to the high technology company’s patent process if each patent application cost $50,000 just to file. The high technology company would file far fewer, but more important patent applications and they would spend more time and effort doing so. The pharmaceutical company’s process probably would not change much because a billion dollar decision depends on the outcome of the patent process.

What would happen to non-practicing entities, sometimes derisively referred to as patent trolls? I believe that these entities will change to patent market facilitators, or cease to exist. When the value of all patents is increased substantially, it is very unlikely that any patent will be available to fall to these non-practicing entities. First, each individual patent will be more valuable to the current owner of that patent, so it will be less likely that an owner would be willing to part with it to a troll. Second, if a company does fail, competitors of that company may be more willing to buy that patent rather than allow it to fall to a company that may sue the competitor. Finally, fewer issued patents mean that it will be easier for companies to monitor patents issuing in their product space and less likely that they will allow those patents to fall into the hands of a troll.

DDC Comment: Wilson’s proposal has some merit, and his work on the demand curve is especially interesting. However, the proposal suffers from three fundamental problems: First, the proposal implicitly equates economic value with technologic value – the two are related but different. Many important technical advances have only limited economic value, but still serve as building blocks for future advances. (i.e., standing on the shoulders of giants). Second, the proposal greatly favors technologies where the economic value is well known up front. Again, many important technologies are eventually found valuable – but the very high up-front price will greatly limit those applications – and consequently, the upstream incentive to innovate in that area. Third, the proposal favors firms with cash – i.e., those that have performed well in the past and have saved their money. However, many innovation experts believe that most of the breakthrough work comes from these mainstream companies. To his credit, Wilson addresses this problem by stating that the high-price only applies to large companies. However, that approach would tend to allow the “non-practicing entities” to continue to obtain patents (against one of Wilson’s primary goals). In addition, the prospect of small entities paying only $500 while large entities pay $50,000 would surely lead to other political and practical problems.

  

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

108 thoughts on “Patent Demand – A Simple Path to Patent Reform

  1. anon,

    Re your idea about timing for 1 claim examination & extrapolating:

    Interesting, but there are a LOT of variables that would still need to be taken into account. These would include:

    the field of art of the claim;
    the experience of the examiner;
    the competence of the examiner;
    the length of the claim;
    the details in the claim;
    how much of the length and/or details are conventional & how much are well known;
    is there actually prior art out there on that claim;
    how well the claim is written;
    how well the spec is written;
    etc…

    IF you can take ALL of this into account, you MIGHT have a starting place, but there would be a LOT of work still to do.
    We all know that claims are not cookie-cutter & vary with regard to all of the above. So, even if you had a decent accounting for all of the above, you would then need to determine how to modify that number for all of these (and any other) variables to come up with a metric that would be usable for other cases & claims.

    Not trying to be negative, just pointing out that most solutions are not so easy when you really get down to the brass-tacks of things. People often do not consider all of the variables when suggesting something & so something may sound good at 1st blush but when really analyzed flaws develop. And, unless people are willing to accept that their ideas have flaws & are willing to adjust to take other factors into account, the ideas are usually more harmful than beneficial (much like the rules packages that they tried to push thru).

    Just like the 1d10t on here & his idea about adjusting production for examiners by the number of pages of spec & the # of claims. AT BEST, that would be a zero-sum game (which he has admitted) & be like rearranging deck chairs on the Titanic. In practicality, would probably result in LESS time for examiners to do a case & be like seeing the iceberg & ordering “Full steam ahead!”

    Personally, I would love to see changes made to production as well as a lot of other things in the examination process. However, until we get people on BOTH sides of prosecution to agree to their role in the problems and be willing to compromise to get to a better solution for everyone, the public, applicant, assignee, examiner, and attorney alike, things will not get better.

    Just my 2 cents.

    MVS

  2. Most seriously, this theory is based on and perpetuates the myth that the value of inventions, much less patent claims thereon, can be accurately determined at the early date on which patent applications must be filed. That is usually before the product has been fully developed and tested, mass manufacturability established, essential market success [at the whim of the public] established, and then competitive alternatives or design-arounds developed.

  3. “I suppose they offend our sense of aesthetics, but what harm do they do otherwise?”

    Are you kidding? You put a lot of effort into your post, but if you’re smart enough to be an attorney, you sure as he11 are smart enough to figure out what the “bad” thing about having “bad” patents around is.

  4. This comment is based on a few comments upstream. I wonder if the PTO has ever tried to produce a metric of how long, on average, it takes an Examiner to examine 1 claim.

    It seems to me this would not be so difficult to do, assuming that Examiner time is tracked on an per application basis. It must be if Examiners are only allowed a maximum of 30 hours per app. If the PTO could produce this kind of metric, then it would be a no-brainer to scale the length of time allowed per application to the length and/or number of claims in the application.

    Just a thought…

  5. Can someone explain the harm done by poor quality patents? I suppose they offend our sense of aesthetics, but what harm do they do otherwise? I see a risk in raising fees to discourage patenting, and I am not sure what the point of taking this risk is.

    Disclosure – I am a patent prosecutor and I know I have a pro-patent bias. But on the other hand I like to think I don’t file “poor quality” patents so I have no particular need to get defensive about them. :-)

  6. “I thought most of the money in prosecution was made with drafting the application and not on OA responses.”

    Applications are a nice chunk at once, however there is plenty of money to be made in responding to a steady stream of OA’s. My time each month is split fairly evenly between drafting applications and responding to office actions.

    As PDS has pointed out, sophisticated corporate clients don’t get upset at the attorney when examination is poor and the attorney must spend more time to get the case allowed. Companies who file hundreds of patents a year know and understand exactly what is going on at the PTO.

    Poor examination only makes me more money..

  7. I believe that the way to create better patents is by repeal of a blantantly unconstitutional section of the patent code. the e, f and g exceptions under 35 USC section 103

  8. Regarding the “non-practicing entities” (NPE) — remember that while some NPE models include being invention machines, remember, many of the NPEs often referred to as patent trolls ACQUIRE their patents through the purchase of the patents through the initial inventors.

    Raising the cost of filing a patent only causes the NPEs to refocus their efforts into acquiring patents FROM OTHERS rather than from the patent office.

  9. “There’s an obvious problem that at least needs explanation. Almost all demand curves have two tails, one extending up and to the right, like one lobe of a hyperbola. I know of no exception where the sole source of supply is a monopolist, and there are no market substitutes – like with patents. A demand curve that looks like a quarter of an ellipse, falling off to zero in both dimensions, is EXTREMELY suspicious.”

    Well, for what it’s worth, David, Mr. Wilson’s “curve” is just an estimate. Further, the shape that raises your suspicion is accentuated by the fact that he approximates this curve with just 3 linear segments.

    That said, a couple of thoughts on whether this curve should look like the “normal” demand curve, whatever that might be:

    First, there are market substitutes for patents in many cases. Sometimes a trade secret is an imperfect market substitute. Increased marketing or increased investment in customer service might also substitute for the temporary monopoly of a patent. Thus, there is almost certainly a cost at which the demand for patents will get very close to zero, relative to the current demand.

    Second, with regards to the other end of the curve, the filing fee is not the only cost associated with filing for and obtaining a patent. An obvious upfront cost is the attorney’s fee, which in today’s market is many times the filing fee. Thus, reducing the filing fee to zero is not the same as reducing the cost to zero, and will not likely drive demand to infinity, as you might expect to see in a more typical demand curve.

  10. The first problem with Mr. Wilson’s analysis is his counting of patent applications. By including all filings, including continuations, he is double-counting all of those “rework” applications the PTO is complaining about (and from the ongoing complaints about examination quality and second action final practice, maybe a fair number of them are for the need to get reasonable examination – meaning that if PTO examination strategy were to change, the numbers could decrease considerably). The second problem is that beyond the initial “inelastic” part of the curve, his numbers are simply guesses. Surely the number of filings will decrease as the cost increases, but he provides no support for the top 90+% (in dollar numbers, 75% in log terms) of Figure 5. And third, what makes 100,000 applications per year the “right” number? – whole fields of scientific and technological endeavor that now exist either did not exist in 1980 (most of biotech, the things that have become possible with cheap computing) or were not considered patentable (biotech again, computer-aided inventions). I have to believe there are way better and less Draconian solutions than the one Mr. Wilson proposes. I might suggest annuities on applications as well as patents (starting low and increasing over time) and deferred examination (with third-party requests possible) to allow self-regulation, coupled with changes in examination practice – but everyone will have their favorite.

  11. There’s an obvious problem that at least needs explanation. Almost all demand curves have two tails, one extending up and to the right, like one lobe of a hyperbola. I know of no exception where the sole source of supply is a monopolist, and there are no market substitutes – like with patents. A demand curve that looks like a quarter of an ellipse, falling off to zero in both dimensions, is EXTREMELY suspicious.

    I haven’t seen the paper or the analysis, but this one plot gives me real pause about the rest of the paper.

  12. “Put Newman out to pasture once and for all; let Moore talk about her bra back at BarBri, and let Rader, Lourie and Michel apply their talents in other circuits.”

    Your misogyny is showing, realistic.

  13. Has anyone considered the negative effects this could have on American companies’ ability to compete on the world stage? Would these charges be applied to foreign entities? If so, what kind of blowback would such an arrangement have on foreign governments toward the US? Perhaps I am naive but it seems to me that such an arrangement could end up negatively impacting American companies with higher filing fees around the world while giving foreign competitors a clear advantage in foreign lands where their fees would, likely, remain unchanged.

  14. If Wilson really wanted to reduce patent filings, his most logical suggestion should have been to abolish the CAFC. We’ve seen that legendary graph of patent filings vs. year so many times over the years: look at what happened right after 1982, when the Federal Circuit was created. And the contrast is even more striking if you go back even further in time.

    Put Newman out to pasture once and for all; let Moore talk about her bra back at BarBri, and let Rader, Lourie and Michel apply their talents in other circuits.

    It’s so easy.

  15. Could we perhaps veer more in the direction of civility?

    In any other field an investor is called just that, or perhaps an angel or venture capitalist. Or they are real estate investors who happen not to rent in their own holdings.

    But here we have been overtaken by those who want to make products without paying the inventors, and who have popularized the offensive pejorative “troll”.

    Perhaps in keeping with the new vision of America, an inclusive America, a non-partisan America, we could use the term “patent investors. (BTW, I am not one of them, I just believe in civil discourse.)

    Thank you.

  16. “That is true when you get a good examiner … most of the money is in the writing of the application.”

    when you get a good examiner AND you start with good claims

    too often, however, drafting budgets are bid low. as a result, most of the drafting budgets are spent throwing written description up against the detailed description wall with claim drafting implicitly budgeted as part of later prosecution

  17. “1. A computer-implemented method for handling run-time exceptions, comprising the steps of: (a) receiving source code that includes higher order computer language statements, wherein the statements include an exception branching statement and an exception catching statement; (b) compiling the received source code into machine code and storing the machine code in a non-volatile storage medium; (c) executing the machine code, wherein upon an exception occurring, execution of the executing machine code branches to the exception catching statement in accordance with the exception branching statement; wherein upon an exception happening, an exception signal handler allows execution to resume at recovery code associated with the exception catching statement; wherein the exception signal handler comprises software instructions; wherein the exception signal handler allows execution to resume at the recovery code by placing a value stored from the exception branching statement into a program counter slot of an exception context structure that was passed to the exception signal handler.”

    Searching this claim would not take long. For instance, the end of the claim mentions “a value stored from the exception branching statement into a program counter slot of an excetion context strucutre that was passed to the excetion signal handler.” To someone of skill in the art, they would need to find an exception object that stores a value in a program counter slot. Examining exception object APIs for modern programming languages should take less than an hour at most to determine whether this is common practice in the industry.

    Of course, there aren’t any examiners who look at programming language APIs for prior art.

  18. The first three patents above have broad independent claims for which a prior art search should not be too difficult. The fourth patent has a narrow claim.

  19. “For that matter JD, do you remember the serial of the HTML enabled ATM machine app that you allege ‘should’ be issued by now? Repost that one, repost my art that I took 10 minutes to find. There you have it.”

    If I remember, your art was still susceptible to being sworn behind. So you’d better find some more art.

    “Bring breakfast for the hearing”

    I don’t think breakfast is allowed in the court room, but I’ll ask.

    “..and I’ll spend an hour and have a ref spelling out the specifics of that case’s ind. Or, at the very least, two, EASILY, and CONVINCINGLY, combinables. That is, one that spells out the specifics even better than the ref that I already provided, at no cost to you I might add.”

    I wouldn’t pay for it anyway.

    Those cases are still pending. There’s no reason you can’t leave your art and analysis with the examiner who’s been spinning his wheels for 5 years. He may be willing to pay for it.

  20. How do we ensure that the individual inventor who works in his/her garage and does not have even $30K will get a patent? The supply and demand concept does not take into consideration those that are legitimate inventors but do not have deep pockets. Further, I fail to see how higher fees will lead to “better applications covering higher quality inventions.” Quality of applications depends, it seems to me, on the quality of the agent drafting it and the quality of the examination. If we have good emanination procedures, bad applications will be selected out.

  21. Why not?
    They killed the automatic injunction.
    They made obviousness more broad.
    Heck, why not make it 50k to file an app? And let’s enact the proposed rule changes. Better yet, tweak ’em:

    2 documents maximum in an IDS, with a 4 page description of how each invalidates the pending claims. 1,000 dollars for every document over 2, and 4 more pages.

    No continuations allowed at all.

    RCE only with permission of Barack Obama himself.

    10 days to respond to Office Actions, 1,000 dollars a day thereafter.

    The goal is to kill patents. Simple as that. The U.S. is a corporotocracy, and Patents work against the interests of the PTB. Simple as that folks. Get used to it, it’s only going to accelerate until they finally have the means in place to grab Hank Rearden’s patent.

  22. What I see is poor qualtity patent examinations, not poor quality patent applications.

    Clients would be willing to pay double USPTO fees for an examiner with English as a native tongue.

    Clients would be willing to pay double USPTO fees for an examiner with 7 or more years of experience in the relevant art.

    Sometimes, it would be nice if the examiner even read a response that had been submitted, before sending back a “get lost” office action totally devoid of factual or legal support, and completely ignoring and being totally unresponsive to arguments submitted in the previous response. Whatever, Monday was a lucky day, I only got one such Office Action in the mail… … although historically rare, such things now show up with increasing frequency….

    The basic constitutional purpose recognized as the basis for patents is “To promote Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”….. Fewer patent applications won’t promote the progress of science and the useful arts…… …nor will it enable the “little guy” or independent business to invent something and get financing and build a business to reach for the American dream…..

  23. “However, it will also decrease the number of good bad applications. ”

    Freudian slip? good bad applications lol.

    pds, your stating that if an amount just shy of 25% of all apps were badly issued shows that you are so biased against change that even if there is a huge problem you’re not willing to change to solve it. Sorry. It’s folks like you that eventually get bowled over.

    “There are just too many unknowns to be able to distinguish a bad application from a good application prior to preparing the application.”

    Like what? The prior art? Too many unknowns huh? But the office is supposed to take care of all those unknowns. Along with your other “unknowns” that you’ll no doubt bring up… claim construction, and whether or not the application falls within a statutory catagory.

    “Most ideas, at the time of filing, are worthless”

    Thanks for proving my point. Now, eventually you can come around to the proper conclusion. I’m not going to walk you through this one, I’ll leave it up to you this time big boy.

    “I highly doubt that there will be any serious push over the next decade or so to drastically increase the filing fees for patent applications. ”

    I doubt it either, it’ll probably be AQS’s that weed most out.

    Though, to be fair, I’ve already stated many times on here that my position is that the fee increase need not be exorbinant as some propose. Simply quadruple, or multiply by 8. That should probably do just fine for now. There is no need to kill patent filings almost entirely, a mere reduction of 10 to 25% should level things out and eventually allow the office to catch up, and should take care of the worst of the worst ridiculousness in apps.

    “It is funny, but the action that most examiners think will hurt the patent attorney (i.e., reject the claims) is the action that puts more money in the attorney’s pocket.”

    I’d say we’re all pretty clear that we only “hurt” the applicant anytime we reject the app. We certainly benefit ourselves, and we certainly benefit the attorneys. We’re all getting paid by the app.

  24. I have an alternative idea (i) hire more examiners to reduce the backlog (not exactly new), and (ii) raise maintenance fees to weed out bad patents post-issuance.

    Few would disagree that hiring more examiners will reduce the backlog at the USPTO. I’ll focus my comment on explaining why raising maintenance fees may be a better approach than raising application fees.

    1. More public disclosure

    One aim of patent policy is to encourage inventors to disclose their ideas to the public. If raising application fees discourages the number of patent applications, then fewer inventions will be disclosed to the public — not to mention fewer job prospects for patent attorneys.

    In contrast, raising maintenance fees probably won’t decrease the number of applications as much. Why? Because, the inventor gets to delay the pain of paying the maintenance fee until after the patent has been issued. Therefore, more ideas will be disclosed to the public if we raise maintenance fees instead of application fees.

    2. Reducing the number of bad patents

    Wilson’s approach reduces the number of bad patents by raising fees so inventors are discouraged from applying for patents. In short, he wants to discourage bad patents from being issued.

    My approach of higher maintenance fees is designed to reduce the number of bad patents post-issuance. If you raise maintenance fees, fewer people will want to maintain their patents — especially if they have lousy patents.

  25. “I thought most of the money in prosecution was made with drafting the application and not on OA responses.”

    That is true when you get a good examiner … most of the money is in the writing of the application.

    However bad examiners = lots of responses. Clients are not dumb, they know a bad examination when they see it, so they don’t get upset when you (as the attorney) are forced to spend more time to respond to bad rejections.

    It is funny, but the action that most examiners think will hurt the patent attorney (i.e., reject the claims) is the action that puts more money in the attorney’s pocket.

  26. “The proposal does not really favor apps that the economic value is known up front because, as noted above, we need to look at the amount of benefit it is being given AT THE TIME OF FILING.”

    The benefit, “AT THE TIME OF FILING,” is an extremely poor way to measure the value of a patent/technology. Most ideas, at the time of filing, are worthless. In many instances, it takes years of marketing, R&D, further inventions, growth in the market before the true value of the patent becomes apparent.

    Not only the US patent system, but the patent systems throughout the world, place an extremely high value on being quick to the patent office with an application. As such, there is little time to properly value a technology before the filing decision needs to be made.

    Fortunately, all this discussion is academic. I highly doubt that there will be any serious push over the next decade or so to drastically increase the filing fees for patent applications. Such a proposal may appeal to certain academic types (with little experience in the patent system) or anti-patent advocates. However, such a proposal wouldn’t win any popularity contest with the masses. A proposal for seriously hiking fees for small entities will go nowhere and a proposal for seriously hiking fees only for large entities will do little more than generate a lot of lobbying fees to kill such a proposal.

    Then again, 6K is the champion of loser arguments, so keep at it ….

  27. “I bet that many of the lawyers who oppose increased filing fees don’t want people to mess with their business model, which has a low cost entry for application drafting and a higher cost, backend gravy train for office action responses.”

    I thought most of the money in prosecution was made with drafting the application and not on OA responses.

  28. “JD, while I appreciate you playing the tough guy with MM, get real dude. We’ve seen quite a number of examples right here on PO. … There is no shortage of examples, and I’m surprised MM hasn’t started a collection by now so he can simply copy/paste the serials from a notepad file.”

    Let’s see, from Wilson’s own paper, we see that filings for 2006, 2005, 2004, and 2003 are respectively 419,760, 384,228, 355,527, and 333,688, and you and monkey-boy start high-fiving over the handful of bad patents/applications that have been identfied on this board. Have you ever heard of the “law of truly large numbers” … basically, when the sample size gets big enough, you are bound to find examples of anything you are look for.

    Personally, I don’t care if you, monkey-boy, or anybody else could point me to 100K bad patent applications that were filed in 2006 because that still represents less than 25% of the total patent applications filed for that year.

    I don’t disagree that increasing the filing fee will decrease the number of bad patent applications. However, it will also decrease the number of good bad applications. Moreover, unless the filing fee gets raised to a really high amount, I don’t see the ratio of bad application to good application (whatever that number is) changing significantly. There are just too many unknowns to be able to distinguish a bad application from a good application prior to preparing the application.

  29. “I bet that many of the lawyers who oppose increased filing fees don’t want people to mess with their business model, which has a low cost entry for application drafting and a higher cost, backend gravy train for office action responses.”

    Uh-oh. Another trouble maker.

  30. I bet that many of the lawyers who oppose increased filing fees don’t want people to mess with their business model, which has a low cost entry for application drafting and a higher cost, backend gravy train for office action responses.

  31. “1. A computer-implemented method for handling run-time exceptions, comprising the steps of: (a) receiving source code that includes higher order computer language statements, wherein the statements include an exception branching statement and an exception catching statement; (b) compiling the received source code into machine code and storing the machine code in a non-volatile storage medium; (c) executing the machine code, wherein upon an exception occurring, execution of the executing machine code branches to the exception catching statement in accordance with the exception branching statement; wherein upon an exception happening, an exception signal handler allows execution to resume at recovery code associated with the exception catching statement; wherein the exception signal handler comprises software instructions; wherein the exception signal handler allows execution to resume at the recovery code by placing a value stored from the exception branching statement into a program counter slot of an exception context structure that was passed to the exception signal handler.”

    The only part you likely need to be concerned with is the “wherein…” part at the end.

    However, I would say off hand that it would be impossible for me to examine this claim within 10 hours so I will decline this invitation. Also, these claims may have Bilski issues despite the fact that the inventors went out of their way to try to be specific about tying the machine to a particular computer.

  32. “I for one am looking forward to the attrition that rids us of 6k. Maybe RIF’s will come to the PTO.”

    LOL, I’ll leave precisely when I choose to. I told you the other day, this job just got a hella lot easier thanks to the RCE gravy train pulling into town :) CHOO CHOO ALL ABOARD!

  33. “No. You were offering them up. Something about them not being hard to find. So where are they?”

    JD, while I appreciate you playing the tough guy with MM, get real dude. We’ve seen quite a number of examples right here on PO. Just limiting myself to the high profile ones for a moment I’ll toss a few. Anyone remember a tiny little case called Bilski? Anyone remember a tiny little case called KSR? These aren’t the worst, but they sure aren’t examples of a “good” patent.

    For that matter JD, do you remember the serial of the HTML enabled ATM machine app that you allege “should” be issued by now? Repost that one, repost my art that I took 10 minutes to find. There you have it. Bring breakfast for the hearing, and I’ll spend an hour and have a ref spelling out the specifics of that case’s ind. Or, at the very least, two, EASILY, and CONVINCINGLY, combinables. That is, one that spells out the specifics even better than the ref that I already provided, at no cost to you I might add. Not to be too mean to you, but it has been my exp so far that the only way to “win” an argument with an attorney is through his wallet, and you’ve already had a freebie.

    There is no shortage of examples, and I’m surprised MM hasn’t started a collection by now so he can simply copy/paste the serials from a notepad file. Lord knows I have a collection, its called my rejected docket. Of course, those aren’t issued yet, so we can’t really call them junk patents yet. But we can call them junk apps.

  34. “1. A client-side computer-implemented apparatus for performing validations on a web-based form, wherein the web-based form was provided by a server over a network, comprising: an array of web-based control elements contained in the web-based form for acquiring responses from a user, wherein manipulation of a control element in the array affects the value associated with the control element, trans-control element rules containing validation conditions that specify control element-related actions based upon state information from a plurality of the web-based control elements; and a control element handler that modifies an input value provided by the user to a first control element within the array after use of the trans-control element rules to examine both the state information of the first control element and the state information of a second control element within the array.”

    LOL.

    This is a composition claim. It recites “an array of web-based control elements contained in the web-based form” and “a control element handler”. The rest of the claim is pure functional garbage written in classic softard format. I love the idea of using the word “after” in a composition claim. I’ll have to try that sometime.

    Obvious crap, assuming it’s not anticipated by any one of reams of web-based forms that were implemented prior to the filing of this doo-doo.

  35. Malcolm and others: please find good art for the issued claims posted by: pds | Nov 11, 2008 at 08:36 PM. Thank you.

  36. “It would be far easier for SAS to reduce the filing of their competitors than it would be for SAS to increase their own filings.

    As Paul Harvey would say … “now you have the rest of the story.””

    And it would be far easier for everyone to reduce the filing of their competitors than it would be for them to increase their own filings. Especially if everyone goes along with it.

    As I would say … “now you have the entire story”.

  37. There are a few crucial problems with:

    “Wilson’s proposal has some merit, and his work on the demand curve is especially interesting. However, the proposal suffers from three fundamental problems: First, the proposal implicitly equates economic value with technologic value – the two are related but different. Many important technical advances have only limited economic value, but still serve as building blocks for future advances. (i.e., standing on the shoulders of giants). Second, the proposal greatly favors technologies where the economic value is well known up front. Again, many important technologies are eventually found valuable – but the very high up-front price will greatly limit those applications – and consequently, the upstream incentive to innovate in that area. Third, the proposal favors firms with cash – i.e., those that have performed well in the past and have saved their money. However, many innovation experts believe that most of the breakthrough work comes from these mainstream companies. To his credit, Wilson addresses this problem by stating that the high-price only applies to large companies. However, that approach would tend to allow the “non-practicing entities” to continue to obtain patents (against one of Wilson’s primary goals). In addition, the prospect of small entities paying only $500 while large entities pay $50,000 would surely lead to other political and practical problems.”

    “The technological value” is precisely equal to the economic value AT THE TIME OF FILING. And that is the only time which it is relevant to look at because that is the time when the public gets its part of the deal (or in the alternative, when a pub is issued). Thus, the technological argument makes no sense.

    The proposal does not really favor apps that the economic value is known up front because, as noted above, we need to look at the amount of benefit it is being given AT THE TIME OF FILING.

    As to the proposal favoring firms with cash… so what? Everything in life favors firms with cash. Otherwise, I would overthrow MS tomorrow with my new startup 6ksoftware because it is the awesome, and our programs never crash, and never have interoperability problems, etc.

    For those of you who may take issue with what I’m saying about the time of filing I’ll provide an example. Here we look at 2 apps. One which has high tech value eventually, and low econ value and also has virtually no economic prospects at time of filing (miraculously, a company decided to file anyway lol). The second has low tech value, but high econ value at time of filing and also has infinite economic prospects. When they are both filed, the high tech value one has zero tech value because it is supposedly something which is completely unknown to members of the public, and thus, they cannot even give a value to it, because nothing has been built off of it. It might look promising to some people, but there’s no certainty that anything will come from that building block at the time of filing. So, you have an application that is zero tech value, and low econ value in place of the first one and one with zero tech value and high econ value for the second. However, looking at the econ value at the time of filing, that is also a shot in the dark. So we have two apps both with low tech and low econ assured value. They may both have different prospective values, but that’s all just predictions about the future.

    In any event, what can be assured is that companies CAN, nearly for certain, plan on is filing applications which have a very high probability of being novel and non-obvious. It might take work, but it can be done. And that is something concrete to base this decision to up fees, or not, on.

    In any event, I don’t think small ents should still get one for 500, and only high the big companies. Patents are just as valuable to the small ents. If they need funding then we have a free market, maybe they should sell the idea straight to a corp after filing a prov. Provisionals are what truly enable this plan. Because anyone can file a provisional and have plenty of time to deal with what they want to do, and raise $.

  38. “…good luck finding art for these claims.”

    Malcolm doesn’t need art. He’ll just declare the claims “facially invalid” and then tell you that examples you provided do not meet his ever shifting conditions. All the while forgetting that it was actually he who claimed that such examples wouldn’t be hard to find.

  39. “Can we see the claims? Someone here was asking for some examples of crap patents. I figure that’s a good place to start as any.”

    You asked for it — good luck finding art for these claims.

    Claim 1 of US Pat. No. 7,003,762
    1. A computer-implemented method for handling run-time exceptions, comprising the steps of: (a) receiving source code that includes higher order computer language statements, wherein the statements include an exception branching statement and an exception catching statement; (b) compiling the received source code into machine code and storing the machine code in a non-volatile storage medium; (c) executing the machine code, wherein upon an exception occurring, execution of the executing machine code branches to the exception catching statement in accordance with the exception branching statement; wherein upon an exception happening, an exception signal handler allows execution to resume at recovery code associated with the exception catching statement; wherein the exception signal handler comprises software instructions; wherein the exception signal handler allows execution to resume at the recovery code by placing a value stored from the exception branching statement into a program counter slot of an exception context structure that was passed to the exception signal handler.

    Claim 1 of US Pat. No. 7,096,419
    1. A computer-implemented method for persisting private object state data created within an object development environment, comprising the steps of: determining the private object state data of objects used within the object development environment; wherein the objects are queried with respect to their private object state in order to determine the private object state data; wherein the private state data is an object’s internal state data, and public state data is data that can be retrieved via public method calls or public fields; wherein a computer-readable file is in a human-understandable format; determining whether the private object state data of the objects has been modified from initial values given to the objects upon the objects’ creation; storing in a computer-readable file the private object state data that has been determined to have been modified; and wherein the computer-readable file is in the human-understandable format, thereby allowing a text editing computer program to directly edit the computer-readable file; restoring from the computer-readable file the private object state data that had been determined to have been modified.

    Claim 1 of US Pat. No. 7,099,918
    1. A client-side computer-implemented apparatus for performing validations on a web-based form, wherein the web-based form was provided by a server over a network, comprising: an array of web-based control elements contained in the web-based form for acquiring responses from a user, wherein manipulation of a control element in the array affects the value associated with the control element, trans-control element rules containing validation conditions that specify control element-related actions based upon state information from a plurality of the web-based control elements; and a control element handler that modifies an input value provided by the user to a first control element within the array after use of the trans-control element rules to examine both the state information of the first control element and the state information of a second control element within the array.

    Claim 1 of US Pat. No. 7,433,809
    1. A computer-implemented non-linear optimizer for use with a limited precision computer processor executing a calling procedure that generates a plurality of model parameters and requests a solution to a non-linear model from the non-linear optimizer, comprising: means for initializing a non-linear model by forming an objective function (F) having functional components (F1, F2, . . . ) and a marginal variance matrix (V) using a plurality of input parameters to the model stored in a memory coupled to the processor; means for iteratively solving the non-linear model using the computer processor until the model has converged to a feasible solution, comprising: means for evaluating the feasibility of computing the objective function by determining if the marginal variance matrix (V) is positive definite, thereby indicating whether the limited precision processor is capable of calculating a feasible solution to the objective function; means, responsive to the marginal variance matrix (V) being positive definite, for executing a first set of computer software instructions using the limited precision computer processor that calculate the objective function (F) and its gradient using the marginal variance matrix (V); and means, responsive to the marginal variance matrix (V) not being positive definite, for executing a second set of computer software instructions using the limited precision computer processor that: (a) construct a surrogate marginal variance matrix (V+) that is positive definite; (b) construct a surrogate objective function (F+) in which the functional components (F1, F2, . . . ) of the objective function are replaced with surrogate functional components (F1+, F2+, . . . ) having continuous first derivatives; and (c) calculate the surrogate objective function (F+) and its gradient using the surrogate marginal variance matrix (V+); wherein the limited precision computer processor is able to continue iteratively solving the non-linear model without crashing or returning an incorrect result even though the marginal variance matrix (V) for a given iteration is not positive definite, and wherein the objective function (F) is described by the following equation: .times..times..times..times..times..times..times..times..times.- .times..times..times..times. ##EQU00020## , wherein the variable “-likelihood” is the objective function, V.sub.j is the marginal variance matrix, and r.sub.j is the residual value.

  40. “Someone here was asking for some examples of crap patents.”

    No. You were offering them up. Something about them not being hard to find. So where are they?

    “Thanks for proving my point.”

    Not sure I proved your point. Maybe you want to re-read my post.

    I for one am looking forward to the attrition that rids us of 6k. Maybe RIF’s will come to the PTO.

  41. If you want to change fees, how about something really radical?

    Keep the filing & other fees low. Instead of maintenance fees, just cut the office in for a small % of the money made (sales, licencing, etc.) from the patent. True it might be a B1*** to calculate, but it’s done regularly in licensing & litigation. Gives the office more incentive to issue stuff, anyhow. Throw in something like a maintenance fee (raised by about a factor) to keep the patent pending if no money is made from the patent at regular intervals to make companies make hard decisions if it is worth it to maintain the patents that are not producing $$$.

    OK, I am sure there are problems with this & it may not be practical, but I would prefer it to just raising the fees like the article proposes. And I think we are at the stage where radical ideas are needed.

    thanks,

    LL

  42. “And hey, the money ain’t bad either!!”

    Thanks for proving my point. I just find it funny that many (most) of those constantly lamenting the PTO’s retention problem are actually people who used to work there themselves!! I guess as long as there are greener($$) pastures elsewhere, the revolving door will continue to spin over at the PTO.

  43. “For those that don’t know what SAS Institute does, they make business software. Also, a fact that I didn’t know until just about 5 minutes ago, they are the world’s bigggest privately-owned software company (the CEO owns about 2/3 of the company and the EVP owns the rest).
    Personally, I have a little knowledge about their patent practice. Essentially, SAS Institute eschewed obtaining patents on their products for many, many years. For a $2B/year revenue company they have a pittance in issued patents.”

    Can we see the claims? Someone here was asking for some examples of crap patents. I figure that’s a good place to start as any.

  44. The fairness of the fees could be maintained by basing them on market capitalization, or annual revenue or profits of the applying entity. Each entity would be paying the same relative amount.

  45. The logic behind John Wilson’s reasoning is quite transparent when you know a little more about SAS Institute.

    For those that don’t know what SAS Institute does, they make business software. Also, a fact that I didn’t know until just about 5 minutes ago, they are the world’s bigggest privately-owned software company (the CEO owns about 2/3 of the company and the EVP owns the rest).

    Personally, I have a little knowledge about their patent practice. Essentially, SAS Institute eschewed obtaining patents on their products for many, many years. For a $2B/year revenue company they have a pittance in issued patents.

    As far as I can tell, they have 37 issued patents with the vast majority of those issuing in the last 3 years.

    The long and the short of it is that SAS has a teeney, tiny patent portfolio, and SAS has underprotected their R&D since day 1 (sometime in 1976). Thus, SAS’s aversion to patents simply comes down to $$$$. Given the size of their company, they likely don’t have the company culture and infrastructure to harvest patentable ideas they have created, which makes it even harder for them to catch up. Not only do they have to invest $$$$ into patent preparation/prosecution, they also have to invest $$$$ into setting up an in-house structure capable of capturing the patentable ideas they have been developing.

    It would be far easier for SAS to reduce the filing of their competitors than it would be for SAS to increase their own filings.

    As Paul Harvey would say … “now you have the rest of the story.”

  46. ” . . so why the phuck did you leave the PTO if you had such a ‘cushy’ job as an Examiner with such a ‘great’ salary??? My guess is it wasn’t to take a job making LESS money . . .”

    For most of us, it was to avoid the brain rot that is the inevitable result of having to work for legally incompetent (mis)managers.

    And hey, the money ain’t bad either!!

    LOL

  47. “I, like many others who post on this board, worked at the Patent Office.”

    “One further comment – Examiners don’t know how good they really have it. They are in the top few percent of salaries for those with engineering degrees.”

    . . . so why the phuck did you leave the PTO if you had such a “cushy” job as an Examiner with such a “great” salary??? My guess is it wasn’t to take a job making LESS money . . .

  48. “But if you (and apparently so many others) think the USPTO could be better run, it certainly isn’t outside the realm of possibility to hire someone with your vision, is it?”

    They can’t afford me.

    LOL

    In all seriousness, there are many changes that could be made but aren’t being made. The problem is twofold: 1) the current (mis)management of the PTO doesn’t know how to fix, or even address, the problems; and 2) even if they did, they would be incapable and/or unwilling.

    You have to get rid of the entire (mis)management team that is in place.

    And the first thing that needs to be done by a new management team is to negotiate the CBA with POPA. Yes, examiners should be given more time. But that time is going to come with agreements by the examining corps to more stringent requirements for acting on new applications, applications with responses pending, and applications that are appealed.

    The entire process of maintaining the file wrapper also needs to be overhauled. Currently, a docket clerk reviews the response for compliance with the rules. Then the examiner. So if the docket clerk doesn’t object to your filing and puts it on the examiner’s docket for action, you think you’re good to go, right? But then the examiner sits on it for the full two months the current CBA allows, and at the last minute decides that your status modifier for claim 17 is not to his/her liking and sends you a notice of non-compliance. And the whole process starts over. So the amendment you filed takes 6-8 months to get acted on.

    It’s worse with appeal briefs. The examiners are bouncing them for clearly improper reasons, and then even after you force the examiner to accept it, the clerks at the Board decide they don’t like something about it. So it takes you a year and a half just to get the case docketed to the Board.

    It is within the PTO’s power to end nonsense like this tomorrow. But they don’t. And they won’t. Why? Because they are selling this garbage that the 760,000+ application backlog and 32+ month pendency are 100% the fault of applicants and the patent bar.

    You cannot accomplish any meaningful improvement at the PTO until all of the current (mis)management is sent packing. And replaced with people who have respect for the law and have some actual experience running a business or some other large organization.

  49. Whoops. After reading the article, I see that he argues that the fee increase should apply only to larger corporations.

    I like this in principle — price discrimination, in effect. But there are serious issues to be addressed with how application fee pricing would be determined and enforced. Having differential pricing could introduce new distortions into the market for patented inventions.

  50. The patent owner is often best positioned to value an invention, but the value is often not apparent when the application is filed and often not until the first maintenance fee is due. Maintenance fees are better at removing worthless patents from the records than application fees.

  51. “All that said, I do not think the proposal to raise fees to that high a level is a good thing. It will tend to stifle innovation and make patenting a rich-man’s sport.”

    That’s fine. I would just like to see the filing fees raised to the point where applicants would at least *think* about performing a prior art search before filing.

    Currently, too many applicants and their lawyers figure they can just barf up everything they can think about into a spec and then fix the claims after they get the examiner’s search. But since the initial claims are typically drafted as broad as possible, they can easily be knocked out with references that never would have been cited had the claims been narrowed in view of a pre-filing search. You amend the claims, and you get a better set of references and a final rejection. Consequently, you have to get at least one RCE to have any meaningful examination. That’s what’s wasting examination resources: applicants refusing to do their homework and examiners refusing to do more than the bare minimum in response.

  52. “No offense, but did you miss my previous post?”

    No. I didn’t miss it.

    Any meaningful reform would obviously require meaningful management, which would be a significant departure from the current management and past management.

    But if you (and apparently so many others) think the USPTO could be better run, it certainly isn’t outside the realm of possibility to hire someone with your vision, is it?

  53. SF, you are right. Like I said in my 12:39 post above. IF (and it is a BIG if) changes are made to the production system to accompany higher fees that would help quality. It just has not happened before, even when they said the reason for higher fees was to improve quality.

    Until they actually revisit production goals and bring them back in line with the job as it is supposed to be performed today (and not back in ’78 or so) things will not improve. And recent administrations have been loath to do anything to reduce the production requirements. This leads to bad actions and the present state we are in.

    The production system, and managements justification of it is much like the old joke about the Army mule. Some Lt. decides that the cost of food was too high for the work the mule produced so he said to cut the food in half. The mule wound up being pushed harder & doing more work. So they cut the food in half again. And the work increased. They kept doing it until it was given no food. And, just when it was most productive, the mule died. (That’s the gist anyhow; I’m a lousy joke teller).

    That is where we are rapidly heading now. Management wants more production no matter the cost and they get what they demand. They want more examiners to make bonuses & then point to that as reason the production does not need be adjusted. They don’t ever acknowledge the voluntary OT or the number of cars in parking lots at work at midnight on a Sat or Sunday night.

    All that said, I do not think the proposal to raise fees to that high a level is a good thing. It will tend to stifle innovation and make patenting a rich-man’s sport. Getting a patent should be available at a reasonable rate to all of those that invent something.

    If you want to adjust fees do something like (literally) exponentially raise the fees for each CON filed. More so on CONs dependent upon an allowed patent. And _drastically_ raise fees for the increase number of claims filed. Many other things can be done like this.

    Things like this would still let most anyone in the front door but would be a detriment to some of the practices that many see as “abuses” of the system.

    MVS

  54. SF,

    No offense, but did you miss my previous post? PTO (mis)management has been given increased fees (i.e. extra claims and pages fees) for years now and has never provided the examiners more time. They took the money, spent it on a first generation electronic filing system (EFS) that was so inscrutable it resulted in about 4 applications being filed, at which point they scrapped it and went out and licensed the EPO’s system (Phoenix, I think it was called).

    PTO (mis)management has spent $1B+ on its “paperless” office, and it still takes them two months to take an Amendment filed by EFS and put it on the examiner’s docket for action.

    “…but you can’t argue that more examination time, if given, would be a bad thing.”

    I can argue with that. Back in the 1990’s the PTO decided it was going to “re-engineer” the patent examination process. They took in a bunch of examiners as volunteers and set them up in an office all to themselves and told the volunteers, “You’re not on any production requirements. Work at your own pace. Spend as much time on each case as you think you need.”

    Take a guess what the results were.

    Okay, I’ll tell you.

    The examiners did nothing. The output was so meager as to be almost non-existent.

    And the quality? Oh boy, the quality!!! Same old, “Claims 1-20 are anticipated, or in the alternative, obvious over Jones. See abstract. And it would have been inherently obvious to routinely optimize everything as a matter of experimentation as some court decided in some case I never read.”

    Giving the examiners more time to punch up boilerplate form paragraphs citing inapposite case law to serve the mandate of “quality = reject, reject, reject” is not going to improve anything.

    You can’t improve “examination quality” until you remove the results oriented (mis)management that has decided that some arbitrary allowance rate equates to “record breaking quality.”

  55. re: “True, but uselessdonothingknownothingdeadweightGS-15’s can’t”

    You’re right. “useless..” ones can’t. Just like certain “useless…” attorneys can’t.
    The 15’s that can, however… He HE HE

    :)

    MVS

  56. Leopold Bloom wrote, “On the other hand, the conclusion that follows from your comment is that inventors are currently making patenting decisions without any feel for the value of their invention. That’s not what I see with my clients.”

    Right on, Bloom. Clients can figure this out when facing $1000 in filing fees. They can figure it out when facing $10000 in filing fees, which, by the way, is what Tim Wilson’s paper proposes as an initial proof of concept test. The problem with this blog post is that $50K is so shockingly high that people reject it out of hand. $10K is much more reasonable.

    MVS wrote, “Most of the above posters are correct. Simply raising fees, no matter how high, will not improve quality.”

    But that’s not what Mr. Wilson proposes. He proposes using the increased fees to allow for more examination time and retention. You can argue whether more examination time would be actually be given, but you can’t argue that more examination time, if given, would be a bad thing.

  57. There can be no improvement in the quality of examination without better examiner retention. No business that invested as much in training its new hires as the PTO does would do any better if it bled them at a comparable rate just as they were getting the hang of things. Unfortunately, patent examination is fundamentally disagreeable to most literate people with decent options (it’s boring AND stressful), so I wouldn’t hold my breath on this one.

  58. “See, even a blind nut can find a squirrel sometimes.”

    True, but uselessdonothingknownothingdeadweightGS-15’s can’t.

  59. “I’d like to see an example. Are you also going to provide the evidence that it’s crap, or is it going to be your usual “Oh come on, everybody knows this is obvious!! It’s so obvious nobody ever bothered to write it down!!” analysis?”

    You are right.

    See, even a blind nut can find a squirrel sometimes. 😉

    MVS

  60. Raise the fee so individual inventors and small companies are out of the game completely. What a joke. Could someone tell this dumb that the best inventions come from small time inventors, bogus apps are filed by big companies (such as washout like SAS).

  61. “However, it also perpetuates the myth that the potential economic value of inventions, much less patents thereon, can somehow be crystal-balled at the early date on which patent applications usually need to filed to be effective – years before completed R&D, testing, tooling, manufacturing and then proven marketing success, much less competitive alternative commercial activities.”

    If an inventor (or more likely, an assignee) can’t place some sort of value on an invention, then how in the world are they persuading inventors to pay for the R&D, testing, tooling, manufacturing, etc. that are necessary to “prove” its value?

    Mr. Wilson’s proposal is based on the very reasonable assumption that nobody is better positioned to assess the value of an invention than its owner. His proposal is further based on the also reasonable assumption that inventors will think harder before filing an application if the cost goes way up. You can question the rest of his assumptions, or the degree to which the proposal is likely to achieve its stated goals, but these two assumptions are sound, in my humble opinion. On the other hand, the conclusion that follows from your comment is that inventors are currently making patenting decisions without any feel for the value of their invention. That’s not what I see with my clients.

  62. This kind of proposal is so politically unrealistic as to hardly be worth discussing. However, it also perpetuates the myth that the potential economic value of inventions, much less patents thereon, can somehow be crystal-balled at the early date on which patent applications usually need to filed to be effective – years before completed R&D, testing, tooling, manufacturing and then proven marketing success, much less competitive alternative commercial activities.

  63. “Let me know if you need a specific example. They aren’t hard to find.”

    I’d like to see an example. Are you also going to provide the evidence that it’s crap, or is it going to be your usual “Oh come on, everybody knows this is obvious!! It’s so obvious nobody ever bothered to write it down!!” analysis?

  64. David Stein “There IS no objective metric of “patent quality.” The quality of any particular patent derives from three factors:
    (A) the clarity and sufficiency of the disclosure; (B) the definiteness and skill in drafting the claims; and (C) (especially) the clear novelty and non-obviousness of the patent over all qualifying prior art. Those factors are very difficult to assess”

    Not when the patent is pure crap, David. Let me know if you need a specific example. They aren’t hard to find.

  65. I would imagine that Europeans, Japanese, Canadians, Australians and other foreigners would be pretty upset with a large entity $50,000 filing fee. My guess is that they would reciprocate by charging U.S. applicants a similar filing fee.

  66. More of an “inciteful” proposal than an insightful one. The proposal fails on many levels. Just one is that our and foreign patent systems have things like novelty bars that force early filing on inventions before commercial merit can be vetted. This is particularly true in the biopharma area where public disclosure is often long before clinical trial completion, or even funding (not, as one person smugly commented, because of a lack of “visionary” leadership). The use of deferred examination would result in a large drop in examinations by taking out of the pipeline filings on inventions that do not pan out and those made for defensive purposes. Thus it achieves the reduced workload goals sought by those who believe that translates to higher quality. It allows innovators to proceed with valuable inventions at a reasonable cost. A provision for a third party request would be a safety valve for the those who just sit on the fence – or their hands – as a Sword of Damocles over competitors. At the same time, however, it would still achieve one of the primary goals of the patent system, early dissemination of technological advances. It further preserves the ability of nascent industries to obtain the patents they need to attract investment, as well as providing IP as a method of overcoming barriers to new entrants in old markets dominated by large, entrenched companies. Such a proposal would in fact be fair, and not solely benefiting the siloed interests of the Patent Fairness coalition.

  67. Why don’t we try to adjust the “count” system, improve the examiner’s search tools and reduce the backlog at the Board so appeal is more of a viable option than filing an RCE.

    Dennis, why don’t you post an article on this option?

  68. If you really want to reduce the number of filings, drastically raising the cost is certainly one way to do it. I agree that the reduction in patenting would probably benefit large corporations that try to ignore everyone else’s patents anyway.

    However, a better proposal might be to require “working” of a patented invention, with compulsary licensing at a fixed rate available after 3 years from the issue date for any patented invention not worked. In essence, a patentholder would waive his right to exclusivity, but not to reasonable compensation, if the patented invention isn’t practiced (made, used, sold) and its asserted benefits made available to the public within a reasonable time period. This would likely deter companies from simply filing patents on everything as a purely defensive or even anti-competitive measure, and then putting those inventions on the shelf, so to speak, to gather dust.

    Of course the downside to any reduction in patenting activity is the loss of the technical information of the various inventions (and not quite inventions) that would simply be kept secret, or forgotten.

  69. Raising patent filing fees according to Wilson’s proposal is definitely the wrong approach to the “patent quality” issue. This is similar to the misguided view expressed by the current USPTO hierarchy that excessivley low allowance rates = patent quality. Also, by putting the patent filing fee bar so high, you’ll greatly descrease the incentive to pursue patent protection (and thus will descrease R & D expenditures) on innovations that are “speculative” in valure or other then “sure things.” (This has already happened in the VC world which invests now primarily in “sure things”.) In fact, you might even kill off biotech/pharma R & D completely, and certainly by the smaller enterprises where much of the biotech/pharma innovation is now coming from.

    This proposal also ignores where most of the USPTO fees currently come from, namely maintenance fees. The figure I’ve seen is that over 70% of the fees the USPTO gets is from maintenance fees (which, by the way, are earned only at 3 times during the patent’s life.) By raising the filing fee so high, you will eventually starve the USPTO of its current primary source of fee funding.

    What might make more sense is to increase maintenance fees, including requiring maintenance fees to be paid yearly and to increase somewhat exponentially as the patent reaches the later years of its life. This is what Europe does, and it at least indirectly makes the patent owner assess the value of keeping the patent in force (i.e., if the patent is worth it, pay the maintenance fee, and if it’s not, let the patent lapse). That would at least not price the Davids of Innovation out of the patent filing market, but would also put some economic incentive (and pressure) on the the patent owner to assess the worth of keeping the patent in force as it gets longer in the tooth.

  70. I also suggest that all vehicles on the road must be twice as safe and twice as efficient as current vehicles. My guess is that they would cost a minimum of $100K each.

  71. Dear just a lowly patent agent,

    Re: “… how can a “troll” be an independent inventor marketing his own invention? I thought the term was reserved for “shell” companies that buy up patents, not for manufacturing products, but for the express purpose of suing people over them. Or have I missed something?”

    You are not missing anything. You got it Just right. But in patent litigation, for example, lawyers representing pirate infringers often use the term loosely because it has a huge negative emotional impact owing in part to the fact that as children learning to read we all were taught to fear “trolls.” The term is used in litigation to prejudice judges and juries against inventors. And some low-life posters on patent blogs like Patently-O tend to use the term against other posters whose opinions they do not like whether or not there is any basis for such libel.

    That is also why despicable companies like Cisco and others in league with the sell-out-America, greed-driven agenda of the international “Coalition for Patent Fairness” and their ilk have “propagandized” honest independent inventors with the term.

    Also, please see the last two comments on page 2 of this thread:
    link to patentlyo.com

    * * * * *

    HYPOTHETICAL:
    Let’s assume that I sold my patent to one of my inventions which I’ve not had any financial luck with to, for example, IBM, Acacia or Ocean Tomo, and they made money by licensing or selling it to a third party.

    Would anyone in the IP community have anything against such IP business transactions?

  72. Most of the above posters are correct. Simply raising fees, no matter how high, will not improve quality.

    David Stein has a lot of good points, much of which I agree with. The problem with the patent system is not so much that there are a lot of “bad” patents being issued. Some? Yes. But these are usually quickly laughed away or, at worst, eliminated during litigation (though sometimes after many smaller companies have paid up big $$).

    The bigger problem is in the quality of applications (not subject matter, but the written content) being filed and the reject mentality of way to many spes & examiners (thanks in large part to those who harp on the “bad” patents that issue and in lesser part to some other factors).

    JD, actually gets it right here (G0d forgive me :). The hours have not changed in 30 years. The standards for an action those hours were based on (remember the old short forms, anyone?) are only a ghost of what is needed now to make even an decent average rejection. The amount of prior art has more than doubles, not even taking into account pubs & NPL & Internet searches. The fee increases have not gone to improve the system or increase time for examiners. The same thing would happen with a raise to 50K.

    For those of you that worked in the office before the mid-90’s or so, it is a very different world there now. Comparing your experiences to those examining now is really like comparing a car to a boat. Two really different things.

    The goal should not be to drastically reduce the # of applications (though cutting off a certain small % (say5-10%?) that can be abusive might help). The solution really is filing better written applications, file claims along the suggested guidelines of the mpep (not law, I know) that vary from broadest you think you are entitled to narrowest you are willing to accept. And a mindset at the office to allow patents rather than to reject for the sake of rejecting. Do all that & I think most of our problems will be taken care of.

    MVS

  73. Shocking that a board full of patent lawyers think that there should be more, not fewer patent filings; that patent quality is high, not low; and that their lucrative status quo should remain the same.

    Can’t you put down the “more patents means more innovation” Kool-Aid and your own self interest long enough to look at this objectively?

  74. Only if excess fee intake is not given exclusively to the PTO or diverted to wasteful spending, such as wars (investing in scientific research would be a good target for the money).

  75. This kind of proposal was inevitable given the way that most corporations, the PTO, and even Congress, have come to believe that patents are for corporations.

    If the point of the patent system is to give inventors a foothold in entering a market in competition with incumbents, then this is a terrible idea.

    But the estimated demand curve is really cool and useful!

  76. Little David files, only in the USA, hoping that his lottery ticket will win the jackpot. Giant Goliath files excessive numbers, not just in the USA, in order to accrue a higher pile of patents than his competitors, for negotiating advantage. Whatever the filing fee, if nothing else changes, why should Goliath’s filing behaviour change? A lot of people assert that the excessive filings by corporations is a world-wide problem. So, there needs to be a world-wide solution. The trilateral Offices meet in Holland next week to announce their work-sharing ideas. The recent EPO move to charge swingeing fees for every claim after the first 15 has had the consequence that, as of now, most every Applicant files 15 claims or less. It’s too early to tell, whether the trilateral clampdown on “trivial” subject matter has dampened Goliath’s passion to file on everything. My hunch is that we will see in 2009 a lot less corporate filing on trivial stuff. I say, no need to ramp up filing fees to absurd levels, because the pendulum is already swinging back towards much lower filing volumes.

  77. @JAOI — how can a “troll” be an independent inventor marketing his own invention? I thought the term was reserved for “shell” companies that buy up patents, not for manufacturing products, but for the express purpose of suing people over them. Or have I missed something?

  78. Tim Wilson is correct insofar as he does not define or understand the derisive and pejorative term “troll” to be comprised of independent inventors marketing their own patented inventions (some careless thoughtless libelers don’t even know that much).

  79. There is no point in getting all knotted up over this because it ain’t gonna happen – at least not in the next four years. The day of looking to the “free” market to set prices for government services has passed.

  80. I have a better idea. Let’s raise patent office fees to $250k per application. That will lead to even fewer applications filed. Then we can raise the court filing fee for patent lawsuits to $500k. Then nobody will get patents and the wealth will be spread around to everyone, and Ahmadinejad will make peace with Israel, and the lion will lay down with the lamb, and all will be right with the universe.

  81. This is 100% pure nonsense!

    If you want to improve patent quality, hire more examiners and train them better. Why stifle invention. Tim Wilson should go to patent 101 class. Patents promote disclosures and encourage people to invent around.

    Big corporations are NOT evil. If they don’t have billions of dollars, they can’t spend billions on research. They cannot hire thousands of people. Although their profits look huge, remember they also have millions of share holders. Big companies should not be punished for filing too many patents.

    Also, high number of patent “applications” doesn’t lead to high number of patents. If we have an efficient patent office, only few strong patents will be granted.

    Shame on you Dennis for publishing this garbage!

  82. And just what cost would the small inventor pay? Lets just say its half of the amount … $25K… this still comes in under the category of “impossible” to afford for many. How about we just undo the AIPA?

  83. This same type of solution could also be applicable to the problem of overpopulation. For example if a large fee were required for every family wanting to have a child than that child would probably be seen as more valuable to the family and would be treated better. Since fewer people would be born there would also be less competition for jobs and people would be seen as more valuable. Of course with fewer people available there might be a slight reduction in creativity in the world but that is a small price to pay.

  84. One further comment – Examiners don’t know how good they really have it. They are in the top few percent of salaries for those with engineering degrees.

    When I worked for (perhaps) the world’s largest defense and space contractor in the mid 90s, my bosses, and the bosses’ bosses, worked 75+ hour work weeks (no exaggeration). No overtime, no flex time. The salary was 70s or 80. Then I went to the Patent Office a year later. My friends, two years out of college, were making more before their productivity bonuses.

    POPA has done an excellent job convincing Examiners they actually have a reason to complain.

  85. “Overall patent quality should increase, because a reduced number of patents would mean more time for patent examiners. Under his approach, more patent examiners might read the patent application before writing an office action.”

    Not true. The amount of time that is provided to the examiners is fixed and has not changed for 30+ years.

    The examiner gets the same amount of time to examine the application regardless of its length and/or quality, or lack thereof.

    If the application is 500 pages and has a 1,000 claims the examiner gets the same amount of time to examine it as an application that is 5 pages and has 10 claims.

    Applicants have been paying extra claim fees for 20+ years, and extra page fees since December, 2004, on PTO (mis)management’s theory that “extra claims require extra examining resources.” Well that’s just fine, ain’t it?

    The problem, of course, is that PTO (mis)management has been collecting, and spending, all of those fees and has NEVER provided applicants, or examiners, with what was paid for, i.e. more time/extra examining resources/call it whatever you want.

    That is disgraceful. Yet PTO (mis)management has never been called on the carpet, by Congress, or anybody else, for such a shameful practice.

    So I ask you, if you have to pay $50,000.00 to file an application, are you going to file a 500 page application or a 5 page application?

    We all know the answer to that one.

    Then the question becomes: how is “quality” going to increase by having examiners examine 500 page applications under the “one time fits all” production scheme that’s in place at the PTO?

    The answer is: it won’t.

    Fancy computer generated curve, meet reality.

  86. YA Anon:

    I, like many others who post on this board, worked at the Patent Office. There is more than enough time for Examiners to examine applications. Increasing the time to examine applications will result in one or more of the following for Examiners: more computer solitaire, more trips to the gym, longer lunches, easier to obtain bonuses, & c.

    Please don’t fall for the Examiner’s line that more hours equals higher quality. It is just not the case.

  87. Yes, demand for the USPTO’s service is price-elastic. It’s Econ 101.

    I’ve got three preliminary comments on Tim’s position:

    1) “Poor patent quality…”

    Many people discuss “poor patent quality” as a proven fact of our time, as indisputable as a law of nature. But when asked for evidence to back up their claims, these analysts offer arguments that include the phrases “it’s common knowledge,” or “in my experience,” or references to other analysts’ opinions and editorials.

    There IS no objective metric of “patent quality.” The quality of any particular patent derives from three factors:
    (A) the clarity and sufficiency of the disclosure;
    (B) the definiteness and skill in drafting the claims; and
    (C) (especially) the clear novelty and non-obviousness of the patent over all qualifying prior art.

    Those factors are very difficult to assess, even qualitatively, for any particular patent. A lengthy review may produce a solid conclusion, but in many cases, “reasonable minds may differ.” That’s why the patent case law landscape is a swamp of inconsistency, and why patent litigators get paid such big bucks. 😉

    And that’s just for ONE patent. Suggestions that such assessments are available for an entire BODY of patents are ludicrous.

    So why do so many people feel free to draw conclusions about “poor patent quality?” Generally, what people mean when they write “poor patent quality” is (1) “all of my competitor’s patents” or “all patents written by less reptuable firms”; and/or (2) “all patents in a particular area where patent protection should be unavailable” (such as software patents); and/or (3) “all patents, period” (by opponents of the IP system.) And generally, what follows is a recommendation to change the patent landscape in a way that benefits the analyst.

    (From my [wholly subjective] viewpoint, I believe that the “quality” of the average patent has increased over the years for two reasons:
    (A) More rigid requirements by patent examiners for sufficient disclosure, enablement, and well-drafted claims (antecedent basis, consistent terminology, support for claims in specification, etc.); and
    (B) More standardization of “best practices” among patent practitioners in claim-drafting.
    …but that’s just my experience.)

    2) “More patents = more poor-quality patents…”

    Those who speculate about “poor patent quality” as a proven fact also like to draw correlations between the diminishing quality of such patents (in their estimation) and the growing number of patents issuing or patent applications being filed.

    Yes, patent filings have grown steadily over the last 30 years – that’s one of the few reliable metrics in this field. But consider what else has happened in the last 30 years:

    * Many fields of science and engineering have *exploded* with innovation. Electrical engineering, software, chemistry, biochemistry, genetics, polymer sciences… really, it would be easier to list the fields that *haven’t* exploded with creativity in the last 30 years.
    * The economy has grown tremendously – both nationally and internationally. Many more firms bringing an incredibly broad and deep body of products to market.
    * The awareness of the workings and value of the patent system has grown steadily over the years, and entrepreneurs are more interested in partaking of it.
    …etc.

    Is it possible that patent filings have grown for many reasons? Is it possible that patent filings may have grown while “patent quality” (even if it were an estimable trait) has remained steady?

    People *do* have legitimate arguments about the effects of such a large number of issued patents. But these arguments are wholly unrelated to the “quality” of an increased volume of issuing patents.

    3) “Discriminatory fees for different institutions…”

    I understand that the goal of this suggestion is to diminish patent filings while preserving access to the patent system by small inventors. I share that eagerness – I believe that the patent system is *most* effective for startup companies.

    But that’s only one side of the coin. Yes, large entities file more patent applications… because they employ hundreds or thousands of researchers, and engage in a ton of R&D. Is that really a problem? Even if we acknowledge that high patent volume is a problem, is it best tackled by simply throttling or foreclosing the patent system from institutions that produce more inventions? I’d trot out an apropos metaphor here involving the words “baby” and “bathwater,” but it seems sort of self-evident.

    In general, it’s simply a bad idea to “game” a federal system in favor of certain entities and against other entities. That’s simply unfair and undemocratic – the system should be equally available to all who qualify. (And more pragmatically, I’ll argue that such attempts NEVER work as intended… if you can “game” the system, so can others, and they can probably do it better than you. McCain-Feingold is a classic example.)

    There are many ways of reducing patent volume that don’t require discriminating against more frequent inventors. For example:
    * Raise the standard of disclosure. Make applicants disclose more information, such as in the area of enablement. (Arguably, this is what the CAFC sort of wanted to do in Bilski – but instead, it imposed a completely arbitrary bright-line test, whereunder many worthy inventions might not qualify while many bad applications remain allowable. Very clumsy holding.)
    * Raise the standard of utility – e.g., “spark of genius.”
    * Revise 102 to expand the body of prior art usable against an application.
    …etc.

    I’m not offering these as *good* suggestions. I’m merely offering them as ways that patent volume might be reduced without discriminating against particular types of inventors.

    – David Stein

  88. Overall patent quality should increase, because a reduced number of patents would mean more time for patent examiners. Under his approach, more patent examiners might read the patent application before writing an office action.

  89. Is the goal to lessen the backlog at the Office or increase the number of quality applications?

    I am troubled with the logic in Wilson’s arguement. He claims that increasing the price (thus mitigating the number of filings) will effectively result in better quality applications. Or, in other words, quantity and quality are indirectly related to each other. I think that what he’s really trying to say is that companies are going to be more judicious about applying for a patent if the application fee is higher. That said, I’m sure that bad patents will still get filed and some really good ideas will never come to fruition. I guess I don’t put a lot of faith into what Wilson is arguing (at least on the fundamental level).

  90. There have been a lot of good comments on both sides relating to the use of fees to manipulate filing/preparing practices:

    link to patentlyo.com

    I would support a significantly high filing fee that would encourage applicants to perform a professional search and thus deter knee-jerk, shot-in-the-dark filings. I would also support deferred examination with a large examination request fee to allow businesses with less-than-visionary leadership the opportunity to see what inventions prove to be commercially significant.

    The reality is that the USPTO is going to lose the Tafas/GSK case and then have to ask for, and get, the authority to ask for Examination Support Documents and IDS analyses. When that happens, you won’t need to ramp up the filing fees because the ESD will tack on at least $5K to $10K.

  91. Way to engage Mr. Wilson’s argument on the merits, anonymousAgent. Do you rely exclusively on ad hominem arguments in office action responses as well?

  92. I would gladly pay $50K for a patent — if that price also got me a 100% guarantee of devoted, responsive, high-quality examination on the merits, backed up by a court with a really big stick.

    Heck, how about I get the inventors and business people together and we all go down to DC, plunk down our money, and have a one-day intensive examination session? No secret quotas, no bias, no BS, no politics.

  93. “Finally, fewer issued patents mean that it will be easier for companies to monitor patents issuing in their product space and less likely that they will allow those patents to fall into the hands of a troll.”
    What about those “powerful” computing resources at SAS? The big technology companies EASILY have the resources to monitor issued patents (they’re IT companies for crying out loud!)
    They just are unwilling to do so (unlike the pharma industry which has done so for decades).

  94. Sorry about the type-O – I meant “SAS” another darling member of the Coalition for Patent “Fairness” who want to make sure that patents remain the sport of kings.

  95. Of course he is correct — higher fees equal lower applications. And who is better to judge the value of a potential patent application than the inventors, so this is a nice Pigovian approach to reducing an undesirable behavior. (See link to en.wikipedia.org)

    The real downside is that “for large corporate applicants” the costs will be punitive while the costs for “small entities” remains trivial. This will distort R&D expenditures. More efficient organizational structures will re-form into less efficient organizational structures up to the point where the higher overhead costs per patent are increased by $49,499.99 on average.

    In other words, BigCorp’s R&D shop will be spun off into (or laid off and the work farmed out to) a bunch of little entities, each costing more money to run but evading the punitive fees.

    You will see very few $50K patent applications (i.e., BigCorp patent filings will drop to near zero), but a smaller reduction in the total number of patents filed.

    I think (pretty sure, not certain) this would encourage patents as a tradeable commodity between NPEs and Ocean Tomo-like clearing houses.

    If you insist on treating patenting as a behavior that must be curtailed, then you should increase the fees across the board. This insistence on punishing the successful causes all sorts of inefficiencies and side effects.

  96. Dennis – why didn’t you note that SAP is a member of the Coalition for Patent “Fairness” [along with other model Corporate Citizens such as Countrywide Financial] – Wilson’s proposed “reform” is just a green light for large technology behemoths to take whatever they want from start ups or small firms who obviously won’t have this kind of money.

    Of course, fewer patents is EXACTLY what well-moneyed corporations with large marketing departments want.

    SAP is ANYTHING BUT a disinterested party in this.

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