The Federal Trade Commission came out to Berkeley this week to talk shop with some patent experts, convening several panels Monday and Tuesday about "The Evolving IP Marketplace." The Prior Art dropped in on a panel discussing the "public notice" function of patents—that is, the idea that published patents put the public on notice as to what we're not allowed to use, sell, or manufacture without a patent-holder's consent.
The most notable part of the discussion was that no one ever really got around to mentioning whether patents provide any kind of meaningful public notice at all. When FTC attorney Bill Adkinson, who moderated the panel, began the discussion on claim construction with a quote from longtime Federal Circuit Judge Giles Rich, who was instrumental in crafting the modern U.S. patent laws, he had to urge some panelists to stifle their cackles:
"Judge Rich said the function of claims is to enable everyone to know, without going through a lawsuit, what infringes the claims and what does not."
As TPA knows from interviews with numerous defendants in patent suits, it's incredibly difficult to know—and indeed, defendants are often told they can't know, without talking to their lawyer—whether or not they infringe a particular patent. A few panelists did acknowledge this reality, although subtly.
"If you don't put in many embodiments [in your patent application], you may get better scope than if you have a lot," said Peter Menell, a professor at UC Berkeley Law School. John McNelis, a partner at Fenwick & West, also acknowledged the "natural tension" between needing to be specific and wanting to preserve broad claims in the best interest of a client. Daralyn Durie, of Durie Tangri, noted that bad patents can often be more difficult to defend against than good ones, precisely because they tend to be vague.
But rather than focusing on the obvious lack of public notice, the panelists responded to FTC moderators' questions, mainly suggesting changes to patent examination and claim construction procedures that might better serve a public notice function.
Jason Schultz, a former Electronic Frontier Foundation attorney and now at UC Berkeley Law School, noted that the current practice of simply noting that an interview took place between a patent applicant and an examiner isn't exactly transparent. Schultz said he's worked with open-source software coders he's worked with who look through file histories trying to determine how a patent got issued. "It's mystifying to them in some ways," he noted. Viewers of the patent's prosecution history can simply see that an interview took place, and subsequently a claim was allowed -- but that's it. "Often I intuitively feel that's where the examiner gave up." Schultz suggested that while interviews between applicants and examiners were a good thing, it would be helpful if an interview was recorded and posted in the public file history.
Michele Lee, Google's top patent lawyer, agreed, saying some of the many patents being litigated against Google involve similarly murky examination procedures. "I know an interview occurred, and I know a final issue [of the patent] came out," she said. But it wasn't clear what was discussed in the interview, or how an applicant overcame an examiner's objections.
The FTC moderator then mentioned the Lemley / Cotropia research that indicated that upwards of 90 percent of patent defendants are "inadvertent infringers" who developed their allegedly infringing products independently, without copying products or patents of others.
That spurred Lee—who has overseen an explosion in patent claims against her company—to take a shot at the do-nothing companies that comprise a big chunk of patent lawsuits:
"In almost all the litigations we're dealing with, we did not receive prior notice. They [non-practicing entities] know the cost of defense is $5 to $6 million. So guess where the discussions about settlement start? At $5 to $6 million."
At that point panelist Kevin Rivette, author of the landmark 1999 book "Rembrandts in the Attic" that extolled patents as competitive weapons, chimed in to offer a counterpoint.
"Having been at IBM, I understand the problem of being a large target," said Rivette. "I get nervous when I see 'NPE' rolled out as a real bogeyman. I've seen it with small companies, small inventors… I think that distinction should go away. The question is, how do we deal with this as a global system? At IBM, we did a lot of research that ended up in other people's products. Were we an NPE?"
Oh, and just so this post can be found by normal humans: NPE is the politically correct term for "patent troll."