Patent Law

The White House Hates Patent Trolls


Patent Troll
Credit: Diver721: Dreamstime

As who does not? The President's Council of Eonomic Advisors, the National Economic Council, and the Office of Science and Technology Policy have just issued a new report on the harms that patent assertion entities (PAEs), a.k.a. patent trolls, are doing to the economy. The report asserts that aggressive litigation by PAEs slows down the pace of innovation. PAE litigation is chiefly a software patent problem. As the report notes:

An additional reason that the issue of overbroad patents is particularly salient in software is due to the prevalence of "functional claiming" in these patent classes (Lemley 2012). A claim term is "functional" when it recites a feature by "whatdoes rather than by what it is" (In re Swinehart1971). 

Functional claiming involves claiming exclusive rights over any device that performs a given function, regardless of how that function is performed. Functional language can therefore lead to very broad and/or vague claims. These problems are especially acute for software patents.

For these patents, it has been argued rhat the code Is the function, with the implication that a software patent arguably excludes any other code that performs that same function. In contrast, in pharmaceutical; the distinction between a function and the means used to perform that function is generally clear. For example, several patents have been awarded for the function of reducing cholesterol; each patent covers a different chemical compound—a different means of providing that function.

Compounding the problem is the fast-moving, interdependent nature of technical change in the software industry. Functional claims can be used to 'over-assert' patent by attempting to cover products and processes that were never contemplated by the inventor or the examiner as being within the claim scope at the time of the invention.

For example, a patent claim about a programmed processor could be asserted broadly to cover any and all devices that achieve the claimed result, rather than being limited to a device programmed with the specific software used by the inventor. In addition, a single piece of software or website might have several thousand "functions" that could be claimed in as many patents.

It is also difficult for an outsider to judge what an inventor meant by a claim and to know what sort of invention would be "obvious" to a skilled practitioner and thus unworthy of a patent.

The new White House report observes that a similar spate of patent-sharking occurred in the late 19th century with regard to overbroad railroad and agriculture patents. That situation was resolved when farmers and railroad companies banded to together to aggressively fund counter lawsuits to fight patent sharks and get the non-obvious criterion for patent issuance better defined. Interestingly, the information technology lobbying organization, TechAmerica, issued an immediate statement praising the new report:

TechAmerica, the leading U.S. technology association, today welcomed the White House initiative to combat "Patent Trolls". The following statement is from Kevin Richards, TechAmerica's Senior Vice President for Federal Government Affairs:

"The strong support by the White House adds to the strong bipartisan support that reigning in abusive patent litigation shares.  Protecting innovators intellectual property is a key component to maintaining the competitive advantage the United States has over the world.

I weighed in on the controversy with my 2012 column, "Patent Trolls or Tech Fairy Godmothers?" in which I concluded:

Instead of a capital market for inventions, information technology companies in the U.S. find themselves enmeshed in a growing capital market for litigation. The result is reduced incentives to innovate, slower introduction of new advanced products to consumers, and reduced earnings for shareholders.

The Obama Adminstration is basically right that the patent system is broken when it comes to software patents. Frankly, I would prefer to junk the whole concept of software patents.

In in the alternative, the TechAmerica statement may mean that infotech companies may be ready to band together to fund a war chest and just keep suing the bastards back until they go broke.