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August 17, 2007

Entrepreneurship

The Seattle PI newspaper ran an article by Susan Schreter on what it takes for software companies to obtain venture capital funding, with no mention of patents. A reader asked about the omission. The turnaround: "Angel investors and venture funds are unapologetic in their quest to back entrepreneurs who have a "sustainable and unfair advantage" in the marketplace." With USPTO examination rigor post-KSR, it's even harder to get a software patent, which makes one even more valuable, as a granted patent is much less likely to be found obvious than before, and thus more likely to be enforceable.

Posted by Patent Hawk at August 17, 2007 4:12 PM | Patents In Business

Comments

I think you misunderstand her. The point is that the technology itself can be a barrier to competitive entry for software companies.

http://brokensymmetry.typepad.com/broken_symmetry/2007/07/is-the-patent-s.html

Also, I think your logic on patent value post-KSR is a little off. Why should patents be more valuable when courts, as well as the PTO, are more likely to view claims as obvious?

Posted by: Michael Martin at August 20, 2007 9:51 AM

Thanks for the comment. After reconsideration, I think I understood her perfectly. A patent can be a "'sustainable and unfair advantage' in the marketplace." Historically, patents have been a positive signal to venture capitalists of having an edge worth backing. That signal for pre-KSR extant patents has been badly skewed, as there a mismatch was revealed between what the patent office was granting and what KSR determined should have been obvious. The patent office and the courts are now on the same page on that score.

The USPTO is up to speed with KSR, and is more rigorous in its examination, including search. I know this from my own prosecutions, as well as from conversations with other prosecutors. Any patent granted henceforth is thus more likely to be non-obvious.

While obviousness now casts a much broader net than pre-KSR, it is also, almost perversely, somewhat better defined: if the subject matter claimed is not the result of combination, or the claimed combination is unexpected, has an element functionally distinct from the prior art, or could not have been achieved by prior art techniques, then the patent is likely to stand.

Hindsight now being 20/20, anything that seems obvious is going to be found so, while something that seems clever is likely to be valid. There are less likely to be close calls now in litigation on obviousness, the default strongly going to invalidity, so litigation is less of a crap shoot.

Post-KSR, the rules relating to invalidity are simpler (if it seems obvious, it was), ergo less uncertainty in evaluating a patent for validity. Hopefully, those involved are more conscious than ever of the need to have searched the prior art to know what's out there before betting on a patent, and if prior art is close, that's too close: the patent is unlikely to withstand a validity challenge.

Posted by: Patent Hawk at August 20, 2007 11:08 AM