Microsoft outlines patent reform goals for U.S.

Redmond is well known as a vast holder of technology patents. But the company says the U.S. needs to make some drastic changes to its current system to stay competitive.

Josh Lowensohn Former Senior Writer
Josh Lowensohn joined CNET in 2006 and now covers Apple. Before that, Josh wrote about everything from new Web start-ups, to remote-controlled robots that watch your house. Prior to joining CNET, Josh covered breaking video game news, as well as reviewing game software. His current console favorite is the Xbox 360.
Josh Lowensohn
3 min read

As the holder of more than 25,000 patents and pending patent applications in the United States, Microsoft knows a thing or two about getting them. And a long history of litigation is further proof of its intent on defending such intellectual property.

But in a post yesterday by Senior VP and General Counsel Brad Smith and VP and Deputy General Counsel Horacio Guitierrez on the company's Microsoft on the Issues blog, the pair outlined some things about the U.S. Patent and Trademark Office (USPTO) that the company believes could use some work.

"In our view, the time has arrived to move beyond old controversies and focus on ensuring that the USPTO has the resources and tools it needs to improve patent quality and continue its efforts to tackle the enormous backlog it faces today," the post said. "The office has demonstrated that it has the talent necessary to succeed, if they are equipped with the tools and resources required to do their job."

The post comes a week after the introduction of the Patent Reform Act of 2011 (PDF) to the U.S. Senate, the fourth such attempt to reform patent legislation in the U.S. following similar proposals in 2005, 2007, and 2009. Microsoft is also in the midst of clearing regulatory hurdles on its way to acquiring nearly 900 patents as part of the November sale of Novell to Attachmate.

So what are those "tools and resources" that would make for a fix? The top issue, Microsoft said, was funding--particularly the freedom for the USPTO to be able to set fees, and keep those fees within its own organization.

"The USPTO needs the freedom to set its own fees in order to continue to reduce pendency," Microsoft said. "But fee-setting authority will only solve the problem if fees cannot be diverted for other government uses beyond those in support of advancing USPTO's vital mission."

Microsoft also highlighted patent practices from elsewhere in the world--particularly Europe and its use of a post-grant review system, which Microsoft said was effective at "invalidating weak patents that didn't deserve to be granted." This is of special note given Microsoft's upcoming Supreme Court hearing over its request for a reexamination of i4i's patent of XML technology. The request had previously been denied twice by lower courts, following Microsoft's attempts at invalidating the patent.

Timing was also brought up as an issue in two of separate points by Microsoft. The first being the USPTO's current use of the "first to invent" system, which awards a patent based on the conception of the invention, not necessarily when it's filed. Microsoft argued that the USPTO should switch to the "first to file" system, which as the name suggests, awards a patent to the first person that files it. Microsoft's argument for that shift was that "the rest of the world" has already adopted the first to file system, and that "there is a broad consensus that doing so is good policy."

The other timing issue is with prior art, which Microsoft wants expanded so that third parties can contribute it to pending patent applications.

Lastly, Microsoft said it wanted and end to Qui tam litigation for false patent marking, the practice wherein individuals or law firms can sue manufacturers for incorrectly including patent numbers on their products. Such claims have hit other tech giants like Apple, Sprint, and Verizon in a patent marking lawsuit filed last year. Microsoft called this type of litigation a "cottage industry," and called for marking cases where no harm was suffered to be limited in their monetary scope. The company also called out the practice with expired patents, which had cropped up as part of a landmark trillion-dollar lawsuit last year against the Solo Cup Company.

Microsoft closed its letter by saying that "the time to act is now," and that "a narrower piece of legislation provides the best path ahead."

Correction at 1:49 p.m. to clarify the differences between "first to file" and "first to invent."