Patent Law

Snuffing Candles

By Gary Odom and Jordan Kuhn

Tackling Bilski and patents in general, the Wall Street Journal presents one of the more subtle propaganda pieces seen: "The greatest innovations today are better methods rather than new machines. We shouldn't grant monopolies on concepts." Quoting IBM's David Kappos: "As things now stand, the vagueness of patent law means the 'precious time of skilled scientists and engineers is too often spent defending against costly and time-consuming litigation, instead of creating innovations that drive economic growth.'"

Kappos is disingenuous. "Skilled scientists and engineers" don't defend patent suits. Lawyers do. Kappos skirts the nub of IBM's problem with patents. "Many of the products that consumers demand are complex and include contributions from multiple innovators that incorporate hundreds if not thousands of patented inventions." This "increases the need for predictability and clarity in determining the valid scope of patent rights." What Kappos doesn't say, but surely feels, is that the one patent out of the hundreds it doesn't own for an IBM product aggrieves it terribly to have to pay any "patent tax."

In a twist of "What would Jesus do?," the crowning achievement of the WSJ article is to cast Thomas Jefferson as patent reformer.

Thomas Jefferson, the nation's inventor-president, would support patent reform in an era when new information technologies build on themselves. An idea, he observed, is a rare thing whose value increases as it's shared. "No one possesses the less because everyone possesses the whole of it," he wrote. "He who receives an idea from me receives it without lessening me, as he who lights his candle at mine receives light without darkening me."

Japan became a great industrial power in the 1980s after the FTC forced cut-rate compulsory licensing on hundreds of U.S. companies. From the Invisible Edge:

This forced technology transfer on the part of the government has been labeled by one observer as "the largest 'white sale' on technology in history," a bargain that aggressive Japanese companies took full advantage of. Between 1950 and 1980, Japanese companies consummated more than 35,000 technology license agreements with foreign, mostly U.S., companies, many of which included the free or low-cost licenses made possible by the numerous consent decrees issued by the U.S. FTC and DOJ.

In the 1960s, fresh off its own antitrust suit, IBM carped about Xerox's monopoly in the copier market to the FTC. Xerox was forced to light its "candle at mine," as Jefferson analogized. In 1972, Xerox, by sheer dint of its inventions, had virtually 100% of the market for plain-paper copiers. Four years later, after its obliged FTC consent decree, it had less than 14%. Domestic rivals IBM and Kodak didn't grab the lion's share: Japanese competitors Canon, Toshiba, Sharp, Panasonic, Minolta and Konica did.

The same potential economic damage from short-sightedness applies today. Gut patent protection and watch China rise and dominate the American economy even more than it does now.

The problem with clearly defined patent rights lies not in §101, but in §112 ¶2. The issue of "predictability and clarity in determining the valid scope of patent rights" is not damning processes as unpatentable, but in damning patents that don't clearly define their metes and bounds. Bilski's claimed processes are ill-defined, and so fail under a reasonable interpretation of definiteness. Alas, the CAFC is far too lenient, letting any claim stand under §112 ¶2 as long as something can be made of it.

Process patentability deserves as much credence as any "machine, manufacture, or composition of matter." So said Congress, so says the law, and so said the Supreme Court in Diamond v. Diehr.

Process patents are not the problem. Clarity is. What every claim to any patentable invention needs to be is definite.

Full post as published by The Patent Prospector on June 15, 2009 (boomark / email).