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09.07

The Informed Opinion

Is the Patent System Broken?

By David S. Holland

Should the arrangement of furniture and equipment, including the provision for a “kid’s area,” in the branch office of a bank, receive patent protection? It did in Patent No. 6,681,985, issued 27 January 2004.

Should a search request in the form of “a string of words” in a computerized investment research delivery system receive patent protection? It did in Patent No. 5,502,637, issued 26 March 1996.

Should a “computer program product storing computer instructions therein for instructing a computer to perform a process of at least one of ranking and indexing enterprises with respect to at least one of each other and predetermined criteria to be used in at least one of investment decision making and enterprise decision making” receive patent protection? Whatever it means, it did in Patent No. 6,154,731, issued 28 November  2000.

Such patents may not be evidence of a broken patent system, but they certainly suggest to some that the system needs overhauling. After a stint of little more than a month as a patent examiner trainee, I am one of those some.

I was a retired federal government employee who was not ready to leave the workforce completely and who needed to pad his pension to pay those horrendous Northern Virginia real estate taxes. To handle an avalanche of new patents, the Patent Office is trying to expand by more than 1,000 examiners a year. It seemed a good match. Examining patent applications might prove interesting and challenging, and the Patent Office certainly seems to need warm bodies.

Why does the patent office need new examiners? Because the number of applications has increased dramatically, from just under 300,000 in fiscal year 2000 to more than 400,000 in fiscal year 2006. At year end for fiscal years 2000 and 2006, the number of applications pending soared from approximately 485,000 to over 1 million.

What is behind those numbers? Two related factors are among the causes of growth. First, in 1998, a federal appeals court issued a decision that significantly bolstered the concept of business methods patents (State Street Bank & Trust Company v. Signature Financial Group, Inc.). The decision led to a substantial increase in applications in this category. Of the world’s major patent systems, the system in the United States goes the furthest in explicitly recognizing business methods patents.

Second, and more far-reaching, computers and the digital age appear to have dramatically lowered the costs of innovation and invention in a number of fields, including the business methods field. Using computers, both new ideas and incremental changes to old ideas can be investigated and simulated with relative ease.

Moreover, in business methods and related fields, many so-called inventions today are little more than data-in, data-out manipulations of data, often called software patents. Some broad ill-defined data inputs are run through some sort of computer program or programs, the output of which is some broad ill-defined rating, or score, or advice. This soft, fuzzy center is camouflaged by much description of computer hardware and by detailed diagrams and flow charts, but the essence of the so-called inventions is simply the manipulation of data. In the business methods field, a business or finance student on a slow afternoon at the computer can come up with an “invention,” and maybe even a patent.

Why is this bad? Because in the hands of a litigious “inventor” — or more likely a litigious collector of patented incremental alterations in existing processes — a patent becomes a tool of extortion and a burden on legitimate commerce. The desirable public policy of rewarding the efforts of a long-tolling inventor falls flat: the efforts were minimal and the toiling was not long.

Other than by throwing more patent examiners at the problem, how can the patent system be fixed? A basic need is for the Patent Office, the courts, and most especially Congress to revisit definitions and requirements in the patent laws, in part to counter the ease with which “inventions” can be made in the digital age. Under current law, a utility patent, the most common type, can be granted for any “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”

Over the decades, the courts and the Patent Office have rendered the words “new” and “useful” almost meaningless. The Supreme Court recently issued a decision (KSR International Co. v. Teleflex Inc.) that might restore some substance to “new,” but there is still a long way to go before the words impose any significant restraint on what can be patented. And the word “process,” added to the patent laws in 1952 before the onset of the digital age, has become the authority for a wide variety of nebulous inventions, including data-in, data-out manipulations of data and vague descriptions of alleged business methods.

As for my career as a patent examiner? Well, I’ve always had a problem playing with others. That plus the growing feeling that I was on the bottom rung of a system in need of serious overhaul led me to pull the plug late one afternoon in early June. In fact, I’m thinking of applying for a business methods patent for my method of exit. In the peculiar wording and terminology of the patent world, the claimed invention would be as follows:

“A method of resigning from a position comprising the steps of handing one’s security badge to the security guard at the exit with the comment, ‘I ain’t coming back,’ having the security guard respond with a chuckle, ‘Bad day, huh,’ and in turn responding, ‘Bad month.’”

David S. Holland is an IEEE member in Alexandria, Virginia. Comments may be submitted to todaysengineer@ieee.org. Opinions expressed are the author's.