Patents have two primary purposes: They are designed to provide a limited monopoly as an incentive for invention and the investment needed to commercialize inventions. The limited monopoly is also designed to promote public disclosure in return for the limited monopolicy. However, the patent system is essential one-size-fits-all, and it works better for technologies where there is a close correspondence between patents and products (pharmaceuticals, chemicals, medical devices) and where the investment required to get products to market is large compared to the costs of acquiring, managing, and litigating patents. In information technology, other incentives dominate, and the disclosure function does not work in an environment of hundreds of thousands of questionable patents. As result, patents are of greatest value to trolls, who are able to capitalized on the weaknesses of the system.
The patent should promote innovation in all sectors in which it applies. It should not simply promote large-scale patenting that does not properly serve the purposes of the patent system. The high costs of the system enable exploitation by incumbents whose portfolios can work as thickets that inhibit new entrants and create barriers to competition. High volumes of quality patenting can create national thickets that make entry difficult and entrench past innovators at the expense of future innovators. In this regard, it appears that the Chinese patent system is evolving in ways that emulate (in different form) the worst aspects of the U.S. system.
CCIA has advocated a wide range of reforms to the U.S. patent system. These include:
- modifications to the jurisdiction and exclusion orders of the International Trade Commission so that it no longer promotes parallel litigation inconsistent with Supreme Court’s eBay
- clear direction to the Federal to recognize and adapt to industry differences
- restrictions on the patenting of abstract ideas
- raising the threshold of the inventive by tying to an expert standard analogous to peer review rather than an “ordinary skill” standard
- eliminating the enhanced presumption of validity accorded to the limited examination performed by the USPTO
- requiring owners of invalidated patents to reimburse costs imposed on the USPTO and others