It's rather commonplace to read about multiple, big-name patent suits in the mainstream press. Market leaders such as IBM and Microsoft wrangle with startups and other competitors over patentable material on a continual basis. However, this intellectual property struggle between the Davids and the Goliaths of the tech world may cease if they follow IBM's move to publicly post its patents and pending patent applications online.
As part of a new corporate policy announced earlier this month, IBM now places responsibility onto patent holders within its company to ensure patent claims are clearly written, transparent, and available for public comment. The tenets of the policy apply across borders.
According to a prepared statement, the company's impetus for the new policy is to foster an environment that promotes innovation and respect for intellectual property rights. For example, technical experts now will review annually published patent applications submitted to the U.S. Patent and Trademark Office (USPTO) and provide prior art to assist the agency in verifying the patentability of submissions.
Approximately 50% of IBM's total business method patents now will be available to the public, according to the company. It will publicly record the assignment of all patents and published patent applications it owns, strategies developed during its Global Innovation Outlook, a two-month online forum. Throughout May and June 2006, participants collaborated in the online IP Marketplace wiki, a new media Web 2.0 tool that enables documents to be collaboratively written and rewritten through a common Web site. The result was a blueprint with key characteristics of a properly functioning IP marketplace.
Some argue that IBM's move to post patents online stems from a USPTO-sponsored Community Patent Review (CPR) pilot developed by the Institute for Information Law and Policy at New York Law School. The pilot studies the impact of open, community-reviewed patent applications in which patents are made public on an online system so the scientific community can comment during the patent examination process. This so-called open review process is designed to provide the patent examiner with relevant information for assessing whether an invention is patentable.
The CPR launches as a one-year pilot project beginning in 2007. IBM, Microsoft, Red Hat, and Hewlett-Packard are sponsoring the project and have consented to let some of their own patent applications be peer reviewed as part of the pilot, according to the CPR.
However, there is a strong incentive to participate in the pilot program and, perhaps, one that leads to a competitive advantage for participants. The USPTO has offered to move any patent application submitted for peer review to the front of the queue for examination. Applicants usually wait three to four years for a first response from the patent office. The aforementioned participating companies will have the opportunity to ensure their patents are viewed and approved prior to those of smaller shops, which some pundits clamor is an unfair advantage.
Is this move by IBM an effort to improve the patent process, to support open-source software, or to save litigation costs? Litigation costs may be a driving factor. According to the Congressional Research Service, "[T]he complex legal and technological issues, extensive discovery proceedings, expert witnesses, and specially qualified attorneys associated with patent trials can lead to high costs; the average cost of defense is $1.5 million, and [f]or patent suits involving damages claims of more than $25 million, expenses reportedly increase to $4 million per side." For example, IBM is now fighting a lawsuit from the SCO Group, which launched a multibillion-dollar lawsuit in 2003 claiming Big Blue illegally contributed code to UNIX. It launched the suit in the third judicial district of Salt Lake (Utah) County, claiming IBM misused and misappropriated SCO's proprietary software and enabled others to do the same. A 2004 survey by Public Patent Foundation found that 283 registered software patents, including 27 held by Microsoft, could conceivably be used as the basis of look-alike patent suits. This leads some to wonder whether SCO is "patent trolling," a derogatory term used to describe a patent owner that goes after big-name companies over petty patent disputes.
"We're probably not an appropriate company to comment on this since we are in litigation with [IBM] right now," said Blake Stowell of the SCO Group's communications department.
Whatever the motivation behind the suit, it is representative of how rampant patent cases are and how the USPTO is an easy mark for blame.
Jason M. Schultz is a staff attorney with the Electronic Frontier Foundation (EFF), a nonprofit organization focused on free-use and democratic rights in cyberspace. Schultz said whether the U.S. patent system is competent is up for argument. In his opinion, it is an effective system albeit one that is ineffectual when it comes to innovation and open-source-software initiatives.
"Software patents in general have not been shown to be an effective incentive for producing software—open, free, or otherwise," he said.
Schultz said many invalid patents are being issued and asserted inappropriately against companies such as IBM. Illegitimate patents inhibit progress because anyone who wants to use these technologies cannot do so if they are threatened by "one of these bogus patents," he said.
However, IBM's move to post patent applications openly online may improve the quality of patent applications and reduce the litigation burden on companies.
"It is a good thing in that more people will be able to scrutinize their patent applications and keep some overly broad patents from issuing," Schultz said.
In the meantime, there are some common-sense strategies to deal with the backlog of patent applications at the USPTO. Schultz said the agency should charge more money, limit the number of applications per entity, increase funding at the USPTO, and, most important, make patent applicants do an initial search for prior art before applying for a patent. In addition, companies should support patent reform in the U.S. Congress.
Will patent reform be a trend that catches on with other tech players?
"I have no idea," Schultz said. "I hope so."
Mary Rose Roberts is a Chicago-based freelance writer and a masters of science, journalism candidate at Roosevelt University, Chicago. She can be reached at
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