At the moment, the patent system is seriously malfunctioning.
The high volume of low quality, poorly defined patents, particularly in the software and IT industries, is catalyzing the explosion in patent litigation. And lately, the problem has been getting much worse. In fact, the amount of litigation involving software patents has tripled since 1999 and a software patent is more than twice as likely [PDF] to be involved in litigation as its non-software counterparts.
Our broken system affirmatively penalizes innovation. Empirical research has shown that the more money a company invests in R&D, the more likely it is to be punished with infringement litigation. This weakens our economy and harms our nation’s global competitiveness. Just ask America’s most prolific legal scholar, Judge Richard Posner. Furthermore, last year’s patent “reform” legislation, the America Invents Act (AIA), did little to solve the fundamental problems at the heart of the current explosion in litigation. As Richard Waters of Financial Times wrote last year, the AIA did little to fix the broken system:
Yet, while there was general agreement that an overhaul was badly needed, the law that was eventually passed did little to fix what is widely seen as the current system’s chief weakness: that it leads to the issuing of too many patents that lack real innovation and that clog up the legal system once their holders seek to enforce them against alleged infringers.
As a result, we have arrived at another inflection point as patents, and the problems surrounding them, are again in the headlines. Although the Samsung vs. Apple trial, and its fight over who owns the rights to a rectangle, is getting a majority of the recent headlines, another major patent battle is looming. This Monday opening bids were submitted ahead of an August 8 auction for some 1,100 patents belonging to the now bankrupt Eastman Kodak Corporation. Given the rampant patent litigation in the high-tech space, the thought of 1,100 more litigation weapons flooding the marketplace is troubling. The situation gets even more worrisome when one looks at the parties lining up to bid.
The Wall Street Journal reports that both Apple and Google are leading competing consortia in an effort acquire these patents, which largely pertain to digital photography – a key component in smartphones. The consequences of this will potentially open up another front in the smartphone patent wars. Although Google’s consortium appears defensive, as it is made up of its partners in the Android ecosystem, Samsung, LG and HTC, and defensive patent aggregation firm RPX (which pledges never to assert its patents offensively), Apple’s consortium is headlined by the notorious (and massive) patent assertion firm, Intellectual Ventures, and Microsoft.
The partnership between Apple, the main litigant in the global “thermonuclear war” against Android, and Intellectual Ventures, the king of the patent trolls, is particularly troubling for many reasons: two of which are explored here.
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