September 24, 2007 9:19 AM
How Patent Reform Can Help the Internet
One of the hottest debates in DC over the past few months has been the contentious issue of patent reform. Last week the latest salvo in this battle was launched as a group of 20 noted inventors and US company executives took to the Hill to plead their case against the current legislative frontrunner, a bill that recently passed through the House and is up for debate in the Senate.
Instead of going into detail about the nuances of this proposed legislation, and to avoid falling too far down the rabbit hole of explaining how the patent system works (or doesn’t work, depending on who you ask), I wanted to chime in with what I see as the two areas most in need of reform from the perspective of enabling the continued growth of the online industry.
The first is to find a way to make the patent office more effective and efficient.
There’s little doubt the current patent system is broken. I know of at least one broadband application developer who has been waiting for his patent application to work its way through the system for more than 5 years, and he’s still got hundreds of thousands of applications left ahead of him.
The Internet is such a fast-paced environment that these lags can be devastating as by the time patents are granted the technologies they describe and terminology they use may either be outdated or already surpassed, making the considerable investment needed to file for a patent a complete loss.
The patent office was meant to be a boon to innovation, but the amount of innovation seen online has overwhelmed the patent office’s capacity to keep up, turning it into a burden that’s hindering rather than helping innovation.
There has been some movement to bolster the current system beyond legislative means, though, including a pilot program for testing the use of open access peer review for the discovery of prior art. Simply put, this system allows the public to track new patent applications and submit prior art—or evidence that shows the earliest date a concept was introduced—which helps the patent office spread around the burden of vetting patent applications.
I think this is a fascinating use of the Internet to support the patent office, and we should be continuing to seek out other innovative solutions like this for streamlining and making more effective the patent process.
The other major issue that needs to be addressed is the rapidly increasing practice of dormant-patents-as-litigious-fodder-as-core-business-model.
To frame this thought, as a contributing editor for StreamingMedia.com I covered a company called Acacia Technologies for more than a year.
Acacia Technologies is a patent holding company. They buy up old patents in which they see opportunities to broadly apply them across industries and in doing so drive licensing revenue or bring patent infringement cases to court.
Their modus operandi is as follows: send letters to companies citing their infringement of Acacia’s patents, threaten litigation, and then offer licensing deals at a price where it’s cheaper for these companies to license the technology than take it to court.
For StreamingMedia.com, I covered Acacia’s pursuit of the Digital Media Transmission patents, which they had interpreted as covering all forms of on-demand video transmission.
Acacia first approached the porn industry, then a number of cable operators, then most of the major media companies, and finally other corporations for whom online video was not a major focus of their business. At one point they even sent a round of threatening letters to universities across the country.
Many companies that received letters took the licensing deal, in particular bigger companies that could afford to simply pay Acacia to make them go away. But others fought back—most notably the porn guys and some cable operators—and the case is still being hashed out in court.
In conversations with them, Acacia has claimed to be protecting the rights of small-time inventors whose intellectual property was being trampled on by big companies and who had no way of fighting back.
While it’s true that in some cases the inventors are involved in the financial windfalls Acacia generates through pursuing old patents, what I don’t see is how this practice encourages innovation.
It’s hard not to see this process of finding old patents—which may or may not have played any real role in getting technology to where it is today—and then applying them as broadly as possible to create as big a net as possible of infringing companies as moving money from the people who are innovating today into the pockets of the people who may have been innovative in crafting patents but never did much with their ideas and the lawyers who know how to work the system.
But this practice is rampant and increasing as companies like Acacia realize financial windfalls, validating their business model.
I believe it’s important that we explore ways to lessen this inefficient use of resources while still respecting the rights of individual inventors.