1 Software Patents: A time for change?

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3 Patent notice problems A good system of property rights provides “notice” information to strangers about ownership and scope of rights Notice problem, not missing prior art deserves the most attention by patent reformers Notice problems present for all technologies Growing worse ( ) High for software and ICT generally Lower for traditional chemicals (incl. small molecule drugs) Notice problems much smaller in more successful property regimes (copyright?)

4 Taxonomy Fuzzy boundaries Public access to boundary info Property rights untethered to possession Search cost

5 Fuzzy Boundaries Expensive opinion letters Problematic claim construction process High and rising reversal rate on claim construction Insufficient (no?) penalty for indefinite claim language

6 Public access to boundary info –Continuations common and increasing Lemley & Moore Property rights untethered to possession –Claim scope changes over time – TKT, E- Data, In re Hogan

7 Search Cost Flood –3G standard 7600 patents Perverse willfulness doctrine Find the owner –IBM call for transparency Result –65% of firms do not conduct a patent search before initiating product development Cockburn & Henderson survey for IPO

8 Consequences of Notice Failure Insurance market failure Inadvertent infringement

9 Everything’s Worse with Software Abstract inventions Abstract claim language General purpose technology

10 Abstract Inventions Often less precise language –Freeny (e-Data) patent asserted against e- commerce sites Material object (cassette tape, hard drive) Point-of-sale location (store, home) Meaning changes over time –Morse claim 8 –Wang videotex frame processing Hey Mom, I patented the internet! Hidden equivalence –Church-Turing thesis

11 Abstract Claims Functional language tends to be less precise –Fed Cir shudders when functional language is used in biotech and worries about notice problem Hard to search –Both examiners and potential infringers

12 General Purpose Technology Meaning of language changes with industry or technological context Lawsuits from the Antipodes

13 Good Software Patents Vigorous enablement requirement –Limit overly broad scope Enhanced claim definiteness requirement Constrained DOE Also helpful –Independent invention defense –Remedy reform –Stronger 103