I have given a lot of thought to patent reform, and most of the angst about patents derives from a simple fact: Some patents generate industries and others just make minor tweaks, but all of them are treated equally under the law. Not all inventions are created equal, and jamming them all into a binary patent system (i.e. “valid” or “invalid”) means that the incentives we give to invent a cold fusion reactor are unfairly given to people making nearly negligible, incremental improvements to existing technology.
The precise shape of the curve is unknown (I think the red line may be more accurate).
The terms “broad” and “narrow” have special meaning in patent law, so to avoid confusion I’ve come to identify patents as “broadband” or “narrowband”. Basically, some patents are “broadband” patents, covering a technology that is entirely new. For example, a broadband patent that spawned an entire industry started as simply sending more current through a wire than the wire can handle, causing the wire to release light. Other examples are triangulation of a signal (eventually LORAN and then GPS), use of radio towers to handle the hand-off of a signal from one tower to another (eventually cell phones), or regenerative braking. Each of those inventions gave rise to a set of important, but less broadband inventions, such as using different kinds of wire to make light, varying the current, enclosing the wire, filling the enclosure with different gases, coloring the enclosure, etc.
Eventually, inventions start to refine ever-smaller areas of the field. While we might start out with the amazing idea of handing off radio calls between fixed towers, and integrate other awesome and important ideas such as frequency hopping, we eventually end up with the narrowest of narrowband patents, ones that cover things like using a smart phone to buy something within an app, or having a list displayed on a phone “bounce” when a user scrolls to the bottom of the list (and mixing apples and oranges, we end up with design patents like protection for design with a black shiny screen with a beveled edge). Nobody would argue that the “bouncing list” invention was anywhere near as important as the invention of the use of multiple towers to communicate with a moving device, or that in-app purchases are on the same level as GPS triangulation, but the patent system treats all utility patents equally. The patent term, rights and remedies afforded the tiniest incremental improvement patent are identical to those afforded the patent that spawned the industry.
Intellectual property law is one of the few (perhaps only) areas where the law is nearly entirely binary. The process starts the minute the invention leaves the inventor’s hands and lands in the patent office. From there, four simple questions determine patentability: (i) Is the invention patent-eligible subject matter? (ii) Is the invention useful? (iii) Is the invention novel? (iv) Is the invention not obvious (the clumsy "not obvious" phraseology is commonly used in patent practice)? An invention that is barely novel, one that is only barely not obvious, one that is barely useful and squeaks past the subject matter eligibility test, is afforded the same protection as the greatest of all inventions.
I believe the equal treatment of narrowband inventions (combined with horrible enforcement choices, such as going after end users) is the main reason many people view non-practicing entities as “patent trolls” and why there is a broad belief in some groups that something is broken with the patent system.(1) If I invented cold fusion, nobody would begrudge me a 20 year patent. I could sue every infringer and all but the most hardened enemies of patents would feel that this is the way the patent system is supposed to work. Indeed, I could assign the patent to a non-practicing entity so that I could spend my time on my next invention instead of litigating my previous invention, and while people might think I’m stupid for sharing the profits from my invention, they wouldn’t think it meant that the system was broken.
The patent system works as intended with regard to broadband inventions – but breaks down as the inventions it protects become narrower. The fundamental human rejection of unfair enrichment at the expense of others bumps up against the binary nature of the patent system when the amount of protection given to an invention is unhinged from the importance of the invention.
We can differentiate a broadband patent from a narrowband patent by asking whether the patented claims would have inevitably been invented during the patent term. Obviously, the invention itself cannot be used as the basis for identifying the inevitable invention date, as that would frustrate the intent of the rule. Rather, progress in related (or unrelated) fields would be used as the benchmark.
For example, the field of smart phones and apps was moving so quickly that whether the Lodsys patent was legitimately issued or not, it is being enforced at a time when nearly every app developer would have independently invented the features protected in the patent claims. Put another way, the more an invention carves out an entirely new field, or an entirely new area within an existing field, the longer it would have been before somebody else would have inevitably invented the same thing.
Most people would agree that the patent system should encourage the development of important inventions that carve out new fields. Where we start to see radically divergent opinions is when we talk about inventions that shaved a few years, or sometimes a few months, off of the development of an incremental improvement in a field.
In short, some inventions are so fundamental that they build on little more than the creativity of the inventor. Those inventions spawn industries. Other inventions are so trivial that they do little more than provide superficial polish to existing products. Rather than pretend that all inventions are equal, a far better system would hinge on an “Inevitable Invention Rule”. Basically, the patent system would recognize that some inventions are more important than others, and would treat them that way. In a theoretical world, a patent would simply expire on the date that its claims would have inevitably been invented by a third party even had the original inventor never existed. In the real world, though, the actual inevitable invention date is far from clear-cut. There is also the need to encourage the development of incremental innovations through the grant of some kind of patent term (imagine the case of numerous drug companies racing to develop the same drug).
While the implementation and details are of no small import, legislators and courts are well equipped to treat different things differently. One approach may be to put the onus on the patentee to file a document with the patent office identifying the inevitable invention date within two years of the passing of the inevitable invention date. The patent would automatically expire some period (four years?) after the declared inevitable invention date. There would need to be some kind of expedited system where a party could challenge the patent administratively or in court and seek a declaration as to the inevitable invention date. To encourage the inventor to admit the inevitable invention date and save everybody the trouble and cost of proving it, a penalty should apply if the inventor refuses to admit the passage of the inevitable invention date. Perhaps an administrative or court declaration of inevitable invention date that is significantly earlier than the one the inventor declared (if the inventor declared one at all) should have the effect of immediately terminating all rights in the patent as of the court- or administrative-identified date, possibly including the right to damages for past infringement.
Now imagine how the Lodsys patent enforcement effort happens if the inevitable invention date system were in place. It is pretty much a no-brainer that in-app purchases would have inevitably been invented by around 2009. So Lodsys would likely have declared that date and collected a small amount of royalties for four more years, but been without even the possibility of an injunction (I know, Ebay, but still). If Lodsys got greedy and refused to declare the inevitable invention date, the defense would have been that it failed to declare the inevitable invention date, and when the defense prevailed, Lodsys would have received nothing.
The beauty of the inevitable invention date rule is that it tracks our common sense understanding about what the patent system should be doing. It leaves inventors of incremental narrowband inventions with the ability to get paid for the invention but without the leverage to earn more than the invention really is worth. At the same time, it leaves inventors of broadband inventions with the full patent term they deserve (this works particularly well in the biotech field, since the first drug in a class of drugs would almost always have no inevitable invention date, while the development of subsequent drugs in that class would have an inevitable invention date a reasonable time in the future).
1. This question has gathered increasing importance as courts and legislators struggle to deal with the consequences of a system that misses real problem: Some inventions are simply inevitable. Because the statutory tools do not exist to deal with the problem on this level, however, subject matter eligibility has become a (poor) proxy. Many software innovations fall into the inevitable invention category, but because of the failure to appreciate the true underlying problem, there has been a push to make software ineligible for patent protection.