2007 Patent Reform - It's Off To An Ugly Start . . .

The U.S. House of Representatives Committee on the Judiciary is organizing the Subcommittee on Courts, the Internet, and Intellectual Property for oversight hearings this Thursday (2:00 PM) on patent reform.

The title of the hearings pretty much says it all: "American Innovation at Risk: 'The Case for Patent Reform.'” The current list of witnesses, and their linked testimony, includes:

• Adam B. Jaffe, Professor of Economics and Dean of Arts and Sciences, Brandeis University Whaltham, Massachusetts (view prepared testimony here)
• Suzanne Michel, Chief Intellectual Property Counsel and the Deputy Assistant Director for Policy Coordination Federal Trade Commission Washington, D.C. (view prepared testimony here)
• Mark Myers, Co-Chair of the National Academy of Sciences Report Patent System for 21st Century Unionville, Pennsylvania (view prepared testimony here)
• Daniel B. Ravicher, Executive Director Public Patent Foundation New York, NY (view prepared testimony here)

The testimony of Myers and Michel lay out the conventional case for patent reform: quality issues at the PTO create uncertainty, trolling litigation exploits the uncertainty, and the lack of challenge mechanisms on validity propagate the uncertainty. Thus, the following reform measures were highlighted

1. increase scrutiny (i.e., "second pair of eyes") and funding for PTO examination;
2. provide post-grant opposition to challenge questionable patents;
3. tighten standards on obviousness and willfulness; and
4. provide safe havens for prior user rights and research exemptions.

One interesting note on Suzanne's testimony is that she resurrected the "preponderance of the evidence" standard for invalidity which was recently recommended in the FTC's 2002 report on patent policy. Other than noting this recommendation, Suzanne didn't pursue this further in the testimony.

The testimony of Jaffe and Ravicher, however, is another matter. With all due respect, it's just over the top. Some of the testimony is inaccurate and misleading (the USPTO has an 85% allowance rate? Really?) some of it is simply untrue ("through a quota system, patent examiners are given more credit, and evaluated more favorably, if they issue, rather than reject patents"), and some of it is just bizarre. Take this, for example, when Ravicher compares bad patents to condemned prisoners on death row:

[l]itigated patents tend to have a much greater significance to the public, on average, than non litigated patents. To draw an analogy, if 35% of the people on death row who challenged their convictions were actually proven innocent, that wouldn't necessarily mean that 35% of all people on death row, much less 35% of all convicted criminals, were actually innocent (that ratio could be higher or lower), but the severity of each mistake regarding someone on death row is extreme nonetheless. Similarly, the technology involved with litigated patents is almost without exception extremely valuable, so any mistakes regarding the validity of those patents can cause severe harm in and of itself, regardless of the validity rate of issued patents in general.

Of course, the call for banning software and business method patents is urgently argued, as well as reducing wilfull infringement strictly to cases where direct copying is proven. In short, the patent world, according to Jaffe and Ravicher, is populated with good guys and bad guys - and the bad guys are people who dare to exclude others, who purport to have good intentions, from technological advancements.

This is not to say that their testimony is wholly without merit, because they do make a few valid points. However, the rhetoric is simply too much, and frankly, is getting a little old.

Rep. Boucher (D-Va.) Promises "Early" Passage of Patent Reform In 2007

Last Wednesday, U.S. Rep. Rick Boucher (D-Va.) predicted before an early morning crowd at the State of the Internet Conference that the tech industry's interest in patent reform would be rewarded early in the 110th Congress.

Reports stated that, hours after the conference, Boucher and Rep. Howard Berman (D-Calif.) (re)introduced the Patents Depend on Quality Act of 2006 (PDQ Act). Boucher said hearings would begin this month, and he hoped for a full floor vote by March or April.

The reports don't provide any further detail on the proposed law (and Thomas and GovTrack don't show any updates yet), but it is presumed that the current PDQ Act is substantially the same as H.R. 5096 introduced in April of '06 (see text here).

For those keeping track, the PDQ Act is considered to be the narrowest of various reform acts that were paraded through Congress in '05 (H.R. 2795) and '06 (S.3818). So far, none of the proposed laws have seen the light of day.

Maybe the third time's the charm for this bill. As mentioned above, this bill is a retread of H.R. 5096, which, in turn, is a retread of H.R. 5299 ("Patent Quality Assistance Act of 2004"). In short, the PDQ Act proposes many of the more widely-accepted aspects of patent reform: post-grant review within the PTO, 3rd-party submission of prior art following publication, and removal of the estoppel provision for inter partes reexamination. However, the PDQ Act does contain the controversial "second window" for post-grant review, which may cause some problems (see more from Matt Buchanan's blog post here).

Andrew Noyes, who posts on the Tech Daily Dose blog for the National Journal's Technology Daily, was present at the conference in which Boucher made his remarks, and adds the following tidbits:

Aaron Cooper, a staffer for Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., said his boss and Sen. Orrin Hatch, R-Utah, will likely introduce a bill similar to the one they sponsored last year (S.3818).

But Ryan Triplette, who works for the panel's Ranking Republican Arlen Specter of Pennsylvania, said her boss wants in on the action. He was not at the negotiating table last year so "we're not as wedded to S.3818," she said. The issue is a top priority for Specter. "This is something that can get done this Congress," Triplette
said.

In the House, Reps. Rick Boucher, D-Va., and Howard Berman, D-Calif.,
will lead the charge. Amy Levine, a staffer for Boucher, said "you will see real initiative and a real drive to get patent reform legislation through."

Branden Ritchie, who works for Rep. Bob Goodlatte, R-Va., agreed that lawmakers "moved the ball pretty far" last year through a series of hearings and legislation. "We're looking forward to doing that again this time."

See report from InternetNews.com here.

On a side-note, Andrew also blogged about copyright issues discussed at the conference, and particularly about user-generated content. A panel featuring Jim DeLong of the Progress & Freedom Foundation, Pam Samuelson of the Berkeley Center for Law & Technology and Steven Starr from Revver.com started their session off with a video called "Brokeback to the Future," which induced more than a few chuckles in the audience - to view the video, click here.