Patent Law Changes Approved by Panel

After all the years of stalemate, it seems as if Congress has finally made some initial progress in their efforts to overhaul the U.S. patent system.  Yesterday, the Senate Judiciary Committee approved potential changes to U.S. patent laws by a 15-4 margin, reports CNNMoney.

One of the changes this bill would bring to the patent system is revising the calculations of damages in patent-infringement lawsuits.  The concept of a “gatekeeper,” to be played by judges, would be introduced and hopefully give judges clearer standards to use when rewarding damages.

However, not everyone is pleased with the bill.  Senator Orrin Hatch, co-sponsor of the Patent Reform Act of 2009, said the he “cannot support a bill that I know does not improve the status quo.”  Senator Jon Kyl complained that the approved revisions to this bill would actually make it easier to challenge patents, while Senator Tom Coburn objected because the bill doesn’t provide funding increases for the USPTO.

Technology and patent law groups have supported the compromised version, and Deputy General Counsel of Microsoft Horacio Gutierrez followed that trend.  He said, “Microsoft is pleased to support the Committee’s efforts and looks forward to more progress in this important matter.”

For those that are unaware, the House of Representatives passed patent law legislation in 2007, but a companion bill has failed to clear the Senate.  That fact may change in the near future.

Research Team: Patent System Needs Reform

The pros and cons of the current patent system have often made people wonder if the system is in need of some type of overhaul.  According to an international research team, not only does the system need overhaul, it should be reformed to reflect more of a free market system.

As reported on swissinfo.ch, a team of researchers found that a market economy, where inventors buy and sell shares of the key elements of their discoveries, beats the winner-take-all patent system.  The market economy system increased the number of beneficiaries, as well as driving up new levels of collaboration and development.

The researchers fault the current patent system, because it only rewards the prize to the winner, or whoever submits the idea first.  Anyone who submits the idea second or third walks away empty handed.  Therefore, many are discouraged from filing for patents because they simply believe that someone else has already beaten them to the punch.

The researchers drew these conclusions from a series of “rucksack” experiments, where participants were given a large number of items as well as a bag that could not possibly hold all of the items.  The participants were supposed to figure out how to maximize the number of items that could fit into the bag.  One set of participants  was to figure out the problem by using a system similar to patents, where the reward was only awarded to the first individual that could work out the solution. 

The other group was to solve the problem by using a free-market system, where participants were encouraged to buy and sell securities attributed to each item.  The researchers found that even in the free-market group the initial inventor held an advantage, but it also gave “the second and third person a chance to profit from their work as well.”  Furthermore, the free-market group also led to numerous people trying different ideas each time the game was played.

While the patent system does need reform, this research is hardly the information that would be needed to change the current patent system.  The results are interesting but it should be taken with a grain of salt.  Although the current system has its faults, it does discourage the stealing of ideas while also turning an intangible invention into a tangible asset.  The patent system is far from perfect, but would radically changing the system really solve all the problems?