This week in the Tech Policy Weekly podcast with Jerry Brito, Adam Thierer, Tim Lee and special guest Mike Masnick, I discuss the patent reform proposal introduced last week in the Senate and House, which I’ve described here and in previous posts.
The utility, novelty and non-obviousness requirements haven’t been consistently applied, particularly in the software and business methods areas, nor the rule against vagueness. These concepts all need to be resurrected. Unfortunately, patent quality usually comes down to a plea for more funding for the PTO, which would allow the PTO merely to subsidize its preexisting weaknesses.
On the positive side, the proposal permits third parties to submit relevant prior art references to the Patent Office and it modifies the definition of willful infringement — which subjects an infringer to treble damages — so that treble damages will be available where an infringer intentionally copies a patented invention with knowledge that it was patented. But innovators hopefully won’t be discouraged from reviewing issued patents to determine whether a patent exists as now, where mere knowledge of a preexisting patent leads to treble damages.
The media seems to be focusing on the fact that the proposal converts the U.S. from a first-to-invent to a first-to-file system, giving priority to the earlier-filed application. Didn’t we have that once? And didn’t we get rid of it because the first to file wasn’t always the first to invent, and it’s the latter who seems to be the more deserving of the two?
Some of the provisions will allow for harassment of patent owners. The PTO will issue regulations to prevent abuse, but we don’t know what those will be. As in every proposal to reform some aspect of the legal system, there are limitations on damage awards in this proposal, because some feel litigation isn’t producing predictable damage awards. Some predictability is of course necessary but absolute predictability is dangerous: The more predictable a penalty for wrongful conduct is, the easier it can be factored in as a mere cost of doing business.
I also don’t like the new and unnecessary layer of post-grant review, which limits incentives for all parties to participate up front. That’s necessary to protect innocent third parties who participate in bringing innovations to market — such as investors, employees and suppliers (including their families and communities).