Patently-O Bits and Bytes No. 90

  • Patent Reform I: In a recent article, DC insider Hal Wegner noted that there is “reason for optimism that patents will not be put on the back burner by the new President.” Wegner pointed to the President’s pro-reform start and to the President’s Technology Agendy that calls for: (1) ensuring that American IP is protected abroad and (2) reforming the patent and copyright systems “while ensuring that intellectual property owners are fairly treated.” The agenda speaks specifically to patent reform: “Reform the Patent System: Ensure that our patent laws protect legitimate rights while not stifling innovation and collaboration. Give the Patent and Trademark Office (PTO) the resources to improve patent quality and open up the patent process to citizen review to help foster an environment that encourages innovation. Reduce uncertainty and wasteful litigation that is currently a significant drag on innovation.” [Read the Technology Agenda]
  • Patent Reform II: Although Wegner noted “optimism,” many patent industry insiders may be pessimistic that there is a high likelihood of patent reform. In particular, the technology agenda statements, coupled with Professors Sprigman and Rai as advisors, further coupled with the rumored appointment of John Thompson as Secretary of Commerce point toward legislative patent reforms being along the same lines as eBay (weakening injunctions), KSR (making it easier to find patents obvious); VW (weakening plaintiff’s choice of forum); Bilski (limiting patentable subject matter); and Seagate (limiting damage awards).
  • Patent Reform III: On the other hand, Professors Rai and Sunstein are both major administrative reformers. There is hope that their style of internal PTO reforms – made through rule changes and standard operating procedures – could dramatically change the PTO for the better.
  • Role of the Secretary of Commerce: 35 USC 1(a) establishes the Patent Office (PTO) within the Department of Commerce. However, the statute is clear that the PTO has some power independent of the larger department: “The [PTO] is established as an agency of the United States, within the Department of Commerce. In carrying out its functions, the [PTO] shall be subject to the policy direction of the Secretary of Commerce, but otherwise shall retain responsibility for decisions regarding the management and administration of its operations and shall exercise independent control of its budget allocations and expenditures, personnel decisions and processes, procurements, and other administrative and management functions in accordance with this title and applicable provisions of law.”

76 thoughts on “Patently-O Bits and Bytes No. 90

  1. I can’t help but notice that the USPTO allowance rate roughly mirrors (or slightly anticipates) several economic indicators including new home sales, consumer confidence, and employment.

  2. Many thanks to Steve and Ron R. for courage, persistence, and perseverance in truth telling against waves of dis-information and overt deceit. One attorney authored article conceptualizing range of contingency agreements. I do not know any legal firms advertizing and offering contingency representation that actually provide it.

    The same attorney agreed to consider a well documented case of infringement. He sought clarification on a number of patent language issues and these were provided to him. He held patent data for ~ 7 months. During a telephone discussion he revealed working on a similar patent intended for application. Here’s what I wrote to him after representation was turned down:

    ‘I appreciate your willingness to review matter. One expert shared a view that anything can be argued. And so, the years of effort continue to accumulate without diminishing my interest and intent. I had a strange thought that IP attorneys entered practice not only to protect rights of the inventor as stated in the Imprimatur but also actively sought to protect the ailing invention backbone of this country, the same that created everything most of us take for granted. There’s money in big corporations that can afford to litigate. The small but not insignificant inventor, the garage tinker, has to use other means. There’s a case here. Someone will see it. In a short period the invention has contributed to health care and to the culture. Reading popular and scientific reports lend support to that view. For a creative mind, there will always be something to invent.

    But why patent when legal entities shamelessly side with money? Perhaps a renaissance of sorts is taking place with so little virtue to nurture and sustain valued futures. What lessons are taught to aspiring inventors and newly licensed attorneys from your perspective? Does it have anything to do with personal and collective efficacy? Virtue one asks, like someone from the 60′s inquiring about a Crosby, Stills, Nash, & Young CD from a youthful clerk? “Never heard of them.” It (virtue) departed consciousness long ago. Not in practice for sure. There is wisdom but lost on a playing field once cultivated by Aristotle. Should an inventor turn the head because infringement happens all the time (As you so easily observe acknowledge and say…Sir. As if it’s nothing. Just business as usual)?

  3. “The biggest individual owner/inventor in the country currently does almost all, if not all, of his own prosecution.”

    Who are you talking about?

  4. >>Mooney is a cynical, negative, troll who >>thinks he is some kind of radical thinker.

    Please don’t flatter him. It will only encourage more posts from him.

  5. “The cost of overcoming these groundless objections can run well over $ 30 k, and sometimes over $ 100k. Yet is the examiner who make this kind of baseless rejection required to make good the applicant’s needless expense from his own pocket? ”

    Anyone anywhere can prosecute their own patents for 500 dollars per 2 actions (or more actions in some cases). You’ll forgive us if we aren’t concerned about their perceived need to consult with you and yours. The biggest individual owner/inventor in the country currently does almost all, if not all, of his own prosecution.

    In short, qq moar.

  6. But Rai and Sprigman have no relevant experience. Neither is a patent attorney, never filed, prosecuted, appealed, litigated, or licensed patents. They are not qualified. The last things we need is parties running the PTO who need on the job training.

    Who is Sunstein?

  7. Hey, hey, Mooney does bake a fine cake! Just look at all of his recipes. I just wish he would stop wearing my clothes.

  8. Laws have been changing forever. If TSM was the best reason to challenge a bogus plug-the-claim-terms-into-the-search-engine-in-an-act-of-bald-hindsight-and-write-up-the-first-three-references approach to examining, then, despite KSR, there will be a new approach to challenging bogus rejections. Those who really know what they are doing, unlike Mooney, will be able to persevere.

    Mooney is a cynical, negative, troll who thinks he is some kind of radical thinker.

    Sorry Mooney, everything, including your discouraging little song and dance act, has all been done before. And guess what, society keeps advancing and inventors keep inventing really cool stuff that you don’t have a clue about.

    We used to call it “PFM” I’m sure its something Mooney knows nothing about.

    But if there are any j-omega types out there, they know exactly what I mean.

  9. ” The market will often be the acid test of inventiveness, i.e., obviousness, and it is far, far more skilled at doing this than patent examiners.”

    Care to defend this bizarre proposition? My impression is that the market determines what is marketable.

    Your post was interesting, otherwise.

  10. Dear another anonymous patent attorney,

    I loved your comment!

    You know who to blame for:

    “Patent Reform II: …
    John Thompson as Secretary of Commerce [oh shiit!] …
    eBay (weakening injunctions), …
    KSR (making it easier to find patents obvious); …
    VW (weakening plaintiff’s choice of forum); …
    Bilski (limiting patentable subject matter); and
    Seagate (limiting damage awards).

    When 125+/– organized big businesses, e.g., Mark Chandler’s Cisco and John Thompson’s Symantec, form a cartel, call it “Coalition for Patent Fairness,” and overtly and covertly Lobby Lobby Lobby Lobby Lobby our three branches of government, all our “neutral” Media and We the People with all kinds of distorted Lobbying propaganda – to kill our patent system’s strengths – year after year after year after year, what do you expect?

  11. The subject of patent reform is driven by improper motivation, employs tools not rationally related to legitimate objectives, and gives generally well-meaning but unqualified people capricious power to destroy commercially valuable property.

    First, improper motivation. The whirlwind of patent reform only really picked up speed after the NTP v. RIM fiasco. RIM’s leaders have described RIM as the poster child for patent reform. Well, maybe, and maybe not. I feel bad for RIM, and think they were hard done by. But that isn’t an excuse for destroying everybody else’s intellectual property rights.

    It appears that unfortunate decisions were made at trial, such that in the reported reasons the trial judge referred to a portion of RIM’s evidence as being fraudulent or very nearly so. Ouch. After that, RIM couldn’t get a break on anything. That is not the fault of the patent bar, the USPTO, 35 USC, 37 CFR, anything else or anyone else. It isn’t the fault of continuation practice. It isn’t the fault of divisional practice. It isn’t the fault of the TSM test. No amount of “patent reform” would have prevented a defendant from leading evidence that the judge would subsequently describe as being misleading to the point of being fraudulent, whether in a patent trial, a contractual dispute, or an immigration hearing. Before we have any more calls for patent reform, somebody needs to take a long, slow, look in the mirror.

    Without making any comment on the initial examination of NTP’s applications in the first place, the failure of the PTO to produce a first office action in commercially critical proceedings in a reasonable time (i.e. 3 years to first Office Action) does not seem to have comported with the requirement of “special dispatch” under 35 USC 305. Not, perhaps, the PTO’s finest hour?

    The refusal of the court to grant a stay of proceedings when all of the claims in question stood under rejection, and ‘final’ rejection, is something that many people might consider to have been at odds with basic notions of fairness. Not, perhaps, the finest hour of the courts?

    There are other comments that might be added, both about the conduct of the trial and about the conduct of the re-examination proceedings, but it is simply easier to say that anyone can look up the public record of the trial and of the re-examination proceedings.

    The point is that the NTP v. RIM fiasco is not an appropriate starting point for any discussion about patent reform. The PTO needs to stop trying to mete out collective punishment to the profession in general for this disaster. It would be much more to the point to seek legislative action to enable RIM to recover the money paid in settlement when the claims were under ‘final’, and to make a stay of litigation automatic under those circumstances.

    Perhaps, too, those who want State Street overturned have a point. Much of the public ridicule heaped on the patent system is directed toward business methods and software patents.

    Second: Tools not rationally related to legitimate outcomes. This has been covered many times by others. Perhaps the strongest point is that the proposed rules would have had de facto retro-active effect that was grossly unfair. Again, collective punishment is far more likely to injure the innocent than the guilty, and the potential destruction of commercially valuable rights by the proposed rules was large, certainly well into the billions of dollars, if not the tens of billions. The 5/25 rules were particularly inane. They bore no logical relationship to anything, other than a desire arbitrarily (and seemingly deliberately?) to increase the cost and difficulty of obtaining patents, without regard to whether the claimed inventions were meritorious or not. They were based on the nonsensical assumption that all inventions are of equal complexity and commercial importance. Isn’t the easier, and fairer, way to solve the Lemelson or Borgese problem merely to require that the Applicant submit responses that constitute a bona fide effort to advance the case toward allowance? I.e., to limit roll-over continuations?

    It is not the PTO’s business to set an arbitrary target for an allowance rate. The PTO’s business to to examine patent applications on their merits in light of the law, and to grant or reject claims accordingly. If that yields a 100 % allowance rate, or a 70 % allowance rate, or a 40 % allowance rate, so be it. But targetting a specific allowance rate, without any relationship to the substantive requirements of the statue, seems both illegitimate and outside the PTO’s authority.

    KSR has given patent examiners free license to reject claims on almost any basis, no matter how tenuous. Very few examiners are ill-meaning. But almost none of them are “persons of ordinary skill”. Yet they are emplowered to make rejections on the basis of their own perceptions of “ordinary skill” that, as a practical matter often have little or no basis in objective fact. For an underpaid examiner, with a stack of cases in his or her in-tray, KSR provides an irresistible short-cut to two points. The cost of overcoming these groundless objections can run well over $ 30 k, and sometimes over $ 100k. Yet is the examiner who make this kind of baseless rejection required to make good the applicant’s needless expense from his own pocket? No, applicants are expected to grin and bear it. Many will simply give up. Where is the fairness in that? Perhaps the real problem is the point system.

    What has also been forgotten in the lawless free-for-all in the PTO that has followed KSR is that patent Examiners are generally poorly placed to make decisions with respect to the commercial value of admittedly novel products. The market will often be the acid test of inventiveness, i.e., obviousness, and it is far, far more skilled at doing this than patent examiners. The test for obviousness as applied by the PTO should therefore be a very low hurdle for patent applicants, and should require a reasonably high level of proof by the examiner – which the much maligned TSM test did require when properly applied. The question only ever matters where a competitor wants to copy an invention, and so therefore infringe the claims. That copying tends to suggest inventiveness with the greatest sincerity. Why then, is it the business of the PTO to be the handmaiden of infringers, as KSR has so clearly made it?

    One of the great ironies of “Patent reform” is that it boils down to an effort by a number of large companies, predominantly in the electronics and telecommunications industries, to maximise the amount of new, useful and unobvious subject matter that patent applicants inadvertently dedicate to the public. The image of, for example, Microsoft or Cisco systems as the stalwart champions of squatters’ rights is never one that fails to amuse. Yet that is the effect that the proposed “reforms” always seek. Why shouldn’t a patent applicant be allowed to use a divisional or a continuation push a squatter off his land? Are we going to tell land owners that they can’t buy more then three fences, and that each fence can have no more than five posts and 25 lineal feet of fencing? Ridiculous. And yet that is what is proposed. Microsoft: Champion of squatters’ rights … LOL.

    Finally, after the reign of terror, let’s put somebody in charge who has a steady hand. We do not need university professors. A minimum requirement, whether as Commissioner, Director, or General Counsel, ought to be ten years of experience in private practice as a patent prosecutor. We need top quality people who have practiced for decades in this field, and who have a sense of fairness and balance. The kind of people suitable for these positions have personalities, knowledge, and experience like Ken Nigon. It might not be his cup of tea.

  12. “The Deming Management Method,” by Mary Walton and W. Edwards Deming:
    14 Points
    1. Create constancy of purpose for improvement of product and service.
    2. Adopt the new philosophy.
    3. Cease dependence on mass production.
    4. End the practice of awarding business on price tag alone.
    5. Improve constantly and forever the system of production and service.
    6. Institute training.
    7. Institute leadership.
    8. Drive out fear.
    9. Break down barriers between staff areas.
    10. Eliminate slogans, exhortations, and targets for the workforce.
    11. Eliminate numerical quotas.
    12. Remove barriers to pride of workmanship.
    13. Institute a vigorous program of education and retraining.
    14. Take action to accomplish the transformation.
    5 Deadly Diseases
    1. Lack of constancy of purpose.
    2. Emphasis on short-term profits (or goals).
    3. Evaluation by performance, merit rating, or annual review of performance.
    4. Mobility of management.
    5. Running a company (government agency, firm, or any other organization) on visible figures alone.
    Read it and understand it folks. Many of these types of problems could be avoided.

  13. Michael R. Thomas – you seem conpletely clueless. Please go get a law degree and figure out what you are talking about before posting stuff that is of the same amazingly low quality of Townhall and the Gateway Pundit on this blog.

  14. Isn’t blind ignorance what we want when it comes to patent reform? The judiciary is fixing any percieved issue, thus no reform is required. Maybe we need deferred exam to work on the backlog, but isn’t that the only reform actually reequired? I mean look at it, the FedCir is slowly over-turning the State Street Bank case and biz methods, IKSR has raised the nonobviousness bar – let all take a deep breath and let the sytem function.

  15. The biggest problem with our patent system is it has isued 7 million no good patents unmarketable. The 20000 or 30000 good marketable products they either refuse to grant patents on or grant to the wrong persons then reissue years later to other wrong persons after the original patents expire.We have a system that stiffles innovation by not granting correct persons valuable patents.

  16. Night Writer Patent Attorney, I agree!

    101 caselaw is a crazy maze I can’t figure out. It seems to make no logical sense when viewed in light of AT&T and State Street. It seems we were headed in the right direction in the late 90s, but that now we are devolving.

    The PTO management is full of willfully ignorant people always looking for the easy way out. I tried very hard in the past to help out, but I was turned away each time.

    At one time, I had a meeting with Dudas just after he took over the PTO. I laid out a plan that would have fixed the “churning” problem (he was concerned about churning causing catastrophic backlog – duh) and ACTUALLY improved quality. I worked there long enough to understand how that system worked, so I believed he considered my insight valuable (which is why I was given the meeting in the first place).

    I explained to Dudas why his programs for carrying out review and measuring quality would not work. I proposed solutions that would have worked, some of which I discussed here and elsewhere. Of course, he ignored every one of my suggestions.

    At another time, I tried to return to the PTO as a manager/trainer of sorts, and one still willing to examine applications while working to fix the place. I called the PTO human resources office and told that manager I had about 15 years experience in this business, both inside and out, that I had been a well respected primary examiner, and that I had much to contribute to the PTO. I was told the PTO might hire me as a junior examiner in an entry level position.

    I understand that examiners can do the right thing when led to do so. It is not their fault. PTO management must be purged.

  17. “It’s called “growing up.” “get you head out of your crack”

    Two things I know nothing about…

  18. >>Despite hyperbole about “the death of >>innovation,” business will adjust to a broken >>patent system, and life will continue.

    There is no basis to say this. In another post maybe I will write out my prediction for what will happen. It will take years for it all to play out and it will hurt innovation quite a bit.
    But, one of the biggest changes is going to be people not disclosing what they are doing. Everything is going to become a secret as it was when I graduated from college in the 1980′s. Figuring out how to hide what you’ve done is going to become big again.

    What I see in my practice: I write and prosecute patent applications for large, medium, and small technology companies. And, some individual inventors. Many of the people have Ph.D.s in engineering and the sciences.

    Some bullet points of my experiences:

    (*) inventors from large to small saying they can’t talk to another company about selling their product before I file the application because they will take it from them. This comes from inventors and attorneys from some of the storied technology companies in the USA.

    (*) inventors seeking start-up money saying they need the applications to go out and get money. That large companies will take their inventions.

    (*) I don’t see an excess of patent filings. I see companies filing a reasonable number of patents and in general not wishing to incur the heavy cost of filing and prosecuting a patent application. As well as the time from the inventors and the in-house attorneys. I see the process of patent applications to patent costing in attorney charges for large tech companies about $15K-$50K. That does not include all the time of in-house attorneys and the inventors.

    (*) I see that no firm that I’ve worked for wants to take on an individual as a client because the overhead of taking on a new client is too great for the amount of work and because of the potential conflicts created.

    (*) I find that the USPTO often does not do a good job of finding the right prior art until the second or third office action.

    (*) I find the USPTO taking years for a first action.

    In short, many of the problems I encounter are caused by the USPTO not doing a good job. I think most of the problem is the USPTO does not give the application to the right person so that examiners can specialize, which over-loads the examiners. The examiners have to figure out too much technology. I spend hours on the phone explaining prior art to examiners because they are given applications that they shouldn’t be examining.

    I think that overall, the examiners are decent people trying to do a good job. The problems are caused by mismanagement at top. I think that almost every patent application that has become the topic of a big case recently could have easily been dismissed using 102 or 103.

    What else I see:

    (*) Every credible report I’ve read says that patents have encouraged 100′s and 100′s of billions of dollars in research and development and that the cost of filing patents and of litigation is noise.

    (*) I see patents as not just empowering the individual, but having given worth to researchers. I think fewer researchers positions are going to exist. I think that is a complicated point because researcher positions can be created for multiple reasons.

    (*) I see court cases that are frankly bizarre.
    Benson for example was one of the most critized cases in academia when it was decided. Terms are used that do not have any meaning to one skilled in the art. Such as mathematical algorithm, etc. In fact none of the tools of computer science are used by the courts, e.g. big oh notation, information theory, etc.

    Software is a particular machine. Information is a physical transformation. The hardware is at a basic level very simple. A tape limited Turing machine. The software is a giant information processing machine. The courts do not even know what the Church Turing thesis is. (a bit like not knowing what gravity is.)
    The courts decide cases with broad ridiculous claims when there are real companies trying to do the same thing as those broad claims, but with real structure in the how to accomplish those broad claims.

    What I see:

    (*) Bad case law. 101 is now uncertain. How are we supposed to write patent applications now? I am not sure. Even for EE inventions there is the problem of how to claim them when so much of many devices is really the digitized signals being processed.

    (*) KSR has pushed the decision maker down to the patent examiner who can then be controlled by upper management. Bad case law. TSM is the right standard.

    (*) Threats from the PTO of inequitable conduct if you do this or that.

    Basically, I think that filing of bad patent applications should be gravy to the USPTO if it were run right. The examiners could easily apply the right art and get lots of points for little work. The problem is that the system in the PTO is broken and the tail is wagging the dog. We are supposed to give up our patent system because the PTO can’t do its job. Really sad when you consider that Bush appointed someone who had never written a patent application and when you consider the real business of the PTO is examining patent application. A bit like hiring a person to be the editor of a major newspaper who had never written an article for a newspaper.

  19. It was mentioned before, but I believe it to be an important point that bears repeating.

    I never cease to be amazed at the number of “experts” who have never been fully immersed and engaged in a system who have all the answers on the cures need to reform the system.

    One can only hope that persons with intimate knowledge of the system are able to articulate informed views that effectively traverse the “experts”.

    I am prepared to provide some level of credence to the opinions of the above-noted” experts when and as they demostrate a working knowledge of the rules, regulations and internal policies that govern how the system actually works. If you do not know how it actually works, then how can you possibly have an informed opinion on what could/should be done to cure the system’s ailments?

  20. I was just looking through Stanford’s IPLC. Things are not looking to great. By january 23 last year, 156 suits had already been filed. So far this year, only 118.

  21. >>Re: “Dodge v. Ford … (Mich. 1919).”

    That’s where we went wrong. We the People and our business entities should be required to abide the Pledge of Allegiance:

    I pledge allegiance to the flag of the United States of America and to the republic for which it stands: one nation under God, indivisible, with liberty and justice for all.<<<

    The words “under God” was not in the Pledge in 1919.

  22. “Or Justice Jackson’s statement about the 1949 SCOTUS: “The only valid patent is one which this Court has not been able to get its hands on?” (Hint: Jackson wasn’t commenting about the quality of contemporary patents.)

    If you’ve really gone so far over the edge as to believe that virtually nothing you see should be allowed… then please consider reevaluating your chosen line of work.”

    That SCOTUS judge was right on the mark but I don’t know why you’re quoting him. He was commenting that it seemed to him that the court was invalidating patents just to invalidate them if you read that statement in context.

    Here’s the deal man, when I got here I was “over the edge” of where I would have needed to believe that hardly anything that I’ve seen here on my docket warrants a patent (save perhaps a couple, I’ve got some real winners on my docket actually). But I certainly don’t believe for one minute that they shouldn’t be allowed according to the statute. I blame the failings of the system more on the failings of the statute and the (mostly previous) interpretations thereof. Since I got to these boards I was a staunch supporter of interpreting the laws in ways that are now being reflected by cases like KSR and even remotely by Bilski. I think they were close, but not quite on with that decision, mainly because I think the SCOTUS was close, but not quite on with the machine/transformation test. The last one to need substantial revision is 112.

  23. “How about we just reduce examination to rolling a d20, and only allowing apps that “score” above an 18?”

    That’s what I’m doing currently accept I only accept 19′s and 20′s. Were you under the impression that something different was going on?

    “then the USPTO has no reason to claim credit for reducing allowance rates, ”

    They don’t get to say “Hey we’re so awesomes for catching all these malefansence of these hea applicants?”. Police take credit for lower crime rates and people applaud. Why is this different?

    “I think that perspective proves something about YOU, 6. I think you’ve drunk a little too much of the adversarial, patent-malevolent USPTO management’s Kool-Ade.”

    If you personally think that because I feel like applicants currently do not go through the trouble to even try to draft a valid claim is indicative of kool aid then fine. But since you and other attorneys here blatantly admit that you don’t go through that trouble UNLESS I MAKE YOU then I personally have a hard time sharing your viewpoint.

    “How about Charles Duell’s statement that “everything that can be invented has been invented?” Want to subscribe to that one?”

    No thank you. I personally believe there is plenty left for me to invent personally so I figure the same is probably true for others.

    “Which is more important to society – a cartoon character or a life-saving drug? ”

    Idk about society but to me the character. Unless someone I know is dying. Then its a tough call.

    Stein tbh, it’s probably a mixture of your awareness theory and mm’s exploitation theory. They’re not mutually exclusive. In fact they seem to go hand in hand.

  24. “Are you ready to do something else?”

    I already am. I won’t shed a tear for guys with obscenely high billing rates as I take their work and produce a better product to boot.

  25. Malcolm:

    Your post is interesting, related more to the issue than to the individuals, and more based on reasonable analysis than conclusory statements. Which begs the question… is this the *real* Malcolm Mooney? ;)

    For the first time, I’m going to respond to your post, because it has merit.

    I disagree with you on two central points:

    First – the increased use of the patent system over the past 20 years was driven by two key factors (supported by evidence):

    (1) An increased popular visibility of patents (particularly in the business press), which sort of made them “trendy” for a while. The motivation was not to bilk the patent system – but to use it for its stated purpose, as business types became more aware of its existence. It’s not exploitation… it’s simply awareness.

    Evidence:
    * Consider the growth of technology transfer since the Bayh-Dole Act.
    * Consider Google indexing patents as a niche search engine.
    * Consider the growth of mainstream-press books published about the patent system, such as Rembrandts in the Attic.

    (2) Historically, the single largest determinant of patent filings is R&D expenditures.

    Evidence: Many, many academic papers… including this one:
    link to papers.ssrn.com

    And guess what’s happened to R&D in the U.S.? The percentage of the U.S. GDP that corporations spent on R&D has doubled (from 1.3% to 2.6%) in the last 50 years…

    link to nsf.gov

    …and over the same period, the size of the U.S. GDP (adjusted for influation) has grown between 10 and 40 times.

    link to bea.gov

    In other words – there’s a strong correlation betwen the massive, steady increase in filings and the massive, steady increase in research being conducted. Changes in patent law seem to be a non-issue.

    Second – the cause of the collapse in the financial and housing markets is inherent, systemic unsustainability. By contrast, the cause of the “crunch” in the patent system is waffling by the CAFC and shifting preferences by the USPTO. ALL of the markets – biotech, electronics, chemicals, and yes, even software! – are actually doing just fine with the current system, but the USPTO wants to crush it for… well, for its own reasons.

    - David Stein

  26. 95% of Malcolm’s last post is absolutely correct. The big picture issue is not whether software or business method patents should be patentable, but whether we can get the system back under control before it comes crashing down around us. Regardless of whose fault it is (although the PTO appears to have a propensity for self-inflicted wounds), the PTO is overwhelmed and the examination process is almost completely broken. If trends continue, the corporations that fund this system are simply going to walk away, and the patent industry (yes, it’s an industry, don’t kid yourself) will crash. (Sorry, JAOI – I’m sure your inventions are wonderful, but the solo inventor is economically insignificant.)

    Despite hyperbole about “the death of innovation,” business will adjust to a broken patent system, and life will continue. But the ride on the patent prosecution gravy train might be coming to an end, and perhaps sooner rather than later. Are you ready to do something else?

  27. I’ve never understood why the copyright lobby is so strong, and the patent lobby is apparently so weak. For example: copyright protection arises automatically, is easy and cheap to register, and lasts forever; patent protection does not arise automatically, is expensive and time consuming to pursue (with no guarantee of getting it), and lasts only 20 years from the date of filing. Which is more important to society – a cartoon character or a life-saving drug? Why do so many see copyright holders as poor artists trying to make a living, and patent-holders as greedy opportunists? Why does copyright reform generally involve strengthening authors’ rights, and patent reform generally involve weakening inventors’ rights?

  28. CORRECTION

    Unchecked, Greed will slowly destroy our human righteousness.

    The greatest rewards on Earth are achieved through principled Biblical behavior, and by helping one another.

    Feeling thankful and saying/thinking so in thought projected into the Universe is good for the body and spirit, and positive thinking fosters self-fulfilling prophecy.

    Believe in the collective sanctity of humanity.
    Together, We the People comprise power greater than one.

    As long as we keep the jews and the blacks in their place.

  29. JAOI,

    Great quote from Network. And I agree that it is ironic that people see living under large global corporations as any different than living in a communist state.

  30. Stein, get your head out of the sand. Allowance rates have been decreasing because the filing of crxp has been increasing — FOR YEARS.

    We’ve heard the pro-patent bulls here whine about how the increase in filing is due to some worldwide explosion in human ingenuity that allegedly took place in the last fifteen years.

    In reality, what we saw was a worldwide explosion in the interest of exploiting the patent system for financial gain, a fact made utterly transparent by the filing of numerous applications drawn to (insert shark-jumping sounds here) business methods of exploiting the patent system for financial gain!

    Did we have a housing bubble because there was a sudden “awakening” in the minds of Americans that owning a house was, as a matter of objective fact, the be-all and end-all of existence? Or was an artificial demand created by developers, banks and other “investors” who stood to profit only if they could perpetually find suckers to buy into the pyramid scheme?

    The patent bubble is not and was not driven by a non-existent “technology explosion.” It was driven by (1) the observation that if you filed (or bought) a lot of patents in a “hot” technology, you could shake someone down for $$$ no matter how crappy the patent; and (2) the observation that you could obtain a patent on just about anything if you threw enough paper at the PTO or got lucky by virtue of a lazy, incompetent Examiner.

    The concept of dialing it back seems alien to some commenters here. They seem to think it is not the PTO’s business to be controlling what patents and how many patents are issued. I have no idea how people could become that misguided but I suspect it is related to one’s personal investment in a delusional fantasy world where the present rate of growth in patent filings continues indefinitely.

    Like the ever-expanding housing bubble, you do not have to be a genius to see that a period of massive contraction is forthcoming. But you do have to pull your head out of your crack. And you do have to be honest to admit it even if it’s not the awesome reality you imagined ten years ago.

  31. JAOI,

    Shouldn’t you put allegiance to the planet and allegiance to the human race before allegiance to the country? Or is being a good American more important than being a good global citizen?

  32. I can get behind a policy that the employees of a corporation automatically have 1/3 ownership of the company and 1/3 of the voting rights.

  33. JAOI,

    As others point out in a capitalist system, the corporation itself should put its shareholders above all (of course an argument can be made that by putting the customers first, they are helping the chareholders in the long term, but shareholders today want their return tomorrow, not next month, next quarter, and certainly not next year)

    HOWEVER, this is why we need significantly more regulation about exactly what businesses can and can’t do. We need improved legislation and more proactive regulatory agencies.

  34. Out of the cases cited for possibly raising “pessimism” among the bar, the only one I have a problem with per se is Bilski.

  35. Stein “You don’t seem to acknowledge the USPTO has chosen to push down the allowance rate [as a core item in its agenda] **by applying the law instead of rubber-stamping baloney and letting the courts sort it out**.”

    fixed your typo

  36. “One that is affirmed as being a lie by almost every patent posted on these boards. And further by the amount of patents killed daily by KSR that likely wouldn’t have been otherwise.”

    Wait, wait. Let me get this straight.

    6, your evidence of the quality of the patent system is your own estimate of the quality of your docket?

    You seem to be operating under the presumption that the USPTO’s decisions are grounded in some sort of objective, static principles of patentability. Ipso facto, the current historically low allowance rates are applicants’ collective fault in submitting bad apps that don’t comport with this objective grounding.

    You don’t seem to acknowledge the USPTO has chosen to push down the allowance rate as a core item in its agenda. In every (self-serving) performance report of the past few years, the USPTO has boasted loudly and primarily about its success in reducing allowance rates across the board.

    (The USPTO’s stated motivation for this goal is to improve patent quality. I always get a kick out of that, because it’s so facially illogical. How about we just reduce examination to rolling a d20, and only allowing apps that “score” above an 18? As for the rest: KSR, Bilski, estoppel, continuation rules, or just churn – whatever. Congratulations! 10% allowance rate! USPTO management RULES!)

    My point is that if the low allowance rate were due solely to applicants’ malfeasance (as you suggest, 6), then the USPTO has no reason to claim credit for reducing allowance rates, since it’s just been doing the same job as usual. On the contrary, the USPTO pointedly admits that it’s been active and zealous in reducing allowances as compared with previous USPTO practice. The USPTO’s own agenda disproves your viewpoint.

    As for your other point – that “almost every patent posted on these boards” proves something about patent quality…

    I think that perspective proves something about YOU, 6. I think you’ve drunk a little too much of the adversarial, patent-malevolent USPTO management’s Kool-Ade.

    How about Charles Duell’s statement that “everything that can be invented has been invented?” Want to subscribe to that one?

    Or Justice Jackson’s statement about the 1949 SCOTUS: “The only valid patent is one which this Court has not been able to get its hands on?” (Hint: Jackson wasn’t commenting about the quality of contemporary patents.)

    If you’ve really gone so far over the edge as to believe that virtually nothing you see should be allowed… then please consider reevaluating your chosen line of work.

    - David Stein

  37. Night Writer:

    So…you are saying Geithner, who was in charge of overseeing all those financial institutions, is not qualified to be Treasury?

    If you really believe that Bush didn’t regulate the financials correctly or adequately, you sould be triply p!ssed at the guy Bush put in charge of them!

    But no, His O-ness deemed him Worthy, and therefore he shall serve his O-ness as SecTreas.

    Get a clue — the only change(tm) at the whitehouse has been from one empty source of bubbles to another empty source of bubbles.

  38. “It’s called using a few outliers to justify gutting the system. ”

    If that’s what you truly believe I have a docket that would like to have a word with you.

    “The system is not being gutted and to claim that there are/were only a “few outliers” is an outrageous lie.”

    One that is affirmed as being a lie by almost every patent posted on these boards. And further by the amount of patents killed daily by KSR that likely wouldn’t have been otherwise.

  39. >>The system is not being gutted and to claim >>that there are/were only a “few outliers” is >>an outrageous lie.

    Well, if it is an outrageous lie, then post some real facts about the cost of patent litigation, cost of patent licensing, the benefit to research and innovation, etc.

    The facts I’ve seen say that the cost of patent litigation and prosecution is noise compared with the benefits.

  40. >>Let “eBay (weakening injunctions), KSR (making >>it easier to find patents obvious); VW
    >>(weakening plaintiff’s choice of forum); >>Bilski (limiting patentable subject matter);
    >>Seagate (limiting damage awards)” work through >>the system for five or so years.
    >>Then determine whether any legislation is needed.

    Yes, and why not just let the financial system go for 5 more years without regulation and see what happens.

  41. “It’s called using a few outliers to justify gutting the system.”

    The system is not being gutted and to claim that there are/were only a “few outliers” is an outrageous lie.

  42. Let “eBay (weakening injunctions), KSR (making it easier to find patents obvious); VW (weakening plaintiff’s choice of forum); Bilski (limiting patentable subject matter); and Seagate (limiting damage awards)” work through the system for five or so years.

    Then determine whether any legislation is needed.

  43. >>It’s called “growing up.” The playground will >>have limited access until the toxic waste is >>cleaned up.

    It’s also called putting someone in charge of the PTO to gut the PTO. Just as Bush put people in charge of the several agencies regulating the financial industry to gut the regulations.

  44. >>It’s called “growing up.” The playground will >>have limited access until the toxic waste is >>cleaned up.

    It’s called using a few outliers to justify gutting the system.

  45. “legislative patent reforms being along the same lines as eBay (weakening injunctions), KSR (making it easier to find patents obvious); VW (weakening plaintiff’s choice of forum); Bilski (limiting patentable subject matter); and Seagate (limiting damage awards).”

    i.e., a more rational system that will continue to encourage innovation and continue to benefit the public, while discouraging its exploitation by those seeking only to profit from the system’s weaknesses.

    It’s called “growing up.” The playground will have limited access until the toxic waste is cleaned up.

  46. It would be nice if Obama recognized the assault on patents for what it was and still is.

    The same type of assault that was levied on the regulations of the financial system, the same type of assult levied on research showing global warming, etc.

    Just shameful. Bush put us back into the 1920′s for finanical systems, the medieval ages for science, and it is yet to be determined where he has put us for encouraging innovation, but it doesn’t look good.

    What next? After the destruction of innovation, a giant bailout for inventors.

  47. For past decades self-employed independent inventors have been paying PTO fees for the grant of patents for their discoveries, and along comes a cartel calling itself a “Coalition for Patent Fairness” that, through massive overt and covert Lobbying brainwashing efforts spanning many years, effectively dramatically decreases the strength of these patents — after the fact.

    What about Article I of the United States Constitution, Section. 9:
    Clause 3: No … ex post facto Law shall be passed.

    Can this Clause be interpreted to mean “statutory” and “common” Law?

  48. Unchecked, Greed will slowly destroy our human righteousness.

    The greatest rewards on Earth are achieved through principled Biblical behavior, and by helping one another.

    Feeling thankful and saying/thinking so in thought projected into the Universe is good for the body and spirit, and positive thinking fosters self-fulfilling prophecy.

    Believe in the collective sanctity of humanity.
    Together, We the People comprise power greater than one.

  49. This is the direction we are headed in; this is communism:

    Memorable quotes from Network (1976)”
    Arthur Jensen: They say I can sell anything. I’d like to try to sell something to you.

    Arthur Jensen: [bellowing] You have meddled with the primal forces of nature, Mr. Beale, and I won’t have it! Is that clear? You think you’ve merely stopped a business deal. That is not the case! The Arabs have taken billions of dollars out of this country, and now they must put it back! It is ebb and flow, tidal gravity! It is ecological balance! You are an old man who thinks in terms of nations and peoples. THERE ARE NO NATIONS. THERE ARE NO PEOPLES. THERE ARE NO RUSSIANS. THERE ARE NO ARABS. THERE ARE NO THIRD WORLDS. THERE IS NO WEST. THERE IS ONLY ONE HOLISTIC SYSTEM OF SYSTEMS, ONE VAST AND IMMANE, INTERWOVEN, INTERACTING, MULTIVARIATE, MULTINATIONAL DOMINION OF DOLLARS. PETRO-DOLLARS, ELECTRO-DOLLARS, MULTI-DOLLARS, REICHMARKS, RINS, RUBLES, POUNDS, AND SHEKELS. IT IS THE INTERNATIONAL SYSTEM OF CURRENCY WHICH DETERMINES THE TOTALITY OF LIFE ON THIS PLANET. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU…WILL…ATONE!

    Arthur Jensen: [calmly] Am I getting through to you, Mr. Beale? You get up on your little twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM, and ITT, and AT&T, and DuPont, Dow, Union Carbide, and Exxon. Those *are* the nations of the world today. What do you think the Russians talk about in their councils of state, Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do. WE NO LONGER LIVE IN A WORLD OF NATIONS AND IDEOLOGIES, MR. BEALE. THE WORLD IS A COLLEGE OF CORPORATIONS, INEXORABLY DETERMINED BY THE IMMUTABLE BYLAWS OF BUSINESS. THE WORLD IS A BUSINESS, Mr. Beale. It has been since man crawled out of the slime. And our children will live, Mr. Beale, to see that . . . perfect world . . . in which there’s no war or famine, oppression or brutality. One vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock. All necessities provided, all anxieties tranquilized, all boredom amused. And I have chosen you, Mr. Beale, to preach this evangel.

    Howard Beale: Why me?

    Arthur Jensen: Because you’re on television, dummy. Sixty million people watch you every night of the week, Monday through Friday.

    Howard Beale: I have seen the face of God.

    Arthur Jensen: You just might be right, Mr. Beale.

  50. Poor, poor Lowly,

    Re:
    “put employees ahead of shareholders? that would mean shareholders get $0 in returns because all profits would be disbursed to employees. WAHOO.”

    Employees that are treated fairly and reasonably will make profits for the shareholders.

  51. Dear Windy City,

    Re: “Dodge v. Ford … (Mich. 1919).”

    That’s where we went wrong. We the People and our business entities should be required to abide the Pledge of Allegiance:

    I pledge allegiance to the flag of the United States of America and to the republic for which it stands: one nation under God, indivisible, with liberty and justice for all.

    I propose a Constitutional Clarification Amendment:
    American Companies and Corporations shall henceforth be required to adjust their priorities as follows:
    Serve their Country First;
    Serve their Customers Second;
    Serve their Employees Third;
    Serve their Shareholders Fourth; and, lastly,
    Serve their Officers.

    All American Officials should be made to take their Oath’s of Office annually, on January 20th, in private while hooked up to a lie detector, and the results published.

    * * * * *

    Dear SSP and BigGuy,

    Re: “Putting country first is called communism.”

    With all due respect, you got it bassackwards.

    Why would you call “patriotism” or “fascism” “communism”?

  52. put employees ahead of shareholders? that would mean shareholders get $0 in returns because all profits would be disbursed to employees. WAHOO.

    JAOI has gone off the deep end and is apparently a fascist?

  53. “On the other hand, Professors Rai and Sunstein are both major administrative reformers. There is hope that their style of internal PTO reforms – made through rule changes and standard operating procedures – could dramatically change the PTO for the better.”

    let’s see, rai is not a patent atty, has never filed, prosecuted, appealed, litigated, or licensed patents. yup, only the local dog catcher would be more competent.

  54. Jaoi,

    How do you expect capitalism to function when a company is required to put its country, customers, and employees ahead of its shareholders? Putting country first is called communism.

  55. JAOI, corporate altruism is all well and good, but the shareholders aren’t always on board. See Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668 (Mich. 1919).

  56. American Companies and Corporations should be required to adjust their priorities as follows:
    Serve their Country First;
    Serve their Customers Second;
    Serve their Employees Third;
    Serve their Shareholders Fourth; and, lastly,
    Serve their Officers.

    All American Officials should be made to take their Oath’s of Office annually in private while hooked up to a lie detector, and the results published.

  57. I will blog complain blog complain blog complain loudly, boldly till the proverbial cows come home, that’s what I’ll do, and then I’ll find an attorney smart enough to figure out what to do. We can’t let these bums get away with murdering our patent system.

    For past decades self-employed independent inventors have been paying PTO fees for the grant of patents for their discoveries, and along comes a cartel that, through massive overt and covert Lobbying brainwashing efforts, effectively dramatically decreases the strength of these patents — after the fact.

    What about Article I of the United States Constitution, Section. 9:
    Clause 3: No … ex post facto Law shall be passed.

    Can this Clause be interpreted to mean “statutory” and “common” Law?

  58. When 125+/– organized big businesses, e.g., Mark Chandler’s Cisco and John Thompson’s Symantec, form a cartel, call it “Coalition for Patent Fairness,” and Lobby Lobby Lobby Lobby Lobby Government, the Media and We the People with all kinds of dirty Lobbying tricks – to kill our patent system’s strength – year after year after year after year after, what do you expect?

  59. Re:

    “Patent Reform II: …
    John Thompson as Secretary of Commerce [oh shiit!] …
    eBay (weakening injunctions), …
    KSR (making it easier to find patents obvious); …
    VW (weakening plaintiff’s choice of forum); …
    Bilski (limiting patentable subject matter); and
    Seagate (limiting damage awards).

    Who are you going to blame?

  60. I would be happy if they would just get someone that has actually written patent applications and prosecuted patent applications before the PTO and worked with large and small technology companies in protecting their IP.

  61. “Professors Rai and Sunstein are both major administrative reformers. There is hope that their style of internal PTO reforms – made through rule changes and standard operating procedures – could dramatically change the PTO for the better.”

    For the moment, I’ll withhold judgement on Professor Sunstein. But Professor Rai has supported whole heartedly the recent PTO Rule packages, including the Claim-Continuation Limitation Rule package that is currently blocked by the GSK/Tafas suit. That shows a complete lack of sensitivity to how draconian these Rule packages are, how impractical they are, and the extreme cost they would impose on patent applicants. Rule packages like these won’t fix the examination process in the PTO. As others have said, including me, better management and training of the examiners in the PTO will, and for everyone’s benefit, including the examiners.

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