Dean and the US patent system reform in USA Today.

[Elgin Clock]

http://www.usatoday.com/money/compan...t-reform_x.htm

SAN FRANCISCO — Chip giant Intel, Segway scooter inventor Dean Kamen and a 20-person holograph-making firm from Vermont are among those lobbying Congress to change a troubled patent system they say costs the tech industry billions.



The long-underfunded patent office takes years to review some applications and many patents are improperly granted because examiners lack technical expertise, according to testimony to Congress last week from tech firms, universities and other inventors.

Patents — crucial to tech firms because intellectual property is often their most valuable asset — are contested in court, creating a flood of costly litigation, those inventors and companies said.

Microsoft, for one, says it is embroiled in 35 to 40 patent cases at any given time — racking up $100 million in legal fees each year. Even disputing a patent worth less than $1 million usually costs a company about $500,000, says the American Intellectual Property Law Association, a trade group.

To address these issues, Rep. Lamar Smith, R-Texas, at the hearings introduced an early draft of a bill for patent reform. There's lots of support for the general idea — but debate about the best way to get it done.

"Suggestions for changing the law have been accumulating," says Herbert Wamsley, executive director of the Intellectual Property Owners Association.

From 1992 to 2004, Congress diverted more than $750 million of the revenue generated from patent applications to other government agencies, Wamsley says. That left the office understaffed.

Under pressure from the tech industry, Congress stopped doing that during the current fiscal year, which ends Sept. 30. It also approved a fee hike. The patent office is using the money to hire 900 more examiners, especially those with technical backgrounds.

But many tech companies and trade groups say other changes are needed, including:

•A review period. Now, someone who objects to another person's patent has few options but to sue. A review period of nine to 12 months would let the patent office, instead of the courts, address complaints. That would be a simpler and cheaper way of settling many disputes, Wamsley and other advocates say.

•First-to-file. Today, patents are awarded to the inventor who comes up with an idea first — even if another inventor beats them to the patent office. The first to have the idea gets the patent. But that can be hard to prove. Some tech firms want the patent to go to the first person to file for one. Critics, such as William Parker, co-owner of hologram-maker Diffraction, say that would hurt small firms with few resources.

Legal questions are being debated, too, such as how hard it should be to get an injunction stopping a company from using a disputed patent.

It is unclear how long reform will take. An earlier round of patent reforms took a decade. But tech firms say they'll work hard to move as quickly as possible. "Patents are really the currency of innovation in the tech sector," says David Kaefer, Microsoft's head of business development. "To get (tech devices) to work together, companies need to collaborate and share. You need (patents) to allow that to happen."

[SuperJake]

Guess we'd better keep our eyes peeled for the patented new patent office practices.

[Greg Needel]

what this sounds like to me is basically they need an upgrade it also sounds that if anyone has an idea they want to patent they better do it soon because with new proposed changes going to be taking affect i feel like it will be harder to get a patent then ever

[Carol]

Originally Posted by Greg Needel

what this sounds like to me is basically they need an upgrade it also sounds that if anyone has an idea they want to patent they better do it soon because with new proposed changes going to be taking affect i feel like it will be harder to get a patent then ever

Actually what it does is that it aligns us with what the rest of the world has been doing for decades. (Except for one other country, I think S. Africa but I'm not positive.) As with the metric system, the US is out of step with everyone else.

[KenWittlief]

the real trick to being sucessful in the business world today is not covering your self with patents, but innovating faster than people can keep up with

if you come up with something new, then by the time it hits the market and other start to copy it, you have to be one or two generations ahead already

its gotten to where companys ignore patents and build what they want. 90% of all patents granted in the US prove to be worthless when challenged in court.

[Carol]

Originally Posted by KenWittlief

the real trick to being sucessful in the business world today is not covering your self with patents, but innovating faster than people can keep up with

if you come up with something new, then by the time it hits the market and other start to copy it, you have to be one or two generations ahead already

its gotten to where companys ignore patents and build what they want. 90% of all patents granted in the US prove to be worthless when challenged in court.

That's because a patent only gets to court if the infringer believes it has a good chance of overturning the patent. The vast majority are settled out of court, with the infringer agreeing to pay license fees to the patent owner. IBM makes about $800 million dollars a year income from licensing fees only.

Patents are big business; a company can certainly build anything they want, but they can't sell it if someone else owns the rights without running into big legal fees. And if you do have a great innovation that will be a big success and make tons of money, do you really want to let anyone and their mother copy it and sell it their own version, when they didn't have to spend the time and money you spent to develop it? The only way to stop that is to own the patent rights to it. Why do you think a small company DEKA has almost 200 patents? Why do you think big corporations spend billions of dollars on patent each year? If it wasn't worth the time and money they wouldn't do it.

Name me one good invention (in the last century) that has made money for it's inventor that wasn't covered by a patent.

[Max Lobovsky]

Originally Posted by Carol

Name me one good invention (in the last century) that has made money for it's inventor that wasn't covered by a patent.

Much of Microsoft's early success was not only not patented, but some was even patented by someone else. To this day, Microsoft is generally the one paying out when it comes to patent cases. They stayed ahead because of smart business moves (and if you ask some, illegal moves), and for a long time, being ahead of the game.

AT&T did not control telecom in the US because of a large patent portfolio, either.

Just look at the computer you are using, supposedly an example of the latest technology. There are not really any major parts of it that any single company controls thanks to patents. Almost every single part has many competitors making similar products and that's not because they are all paying license fees to one.

I certainly think patents are useful, but I think the importance of IP is somewhat overrated and the latest fad of high tech companies whose value is solely in IP is just that, a fad.

[SuperJake]

Originally Posted by KenWittlief

the real trick to being sucessful in the business world today is not covering your self with patents, but innovating faster than people can keep up with

if you come up with something new, then by the time it hits the market and other start to copy it, you have to be one or two generations ahead already

Isn't that what Polaroid does? Or used to do? I heard somewhere that the reason you only see Polaroid instant-develop picture cameras is because they put out a product, then by the time any competition comes up with a copy or competitor, Polaroid puts out the next generation. It seems like a good plan, but eventually technology can't keep up with the innovation requirements and that tidal wave of competition behind you catches up and you get washed away.

[Carol]

Originally Posted by SuperJake

Isn't that what Polaroid does? Or used to do? I heard somewhere that the reason you only see Polaroid instant-develop picture cameras is because they put out a product, then by the time any competition comes up with a copy or competitor, Polaroid puts out the next generation. It seems like a good plan, but eventually technology can't keep up with the innovation requirements and that tidal wave of competition behind you catches up and you get washed away.

Kodak had a instant develop camera, but had to take it off the market because Polaroid won a big patent infringement suit against them.

Just look at the computer you are using, supposedly an example of the latest technology. There are not really any major parts of it that any single company controls thanks to patents. Almost every single part has many competitors making similar products and that's not because they are all paying license fees to one..

Single parts are interchangeable, but each is slightly different and those differences are patented to keep the competitors from making an exact copy. Again, why would they bother if it didn't increase their profits? Companies don't stay in business long wasting money like that.

Look at the list of patent numbers on a new PC box some time. For example, Intel alone has almost 10,000 patents, and is in the top ten for number of patents granted last year:
http://www.ipo.org/Template.cfm?Sect...entDisplay.cfm

But, to be fair, computer technology isn't a good example because it is one of the fastest growing fields. But it is only one field and thousands more depend on patents. Microsoft didn't get it's value from patents because, until recently, software wasn't patentable (and that is a big controversy). The biggest field is electronics. Check out the list above. Microsoft is on it, so are a lot I bet you would never guess would be there.