Microsoft's Corporate Vice President, Marshall Phelps, lead a panel of intellectual property industry experts in a discussion of the U.S. patent system, now more than 200 years old, and how it can be made more efficient and inventive.
Marshall C. Phelps is Deputy General Counsel for IP at Microsoft Corporation. He was speaking at the Willard Hotel in Washington, D.C. on March 14th on Licensing Foundation Day.
The current system is accommodating different industries, yet not with the vigor some participants would like. For example, drug companies inventing a product need patents that can protect the close relationship between the idea itself and the process of creating the final product. By contrast, in the IT world, no single inventor creates the entire product. Using an IBM laptop as an example, Phelps said that the architecture may be IBM's own but the components all belong to others' intellectual property.
"Japan is now an 'idea center'," said Phelps. "They will tell you that they manufacture ideas and that the manufacture of goods is done in China."
The patent process has changed a lot since it began in the U.S., when the Constitution was ratified. Phelps noted that some people today do not even believe that patent rights are owned by individuals. You could say the inventions of today are invention by committee; people just do not realize the creativity required of a host of participants in the making of a new product.
Furthermore, patents filed in different countries may require translations, separate examinations and searches for evidence in publicly available publications or prior patents that prove another was the first to invent. All too often, the translation process and different examination policies under individual national patent systems change the original patent. The same patent application filed in the US, Japan, and Europe could evolve into three distinct patents in languages that describe different embodiments of the invention.
Suggesting that the U.S. patent system needed to be overhauled, Phelps called himself a "victim of the patent system," citing the $1.5 billion dollar judgment against Microsoft. He said he would like to see a competition between different business models on patent system reform.
Phelps pointed out the inventive potential of universities, few of which have learned to make the most of their resources. He would like to see the universities break down the individual "silos" and for the engineering and business schools to begin working together to create ideas and apply for patents as a group.
Bringing Efficiency to the Patent System
With the number of patent applications growing worldwide, the Japanese, European, and United States patent offices face an avalanche of applications, some of which belong to one applicant filing in all three systems.
Gerald Messinghoff, Former Assistant Secretary of Commerce and Commissioner of Patents and Trademarks, said that eventually, the increasing workload of the three main patent systems will force leaders in each country to go toward one system, or "Harmonization" as the process is called by the intellectual property community.
Phelps remarked on the need for "Harmonization" between the European Union, Japan, and United States patent systems, saying that the current system is not efficient and results in the replication of the same work done by other patent offices. Messinghoff, said he wanted to see a "Trilateral Plus" system, whereby an application is examined only once, not multiple times and in different languages.
Messinghoff suggested English as a common language for the examination and enforcement of patents. This entails that both the Japanese and European Offices should switch primarily to English.
Messinghoff also suggested a single electronic database of "prior art" to ensure the universal accessibility of all previously patented applications, journal articles, and literature through one database as well as what he called a "controversial" International Patent Court for the enforcement of patent law.
"I don't represent the single inventor, I represent big corporations and they are all for it," said panelist Donald Ware, partner at Foley Hoang LLP, about the proposed plan of moving US patent law toward "Harmonization."
Making U.S. Patent Law Compatible with Other Nations
Harmonization would make U.S. patent laws more uniform with that of most other countries, including European and Japan's systems. In most countries, except the United States, the patent is awarded to those who are "first to file" rather than "first to invent." In the U.S., patents are awarded to those who can prove "first to invent," a 200 year old practice predicated on Article I of the U.S. Constitution.
The concern is that if the U.S. patent system "harmonizes" with the other international systems, independent inventors who are slow to file patents for various reasons, including financial, will be at a disadvantage or at a complete loss in claiming their patent rights of inventorship.
U.S. Patent Process Slow and Costly
Mossinghoff, who worked with the US Patent and Trademark Office (USPTO) to study the benefits of a "first to invent" versus "first to file" system determined that small inventors were still disadvantaged by the "first to invent" system. The study was done within the USPTO.
Echoing the motion, Ware said, "We don't really have a first to invent system," as it is very costly for the small inventor to prove 'first to invent.'" Phelps said that by giving credit to the examination done in Europe, the overall cost of a patent would be lowered. The U.S. Patent Office functions independently of its counterpart in Europe and conducts its own examination of applications and search for 'first to invent.' This lack of any coordination results in higher costs for applicants filing for patent protection in multiple countries.
While patent applications are examined on the merits of the application and claimed invention, the resulting patent is often given to the entity with enough money to prosecute the case during a lengthy examination process, which includes high attorney and filing fees. Though fees are lower for inventors representing themselves without an attorney, the representation by a patent attorney may substantially change the quality of the application and ultimately the success in being granted a patent.
Wes Blakeslee, Executive Director of John Hopkins University's Office of Technology Transfer, remarked upon what he thought stifled innovation, which are patents that should not have been granted in the first place. He cited a "stem cell patent", which after later scrutiny turned out to merely be a definition of a stem cell. He also cited a very broad patent such as one granted in 1992 to a method that transfers files between computers that have audio or video data, an already commonly used computational process.
The Licensing Foundation President, Richard Razgaitis, and holder of four patents, recollected what he described as a confusing experience of visiting the USPTO to meet with a "very young" Examiner in a "dark" back office for an interview, an experience that he equated to going "behind the curtain." Razgaitis said he didn't understand why he had waited four years for something that took the Examiner one day to assess, referring to the huge backlog of patent applications. He later learned that the USPTO "can't hire its way out of the backlog" fast enough, he said.
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