03 March 2008

Why Screen Patents?

I am usually among the first to grump about patent and trademark officers failing to be sufficiently careful in screening dubious patents and trademarks before granting them, but maybe I have the problem all wrong.

In many fields of property law, claimants to property rights make public filings to claim their rights which are not reviewed on the merits by the government to determine if they are valid in advance of litigation. This system is used for title to real estate in non-Torren's title jurisdictions (among common law countries almost everywhere in the U.S., but rare in the U.K. and Australia), copyright law, state law trademarks, oil and gas rights determination, and priority of security interests in personal property.

Federal trademarks and patents are exceptions to this pattern. With these kinds of intellectual property, a government official at the Patent and Trademark office pre-screens the application for validity, and in exchange, at some point, the applicant gets a presumption of validity in later litigation.

The trouble is that the number of applications is increasingly outpacing the ability of the government to provide meaningful review, and some believe that the problem runs deeper than a mere lack of staff. One alternative would be to shift patent law to the real estate recording system or something similar.

How would it work?

Rather than determining the merits of a patent application in advance, one would simply file an application to provide definitive proof of time of application and its contents. Presumptions of validity would be eliminated and the merits would be decided only in litigated cases.

Instead of relying on patent examiners, big companies with potentially very valueable patents upon which they needed to reply would turn to opinion letters from private patent lawyers, in much the same way that commercial real estate companies rely upon title insurance companies, and oil and gas firms obtain elaborate title opinions from oil and gas lawyers before drilling.

Little guy inventors could file and hope, paying only to have an application drawn up, and not invest the money in the prior art/obviousness due diligence until an investor approached the little guy inventor and financed the relevant validity opinion.

Private lawyers exposing themselves to liability in a validity opinion would likely be more cautious about doing so than patent officers who have immunity from liability if the overlook prior art or obviousness or some other flaw, giving them an incentive to rubber stamp applications if they are overburdened.

Indeed, if one wanted something closer to the current system, one could allow the presumptions of an existing PTO screened patent to apply in cases where a bonded and insured patent bar member has filed a validity opinion upon which that bar member is exposed to liability.


Unknown said...

What you describe is already in use in a handful of countries around the world with little or no success. Germans have settled that for some types of design patents, this system actually works.

The presumption is very useful. If you are a CEO trying to notify your competitor of your rights, you send a cease & desist letter. Most cases are settled at this stage. If you do not have a presumption, these letters will have no impact. The only way to enforce your rights will be to go to court. Judges will become patent examiners.

You also forget the doctrine of judicial estoppel. Mac would sue a small corporation with little or no resources, go to court, get a judgment of validity that could be valid against other defendants?

The fact is, when a system has been developped over 200 years, it generally works pretty well. Reformists like to change and critisize but each time you scratch below the surface, you realize there is a reason for apparent nonsense.

Just my two cents.

Andrew Oh-Willeke said...

Real estate litigation seems to manage without a presumption, as do copyright cases, and I'm not at all convinced that the presumption is very helpful in trademark cases where cease and desist letters are frequently frivilous in any case.

Also, estoppel doesn't work that way. Mac loses, and others can hold the loss against it. Mac wins and those not party to the suit are not bound by it.