As the recent BlackBerry case focused the world’s eyes on the arcane field of patents, I was reminded of the 1999 Amazon.com “one click” case, which caused so many to condemn the U.S. patent system.At that time, critics called the system “broken” and a “disincentive to innovation.” Now, the system is under attack again, merely because our BlackBerries were threatened.
The Wall Street Journal jumped onto this bandwagon blaming unscrupulous lawyers and their clients for conspiring to “hijack” the U.S. patent system. Though RIM recently settled and disruption to BlackBerry service was prevented, themes from this litigation will resonate in proposed legislation and cases currently before the Supreme Court.
Not Many Trolls
A patent is an intellectual property right granted to an inventor for a substantive contribution to the wealth of human knowledge. As the arbiter of this grant, the U.S. Patent and Trademark Office imposes considerable requirements — rejecting and limiting the vast majority of submitted applications. The invention must represent an advance in technology to be awarded a patent.
Fewer than 1 percent of patents are litigated, and fewer by far make the press. Cases against “patent trolls” — a name given to companies like NTP that hold patents but make no product — constitute only 2 percent of the handful of patent infringement lawsuits, IT pundit Nathan Myhrvold recently testified before Congress.
In many cases, these holding companies are established when inventors are unable — either due to illness, lack of funding, or for other reasons — to produce the product themselves. Some are formed merely for profit. As a result of publicity surrounding the BlackBerry case, opposition to these kinds of holding companies has grown and is fueling demands for change.
Rights Under Siege
When Americans risk losing a toy or tool that is important to many powerful individuals, a feeling of panic pervades. As a crackberry addict myself, I can well understand. Yet, should we rush to dismantle a system largely responsible for our economic strength? A system so basic to who we are as Americans that Thomas Jefferson sought to implement these rights as strongly as he fought to free us from British rule? With patent trolls responsible for a tiny fraction of all patent litigation, should this issue bring down a system that works?
We Americans crave and depend on sophisticated technology to improve our quality of life. Our economy is geared to reward innovators who “think different.” Belief in the American dream encourages better mousetraps, pharmaceuticals and wireless e-mail routing methods. We expect the rest of the world to honor our intellectual property by curtailing unauthorized use of our patented and copyrighted products: software, songs, movies, pharmaceuticals and just about anything else the U.S. produces. Intellectual property is our lifeblood in trade.
It is ironic that intellectual property rights are under siege in this new idea economy. The Internet and digitization of content have created a climate for infringement on an unprecedented scale. The entertainment industry is in a fierce struggle to protect its copyrights. While patent foes claim the Internet moves too quickly to keep patent rights in place, demanding reduction of patent powers, copyright advocates use the speed of the Internet as a reason to strengthen protections.
In the case of copyrights, it seems the Supreme Court agrees. Last year it unanimously held that file-sharing site Grokster’s infringement was not excusable.
The Heart of Patent Power
As Abraham Lincoln noted, “The patent system add[s] the fuel of interest to the fire of genius.” The hard truth is that without the spur of financial gain, these fires could dim or go out. The limited period of exclusivity of a patent — 20 years from filing the application — and the right to injunctive relief provide the requisite stimulus toward further research and innovation, resulting in the next generation of antibiotics, advances in electronics, and better Internet tools — whether made by individuals alone in their basements or collaborators in corporate labs. In this manner, the United States and other developed nations strive to benefit the public good.
With the recent Kelo case, the Supreme Court has shown a penchant for taking physical property, i.e., land, ostensibly for the greater good. In view of the internecine struggles within American industry on patent reform — for example, between the software and pharmaceutical industries — the patent bar hopes the Court, as well as Congress, will carefully consider the impact of taking away or diluting a major right of all patentees.
Injunctive relief is the heart of a patent’s power. Denying the patentee this right would make compulsory licensing a reality for U.S. inventors for the first time in history.
The System Works
Although the pace of innovation has accelerated, the patent system is far from broken. Despite the present struggles to meet the avalanche of patent applications, the Patent Office has served the U.S. well, and become the envy of the world. Nonetheless, some changes are needed in Patent Office procedures to handle the backlog of applications and assure adherence to treaty obligations with other nations.
While patent statutes must better cope with changes in technologies and business, we must always remember that a strong patent system and the preservation of patent rights are vital to the American way of life. Caution is essential when facing the reduction or elimination of any of those rights.
Our BlackBerries are out of danger — at least for the moment. It’s time for cooler heads to prevail before destroying one of the treasures of the modern world: the U.S. patent system.
Raymond Van Dyke is a patent attorney in the Washington, D.C., office of Nixon Peabody and Adjunct Professor of Law at American University.