Thursday, December 15, 2005

Another Patent Reform Proposal

Patently-O summarizes a recent proposal by two law professors and an economics professor: weaken the 'presumption of validity' of granted patents, offer a new higher-priced examination that comes with a 'presumption of validity', and institute a post-grant opposition system.

These reforms sound like a very small baby-step towards meaningfulness. But those steps are hampered by the advantage they would continue to give to well-healed parties over those without the resources to participate. Large corporations, for example, would be more able to afford the higher-priced examination, and would be much more likely to fund a small army of lawyers to participate in the post-grant watchdog process. Meanwhile, independent inventors, startups, and small businesses are left with the scraps of patents stripped of the presumption of validity, and with lingering fears that a rich competitor will post-grant their patents to the grave.

Here's a reform that helps the small guy: make Statutory Invention Registrations (SIRs) free. Subsidize their examination costs with the fees collected for patent applications (the USPTO takes in more money than they spend). SIRs don't provide inventors with exclusive monopolies, as patents do, but they do offer protection in the form of documented prior art and proof of inventorship. And, perhaps most importantly, with more SIRs the chances for examiners to find claims on applications that should be invalid is increased, and patent quality increases.

Why would a small startup want to use SIRs instead of patents? The more I talk with people doing startups, especially in the high-tech industry, the more clearly I see that their fears are not that big companies will 'steal' their ideas, but more that big companies and patent trolls will force them out of business. Their attitude, by and large, is, "I don't care if someone wants to try to compete with me on merits. What I do care about is the constant fear that someone will get a court to grant an injunction against our innovative products." For this group, SIRs could be a powerful tool, without removing the option for others to file for patents. The only problem? SIRs, although slightly cheaper than patents, are not cheap enough to make them attractive over patents. By subsidizing their examination, we would incentivize innovators to file.


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