Patterico's Pontifications

11/28/2006

The Supreme Court Identifies A Patently Obvious Racket

Filed under: Court Decisions,General,Law,Public Policy — Justin Levine @ 3:56 pm



[posted by Justin Levine – not Patterico]

The current U.S. Patent system is a thoroughly corrupt racket that stifles human innovation and free markets in favor of special interests and statist monopolies. Regretfully, much of the international community has also followed suit.

This racket is so foul that the legal system has even seen fit to try and monopolize the issue by creating a “Patent Bar” and forcing litigation to go through only one federal appellate court.  

Because there is no “competition” between different courts in finding the proper interpretation of Patent Law, the Federal Circuit has been allowed to screw up something as simple as interpreting what the word “obvious” means. They have even gotten away with ignoring Supreme Court precedent in this area for several years. Partly as a result, patent cases now routinely employ “experts” to try and educate juries as to what is or is not “obvious”. Got that? 

Fortunately, the U.S. Supreme Court is indicating that it might be willing to provide at least a small amount of relief in this area. The key issue will be how broad the final ruling turns out to be.

Reading the tea leaves of Supreme Court oral arguments can admittedly be tricky. But it looks like this ruling could bridge ideological lines among the Justices.

A few choice excerpts from the oral arguments:

JUSTICE ALITO: Well, once you define the teaching, suggestion and motivation test that way so that it can be implicit, it can be based on common sense, I don’t quite understand the difference between that and simply asking whether it’s obvious. Could you just explain what that adds?   

MR. GOLDSTEIN: Well, all that it adds is an analytical framework. It’s an elaboration. The word “obvious” –   

CHIEF JUSTICE ROBERTS: It adds a layer of Federal Circuit jargon that lawyers can then bandy back and forth, but if it’s — particularly if it’s nonexclusive, you can say you can meet our teaching, suggestion, or motivation test or you can show that it’s nonobvious, it seems to me that it’s worse than meaningless because it complicates the inquiry rather than focusing on the statute.   

[excerpt deleted]   

JUSTICE SCALIA: I agree with the Chief Justice. It is misleading to say that the whole world is embraced within these three nouns, teaching, suggestion, or motivation, and then you define teaching, suggestion, or motivation to mean anything that renders it nonobvious. This is gobbledygook. It really is, it’s irrational.   MR. GOLDSTEIN: Justice Scalia, I this it would be surprising for this experienced Court and all of the patent bar — remember, every single major patent bar association in the country has filed on our side –   

 CHIEF JUSTICE ROBERTS: Well, which way does that cut? That just indicates that this is profitable for the patent bar. (Laughter.)

MR. GOLDSTEIN: Mr. Chief Justice, it turns out that actually is not accurate.  

 JUSTICE SCALIA: It produces more patents, which is what the patent bar gets paid for, to acquire patents, not to get patent applications denied but to get them granted. And the more you narrow the obviousness standard to these three imponderable nouns, the more likely it is that the patent will be granted.   

…   

MR. GOLDSTEIN:…The experts say it’s not obvious and the reason nobody did it for 12 years and the reason that Asano was never combined with an electronic throttle control is explained in the record in this case and it’s twofold. The first is, and I have to take you now to the picture of Asano because that’s what the claim that is supposed to make our invention obvious is. They say you would have done this with Asano. What the experts say is this Asano thing, no one would ever use it at all.  

CHIEF JUSTICE ROBERTS: Who do you get to be an expert to tell you something’s not obvious.    

MR. GOLDSTEIN: You get –    CHIEF JUSTICE ROBERTS: I mean, the least insightful person you can find? (Laughter.) 

Extra credit test: When your Adobe Acrobat Reader boots up to read the transcript of the Supreme Court oral arguments in the KSR International v. Teleflex patent case, try and quickly count the number of patents Adobe is claiming as part of its software.

This just illustrates another aspect of the problem. Any patented invention can be thought of as a combination simpler components. If those components can also be separately patented, then it prevents technological innovation by getting around the limitations of patent law in terms of scope and time.  

Think of it in terms of copyright law: How many copyrights exist in your morning newspaper (for the few of you that still read the hard copy version)? The paper as a whole is copyrighted as a compilation work, right? But then, each page of the paper can claim its own separate copyright. Each individual article can also claim a separate copyright. The author can also claim a valid copyright in each individual paragraph of an article. Each advertisement is protected by a separate copyright. Each advertisement likely contains several individual images that also can claim their own copyright protection.

So if you were to copy a whole edition of your morning paper, would you be violating only one copyright, or tens of thousands? The answer is both, and every figure in between – depending on what a plaintiff finds to be the most convenient for the case. This lack of objective principle runs throughout intellectual property law- and it stinks to high heaven. (So says I.)

[posted by Justin Levine]

15 Responses to “The Supreme Court Identifies A Patently Obvious Racket”

  1. Excellent, I’d also recommend the work of David Levine and Michelle Boldrin. Such as their monograph Against Intellectual Property. Here is their shorter article on perfectly competitive innovation. More can be found here.

    Steve Verdon (4c0bd6)

  2. [The other] Levine and Boldrin do great work. Minor correction – The name of their book is actually entitled “Against Intellectual Monopoly” (not “Property”). But its a good read regardless of the title.

    Justin Levine (20f2b5)

  3. Of course you want to patent things separately. If both A & B are unique ideas, it is insane to limit your patent to devices that use both.

    Example: you want to patent “the wheel” and “metal rod”. In this thought experiment neither has been invented. You also have the idea of combining the two, coining the phrase “axle” for the novel use of metal rod. That’s 3 legitimate patents. You _could_ also file one patent with three claims, but some court might miss that when you attempted to enforce your wheel patent.

    Why is this a problem? Patents last between 17 & 20 years depending on a few things. This term really hasn’t changed much in a couple of centuries. Nor should it.

    Shouldn’t inventors get paid for their ideas?

    NOW, you do have a point where people are patenting things that are NOT inventions, such as the “push one button payment system” where the idea of just pushing one button is the gist of the patent. Just because no one has put up a web site using “blue” doesn’t mean you can patent using “blue” on a website.

    We could go on all day about what should be patentable, but one good way to rein it in would be to put serious penalties in place for patent fraud. Like jail time.

    Now, there’s only one word for people who oppose ALL intellectual property. It starts with “C” and it sure is NOT “Conservative.”

    Kevin Murphy (0b2493)

  4. Kevin –

    Here is the problem with the way things work today regarding separate and multiple patents for one functional invention.

    Let’s say that I create invention X which is comprised of simpler inventions a1, a2, and a3 (which I have also created simultanously and are intergral to the way X operates).

    The current system allows me to patent a1 separately and alone. Why is this problem? Simple – By patenting a1, it gives me a functional patent over X for 20 years since nobody can use or manufacture the unpatented X without also infringing on my a1 patent. Then when a1’s patent expires, I can just patent a2, thus giving me a functional patent over X for ANOTHER 20 years. Then I patent a3, which gives me a monopoly over X for ANOTHER 20 years. Then at the end of all of that, I can just patent X itself. This allows people to effectively make an end run around the limitations of patent law.

    That’s why this is a problem. You misunderstand the argument. It’s not that people shouldn’t be compensated for their creations. It’s that the current legal system has no objective method for distinguishing between a functional completed invention and a mere component of the invention.

    Please revisit my Adobe Acrobat Reader argument for an example of this. How is it that a single software program could be covered by over 20 patents instead of just 1 since end users don’t recognize it as 20 separate products?

    Justin Levine (20f2b5)

  5. Justin:
    Your hypothetical is nonsense. Why can the Boeing 777 be covered by thousands of patents even though fliers recognize it as one airplane? It has several component parts and functionalities–just like Adobe Acrobat.

    You also fail to recognize the process of the restriction requirement whereby the PTO (that’s the patent office boys and girls) requires the applicant to aggressively separate their application into separate parts for separate prosecution and separate patent grants. This is becasue the PTO examiners are civil servants and get, say, 8 times the brownie points for a patent application on a single invention having 8 elements that they force the applicant to break into 8 pieces and require the owner to prosecute separately. In biotech, 20 and 30 way restriction requirements are not unusual.

    As to your a1-a3 example: wrong, flat wrong, untrue.

    Even in your example, if a1-a3 are integral to X then they must be filed on and claimed or abanandoned under 102(g) and the Maxwell doctrine. a1 a2 and a3 are subject to the same 20 year patent term, that runs from the original filing date of the appication containing a1-a3, which is actually less than that because the 20 year term runs from filing not from grant. So, if the PTO takes 6 years to examine and grant an application–not unusally long–then any patent on X, a1, a2 or a3 has 14 years to run.

    Further, in your example, any attempt to secure a separate patent for a2 or a3 separately from a1 runs afoul of the judicially created doctrine of obviousness-type double patenting and the grant of each such patent would be subject to, and conditional upon, the owner executing a terminal disclaimer that requires the surrender of any patent term of a2 or a3 extending beyond the lifetime of the patent on a1 and a waiver of the right of enforcement of a2 and a3 if a1, a2 and a3 ever become other than commonly owned.

    In the non-Justin real world, the patent system is perfectly self-regulating because the system cannot divest the public of the right to practice any technology that is in the public domain one year before the filing of any patent application. This is the Lemelson line of cases that is readily accesible.

    In reality, the disputes arise from those that who insist, once the patent issues, i.e infringers, that the quantum of advance of the patent over the public domain art is not adequate to justify the exclusive multi-year grant. That is why the US SCt is looking at the obviousness standard to see how that difference is analyzed. THe principle difficulty is that many inventions look simple in hindsight, thus, the law requires the analysis to go back in time to the point at which the invention was made, divest oneself of knowledge of the actual invention, and then examine the issues of teaching, motivation, and suggestion based on the then-available public domain information to determine if the invention was really “obvious” at the time it was made without the foreknowledge of the result. This analysis, as one can readily discern is diffcult, hence the discussion at the Court.

    Clarity (12a651)

  6. The Wright Brothers suppressed plane development for years because they successfully patented just about every idea used in their airplane even though many of the ideas had been used in gliders and only slightly modified by them, including use of rudders, now how long had rudders been around? Since the Phoenicians?? Should a patent be issued simply because you put a different looking one on a new invention?…Glenn Curtiss spent most of his life and money fighting the Wright patents…this is not a new problem. US Patent Law does suppress innovation…

    coreman (a926b0)

  7. Clarity –

    I suspect that you are member of the patent bar that the Supreme Court implicitly ciritcized in this case (along with the nonsensical “teaching, motivation and suggetsion” test that the Justices openly dissed.) If you read the transcript of the case, the Justices don’t merely find the analysis difficult in this case – they took the case specifically to change the (court created) law because it is so nonsensical.

    Justin Levine (1967ff)

  8. Justin–

    Two things wrong with your a1-a3 thing:

    1) If you use a2 or a3 in a product, then 17 or 34 years later try to patent them, and you do not disclose this prior use, you are committing fraud.

    2) If you hold back a2 and a3 from product use, keeping it all a secret until you can spring them on an unsuspecting world, then you run the severe risk that someone else will patent them.

    There is also the combination of the two, where you secretly use an idea and someone else patents it while you lurk. You may get sued for using “their” idea and there is no guarantee you will win.

    Kevin Murphy (0b2493)

  9. Justin–

    On the other hand, everyone here is right when we all say that it is imperative that the number of incremental utility patents be reduced, and that trivial modifications, recombinations, etc, be excluded. The drug company practice of adding, say, aspirin to a patented pain pill 15 years on, and then filing for a new patent must cease. It’s pretty obvious why they are against revising the obviousness standard.

    So, Justin, what is your definition of obviousness? What current patented device do you consider at the borderline?

    Or do you just want to do away with patents entirely, because if so there’s not much to talk about.

    Kevin Murphy (0b2493)

  10. The biggest problem with patents as they are today is that people are allowed to patent inventions that are obvious as soon as anyone comes across the problem. For example, until people started trying to implement arithmetic compression more quickly, there was no need to think about using binary factors to speed up the division. Using binary factors to speed up division is a common trick known to any senior in computer science, yet the patent office let IBM patent the idea of using binary factors specifically in arithmetic compression just because they were the first people to get around to that obvious possibility.

    In software specifically, there are so many people involved that there is no invention that won’t quickly become common knowledge shortly after it becomes useful (The myth of the genius inventor is just that: a myth. Hardly ever does one person invent something that lots of other people weren’t already well on the way to inventing).

    The patent system is nothing but a drag on this kind of environment, being designed for an environment where the use of a new invention usually involved per-unit costs on the order of a fifth of the selling price and where startup costs involved building factories, where marketing was much more expensive per unit, and where the potential market was much smaller. For that kind of environment you need patents to draw investors. In the modern software market, getting investors is the easy part.

    Doc Rampage (4a07eb)

  11. Justin–
    Guilty as charged, you see, I put food on the table by actually knowing what the hell I am talking about.

    Clarity (12a651)

  12. It seems to me that both inventors and the public are best served when rigorous application of “new” is applied to pending applications.

    Simply modifying an existing patent to extend the life should not be permitted (eg drug companies, Nexium vs Prilosec).

    A patent should really encompass novel thought/ideas, a standard that seems much more strict/restrictive than “obvious”.

    In my world, the first guy to come up with the idea of the rigid wing (Otto Lilienthal??)would be the only patent holder for fixed wings.

    All other fixed wing designs would belong in the public domain.

    Same goes for the guy who invented flaps, no one else could ever patent a flap that extended from the trailing edge of a wing.

    It would take a completely new and unique idea before another flap patent would be issued.

    Even the 727 flaps, which were patented, are nothing more than a great improvement on an old idea…and therefore shouldn’t have been protected.

    Boeing had the commercial advantage by being first to market with an airplane that had superior performance to others in it’s class.

    However the 727 flap design really wasn’t a novel idea, that belonged to the guy who first invented the flap, Boeing merely “built a better mousetrap”.

    In my world, you only get paid for truly new ideas and not for mere advancements to existing ones…no matter how clever. This makes the marketplace much more competitive and better serves both the public and private sectors.

    Side benefit would be greatly reduced load on the courts and fewer attorneys…but this isn’t going to happen anytime soon so Clarity can keep eating well for a very long time.

    coreman (a926b0)

  13. I have exactly one patent, for a software algorithm I didn’t think should be patented. (My employer thought otherwise and my terms of employment required me to support their decision.)

    I don’t know whether,from a pure economics standpoint, patents in general are bad or not.

    However, I think this was a bit off:

    “They have even gotten away with ignoring Supreme Court precedent in this area for several years. Partly as a result, patent cases now routinely employ ”experts” to try and educate juries as to what is or is not “obvious”. Got that? ”

    Nope. It’s not just “obvious”, but “obvious to someone knowledgeable in the field.” With the qualifier, the notion of bringing in experts to educate the jury on what would be obvious to someone knowledgeable in the field makes perfect sense.

    Example: The binary factors thing. Obvious to someone knowledgeable in the field. Completely Greek to the average layman.

    Kent G. Budge (b2ac27)

  14. I don’t know whether,from a pure economics standpoint, patents in general are bad or not.

    Hey Kent, fancy seeing you here.

    Anyhow, yes patents are a bad idea. Monopolies are always a bad idea. Patents are what economist call Second Best policies/outcomes. The first best, in this case competition is seen as not being attainable so we go with the “second best”. In the case of patents, the idea is that since the marginal cost of the knowledge is so low, that to assure that there is innovation then granting temporary monopolies is a necessary evil.

    That is what David Levine and Michelle Bouldrin have been arguing, that the usual economic arguments for patents don’t work. I wont go into their economic model, but their argument makes sense and it is at least worth looking at in more detail and possibly even changing policy. The only people who will object are those like Clarity who has a vested interest in maintaining the status quo (rent maintance if you will).

    Steve Verdon (94c667)


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