Worn out patent system: how did we get to this, and how to fix it

There is a fundamental problem in the US patent system.

This problem is us.
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By “we” I mean all of us: companies and people who directly interact with the patent system, the media that cover these interactions, and, finally, a large number of active and noisy readers, whom we serve with our reports. And we collectively accepted the generally accepted truth that the patent system has been corrupted to unsuitability, that it is only a fragment of past times, that it has outlived itself in our age of rapid technological innovation, especially in the field of software, and that it may be worth scrapping .

Over the past few months, these opinions have grown to a fierce scream as the patent system began to negatively affect more and more players in the industry: small developers have become the target of lawsuits from companies that do not and do not produce anything; Apple, HTC and Samsung cannot move places in patent-related litigation; a pair of multibillion-dollar patent auctions triggered a verbal battle between Microsoft and Google that was unheard of in the village. The most ardent critics openly declare that any benefit that the patent system could bring is now completely covered by costs, that resources, which, other things being equal, would be directed towards the development of new ideas, are now being spent on excessively zealous protection of the old.

These arguments are repeated so often and with such confidence that they have become an axiom, a rhetorical and intellectual deception, which is rarely (if ever) called into question. But this is bad and wrong - so much so that it threatens any real attempts at reforming the system. To make noise and be angry is a good way to attract attention, but a terrible way to achieve something, especially if you take into account that most of those who beat themselves in the heel to the chest just repeat the simplified version of the arguments that have been repeated in our country since the time when Thomas Jefferson was appointed head of the Patent Office.

So let's start from the beginning. Let's take a look at how the patent system works, where it especially fails, and how it can be put in order. Ready? Go.

Patent exchange

Everyone ignores the core of the law governing the patent system, despite the fact that it is simple and very reasonable. Patents are not just an incentive for people to continue inventing. They are an exchange between inventors and society. In exchange for a time-limited monopoly on their inventions, the inventors must fully disclose all the details of their invention in the description of the patent and agree that the invention will be available to everyone when the monopoly expires. The rules for disclosure of details of the invention are described in 35 USC § 112 , and they are quite strict: the description should be so detailed that any “expert” in the invention could build the invention, and the inventor must also indicate the “best way” of the construction. Violation of these rules can lead to serious consequences. Thus, a patent that does not fully disclose the details of the invention may be invalidated. And since the descriptions of patents become public domain after the expiration of the patent, we have formed a huge, ever-increasing set of detailed technologies that can be used by anyone to create their products.

What does this mean in practice? Take the patent # 6 285 999 , which is Larry Page's patent on PageRank, the main algorithm in the basis of Google search. Since getting a patent means describing the details of technology, we can take and look at the mathematical calculations underlying one of the most important and destructive inventions in the history of mankind:



(Remember that patented is not that the picture is just a mandatory description of the patent application itself) Since obtaining a patent means that your monopoly on an invention is limited in time, anyone can take this description and create their own search engine after term of the patent in the 2018th year. In the meantime, you can explore the calculations of Google and try to circumvent the specific points in the application. In fact, this is an important point. Thus, the patent system encourages innovation, forcing inventors to create alternative ways to achieve results. There is no doubt that the Microsoft Bing team spent a lot of time studying the patent for PageRank in search of ways to create something that works not only differently, but possibly better.

Similarly, Apple's multitouch patents are more than just trying to limit access to certain technologies to coupon competitors. They also contain detailed descriptions of how to create the same technology in the future. Here is a part of patent number 7 812 828 , which Apple so likes to bring in lawsuits. This patent describes a system that tracks multiple entry points on a multitouch device and is able to correctly filter them. For a long time, we were interested in how Apple manages to make multitouch trackpads and screens better than those of competitors. But when these patents expire, the same competitors can simply use Apple’s designs.



(Again, the example given is part of the description, not of the patent application itself) I could continue, but the idea should be clear. Patents reveal the details of the most advanced developments conducted by some of the most creative and inventive people in history. And these developments in a few years will be available to everyone - for free. Cancel the patent protection, and with it the requirement to disclose the details of the invention, and these details will be hidden behind seven locks. They will be used as long as they bring a competitive advantage, after which they can simply be forgotten.

From the history of Western civilization, we know how technical superiority was protected in the absence of patents: craft guilds like masons pumped the aura of mysticism and forbade teaching anyone from outside, and in the Middle Ages they killed Venetian glassblowers if they tried to leave the city and build somewhere on new place. And you still think that Facebook and Google are going too far, trying to prevent their employees from leaving.

Of course, one can argue about the length of the patent term, what inventions are worth and should not be protected by patents - these are all important issues that need to be discussed. But the fundamental basis of the patent system is the complete disclosure of the details of the invention by the inventor in exchange for a clearly defined limited period of protection. Therefore, any attempt to identify problems and reform the system must respect the interests of both parties to this exchange.

Patent rules

The fact that they are dismissed from state policy in the field of patent law is bad, but a clear disregard for the law itself is utter irresponsibility. Especially when you consider that nothing costs just to sit down and take a look at Chapter 35 of the United States Code , which outlines all the basic elements of patent law. Any talk about “changing patent laws” is ultimately a talk about changing Chapter 35, which means that before talking about any changes, you need to know what it says.

Chapter 35 is vast and thorough. It describes everything from the structure of the Patent and Trademark Office to the contents of the Bureau’s annual report to Congress. Therefore, we will focus on what can and cannot be patented. It all starts with paragraph § 101 , which states that you can patent "a new or useful process, a machine, a method of production, or the composition of a substance." What has been said here has been virtually unchanged since the Patent Act of 1793, which, according to rumors, was written by Jefferson himself, and which courts usually interpret as “everything that was done by human hands” can be patented. “Made by human hands” is a very important reservation. It means that one cannot patent an abstract idea, a law of nature or a natural phenomenon. In our case, this means that we cannot patent mathematics, although everything becomes confusing as soon as it comes to software, and the courts still cannot find a solution to the problem. But we will come back to this.

Chapter 35 describes the two restrictions imposed on patents, which are usually the subject of heated and lengthy debates in the judicial system. Paragraph 102 , also known as a rule of prior art (prior art), states that it is not possible to patent an invention that was known, used or published before the date of the proposed invention or more than a year before the date of the patent application. Paragraph 103 states that it is not possible to obtain a patent for improving an existing invention if this improvement is “obvious” to any person skilled in the art. What exactly can be considered as “obviously” becomes a stumbling block in almost every patent proceeding, and the courts interpret this term more and more widely. The most important decision on this matter is the unanimous decision of the Supreme Court in the case of KSR vs. Teleflex , which states that “ordinary people are ordinary people with ordinary creative abilities” and criticized the Patent Office for not using common sense in determining which improvements to existing inventions are obvious.

In practice, this means that now getting a patent is quite difficult - it is necessary to prove that your invention will not be obvious to anyone who will try to solve the same problem using the same tools. Accordingly, it is much easier to defend oneself during patent proceedings. But yes, of course, the patent system is completely corrupted, so let's betray everything to the fire.

Software patents, and how to fix the situation

If the “patent system is corrupt” is a lazy thinking trick, then “software patents should not be allowed” is generally the most complete absence of the thinking process. The problem is not software patents. The problem is that there are no such patents.

What we call software patents are ordinary patents. In Chapter 35, there is no separate section about software, there is no separation between software and hardware, between software and machinery, between software and anything else. I don’t know when it became fashionable to pretend that software patents are a strange new phenomenon, but it wasn’t always. Essay by the founder of Y Combinator Paul Graham ““ Are Software Patents Evil? (Are the patents on software evil) ”” , written by him in 2006, is still the best holistic analysis of this problem, and it begins with the words: “If you are against software patents, you are against the entire patent system generally". Sadly, the discussion of this issue has become so unsophisticated, especially when you consider that the Patent Office and the Supreme Court have been discussing it for the past 50 years.

It may surprise you, but the Patent Office initially opposed the idea of ​​issuing software patents. And the courts, on the contrary, chose this path. The conflict lay in a simple idea: the software, after all, is just an automated expression of various algorithms and mathematics, and a patent for mathematics cannot be obtained. Therefore, many believe that the prohibition on granting patents on software is a predetermined and predictable solution - a ban on the use of mathematics by anyone is outside the patent system.

But if you look at the question in more detail, it becomes clear that the boundary between “only mathematics” and “patentable invention” is rather vague. Any invention, if you look, are "just math." Traditional mechanical inventions are actually just the physical embodiment of certain algorithms. Take, for example, TurboTap , an extended tap for draft beer , developed by a student of Wisconsin University named Metby Yunkl, who was issued a patent number 7,040,359. Due to its elongated shape and internal structure, this tap allows you to pour beer faster and with less foam (I have conducted numerous ... experiments). Is this not just a talented application of fluid dynamics? Where to draw the line between mathematics, which is the basis of the invention, and the invention itself? These are not easy questions, and after all we are just talking about the tap for beer. Everything becomes much more complicated when we start talking about software, in which there is no physical component to calm our sense of justice. Software is just a bunch of math.

But that's not all! It turns out math is complicated. Very complicated. So complex that it takes incredibly smart people a lot of time and money to develop math that drives innovation in software. And this means that companies and organizations that support these smart people want to protect their investments and inventions as much as possible. And it is not surprising that in the 60s and 70s, during explosive growth, the industry began to investigate software patents. At first, the Patent Office rejected most applications. These decisions were appealed to the courts, leading to a series of Supreme Court decisions called the “patent right trilogy” . They said that software itself cannot be patented, but it is possible to patent a combination of software with any hardware component. A few years and court decisions later, the required “hardware component” turned into nothing more than a data structure written to the physical memory of a computer. This led to an appallingly idiotic period, during which everyone had to pretend that software magically turned general-purpose computers into specialized hardware systems that could be patented.

In 1998, he abolished the ridiculous fantasy “software-this-only-hardware” in his decision on the case of State Street Bank & Trust vs Signature Financial Group , which states that software patents can be issued if "Useful, clear and tangible result." As might be expected, the decision spawned a flood of software patents and, in general, initiated a public debate on software patents. Rewinding events in modern times. The federal district court decided to annul the 2008 case, called In re Bilski , which canceled the State Street case and instead formulated the so-called “machine-or-transformation” test as the only standard determining the right to a patent. And this decision was already reversed by the Supreme Court in the case of 2010 Bilski vs. Kappos : the court ruled that the machine-or-transformation is a “useful and important index” in determining patentability, but is not the only such test.

If you ask 10 lawyers about where we are now after “Bliski”, we will hear 10 different answers. Despite the general opinion that software patents are still valid, it is quite possible that we again returned to pretending that software is hardware. The general opinion is also such that, despite any rulings of the courts and the Patent Office, a smart lawyer will always find ways to circumvent them - and this is precisely what led us to the pretense of "software-this-all-only-hardware".

Does all this seem super boring and unbearably difficult? So it should be, because everything is so . Our judicial system exists to resolve conflicts, not to create laws. And an attempt to create consistent and coherent software patenting rules after 50 years of legal proceedings is the same as trying to build a skyscraper, throwing clods of dirt into a tree. We can not complain that the system is corrupted, because we do not have a system.

The solution is really simple - just add the section on software patents to Chapter 35. What should this section look like? Well, we could try to determine what a “software patent” is, since no one has yet meaningfully done this. We could also directly describe the relationship between software and “just mathematics” and try to find a balance point between the protection of research and investment required for the further development of the industry, and the fact that there are fundamental software principles that are as fundamental as any other kind of math. We would also be able to drastically limit the duration of software patents, reflecting the rate of development of the industry and the lower cost of software development. Software is cheaper to develop and distribute than physical products, so it may make sense to give companies less time to make a profit from their inventions. In 2000, Amazon’s chief executive officer Jeff Bezos wrote an open letter calling for patent reform , which describes most of these proposals. There he calls the term: 3-5 years. Perhaps it is time to blow the dust off this sentence.

I myself am not an application developer, not a mathematician and not an expert on patents, so I cannot say how to create an ideal law on software patents that could protect real innovations, rule out mathematical principles and at the same time save or reduce system costs. But I can tell you with confidence that we just need to treat software as a phenomenon, and not as magic pollen, which turns computers into specialized machines. and especially not to give up and throw the towel into the ring. The first step to recovery is the realization that the problem exists.

Stop Patent Trolls

As it became clear from their recent series, This American Life , Intellectual Ventures is a strange, dark, slightly gangster organization that buys a huge number of patents to extort royalties across the industry - from Apple to little developers. True, "This American Life" did not say that "Intellectual Ventures" are a classic example of successful American business.

Former Microsoft Technical Director Nathan Mirvold and his team of lawyers just apply “buy cheaper, sell more expensive” tactics to patents, and they are hard to blame for it. Because the same cannot be blamed for a person who buys a lot of cheap land in the hope that it will make him rich. What can you blame such a person is if he buys a huge amount of first-class real estate in the city center and digs a quarry in its place. This is exploitative and inconvenient use of property, which leads to the enrichment of one person at the expense of the enormous losses of society. Intellectual Ventures and other patent trolls are doing this more or less: they impose dues on companies that create real products, buying patents on broad fundamental principles, and at the same time do not produce any products themselves. In order to stop patent trolls, it is necessary to shift the scales - it is necessary to make the quarry much less lucrative than a shopping center.

Unfortunately, you can not immediately rush to the swords and ban inventors to sell patents to potential patent trolls. Anyway, patents are property, and tight control over property is clearly not an American approach. If an inventor wants to sell a patent with the same Intellectual Ventures, we simply have to let him do it, so they determine the value or value of his invention. And we cannot start revoking patents solely on the basis of who they belong to (again: America).

Nor can we prohibit companies that “produce nothing” from asserting their rights. Such an approach will not only lead us to a territory contrary to the constitution. Research companies and institutions also will not be able to receive reimbursement for their patents. The patent for PageRank actually belongs to Stanford, who sponsored a thesis work by Larry Page. When Larry and Sergey Brin left the institute and founded Google, they signed an exclusive licensing agreement to use the technology described in the patent in exchange for 1.8 million shares, which were later sold to Stanford for $ 336 million . This is an incredible success story, and I wish there were more such stories.

I do not want to say that aggressive patent collectors like Intellectual Ventures or trolls like Lodsys do not pose a serious problem. The bottom line is that you need to find a balanced solution that respects existing property rights and does not interfere with parts of the system that work well. We need to be smart.

One approach would be a strict limit on compensation for damage that a non-producing company can claim in court. This would encourage more efficient and open licensing, since then licensing would be more profitable than litigation. It would also be possible to implement a compulsory licensing scheme that already exists in countries such as the United Kingdom, Germany, Australia and Japan. In these countries, patent holders are required to grant a license for these patents at affordable rates if they do not begin to produce products on these patents within a certain period of time (for example, Australian Compulsory Licensing Act ). True, the discussion of such schemes is a serious and lengthy process. Google’s nagging about the impact of patents on Android seems insignificant when you consider that the largest recent discussion on the compulsory licensing scheme was related to such advanced pharmaceutical preparations as, for example, AIDS drugs.

The best solution would be to introduce the compulsory licensing scheme into the section on software in Chapter 35 and adopt a hybrid approach: to give inventors the right to dispose of their patents at their discretion for a certain time, after which, until the end of the patent expiration, apply the compulsory licensing scheme for strictly defined rates. This approach allows inventors to get the maximum benefit from their patents for a certain limited time, and to receive compensation for the invention during the term of the patent. Such an approach would also reduce the number of lawsuits based on patents, whose term is coming to an end, since such a scheme would introduce a clearly defined limit on damages.

Again, I am not a patent examiner, and I cannot tell you that I have a ready, perfectly balanced and rights-based scheme for everyone. But it’s not so difficult to look at countries with current patent systems and fewer trolls and to draw examples of possible solutions. Moreover, it is incredibly important that we start talking about it, and not throw out irrational outbursts of anger at each other.

In conclusion

Before becoming the first head of the Patent Office, Thomas Jefferson was passionately opposed to patents. He even called them “a hindrance to society” and was afraid that “the misuse of superficial patents would cause more inconvenience than could be compensated for being really useful.” Sounds familiar? But Jefferson took the job seriously, personally checking and even testing most applications. By the end of his service, he became a supporter of patents , stating that the Patent Act of 1790 "gave life to ingenuity beyond my expectations."

Jefferson's initial skepticism led him to argue that patentable inventions should be useful and not obvious, and this became the basis of our system. These rules may be the solution to the problem of software patents, you just have to wait: the gold patent fever in this area means that all these patents will become public in a few years, and that the obvious improvements will not be patented. The pendulum swings in both directions.

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