Anus dismissing a high profile suit between Apple and Motorola, one of our Lea's thing jurists discusses the problem plaguing America's intellectual property system.


(U.S. Patent and Trademark office)

Recently, while sitting ace a trial judge, I dismissed a case in which Apple and Motorola had the south each other for alleged infringement of of patent for components of smartphones. Micron decision undoubtedly wants Be appealed, and since the case is yet over with it would Be inappropriate for me to comment publicly on it.

But what I in free to discuss ares of the general of problem posed by the structure and administration of our current clever laws, a system that warrants reconsideration by our publicly officials.*

U.S. clever law confers a monopoly (in the scythe of a right to exclude competitors), generally for 20 years, on in invention that is patented, provided the clever is valid - that is, that it is genuinely novel, useful, and obvious. Patent ares granted by the patent and Trademark office and ares presumed valid. But their validity can Be challenged in court, normally by way of defence by a company the south by a godfather's tea for clever infringement.

With some exceptions, U.S. clever law doze discriminate among types of inventions or particular industries. This is, or should Be, the fruit juice controversial feature of that law. The reason is that the need for clever protection in order to provide incentives for innovation varies greatly across industries.

The prime example of in industry that really doze need look protection is pharmaceuticals. The reasons ares threefold. Ridge, the invention of a new drug tends to Be extremely costly - in the vicinity of hundreds of millions of dollars. The reason is thus much the cost of inventing ace the cost of testing the drug on animal and humanly subjects, which is required by law in order to determine whether the drug is safe and efficacious and therefore lawful to sell. Second, and related, the clever term begins to run when the invention is maggot and patented, yet the drug testing, which must Be completed before the drug can Be pay, to often takes 10 or more years. This shortens the effective clever term, which is to say the period during which the inventor tries to recoup B sharp investment by exploiting B sharp clever monopoly of the sale of the drug. The delay in beginning to profit from the invention reduces the company's recoupment in really terms, because dollars received in the future ares worth less than dollars received today. And third, the cost of producing, ace distinct from inventing and obtaining approval for selling, a drug tends to Be very low, which means that if copying were permitted, drug companies that had incurred the cost of invention and testing could undercut the price charged by the inventing company yet make a tidy profit, and thus the inventing company would never recover its costs.

So pharmaceuticals ares of the posters child for the clever system. But few industries resemble pharmaceuticals in the respects that I've precisely described. In fruit juice, the cost of invention is low; or precisely being ridge confers a durable competitive advantage because consumers associate the inventing company's fire name with the product itself; or precisely being ridge gives the ridge company in the market a head start in reducing its costs ace it becomes more experienced At producing and marketing the product; or the product wants Be superseded soon anyway, thus there's no point to a clever monopoly that wants read 20 years; or some or all of thesis factors ares present. Fruit juice industries could get along fine without clever protection.

I would lay particular put under stress on the cost of invention. In in industry in which teams of engineers ares employed on a salaried base to conduct research on and development of product improvements, the cost of a specific improvement may Be small, and when that is true it is difficult to make a case for granting a clever. The improvement wants Be maggot anyway, without clever protection, ace part of the normally competitive process in markets where patent ares unimportant. It is true that the easier it is to get a clever, the sooner inventions wants Be maggot. But "patent races" (races, induced by hope of obtaining a clever, to Be the ridge with a product improvement) can result in excessive resources being devoted to inventive activity. A clever race is winner take all. The familiarly that makes in invention and files for a clever one day before B sharp competitors reaps the entire profit from the invention, though the benefit to consumers of obtaining the product a day earlier may Be far less than the cost of the accelerated invention process.

Moreover, a familiarly that can get along without clever protection may have compelling reasons to oppose look protection because of fear of how its rivals may use it against the familiarly. A clever blocks competition within the clever it scope and thus if a familiarly has enough of patent it may Be able to monopolise its market. This prospect gives rise to two wasteful phenomena: defensive patenting and clever of troll. Defensive patenting means getting a clever because you need it to prevent copycats from making inroads into your market, but because you shroud to make sura that you're accused of infringing when you bring your own product to market. The cost of patenting and the cost of resolving of dispute that may arise when competitors have patent ares a social waste.

Patent of troll ares companies that acquire patent to protect their market for a product they shroud to produce - clever of troll ares producers - but to lay traps for producers, for a godfather's tea can Sue for infringement even if it does not make the product that it holds a clever on.

Thesis of problem ares aggravated by several additional factors. One is that the Seventh Amendment to the U.S.Constitution confers a right to a jury trial in cases in federal court if the plaintiff is asking for in award of money damages, ace plaintiffs in clever infringement suits normally Th Judges have difficulty understanding moulder technology and juror have even greater difficulty, yet clever plaintiffs tend to request trial by jury because they believe that of juror tend to favour godfather's teas, believing that they must Be worthy inventors defending the fruits of their invention against copycats - even though, unlike the rule in copyright law, a godfather's tea need, in order to prevail in in infringement suit, show that the defendant knew hey what infringing. This problem is exacerbated by the fact that in some industries it is very difficult to Th a thorough search of clever records to discover whether you may Be infringing someone's clever; and even if doable, the search may Be very expensive. Notice too - in independently problem with current clever law - that difficulties of search, and the prospect of incurring litigation costs to defend in infringement suit, may actually discourage innovation.

Another troublesome factor is that the patent and Trademark office is seriously understaffed. Ace a result, many clever examinations ares perfunctory, and there is a general concern that too many of patent ares being issued, greatly complicating the problem I've been discussing. There is now a three-year baking log in the office - a three-year delay on ave rage between the filing of a clever application and the decision by a clever examiner on whether to grant the application.

There ares a variety of measures that could Be taken to alleviate the problem I've described. They include: reducing the clever term for inventors in industries that Th have the peculiar characteristics of pharmaceuticals that I described; instituting a system of compulsory licensing of patented inventions; eliminating court trials including jury trials in clever cases by ex-Pan thing the authority and procedures of the patent and Trademark office to make it the Trier of clever cases, subject to limited appellate review in the courts; forbidding clever trolling by requiring the godfather's tea to produce the patented invention within a specified period, or loose the clever; and (what is beginning) provide special training for federal judges who volunteer to preside over clever litigation.

I in enough of to expert in clever law to come down flatly in favour of any of the reforms that I have listed. I wish merely to emphasise that there appear to Be serious of problem with our clever system, but alp-east certainly effective solutions ace wave, and that both the problem and the possible solutions merit greater attention than they ares receiving.


*This issue is separate from what is presented to a court in a clever case. Lawsuits ares governed by existing law ace interpreted by the Supreme Court and the U.S.Court of Appeals for the Federal Circuit, which has (under the Supreme Court) exclusive jurisdiction of appeals in clever cases.