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Thursday, June 20, 2013

Patent reform that we really need

I am not a patent attorney or a patent agent, but professionally I license patents, help engineers to determine whether patents could possibly be obtained on what they've done, assign valuations to patents, and so on. Patents matter to me, and patents matter to us all because they are a principal inducement for innovation. A patent allows the inventor to control how his or her invention is used for a finite number of years. Without patents, the important work of inventors would be ruthlessly cloned and therefore the only incentives for inventors would be altruism and personal satisfaction. Universities and companies would have much less interest in pursuing costly research and development. Legislatures almost worldwide have decided that we're better off when a financial incentive is added.

Obtaining, defending, and using patents are complex processes under the law. People frequently propose reforms to those processes, and some such proposals make sense to me -- but I'm not passionate about them. Rather, I'm passionate about which inventions are, or should be, patent-eligible.

The U.S. Patent and Trademark Office has granted patents too generously, and the courts and Congress have let them get away with it. Critics of patents often point to 4,022,227 and 6,368,227 as examples of foolishness, but my concern is more specific. The law says that "laws of nature, natural phenomena, and abstract ideas" cannot be patented. Over recent decades, however, patent protection has nevertheless been extended to innovations in software, business methods, and genetics. There were some who warned at the outset that this approach to patent eligibility would create trouble, and it has. Other countries have avoided this morass by being more selective when granting patents in these three fields or by simply not granting these kinds at patents at all.

Here's the good news: the U.S. Supreme Court and the Patent Trial and Appeal Board issued rulings last week that restrict this trend. I'm delighted. Many patent attorneys are upset, but it seems to me that their reactions betray their own self-interest. The public interest is most definitely to prune back the excesses in patent eligibility for software, business methods, and genetics -- and to invalidate the patents that should never have been granted.