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Software Patents: A time for change?

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Software Patents: A time for change?

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Patent notice problems• A good system of property rights provides “notice”

information to strangers about ownership and scope of rights

• Notice problem, not missing prior art deserves the most attention by patent reformers

• Notice problems present for all technologies• Growing worse (1984-1999)• High for software and ICT generally• Lower for traditional chemicals (incl. small molecule drugs)

• Notice problems much smaller in more successful property regimes (copyright?)

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Taxonomy

• Fuzzy boundaries

• Public access to boundary info

• Property rights untethered to possession

• Search cost

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Fuzzy Boundaries

• Expensive opinion letters

• Problematic claim construction process

• High and rising reversal rate on claim construction

• Insufficient (no?) penalty for indefinite claim language

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Public access to boundary info– Continuations common and increasing Lemley

& Moore

Property rights untethered to possession– Claim scope changes over time – TKT, E-

Data, In re Hogan

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Search Cost

• Flood– 3G standard 7600 patents

• Perverse willfulness doctrine• Find the owner

– IBM call for transparency

• Result – 65% of firms do not conduct a patent search

before initiating product development Cockburn & Henderson survey for IPO

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Consequences of Notice Failure

• Insurance market failure

• Inadvertent infringement

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Everything’s Worse with Software

• Abstract inventions

• Abstract claim language

• General purpose technology

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Abstract Inventions• Often less precise language

– Freeny (e-Data) patent asserted against e-commerce sites

• Material object (cassette tape, hard drive)• Point-of-sale location (store, home)

• Meaning changes over time– Morse claim 8– Wang videotex frame processing

• Hey Mom, I patented the internet!

• Hidden equivalence– Church-Turing thesis

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Abstract Claims

• Functional language tends to be less precise– Fed Cir shudders when functional language is

used in biotech and worries about notice problem

• Hard to search– Both examiners and potential infringers

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General Purpose Technology

• Meaning of language changes with industry or technological context

• Lawsuits from the Antipodes

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Good Software Patents

• Vigorous enablement requirement– Limit overly broad scope

• Enhanced claim definiteness requirement

• Constrained DOE

• Also helpful– Independent invention defense– Remedy reform– Stronger 103