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July 28, 2007

Patent Deform

Some patent infotainment in today's Wall Street Journal letter page, as David Vandagriff of Helius gets his licks in on Bruce Sewell, Intel patent clown, for being such a corporate slut. On the same page, James McKeown writes like he has a head on his shoulders, until he suggests "eliminating the District Court in the Eastern District of Texas, which has made a booming cottage industry out of encouraging patent infringement litigation."

Vandagriff knows his stuff.

[The Patent Reform Act of 2007] is the brainchild of a small group of very large computer technology companies, including Microsoft, Intel and Oracle. It is not coincidental that each of these companies has been a defendant in an antitrust suit. They rely upon market power to maintain their dominant positions and are serial patent infringers.

The Patent Reform Act is "almost everything an infringer could ever want," says Phil Johnson, chief patent attorney for Johnson & Johnson.

The value of intellectual property in the U.S. has been estimated at $5.5 trillion, more than the gross domestic product of any other country. If Congress grants an open season on patents here, what message will be sent to China and other countries where piracy of intellectual property runs rampant?

Congress may be, collectively, stupid enough to seriously consider passing legislation that would eviscerate the invention engine that fuels this nation's competitive edges, driven by the respective heads of judiciary committees, Sen. Leahy and Rep. Berman. More optimistically, Leahy and Berman may know better (admittedly, doubtful), and may have just found a legislative jalopy to take a joy ride in, a way to rake in lobbying booty. It's the Congressional way.

Patent Hawk thinks the Patent Reform Act of 2007 will be derailed, but only after acting like a money sponge for the bill's sponsors and opponents to Thanksgiving recess. The same game, played since Rep. Smith tuned it up in 2005, is likely to be repeated next year: it's an election year, and it's easy money. But, unless the seriously stupid controversial portions, like damage apportionment, and venue restriction, are dropped, passage has little prospect. And, in an election year, dead duck Dubya is not going to hand a legislative goodie to the Democrats on the Hill.

McKeown is somewhat typical of those who are just shy of a good grip on patent reality. District courts don't encourage litigation; at best, they facilitate the litigation process. It's a good thing, minimizing litigation costs, at least in the first stage. The Eastern District of Texas, which adopted Northern District of California's rules but implemented a compressed timing that results in a faster process, is something of a role model for handling patent litigation, and it's not alone. The Northern District of Texas handles more patent cases per year than the Eastern district does. East Virginia has a rocket docket on par with East Texas, and the Western District of Wisconsin is humming as well.

Where that patent system sits right now, big picture, is that the USPTO has greatly heightened examination rigor, thank goodness, while the CAFC is digesting SCOTUS anti-patent rulings: making many extant patents invalid by being obvious in hindsight, broadening infringement exemption for drug research, limiting injunctive relief, and, to a degree, damages. Too bad that patent litigation is such a crap shoot; blame caprice and bowing to the political winds by the higher courts. Even the ITC is getting a bit weak at the knees on patent enforcement.

The trend has turned against patent protection. In time, as foreign imports of high technology grow, as Americans cannot protect their innovations from ready theft, this country may again choose to better honor invention; the pendulum will swing back, but only after damage done.

Posted by Patent Hawk at July 28, 2007 1:37 AM | The Patent System

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