Patent overhaul gets a boost
Warning that patents of dubious legitimacy can slow innovation and stifle competition, the head of the Federal Trade Commission recommends new procedures for challenging patents.
FTC Chairman Tim Muris said the current level of proof required to challenge a patent in court--"clear and convincing" evidence--is too high a hurdle. "The FTC believes this requirement undermines the courts' ability to weed out questionable patents and instead recommends that courts determine validity based on a 'preponderance of the evidence,'" Muris said.
Speaking to the annual gathering of the American Intellectual Property Law Association in Washington, Muris touted an FTC report released this week that recommends an overhaul of the U.S. patent system. While acknowledging that for the most part "the patent system works well," the report cites poor patent quality, uncertain legal standards and the inability to challenge a patent until a lawsuit has been threatened.
The report comes as technology firms are focusing on the uncertain nature of the U.S. patent system in the wake of an August ruling by a federal jury that ordered Microsoft to pay $521 million to the holder of a software patent that essentially lets a Web browser automatically load additional programs. On Tuesday, the World Wide Web Consortium (W3C) asked the U.S. Patent and Trademark Office to invalidate the patent.
Software patents, in particular, have drawn criticism for being overly broad and prone to have negative consequences for the open-source and free software movements. Software patents are valid in the United States, and last month the European Parliament voted to approve software patents, though with amendments that might curb their scope.
The FTC report stressed that overlapping patents have created a "thicket" of intellectual-property rights that poses particular problems for technology firms. "This thicket of overlapping patent rights results from the nature of the technology; computer hardware and software contain an incredibly large number of incremental innovations. Moreover, as more and more patents issue on incremental inventions, firms seek more and more patents to have enough bargaining chips to obtain access to others? overlapping patents."
The FTC's report, which capped an extensive process of 24 days of public hearings with over 300 panelists, recommends that:
• Congress should enact legislation making it easier to challenge patents through a new administrative procedure at the Patent and Trademark Office.
• Legal standards used to evaluate whether a patent is "obvious" should be tightened.
• The possible harm to competition should be considered before granting patents.