While brawls over Social Security and lobbying high jinks dominate the news on Capitol Hill, Congress is quietly moving on one of the technology industry’s top priorities: revamping the patent system.
As unsexy as that sounds, at stake is who gets to benefit most from innovation.
These days the patent office looks like California during the Gold Rush, with companies, universities and individuals stampeding to sew up as much “intellectual property” as fast as they can. In the information age, ideas are among the most valuable coins of the realm.
Some corporations have internal teams whose sole mission is to file for and acquire as many patents as possible. Patent examiners are overwhelmed, and are waving on patent applications — especially in technology areas — that would be called head-scratching if one were being polite.
(Here’s one: Google owns a newly minted patent for what the page of results looks like when you search for something. Specifically, if the search term that you entered comes back in bold face, like this, that method now belongs to Google.)
Meanwhile, everyone seems to be suing everyone else claiming patent violations, helping to clog the courts and costing everyone money.
Most often the litigation is company vs. company. But patents are now assets in a marketplace that often has nothing to do with the products or services they might help create. A new breed of entrepreneurs — some call them trolls — is buying, trading, selling and enforcing patents against companies to extract cash, not to compete in their businesses.
The result is that one almost never hears the word “patent” anymore without it being followed by the word “reform,” and the gears of Congress are starting to turn.
Rep. Lamar S. Smith (R-Tex.), who heads the House subcommittee on intellectual property, is circulating a draft reform bill for what amounts to a public-comment period before he introduces formal legislation.
Problem is, reform is in the eye of the patent holder.
For example, large tech companies, several of which have lost high-profile infringement cases recently, want to stop the trolls from being able to hold them up for multimillion-dollar settlements. Even companies with deep pockets are vulnerable because their products can be pulled off the market if they are found to be infringing.
The tech firms want a higher standard for when such injunctions are granted, and want damages to be based only on the portion of the product covered by the patent in question, rather than the patent being considered essential to the whole product or service.