The Rewards From Effective Reform Could Be Great

A group of 51 intellectual property scholars have submitted the following letter to Congress with the conclusion that “a large body of evidence . . . indicates that the net effect of patent litigation is to raise the cost of innovation and inhibit technological progress.” – Dennis

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To Members of the United States Congress:

We, the undersigned, are economics and legal scholars who study innovation, intellectual property law, and policy. We write to respond to lobbyists and others who claim there is little empirical evidence available to assess the performance of the American patent system. In fact, a large and increasing body of evidence indicates that the net effect of patent litigation is to raise the cost of innovation and inhibit technological progress, subverting the very purpose of the patent system. As members of Congress debate reforms to improve the patent system we hope they appreciate the failings of the current system, and implement salutary reforms.

Over the last five years, academic researchers have published over two dozen empirical studies on patent litigation and its economic impacts (see the attached bibliography for a selection). These studies have been conducted by researchers with diverse views and using different methodologies.

The preponderant economic picture these studies present is that patent litigation now imposes substantial costs, particularly on small and innovative firms, and that these costs have tended overall to reduce R&D, venture capital investment, and firm startups. Not one study of the economic impact of current patent litigation concludes that the effects are negligible.

The number of defendants in patent lawsuits filed in 2009 was five times the annual number during the 1980s. By most tallies, the majority of lawsuits are now filed by so-called “patent assertion entities” (PAEs), popularly known as patent trolls. Estimates based on surveys, on firm 10-K filings, and on stock prices suggest that PAE litigation has been costing firms tens of billions of dollars per year since 2007. Startups and venture-backed firms, especially, report significant operational impacts from PAE lawsuits in survey-based studies. An econometric analysis finds that the more R&D a firm performs, the more likely it is to be hit with a patent lawsuit, all else equal. Another study associates lawsuits from PAEs with a decline of billions of dollars of venture capital investment; another found that extensive lawsuits caused small firms to sharply reduce R&D spending; and yet another 2 found that costly lawsuits caused publicly listed defendant firms to substantially curtail R&D spending.

Although each of these studies has limitations and none is conclusive by itself, a consistent picture emerges: the patent system provides strong protection without excessive litigation in some sectors such as pharmaceuticals, but substantial evidence highlights serious problems with patent litigation in many other industries. Even if the patent system on the whole promotes innovation, it does so despite the social costs that result from this litigation, not because of it.

Congress, the courts, and the Patent and Trademark Office have all made changes in recent years that help mitigate this problem. The Inter Partes Review and Covered Business Method proceedings established by the America Invents Act of 2011 have helped remove hundreds of invalid patents, many already involved in litigation. Supreme Court decisions have strengthened patentability standards and have somewhat lowered the hurdles to feeshifting in patent cases. Perhaps as a result, patent lawsuit filings declined modestly last year from the record setting level of 2013. While month-to-month comparisons are variable, 18% fewer patent lawsuits were filed last year than in 2013.

Nevertheless, patent litigation rates remain at detrimentally high levels. Indeed, much of the empirical research mentioned above covers periods prior to the last several recordbreaking years for patent litigation. That is, the research demonstrates that patent lawsuits were already harming innovation when litigation rates were significantly below current levels. In this light we are not surprised that a growing chorus of high-tech entrepreneurs and state attorneys general has stepped forward to urge that the patent system should work for innovators and not against them. Though we understand that crafting and implementing effective reform will be difficult, we write to emphasize the rewards from effective reform could be great.

Sincerely,

Clark Asay (BYU); Carliss Baldwin (Harvard Business); James Bessen (BU); Jeremy Bock (Memphis); Michele Boldrin (Wash U Econ); Michael Burstein (Yeshiva); Andrew Chin (UNC); Lauren Cohen (Harvard Business); Wesley Cohen (Duke Business); Kevin Collins (Wash U); Jorge Contreras (Utah); Robert Cook-Deegan (Duke Public Policy); Ben Depoorter (Hastings); Samuel Ernst (Chapman); Robin Feldman (Hastings); Lee Fleming (Berkeley); Roger Ford (UNH); Brian Frye (Kentucky); William Gallagher (Golden Gate); Shubha Ghosh (Wisconsin); Eric Goldman (SCU); Umit Gurun (UT Dallas Business); Bronwyn Hall (Berkeley Econ); Christian Helmers (SCU Business); Joachim Henkel (Technische Business); Cynthia Ho (Loyola Chicago); Herbert Hovenkamp (Iowa); Ben Klemens (U.S. Census); Scott Kominers (Harvard Fellow); Amy Landers (Drexel); Mark Lemley (Stanford); David Levine (Wash U Econ); Yvette Liebesman (SLU); Brian Love (SCU); Phil Malone (Stanford); Michael Meurer (BU); Joseph Miller (Georgia); Ira Nathenson (St. Thomas); Jacob Rooksby (Duquesne); Pamela Samuelson (Berkeley); Sharon Sandeen (Hamline); F.M. Scherer (Harvard Gov’t); Roger Smeets (Rutgers Business); Talha Syed (Berkeley); Alexander Tabarrok (George Mason Econ); Toshiko Takenaka (UWash); John Turner (Georgia Econ); Ryan Vacca (Akron); Eric von Hippel (MIT Management); Jonathan Williams (Georgia Econ). 

About Dennis Crouch

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

88 thoughts on “The Rewards From Effective Reform Could Be Great

  1. We put to much emphasis on the utilitarian reason for having a patent system and to little on the lockean. The natural situation is if you have an idea or a new way of doing something you own that idea. The exception is the ending of the monopoly on use in the constitution NOT the existence of the monopoly in the first place. Though I doubt innovation will really be increased as the money for it will dry up if the rewards go away (we have already seen this in biotech thanks to the supreme court) even if it would the fact that people would be then using ideas without paying for the research for them and the immorality of this situation should not be discounted.

    1. Even better, just checked the affiliation of schools from the 51 list and fully 40% belong to schools that are in the 144 Club.

      Rogues…?

  2. Why is patent litigation many times more expensive in the U.S. than in other Western countries?

    1. Fish,

      Three reasons: 1. Discovery. 2. Time. 3. Law and motion.

      Litigators litigate. They file motion after motion, fight tooth and nail. Give them time, and they will fill every second of every day that a case is pending with billable hours.

        1. Fish,

          1. Reduce issues — one patent per trial, no more than two claims go to the jury.
          2. Require preliminary invalidity and infringement contentions only after claim construction.
          3. Allow discovery, except for the standing issues, only after preliminary contentions.
          4. Require anyone who might seek attorneys fees because the case is frivolous in any regard to bring a summary judgment motion as a condition precedent.
          5. Allow discovery only for as small a time as possible, and schedule trial three months after close.

          If the schedules are held tight, time from complaint to trial should be about a year. In order to meet these schedules, create a new breed of magistrate that does nothing but patent cases and make them available nationwide as needed.

          1. These are all great suggestions, once you’ve arrived in the lawsuit quagmire.

            But you have to do something to cut down first on the number of cases, which have multiplied out of control, almost exclusively due to the “shoot first” mentality that is now SOP. It is SOP b/c of the Medimmune decision, which reversed 30+ years of precedent on DJ standards, and effectively implemented the D patent bar perpetual employment act. It is no longer possible to have a rational business dialog about patents, because everything takes place within the limited domain of the Court system. In that arena, the only persons happy with the “patent” system are big lawfirms making big fees from cases that never end.

            That is where real “reform” should start.

            1. Agreed there too, JNG. Amend the DJ Statute accordingly.

              Perhaps: no suit can be filed by anyone without leave of court until 60 days after a notice of infringement is “served.” Provide that the notice be equivalent to a preliminary infringement contention.

  3. “[C]rafting and implementing effective reform will be difficult.” The letter complains randomly without making any concrete proposals for reform. If these self-annointed “experts” can’t “craft . . . effective reform,” what is a dysfunctional congress supposed to do?

    This group of academics have confused “profit” with “innovation.” The term “patent” means “open” (for those who skipped Latin), and patents are awarded as incentives to publication of technological advances, not manufacturing activity.

    Many inventors assign their rights to their employers, and are rewarded with continued employment, promotions, and/or some form of additional compensation. Others assign or license their rights to trolls, and are rewarded with royalties and/or purchase payments. Few inventors actually practice their own inventions, and fewer still have the resources to enforce them.

    While investment in some start-ups may be discouraged by actual or potential litigation, other start-ups rely upon patents for investment and many have exit strategies that involve sale or licensing of patent rights with little or no actual production of inventions.

    It may also be true that the majority (some estimate 60%) of patent lawsuits are initiated by trolls, and has risen since the 1980s. However, it is also true that the number of patent applications and issued patents has risen and that the remaining (some estimate 40%) patent lawsuits are initiated by other patent holders.

    The problem of high litigation costs lies in the eye of the spender. If cost, by itself, is the perceived problem, then reform may be accomplished by reducing the complexity and uncertainty of litigation and PTO procedure. If too many undeserving patents are issued, then examination should be more rigorous and issuance should be limited to actual inventions, rather than inventive prosecution. If unpredictability in court decisions and/or jury verdicts invites increased litigation, then reform may be advanced by statutes or amendments that provide greater consistency in patent law.

    Any “reform” will have its winners and losers. If innovation is the goal, then more attention should be focused on publication of inventions rather than return on investment.

    1. I agree with you that the main view is that patents are awarded as incentives to publication of technological advances, not manufacturing activity. But I disagree that it is how patents are useful. The success examples I saw involve attracting funding by compensating the higher risk of commercializing innovation with a larger expected reward enabled by patents.

      It is possible that what the courts consider a reasonable royalty is excessive and drives speculation.

    2. Steve, “The problem of high litigation costs lies in the eye of the spender. If cost, by itself, is the perceived problem, then reform may be accomplished by reducing the complexity and uncertainty of litigation and PTO procedure. If too many undeserving patents are issued, then examination should be more rigorous and issuance should be limited to actual inventions, rather than inventive prosecution. If unpredictability in court decisions and/or jury verdicts invites increased litigation, then reform may be advanced by statutes or amendments that provide greater consistency in patent law.”

      Solid.

    1. Well that’s a relief, considering Princeton doesn’t have a law school (as Dennis PU ’97 could tell you).

    1. Why so Ned? At my company, it has cost at least one, if not two new engineering hires over the past three years.

      I watch the new litigation filings daily and lots of small companies sued on lots of dubious software method patents.

      Is there any reason to think very small businesses paying hundreds of thousands of scarce dollars to defend a case where plaintiffs are making unreasonable/impossible demands would NOT harm innovation?

      There are no sanctions whatsoever for massively inflating suspected damages…which is an open threat that must be dealt with, whatever the cost….

      Also, if infringement is theft, as stated here by some commenters, and one is found not guilty of infringement, shouldn’t there then be a cause of action for libel against the plaintiff?

      Before I got into patents as an amusing hobby and realized the nature of the scam being perpetrated against me, I was genuinely offended that someone would accuse me of stealing something that I had not stolen….

      1. Martin, your specific problem is IBM, and generally, software patents. Business method patents today are basically software patents, but not historically.

        So long as the plaintiff can sue you and crush you with litigation costs, you, as a small company, are forced to settle regardless of the merits. This IS a problem, but the villains are not limited to so-called PAEs, but to companies like IBM who use IP as profit centers.

        Now, if the patents being enforced come out of startups, universities and small inventors, the system needs to provide these folks protection. The primary appropriators are not small fry, but the big company. The small company is practically immune from actual enforcement because damages are not sufficient to justify the costs.

        But when big companies plays the game, they like to make examples of people to keep everyone else in line. If someone defies them, they pay the price. I know of companies that have failed after litigation with IBM, and the litigation with IBM is the proximate cause of their failure — and this has nothing to do with the validity or infringement issues. It has to do with the way IBM litigates.

        So long as we do not keep the true villains of this story before us, and the Federal Circuit has to be included this because of long and consistent defiance of the Supreme Court, we cannot solve the problem.

        The patent system is needed for drugs and chemicals, for pure research institutions like universities, for the small inventor and startups — but it should not be available for the likes of IBM IMHO who do nothing but oppress.

            1. Sunlight is the best thing to provide.

              Plus the patent community kicking back against the definition of trolls as NPE’s rather than litigation abusers, regardless of status.

              NPE’s have as much right to monetize IP as anyone.

              Narrowing “troll” to NPE’s perpetuates a myth that “using” an invention has anything to do with the value or standing of a patent, which is false and confusing to laypeople.

              Outlaw software patents that have no physical output and that kills the vast majority of patent abuse, be it from IBM or from NPE’s….

              1. The problem with IBM is its size and its ability to crush even large companies with litigation costs. They use that ability to intimidate, trust me.

  4. Presumably, the cost of patents to the rest of the society is acceptable because patents are useful to promote innovation. I think it is true in several instances, but not always: one thing that remains disturbing about Non Practicing Entities is that they may hold patents that apparently were not deemed necessary before commercializing a product. What is the contribution of these patents? Do they disclose a flash of genius? I think that ship has sailed! Do they cover a non obvious technology development that is very risky to commercialize? Maybe in a few cases a start-up applied for a patent, made the jump to commercialization, and failed; then another company learned from that failure, made a successful commercialization, and is now being sued by the remains of the failed start-up. But in most cases, I think a patent was not needed for a product to appear on the market, and the patent on this product has no utility to the society.
    The problem is not that NPEs prevent innovation, it is that some patents prevent innovation. The existence of NPEs just highlights the fact that many innovations can be made accessible to the public by a manufacturer without the manufacturer holding a patent on these innovations (the NPE holds it), and therefore, granting a patent was not justified in the first place. The issue is estimating obviousness.

      1. I may be confusing incentizing commercialization of products with incentizing inventions.

        But I do not think inventions need to be incentized, people are creative without patent system. And I don’t want to pay taxes to support a system that produces nice inventions on paper if no one is willing to take the risk to commercialize these inventions ASAP instead of playing catch up with the competition.

  5. Oh, this is rich:

    “Over the last five years, academic researchers have published over two dozen empirical studies on patent litigation and its economic impacts (see the attached bibliography for a selection). These studies have been conducted by researchers with diverse views and using different methodologies.”

    Let me correct this little passage to reflect reality and not the half-truths from the ethically challenged “academics” signing this letter:

    “Over the last five years, professors being sponsored directly or indirectly from large serial patent infringers, posing as academics have published over two dozen biased, self-serving studies on patent litigation including wild speculative effects on its economic impacts (see the attached bibliography for a selection of nonsense that involves us citing to our own biased studies as “authority” to create an aura of legitimacy). These studies have been conducted by researchers with diverse corporate sponsors and using different sleight of hand to reach a preordained conclusion.”

    there, now its almost completely accurate

    1. Nice to see that Lemley and hacks are now begging for new signatory recruits since their old shills are being exposed left and right. He used to have John Allison from Texas rubber stamp every bit of faux patent research, but since the latter was revealed as an advisor/consultant to large serial infringer Korean sponsors, he seems far less active.

      1. Also MIA from prior Lemley sponsored letters:

        Professor Jonathan Askin – anti SW patent shill from Application Developer Alliance

        Professor Gaia Bernstein – another pro patent r(d)eform

        Professor Annemarie Bridy

        Professor Irene Calboli

        Professor Michael A. Carrier – finds trolls in every woodpile

        and many others…

        what’s up Mark? Can’t keep the flock in line?

  6. “By most tallies, the majority of lawsuits are now filed by so-called “patent assertion entities” (PAEs), popularly known as patent trolls.”

    Plunk!

  7. There’s a lot of smart people who signed that letter.

    I’m curious, Dennis (or Jason): are there particular aspects of the letter that you disagree with (which ones?), or do you not “believe” in the utility of letters like this?

    Are you working on letters of your own?

    1. (1) I tend not to sign-on to letters that I don’t write or that use soundbites such as “urge that the patent system should work for innovators and not against them.” Innovators have long understood that the patent system is a double-edged sword — you can protect your own innovation, but you run the risk of infringing rights held by others.

      That said, I am very much in favor of patent reforms that take us to a better patent system that reduces litigation and transaction costs while continuing to sufficiently reward innovation and disclosure.

      A few reservations regarding the letter:

      (2) I have a good understanding of the development of empirical legal research and, while I believe it is useful and important, I tend to not place an abundance of faith in its explanatory results. This type of research is very difficult to do well because it is ordinarily not about prospective experimentation but rather about looking back to the past and constructing a story to explain why things happened as they did. As the letter admits, each of the empirical studies has methodology and scope problems. The role of patents in the economy is a very large and complex issue, and I don’t believe that these empirical studies capture that complexity.

      We also know, that the general cost of entry for start-up companies is potentially at an all-time low today and, for the most part, start-ups are not stuck with NPE patent infringement allegations until well after their new idea has been proven in the marketplace. A different story (from that in the letter) can be told by looking at recent damage awards — We have recent multi-million-dollar awards against Apple ($532m); Comcast ($27m); Samsung ($17m); Sears ($11m); Symantec ($17m); and Overstock ($4m). All of these are very large companies (with Overstock being the smallest) and – apart from Apple and Symantec, none are very technologically innovative. Two smaller companies have also recently lost patent infringement cases but the awards did not reach six-digits: Smooth Fitness ($0.2m) and Elite Tactical ($.01m). Keeping these big/small awards in mind, I just have a really hard time believing that start-up investors weigh the benefit of the start-up’s own patents and technology as less important than than the amorphous risk of infringing patents held by another.

      (3) I see the empirical evidence presented as offering support for the letter’s conclusion that changes to the system over the past decade have not had “enough” of an impact.

      (4) Regarding the impact on start-ups: We’ve got something like 4,000 parties sued for infringement in a given year – at the same time, we have 500,000 new businesses with 100,000+ being start-ups with new technology. In this framework, innovation (and the accompanying disclosure) is moving forward at what could easily be seen at an all-time-record-pace. It may be – as the letter suggests – that the net effect of patent rights is a negative on innovation, but my concern here is that our innovation system has a really good thing going right now and I don’t have much faith that the congressional reforms improve the overall system. I continue to have hope that the patent system can and does offer an incentive for innovation and open disclosure that is far better from alternatives where innovators rely only upon secrecy and first-mover (speed-to-market) advantages.

      1. Dennis, the one thing a startup needs is strong patent enforcement.

        Startups and universities are being frozen out of the conversation by big money. They are being dismissively labelled as trolls by the powers.

        There is one exception and that seems to be Mr. Snyder who is being sued by IBM. Now think about that for a second. Just think about who is attacking the small fry and demanding payment?

          1. 6, turn over this rock, and you will find thousands of companies that truly de* spise big blue, and for very, very good reasons.

            Mr. Snyder is the only poster here that has been its victim. But there are many. People who do not pay IBM are crushed like grapes being stepped on by a giant.

            1. There were a dozen defendants at the start, in two actions filed on the same day as I recall, in Delaware and Mass.

              Down to three now. There was a nice older Indian couple that were literally in tears- they could not understand why this was happening to them.

              Just the die-hards now.

              To be sure: IBM did not start the action. It was a company called Kenexa, who IMHO wanted to look like they had valuable IP by taking on a bunch of Palookas, and it worked because IBM paid a pretty penny for the company, and then maintained the suit against us. I always thought if the suits upstairs at IBM knew what was up with this case, they would drop it in a minute since the max damages are a pittance and there is exact prior art, but no luck so far.

              The history of the patent is, as one would expect, tortured. Down thru several bankruptcies from infamous actors in the first place.

              They wont crush us like a grape, but they are digging into our kid’s college funds- which naturally enrages me to no end. Venting here has been educational and therapeutic.

              1. Unfortunately for us, we have had to endure you “venting”. Too bad you don’t place more emphasis on the educational part of your blogging. You need to get that the patent system is complex and it does have failures, but that doesn’t mean it isn’t working well in other parts of the system.

                Moreover, you need to get that the patent system has become so political that real reform seems an impossible dream. For example, consider the lunacy of appointing 3 out of the last 5 Fed. Cir. judges with no technical background and seemingly no interest in science their entire lives.

                No does it make sense to make your top dog at the PTO someone that has no experience in prosecuting patent applications.

                It should show you that some bad actors are about and that there is a lot of money being throw at this. There are a lot of things being said that simply are true.

                Just consider these professors where some have “papers” that did not take into account joinder changes in the AIA. That amounts to intentional deception in any ethical person’s book.

                Big picture: US corps get what they want. If it weren’t for the pharma companies and patent law surviving an attempt to bifurcate it, there would be no patent law worth mentioning. Lots of big corp wants it gone just like labor law and antitrust law and you see what happened to those laws.

                1. Night we wrote the code in my mom’s family room, from scratch, with no outside references, and sold it to customers over the Internet months and months prior to the priority date, so freaking long ago that its silly. The feature is long obsolete and never made a single sale for us, or them. The damages in a hypothetical negotiation, if we hadn’t “invented” it first, would be a handful of thousands. Beyond that, there is no invention in the patent, its obvious, it fails the Limelight test, it fails the Alice test, the company that was granted the patent in the first place are long bankrupt known bad actors in our industry….I’m pretty darn sure IBM ain’t right on this one.

                  Why don’t you have the self awareness to ask why patents in the USA went along for hundreds of years without political controversy, and all of sudden became a huge problem? There MUST be a reason, right?

                  How about the simplest reason, and the one that accords with human nature and history? Bad actors took advantage of judicial and bureaucratic confusion about the nature of software to create an historic racket.

                  Is your answer an unexpected resurgence of leftwing/communist/ progressive power in this one tiny sphere where they could eliminate private property?

                  What else could it possibly be?

                2. Martin, I am not so sure that information processing are at the heart of every bad actor.

                  What I think did happen, though is this. That Benson was such a bad case that intentionally mischaracterized information processing (law of nature? seriously?) that it made it difficult for the courts to deal with information processing. There were papers written at the time of Benson that discussed this. I think Wang was one where he went through how information processing patent should be examined.

                  The root of the bad is Benson. Moreover, from my experience I don’t seem much difference in the other arts.

                  Plus Martin it may have caused some problems but the patent system has helped information processing beyond measure.

                  (and no to your ridiculous questions. I have posted links to articles where Google and other big corp are clearly behind the anti-patent movement.)

                3. Night Writer,

                  Thanks – I see why it did not register; as I had already dismissed the fallacy that Mr. Snyder engages in (one repeated coincidentally by Malcolm) of the notion of independent development.

                  I have previously explained this to Mr. Snyder in great detail.

                  He apparently is rather selective about what he learns.

      2. Thanks for the thoughts, Dennis.

        We have recent multi-million-dollar awards against Apple ($532m); Comcast ($27m); Samsung ($17m); Sears ($11m); Symantec ($17m); and Overstock ($4m). All of these are very large companies (with Overstock being the smallest) and – apart from Apple and Symantec, none are very technologically innovative.

        Were either the inventors or the patent owners “technologically innovative” in those cases, Dennis? Was their evidence that the companies “stole” the technology from the inventor or patentee (as opposed to independently coming up with the idea)?

        I know the answer is “no” in at least one of those cases and I suspect it’s “no” in all of them.

        for the most part, start-ups are not stuck with NPE patent infringement allegations until well after their new idea has been proven in the marketplace.

        There’s a very reasonable expectation for that, of course.

        innovation (and the accompanying disclosure) is moving forward at what could easily be seen at an all-time-record-pace.

        Something’s “moving forward” all right. But whether it’s patent-promoted “progress” is highly questionable, at best. Whether it’s benefitting the overall economy or just the usual suspects is even more questionable.

        1. MM asks: Were any of the plaintiffs in the recent verdict award examples deserving?

          Crouch: I don’t know. In a well working patent system they would have be responsible for an innovative idea worthy of the awarded reasonable royalty. However, for my point here, I don’t think that it matters because most of the focus is on the cost-of-defense. And, even if these were un-deserving plaintiffs, the small-time defendants paid much less as compared with the larger entities being sued. Of course, my off-the-cuff numbers don’t negate any of the empirical evidence cited by the letter, but perhaps they suggest layers of potential additional analysis necessary before we understand the collateral impact of potential reforms.

          1. Those are good numbers. Moreover, I will say it again. People like me that have spent many years working in innovation know very well the value of patents to labor, protection, disclosure, etc.

            You should add to the collateral damage labor. It is no accident that the recent trade secret bills will reach Google workers in California.

            1. Malcolm’s insertion of judgemental “worthiness” should be seen for the smokescreen that it is.

              Hint: “(as opposed to independently coming up with the idea)”…

              A not-so-subtle moving of goalposts of patent law. Independent creation is not – and has never been – a defense.

              Also, his “implicit” comment regarding the timing of infringement allegations – only coming after idea proven in the marketplace as somehow a “bad” intent thing as opposed to merely a smart business decision.

              As well as his out-of-hand dismissal of what Prof. Crouch states as “innovation (and the accompanying disclosure) is moving forward at what could easily be seen at an all-time-record-pace

              Now one of these comments stated in an off-hand manner might be easy to overlook. But when they are made en mass – and by a person relentless in his “views” (and only too willingly to want to see the “bias” in posters like JNG), the ready conclusions and appropriate calling out are more than fair game for a discussion on the “merits” (or even mere “intent” of postings).

              One should not (and in truth cannot) turn a blind eye to the fact that discussions themselves are part of the battlefield of competing philosophies.

  8. This letter represents a view from a specific group, and not consensus in the profession. Several of the Professors have been famously anti-patent for years, and some are well known for papers that are widely discredited.

    I’d note that a similarly large group of Professors wrote a letter to Congress in 2010 (IIRC) predicting widespread inflation, which has famously not occurred.

    1. The above comment represents a view from a specific person and not a consensus in the profession. The commenter has expressed views in favor of junk patents that have been widely discredited.

      I’d note that similar commenters have made comments here about patent reform leading to a communist nation where people have no property rights, which has famously not occurred.

      1. Actually, communism has occurred widely across the globe. The signature feature of communist revolutions is abolition of various forms of private property.

        1. BTW: I am not equating reform with impeding communism. The politics are that the GOP doesnt like trial lawyers, and likes money from big donors. In its zeal to whack lawyers, and gain favor from donors, the GOP is advocating a bill that weakens private property rights, and gives the government more power to extinguish those rights without a proper judicial hearing. It helps to point that out, with the GOP controlling both chambers. We could also add that Reagan signed Hatch Waxman.

  9. Theft is always an expensive business model. The forget that there is no patent enforcement bureau. To assert your rights, you have to file a lawsuit. Why dont we highlight the fact that the companies are INFRINGING on patented technology!

    “The costs of patent litigation…” Yes, if you steal intellectual property, it gets expensive when you get caught.

    The whole letter is just nonsense.

    1. Actually theft is very cost effective. Its only a problem if you are caught. Therefore, change the law so that you are not stealing.

  10. Imagine no possessions, I wonder if you can.

    You may say I’m a dreamer but I’m not the only one, Jane is with me – let’s all grab a knee, and hope and pray for that world as one commune, where the enforcement of rights is considered as bad as having those rights in the first place.

    1. Tabarrok at least is famously libertarian. I’m less familiar with the others’ ideologies, but it’s hardly a group of commies that signed this.

        1. let’s keep in mind too that it is not just the Left that is attacking the patent system.

          Indeed, people of all political stripes can recognize a broken and abused patent system when they see it.

          1. “broken” in the sense of with friends like Malcolm, who needs enemies.

            Because “money” or something.

            (or “grifters” or something equally as “friendly” – nine years and running)

  11. What absolute utter malarkey. Thank goodness none of the IP law professors at my law school (T.C. Williams School of Law, University of Richmond) signed onto this nonsense.

    1. Where I went to law school, some of the professors disliked patents. They thought it was better to simply “compete” in a “free market”. I don’t see any of them signed onto to this letter, but I’m sure they would have if provided the opportunity.

  12. Without conceding the correctness of the assertions made with respect to the software sphere, my clients in the pharmaceutical and biotech areas tell me that patents remain a necessary component for getting investment and ultimately commercializing products. But what do they know, they don’t publish in law journals, they just do real research in real laboratories and invent real stuff. And when they do publish, it’s in peer-reviewed journals, not in far more creditable law reviews edited by students.

    Anyway, glad to see that Dennis didn’t sign this.

    1. Watch for that divide and conquer, Dan, as the anti-software arguments don’t have any real limits and are just a Gist away from your own backyard.

    2. Could it be that the nature of innovation in the pharmaceutical and biotech area is fundamentally different than that in the software and electronics area? Why are we trying to fit them into the same system when it is clear that they have different needs and initial conditions?

      1. OSitA,

        The problem you see is that 101 is a front gate, and that “type of innovation” is necessarily an ex post facto analysis. Congress cannot write a law to cover forms of innovation that may emerge in the future. Thus it is necessary that the front gate be wide open.

        The problem you see is that this philosophy is not in accord with other philosophies being pursued. Other philosophies simply do not want a wide open front gate.

        Further, any type of differentiation runs the risk of unlimited fragmentation while the very acts of innovation often blossom from cross-fertilization. It is eminently counter-productive to try to segmentize innovation.

        1. “anon” The problem you see is that 101 is a front gate, and that “type of innovation” is necessarily an ex post facto analysis.

          That’s false, unless you interpret 101 in a vacuum, which nobody does (least of all the Supreme Court).

          Congress cannot write a law to cover forms of innovation that may emerge in the future.

          Sure they can. “These laws cover all forms of innovation, existing and those that may emerge in the future.” Done.

          In any event, the important point is that “new” information and “new” information processing are not “new” forms of innovation. They weren’t new in 1952. They weren’t new in 1852 either.

    1. :) Great post. Or, the US is the innovative leader of the world. *click*

      By the way, something I find disturbing about this. Lemley. He has helped many of this group get their jobs as professors. Another thing I find disturbing is I don’t think a paper in a law journal should be called research. It should be called the professors opinion piece in a vanity press.

  13. I have no feel for the significance of the number “51” of signatories. Is this 1% of:

    “economics and legal scholars who study innovation, intellectual property law, and policy.”

    If so, do we know where any of the other 99% stand on this issue?

    As to “economics and legal”, I wonder how many of the 51 are “economics” rather than “legal”. Which of the two temples of academe is more qualified to express an opinion on this difficult issue? Economics, I would suppose.

    1. The disturbing aspect of these “academics” to me is that they don’t actual publish interesting articles. Lemley’s functional paper is typical of the lot–a judicial activist that publishing in a vanity press paper about his opinion on things and how to end patents by changing common law.

      Note that of all these papers how many actually have real data on real lawsuits or spend the time and effort to do something like examine 100 lawsuits that are considered part of the problem? None.

    2. The running joke with economists is that if you want to gather six different viewpoints of an issue, invite five economists to discuss it with you.

    3. I have no feel for the significance of the number “51” of signatories.

      It’s approximately 51 more than the number of IP scholars who have written to Congress to tell them that patent litigation reform is tantamount to communism.

      1. The phrase “hide in plain sight” comes to mind.

        Or do you really think that there is no left-minded bias in the academic world…?

        Really?

        Wake up son.

  14. In my opinion, we don’t need academics contributing. First, the OMB said the opposite. OMB is probably the most respected government agency. The academics have not integrated what they are saying with other sources. That is a huge red flag. Moreover, they have not acknowledged the studies that have been shown to be flawed.

    Second, the academics do not publish articles in peer reviewed journals. Law journals have turned into effectively the vanity press for professors that have reputations. Third, how many of these academics have ever actually worked for a start-up, have a technical background, or actually worked as real inventors? Probably close to zero.

    Face it, law academics have very little to no credibility. The people to go to are the real people that work in this industry. The ones that actually understand patent law and technology. If you don’t have a science background, then it is highly likely you should not be part of the debate. If you have never practiced patent law, then it is highly likely you should not be part of the debate.

    If Congress really wants to understand what to do, then find a few real patent attorneys and ask them to look into it like they did with Rich 60 years ago. Barring that we are going to continue to get “suggestions” that are more destructive for our economy than constructive.

    Academics have a nice blow horn so they are heard, but let’s be real. The era of the academic is over. We know that most are ignorant egotists that have little to nothing to contribute.

    1. Night, if there is to be litigation reform, it should be generalized. We should not have special rules for the patent system. That should be a given.

      Undermining the patent system through forced PTO proceedings of all types, removing injunctions from the available remedies, forcing patent owners to pay the litigation costs of the big company regardless of the amount in controversy and and without some limit on what the big company can spend will predictably all but kill the patent system except for the entrenched. This cannot be good for America.

      Forcing patent owners to sue each company separately had been a disaster for the little company who cannot ride on the coattails of the big pocket defendant.

      Placing a hair trigger on DJ actions forces people to sue first. Negotiations are no longer possible.

      And the beat goes on.

      The system is becoming excessively hostile to the small company, the startup, the backbone of new products, true innovation and jobs. This will have a long term adverse effect on America, innovation and our prosperity. We will have to compete on low wages, low taxes and loose regulations on businesses. All of this has a cost.

      We must resist these folks and call them out for who they are. They are liars for one.

      1. I agree Ned with all of that. It is just big Corp buying the law through the back alleys just like they did with anti-trust law and employment law.

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