Sunday, February 05, 2006

Reform: Fine Patent Holders for Valid Prior Art

Incentives drive behavior, especially institutionally. What incentives does the US Patent Office provide for third parties to search for prior art? None, beside self-interest in invalidating patents. Is the Patent Office incentivized internally to search for prior art post-grant? No.

Here's an idea: when prior art is found that invalidates any claim on a patent, the Patent Office could require a significant fee from the patent holder. A large chunk of this fee is then turned over to the submitter of the prior art, as a bounty. The rest is kept by the Patent Office to cover the cost of the re-examination, plus a little extra to reward the examiner. If the patent holder refuses to pay the fee, the entire patent is invalidated. If the entire patent were invalidated by the prior art anyway, a freeze is placed on all other patents held by the patentee, essentially causing a temporary moratorium on the power of the patentee to enforce any of its patents.

Such a reform (or one very much like it), would provide three incentives that are currently lacking:
  1. The patent applicant would be more incentivized to do a really thorough job of searching for prior art before applying, since any holes here could come back to be very costly.
  2. Third parties would have an economic incentive to search for prior art, at no cost to the USPTO.
  3. The USPTO would have an internal, economic incentive to perform more re-examinations (to counter-balance the current incentive to let patents stand for 20 years so that renewal fees keep coming in annually).

Related Reform:See also this poster's ideas about fines for prior art


Anonymous fjarlq said...

Speaking of patent reform, do you know of anybody proposing a restriction of patent duration based on how long it took to invent the thing being patented? I don't know how practical such a restriction would be, but it sure would make sense to me in principle, if we can't do away with patents altogether.

10:34 AM  
Anonymous kenny said...

fjarlq: That's an interesting proposal, because it hints that patent grants should somehow be tied to the difficulty of the invention. The trick is how to measure difficulty, and you'd have to come up with a clearly determinable metric. Length of time to perform the invention would be good, if you could clearly determine when the invention process started (something that I imagine many applicants would stretch to try to proove happened as far in the past as possible).

11:29 AM  
Anonymous Anonymous said...

Ignorant BS...

How long does it take to invent
Public Key Cryptography ?

30 minutes or 30 years ?

I guess your answer would be 30 minutes, you know hindsight is always 20/20.

12:42 PM  
Anonymous fjarlq said...

Yeah, it seems like it would be very difficult to impossible to make a clearly determinable metric. So maybe it should be up to some type of judge/jury or independent expert to decide the length, based on the available factual evidence.

What a concept, eh? Making the folks at the patent office actually have to think, rather than just rubber stamp everything that crosses their desk?

(Yes, I certainly aim to make the patent process more expensive and less rewarding, to deter trivial patents.)

9:45 AM  
Anonymous Anonymous said...

Actually, USPTO is trying to "rubber stamp reject" each and every application coming their way these days because of political pressure...

I just got a first office action from them with ridiculous rejection.

And the whole process is already too expensive for small guys.

Raising financial hurdles will not discorage MShit et al but will kill all small inventors.

11:07 AM  
Anonymous fjarlq said...

Sorry, no, I'm aware of far too many trivial patents getting approval these days to believe that the USPTO is rubber stamp rejecting.

11:07 AM  
Anonymous Anonymous said...

Ask anyone who prosecutes patents - the office is basicalyl rejecting everything they possibly can lately, even when they have no legal basis.

As for your proposal, it's ridiculous. Who would ever pay for a patent if it's just a ticket to getting fined and having your business frozen? Nobody.

10:38 PM  
Blogger Jackson Lenford said...

quote: " Ask anyone who prosecutes patents - the office is basicalyl rejecting everything"

The patent office has a patent acceptance rate of around 75%, so I don't know why you even bring this up. Even if it were only 20%, it would be irrelevant to the topic at hand. The fact that the office has a default reject pattern (and more rejects until finally beaten down by the lawyers and applicant into submission) says nothing about applicants doing a poor job of researching prior art before trying to get an idea monopoly over already-invented topics. If it were up to me, I'd want them to be even more prone to rejection.

quote: "As for your proposal, it's ridiculous. Who would ever pay for a patent if it's just a ticket to getting fined and having your business frozen?"

Point #1: Good! Less crappy patents!

Point #2: If the patent has no valid prior art, no fine is possible, right? So what do you have to worry about, unless you are filing crappy patent applications?

Point #3: The proposal doesn't involve litigation. The fine would be handed down by the USPTO itself. There is no opportunity for one party to sue another directly over invalid prior art.

Point #4: It is *already* fraudulent to file applications with claims that cover valid prior art, but there is *no punishment* for such behavior, other than the off-chance that the patent might get invalidated before you are able to get a court to rule against your opponents. The proposal simply adds disincentives to the existing system to discourage such fraudulent activity.

7:54 PM  
Anonymous Anonymous said...

"And the whole process is already too expensive for small guys.

Raising financial hurdles will not discorage MShit et al but will kill all small inventors."

That was my concern as well -- the potential risk to the independant inventor is much too high, and the cost of such extensive research is likely prohibitive for many.

People who really _need_ patents are the independant inventors. If filing a patent means taking a chance at bankruptcy, how many innovators will be willing to take that chance?

1:11 AM  
Anonymous kenny said...

On expense to the small guy:

How about this: lower patent application/action fees across the board, but be more stringent on what is patentable?

This would require funding the USPTO, at least partly, with tax dollars.

In my mind, such a change would be a good thing: it both fixes the current corrupt USPTO funding model, and it levels the playing a field a bit more for individual patent applicants.

9:11 AM  
Anonymous Mike Spooner said...

The "temporary moratorium effect" won't be effective, as there is a simple way
around it: create a new company for each individual patent held, issue 9 $1 shares (assign 1 each to the appointed company officials and the remaining 4 to the neighbours' dog).

Such a practice would also have the unfortunate side-effect of drastically increasing the required inspection effort of the Patent Office, whom seem to be overworked enough already :-(

5:34 AM  

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