We need a troll-free number

Patent fears, suits hamper innovation

The big news out of the Oracle versus Google showdown on Monday was that one of Oracle’s patents was brought back from the dead, put back into play after the U. S. Patent and Trademark Office reversed its earlier rejection.

But let’s be clear: One zombie patent isn’t the remarkable thing in this case. The remarkable thing is that, when the dust settles, five of the seven patents Oracle claimed that Google violated will likely be overturned because Google forced the patent office to take a second look.

Oracle filed the lawsuit in 2010, alleging Goo-

gle infringed on patents and copyrights related to its Java programming language in developing the popular Android smart-phone software.

If only two of Oracle’s patents hold up on review, that means the patent office got it right less than 30 percent of the time, an average we have every reason to believe is representative of the entire sector’s patents. In fact, software patent holders lose nearly 90 percent of the time in litigation, Stanford law Professor Mark Lemley found in a research paper published last year.

Invalid claims

Yet these overwhelmingly invalid patent claims have had dramatic impacts on the industry. They’ve allowed an entire sector of patent trolls to emerge with the sole aim of strong-arming companies into forking over licensing fees. They’ve forced tech giants to drop billions on legal fees or defensive patent portfolios, money that might have gone into research and development.

“It’s approaching crisis levels,” said James Bessen, a lecturer at Boston University School of Law and co-author of “Patent Failure.” “In most industries, the patent system has become a disincentive to innovation.”

Still, companies are left with little choice but to play the game and act as if all patents are legitimate. It’s so expensive and time consuming to challenge them in court or through the patent office that most companies simply acquiesce to licensing fee demands. Or they buy up patents of their own in hopes of discouraging claims through a sort of mutually assured legal destruction. You sue me, I’ll sue you.

Google is acquiring Motorola Mobility for $12.5 billion, a purchase largely geared to gain access to the company’s trove of mobile and wireless patents. Microsoft spent more than $1 billion to buy nearly 1,000 patents from AOL. And Facebook announced plans Monday to purchase about 650 of Microsoft’s newly acquired patents for $550 million. That’s likely to provide ammunition in its legal battle with Yahoo, which filed a patent suit in March; Facebook responded with a countersuit several weeks later. It’s one of dozens of patent cases now embroiling the online and mobile industries, as Apple, HTC, Kodak, Samsung, Motorola, LG and many others duke it out. So how did we get here? For starters, we have an overworked and underfunded patent office staff, said Gregory Aharonian, who performs research on behalf of companies challenging patent awards, in an earlier interview. Staff members routinely approve redundant, unoriginal or vaguely worded patents. They simply don’t have the resources and motivation that a company like Google can bring to bear in digging up “prior art,” or examples of the technology that precede and thus invalidate the patents.

There’s a complicating factor when it comes to software patents. Since software — unlike, say, chemical compounds — can be described by different firms in completely different language, the only foolproof way for a company to ensure that it’s not bumping up against existing patents is to hire attorneys to examine every one.

Since there are hundreds of thousands of software patents, with 40,000 new ones approved every year, one firm could easily spend hundreds of thousands of dollars to perform patent research on just one piece of software, said researchers Timothy Lee and Christina Mulligan in a summary of their recent paper on the tech blog Ars Technica.

“It’s so difficult, in fact, that the vast majority of software developers don’t even try” to perform that patent research, they wrote.

Another challenge is that the line has continually moved on what can be patented in technology, as a handful of Supreme Court decisions have applied steadily stricter standards. That has certainly nudged the system in the right direction, but it also leaves questionable patents on the books until they’re individually challenged.

“There are a large number of software patents out there fueling litigation that resulted from a 10- or 15-year period when the issuance of software patents was too lax,” said Tim Porter, Google’s patent counsel, in an earlier interview.

But more of the industry’s snarl of suits and countersuits results from an attitude shift among businesses themselves, said Colleen Chien, an assistant law professor at Santa Clara University focused on patents.

Up until the mid-1980s, tech companies had reached a sort of detente. They all knew they had unique inventions but frequently chose not to patent them or at least use their patents offensively, lest their competitors react in kind.

That all began to change as Texas Instruments and later IBM launched licensing and litigation campaigns after their core businesses stumbled. Companies stung by these licensing fees and lawsuits began to build up their portfolios and consider their own suits or licensing demands, Chien said.

In turn, the number of U.S. patent lawsuits tripled from the early 1990s to the present, according to research by Bessen and co-author Michael Meurer.

So where do we go from here?

A growing number of voices in the tech industry argue we should do away with software patents altogether, stressing that copyrights are adequate to protect and encourage innovation in the industry.

At the very least, we need a patent overhaul that goes beyond the America Invests Act passed last year. That reform handed additional money to the patent office to conduct thorough reviews and made it easier for companies to challenge issued patents, among other improvements. But it didn’t address the issue at the heart of the failing patent system: The standards for technology patents.

Other ideas

Lemley believes the courts should play a more active role by dismissing outlandish damage requests, forcing trolls to cough up attorney fees and narrowing the scope of patent claims from broad descriptions to specific explanations of how the technology works.

Bessen said Congress should tighten those standards, while significantly boosting application fees for patents, in an effort to discourage companies from seeking or holding on to frivolous patents.

“There’s a cost to society of having that many patents, so there should be essentially a use tax,” he said. “Many of these duplicate, garbage patents would not be renewed.”