Intellectual Property, iPhone, Patents, Richard Posner, Technology

A Closer Look at the ‘Chaos’ of the American Patent System

On the day the iPhone 5 became available to the public, I wrote a post asking if the new smartphone might be a sign of the IP apocalypse. I’m not the only one, apparently.

Finally, the rumblings of discontent within the tech and legal industries haved boiled over into the mainstream. The New York Times wrote an extensive front-page story yesterday, chronicling the intellectual property arms race gripping the industry.

A lot of the subjects in the piece may be familiar to Above the Law’s readers. We’ve covered Apple’s schizophrenic attitude towards patents and the America Invents Act (and how it could affect one’s ability to patent bedroom gymnastics).

But let’s take a closer look and put it all in context…

Unsurprisingly, Apple is the combatant at the center of The Patent, Used as a Sword. The most profitable company in the world is not only in the middle of several high-profile patent battles, but over the past decade Apple has hugely increased its number of annual patent applications. According to the Times, Apple has ownership of “pinching a screen to zoom in, of using magnets to affix a cover to a tablet computer, and of the glass staircases in Apple stores.”

In case you missed that, Apple patented GLASS STAIRS IN THEIR RETAIL LOCATIONS. WhatisthisIdonteven

And in order to secure a crucial patent at issue in Apple v. Samsung (the so-called “Siri-patent”), Apple applied for it ten times over five years before it was approved.

There’s clearly an institutional bent towards aggressive patenting at the company (and throughout the tech sector). The article goes on to describe an Apple staff meeting that sounds like a Portlandia sketch:

Apple’s engineers were asked to participate in monthly “invention disclosure sessions.” One day, a group of software engineers met with three patent lawyers, according to a former Apple patent lawyer who was at the meeting.

The first engineer discussed a piece of software that studied users’ preferences as they browsed the Web.

“That’s a patent,” a lawyer said, scribbling notes.

Another engineer described a slight modification to a popular application.

“That’s a patent,” the lawyer said.

Another engineer mentioned that his team had streamlined some software.

“That’s another one,” the lawyer said.

“Even if we knew it wouldn’t get approved, we would file the application anyway,” the former Apple lawyer said in an interview. “If nothing else, it prevents another company from trying to patent the idea.”

At the same time, executives like to complain about the paradigm, and they come awfully close to not acknowledging their own role in the problem. Take this comment from Apple CEO Tim Cook, for example:

“There’s some of this that is maddening,” he said. “It’s a waste; it’s a time suck.”

It’s not just Apple’s hyperaggressiveness, though. There’s the whole legitimate “patent troll” problem, which is also in the news this week. A bunch of the major tech companies sue each other with such frequency that the Times created an infographic to help readers understand it all.

Some lawyerly VIPs are coming out of the woodwork to call for more reform, including Judge Richard Posner, who called the situation “chaos.” He told the Times, “The standards for granting patents are too loose.” And Nancy Heinen, Apple’s former GC, lamented big bucks — like, in the billions — “being flushed down the toilet.”

The uptick in lawyers involved in the innovation process isn’t only a possibly depressing aesthetic shift from the DIY garage-fiddling ethos of the ’80s. It also hurts a new generation of savvy solo-inventors, who can be more easily intimidated — and litigated out of the game — by more established companies.

As a side note, the Times also mentions the complicating factor of pharmaceutical companies that heavily, and openly, lobby for strict-as-possible penalties for patent violations. Tech companies, conversely, generally want to limit the financial damages juries can award, so s**t like this doesn’t continue happening.

Not that people aren’t actively trying to solve the problems. We mentioned the new Ask Patents site last month, which aims to crowd-source the application process. Who knows, depending on the outcome of next month’s presidential election, maybe we’ll see a Mitt IP Avenger Act or the Obama Patent Bonanza Bill in the not-so-distant future.

The Patent, Used as a Sword [New York Times]

Earlier: Thanks to Cool New Crowd-Sourcing Website, Now You Can Help Prevent Bogus Patents
Is Apple’s iPhone 5 A Sign of the IP Apocalypse?

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