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Saturday, November 13, 2004

Patenting system needs discipline

The Economist magazine writes that there is a crying need for discipline in the world patenting system. America alone approves about 170,000 patents each year, half of which are granted to foreign applicants. Excerpts:

There is an urgent need for patent offices to return to first principles. A patent is a government-granted temporary monopoly (patents in most countries are given about 20 years' protection) intended to reward innovators in exchange for a disclosure by the patent holder of how his invention works, thereby encouraging others to further innovation. The qualifying tests for patents are straightforward—that an idea be useful, novel and not obvious. Unfortunately most patent offices, swamped by applications that can run to thousands of pages and confronted by companies wielding teams of lawyers, are no longer applying these tests strictly or reliably. For example, in America, many experts believe that dubious patents abound, such as the notorious one for a “sealed crustless sandwich”. Of the few patents that are re-examined by the Patent and Trademark Office itself, often after complaints from others, most are invalidated or their claims clipped down. The number of duplicate claims among patents is far too high. What happens in America matters globally, since it is the world's leading patent office, approving about 170,000 patents each year, half of which are granted to foreign applicants.

Europe's patent system is also in a mess in another regard: the quilt of national patent offices and languages means that the cost of obtaining a patent for the entire European Union is too high, a burden in particular on smaller firms and individual inventors. The European Patent Officemay award a patent, but the patent holder must then file certified translations at national patent offices to receive protection. Negotiations to simplify this have gone on for over a decade without success.

As a start, patent applications should be made public. In most countries they are, but in America this is the case only under certain circumstances, and after 18 months. More openness would encourage rivals to offer the overworked patent office evidence with which to judge whether an application is truly novel and non-obvious. Patent offices also need to collect and publish data about what happens once patents are granted—the rate at which they are challenged and how many are struck down. This would help to measure the quality of the patent system itself, and offer some way of evaluating whether it is working to promote innovation, or to impede it
But most of all, patent offices need to find ways of applying standards more strictly. This would make patents more difficult to obtain. But that is only right. Patents are, after all, government-enforced monopolies and so, as Jefferson had it, there should be some “embarrassment” (and hesitation) in granting them.
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