Wednesday, September 14, 2005

SURVEY SAYS: PATENT QUALITY STINKS! The Intellectual Property Owners Association (IPO) released recent results of a survey showing that its corporate members perceive the quality of patents granted by the U.S. Patent and Trademark Office to be "less than satisfactory." The breakdown for rating the quality of patenes is as follows:

  • 51.3 percent - less than satisfactory or poor (47.5 percent "less than satisfactory" and 3.8 percent "poor")
  • 40 percent - satisfactory
  • 8.8 percent - more than satisfactory (0% said outstanding)

Not particularly surprising, since the USPTO has made itself a scapegoat for all of the problems in the patent system. Also, the only group reporting "poor" ratings was the electronics/computer/software industry, although their dissatisfaction wasn't all that different from other industries (in fact, the industry had one of the more positive outlooks on patent quality as compared to 3 years ago).

Nevertheless, an interesting finding by the survey was that the largest companies were the most critical of patent quality:

  • large (>$50 bil) -------------------------------- 62.6% "less than satisfactory or poor"
  • medium-large (between $10 and $50 bil) - 48.3% "less than satisfactory or poor"
  • medium (between $1 and $10 bil) ----------- 53.8% "less than satisafactory" (0% poor)
  • small (<$1bil) ------------------------------------ 33% "less than satisfactory" (0% poor)

I was initially surprised by this, since it is the larger companies that file the bulk of patents at the USPTO. But then I learned the survey defined "high quality patents" as those that will hold up if challenged in court (what a weird and amorphous definition, BTW). It would make sense that, since large companies spend more time defending against patent infringement lawsuits than enforcing them, they would also be jaundiced towards the patents being asserted against them.

The survey rightfully points out the USPTO's shortcomings, partially caused by fee diversion, and also by failures to modernize the agency's operations. However, I was surprised that there was no discussion on the manner in which courts handle patent litigation and claim construction, particularly since "quality" was so closely tied to a court's proclivity to uphold particular patents.

One question I was disappointed that the survey didn't ask was "how do you rate the quality of examination with regard to your company's portfolio?" It's pretty easy to bad-mouth other people's patents, but it's another matter to critically analyze your own portfolio.

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