Invention is the powerhouse of prosperity. In the book "The Birth of Plenty," William Bernstein cites the four prerequisites for prosperity: 1) property rights; 2) scientific rationalism; 3) capital markets; 4) efficient communication and transportation. The very definition of the Industrial Revolution was England putting those ingredients together.

Patents have a part in all four requisites for economic development. A patent is a grant of property, developed by dint of scientific method and endeavor. Both development and deployment of patented technology requires a working capital market. Patents themselves are a limited-duration bargain of exclusivity for information - information to spur further technological development.

That a patent is itself a commodity strengthens its role as a pivotal player in prosperity. The ultimate triumph of patent law is to turn invention into a commodity. Invention commoditization affords certitude in return-on-investment calculations relating to pure technology otherwise impossible. The emergence of a secondary market for patents is in fact a healthy economic development. Companies that specialize in patent commoditization, so-called patent trolls, are a vibrant testament to a successful patent system. For example, a struggling company can sell a patent for capital to keep going. Contingency law firms also act similarly to patent trolls, in affording monetization of patents.

"We are what we repeatedly do; excellence, therefore, is not an act, but a habit." - Aristotle.

So too with invention. Nathan Myhrvold, founder of Microsoft Research and former chief technical officer, founded Intellectual Ventures, a patent troll that specializes in "pure invention". Do we see a behavior pattern in Mr. Myhrvold?

The strongest argument against the patent grant relates to the pace of technological development. If invention is inevitable, does it merit reward of exclusivity? If so, for how long?

Proposals have been made to alter patent terms for different technologies, particularly shortening the grant duration for software patents. The specific problem with that is the interchangeability of software and electronics hardware. Differentiation by technology is extremely problematic as a basis for differentiating patent terms.

The big picture question, of invention inevitability, is a straw man stalking-horse. Again, differentiation by technology occurs - drug development is, on average, enormously expensive relative to software development. But the devil is in the details, and postulating differentiation as justification is a broad-brush assertion that belies a bell-curve of reality. Patents are the tip of the iceberg of innovative effort, showing only the success, hiding the larger efforts at invention that did not succeed (and were not patented). Most importantly, not all patents are created equal - some reflect considerable research and development cost, particularly those of most benefit to society, both in the original invention, and in continuing subsequent developments. Rewarding invention is the only formula for insuring its continuation.

The power of invention is a patent, and a source of resentment to those without. Those who trash talk about slaying patent trolls, and the need to limit patent enforcement, are ignorant or, at least, self-serving. To lessen the patent as a property right is to kill the goose laying golden eggs. Both history and economics shout the importance of a reliable patent regime.

Recently in this country, little consideration appears given by corporate mouthpieces for patent reform of the well-being of the patent system, only ways to weasel and lessen the cost of infringement. The reform proposals of corporate titans Microsoft and Intel only bespeak desperation of being serial patent infringers and an inability themselves to commoditize their own patents.

The 1996 Supreme Court Markman decision had a positive effect in codifying claim construction as an initial focal point in litigation. Defenses of invalidity and non-infringement naturally flow downstream.

Post-grant opposition as proposed by corporate patent robber barons, putting the validity cart before the claim construction horse, amounts to an attempted rape of the patent grant by jacking the cost of patent ownership, as well as putting patent holders on the defensive, as opposed to the natural presumption of patent validity.

Patent litigation is extremely expensive, and so patents have been called "the sport of kings." The best measures to expediting patent enforcement fall into two categories: improving grant quality even further, and improving litigation processes.

As to quality, examinations that provide greater assurance of validity through robust patentability searching, and sufficient funding of the patent office, are the best remedies, and do not require statutory change.

It is extremely important to note that, for all the carping, there are no reliable broad statistics on patent quality. That a small percentage of asserted patents are invalidated is purely anecdotal, and provides no impetus for reform. As a prior art searcher specializing in invalidating patents, my professional opinion is that the patent office makes my job difficult. The recent carping has already had the effect of making the patent office more wary of granting spurious patents.

It was not until 1982 that appeals of patent cases were moved to the Court of Appeals, Federal Circut (CAFC), producing more consistent rulings. Before that, appeals were handled in circuit courts throughout the country, depending on the district where the case had first been heard. Several of those appellate courts developed reputations of siding against patent owners.

Having a federal patent court circuit has been mooted. Japan has just set up an IP judicial circuit; an experiment worth watching. Statistics showing the incidence of the CAFC reversing district courts in patent cases would be useful evidence as to cost/benefit. Historical testimony supporting uniformity and the prospect of lessening life-cycle enforcement costs certainly argue towards a federal patent court.

Past installments in this series have justified patents, both with theories and as an incentive system. The importance of the integrity of the patent grant cannot be overstated. Suggestions for patent reform should not be weighed as a cost-benefit analysis, but as a rigging of the game, meriting a careful examination of how that game would be played under the new rigging. The stake prosperity has in patents is as fundamental as economic well-being.

Part 1 - Monopoly
Part 2 - Substitution
Part 3 - The Inventor's Dilemma
Part 4 - Incentives
Part 5 - Theories
Part 6 - Perspectives