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Patent Reform 2011 Survey Results

Patriot Scientific

about 13 years ago

Online survey on patent reform. I filtered those results to include only responses coming from intellectual property professionals and excluded individuals with no experience in the field -- leaving 1161 completed responses. Responses came from professionals working in all major areas of technology, including electrical engineering, mechanical engineering, biotechnology, software, chemical engineering, medical devices, pharmaceuticals, telecommunications, energy, semiconductor fabrication, etc. The majority of responses indicated 11+ years of experience working with intellectual property law issues.

Support for Patent Reform: The survey asked "Do you support passage of the patent reforms in H.R. 1249?" Although some responses showed support for the legislation, the weight of responses opposed the reforms, and the median response opposed the Bill.

Intellectual property professionals working in the areas of chemistry and pharmaceuticals tended to support the proposed reforms at a greater level than those working in electrical engineering, software, and medical devices. Self-described Democrats tended to support the proposed reforms more than either Republicans or Independents. Likewise, USPTO patent examiners tend to support the reforms more than the median.

Jobs: Many of the questions from the survey were intended to test sound-bites regarding the potential impact of patent reform. One of the most consistent arguments for patent reform is that the reform measures will lead to the creation of jobs for Americans. Senator Leahy, one of the Bill's primary sponsor's recently stated his belief that passage of H.R. 1249 would >recent speech, President Obama was quoted saying that the reform proposals "will cut the red tape that stops too many inventors and entrepreneurs from quickly turning new ideas into thriving businesses." The survey asked whether the proposed patent reforms will indeed cut the red tape. The response to that question was clear disagreement.

Although the majority still disagreed, the responses showed more support for the ideas that the reform measures will simplify patent law and streamline the patents system.

At this point, a reader may be asking whether the patent reform proposals actually do anything. According to the patent law professionals surveyed, the proposed reforms do indeed represent a major overhaul -- the first in 60 years.

In an open-ended question, the survey asked "If passed, what will be the impact of the reforms?" Responses that supported patent reform tended to indicate a seeming positive impact such as harmonization of the US patent system with the rest of the world and an improved opposition system. Negative responses are too numerous to mention.

The full survey responses can be downloaded here >Guest Post: Patent Troll Myths

Posted: 05 Sep 2011 12:28 PM PDT

(Professor Michael Risch of the Villanova University School of Law is a prolific scholar who is fascinated by patent trolls. Given his interest in this subject, I invited him to write a short post on his current project examining conventional beliefs about patent trolls. - JAR)

Guest Post by Michael Risch

Few players in the patent system (maybe none) are more hated than patent trolls. There is a target="_self">comprehensively study a group of trolls – namely the ten most litigious trolls. I don’t have space here to discuss why I chose this group, but the paper discusses my reasons as well as why I believe that the findings here apply to less litigious trolls. In all, I studied 10 trolls, about 1000 cases, and about 350 patents over a 23 year period. The full paper examines the type of patents, case outcomes, patent quality, venture funding, and other aspects of the cases and patents.

It turns out that most of what I thought about trolls – good or bad – was wrong. But first, one area that fits conventional wisdom: the moniker “troll” is accurate to the extent that it means waiting before asserting a patent. The patents I studied were asserted for the first time on average more than seven years after issuance. That’s a lot of time for an industry to develop. That said, delay decreased as issue dates increased. In other words, older patents sat on the shelf much longer than new patents. Patents issuing in 2006 were asserted on average within 2 years. This could mean that trolls are acting more quickly, or it could be what we call a “selection effect” – only some recent patents were asserted early and there is a large group of patents yet to be asserted; 15 years from now, it may be that the average delay for patents issuing in 2006 is seven years, though I doubt it.

Perhaps the biggest surprise in the study was the provenance of patents. I thought most patents came from failed startups. While such patents were represented (about 14% of initial assignees were defunct), most came from companies still in business in 2010. Indeed, more than a third of the initial assignees were publicly traded, a subsidiary of a public company, or venture capital recipients. Only 21% were patent assertion entities at the time the patent issued, and many of those were inventor owned companies (like Katz) rather than acquisition entities (like Acacia). Further, about 26% of the patents were inventor owned, and a comparison with the percentage of individual inventors represented in litigation generally shows that trolls serve an important role in enforcing individual inventor patents. Of course, if you think individuals have no place in the patent system, this is not a good thing.

Another area of surprise was patent quality. While trolls almost never won their cases if they went to judgment (only three cases led to an infringement finding on the merits), the percentage of patents invalidated on the merits was lower than I expected. A total of 43 patents had validity adjudicated on the merits. Only 4 were found completely valid. Another 23 were held completely invalid, and the rest were partially valid. Thus, just over half were invalidated. This sounds high, and it is—but consider that most of these cases involve a group of related patents that stand or fall together. When viewed on a case by case basis, as most other studies do, 13 cases out of 46 cases that reached a final judgment (28%) fully invalidated a patent. Compare this with a study of all patent cases filed in 1995, 1997 and 2000, which found that 118 out of 584 summary judgment or trial rulings (20%) invalidated a patent. Viewed this way, the invalidation rate for patent troll cases is not that much higher than patent cases in general. The quality is worse, but not that much worse (and as discussed in the paper, methodology differences may mean that the difference is smaller than 8%). Of course, it is more costly to defend against multiple related patents, so litigation strategies still have a social cost.

These are just a few of the findings. A full draft of the paper, called Patent Troll Myths, http://papers.ssrn.com/abstract=1792442" target="_self">is available on SSRN and will be published next year in the Seton Hall Law Review. I am also planning a followup that looks more closely at outcomes and patent quality over time. Comments are appreciated.