In "Patent Bending":

The ITC's power to ban foreign-made, patent-infringing products goes back to the infamous Smoot-Hawley Tariff of 1930 -- which ought to be a hint that this is a bad idea. The fear was that American intellectual property would be stolen by foreign firms, which would use U.S. patents to produce goods overseas without paying royalties and then ship those products to the U.S. The law was never intended to substitute for domestic patent-infringement suits in federal courts between two American companies, which is the story here.

The ITC ban is in effect a bar to innovation by these U.S. companies -- a fact recognized both by Chairman Pearson in his dissent, and by the administrative law judge who originally heard the case and refused to issue a broad ban in October 2006.

WSJ thinks President Bush ought to set the ban aside.

The Journal notes that the ITC case is but one front in the much broader Broadcom-Qualcomm patent war.

WSJ liked the Supreme Court KSR ruling, in a paragraph that revealed facile comprehension, as if obviousness was a new concept being applied for the first time -

Better patents depend most of all on a Patent Office that gives its examiners the right incentives -- which means rewarding them for issuing quality patents rather than disposing of patent cases. The courts can help too, and recently they have been. Last month's Supreme Court decision in KSR v. Teleflex put down a marker on the "obviousness" of inventions that ought to be relevant to patent examiners who are considering whether to grant an application.

In "Businesses Battle Over Patent Laws":

In giving patents "a closer look":

• Why have patents become so important?

Intangible assets, including intellectual property, account for nearly one-third of the value of all U.S. stocks, about $5 trillion to $5.5 trillion, or 45% of U.S. GDP. Innovation fueled about four-fifths of the productivity gains during the economic boom of the late 1990s.

• Why do most large technology companies support an overhaul? ["overhaul" being a euphemism for gutting patent enforcement]

Increased litigation, particularly in cases of inadvertent infringement, creates what amounts to an "innovation tax," businesses argue. It is cheaper to obtain a patent, which can cost $5,000 to $25,000, than to invalidate one. Legal fees average $4.5 million in a dispute where more than $25 million is at risk, and many alleged infringers will settle for much more rather than risk a court-ordered shutdown.

• Why does the pharmaceutical industry oppose changes?

It takes 10 years, half the 20-year life of a patent, and costs $800 million to $1.2 billion to bring a new drug to the point of FDA approval, manufacturers say. Only one-third of new drugs generate profits that equal the average research and development costs, according to the industry. And studies have shown that about two-thirds of pharmaceutical inventions wouldn't have become commercially available without patent protections, compared with about 8% of innovations in other industries.

WSJ notes that some technology companies, those particularly reliant upon innovation and IP protection, like 3M, Caterpillar, and Qualcomm, are "in the opposition camp."

Facts

• There are 1.6 million inventions under active patent in the U.S.

• Abraham Lincoln was the only U.S. president to hold a patent, which he received for an invention to buoy boats over shallow rivers. In 1858, he described patent laws as one of the three most important developments in world history, along with the printing press and the discovery of America.

• Congress adopted a patent law in 1790, and the first patent was issued to Samuel Hopkins, a Philadelphia inventor, for improvements in the production of potash, a compound used to make glass and soap.

• Software patents accounted for 2% of all patents awarded in the early 1980s, compared with about 15% of all patents awarded today.

• Firms lose about 0.5% of their stock market value when sued for patent infringement, according to a study by professors at Boston University.

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