Patent Reform: Do Small Entities Support the Status Quo?

It's not often that I disagree with patent blogger extraordinaire Dennis Crouch...but today I do.  Earlier, he posted on "Patent Reform: Congress Choosing Sides" and made the statement that "Start-ups and individual inventors [have] the goal of keeping the status quo."

In a world where the public views our patent system as a wreck...maintaining the status quo isn't an option.  We have problems that need to be fixed, that is a fact.  HOWEVER, those spending the time proposing the fixes (large entities) aren't concerned with fixing ALL of the problems, but instead seek to fix the problems that impact them the most. 

You can't really blame them...it is human nature to be selfish.  Did I just call them "selfish?"  Yes I did.  Anyone who proposes reforming the patent system by backing reforms that will reduce their liability or chance of being sued are not acting in the public good...they are promoting their self interests under a banner of "reform."  That is wrong and opposing such changes is justified.

Back to Dennis' comment about small entities being pro status quo.  I disagree...I think that small entities in general support reformations to the patent system, in fact, small entities support a number of the current proposals.  HOWEVER, they will not support those "reforms" proposed by large entities for no purpose other than to avoid liability/damages. 

Let's look at the major topics on the table (I'll use most of Shaver's list (which I think came from his notes on the Buchanan CLE)) and I'll give you my off the cuff projections:

1.  Adoption of a first to file system.  Small entities aren't often all that organized...need time to get their ideas in order, hire a patent attorney, etc.  The race to the Patent Office is not small entity friendly..most of them don't know that a race is going on. 

2.  Post grant administrative review of new patents.  Small entities are arguably more concerned with quality patents than large entities.  Large entities tend to be the ones who file patent applications on everything but the kitchen sink (just in case a competitor ever sues them and they need countersuit material).  I don't foresee small entities opposing post grant review. 

3.  Publication of all application within 18 months. More harmonization.  Burdens anyone who files patent applications but lets them go abandoned before issue.  Does it hurt small entities more than large?  Tough call which way small entities will fall...I personally think that publication of all is fine.   

4.  Limits on continuation practice.  This type of practice is not typically performed by small entities.

5.  Modification or elimination of penalty for willful infringement.  Small entities do oppose this.  Without the threat of willful infringement, the worst damages that a corporation could have is paying a reasonable royalty + perhaps attorneys' fees.  That doesn't give a corporation much of an incentive to settle/license (pay a reasonable royalty).  Eliminate willful infringement and you can count on less settlements and more patent trials.

6.  Modification or elimination of standard for inequitable conduct of attorney.  I can't see how small entities would oppose this any more than large entities.

7.  Elimination of the best mode requirement.  I can't see how small entities would oppose this any more than large entities.

8.  Reinvigoration of the non-obviousness standard.  I can't see how small entities would oppose this any more than large entities.

9.  Modification of rules for injunctions.  Small entities will oppose this.  Like willfulness above, without the threat of an injunction, large entities would NEVER settle a case...instead opting for a "we'll see you in court" approach to small entities that complain of patent infringement.

Thus, in summary, I hardly think that opposing SOME of the patent reform proposals (injunctive relief, willfulness and first-to-file) makes small entities in support of the "status quo."  Then again...that is just my opinion. 

Comments

[Matt Buchanan]

Steve - other than the prepared statements of the witnesses who testified at the recent oversight hearings, we don't have much to help us determine the position of small entities on the various reform proposals. The statements of Nathan Myhrvold, William Parker, and Dean Kamen, all of which are available for download at Promote the Progress, are particularly relevant to the small entity issue.

The prepared statements include some interesting information that may or may not rise to a collective "for or against" by small entities. For example, Myhrvold points out that continuation practice is very important to small entities and that any limitations on this practice would hurt these organizations (he, like me, openly wonders about the need for reform in this area considering that patent term is now measured from the earliest priority date). Also, Parker expresses concern over the first-to-file provision but does not express strong opposition to this proposed change. He even suggests that a first-to-file system could be optimized with small entities in mind.

[nipper]

Thanks for the additional insight Matt!!!