The patent system that has fallen into disrepair: how we got to this, and how to fix it

There is a fundamental problem in the US patent system.

This problem is us.

By the word “we” I mean all of us: companies and people who directly interact with the patent system, the media that cover these interactions, and, finally, the large number of active and noisy readers we serve as our reporting. And we all accepted the generally accepted truth that the patent system was corrupted to the point of unsuitability, that it was only a fragment of the past, that it had outlived its time in this age of rapid technological innovations, especially in the field of software, and that it might be worth it to be scrapped .

Over the past few months, these opinions have grown to a furious scream as the patent system has begun to negatively affect more and more players in the industry: small developers have become the target of lawsuits from companies that do nothing and don't produce; Apple, HTC and Samsung cannot move places in patent litigation; a couple of multibillion-dollar patent auctions brought to life an unheard-of verbal battle between Microsoft and Google. The most ardent critics openly declare that any benefit that the patent system could bring is now completely covered by costs, that resources, ceteris paribus would be directed to the development of new ideas, are now spent on overly diligent defense of the old.

These arguments are repeated so often and with such certainty that they have become practically an axiom, rhetorical and intellectual deception, which is rarely (if ever) questioned. But this is bad and wrong - so much so that it jeopardizes any real attempts to reform the system. Making noise and getting angry is a good way to attract attention, but a terrible way to achieve something, especially if you take into account that most people who hit their heels in the chest only repeat a simplified version of the arguments that have been repeated in our country since the time when Thomas Jefferson was appointed head of the Patent Office.

So let's start from the beginning. Let's see how the patent system works, where it especially crashes, and how you can put it in order. Ready? Go.

Patent Exchange

Everyone ignores the very core of the law governing the patent system, despite the fact that it is simple and very reasonable. Patents are not just an incentive given to people to keep inventing. They are an exchange between inventors and society. In exchange for a time-limited monopoly on their inventions, inventors must fully disclose all the details of their invention in the patent description and agree that the invention will be available to everyone when the monopoly expires. Rules for disclosing details of the invention are described in 35 USC § 112and they are quite strict: the description should be so detailed that any “specialist in the field” of the invention could build the invention, and the inventor should also indicate the “best way” to build. Violation of these rules can lead to serious consequences. So, a patent that does not fully disclose the details of the invention may be invalidated. And since patent descriptions become public domain after the patent expires, we are creating a huge ever-increasing set of detailed technologies that can be used by anyone to create their products.

What does this mean in practice? Take the patent No. 6,285,999, which is Larry Page's patent for PageRank, the main algorithm at the heart of Google search. Since obtaining a patent means describing the details of the technology, we can take and look at the mathematical calculations that underlie one of the most important and destructive inventions in the history of mankind:



(Remember that the patent is not what is shown in the picture - it’s just a mandatory description of the patent application itself) Since obtaining a patent means that your monopoly on the invention is limited in time, anyone can take this description and create their own search engine after patent term in 2018. In the meantime, you can study Google’s calculations and try to get around specific points in the application. In fact, this is an important point. Thus, the patent system encourages innovation, forcing inventors to create alternative ways to achieve results. There is no doubt that the Microsoft Bing team spent a lot of time studying the patent for PageRank in search of ways to create something that works not only differently, but also, possibly, better.

Similarly, Apple’s multitouch patents are more than just attempts to restrict access to certain technologies for coupon rivals. They also contain detailed descriptions of how to create the same technology in the future. Here is part of patent number 7,812,828 , which Apple so loves to sue. This patent describes a system that tracks multiple input points on a multitouch device and is able to filter them correctly. For a long time, we were wondering how Apple manages to make multitouch trackpads and screens better than competitors. But, when these patents expire, the same competitors will be able to simply use the development of Apple.



(Again, the above example is part of the description, not the patent application itself) I could continue, but the idea should be clear. Patents reveal details of the most advanced developments carried out by some of the most creative and inventive people in history. And these developments in a few years will be available to everyone - for free. Cancel patent protection, and with it the requirement to disclose the details of the invention, and these details will be hidden behind seven locks. They will be used as long as they bring a competitive advantage, after which they can simply be forgotten.

From the history of Western civilization, we know how technical superiority was defended in the absence of patents: craft guilds like masons inflated an aura of mysticism and forbade anyone to be taught from the outside, and in the Middle Ages Venetian glassblowers were killed if they tried to leave the city and build themselves somewhere on new place. And you still think that Facebook and Google are overstepping the bar, trying to prevent the departure of their employees.

Of course, one can argue about the length of the patent, about which inventions are and should not be protected by patents - these are all important issues that need discussion. But the fundamental basis of the patent system is the full disclosure of the details of the invention by the inventor in exchange for a clearly defined limited term of protection. Therefore, any attempt to identify problems and reform the system must respect the interests of both sides of this exchange.

Patent Rules

It is bad that state policy in the field of patent law is dismissed, but the explicit disregard for the law itself is completely irresponsible. Especially when you consider that it costs nothing to just sit down and take a look at Chapter 35 of the US Code , which sets out all the basic elements of patent law. Any discussion of a “change of patent law” is ultimately a conversation about a change in Chapter 35, which means that before talking about any changes, you need to know what it says.

Chapter 35 is vast and comprehensive. It describes everything from the structure of the Patent and Trademark Office to the contents of the Bureau of Congress annual report. Therefore, we will focus on what can and cannot be patented. It starts with § 101, which states that it is possible to patent “a new or useful process, machine, production method or composition of a substance”. What is being said here has not changed much since the Patents Act of 1793, which, according to rumors, was written by Jefferson himself, and which the courts usually interpret as “everything done by human hands” can be patented. “Made by human hands” is a very important reservation. It means that one cannot patent an abstract idea, a law of nature, or a natural phenomenon. In our case, this means that mathematics cannot be patented, although everything becomes confusing as soon as it comes to software, and the courts still cannot find a solution to the problem. But we will come back to this.

Chapter 35 describes two restrictions on patents, which are usually the subject of heated and lengthy debate in the judiciary. In section 102 , also known as a rule the prior art (prior art), states that can not be patented invention, which has been known or used were published before the expected date of the invention or more than one year prior to the filing date of the patent. In paragraph 103it is said that it is impossible to obtain a patent to improve an existing invention if this improvement is “obvious” to any person skilled in the art. What exactly can be considered as “obviously” becomes a stumbling block in almost every patent proceeding, and the courts interpret this term more and more. The most important decision in this regard is the unanimous decision of the Supreme Court in KSR vs. Teleflex , which states that “an ordinary skill is also a person with ordinary creative abilities,” and criticized the Patent Office for not using common sense in determining which improvements to existing inventions are obvious.

In practice, this means that it is quite difficult to get a patent now - you need to prove that your invention will not be obvious to anyone who will try to solve the same problem using the same tools. Accordingly, it is much easier to defend in patent litigation. But yes, of course, the patent system is completely corrupted, so let's put everything on fire.

Software patents and how to fix the situation

If the “patent system is flawed” is a lazy thought trick, then “software patents cannot be allowed” is generally the most complete absence of the thought process. The problem is not software patents. The problem is that such patents do not exist.

What we call “software patents” are ordinary patents. In Chapter 35 there is no separate section about software, there is no separation between software and hardware, between software and hardware, between software and anything else. I don’t know when it became fashionable to pretend that software patents are a strange new phenomenon, but this has not always been the case. Y Combinator founder Paul Graham 's essay ““ Are Software Patents Evil? (Are software patents evil) ””written by him in 2006, is still the best holistic analysis of this problem, and it begins with the words: "If you are against software patents, you are against the patent system as a whole." It is sad that the discussion of this issue has become so unsophisticated, especially considering that the Patent Office and the Supreme Court have been discussing it for the past 50 years.

You may be surprised, but the Patent Office was initially opposed to the idea of ​​granting software patents. And the courts, on the contrary, chose this path. The conflict was a simple idea: software in the end is just an automated expression of various algorithms and mathematics, and you cannot get a patent for mathematics. Therefore, many believe that the ban on granting patents for software is a predetermined and predictable solution - the ban on anyone using mathematics lies outside the scope of the patent system.

But if you look at the question in more detail, it becomes clear that the border between "only mathematics" and "patented invention" is quite vague. Anyinvention, if you look at it, is "just a math." Traditional mechanical inventions are actually just the physical embodiment of certain algorithms. Take, for example, the TurboTap , an extended tap for draft beer , developed by a student at the University of Wisconsin by the name of Matthew Junkle, who was granted Patent No. 7,040,359. Due to its elongated shape and internal structure, this tap allows you to pour beer faster and with less foam (I have conducted numerous ... experiments). Isn't this just a talented application of fluid dynamics? Where to draw the line between mathematics, which is the basis of the invention, and the invention itself? These are not easy questions, but we are just talking about a beer tap. Everything becomes much more confusing when we start talking about software in which there is no physical component to calm our sense of justice. Software is just a bunch of math.

But that's not all! It turns out the math is complicated. Very difficult. So complex that incredibly smart people take a lot of time and money to develop maths that drive innovation in software. This means that companies and organizations that support these smart people want to protect their investments and inventions as much as possible. And it is not surprising that in the 60s and 70s, during explosive growth, the industry began to research software patents. At first, the Patent Office rejected most applications. These decisions were appealed to the courts, resulting in a series of Supreme Court decisions called the “patent right trilogy”. They said that the software itself cannot be patented, but it is possible to patent a combination of software with any hardware component. A few years and court decisions later, the required “hardware component” turned into nothing more than a data structure written to the computer’s physical memory. This led to an appallingly idiotic period during which everyone had to pretend that software magically turned general-purpose computers into specialized hardware complexes that could be patented.

In 1998, he overturned the ridiculous fantasy “software is just hardware” in his decision in the case of State Street Bank & Trust vs Signature Financial Group, which states that a patent for software may be granted if it produces a “useful, explicit and tangible result”. As might be expected, the decision generated a flood of software patents and, in general, laid the foundation for a public debate about software patents. Rewind events to the present. The federal district court decided to reverse the 2008 case, called In re Bilski , which overturned State Street and instead formulated the so-called “machine-or-transformation” test as the only standard defining patent rights. And already this decision was quashed by the Supreme Court in the 2010 case of Bilski vs. Kappos: the court ruled that machine-or-transformation is a “useful and important indicator” in determining patentability, but is not the only such test.

If you ask 10 attorneys about where we are now after Bliski, we will hear 10 different answers. Despite the general consensus that software patents are still valid, it is entirely possible that we are back to pretending that software is hardware. The general opinion is also such that, in spite of any decisions of the courts and the Patent Office, a smart lawyer will always find ways to get around them - and this is precisely what led us to the pretense of "software is just hardware".

Does all this seem overly boring and unbearably complicated? It should be so, because everything is so. Our judicial system exists to resolve conflicts, not create laws. And trying to create consistent and coherent software patenting rules after 50 years of litigation is like trying to build a skyscraper by throwing clods of dirt into a tree. We must not complain that the system is corrupted, because we do not have a system.

The solution is actually simple - just add the section on software patents to Chapter 35. What should this section look like? Well, we could try to determine what a “software patent” is, since no one has yet done it meaningfully. We could also directly describe the relationship between software and “just math,” and try to find a balance between protecting the research and investment required to further develop the industry and the fact that there are fundamental software principles that are just as fundamental as any other kind of math. We could also drastically limit the duration of software patents, reflecting the speed of industry development and the lower cost of software development. Software is cheaper to develop and distribute than physical products, so maybe it makes sense to give companies less time to profit from their inventions. In 2000, Amazon CEO Jeff Bezos wrotean open letter calling for patent reform , which describes most of these proposals. There he calls the term: 3-5 years. Perhaps it is time to blow off the dust with this offer.

I myself am not an application developer, not a mathematician, or a patent expert, so I can’t say how to create an ideal law on software patents that could protect real innovations, exclude mathematical principles and at the same time save or reduce system costs. But I can tell you with confidence that we simply need to treat software as a phenomenon, and not as magical pollen that turns computers into specialized machines. and especially not give up and throw a towel into the ring. The first step to recovery is the realization that the problem exists.

Stop Patent Trolls

As their recent This American Life series made clear , Intellectual Ventures is a weird, dark, gangster organization that buys a huge amount of patents to extort license fees across the industry — from Apple to small developers. True, This American Life did not say that Interactive Ventures are a classic example of successful American business.

Former Microsoft technical director Nathan Mirwold and his team of lawyers just apply the “buy cheaper, sell expensive” tactics to patents, and it's hard to blame them. Because it is also impossible to blame a person who buys a lot of cheap land in the hope that it will make him rich. What can you doblaming such a person is if he buys a huge amount of first-class real estate in the city center and digs a quarry in its place. This is an exploitative and inconvenient use of property, which leads to the enrichment of one person due to the enormous losses of society. Intellectual Ventures and other patent trolls are more or less involved in this: they levy taxes on companies that create real products, buying up patents for broad fundamental principles, and do not produce any products themselves. In order to stop patent trolls, it is necessary to move the scales - it is necessary to make the quarry much less profitable than a shopping center.

Unfortunately, you can’t immediately race with drafts naked and forbid inventors to sell patents to potential patent trolls. Say what you like, patents are property, and tight control over property is clearly not an American approach. If an inventor wants to sell a patent to the same Intellectual Ventures, we simply must let him do it, in so doing they determine the value or value of his invention. And we cannot begin to revoke patents only on the basis of who they belong to (again: America).

We also cannot ban companies that “produce nothing” from claiming their rights. Such an approach will not only lead us to a territory contrary to the constitution. Research companies and institutes will also not be able to receive compensation for their patents. The PageRank patent is actually owned by Stanford, who sponsored Larry Page's thesis. When Larry and Sergey Brin left the institute and founded Google, they signed an exclusive license agreement to use the technology described in the patent in exchange for 1.8 million shares, which were subsequently sold by Stanford for $ 336 million . This is an incredible success story, and I would like to have more such stories.

I do not mean that aggressive patent collectors like Intellectual Ventures or trolls like Lodsys do not pose a serious problem. The bottom line is that you need to find a balanced solution that respects existing property rights and does not interfere with those parts of the system that work well. We need to be smart.

One of the approaches could be a strict restriction on compensation for damage that a producing company may claim in court. This would encourage ways of more efficient and open licensing, since in this case licensing would be more profitable than litigation. It would also be possible to implement a compulsory licensing scheme that already exists in countries such as the United Kingdom, Germany, Autsrlia and Japan. In these countries, patent holders are required to license these patents at affordable rates if they do not start producing products for these patents within a certain period of time (for example, the Australian Law on Compulsory Licensing) True, the discussion of such schemes is a serious and lengthy process. Google’s whimpering over the impact of patents on Android seems insignificant, given that the largest recent discussion on the compulsory licensing scheme has been related to leading pharmaceuticals such as AIDS drugs.

The best solution would be to introduce the compulsory licensing scheme in the software section in Chapter 35 and adopt a hybrid approach: to give inventors the right to dispose of their patents at their discretion for a certain time, after which, until the patent expires, apply the compulsory licensing scheme for strictly defined rates. This approach allows inventors to maximize the benefits of their patents for a certain limited time, and receive compensation for the invention during the term of the patent. Such an approach would also reduce the number of patent-based lawsuits that are about to expire, since such a scheme would introduce a well-defined restriction on damages.

Again, I am not an expert on patents, and I can’t tell you that I have a ready-made, perfectly balanced and rights-based scheme in my hands. But it’s not so difficult to look at countries with existing patent systems and fewer trolls and provide examples of possible solutions. Moreover, it is incredibly important that we start talking about it, and not splash irrational outbursts of anger at each other.

In conclusion

Before becoming the first head of the Patent Office, Thomas Jefferson was an ardent opponent of patents. He even called them "a hindrance to society" and was afraid that "the abuse of surface patents would cause more inconvenience than can be compensated for really useful." Sounds familiar? But Jefferson set to work in all seriousness, personally checking and even testing most applications. Towards the end of his service, he became a supporter of patents , stating that the Patent Act of 1790 "gave life to inventiveness beyond my expectations."

Jefferson's initial skepticism led him to claim that patentable inventions should be useful and unobvious, and this became the foundation of our system. These rules may be the solution to the problem of software patents, you just have to wait: the gold patent rush in this area means that all these patents will become public in a few years, and that obvious improvements cannot be patented. The pendulum sways in both directions.

But it doesn’t seem to us that we should sit back and wait until the ghost of Thomas Jefferson helps us, or until the District Federal and Supreme Courts try to pass new laws into decisions on appeals. It is time to turn our skepticism about patents into an understandable set of legislative reforms that would reflect the reality of American technological innovations, into a set of reforms that respects and protects interests in software development and investment, while respecting the unique properties of the software itself. We live in the most innovative time in human history. It's time to grow up and stop pretending that the problem with patents is hard to solve.