Wael Zohni

Examining the Role of Patent Quality in Large-Scale "Patent War" Litigation

A Historical Comparison and Proposal for a Restorative U.S. Patent System

1. Edition 2018, ISBN print: 978-3-8487-5107-5, ISBN online: 978-3-8452-9309-7, https://doi.org/10.5771/9783845293097

Series: Munich Intellectual Property Law Center - MIPLC Studies, vol. 31

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Zo hn i • E xa m in in g th e Ro le o f P at en t Q ua lit y in L ar ge -S ca le “ Pa te nt W ar ” Li ti ga ti on MIPLC Studies Examining the Role of Patent Quality in Large-Scale “Patent War” Litigation Wael Zohni A Historical Comparison and Proposal for a Restorative U.S. Patent System 31 Nomos31 www.miplc.de ISBN 978-3-8487-5107-5 MIPLC Studies Edited by Prof. Dr. Christoph Ann, LL.M. (Duke Univ.) TUM School of Management Prof. Robert Brauneis The George Washington University Law School Prof. Dr. Josef Drexl, LL.M. (Berkeley) Max Planck Institute for Innovation and Competition Prof. Dr. Michael Kort University of Augsburg Prof. Dr. Thomas M.J. Möllers University of Augsburg Prof. Dr. Dres. h.c. Joseph Straus Max Planck Institute for Innovation and Competition Volume 31 Wael Zohni Examining the Role of Patent Quality in Large-Scale “Patent War” Litigation A Historical Comparison and Proposal for a Restorative U.S. Patent System Nomos The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the Internet at http://dnb.d-nb.de a.t.: Munich, Master Thesis Munich Intellectual Property Law Center, 2017 ISBN 978-3-8487-5107-5 (Print) 978-3-8452-9309-7 (ePDF) British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. ISBN 978-3-8487-5107-5 (Print) 978-3-8452-9309-7 (ePDF) Library of Congress Cataloging-in-Publication Data Zohni, Wael Examining the Role of Patent Quality in Large-Scale “Patent War” Litigation A Historical Comparison and Proposal for a Restorative U.S. Patent System Wael Zohni 78 p. Includes bibliographic references. ISBN 978-3-8487-5107-5 (Print) 978-3-8452-9309-7 (ePDF) 1st Edition 2018 © Nomos Verlagsgesellschaft, Baden-Baden, Germany 2018. Printed and bound in Germany. This work is subject to copyright. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers. Under § 54 of the German Copyright Law where copies are made for other than private use a fee is payable to “Verwertungs gesellschaft Wort”, Munich. No responsibility for loss caused to any individual or organization acting on or refraining from action as a result of the material in this publication can be accepted by Nomos or the author/editor(s). Table of Contents Charts and Figures 7 Abstract 9 Acronyms and Abbreviations 11 IntroductionI. 13 The Patent WarsA. 16 Purpose of ComparisonB. 17 Origins of the U.S. Patent SystemII. 19 OverviewA. 19 Pre-Constitutional SettingB. 20 House Resolution 10 (H.R. 10)C. 21 Patent Acts of 1790 and 1793D. 23 The “Registration Years:” 1793 through 1836E. 24 SummaryF. 25 U.S. Patent Quality TodayIII. 26 IntroductionA. 26 Congressional Review of USPTO PerformanceB. 26 2016 GAO Report FindingsC. 27 Analysis and SummaryD. 28 Patent War Today: Apple vs. SamsungIV. 30 BackgroundA. 30 iPhone vs. Galaxy1. 30 Patent Litigation2. 31 5 RulingsB. 33 Patent Battles, Product War1. 34 Section 289 Damages2. 38 AnalysisC. 39 Colossal Legal War1. 40 Invention vs. “Cool” Product2. 41 Questionable Patents3. 41 Patent War Yesterday: Wright v Herring-CurtissV. 43 BackgroundA. 43 AnalysisB. 44 Synthesis and AnalysisVI. 49 Drift from Historical BasisA. 49 Long-standing Patent Quality ConcernsB. 51 Unwritten Rule on UtilityC. 55 Comparing Apple and Wright CasesD. 58 Net ChallengesE. 60 ProposalsVII. 63 The “Utility Parameter”A. 63 “High-Tech” Patent RegistrationB. 64 Description1. 65 Compatibility with Existing Systems2. 66 Agency Examination Option3. 67 Benefits4. 67 Risks and Unknowns5. 68 Summary6. 69 ConclusionVIII. 70 Revisiting Apple and WrightA. 70 Looking AheadB. 73 List of Works Cited 75 Table of Contents 6 Charts and Figures Figure 1: “slider toggle” on the bottom left and the “lever toggle” bottom right 36 Figure 2: Illustration of Wright concept of “wing warping” 47 Figure 3: Ailerons (moveable) with fixed straight wing of modern aircraft 47 Figure 4: U.S. Patent Lawsuits Filed in District Courts 52 7 Abstract The dramatic world-wide impact of the ‘iPhone’ smartphone has made Apple Corporation a topic of modern-day legend. Samsung’s alleged “theft” of Apple’s iPhone concept in March of 2010 led to the start of what has come to be known as the “Smartphone Wars,” a cascade of litiga‐ tion that has become just as legendary. Over one-hundred years prior, an‐ other well-known “patent war” concerning the establishment of modern aviation took place between the Wright Brothers and Glenn Curtiss. In this case, the Wrights viewed Glenn Curtiss as having stolen critical aspects of their claimed aircraft design enabling controlled flight. The Wrights pur‐ sued extensive litigation against Curtiss and others accordingly. Although widely separated by time and circumstance, these cases support similar negatively held notions of the patent system; namely, that it diverts valu‐ able resources away from innovation and towards legal and business ma‐ neuvering. Anti-patent commentators refer to patent wars as evidence of burdensome transactional costs to society. On the other hand, proponents point out that such examples are an exception and that the patent system has facilitated benefits that far outweigh such costs. Reality appears to rest somewhere between these opposing views. Although the U.S. Patent System has been essential to spurring innova‐ tion it has wavered in its efficiency and effectiveness at doing so. This pa‐ per first makes historical comparison and analysis of the Apple and Wright landmark patent war cases to illustrate that, irrespective of timing, benefits of a patent system fundamentally hinge on how well it defines and main‐ tains “patent quality.” Much of the challenge in maintaining such quality relates to the subjective and often uncertain nature of invention criteria such as “non-obviousness.” As shown by recent trends, decreased patent quality leads to greater uncertainty about patent validity, which in turn in‐ vites more litigation. This work then proposes that to improve constancy on patent quality the U.S. patent office should consider returning to original strategies envi‐ sioned by the Founders of the United States. This approach is outlined in Congressional House Resolution (H.R.) 10 passed in 1789. H.R. 10 de‐ scribes a patent-registration system that emphasizes the utility of invention and reliance on public review to govern much of the patent granting pro‐ 9 cess. After more than forty years, the U.S. patent office turned to an exam‐ ination-based system, not because of flawed virtues with registration, but lack of supporting technical and logistical capabilities required for its proper execution. Modern technology can now be applied to achieve the original vision sketched out in H.R.10 to restore patent quality control sys‐ tems. A “high-tech” patent registration system can obtain the self-govern‐ ing aspects intended by the Founders by integrating a utility parameter and information technology into the application process. Further discussion is provided to illustrate how a restorative U.S. patent registration system can utilize existing infrastructure in an undisruptive yet dramatically improved manner; helping avert future patent wars and other costly litigation. Finally, this paper revisits the Apple and Wright cases from a theoretical standpoint that considers proposed reforms. Abstract 10 Acronyms and Abbreviations 3G 3rd Generation of mobile phone standards AIA America Invents Act of 2012 API Application Program Interface Art. Article CEO Chief Executive Officer CHFP Certified Human Factors Engineering Professional EP European Patent EPO European Patent Office Fed. Cir. Federal Circuit GAO Government Accounting Office GPU Graphical User Interface H.R. House Resolution IP Intellectual Property ITC International Trade Commission JMOL Judgment as a Matter of Law LTD Limited MP3 MPEG-2 Audio Layer III R&D Research and Development S. Ct. Supreme Court TUX Total User Experience USC United States Code USPTO United States Patent and Trademark Office 11 Introduction For many Americans the term “patent” is linked to a sense of tradition and cultural icons such as Thomas Edison, inventor of the operational incan‐ descent light bulb. The very image of the light bulb itself has become a symbol for invention or a good idea.1 Another commonly held notion is that a patent guarantees an individual protection from having his or her idea stolen by unscrupulous competitors. Such protection is to help ensure that the time and expense applied towards developing new products is not lost by those willing to invest such substantial efforts.2 In fact, these views do represent the mission of the U.S. patent system. However, as one digs further into patent system practices and its history, it becomes apparent that these beliefs only reflect an often elusive ideal. How close the U.S. patent system actually comes to representing this ideal has varied over the years.3 Before considering the functionality of the patent system, there is the question of its necessity in the first place. Whether a patent system truly fosters benefits to individuals and society continues to be a topic of debate from both a historical and forward-looking perspective. Opponents of the patent system have long argued that granting inventors exclusive rights runs counter to anti-competitive foundations of a free-market economy by enabling profit interest to overtake the drive for legitimate innovation.4 They also express that the task of identifying deserving ideas is itself problematic because all inventions leverage the work of predecessors to I. 1 Hunter Oatman-Stanford, Let There Be Light Bulbs: How Incandescents Became the Icons of Innovation, Collector’s Weekly (July 2015) https://www.collectorswee kly.com/articles/let-there-be-light-bulbs/ (accessed Sep 1, 2017) 2 Drew Hendricks, 7 Simple Ways You Can Protect Your Idea From Theft, Forbes (Nov. 2013), https://www.forbes.com/sites/drewhendricks/2013/11/18/7-simple-wa ys-you-can-protect-your-idea-from-theft/#7af8b02b1f86 (accessed Sep 2, 2017) 3 Richard A. Posner, Why There Are Too Many Patents in America, The Atlantic (Ju‐ ly 2012), https://www.theatlantic.com/business/archive/2012/07/why-there-are-toomany-patents-in-america/259725/ (accessed Aug 30, 2017) 4 An Economic Review of thePatent System: Hearing Before the Subcomm. on Patents, Trademarks, and Copyrights, 85 Cong.33 39 (1958) (Report of Fritz Machlup) 13 some extent. Chemist and economist Michael Polanyi describes that any patent system “is essentially deficient, because it aims at a purpose which cannot be rationally achieved. It tries to parcel up a stream of creative thought into a series of distinct claims, each of which is to constitute the basis of a separately owned monopoly.”5 On the other hand, proponents of the patent system describe a moral and common-sense need to sufficiently compensate those who invest the substantial time and resources required for accomplishing important inno‐ vation. Without an incentive very few would be willing to risk such re‐ sources. In this view, a patent provides compelling motivation in the form of securing fixed-term exclusive use rights to a new technology and corre‐ sponding market advantage to the inventor. Modern economic theory has generally accepted the “monopoly-profit-incentive” scheme to work.6 Austrian theorist Friedrich von Wieser summarizes this common view with: “the patent right is granted to the inventor, in order to bring his tech‐ nical leadership, his talents, and genius into the service of society.”7 An‐ other well-known economist, A.T. Hadley, once stated that “a patent sys‐ tem, if properly guarded, seems to be thoroughly justified by its results. In the absence of such protection, few new inventions would be developed.”8 There are legitimate concerns brought up by both sides of this debate. Overall it appears that the patent systems implemented in the US, Britain and elsewhere have been instrumental in driving individuals and com‐ panies to innovate new and useful technology and products. At the same time, even advocates of these systems acknowledge that maintaining an optimal patent system has been a challenging pursuit. Much of this chal‐ lenge is due to the subjective nature of defining invention alluded to by Polanyi and others. This uncertainty is said to lead to excessive conflict in the market that exacts a high toll from society by diverting resources from innovation to complex legal engagements. Some of the worst examples of such penalty 5 Id. at 29 6 Id. at 23 7 Id. at 33 8 Id. at 37 I. Introduction 14 are “patent wars,” prolonged and far-reaching litigation that usually sur‐ rounds a monumental technology market opportunity.9 The position of this paper is that moral considerations, “money-profitincentive” and aims for societal benefit provide sound basis for establish‐ ment of the U.S. patent system. The dramatic rate of innovation witnessed in the 20th century and beyond suggests that the patent system has provid‐ ed benefit; but whether it can continue to do so depends on, as A.T. Hadley puts it, whether it remains “properly guarded.” This work argues that a central element to guarding a patent system is establishment of ef‐ fective and reliable guidelines for determining what constitutes a ”quality” patent. As will be discussed, insufficiencies in both defining and enforcing a consistent standard for patent quality have been largely responsible for the heavy transactional costs described by opponents of the patent system.10 The value and perception of a U.S. patent have been diluted from that of a given right to that of “a chance of an exclusive right” as some modern economists have referred to it.11 As will also be argued, this issue relates to the element of an invention’s utility when considering perspectives that were present during early legislation of the U.S. patent system. This paper will begin by examining the origins of the U.S. patent sys‐ tem before comparing two historic patent wars; that of Apple v Samsung (2012) concerning today’s smartphone and Wright v Herring-Curtiss (1908) concerning invention of the modern airplane in 1903. Finally, ana‐ lysis and concepts for further investigation will be proposed on the topic of enabling the U.S. patent system to effectively meet future challenges. Part of this enablement uses technology itself to achieve original con‐ structs intended by Founders of the nation almost two-hundred and fifty years ago. 9 Kurt Eichenwald, The Great Smartphone War, Vanity Fair (May 2014), https://ww w.vanityfair.com/news/business/2014/06/apple-samsung-smartphone-patent-war (accessed Aug 29, 2017) 10 Intellectual Property: Patent Office Should Define Quality, Reassess Incentives, and Improve Clarity, Government Accountability Office, GAO-16-490, Report to Chairman, Committee on Judiciary, House of Representatives 1 (June 2016) 11 Described by Professor Joseph Drexl in lecture, IP and Competition Law (semi‐ nar), Munich Intellectual Property Law Center (June 2017) I. Introduction 15 The Patent Wars The 20th century has ushered in a period of momentous progress in infor‐ mation technology including dramatic advances in mobile communication and computing devices. The worldwide smartphone sensation was started by Apple Corporation in 2007 with the introduction of their “iPhone 3.” By combining smooth touchscreen functionality with stylish, compact de‐ sign, Apple introduced a major disruption to the mobile phone market. Apple’s rival, Samsung Corporation, acting somewhat as Google’s proxy, responded by designing and manufacturing their line of “Galaxy” smart‐ phones which took liberties with protected iPhone product features. Apple responded with a major litigation campaign with their famous founder, Steve Jobs, declaring “thermonuclear war” on Samsung. Jobs considered Samsung to have stolen the iPhone product concept and became dedicated to pursuing patent infringement lawsuits and injunctions accordingly.12 Another famed patent war occurring over one-hundred years prior, Wright vs. Curtiss, appears to have some interesting parallels to the mod‐ ern Apple vs. Samsung case. In Wright, the world-changing invention was that of the airplane. In place of Steve Jobs there was Orville and Wilbur Wright, recognized pioneers of fixed-wing aircraft design. Corresponding to Samsung was Glenn Curtiss, a rival engineer who launched his aircraft business using elements contained in patents filed by the Wrights. Like Jobs’ view of Samsung, Wilbur Wright considered Curtiss’ actions open theft and dedicated himself to stopping his opponent at any cost. The Wright Company launched an extensive litigation campaign to prevent Curtiss as well as others from using what they viewed as their concept for controlled flight.13 Despite the dramatic similarities in these two patent wars, there are of course also substantial differences. Apple takes place in the modern infor‐ mation age against a sophisticated backdrop of intensified patent activity and fierce global corporate competition. Wright occurred in a compara‐ A. 12 Shara Tibken, Apple v. Samsung patent trial recap: How it all turned out, CNET (2014), https://www.cnet.com/news/apple-v-samsung-patent-trial-recap-how-it-all -turned-out-faq/ (accessed Aug 30, 2017) 13 Matt Levy, Yes, The Aviation Industry Was Nearly Derailed by the Wright Broth‐ ers’ Patent, Patent Progress (Jan 2015) https://www.patentprogress.org/2015/01/1 2/yes-aviation-industry-nearly-derailed-wright-brothers-patent/ (accessed Aug 25, 2017) I. Introduction 16 tively simple setting with a patent system that emphasized utility and eco‐ nomic advancement. Although both cases are considered patent wars the former could indeed be viewed as a “nuclear” war in comparison to the relatively conventional conflict of the latter. Modern patent wars have be‐ come dramatically larger in terms of number of patents and international implications. Establishment of voluminous patent portfolios as a form of deterrence and protection has today become a matter of policy with large firms such as Apple and Samsung. In both Wright and Apple however, ob‐ servers and historians have argued that the time, resources and expense consumed by such large-scale litigation ultimately do not serve founding principles and objectives of the U.S. Patent System.14 Purpose of Comparison Comparing the Apple and Wright patent wars helps to separate long-stand‐ ing issues from temporary circumstantial situations that have faced the U.S Patent System. In the early 1900s for instance, patent office examina‐ tion priorities emphasized proven demonstration of any flying machine-re‐ lated claims; a stringent requirement that led to the rejection of initial patent filing attempts by the Wright brothers.15 Modern day patent exami‐ nation has reached the opposite extreme where relaxed criteria are allow‐ ing excessive patent grants.16 There are always challenges with properly “tuning” patent examination criteria to particular times and circumstances. Comparison of the Apple and Wright cases provides illustrative examples of this tuning process. Furthermore, plotting these two data points relative to the baseline defined by origins of the U.S. patent system can improve understanding of its fun‐ damental issues. This paper intends to explore these historical representa‐ B. 14 Joe Nocera, Greed and the Wright Brothers, NY Times (Aug 2014), https://www.n ytimes.com/2014/04/19/opinion/nocera-greed-and-the-wright-brothers.html?_r=2 (accessed Aug 25, 2017) 15 Rodney K. Worrel, The Wrights Brothers’ Pioneer Patent, 65 American Bar Asso‐ ciation Journal 1513, 1514 (1979) 16 Lisa Rein, Patent Lawsuits Swell and Watchdog Says the Government is to Blame, Washington Post, (July 2016), https://www.washingtonpost.com/news/powerpost/ wp/2016/07/20/patent-office-tktk/?utm_term=.be6d9769eecb (accessed Aug 25, 2017) B. Purpose of Comparison 17 tions before providing observations along with recommended approaches for future investigation. I. Introduction 18 Origins of the U.S. Patent System Overview Article I, Section 8, Clause 8, of the United States Constitution grants Congress the power “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”17 Because this clause de‐ scribes Congress’ authority to pass legislation on copyrights and patents, it has become known as the “patent and copyright clause.”18 Although many details of early U.S. patent system history remain murky, it is apparent that the majority of Framers of the Constitution recognized a need for estab‐ lishing a national patent system. This awareness was based on apprecia‐ tion of historical patent customs and specifically the example set by the British system as a working model.19 British patent custom at the time rep‐ resented an exception to their Statute of Monopolies of 1623. Whereas the Statute specified a general ban on monopolies, it made a special exemp‐ tion for rewarding inventions.20 Although the Framers relied heavily on English precedent, they also pursued a mechanism that was uniquely American to address the needs of a growing nation. A series of bills and acts from years 1789 through 1836 reflect these early attempts. Examining this first period helps identify orig‐ inal intentions by the Framers and establish a context for considering sub‐ sequent events concerning U.S. patent law.21 II. A. 17 U.S. Const. art. I, § 8, cl. 8. 18 Cornell Law School, https://www.law.cornell.edu/wex/intellectual_property_claus e (accessed Sep 1, 2017) 19 Thomas T. Gordon et al., Patent Fundamentals for Scientists and Engineers, 7 (3d ed. 1995), https://books.google.de (accessed Aug 27, 2017) 20 Edward C. Walterscheid, To Promote the Progress of Useful Arts: American Patent Law and Administration, 1798-1836 11 (1998) 21 Id. 19 Pre-Constitutional Setting As part of examining the origins of the patent clause, it is fitting to consid‐ er the historical setting in which the U.S. Constitution was drafted. Lead‐ ing up to the American Revolutionary War, Britain’s Parliament had pur‐ sued a policy of increased taxation on the American colonies through leg‐ islation such as the Sugar Act, Quartering Act of 1764 and Stamp Act of 1765.22 Colonists thought it was unfair to have important policy decisions so far out of reach of America itself. This chief complaint of “no taxation without representation” became the American Revolutionary War cry.23 Colonial leaders reacted against the British by establishing their own sepa‐ rate Continental Congress. By March 1781, a preliminary constitution entitled the “Articles of Confederation” was ratified by this new Continental Congress. These Arti‐ cles provided a minimal framework for a functioning central government with most authority remaining with individual states. This minimalist ap‐ proach reflected the general suspicion American states held towards cen‐ tralized power based on their experience with the British. 24 The topic of patents was a low priority given all the other challenges of unifying the colonies at the time. It is therefore not surprising that no spec‐ ified measure of promotion of the useful arts was included in this first doc‐ ument. However, it soon became clear that the new administration would need more power to function properly.25 The interval between the Articles of Confederation and ratification of the U.S. Constitution reflects a challenging and foundational phase for the development of the United States. The Founders struggled with balancing needs for sufficient centralized power against lingering concerns with such authority. Still, intellectual property stood out as being important enough to be included in the final document. The British patent system, with its B. 22 William S. Price, Jr., Reasons Behind the Revolutionary War, Tar Heel Junior His‐ torian Association, NC Museum of History (1992) taken from NCMedia, http://w ww.ncpedia.org/history/usrevolution/reasons (accessed Aug 29, 2017) 23 Id. 24 History.com staff, The Continental Congress, (2010) History.com, http://www.hist ory.com/topics/american-revolution/the-continental-congress (accessed Sep 5, 2017) 25 Walterscheid, supra, at 26 II. Origins of the U.S. Patent System 20 inexpensive reward system based on the grant of exclusive rights, had demonstrated this importance.26 A Constitutional Convention took place in Philadelphia, Pennsylvania during the summer of 1797. The goal was to modify the Articles into a more practicable document. Charles Pinckney, a delegate from South Car‐ olina, brought his “South Carolina Plan.” Although details remain unclear, it appears that Pinckney’s Plan contained a proposal to grant Congress au‐ thority “to secure to authors the exclusive rights to their performances and discoveries.” However, some deny his plan included these choice words.27 None of the other state plans suggested language on an intellectual proper‐ ty clause; therefore details on how it was finalized within the U.S. Consti‐ tution remain obscure. The Articles of Confederation were replaced by the finalized U.S. Constitution in May 1789.28 The new federal government went into effect March 4, 1789, with Congress entering its first session through Sep 29, 1789. Some individuals presented patent applications as well as bills to promote the useful arts but were ignored due to other priorities during this phase. A second session ran from Jan 4, 1790 to Aug 12, 1790, at which time Congress took first steps to enact a system for securing exclusive rights to inventors for their discoveries and inventions. This first activity forms the basis of the U.S. patent system.29 House Resolution 10 (H.R. 10) During its first sessions Congress was approached with several requests for exclusive rights by inventors based on the patent clause.30 Amongst some of these early inventors was John Churchman who claimed methods for navigation using a needle compass and John Fitch for applying steam power to ships. Several fundamental questions regarding rights and proce‐ dures for handling patent prosecution and third party disputes naturally came up as a matter of course in these first few months. 31 These questions C. 26 Id. at 27 27 Id. at 35 28 History.com, supra 29 Walterscheid, supra, at 8 30 Id. at 81 31 Id. at 84-85 C. House Resolution 10 (H.R. 10) 21 were difficult to resolve as there was only the patent clause contained in the Constitution to work with at that point. Therefore, Congress appointed a committee tasked with investigating these questions and determining “a bill to promote the progress of science and the useful arts.”32 The commit‐ tee presented this first bill, designated H.R.10 on June 23, 1789. H.R.10 was to become the precursor to the Patent Act of 1793.33 H.R.10 contains eights sections with the first two addressing copyright and the remaining six directed to patents.34 Although it mostly followed the British model it introduced substantial departures such as adding more specific methodologies for implementing patent rights and not allowing patents of import. Section 3 presents patent application procedures that in‐ struct inventors to “direct an advertisement to be inserted, at the costs and charges of the petitioner in some two of the public papers ___ for the term of ___weeks, one at least in each week, giving notice of such application, and...requiring all persons concerned to appear before..at certain day and place..to shew cause why letters patent under the great seal of the United States, should not issue..” 35 This section describes a system wherein the concerned public would review applications in an expedited fashion to de‐ termine objections to any grant. This approach is “clearly intended to cre‐ ate a registration rather than an examination system, and in addition one that is modeled rather closely after the English system. Thus it provides for an American version of a caveat notice.”36 The English caveat notice was a formal request made by a rights holder to the managing patent office to receive alerts of any third-party applica‐ tions in a given subject matter. This signal provided the requestor an op‐ portunity to contest any applications before they issued as patents. Be‐ cause the English system did not include formal examination, the caveat system was the only way to interrogate new applications.37 Section 3 ap‐ pears to pursue similar ends but instead uses mass publications to provide more impartial exposure of the idea to the public as a whole. Section 4 of 32 Id. at 87 33 Id. at 98 34 Id. at 91 35 Id. at 92, 95 36 Id. at 98 37 28 Sean Bottomley, The British System during the Industrial Revolution 1700-1852, Cambridge IP and Information Law 53 (2014) II. Origins of the U.S. Patent System 22 the bill calls for a proper description of the invention as was the English practice.38 Section 5 of H.R.10 provides a summary of procedures for handling challenges arising from section 4. It includes that “upon the notice,..any other person .. shall shew cause to..why letters patent..should not issue to the party petitioning ..shall refer the petition..to the chief justice, and one other justice of the supreme court..” It mostly follows the English model except it moves decision authority from the executive to the judiciary. In this way, it appears that H.R.10 was attempting to shorten the feedback loop that takes place between conflict and development of case law that updates guidelines for future engagements. The remaining sections of the bill deal with formalities such as filing procedures and fees.39 Patent Acts of 1790 and 1793 Following H.R.10 there was a flurry of activity that included several other House Resolutions before settlement on the first formal Patent Act of 1790. By that point, the registration system described by H.R.10 had tem‐ porarily given way to a formalized review process that assessed incoming patent applications. This examination would determine if the invention was “sufficiently useful and important.” It is submitted that this methodol‐ ogy, unprecedented at the time, reveals a fundamental concern over utility that was to be considered alongside novelty as a means for avoiding frivolous or weak patents.40 This first attempt at examination lasted barely three years before having to make way for realities of an overwhelming flow of patent petitions. Amongst several other changes, the Patent Act of 1793 returned to the reg‐ istration system described originally in H.R.10 due, in large part, to unre‐ alistic expectations for completing a proper examination of all incoming applications. As historian Edward C. Walterscheid describes: “an examination system had been briefly tried and found wanting .. because the task of examination was found to be too burdensome..a registration sys‐ tem akin to that being used in Great Britain..appeared to be functioning rather well..and had the distinctly laudatory and desirable advantage of minimizing D. 38 Walterscheid, supra, at 99 39 Id. at 101 40 Id. at 14 D. Patent Acts of 1790 and 1793 23 the role of government and hence of governmental expense in implementing a system of patents.”41 Although the Patent Act of 1793 did away with examination, the language of the legislation continued to emphasize utility and novelty. Section 1 maintained that inventions should represent “new and useful art, machine, manufacture, or composition of matter, or any ..improvement” similar to language that was in H.R.10. Section 2 makes distinctions between “dis‐ covery” and “improvement” patents; the former representing major ideas with broad application and the latter representing significant but compara‐ tively incremental modifications inside the “shadow” of a major inven‐ tion.42 The “Registration Years:” 1793 through 1836 With the Patent Act of 1793 U.S. patent law entered a more than fortyyear “era of registration.” As case law and public perception developed during this period so did criticisms of the patent system. The chief com‐ plaint from the public at large centered upon “fraudulent or worthless patents issued under the Act of 1793.”43 Despite the ideal framework de‐ scribed in the Act, there emerged problems with unscrupulous oppor‐ tunists who took advantage of registration to attempt patents on trivial content. At that time patent letters contained the Seal of the President of the United States and therefore appeared intimidating to the uninitiated subjects of “enforcement” of such patents.44 Complaints “that speculators were using ‘frivolous’ patents to prey on the public would be raised again and again. Thus..in 1830 William Elliot, chief clerk .. reiterated the need for authority ‘for refusing patents … to mere speculators (not inventors) who make a business in levying contributions on the public by licensees under the title of ‘patents’ for neither new nor useful inventions, .. and who fill the country with litigation.”45 As will be later detailed, limited ac‐ cess to relevant publications and information on patents by the general public eventually resulted in rejection of the patent registration system. E. 41 Id. at 15 42 Id. at 480 43 Id. at 18 44 Id. at 323 45 Id. at 325 II. Origins of the U.S. Patent System 24 This backlash led to the Patent Act of 1836, which set the basis of the ex‐ amination-based U.S. patent system held to this day. Summary As a newly forming nation, the United States recognized the importance of intellectual property rights enough to include the special provision known as the “copyright and patent clause” in the Constitution. Although early legislation was based on the successful British patent custom, Amer‐ ican law was more ambitious in codifying patent laws while simultaneous‐ ly limiting the extent of government reach for granting “monopoly rights.” Initial bills such as H.R.10 reflected these intentions by setting firm stan‐ dards for usefulness and calling upon the public to assist in interrogating applications for patent registration. Subsequent efforts at developing patent law have had to struggle with many issues including resources and unscrupulous speculators. Although an examination-based system was introduced in 1836, the framework defining the preceding “era of registration” still holds valuable indications on patent system implementation. F. F. Summary 25 U.S. Patent Quality Today Introduction Fast-forwarding to the early 21st century it is remarkable that many of the issues the Framers dealt with are still being grappled with today. In 1790 there were only two or three individuals performing all patent examination whereas now the U.S. Patent and Trademark Office (USPTO) employs thousands of examiners.46 Yet the patent office is still so overwhelmed with processing applications that turn-times are on the order of years and even then, patent grants are often questionable. A recent exposure on this state of affairs is found in a government assessment report from 2016. Congressional Review of USPTO Performance Dramatic increases in patent litigation have recently prompted U.S. Congress to investigate practices of the USPTO. A Government Account‐ ing Office (GAO) report released June 2016 confirmed long-standing is‐ sues concerning patent quality control; describing that overwhelming vol‐ umes of patent applications have led to prioritization of turn-time over ex‐ amination diligence. This trend has resulted in frequent grant of question‐ able or weak patents, fueling the excess litigation problem seen today: “GAO, which conducted its audit from 2014 to 2016, focused on how poor patents are contributing to the recent rise in litigation. Lawsuits in federal dis‐ trict courts over the illegal use of inventions have exploded in recent years, with 5,000 filed in 2015, up from 2,000 in 2007, the audit said..”. “Just the threat of litigation can deter innovators from coming up with new products, GAO found.” 47 III. A. B. 46 Dennis Crouch, USPTO’s Swelling Examiner Rolls, Patent Lyo (2014), https://pate ntlyo.com/patent/2014/11/usptos-swelling-examiner.html (accessed Sep 5, 2017) 47 Intellectual Property: Patent Office Should Define Quality, Reassess Incentives, and Improve Clarity, Government Accountability Office (GAO), Report to Chair‐ man, Committee on Judiciary, House of Representatives 1 (June 2016) 26 Firms attempting to innovate new products, particularly in computer tech‐ nology, are facing interference from associated right holders; often leading to delays or abandonment of effort to avoid patent wars. De-incentivizing new product development in this manner runs counter to the fundamental objectives of the patent system and naturally carries negative economic and social implications.48 Another observation from the GAO report is that there are no clear cri‐ teria for even defining patent quality at the USPTO or otherwise. There has only been limited interpretation of language from the US Constitution and Patent Act: “The patent office ‘does not have a consistent definition of patent quality that is clearly articulated… or fully developed measurable goals and performance indicators to guide and evaluate work towards the agency’s quality goals,’ GAO..” 49 The USPTO largely concurred with findings of the GAO report in a for‐ mal response letter that expressed they continue to pursue improvement efforts. 2016 GAO Report Findings A chief concern expressed by GAO is that without a “consistent defini‐ tion” for patent quality it is difficult to measure and monitor agency per‐ formance..as a result, it is hard for USPTO to define, measure, and work toward quality goals.” 50 Furthermore, the USPTO describes a dilemma in which patent litigation attorneys prefer clearly defined claims, whereas rights holders tend to pursue more open-ended claims to widen applicabil‐ ity of their concept.51 Feedback from industry sources describe they feel that “time pressure” on examiners is a major contributor to compromised patent quality. This observation was verified from GAO’s survey where an estimated 70% of examiners stated they have insufficient time to complete a proper exami‐ nation with current volume demands. C. 48 Id.at 2 49 Id at 0 50 Id at 23 51 Id at 21 C. 2016 GAO Report Findings 27 The report goes on to describe that determining prior art takes up most of the time required for examination. It does not help that applications are not required to show evidence of prior art search but only disclosure of any incidental knowledge of relevant art the applicant may have become aware of. GAO also notes that there is no limitation to the number of con‐ tinuation requests that can be made by applicants. Therefore the only prac‐ tical ends to an entered exchange are either a grant by the patent office or cessation by the applicant. 52 Another concern is that examiners are graded based on the number of examinations they can complete each month. GAO estimates that 70% of examiners are pressured to circumvent lengthy formal exchanges with ap‐ plicants. Examiners sense that the system prefers for them to approve a grant rather than engage in prolonged application reviews.53 Analysis and Summary Criticisms of the USPTO contained in the GAO report are alarmingly comprehensive in that they describe fundamental flaws in both theoretical as well as operational aspects of the agency. Regarding the former, GAO highlights that the USPTO has not formulated a concept for patent quality itself never mind try to uphold it. Longstanding struggles with determin‐ ing boundaries in exclusive rights ownership have become only more dif‐ ficult with increased sophistication of technological development. Novelty and non-obviousness are becoming more subjective measures. And it hasn’t helped that industry and political pressures have pushed the USPTO to sacrifice diligence for the sake of increased output. It is also disconcerting to realize that these are not new problems. An‐ other GAO industry survey report appearing twenty-three years prior paints a strikingly similar picture: “One company patent attorney said that the quality of examination has deteri‐ orated significantly in recent years due to ‘pendency pressures’ and the lack of experience and knowledge of examiners in some technology fields. Anoth‐ er attorney, .. said that among the U.S., Japanese, and European patent sys‐ tems, USPTO examination results are the ‘most inconsistent.’ .. one attorney said it is too easy to obtain patents on trivial or obvious inventions… Another D. 52 Id at 8 53 Id at 27 III. U.S. Patent Quality Today 28 patent attorney noted that some patents are found to be valid even though they contribute minimally to the technology.”54 Respondents reiterated that it was too easy to obtain patents for trivial concepts and that the patent office needs to better define “obvious” and re‐ turn to a “no invention-no patent” policy. They also describe secondary undesirable consequences such as examiners manipulating lengthy proce‐ dures to compensate for lack of knowledge. For example, it was common for an examiner with insufficient understanding in a given subject matter to frivolously file an interference (pre-AIA, first to invent), sparking a dis‐ pute in order to indirectly derive explanation from ensuing exchanges be‐ tween opposing parties. Lack of knowledgeable examination and exces‐ sive turn-times were similarly criticized for holding up product develop‐ ment due to apprehensions with conflicting matters being invisibly stuck in the “pipeline” at the patent office. 55 The above list of significant problems reflect the technical challenges surrounding proper examination and granting of patent rights. Data from GAO suggests two fundamental vulnerabilities of patent quality that con‐ tribute to this situation. First is the technical challenge of assessing the patentability of proposed concepts where a) subjective criteria of “novel‐ ty” and “non-obviousness” are becoming increasingly difficult to interpret and b) a backdrop of growing and complex prior art adds to an already dif‐ ficult search exercise. Without more specific guidelines the task of assessing patent quality it‐ self may become too subjective. This lack of measure has allowed the USPTO to escape full accountability for some time now, even in cases where there have been extensive error in patent examination and grant. Properly assessing patent quality without the establishment of more defi‐ nite examination criteria has become increasingly unworkable. As will be illustrated with the Apple and Wright case studies, such shortcomings re‐ sult in uncertainties that contribute to the size and frequency of patent liti‐ gation. 54 Intellectual Property Rights: U.S. Companies' Patent Experiences in Japan, Gov‐ ernment Accounting Office, GGD-93-126, 14 (July 1993) 55 Id. at 15-16 D. Analysis and Summary 29 Patent War Today: Apple vs. Samsung Apple’s iPhone 3 disrupted the cell phone market in 2007. It brought a new touchscreen-driven user interface that made integration of features and navigating utilities on a mobile communication and computing device much easier than ever before. The series of Apple vs. Samsung cases be‐ ginning in 2010 represent the start of the “Smartphone Wars.” Although many companies later became involved in associated litigation, this case was the central conflict, taking on a scale that stretched over several coun‐ tries and jurisdictions. The narrative on these two companies and their le‐ gal confrontation has been the topic of films and popular periodicals.56 Background iPhone vs. Galaxy Top secret efforts on the iPhone began at Apple in 2004. Internal product teams had proposed the concept of a mobile phone with integrated com‐ puting in prior years, but Apple CEO Steve Jobs had been reluctant to move ahead due to apprehensions with existing market competition and dependence on third party cellular service companies. He also had techni‐ cal concerns with achieving adequate internet connectivity on a mobile handset. A major shift in attitude occurred after Apple design director Jony Ive produced impressive smartphone mock-up units that showcased the “multi-touch glass” concept.57 The company then moved ahead with smarthphone development. By January 2007 Jobs announced the new iPhone product at the annual MacWorld show in San Francisco, CA. The cell phone establishment did not think the iPhone would be successful and for the first nine months of 2008, the iPhone did not gain much traction. As the market became more IV. A. 1. 56 Eichenwald, supra 57 Id. 30 aware of the iPhone and its features, demand increased to where Apple’s production could no longer keep up with demand.58 Samsung, which was struggling in the smartphone market, understood it had to react to the iPhone sensation.59 As the company worked on a new design, it began to resemble the iPhone itself both physically as well as in user interface features. In March 2010 the Samsung Galaxy S product was announced at the CTIA Wireless trade show. 60 Despite Jobs’ initial outrage at discovering the Galaxy S and its similar‐ ities to the iPhone, Apple pursued negotiations in hopes Samsung would agree to a license agreement. Then in March 2011 Samsung introduced a tablet computer resembling Apple’s iPad2. Viewed as yet another “grand theft,” Jobs reached a breaking point and launched a federal lawsuit against Samsung in a Northern California District Court for their infringe‐ ment on both the iPhone and iPad. Apparently Samsung had been pre‐ pared as they responded with countersuits in Germany, Korea, Japan and the U.S. Related suits were eventually brought to Britain, France, Italy, Spain, Australia, and the Netherlands as well as federal court in Delaware and with the U.S. International Trade Commission (ITC).61 Patent Litigation The subsequent global legal battle between Apple and Samsung has be‐ come famous for its size and scope and is associated with largest jury award for patent infringement in history (over one billion US dollars ini‐ tially). The case has gone several rounds, spanning years and continents, and involved various patents introduced at each stage.62 The following discussion mainly considers initial actions taken by the parties in trying to 2. 58 Id. 59 Id. 60 Id. 61 Id. 62 Eingestellt von Florian Mueller, Apple, Samsung provide final list of patents and accused products for California spring trial, Foss Patents (Feb. 2014), http://www .fosspatents.com/2014/02/apple-samsung-provide-final-list-of.html (accessed Aug 27, 2017) A. Background 31 assert Smartphone rights as well as selected subsequent events that charac‐ terize the overall engagement.63 This starting round of the patent war was based on seven patents from Apple asserted against Samsung. Samsung’s countersuit was based on five patents. The total of twelve patents are described below:64 Apple: – 7,469,381: touchscreen actions, including dragging, pinch zoom, multi-touch, and bounce. – 7,844,915: Application Program Interface (API) for a touch-sensi‐ tive devices. – 7,864,163: touchscreen zoom and navigation methods. – D618,677: design patent for physical structure of an early iPhone. – D593,087: design patent for general outline of another early iPhone. – D504,889: design patent for layout of an iPad tablet. – D604,305: design patent for the “graphical user interface” (GPU). Samsung65: – 7,675,941: mobile phone 3G data transfer capabilities. – 7,447,516: other mobile phone 3G capabilities. – 7,698,711: MP3 playback technology for a mobile device. – 7,577,460: a “communication terminal” for cellphone and camera data transfer – 7,456,893: a method for indexing user’s place in a gallery of im‐ ages. It is telling that Apple selected the above seven patents out of their portfo‐ lio of more than 1,300 patents in mobile electronics technology. This short-list, the majority of which are design patents, reflect a distillation to the iPhone’s most noteworthy and appealing user features.66 The “Total 63 Charles Mauro, Apple v. Samsung: Impact and Implications for Product Design, User Interface Design (UX), Software Development and the Future of High-Tech‐ nology Consumer Products, PulseUX Blog (Dec 2012), http://www.mauronewme dia.com/blog/apple-v-samsung-implications-for-product-design-user-interface-uxdesign-software-development-and-the-future-of-high-technology-consumer-produ cts/ (accessed Aug 25, 2017) 64 David Kravets, Who Cheated Whom? Apple v. Samsung Patent Showdown Ex‐ plained, Wired (July 2012), https://www.wired.com/2012/07/apple-v-samsung-exp lained/ (accessed Aug 27, 2017) 65 Id. 66 Mauro, supra IV. Patent War Today: Apple vs. Samsung 32 User Interface and Experience” (TUX) engineering community has resul‐ tantly taken notice of this case. As one industry expert, Charles Mauro CHFP (Certified Human Factors Engineering Professional) has described, the selected patents from Apple cover largely artistic aspects of both the hardware and software yet, in combination with the user-interface, aims for a “whole greater than the parts effect.”67 The design patents cover the simple but elegant design of the iPhone form factor while the utility patents covered characteristic human interface features designed to ease access to internet resources such as email and web browsing. Samsung on the other hand, appears to have selected their patents “piece-meal” based on each claim’s individual chances for broad application to mobile phone technology.68 In 2012 a California jury acknowledged Samsung’s “copying” of the iPhone and awarded Apple $1.05 billion out of the $2.75 billion sought, but this was only the beginning of a long line of legal battles involving other patent infringement claims.69 For example, Apple filed another law‐ suit against Samsung in February 2012 on another set of patents maintain‐ ing that Samsung “has systematically copied Apple’s innovative technolo‐ gy and products, features, and designs, and has deluged markets with in‐ fringing devices in an effort to usurp market share from Apple.”70 Rulings Despite the one billion dollar award for Apple in their first case, Samsung has been able to secure increasing amounts of market share as subsequent legal clashes have worn on. They have produced the “Apple-ish, only cheaper” Galaxy smartphone as well as derivative products such as tablets that leverage the same technologies and have gained market share and technical capability in the process.71 B. 67 Id. 68 Id. 69 Apple Corporation v. Samsung Electronics. Ltd, No. 5:2011cv 01846 (N.D. Cal. Apr.15, 2011) 70 Tibken, supra referencing Apple Corporation v. Samsung Electronics. Ltd, No. 5:2012cv 00630 (N.D. Cal. Feb. 8, 2012) 71 Eichenwald, supra B. Rulings 33 For further insight into the extensive litigation, the following offers a selective review of associated rulings. The complex technical exchanges that were to follow also gave rise to fundamental legal questions associat‐ ed with calculating appropriate damages for product infringement. These issues ultimately made their way to the U.S. Supreme Court.72 Patent Battles, Product War Although it appears that the legal engagement between Apple and Sam‐ sung has finally drawn to a close with announcement of a settlement in June 2018, this development arrives only after years of costly international litigation. The seven-year confrontation has been characterized by a back and forth struggle that holds true to the popular “war” analogy. Both sides have had rounds of success and failure in the smaller battles confined to subsets of patents or jurisdictions. Some observers felt the first court deci‐ sion against Samsung would have spelled their end in the smartphone mar‐ ket, but this has clearly not been the case.73 Although Apple was able to obtain rewards that acknowledge the patent protection that surrounds their iPhone user experience, there were later cases when such patents were called into question and even invalidated. At the same time, although Samsung was often penalized for allegedly “copying” the iPhone and iPad, they were able to show that Apple did indeed infringe on some of their mobile technology patents. This record makes for lack of a clear vic‐ tor in the smartphone war. In line with this paper’s analysis, this section intends to highlight three of the Apple patents that were found to be either invalid or unclear during subsequent litigation with Samsung. As with the list of original seven patents from the 2011 first filed case, the below utility patents reflect the “Total User Experience” (TUX) aspect of the iPhone product. One of the key questions to be considered later is the potential relationship between Apple’s product-centric approach and recent trends in patent quality. 1. 72 Samsung Electronics v. Apple Inc., No. 15-777 (S. Ct. Dec. 6, 2016) 73 Joe Mullin, Apple’s $120M jury Verdict against Samsung destroyed on appeal, Ar‐ stechnica (Feb. 2016), https://arstechnica.com/tech-policy/2016/02/appeals-court-r everses-apple-v-samsung-ii-strips-away-apples-120m-jury-verdict/ (accessed Aug 27, 2017) IV. Patent War Today: Apple vs. Samsung 34 The first two Apple patents for consideration are 8,046,721 and 8,074,172 which describe the “swipe to unlock” and “auto-correct” spell check features respectively. Both patents were ruled invalid in February 2016 by the Court of Appeals for the Federal Circuit because claims “would have been obvious based on the prior art”; reversing the previous decision of infringement by the U.S. District Court for Northern District of California.74 Patent ‘721 primarily claims “A method of unlocking a hand-held elec‐ tronic device, .. including a touch-sensitive display, the method compris‐ ing: ..continuously moving the unlock image on the touch-sensitive dis‐ play ..wherein the unlock image is a graphical, interactive user-interface object …” The Federal Circuit court opinion provides that the ‘721 patent is “directed to the ‘slide to unlock’ feature of the iPhone. As described in the specification, one problem with a portable device with a touchscreen is the accidental activation of features..cell phone manufacturers had long used ‘well-known’ procedures to prevent this, by locking the phone (i.e., not recognizing any touch inputs).. The ’721 patent claims a particular method of unlocking. The user touches one particular place on the screen where an image appears and, while continuously touching the screen, moves his finger to move the image to another part of the screen.”75 During the trial, Samsung provided two prior art references: a “NeoN‐ ode” N1 Quickstart Guide from 2004 and a presentation by “Plaisant” from a computer conference taking place in 1992. They argued these two references make Apple’s ‘721 claims obvious.76 Samsung’s motion for “judgment as a matter of law” (JMOL) on invalidity was initially denied by the California District Court. The NeoNode art provides an unlocking sequence for a touchscreen phone whereby the user “continuously” moves a finger on the surface of the screen. It also includes the feature of having text reading “Right sweep to unlock” on the screen to instruct users. Even Apple did not deny that this art captured essential elements of their claim, leaving only that Apple added a dynamic on-screen image whereas NeoNode did not call out for any such “moving image” response. Samsung argued that the second ref‐ erence, the “Plaisant paper,” provides this missing element with descrip‐ tion of “six different touchscreen-based toggle switches to be used by 74 Apple Inc. v. Samsung Electronics Co. Ltd., No. 15-1171 (Fed. Cir. Feb. 26, 2016) 75 Id. 76 Id. B. Rulings 35 novice or occasional users to control two state (on/off) devices in a touch‐ screen environment.” Two of these toggle switch representations, “slider toggle” and “lever toggle” shown below, closely resemble the “slide-tounlock” feature of the iPhone.77 “slider toggle” on the bottom left and the “lever toggle” bot‐ tom right78 Together, this prior art invalidated Apple’s ‘721 patent. The second patent (‘172, not to be confused with above ‘721) con‐ cerned Apple’s claims for an automated spelling correction feature known as “autocorrect.” This patent’s primary claim is a “method, comprising: a..touch screen display: in a first area..displaying a current character .. in a second area of the touch screen .. displaying the current character string or a portion thereof and a suggested replacement character string..”79 As with the ‘721 patent, it describes a software-based interactive touch‐ screen feature. In this case the user can have spelling-correction sugges‐ tions appear on an intermediate scroll bar. Prior art was identified in U.S. patent 7,880,730 from Tegic Communications, LTD which includes a claim for a “..text entry system comprising .. an auto-correcting keyboard region comprising a plurality of the members of a character set, wherein locations having known coordinates in the auto-correcting keyboard re‐ gion are associated with corresponding character set members..” Once again, Apple was not able to refute the similarity to this reference but in‐ Figure 1: 77 Id. 78 Id. 79 Id. IV. Patent War Today: Apple vs. Samsung 36 sisted that Samsung had nonetheless copied their recent implementation of this feature with the iPhone.80 In a third example, the Federal Circuit reversed findings of infringe‐ ment by Samsung on Apple patent 5,946,647 based not on invalidity, but interpretation of the claims language. The District court jury had originally awarded nearly one-hundred million dollars to Apple on this patent after Samsung’s request for JMOL was denied. Apple patent ‘647 describes a “tap-to-link” single-touch response feature that allows users to dial num‐ bers or visit websites without cutting and pasting the link. The primary claim provides a “system for detecting structures in data and performing actions on detected structures, comprising: an input device..an output de‐ vice..; a memory..including program routines including an analyzer server for detecting structures in the data, and for linking actions to the detected structures.”81 Neither Samsung nor Apple had pursued formal interpretation of what comprised an “analyzer server” so the Federal Circuit resorted to an “ordi‐ nary meaning” interpretation of their own. Citing another case, Motorola, 757 F.3d at 1304, the court had “construed ‘analyzer server’ to mean ‘a server routine separate from a client that receives data having structures from the client.’” In other words, the term “server” denoted a client-server configuration where a host resource is providing processing capability to a remote client. Therefore Apple’s view of the “analyzer server” simply be‐ ing “a program routine(s) that receives data, uses patterns to detect struc‐ tures in the data and links actions to the detected structures ”– and that “the analyzer server need not be ‘separate from a client’ ” was rejected because it ignored the commonly held meaning by those familiar with the art.82 Apple’s expert witness attempted to retrofit the operation of iPhone’s tap-link function into the refined definition by emphasizing the critical software resided on a different portion of the phone’s memory and proces‐ sor and thus could be considered a separate “server” in the established sense. The court rejected this argument stating “this testimony is not suffi‐ cient evidence to allow a jury to conclude that the Samsung software met the ‘analyzer server’ limitation .. client-server computing is a distributed 80 Id. 81 Id. 82 Id.(emphasis added) B. Rulings 37 computing model in which client applications request services from server processes.”83 Section 289 Damages As if technical aspects of patent interpretation and determining infringe‐ ment between Apple and Samsung were not complex enough, the magni‐ tude of the judgment awards being generated by juries over various trials soon led to fundamental questions regarding how these values were calcu‐ lated. For example, in March 2013 U.S. District Court Judge Lucy Koh or‐ dered “a new trial to recalculate some of the damages in the case, striking four-hundred and fifty million dollars off the original judgment against Samsung.”84 Further questions on damage calculations ultimately made their way to the U.S. Supreme Court with a key decision provided in December 2016.85 The decision reversed and remanded a prior judgment by the U.S. Federal Circuit Court of Appeals which based damages on total sales en‐ joyed by Samsung’s infringing product line. Leading technology com‐ panies such as Google and Facebook had lobbied the Supreme Court to hear Samsung’s appeal due to concerns that the sizable judgments made against it “will lead to absurd results and have a devastating impact on companies because of the implications of how patent law is applied to technology products such as smartphones.” In the written summary of the unanimous Supreme Court opinion, Judge Sotomayor first described that “Section 289 of the Patent Act makes it unlawful to manufacture or sell an ‘article of manufacture’ to which a patented design or a colorable imitation thereof has been applied and makes an infringer liable to the patent holder ‘to the extent of his total profit.’ ..35 USC. § 289 “ It goes on to describe how a jury awarded Apple about four-hundred million dollars in damages according to “Samsung’s entire profit from the sale of its infringing smartphones.” The Federal Cir‐ cuit rejected Samsung arguments for reduced damages “because the rele‐ vant articles of manufacture were the front face or screen rather than the entire smartphone” and that “components of Samsung’s smartphones were 2. 83 Id.(emphasis added) 84 Tibken, supra 85 Samsung Electronics v. Apple Inc., No. 15-777 (S. Ct. Dec. 6, 2016) IV. Patent War Today: Apple vs. Samsung 38 not sold separately to ordinary consumers and thus were not distinct arti‐ cles of manufacture.”86 The Supreme Court reversed this Federal Circuit decision and instead held that “in the case of a multi-component product, the relevant ‘article of manufacture’ for arriving at a § 289 damages award need not be the end product sold to the consumer but may be only a component of that prod‐ uct.” § 171(a) of the Patent Act permits “a design patent that extends to only a component of a multi-component product..” Finally, Judge Satomayor provides ”because the term ‘article of manufacture’ is broad enough to embrace both a product sold to a consumer and a component of that product, whether sold separately or not, the Federal Circuit’s narrower reading cannot be squared with § 289’s text.” 87 The case was remanded for calculation of reduced damages.88 This decision should have a significant impact on future high-technolo‐ gy litigation in that it bounds potential damage awards for infringement. Many stakeholders have expectedly welcomed the Supreme Court rul‐ ing.”89 Nonetheless, these events provide a dramatic example of the tremendous losses that may result from not properly bounding associated exclusive rights in the first place. Analysis Although the Apple vs. Samsung litigation saga has apparently come to a close, it will take more time to understand the full impact it may have on future technology disputes. In the meantime, there are numerous indica‐ tions that have been made thus far. Discussed below are notable observa‐ tions, which include the scale of the litigation, trends in patent protection strategy, and the apparent state of the current patent system. C. 86 Samsung v. Apple , 15-777 at 1 87 Id. 88 Crum, supra 89 Id. C. Analysis 39 Colossal Legal War The Apple vs. Samsung patent war has taken on a grand scale, lasting more than seven years, costing more than a billion dollars and spread as wide as four continents. Some contend that even though it has been one of the “bloodiest corporate wars in history,” Apple “may have won legal battles but still lost the war.” A source near Apple reports “that the endless fight‐ ing has been a drain on the company, both emotionally and financially.” 90 During the last year of his life, Steve Jobs spoke of Apple’s patent-viola‐ tion lawsuit against Google, whose Android mobile operating system en‐ abled Samsung’s smartphones: “Our lawsuit is saying, ‘Google, you (ex‐ pletive) ripped off the iPhone, wholesale ripped us off.’ Grand theft.’” 91 Perhaps most will identify with Steve Jobs’ outrage and agree that Sam‐ sung has largely succeeded in mimicking a revolutionary product concept introduced by Apple. Still, questions remain as to how much of the iPhone was truly pro‐ tectable from competitors from a patent standpoint and whether the iPhone itself relied on technologies held by Samsung and others. Each party was prepared with plentiful “ammunition” in the form of vast patent portfolios but were selective with their patents when it came to trial. Although this approach may have been strategic, especially in the case of Apple, Judge Lucy Koh had also forced the companies to limit the number of claims set forth in order to ease the process for an overwhelmed jury.92 Future cases may not have such limits set. This paper takes the view that the scale of litigation was indeed exces‐ sive. Although Apple had some initial success with the 2012 U.S. District Court ruling, the follow-up litigation probably indicated they were starting to throw “good money after bad.” Neither Apple nor Samsung achieved complete success in their legal war. In South Korea infringement was found on both sides. In Japan a court did not accept an Apple claim. In Germany, there was a sales ban on the Galaxy Tab 10.1 due to its close match in appearance and function to Apple’s iPad2. In Britain, a court 1. 90 Eichenwald, supra 91 Diamond, supra 92 Paul R. Gugliuzza, Patent Trolls and Preemption, 101 No. 6 Virginia Law Review 1579 1590 (October 2015) IV. Patent War Today: Apple vs. Samsung 40 found for Samsung, stating that its tablet was “not as cool” as the iPad so would not mislead customers.93 Invention vs. “Cool” Product Industry analysis of this case suggests that TUX design will become more important as individual features become less separable from accumulating technology. In light of the Apple case, TUX analyst Mauro asserts: “Smart companies going forward will work with their IP counsel to frame patent applications and related litigation toward protecting the total user expe‐ rience of their products. But the road to an IP strategy like Apple’s that focus‐ es on the total user experience may not be an easy one. The current legal sys‐ tem works in exactly the opposite direction by requiring inventors to slice up their products into many features ..”94 Nonetheless, Apple’s strategy of clustering TUX patents appears to have met with some success. Continuing along this path may afford companies more opportunity to fortify their trade dress claims with related patent fil‐ ings. As developments in TUX become more dramatic and distinguished, companies may begin attempts to patent such combinations “to protect the ..‘whole’ of their user experience solutions across all relevant cus‐ tomer touchpoints.”95 The prospect of leveraging patent rights into trademark-like protection is an unintended and detrimental consequence of such a trend. Should identification of a “cluster of patents that combine to drive high levels of user engagement” become an invention itself? TUX developers appear ex‐ cited that Apple has taken first steps to doing just that.96 These concerns are discussed further below. Questionable Patents In addition to revealing Apple’s TUX patent clustering strategy, the case also highlights fundamental questions of whether these types of software 2. 3. 93 Eichenwald, supra 94 Mauron, supra 95 Id. 96 Id. C. Analysis 41 patents should qualify for utility patent protection in the first place. Legal analysts have suggested that both Apple and Samsung incorporated “intel‐ lectual property that should never have been patented.” 97 Author and le‐ gal scholar from UC Hastings College of the Law, Robin Feldman, com‐ mented on the favorable ruling for Apple in 2012 with: “Regardless of the outcome of the trial, we might want to step back and con‐ sider whether society should be granting such powerful rights so easily. Are the features at issue here really deserving of so much protection? .. On the whole, the trial is one more indication of a patent system that has lost its bear‐ ings, with litigation rather than innovation leading the way.”98 The iPhone was undoubtedly an impressive and groundbreaking product from a consumer perspective but whether it deserved the enormous trans‐ actional costs associated with utilizing legal resources for prosecution and litigation in this way is a long term question that society will have to an‐ swer. Given the descriptions of many of the Apple software patents in con‐ tention, it does not appear reasonable for the companies to have spent well over one billion dollars and corresponding public resources to try and se‐ cure absolute command of the smartphone market through such means. As the 2016 GAO report indicates, the abstract and ubiquitous nature of soft‐ ware seems to have only added to the patent quality problem.99 Transactional costs are not limited to litigation. In an academic article from Berkeley Law School appearing in 2012 author Thomas H. Chia pro‐ vides: “Smartphone companies are amassing enormous patent portfolios in order to remain competitive against a rival’s patent portfolio...This patent strategy is analogous to the military tactic of mutually assured destruction. However, continually amassing patents under a mutually assured destruction strategy may not be financially sustainable or desirable from the perspective of tech‐ nological innovation.”100 The USPTO is already overwhelmed with applications and wrestling with quality issues. The flood of questionable software patent applications due to this “amassing” only adds to difficulties. 97 Kravets, supra 98 Id. 99 GAO-16-490 at 0 100 Thomas H. Chia, Fighting the Smartphone Patent War with RAND-Encumbered Patents, 27 Berkeley Technology Law Journal 209, 214 (2012) IV. Patent War Today: Apple vs. Samsung 42 Patent War Yesterday: Wright v Herring-Curtiss Background In December 1903, more than 100 years prior to the iPhone, the Wright brothers demonstrated their working Wright Flyer heavier-than-air proto‐ type aircraft. Attempts at human piloted aircraft had been ongoing for sev‐ eral decades in the form of primitive balloons and gliders. These prior air‐ craft lacked control and thus served limited utility. Wilbur and Orville Wright then developed a breakthrough tri-axis control system by incorpo‐ rating a “wing-warping” mechanism into aircraft design. By twisting and shaping the wing, a pilot can maintain balance and directional control dur‐ ing flight much like a bird adjusting the contour of its wings. Achieving such equilibrium had proved elusive until this point. This breakthrough ushered in the age of modern aviation which today utilizes the associated “aileron” to achieve directional control on fixed wing aircraft.101 The move from wing warping to use of ailerons as well as a host of oth‐ er substantial improvements to the Wright Flyer concept were achieved early on by Glenn Curtiss, inventor and engine designer. Curtiss recog‐ nized an opportunity to apply his technical capabilities and know-how from motorcycle engine design to aircraft. He entered the aircraft business and started producing superior prototypes in hopes of securing govern‐ ment and private interest. After hearing of his methods of simplifying wing shape control, the Wright brothers quickly confronted him with a lawsuit. They felt strongly that their patents covered any variations to wing surface alteration lending to aircraft control and thus Curtiss’ design for ailerons and other components became their intellectual property. Cur‐ tiss did not agree with the Wrights’ claims and continued to innovate new aircraft designs while evading enforcement of their issued patents.102 A contentious period followed where the Wrights suffered substantial inter‐ ruption to their business while Curtiss also struggled to continue improve‐ ments on aircraft design in the midst of legal confrontations. As with Ap‐ V. A. 101 Lawrence Goldstone, Birdmen: The Wright Brothers’, Glenn Curtiss, and the Battle to Control the Skies 41 (2014) 102 Id. at 124 43 ple vs Samsung, these events have become the topic of historical debate with a central question being whether the Wright vs Herring-Curtiss patent war disrupted what otherwise would have been a more rapid and efficient evolution of American aircraft design.103 Analysis Some analysts feel that the Wrights had become too focused on securing profitability after their initial success with their Wright Flyer prototype aircraft As attorney and columnist Matt Levine describes:104 “Rather than take advantage of their legal monopoly by developing, promot‐ ing and selling the airplane, they kept it under wraps, refusing for many years even to show it to prospective purchasers. However, while refusing to devote any effort to selling their own airplane, they did invest an enormous amount of effort in legal actions to prevent others, such as Glenn Curtis, from selling airplanes.”105 Opponents of the patent system point to Wright vs. Herring-Curtiss as yet another example of how innovation is inhibited rather than encouraged un‐ der such a system. It is helpful to describe certain aspects concerning the patent system as it existed in the early 1900s to obtain added perspective on the role of patent quality in large scale litigation. Firstly, the patent office at the turn of the century appears, at least for aviation claims, to have set forth a more rigorous examination than what exists today. Initial attempts by the Wrights to patent their aircraft structure were met with refusals from the U.S. patent office. Their first application submitted in March 1903 was re‐ jected for a host of reasons including drawings that were “inadequate,” claims perceived to be “vague and indefinite,” as well as suggestions that their work was already covered by at least six pre-existing patents.106 To top it all off, the examiner suggested the Wrights’ concept was “a device B. 103 Matt Levy, Yes, The Aviation Industry Was Nearly Derailed by the Wright Broth‐ ers’ Patent, Patent Progress 67 (Jan 2015) https://www.patentprogress.org/2015/ 01/12/yes-aviation-industry-nearly-derailed-wright-brothers-patent/ (accessed Aug 25, 2017) 104 See U.S. patent 821,393 105 Michele Boldrin & David K. Levine, Against Intellectual Monopoly, 21 (dklevine.com 2004) 106 Worrel, supra V. Patent War Yesterday: Wright v Herring-Curtiss 44 that is inoperative or incapable of performing its intended function;” in other words, he did not believe it would really work. Apparently it did not help that the patent office had been flooded with applications from “cranks” claiming aviation patents that were not plausible or substantiat‐ ed.107 In any case, it is notable that despite having less formal procedures than today, the patent office reacted to these conditions by qualitatively raising the standard on demonstrated utility for incoming applications con‐ cerning aviation. A second point, obscured by limited historical account, is the question of how much the Wrights actually contributed to the centuries old efforts at achieving powered, manned flight. The Wright brothers had been fasci‐ nated with flight from a young age and made efforts to track the efforts of other famous aviation pioneers. A primary example is German engineer Otto Lilienthal who in 1889 “produced the most advanced study ever writ‐ ten on the mechanics of flight, Der Vogelflug als Grundlage der Fliegekunst – ‘Bird-flight as the Basis of Aviation.’” 108 Wilbur Wright followed Lilienthal’s work and was inspired by him to pursue aircraft de‐ velopment. Wright tracked and communicated with other notable pioneers in avia‐ tion such as Octave Chanute, a French American engineer who completed extensive research into high-lift airfoil designs.109 Chanute had published a compilation of his technical articles in 1894 under the title Progress in Flying Machines. In his assessment for fixed-wing “aeroplanes,” he con‐ cluded that the “problem of the maintenance of the equilibrium is now, in my judgment, the most important and difficult of those remaining to be solved ..” 110 There is record of the Wrights referencing these prior works and the Wright 821,393 patent operates upon the principle of resolving the equilibrium challenge described by Chanute.111 Not only is there the question regarding contributions occurring before an invention, but also how to “parcel out” inventions that arise post-grant. The primary claims by the Wrights in their ‘393 patent state broad terms: 1. In a flying-machine, a normally flat aeroplane having lateral marginal por‐ tions capable of movement to different positions above or below the normal 107 Goldstone, supra at 30 108 Id. at 3 109 Id. at 12 110 Id. at 14 111 Id. B. Analysis 45 plane of the body of the aeroplane, such movement being about an axis trans‐ verse to the line of flight, where-by said lateral marginal portions may be moved to different angles relatively to the normal plane of the body of the aeroplane, so as to present to the atmosphere different angles of incidence, and means for so moving said lateral marginal portions, substantially..” The essential segments of language, repeated in many of the subsequent claims, centers upon the aeroplane’s (or “wing’s”) ability to “be moved to different angles .. so as to present to the atmosphere different angles of in‐ cidence.” In the Wright Flyer aircraft prototype used to demonstrate this method, a mechanism of pulleys was used to flex the wings of the aircraft in order to deflect oncoming airflow and steer the entire aircraft. Glenn Curtiss was a talented and proficient mechanical engineer experi‐ enced with developing powerful and light-weight motorcycle engines. He was initially drawn to aviation when realizing the benefit his light-weight engines could provide to aircraft.112 As he started building entire aircraft on his own, he came up with an alternative to the wing warping approach used by the Wright Flyer. Instead of warping the entire wing of the air‐ craft, Curtiss instead placed controllable hinged tabs near each wing-tip (compare Figures 2 and 3). This modification not only dramatically sim‐ plified aircraft design and improved mechanical reliability, but also of‐ fered better steering control compared to the full wing warping employed by the Wrights. This wing tab, now known as an “aileron,” remains an es‐ sential component of aircraft design today. 112 Goldstone, supra, at ixxx V. Patent War Yesterday: Wright v Herring-Curtiss 46 Illustration of Wright concept of “wing warping”113 Ailerons (moveable) with fixed straight wing of modern air‐ craft114 The Wrights pressed on to have their patent granted in 1908 and later fol‐ lowed up with impressive public displays of their working Wright Flyers. However, as Curtiss and other interested parties joined in on aircraft de‐ velopment, the Wright brothers became so consumed by the litigation that they started to fall behind on further research and development.115 Still, courts had recognized their achievement and ultimately held their patents Figure 2: Figure 3: 113 Wright-Brothers.org, http://www.wrightbrothers.org/History_Wing/Wright_Story /Inventing_the_Airplane/Wagging_Its_Tail/Wagging_Its_Tail_images/1902-Glid er-wings-compared.jpg (accessed Sep 5, 2017) 114 Precision Graphics, http://cf.ydcdn.net/1.0.1.80/images/main/A5aileron.jpg (accessed Sep 5,2017) 115 Goldstone, supra, at 203 B. Analysis 47 valid and infringed. Furthermore, the courts considered their progress “to be of a pioneer nature entitled to having their claims given the broadest interpretation” therefore would cover Curtiss’ ailerons as well as wing warping.116 Curtiss and other parties viewed their improvements to aircraft design as distinctive so remained defiant. The conflict was settled only af‐ ter Assistant Navy Secretary Franklin Roosevelt in 1917 “pressured the ri‐ vals to allow unrestricted production of airplanes for the war effort,” bringing the Wright patent war to a close.117 116 Worrel, supra 117 Sean Trainor, The Wright Brothers: Pioneers of Patent Trolling, Time (Dec. 2015), http://time.com/4143574/wright-brothers-patent-trolling/ (accessed Sep. 3, 2017) V. Patent War Yesterday: Wright v Herring-Curtiss 48 Synthesis and Analysis As described, this paper aims to examine the role of patent quality in con‐ tributing to patent wars and generally increased litigation seen in recent years. As a baseline, Chapter II provided overview on legislative origins of the US patent system. Chapter III summarized major concerns brought up in a recent GAO audit of the USPTO; many of which are associated with patent quality. In Chapter IV, the Apple vs. Samsung smartphone liti‐ gation was reviewed and analyzed as a modern example of a patent war whereas Chapter V described the Wright vs. Herring-Curtiss patent war occurring almost one hundred years prior. These complementary perspec‐ tives have been provided to help illustrate the constant challenges with maintaining an effective patent system. This chapter provides corresponding synthesis and analysis of these perspectives beginning with comparison of original intents with current practices of the U.S. patent system followed by a review of supplementary data to the GAO (2016) report. The aspect of utility of invention is then considered before comparison of the Apple and Wright patent wars. Final‐ ly, a list of primary challenges facing the US patent system is compiled based on this analysis. Drift from Historical Basis As provided Chapter II, Framers of the U.S. Constitution and legislators from the first Congressional proceedings relied considerably on the exam‐ ple set by Britain for establishing a patent system. They aligned with the British precedent to set up an effective, low-cost registration-based patent system.118 The requirements outlined in first Congress’ H.R.10 empha‐ sized utility and reliance on public feedback as a method of governing de‐ clared exclusive rights. Apart from the savings in cost, there was already recognition that any examination process presented a daunting, unfeasible task of research and evaluation.119 Still, in 1836 the United States resorted VI. A. 118 Walterscheid, supra, at 37 119 Id. at 98 49 to an examination-based patent system due to loss of control over abusive and fraudulent filing activities. Circumstances had deteriorated to the point where applicants were copying already existing patents in order to obtain a formal letter grant for use in intimidating unwitting “infringers.” By 1835 license revenue from such fraud was estimated at approximately half a million dollars per year.120 But how had matters reached such a point? The answer appears to rest in the fact that the newly established U.S. was a vast geographical terri‐ tory.121 Given the limited communication and transport technology of the day, this would have made timely mass communication quite difficult. A first consequence is that much of the population was not aware of the dis‐ honest practices surrounding patent issues until it was too late. More fun‐ damentally, lack of effective mass communication disabled the “public no‐ tice” function intended by the Patent Act of 1793. The country was “an enormous place and publication of advertisements in Philadelphia ..New York and even Boston would not give adequate notice across the country of the existence of ..particular patent application.”122 As such, one may consider that the registration procedure was never truly implemented un‐ der such circumstances. Resultantly the Patent Act of 1836 introduced the examination-based system which formed the basis of the U.S. patent system of today. Estab‐ lishment of the USPTO and growing needs for legal protection of technol‐ ogy have probably introduced more cost overhead than the Framers were able to imagine; perhaps even calling into question whether the patent sys‐ tem is still offering benefit to society. In addition to introducing enormous cost, today’s examination-based patent system has also fallen short in maintaining the emphasis that early Congress placed on utility of invention. In the late 19th century much of the enthusiasm surrounding the patent system was derived from expecta‐ tions that it would encourage development of machines with capabilities that would make up for the shortages in manpower relative to abundant land resources enjoyed by the new nation. Furthermore, American leader‐ ship had its sights on greater industrialization as a long term goal.123 120 Kenneth W. Dobyns, The Patent Office Pony: A History of the Early Patent Of‐ fice 97 (1997) 121 Id. at 43 122 Walterscheid, supra, at 98 123 Dobyns, supra at 43 VI. Synthesis and Analysis 50 Growing influence from industry and capacity limits for patent examina‐ tion have worked to diminish patent quality and traditional notions of util‐ ity with it. In sum, the modern patent system appears to have drifted far from the early vision for the U.S. patent system as described in the U.S. Constitu‐ tion, H.R.10 and the Patent Act of 1793. The move from registration to ex‐ amination has introduced burdens that were not part of the original “lowcost” British model for a patent system. Furthermore, reliance on public disclosure and discourse as a mechanism for governing patent recognition has been replaced by an overwhelmed examination process that introduces significant delays in publication with arguably no significant increase in legal certainty. Finally, subjective standards on utility have been lowered to allow too many weak patents. Recent improvements such as third party reviews and patent office review boards reflect some modest steps back towards a system of self-regulation but it is not clear whether these for‐ malized methods are sufficient for addressing future challenges. Long-standing Patent Quality Concerns The GAO (2016) report on the USPTO’s performance describes a discon‐ certing array of both fundamental and operational problems. Additionally troubling is that this report reflects a state of affairs representing at least the last forty years. Problems with patent quality and increased litigation are long-standing issues. In their aptly titled book from 2008, “Patent Failure,” economic and le‐ gal authors James Bessen and Michael J. Meurer delve into an assessment of the U.S. patent system in relation to the tangible property ownership scheme after which it is modeled. They observe that the patent system is falling far short of this ideal model due to four reasons:124 – “fuzzy boundaries”: uncertainties with interpretation of claims lan‐ guage that is so complex that there is “no reliable way of determining patent boundaries short of litigation” B. 124 James Bessen & Michael J. Meurer, Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk 10-11 (2008) B. Long-standing Patent Quality Concerns 51 – “public access to boundary information”: delays and maneuvering “hide language for many years..” thus adding uncertainty and risk to R&D investment – “scope of rights”: during litigation claims are often widened or nar‐ rowed beyond what was intended by patentee adding more uncertainty – “patent flood”: current USPTO criteria such as non-obviousness and operational practices are not working well The authors describe that these issues have led to a tripling in patent litiga‐ tion over about a thirty-six year span (see Figure 4).125 These points re‐ semble the 2016 GAO report; which itself was initiated due to a doubling of patent litigation between 2007 and 2015. U.S. Patent Lawsuits Filed in District Courts126 Bessen and Meurer focus on the term “patent notice” as a parameter mea‐ suring how well the patent system mimics land ownership. This parameter appears to embody both scope of property rights and awareness of those rights by society. In other words, they envision that patent rights be as clearly defined as a fenced area of land clearly marked with “do not enter” signs on all sides. Figure 4: 125 Id.at 17 126 Id. at 122 (taken from Administrative Office of the U.S. Courts; John L. Turner) VI. Synthesis and Analysis 52 “..the genius of a property rights system is that it relies on .. judicial discretion as little as possible … Without clear notice, no property system can work well and the result is excessive disputes… Indeed, Duffy (2000) writes, ‘The qual‐ ity of an authoritative claim interpretation depends not on its fidelity to some abstract ideal of interpretation, but on its predictability.’” 127 Whether an equivalency to the land ownership model can ever be truly re‐ alized remains a debate, but nonetheless it provides a target standard. This paper takes the term “patent notice” to effectively mean the same thing as “patent quality.” Ironically, it comes down to interpretation of the language being used for these commonly used terms. Arguably higher patent quality would result in greater certainties regarding patent validity and scope, which in turn would provide the improved boundaries and patent notice that Bessen and Meurer seek. Similar to GAO (2016), “Patent Failure” points out that software patent litigation has been a particularly problematic area whereas subject matters in chemical and pharmaceutical products have not exhibited such increas‐ es in litigation.128 This correlates to the abstract nature of software claims which have tested the definition of patentable material in well-known cas‐ es such as Bilski and Alice v Mayo. Adjustments from case law have ap‐ parently not been enough to address the greater challenges posed by such abstraction.129 These same struggles of the patent system have been documented by other government research. For example, in June 2004 a Congressional subcommittee on Courts, the Internet and Intellectual Property held a hear‐ ing to obtain industry feedback on proposed patent opposition procedures designed to cut down on invalid patent grants. Guest speakers included distinguished IP professionals from high-profile corporations such as Google and Genentech.130 During opening comments, state of Virginia representative Rick Boucher provided that although an “interference” reexamination was an option for challenging a patent any time after grant, it required new and compelling prior art to be introduced, as well as other strict formalities making the method effectively inactive. 131 127 Id. at 235 128 Id. at 21 129 Id. at 22 130 Patent Quality Improvement: Hearing Before the Subcomm. on Courts, the Inter‐ net, and Intellectual Property, 108th Cong. 39 (2004) 131 Id. at 3 B. Long-standing Patent Quality Concerns 53 During the hearing Mr. Karl Sun, Senior Patent Counsel for Google, Inc. provided a presentation where he highlighted many of the same con‐ cerns that would be mentioned eight years later in the GAO (2016) report. Amongst the issues raised were observations on how the USPTO incen‐ tivized patent examiners “according to a point or ‘count’ system that en‐ courages patent issuance.” He stressed that changes to the system have to acknowledge the actual conditions facing the patent office: “Reforms need to recognize and address the practical realities of the patent system, including the burgeoning rate of patent filings, an overworked and understaffed examining corps, and the ex parte process..” Sun goes on to describe that increased third party challenges should be en‐ abled and not restricted to narrowed patent office criteria such as novelty and non-obviousness.132 The realities alluded to by Sun and others are not limited to the United States. Worldwide, patent offices are facing challenges with high rates of patent invalidation. For example, in a recent paper examining legal cer‐ tainty for patent holders in Europe, Professor Dr. Christoph Ann of Tech‐ nische Universität München (TUM) provides there “is no disputing the fact that the success rates of nullity suits against German patents and for EP (European) patents valid in Germany are considerable” and that this trend “is not new, but has been more or less unchanged for more than at least 50 years.”133 Ann cites a 2014 study which revealed that nullity ac‐ tions on software and telecommunications patents “led to almost a rate of 60% total invalidations for the period 2010-2013. Approx. 30% of patents were partially invalidated. And only a good 10% were upheld.” 134 In Japan, the rate of patent invalidation by trial in 2006 was as high as 70%. Although this rate has been driven down by improved review processes, the average invalidation rate over the following nine years was approxi‐ mately 40-50%.135 132 Id. at 39 133 Christoph Ann, Patent Invalidation and Legal Certainty - What Can Patent Holders Expect? SSRN (July 5, 2016) 16, https://ssrn.com/abstract=2804992 (accessed Aug 29, 2017) 134 Id. at 6 135 Atsushi Sato, Japan Patent and Trademark Update, TMI Associates, Issue 7 (Ju‐ ly 2017), https://www.tmi.gr.jp/wp-content/uploads/2017/07/jptu-vol.7.pdf (accessed Sep 5, 2017) VI. Synthesis and Analysis 54 Finally, in 2016 Notre Dame law school Professor Steve Yelderman ex‐ pressed the benefits of “patent challenge” to competition law. Referring to the 2011 Leahy-Smith America Invents Act which introduced the new op‐ position proceedings he states: “One theory that is specific to patent disputes is that they present an opportu‐ nity to mitigate the harms to competition imposed by individual patents. On most accounts, the purpose of having patent system is to reward invention through time-limited bequests of market power. According to this theory of the benefits of patent challenges, such cases can reduce or eliminate the patent holder's market power, stemming the harms to competition that might otherwise flow from an overbroad or invalid grant.”136 In effect, these additional administrative reviews provide “a golden oppor‐ tunity to mitigate the costs of having a patent system.” 137 He also stresses that there is “public interest in free competition” that “is not necessarily represented by any of the parties to a particular dispute.” 138 Patent chal‐ lenges therefore not only resolve specific mistakes but also lend to gained public confidence in the system that increases incentives for future inven‐ tors.139 Unwritten Rule on Utility Language regarding promotion of the “useful arts” originates with the U.S. Constitution and corresponds most directly with “helpful and value trades” given the context in which it was developed.140 The term “useful arts” has been reiterated in subsequent patent legislation and has worked to shape the evolution of patent law ever since. In order to consider the implications intended by this requirement, especially relative to modernday practices, it is helpful to obtain some additional historical perspective. Beginning with H.R.10, section 3, petitions for patent are specified for “any new art, manufacture, engine, machine, invention or device.” 141 The majority of these terms are associated with objects that can benefit from C. 136 Stephen Yelerman, Do Patent Challenges Increase Competition?, 83 4, The Uni‐ versity of Chicago Law Review 1946 (2016) 137 Id. at 1952 138 Id. at 1953 139 Id. 140 Walterscheid, supra at 51 141 Id. at 435 C. Unwritten Rule on Utility 55 performance improvements as demonstrated in the late 18th century. For example, “engine” suggests a powerplant used for running equipment or perhaps a transport device such as the steamboat being developed at the time. “Manufacture” referred to mass production such as that enabled by the cotton gin. These key words suggest a basis upon which quantification can be used as a tool to distinguish one idea from the next. For example, a machine such as Eli Whitney’s cotton gin was shown to double the yield of raw cotton production.142 In this way it may be drawn that the Founders envisioned patents to represent inventions that similarly provide measur‐ able improvement to the state of a trade or industry. “Progress of the use‐ ful arts was contemporaneously understood to mean promoting the devel‐ opment of manufacturing.” 143 This directive to improve America’s position in manufacturing is re‐ flected in a statement made by George Washington in 1790 during an ad‐ dress to Congress: “a free people ought not only to be armed,..their safety and interest require that they should promote such manufactories, as tend to render them independent from others for essential, particularly, for mili‐ tary supplies.”144 Although today’s U.S. patent code inherits the foundational language surrounding “usefulness” from early legislation, there has been surprising‐ ly little elaboration on this requirement in the over two centuries since. Al‐ though entitled a “utility patent” there is no detailed description for a “util‐ ity” requirement. According to USPTO guidelines, a “utility patent is is‐ sued for the invention of a new and useful process, machine, manufacture, or composition of matter, or a new and useful improvement thereof..”145 Guidelines for examining utility provide only that a “credible” and “spe‐ cific” or “well-established” utility should be included in the specification of the patent application.146 Per 35 U.S.C. section 112, the specification portion of a patent application requires only that the applicant provide a 142 Joan Brodsky Schur, Eli Whitney’s Patent for the Cotton Gin, National Archives (2016), https://www.archives.gov/education/lessons/cotton-gin-patent (accessed Sep 5, 2017) 143 Walterscheid, supra at 146 144 Walterscheid, supra at 148 145 USPTO website, Types of Patents, https://www.uspto.gov/web/offices/ac/ido/oei p/taf/patdesc.htm (accessed Sep 5, 2017) 146 USPTO website, Synopsis of Application of Utility Guidelines with Examples, https://www.uspto.gov/ip/rules/proposed/utility-synopsis.jsp (accessed Sep 5, 2017) VI. Synthesis and Analysis 56 description of the invention “in such full, clear, concise, and exact terms as to enable any person skilled in the art” to “make and use the same.” Le‐ gal scholars point out that section 112, in addition section 100 of the patent code which defines patentable subject matter, provide a mechanism for ensuring some credible utility aspect to the filed invention.147 Still, the limited treatment of utility in United States code and USPTO guidelines results in little practical barrier for applicants when it comes to this aspect of usefulness of invention. Adding to this bearing is the relatively scarce U.S. case law on the mat‐ ter of utility. Scholars point mainly to the renowned Joseph Story, Asso‐ ciate Supreme Court Justice and Dane Professor at Harvard Law School and his opinion from Lowell v. Lewis, (Court, D. Massachusetts, 1817 15 F.Cas. 1018) which “set forth the contours of the utility requirement which persist today.”148 The defendant in this case tried arguing that the patent for a competing pump design was not valid because the plaintiff could not prove that his invention “is of general utility; so that in fact, ..it must su‐ persede the pumps in common use.. and must be, for the public, a better pump...” 149 Judge Story flatly disagreed with this view, instead providing that the Patent Act of 1793 intended only to block any inventions that may be “frivolous or injurious to the well-being, good policy, or sound morals of society” and that the word “useful” is used in “contradistinction to mis‐ chievous or immoral.”150 Judge Story emphasized that utility criteria should not impose any restrictions on the flow of incoming ideas because frivolous concepts would naturally and “silently sink into contempt and disregard.” Notably, this opinion was formed while the patent system was still in the “age of registration” established by the Patent Act of 1793. Given the dramatic changes in technological and legal landscape since 1817, one should question how well Judge Story’s position aligns with modern circumstances. Patent Law Professor Martin J. Adelman provides: “This sense of ‘practical’ or ‘beneficial’ utility is an all-or nothing proposi‐ tion: Either the claimed invention possesses utility or it does not..does Justice Story’s assertion that no harm befalls the public if a patented invention pos‐ 147 Martin J. Adelman, U.S. Patent Law class (lecture), Munich Intellectual Property Law Center (Apr. 2017) 148 Taken from Martin J. Adelman, MIPLC U.S. Patent Law Casebook 91 (4t ed. 2016) 149 Martin J. Adelman, MIPLC U.S. Patent Law Casebook 91 (4t ed. 2016) 150 Id. C. Unwritten Rule on Utility 57 sesses limited utility remain correct? Doesn’t the public suffer the burden of lengthened examination times when notoriously overworked patent examiners must allocate scarce resources towards the extended consideration of worth‐ less technologies?”151 This paper contends that in light of the documented challenges facing the modern patent system, the answers to above questions are “no” and “yes” respectively. Comparing Apple and Wright Cases The stories behind the Apple and Wright patent wars have some interesting parallels as well differences which help expose long-standing challenges facing the patent system. The cases are compared here. In terms of similarities, both cases were fueled at least in part by a deep-seated rivalry stemming from what was perceived as theft of person‐ al property. The land ownership model appears to successfully take hold with respect to this human dimension. The Wrights and Steve Jobs both felt their inventions were stolen and were seemingly driven as much by a moral sense of justice as concern for material losses. How much of a role such emotion plays is difficult to ascertain but it seems likely that human factors only aggravate such volatile situations. One can at least draw the conclusion that it is in the interest of society to establish property systems that facilitate fair and expedient resolution in such disputes. Any viola‐ tions in land usage such as trespassing would be dealt with swiftly by law enforcement and other government officials. The delays and uncertainties that the patent system presented in each case provided conditions where emotions could fester and hence contribute to protracted resource-consum‐ ing litigation. Both cases also dealt with breakthrough products emerging as the world was on the cusp of disruptive technological change. In the 1900s the in‐ dustrial revolution was well underway with inventions such as the light bulb and gasoline engines beginning to gain traction. There was already much research activity underway with aviation, most of which concentrat‐ ed on balloon aircraft due to considerable difficulties with heavier-than-air flight.152 In the case of smartphones, the emergence of the information age D. 151 Id. at 92 152 Goldstone, supra at 7 VI. Synthesis and Analysis 58 was the disruptive technological backdrop. In both cases there was natu‐ rally a “burgeoning” of invention and business pursuit as industry players and innovators struggled to stake their claims for the future. Such circum‐ stances present a stress-test to the patent system, which is tasked with “parceling” out property rights commensurate to achievement for each patent applicant. The increased volume of patent applications and dynamic nature of new technology make the already daunting task of examination all the more difficult during such periods. Examining the differences between Apple and Wright can begin with consideration of the U.S. patent office in 1903 versus 2010. As mentioned, Wilbur Wright had a difficult time getting his patent granted due to appre‐ hensions with revealing required data to the patent examiner. In line with early practices of the patent office, examiners routinely expected to see substantial supporting evidence of invention whether it be in the form of technical reports, testimonies, or working models. The Wrights’ reluctance to display their aircraft cast doubt on their claims; indicating the patent of‐ fice at this time maintained a rigorous, albeit subjective, standard for utili‐ ty on patent grants. This approach is contrasted with the practices already described by GAO (2016) where patents are granted too easily. Therefore there are two extremes being represented in the contempora‐ neous patent office practices in each of these patent war cases. One can view the Wright scenario representing a period of “under-patenting” where the patent office may have disregarded legitimate concepts due to empha‐ sis on supportive data on claims. In contrast, the modern era has provided an “over-patenting” environment where too many bad patents are passing examination due to criteria that are diminishing in the face of increased time and resource pressures placed on the patent office. These differences in patent system practices correspondingly led to dif‐ ferent approaches to litigation. The difficult standard on utility patents at the time of Wright had them rest all litigation on their ‘323 patent which described how to achieve aircraft equilibrium in fairly broad terms. Once their patent was granted, courts provide the wide interpretation of claims afforded by “principle” patent status. This is in contrast to the “arms race” approach used by large corporations such as Apple and Samsung facilitat‐ ed by the patent system of today. Furthermore, the complexity and high degree of overlap occurring in high-congestion subject matters such as smartphone technology led Apple to successfully pursue a clustered “user experience” approach to legal protection that some argue represents spillover of patents into trade dress rights. Again, these are circumstances D. Comparing Apple and Wright Cases 59 that arguably have resulted from the patent quality challenges that have been exhaustively documented over the last several decades. As a sidenote, both cases occured outside the foundational registrationbased system described in Chapter I. Both faced challenges with having patent examination proportionately allocate exclusive rights under these “under-patenting” and “over-patenting” conditions. Still, probably due to its proximity in history, the Wright case reflects a system that lies closer to original intentions described by the first sessions of U.S. Congress. The aforementioned strict regard for claims-supporting evidence exhibited by the patent office in 1903 appears to take greater measure at upholding the “new and useful” requirement as understood in the late 18th century. In summary, the Apple and Wright cases illustrate that irrespective of historical placement, a primary challenge of any patent system is indeed the appropriate identification and bounding of patentee exclusive rights. With Apple one sees invention being effectively diced and diluted down into hundreds of patents many of which have no classic inventive sub‐ stance; i.e., low patent quality. These high numbers inevitably result in complex entanglements with market competitors leading to patent war. On the other hand, with Wright one sees invention being reserved for only the most dramatic and substantial demonstrated achievement, effectively dis‐ regarding legitimate contributions made by other parties. This scenario can also be considered a display of low patent quality in that the disclosure was not properly bounded. Both scenarios led to patent war. As will be de‐ scribed in the next chapter, it is suggested that proper “tuning” of a patent system to avoid such extremes is likely unattainable with an examinationbased system. Instead, the USPTO should consider a newly enabled im‐ plementation of the original patent registration framework depicted in H.R.10 and the Patent Act of 1793. Net Challenges Despite overwhelming support for a federal patent system amongst the Founders there existed skeptics such as Thomas Jefferson who voiced “ambivalence concerning the merits and efficacy of the American patent E. VI. Synthesis and Analysis 60 system” and apprehensions with the challenging task of “parceling” exclu‐ sive rights to inventors in a fair and consistent manner. 153 The daunting challenges of patent examination were indeed recognized by government officials as early as 1790. After a brief attempt at institut‐ ing the process, there was a return to registration after a “dawning recogni‐ tion by the members of the patent board, and particularly by Jefferson, that they simply had insufficient time to properly carry out the tasks assigned to them..”154 The board was overwhelmed with applications, leading to “frustrating” delays for inventors. Unfortunately this scenario sounds all too familiar today. As Jefferson took part in preparing the Patent Act of 1793 he built upon concepts introduced with H.R.10. The registration system would require applicants to file a notice in “every District Court of the United States” as well as “three times in some one Gazette of each of the said Districts.”155 His concern over “trifling” invention submissions likely played a role in devising this procedure for public disclosure. 156 These activities indicate that the Founders were well acquainted with the challenges of proper ex‐ amination in determining divisions in inventor exclusive rights. This proper division of intellectual property has been shown to depend on patent quality because high quality patents establish legal certainty. By definition, high quality patents can survive opposition challenges and de‐ scribe clear boundaries of ownership. The property model described by Bessen and Meurer reflects this conventional academic thought on the matter. What the recent GAO report and a host of other studies have shown however, is that consistent quality is not being achieved with to‐ day’s costly ex-parte application and examination procedure. Adding more question to the tremendous expense of the examination process is the fact that the vast majority of issued patents are never even implemented. In a 2007 journal article discussing the “bad patent” prob‐ lem, law professors Lichtman and Lemley provide: “a..growing number of ‘patent trolls’ today (are)..using patents on obvious in‐ ventions quite literally to tax legitimate business activity..What to do? One tempting idea is to increase PTO funding, making possible more rigorous upfront screening..but the drawback is that most of the money would be wast‐ 153 Walterscheid, supra at ix 154 Id. at 195 155 Id. at 202 156 Id. at 201 E. Net Challenges 61 ed..most patents lie dormant after issuance..They are lottery tickets..Money spent perfecting these documents..is money thrown away.” 157 Thus the drawbacks of full patent examination are two-fold: unrealistic expectations for completing thorough examination and massive amounts of wasted effort processing inconsequential “dormant” patents. In summary, the net challenges facing today’s patent system can be re‐ duced to two “classic” problems recognized over 200 years ago: – Subjective patent criteria: definitions and standards for novelty, nonobviousness, utility, and enablement have varied throughout history due to changing landscape as well as limitations with language inter‐ pretation leading to inconsistent results and reduced legal certainty. – Unrealistic patent examination process: determining patent validity in a closed examination-based process has always been an insurmount‐ able and wasteful prospect. Only a fraction of patents are challenged. Examiners do not have time or resources to complete a proper exami‐ nation anyway, and are actually incentivized to grant issues. This situa‐ tion leads to delayed publications and weak patents which also under‐ cuts legal certainty, inviting opportunity for more litigation that inhibits innovation. Given these problems the question becomes: what other ways besides exparte examination can be used to achieve patent quality? As suggested, a modernized version of the Patent Act of 1793 offers at least one option. 157 Lichtman and Lemley, supra at 48 VI. Synthesis and Analysis 62 Proposals Below are respective proposals for addressing the two root problems iden‐ tified from the analyis contained in the previous chapter. A “utility param‐ eter” is introduced as an added entry for patent content in order increase objectivity in determining patent value as well as scope. Such parameter is to be incorporated with a return to a registration-based patent system that leverages the latest capabilities in information technology. The “Utility Parameter” Chapter VI, section C provided that original meaning for the utility re‐ quirement for patents emphasized measurable improvements to manufac‐ turing. In 1817 Judge Story did not want to impose any requirement that a patent “must have” improved utility over existing methods but only that it did not introduce any detrimental or immoral subject matter. He did so in order avoid imposing unnecessary restrictions on incoming ideas, instead relying on an assumption that any patents lacking in utility would natural‐ ly “sink” into obscurity. Unfortunately, instead of “sinking” away, bad patents continue to surface amongst the sea of growing litigation described by GAO and others.158 One should also consider that during early U.S. history, utility of an in‐ vention was more easily recognizable. Again, the cotton gin had doubled the rate of textile manufacturing. In contrast, modern notions of utility have been obscured by greater competition, market influence, technical complexity and uncertainty. This situation has led to many “weak” patents being issued on what amounts to obvious or slight design variations. This paper proposes that introducing a “utility parameter” as a formal, albeit unverified, entry on patent applications would inject a needed mea‐ sure of objectivity in what has become an excessively subjective exercise of claims interpretation. The utility parameter would simply require the applicant to quantify the significance of their invention by whatever means VII. A. 158 Id. 63 he or she feels is most suitable for capturing the advantage that the inven‐ tion offers. For example, if an inventor developed a new fuel injector de‐ sign for engines that resulted in increased vehicle range, the inventor can specify how many more kilometers of travel can be obtained from a given amount of fuel for a particular size and weight of vehicle based on either calculated estimates or actual test data. Ideally this improvement would be supported by attaching such reports but it would not be required. The pri‐ mary purpose for the utility parameter is to assist in bounding a patent by revealing substantially more about the nature and result of the intended in‐ vention itself. Therefore, it would also help determine whether there is tru‐ ly any “equivalence” with a contending patent claim. The utility parameter purported by the applicant would be tested only in the event the patent is formally challenged. Such test would also consider the extent to which the patentee has actually demonstrated said utility parameter, in order to dis‐ courage empty or inflated figures. Although many applicants may already include content resembling a utility parameter in their specification and claims, there is currently no re‐ quirement to do so. This proposal only requires that the utility parameter include a quantification of benefit and be presented in clear and under‐ standable language as a formality of the patent application. There would be no binding standard for a minimum utility beyond what is suggested by existing U.S. patent law. The utility parameter intends only to provide a missing “measuring stick” for use in an evaluation process that is other‐ wise restricted by often ambiguous standards for novelty and non-obvious‐ ness; hence helping to more quickly eliminate weak patents and “fuzzy boundaries” on claims. “High-Tech” Patent Registration As described in Chapter VI, Section A, the major logistical problem facing the patent registration system in 1793 was lack of patent notice communi‐ cation capability. Furthermore, there was a general lack of understanding with regards to patent issues and abuses that were taking place at the time. In today’s communication and information age these problems simply no longer exist. B. VII. Proposals 64 Description It is proposed that with use of modern information technology, the USPTO can now access the public support once sought by the Founders to assist in governing patent issues. An online registration-based patent system would leverage public expertise and manpower that would dwarf the efforts of current examination proceedings. These efforts would provide greater illu‐ mination of the patent landscape, leading to improved anticipation of patent strength. It is important to note that this proposed online system is not intended to provide a legal determination on patent validity built on consensus. In‐ stead it enables expression of a perceived public value or strength in asso‐ ciation to a given patent. It is simply an electronic registry database and public forum that promotes expedited disclosure and the accumulation of public feedback. The gathered commentary would effectively provide a “word on the street” reading that can assist the public as well as stakehold‐ ers in their assessment of patent positioning and strength. It would not legally determine what is a valid patent, but instead assist in identifying what is a “valued” patent. Users of the online system would be registered and verified by the USPTO patent registry website. Relevant user and demographic data such as associations with certain companies or industries would be collected for each user account. Users would then be able to leave named or anonymous commentary on a moderated “message board” occurring for each regis‐ tered patent. Users would use these message boards in much the same way as many popular social media sites such as Yahoo, Google, and Face‐ book.159 Individuals may leave questions or comments regarding each patent. To avoid patentees being inundated with commentary, moderator support as well as advanced consensus identification utilities such as “vot‐ ing up” options can be used. Voting items up or down would help identify the most pressing questions or comments from the general public which the patentee can then respond to online. Notably the USPTO already em‐ ploys an online utility that resembles this scheme for gathering ideas from 1. 159 Chris Dixon, Why Google Succeeded Where Other Search Engines Failed, Busi‐ ness Insider, (2011) http://www.businessinsider.com/accurate-contrarian-theories -2011-5?IR=T (accessed Sep 7, 2017) B. “High-Tech” Patent Registration 65 the public on how to improve the Manual on Patent Examination Practices (MPEP).160 Applicants would file online and have their registered patents published after a formality check that should take no more than sixty days to pro‐ cess. Timely disclosures and publication benefit the research and develop‐ ment community by minimizing the number of applications hidden in the “pipeline” at any one time. Compatibility with Existing Systems Installation of the proposed online patent registration system would be minimally disruptive to the existing legal infrastructure. All existing legal proceedings including formal post-grant review would remain intact. Patent law would maintain existing criteria such as novelty and non-obvi‐ ousness, introduce new entries such as the “utility parameter,” yet elimi‐ nate the requirement for formal examination of patent filings. Instead, ap‐ plications would be rapidly posted to the online database. The online reg‐ istry would be equipped with adjoining search and communication forum functionality. In addition, it would be designed to process filing fee pay‐ ments and facilitate an efficient formalities-only incoming check by the USPTO. This online repository would also enable the attachment of data and media files that support stated claims. An advanced search function that updates with the latest image and algorithmic search capabilities would also be provided to users. Powerful computer sciences such as arti‐ ficial intelligence and block-chain crytography can be harnessed to help the USPTO manage an increasingly vast volume of time-sensitive data. These advances would be applicable to all aspects of the patent process; from search, to prosecution, and, as necessary, during litigation. Electronic patent registration would be disruptive only as far as elimi‐ nating the burdensome and wasteful examination process being attempted today. The existing infrastructure of courts, agencies and legal services will of course still be needed but these resources would be used much more efficiently and effectively. The USPTO would undergo downsizing but maintain a contract examiner resource pool through establishment of supplementary private agencies. Full-time examiners would be able to tru‐ 2. 160 USPTO, Ideascale, https://uspto-mpep.ideascale.com/ (accessed Sep 7, 2017) VII. Proposals 66 ly hone their skills and help improve search algorithms when they are no longer rated on ‘count’ of patent grants per month, but rather thoroughness of examinations, limited to important and high-potential subject matters as described below. Agency Examination Option As a supplemental option, a professional examination report by the USP‐ TO or government-approved third party agency may be provided, at a pre‐ mium fee, for those seeking a stronger indication of patent value. The patentee is free to elect whether or not to post findings of such a report. As with any non-legal opinion, such report would not serve to provide deter‐ mination of validity. It would only reflect additional steps beyond nominal processing taken on the part of the patentee to verify strength of claims. The above formal agency review option may appear to reintroduce patent examination that favors well-financed corporations but selective third-party examination input is not likely to overcome the self-regulation enabled by low-cost public registration. Professional assessments would be discouraged from offering binary determinations on patent status. In‐ stead, they would provide a “strength rating” such as a percentage likeli‐ hood of patent validity in a third-party challenge. Like any other opinion, this assessment would be open for questioning if posted publicly. Further‐ more, the online database would track these assessments against results from actual litigation or challenge. Hence, an “accuracy rating” can be generated for each agency providing a measure of competition and quality control that escapes the USPTO today. To add, a fixed-capacity USPTO with private agency supplementation would provide a more flexible and cost-effective examination resource. Benefits The “open book” approach of online patent registration should accomplish far beyond even what the Founders had sought with the newspapers of their day. With internet-enabled advanced information management re‐ sources, relevant patents would undergo a virtual “townhall” review pro‐ cess where the general public could weigh-in on strength of the claims be‐ ing set forth. 3. 4. B. “High-Tech” Patent Registration 67 This high-visibility, crowd-sourcing scenario would result in a database that can be used to dramatically reduce litigation and avoid patent wars. Greater real time access to the patent landscape would enable more “pregame” analysis for those considering post-grant review, litigation or other formal patent challenges. The consensus of opinion contained in such a registry would provide a virtual examination process that should dissuade questionable claims and frivolous legal actions. It should also encourage private settlement. Public commentary on patentee claims regarding nov‐ elty, non-obviousness, and the utility parameter would provide a supple‐ mental cross-check to private analysis parties may be pursuing in parallel. Furthermore, by “laying out all their cards” sooner, rival companies are provided better opportunity to propose patent pool or standards-essential patent agreements which can work to avoid potential patent wars. An online patent registry would also provide judges and attorneys means to become rapidly acquainted with a given subject matter by brows‐ ing relevant message boards associated with any case at hand. In this way, industry participants as well as the general public will have a chance to have their voices heard without having to surmount the formalities or ex‐ posure of a formal patent challenge or litigation. Risks and Unknowns Some may argue that an online registration system will invite similar as well as new types of abuses as seen between 1793 and 1836. As described, the problems taking place after the Patent Act of 1793 were due mainly to a lack of adequate communication and information regarding patent notice and alerting the public to abuses. In today’s internet age, these problems would be eliminated. Anyone across the world with internet connection would be able to see and comment on the latest patent filings within sec‐ onds of issue. Furthermore, unscrupulous individuals can no longer hide behind a document with the Presidential Seal as they did in the early 1800s. Any new attempts at intimidation or abusive methods would be quickly exposed given today’s resources. Although there remain risks with any such reform, there is also possi‐ bility of unknown benefits. An online registry may produce yet unpredict‐ ed advantages such as the emergence of public reputation as contributing self-governing factor. For example, some may still be concerned with companies “flooding” the registry with worthless patents as an intimida‐ 5. VII. Proposals 68 tion tactic. Firstly, employees may be reluctant to be personally named as inventors on such patents as they will no longer be able to point to the USPTO as having fully concurred with their application; this would make the inventor solely responsible for outlandish or false claims that are later exposed. Furthermore, such companies would probably be called out on the public forum anyways. Repeated actions such as flooding or filing of weak or obvious patents can be made apparent with data filtering and in‐ formation ranking options easily worked into an online database. Again, any company can choose to challenge public findings in formal proceed‐ ings, but the backdrop provided by online consensus should reduce these actions to only the most deserving disputes. Summary The above provides only a rough sketch of the framework and potential benefits of restoring original U.S. patent registration principles through modern means. There are hosts of other factors to consider alongside such a reform. Other elements to be incorporated may include reduction of patent terms, increases in filing fees, and other procedural adjustments. The focal point however, remains to be the leveraging of public participa‐ tion and advanced data management tools to achieve a crowd-sourced vir‐ tual examination process that minimizes governmental expense while ef‐ fectively maintaining high patent quality standards. Such a system would lead to increased legal certainty that works to encourage innovation. Theo‐ retical application of this proposed system to the Apple and Wright scenar‐ ios is provided in the concluding chapter. 6. B. “High-Tech” Patent Registration 69 Conclusion In closing, this paper has provided a historical perspective on origins of the U.S. patent system along with review of patent quality and two wellknown patent wars. This information reveals a persisting quality crisis with patents on most subject matters. This crisis corresponds to a drift away from founding constructs of the U.S. patent system; a foundation that emphasized usefulness, disclosure and publication before grant of ex‐ clusive rights. An effective restoration of these founding principles is now possible using technology that is available today. This paper concludes with theoretical application of proposed reforms to the Apple and Wright cases and final remarks. Revisiting Apple and Wright Below is a theoretical exercise that applies the proposed utility parameter and online registration system from Chapter VII to the Apple and Wright cases. The purpose is to illustrate how such a system may have helped avoid or reduce the extent of these patent wars. With Apple vs. Samsung we see that Apple devised an assertion scheme based on clustering of “user experience” patents, most of which covered the physical design and graphical icons on the iPhone. The “utility param‐ eter” may have provided both direct and indirect effects that could have distinguished the product in a more substantial and meaningful way than what essentially amounts to electronic trade dress. A contemporary study completed by Google titled “The New Multi-screen World” has revealed a “staggering shift in user behavior toward engaging with smartphones first as their primary entry point for a wide range of tasks that have critical business impact…now 65% of all tasks involving ‘Searching for Info’ start on the smartphone.”161 No doubt Apple’s iPhone has caused this mi‐ gration to mobile usage due to the features that it highlights such as on‐ screen manipulation with a user’s fingers. But whereas the current content VIII. A. 161 Mauro, supra 70 of patents focuses on showing “how” users are able to use their fingers to engage on-screen images, the utility parameter would reinforce the “why” behind such a feature. For example, for Apple’s two-finger zoom, they may have elected to enter utility parameter data which captures how much more quickly users are able to search for data or check email compared to conventional scroll and select methods used on existing phones. Such data places focus on the true appeal of the iPhone, increased utility, rather than the artistic and fluid features than enable that utility. This utility is reflect‐ ed in the findings of the Google “Multi-screen” report. The utility parame‐ ter would have more prominently displayed this distinction, cutting down on long, subjective arguments on whether an infringing product looked “cool” enough to be mistaken for an iPhone. Indirectly, the virtual examination aspect of the proposed registration system would have helped counter the stockpiling strategy employed by both companies by “devaluing” questionable software claims. Further‐ more, by referring to online patent registration data, Apple may have ap‐ proached Samsung on patent pooling proposals to pre-empt confrontations on upcoming products such as the iPhone and iPad. For example, Apple may have recognized the relevance of Samsung’s 3G patents earlier and negotiated a patent pooling agreement. They could have negotiated favor‐ able terms before revealing the iPhone, making it out of reach from Sam‐ sung due to this pre-placed agreement. A number of other hypothetical outcomes can be speculated but the point is that increased focus on prod‐ uct utility and visibility could have helped avoid or at least shorten the smartphone war between Apple and Samsung. In the case of Wright v Herring-Curtiss we find an example of the co‐ nundrum facing most “principle” patents which disclose sweeping claims on an enabling technology. This conundrum was represented by the con‐ flict between the Wright “wing-warping” method of lateral aircraft control and Curtiss’ more efficient aileron construction. It is an example that goes to the heart of the question regarding how to “parcel out” inventor rights. Here again a utility parameter may have helped break the theoretical stale‐ mate between what were two good ideas. To illustrate this point, the following analogy is offered. Consider someone “inventing” a single pole for use as a bridge to cross over small rivers. The original inventor can quantify benefit in terms reduced cost by arguing boats would no longer be required to traverse the waterway, or re‐ duced time and distances for travel. A second party then designs a ladder style bridge which incorporates two poles connected by a series steps A. Revisiting Apple and Wright 71 thereby eliminating the need for careful balance as travelers traverse over it. Under current standards the first party will argue that the ladder bridge idea from the second party is an “obvious” derivation of the first party’s original idea. The second party will argue that their bridge is much less dangerous and easier to use for an average traveler thus represents a new invention. A debate would ensue as courts try to resolve whether a ladder is really just two poles set next to each other or a new concept all together. With the utility parameter, the second party would now be able to docu‐ ment quantifiable benefit in a mode they deem most relevant. For exam‐ ple, they would be able to run a study that compares the average transit time of a group of individuals when using the ladder style bridge against use of the single pole. They could also collect statistics on the rate of falls or missteps on their design versus the single pole. This data could be pro‐ vided as an attachment under the utility parameter entry. In the event of litigation, courts could then use this additional resolution to help deter‐ mine whether the new ladder design deserves an exclusive right of its own. In similar fashion, the difference between Wright’s wing warping and Curtiss’ aileron would have been better documented with use of a utility parameter. Although an aileron operates under a similar principle as wing warping, the amount of simplification it presents to aircraft design is im‐ mense. Warping an entire wing multiplies the number of connections and control mechanisms required from the cockpit to the wing, imposes sub‐ stantial limitations to aircraft material options, and compromises flight control authority. It is no wonder that Curtiss’ aileron remains an essential part of aircraft design today. These advantages could have all been more readily captured if each inventor was forced to contemplate a utility pa‐ rameter at filing. In this way, the values for both Wright and Curtiss would have been recognized earlier and dealt with accordingly; likely through a cross-licensing agreement. To reiterate, the utility parameter is not proposed as a binding criterion. Its purpose is to inject a measure of objectivity that may help overcome the subjective criteria of novelty and non-obviousness in many cases. Finally, the registration system would have likely forced the Wright Brothers to demonstrate their Wright Flyer much sooner than they actually did. Wilbur Wright was apparently reluctant to showcase his design until it was “locked-up” with a patent grant. Firstly, the lowered barrier for filing with registration would have increased the risk that another party would file a similar concept sooner. Secondly, the data from flight tests would VIII. Conclusion 72 become a greater component of substantiating the registered patent. Both of these factors should have inspired the Wrights to disclose their idea more quickly while continuing to focus on developing and improving their aircraft design. Instead, they were consumed with lengthy exchanges with the patent office and subsequent litigation.162 Looking Ahead As provided in the introduction to this paper, noted economist A.T. Hadley once stated: “a patent system, if properly guarded, seems to be thoroughly justified by its results.“ Over one hundred years prior, Thomas Jefferson, acting as one of the first examiners of U.S. patents proposed a shift to reg‐ istration due to “insufficient time to properly carry out tasks assigned to them.”163 These congruent observations reveal that patent quality lies at the core of a properly functioning patent system. This quality relies on es‐ tablishing a degree of confidence on the value and reach of any given patent issue. It has become abundantly clear that the closed examination process cannot establish this required level of confidence today and that this task will only grow more difficult with time. Once again, this understanding reaches beyond the U.S. patent system. As Professor Dr. Ann highlights in his 2016 paper on patents and legal certainty: “Examiners who feel all too secure here may want to consider the well-known quote by Bob van Benthem, the EPO’s first president: ‘I mean . , ., that the examiner, who is sitting at his desk outside the practice, should show some modesty. He should not be a specialist. Even auditors who have a great deal of practical experience inevitably lose contact with the practical artisan prob‐ lems, if they have only spent a few years in the office.‘”.164 B. 162 Goldstone, supra 163 See note 154 164 Ann (2016), translated with www.translate.google.com, original quote “Ich meine . . ., dass der Prüfer, der abseits der Praxis an seinem Schreibtisch sitzt, eine gewisse Bescheidenheit an den Tag legen sollte. Er sollte sich nicht als Spezialist aufspielen. Sogar Prüfer, die große praktische Erfahrung hinter sich haben, verlieren unweigerlich in gewissem Grade den Kontakt mit den prakti‐ schen handwerklichen Problemen, wenn sie erst einige Jahre im Büro verbracht haben” B. Looking Ahead 73 Patent invalidity rates in Europe, Japan and the United States have been cause of ongoing concern and debate despite the tremendous resources be‐ ing expended on examination each year. The USPTO needs to acknowledge that the current patent examination process is no longer feasible. An alternative, robust and comprehensive method for ensuring patent quality is needed to avoid further loss of confi‐ dence in the system. In his 2012 article, Judge Posner goes on to echo much of today’s sentiment stating “that there appear to be serious prob‐ lems with our patent system, but almost certainly effective solutions as well, and that both the problems and the possible solutions merit greater attention than they are receiving.” This paper has proposed that introducing a utility parameter with return to a registration-based patent system as originally envisioned by the Founders offers a solution to these serious problems. Registration that leverages modern information technology enables the USPTO to “share the load” of patent value assessment with the public and would better rep‐ resent the scheme outlined by one of America’s first patent examiners, Thomas Jefferson. Jefferson based his framework on long term concerns for a newly formed nation. And for years after his tenure, he continued to emphasize the importance of properly determining which ideas were “worth to the public” of an exclusive patent right. Who better to enlist for this task than the public itself? VIII. Conclusion 74 List of Works Cited Cases: Samsung Electronics v. Apple Inc., No. 15-777 (S. Ct. Dec. 6, 2016) Apple Inc. v. Samsung Electronics, No. 15-1171 (Fed. Cir. Feb. 26, 2016) Apple Corporation v. Samsung Electronics. Ltd, No. 5:2012cv 00630 (N.D. Cal. Feb. 8, 2012) Apple Corporation v. Samsung Electronics. Ltd, No. 5:2011cv 01846 (N.D. Cal. Apr. 15, 2011) Constitutions: U.S. Const. art. I, § 8, cl. 8 Statutes: 35 U.S.C. § 100-103 Leahy-Smith America Invents Act of 2011, Pub. L. No. 112-29, § 125, Stat. 284 (2011) U.S. Patent Act of 1836, 5 Stat. 117 (1836) taken from Edward C. Walterscheid, To Promote the Progress of Useful Arts at 497-509 U.S. Patent Act of 1793, 1 Stat. 318 (1793) taken from Edward C. Walterscheid, To Promote the Progress of Useful Arts at 479-483 U.S. Patent Act of 1790 1 Stat. 109 (1790) taken from Edward C. Walterscheid, To Promote the Progress of Useful Arts at 463-468 Legislative Materials: Intellectual Property: Patent Office Should Define Quality, Reassess Incentives, and Improve Clarity, Government Accountability Office, GAO-16-490, Report to Chairman, Committee on Judiciary, House of Representatives (June 2016) Patent Quality Improvement: Hearing Before the Subcomm. on Courts, the Internet, and Intellectual Property, 108th Cong. (2004) Machlup, Fritz, An Economic Review of the Patent System: Hearing Before the Sub‐ comm. on Patents, Trademarks, and Copyrights, 85 Cong. 2 (1958) H.R. 10, 1st Cong. (1789) taken from Edward C. Walterscheid, To Promote the Progress of Useful Arts at 433-439 Books: O’Regan, G., Pillars of Computing: A Compendium of Select, Pivotal 75 Technology Firms (2015) Bottomley, Sean, The British System during the Industrial Revolution 1700-1852, 28 Cambridge IP and Information Law 53 (2014) Goldstone, Lawrence, Birdmen: The Wright Brothers’, Glenn Curtiss, and the Battle to Control the Skies (2014) Bessen, James & Meurer, Michael J., Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk (2008) Boldrin, Michele & Levine, David K., Against Intellectual Monopoly, (dklevine.com 2004) Walterscheid, Edward C., To Promote the Progress of Useful Arts: American Patent Law and Administration, 1798-1836 (1998) Dobyns, Kenneth W., The Patent Office Pony: A History of the Early Patent Office (1997) Gordon, Thomas T. et al., Patent Fundamentals for Scientists and Engineers, 7 (3d ed. 1995), https://books.google.de Periodicals: Yelderman, Stephen, Do Patent Challenges Increase Competition?, 83 4, The Univer‐ sity of Chicago Law Review pg, (2016) Diamond, Arthur M., Seeking the Patent Truth: Patents Can Provide Justice and Fund‐ ing for Inventors, 19 N.3 The Independent Review 325, (2015) Graham, Stuart & Vishnubhakat, Saurabh, Of Smart Phone Wars and Software, 27, American Economic Association 67, (Winter 2013) Chia, Thomas H., Fighting the Smartphone Patent War with RAND-Encumbered Patents, 27 Berkeley Technology Law Journal 209, (2012) Worrel, Rodney K., The Wrights Brothers’ Pioneer Patent, 65 American Bar Associ‐ ation Journal 1513, 15xx (1979) Articles: Eichenwald, Kurt, The Great Smartphone War, Vanity Fair (May 2014), https://www. vanityfair.com/news/business/2014/06/apple-samsung-smartphone-patent-war (Aug 29, 2017) Crum, Rex, Supreme Court throws out Apple’s $399M win in Samsung patent fight, Mercury News (Dec. 2016), http://www.mercurynews.com/2016/12/06/supreme-c ourt-throws-out-apples-399m-win-in-samsung-patent-fight/ Whittemore, Lauren E., U.S. Government Accountability Office Releases Two Reports on the United States Patent and Trademark Office and a Survey of USPTO Examin‐ ers, Fenwick and West LLP (Aug 2016), http://www.lexology.com/library/detail.a spx?g=b49734c2-6e59-4970-8354-8b3ff5e0d853 Davis, Ryan, GAO Says Time Pressure At USPTO Leading To Poor Patents, Law360 (July 2016) https://www.law360.com/articles/819570 List of Works Cited 76 Rein, Lisa, Patent Lawsuits Swell and Watchdog Says the Government is to Blame, Washington Post, (July 2016), https://www.washingtonpost.com/news/powerpost /wp/2016/07/20/patent-officetktk/?utm_term=.be6d9769eecb Broussard, Mitchel, Apple Loses Appeal in Samsung Case: Two Patents Ruled Invalid, $120 Million Verdict Overturned, MacRumors (Feb. 2016), https://www.macrumor s.com/2016/02/26/apple-samsung-appeal/ Mullin, Joe Apple’s $120M jury verdict against Samsung destroyed on appeal, Arstechnica (Feb. 2016), https://arstechnica.com/tech-policy/2016/02/appeals-cou rt-reverses-apple-v-samsung-ii-strips-away-apples-120m-jury-verdict/ Trainor, Sean The Wright Brothers: Pioneers of Patent Trolling, Time (Dec. 2015), http://time.com/4143574/wright-brothers-patent-trolling/ Oatman-Stanford, Hunter, Let There Be Light Bulbs: How Incandescents Became the Icons of Innovation, Collector’s Weekly (July 2015) https://www.collectorsweek ly.com/articles/let-there-be-light-bulbs/ Matt Levy, Yes, The Aviation Industry Was Nearly Derailed by the Wright Brothers’ Patent, Patent Progress (Jan 2015), https://www.patentprogress.org/2015/01/12/y es-aviation-industry-nearly-derailed-wright-brothers-patent/ Nocera, Joe Greed and the Wright Brothers, NY Times (Aug 2014), https://www.nytim es.com/2014/04/19/opinion/nocera-greed-and-the-wright-brothers.html?_r=2 Tibken, Shara Apple v. Samsung patent trial recap: How it all turned out, CNET (2014), https://www.cnet.com/news/apple-v-samsung-patent-trial-recap-how-it-all-t urned-out-faq/ Von Florian Mueller, Eingestellt , Apple, Samsung provide final list of patents and ac‐ cused products for California spring trial, Foss Patents (Feb. 2014), http://www.fo sspatents.com/2014/02/apple-samsung-provide-final-list-of.html Hendricks, Drew, 7 Simple Ways You Can Protect Your Idea From Theft, Forbes (Nov. 2013), https://www.forbes.com/sites/drewhendricks/2013/11/18/7-simple-wa ys-you-can-protect-your-idea-from-theft/#7af8b02b1f86 Mauro, Charles Apple v. Samsung: Impact and Implications for Product Design, User Interface Design (UX), Software Development and the Future of High-Technology Consumer Products, PulseUX Blog (Dec 2012), http://www.mauronewmedia.com /blog/apple-v-samsung-implications-for-product-design-user-interface-ux-design-so ftware-development-and-the-future-of-high-technology-consumer-products/ Grosse Ruse-Khan, Henning, Options Within the IP System to Promote Minor Innova‐ tions, WIPO Regional Seminar (Sep 2012), Max Planck Institute for Intellec‐ tual Property and Competition Law, http://www.wipo.int/edocs/mdocs/aspac/e n/wipo_ip_kul_12/wipo_ip_kul_12_ref_t4b.pdf Kravets, David Who Cheated Whom? Apple v. Samsung Patent Showdown Explained, Wired (July 2012), https://www.wired.com/2012/07/apple-v-samsung-explained/ Posner, Richard A. Why There Are Too Many Patents in America, The Atlantic (July 2012), https://www.theatlantic.com/business/archive/2012/07/why-there-are-too-ma ny-patents-in-america/259725/ History.com staff, The Continental Congress, (2010) History.com, http://www.history .com/topics/american-revolution/the-continental-congress List of Works Cited 77 Quinn, Gene, An Old Patent Examiner Explains Poor Patent Quality, Ipwatchdog (Aug 2009), http://www.ipwatchdog.com/2009/04/17/an-old-patent-examiner-expla ins-poor-patent-quality/id=2651/ Lichtman, Doug and Lemley, Mark A., Rethinking Patent Law’s Presumption of Validi‐ ty, Stanford Law Review (Aug 2007), https://www.researchgate.net/profile/Mark _Lemley/publication/228188392_Rethinking_Patent_Law's_Presumption_of_Valid ity/links/02e7e51eaa79346c23000000.pdf Hise, Phaedra, How the Wright Brothers Blew It, Forbes (Nov 2003), https://www.forb es.com/2003/11/19/1119aviation.html Price, Jr., William, Reasons Behind the Revolutionary War, Tar Heel Junior Historian Association, NC Museum of History (1992) taken from NCMedia, http://www.ncp edia.org/history/usrevolution/reasons Library of Congress, Wilbur and Orville Wright Papers at the Library of Congress, 1901 to 1910, https://www.loc.gov/collections/wilbur-and-orville-wright-papers/arti cles-and-essays/the-wilbur-and-orville-wright-timeline-1846-to-1948/1901-to-1910/ Cornell Law School, https://www.law.cornell.edu/wex/intellectual_property_clause List of Works Cited 78

Abstract

Although the U.S. Patent System has been essential to spurring innovation, it has wavered in its efficiency and effectiveness at doing so. This research first makes historical comparison and analysis of the Apple and Wright landmark patent war cases to illustrate that, irrespective of timing, benefits of a patent system rest heavily on how well it defines and maintains “patent quality.” Much of the challenge in maintaining such quality relates to the subjective and often uncertain nature of invention criteria such as “non-obviousness.” As shown by recent trends, decreased patent quality leads to greater uncertainty about patent validity, which in turn invites more litigation. This work proposes that, in order to improve constancy on patent quality, the U.S. patent office should consider returning to original strategies envisioned by the Founders of the United States as described by a patent-registration system that emphasizes utility and public review in governing the patent granting process. Modern information technology can now be applied to effectively restore this original framework envisioned for patent quality control systems.

Zusammenfassung

Obwohl das US-Patentsystem wesentlich daran beteiligt war, Innovationen anzukurbeln, haben seine Effizienz und Effektivität in diesem Bereich nachgelassen. Diese Forschungsarbeit stellt zunächst einen historischen Vergleich an und analysiert die wegweisenden Apple- und Wright-Entscheidungen, um zu zeigen dass, ungeachtet des Zeitpunkts, die Vorteile eines Patentsystems wesentlich davon abhängen, wie gut es die „Patentqualität“ definiert und erhält. Ein großer Teil der Herausforderung bei der Erhaltung einer solchen Qualität bezieht sich auf die subjektive und oft unklare Beschaffenheit von Inventionskriterien wie „Nichtnaheliegen“. Wie aktuelle Trends zeigen, führt eine verminderte Patentqualität zu größerer Unklarheit über die Patentgültigkeit, was wiederum mehr Rechtsstreitigkeiten hervorruft. Das Werk schlägt vor dass, um die Konstanz der Patentqualität zu verbessern, das US-Patentamt die ursprünglich von den Gründervätern der USA erdachten Strategien beachten und so ein Patentanmeldungssystem, das den Nutzen und die öffentliche Prüfung beim Patenterteilungsverfahren hervorhebt, schaffen sollte. Moderne Informationstechnologie kann nun genutzt werden, um diesen ursprünglichen Rahmen für Patentqualitätskontrollsysteme effektiv wiederherzustellen.

References
O’REGAN, G., PILLARS OF COMPUTING: A COMPENDIUM OF SELECT, PIVOTAL
TECHNOLOGY FIRMS (2015)
BOTTOMLEY, SEAN, THE BRITISH SYSTEM DURING THE INDUSTRIAL REVOLUTION 1700-1852, 28 CAMBRIDGE IP AND INFORMATION LAW 53 (2014)
Goldstone, Lawrence, Birdmen: The Wright Brothers’, Glenn Curtiss, and the Battle to Control the Skies (2014)
Bessen, James & Meurer, Michael J., Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk (2008)
BOLDRIN, MICHELE & LEVINE, DAVID K., AGAINST INTELLECTUAL MONOPOLY, (dklevine.com 2004)
Walterscheid, Edward C., To Promote the Progress of Useful Arts: American Patent Law and Administration, 1798-1836 (1998)
Dobyns, Kenneth W., The Patent Office Pony: A History of the Early Patent Office (1997)
GORDON, THOMAS T. et al., PATENT FUNDAMENTALS FOR SCIENTISTS AND ENGINEERS, 7 (3d ed. 1995), https://books.google.de
Periodicals:
Yelderman, Stephen, Do Patent Challenges Increase Competition?, 83 4, THE UNIVERSITY OF CHICAGO LAW Review pg, (2016)
Diamond, Arthur M., Seeking the Patent Truth: Patents Can Provide Justice and Funding for Inventors, 19 N.3 The Independent Review 325, (2015)
Graham, Stuart & Vishnubhakat, Saurabh, Of Smart Phone Wars and Software, 27, AMERICAN ECONOMIC ASSOCIATION 67, (Winter 2013)
Chia, Thomas H., Fighting the Smartphone Patent War with RAND-Encumbered Patents, 27 BERKELEY TECHNOLOGY LAW JOURNAL 209, (2012)
Worrel, Rodney K., The Wrights Brothers’ Pioneer Patent, 65 AMERICAN BAR ASSOCIATION JOURNAL 1513, 15XX (1979)
Articles:
Eichenwald, Kurt, The Great Smartphone War, VANITY FAIR (May 2014), https://www.vanityfair.com/news/business/2014/06/apple-samsung-smartphone-patent-war (Aug 29, 2017)
Crum, Rex, Supreme Court throws out Apple’s $399M win in Samsung patent fight, MERCURY NEWS (Dec. 2016), http://www.mercurynews.com/2016/12/06/supreme-court-throws-out-apples-399m-win-in-samsung-patent-fight/
Whittemore, Lauren E., U.S. Government Accountability Office Releases Two Reports on the United States Patent and Trademark Office and a Survey of USPTO Examiners, FENWICK AND WEST LLP (Aug 2016), http://www.lexology.com/library/detail.aspx?g=b49734c2-6e59-4970-8354-8b3ff5e0d853
Davis, Ryan, GAO Says Time Pressure At USPTO Leading To Poor Patents, LAW360 (July 2016) https://www.law360.com/articles/819570
Rein, Lisa, Patent Lawsuits Swell and Watchdog Says the Government is to Blame, WASHINGTON POST, (July 2016), https://www.washingtonpost.com/news/powerpost/wp/2016/07/20/patent-officetktk/?utm_term=.be6d9769eecb
Broussard, Mitchel, Apple Loses Appeal in Samsung Case: Two Patents Ruled Invalid, $120 Million Verdict Overturned, MACRUMORS (Feb. 2016), https://www.macrumors.com/2016/02/26/apple-samsung-appeal/
Mullin, Joe Apple’s $120M jury verdict against Samsung destroyed on appeal, ARSTECHNICA (Feb. 2016), https://arstechnica.com/tech-policy/2016/02/appeals-court-reverses-apple-v-samsung-ii-strips-away-apples-120m-jury-verdict/
Trainor, Sean The Wright Brothers: Pioneers of Patent Trolling, Time (Dec. 2015), http://time.com/4143574/wright-brothers-patent-trolling/
Oatman-Stanford, Hunter, Let There Be Light Bulbs: How Incandescents Became the Icons of Innovation, COLLECTOR’S WEEKLY (July 2015) https://www.collectorsweekly.com/articles/let-there-be-light-bulbs/
Matt Levy, Yes, The Aviation Industry Was Nearly Derailed by the Wright Brothers’ Patent, PATENT PROGRESS (Jan 2015), https://www.patentprogress.org/2015/01/12/yes-aviation-industry-nearly-derailed-wright-brothers-patent/
Nocera, Joe Greed and the Wright Brothers, NY TIMES (Aug 2014), https://www.nytimes.com/2014/04/19/opinion/nocera-greed-and-the-wright-brothers.html?_r=2
Tibken, Shara Apple v. Samsung patent trial recap: How it all turned out, CNET (2014), https://www.cnet.com/news/apple-v-samsung-patent-trial-recap-how-it-all-turned-out-faq/
Von Florian Mueller, Eingestellt , Apple, Samsung provide final list of patents and accused products for California spring trial, FOSS PATENTS (Feb. 2014), http://www.fosspatents.com/2014/02/apple-samsung-provide-final-list-of.html
Hendricks, Drew, 7 Simple Ways You Can Protect Your Idea From Theft, FORBES (Nov. 2013), https://www.forbes.com/sites/drewhendricks/2013/11/18/7-simple-ways-you-can-protect-your-idea-from-theft/#7af8b02b1f86
Mauro, Charles Apple v. Samsung: Impact and Implications for Product Design, User Interface Design (UX), Software Development and the Future of High-Technology Consumer Products, PULSEUX BLOG (Dec 2012), http://www.mauronewmedia.com/blog/apple-v-samsung-implications-for-product-design-user-interface-ux-design-software-development-and-the-future-of-high-technology-consumer-products/
Grosse Ruse-Khan, Henning, Options Within the IP System to Promote Minor Innovations, WIPO Regional Seminar (Sep 2012), MAX PLANCK INSTITUTE FOR INTELLECTUAL PROPERTY AND COMPETITION LAW, http://www.wipo.int/edocs/mdocs/aspac/en/wipo_ip_kul_12/wipo_ip_kul_12_ref_t4b.pdf
Kravets, David Who Cheated Whom? Apple v. Samsung Patent Showdown Explained, WIRED (July 2012), https://www.wired.com/2012/07/apple-v-samsung-explained/
Posner, Richard A. Why There Are Too Many Patents in America, THE ATLANTIC (July 2012), https://www.theatlantic.com/business/archive/2012/07/why-there-are-too-many-patents-in-america/259725/
History.com staff, The Continental Congress, (2010) HISTORY.COM, http://www.history.com/topics/american-revolution/the-continental-congress
Quinn, Gene, An Old Patent Examiner Explains Poor Patent Quality, IPWATCHDOG (Aug 2009), http://www.ipwatchdog.com/2009/04/17/an-old-patent-examiner-explains-poor-patent-quality/id=2651/
Lichtman, Doug and Lemley, Mark A., Rethinking Patent Law’s Presumption of Validity, STANFORD LAW REVIEW (Aug 2007), https://www.researchgate.net/profile/Mark_Lemley/publication/228188392_Rethinking_Patent_Law's_Presumption_of_Validity/links/02e7e51eaa79346c23000000.pdf
Hise, Phaedra, How the Wright Brothers Blew It, FORBES (Nov 2003), https://www.forbes.com/2003/11/19/1119aviation.html
Price, Jr., William, Reasons Behind the Revolutionary War, Tar Heel Junior Historian Association, NC Museum of History (1992) taken from NCMEDIA, http://www.ncpedia.org/history/usrevolution/reasons
LIBRARY OF CONGRESS, Wilbur and Orville Wright Papers at the Library of Congress, 1901 to 1910, https://www.loc.gov/collections/wilbur-and-orville-wright-papers/articles-and-essays/the-wilbur-and-orville-wright-timeline-1846-to-1948/1901-to-1910/
Cornell Law School, https://www.law.cornell.edu/wex/intellectual_property_clause

Abstract

Although the U.S. Patent System has been essential to spurring innovation, it has wavered in its efficiency and effectiveness at doing so. This research first makes historical comparison and analysis of the Apple and Wright landmark patent war cases to illustrate that, irrespective of timing, benefits of a patent system rest heavily on how well it defines and maintains “patent quality.” Much of the challenge in maintaining such quality relates to the subjective and often uncertain nature of invention criteria such as “non-obviousness.” As shown by recent trends, decreased patent quality leads to greater uncertainty about patent validity, which in turn invites more litigation. This work proposes that, in order to improve constancy on patent quality, the U.S. patent office should consider returning to original strategies envisioned by the Founders of the United States as described by a patent-registration system that emphasizes utility and public review in governing the patent granting process. Modern information technology can now be applied to effectively restore this original framework envisioned for patent quality control systems.

Zusammenfassung

Obwohl das US-Patentsystem wesentlich daran beteiligt war, Innovationen anzukurbeln, haben seine Effizienz und Effektivität in diesem Bereich nachgelassen. Diese Forschungsarbeit stellt zunächst einen historischen Vergleich an und analysiert die wegweisenden Apple- und Wright-Entscheidungen, um zu zeigen dass, ungeachtet des Zeitpunkts, die Vorteile eines Patentsystems wesentlich davon abhängen, wie gut es die „Patentqualität“ definiert und erhält. Ein großer Teil der Herausforderung bei der Erhaltung einer solchen Qualität bezieht sich auf die subjektive und oft unklare Beschaffenheit von Inventionskriterien wie „Nichtnaheliegen“. Wie aktuelle Trends zeigen, führt eine verminderte Patentqualität zu größerer Unklarheit über die Patentgültigkeit, was wiederum mehr Rechtsstreitigkeiten hervorruft. Das Werk schlägt vor dass, um die Konstanz der Patentqualität zu verbessern, das US-Patentamt die ursprünglich von den Gründervätern der USA erdachten Strategien beachten und so ein Patentanmeldungssystem, das den Nutzen und die öffentliche Prüfung beim Patenterteilungsverfahren hervorhebt, schaffen sollte. Moderne Informationstechnologie kann nun genutzt werden, um diesen ursprünglichen Rahmen für Patentqualitätskontrollsysteme effektiv wiederherzustellen.