Statistics issued by the US Patent Office suggests that reexamination is the most successful way to challenge bad patents. For example, ex partes reexamination is granted 92% of the time, with all claims being canceled in 10% of cases and at least some claims being changed in 64% of cases. So for ex parte reexamination 9.2% of requests result in all claims being canceled and 59% of the time certificates issue with at least some claims being changed. Even more astounding are the inter partes reexamination statistics. Inter partes reexamination is granted 95% of the time, with all claims being canceled in 78% of cases and at least some claims being changes in 15% of cases. This means that for inter partes reexamination 74% of requests result in all claims being canceled and 14% of the time certificates issue with at least some claims being changed. This is staggering because if you can eliminate all claims then the patent is worthless, but even if you can only change claims you have effectively prevented retrospective infringement of changed claims because the claim that is changed can only be enforced moving forward from the point of change. Thus, quality reexamination representation is far better than paying a bounty for the collection of prior art references.
Nevertheless, yesterday Article One Partners announced the launch of what they characterize as a new global community to legitimize the validity of patents. Community members, called Article One calls Advisors, have an opportunity to send in previously hard to find evidence that challenges the validity for high profile patents. By tapping the unique knowledge and referral networks of our Advisors, this publicly available evidence known as prior art can be discovered. Article One analyzes the prior art to determine whether it can show patents to be legitimized or invalid. If Article One forms an opinion that patents are invalid, Advisors earn up to U.S. $50,000, with $1,000,000 total being offered for launch. Advisors who actively build the community also earn premium compensation in Article One’s Profit Sharing Plan of about five percent (5%) of the company’s net annual profit. The result is a highly-rewarded community providing a citizen’s review of U.S. patents to justify monopoly pricing for true innovation and energize U.S. patent reform.
“The United States Patent Office does high quality work, but its resources are limited to fully research the global pool of evidence used to determine patent validity,” said Cheryl Milone, founder of Article One Partners. “The community of Article One Partners includes Advisors worldwide who have knowledge of science and technology and can uncover new evidence. This evidence adds a crucial level of review to a patent system in need of reform to improve patent quality.”
According to the company website, Article One rewards Advisors not at a minimum level for uncovering prior art, but for the true value of their research and contributions to our community-what they know and even who they know for referrals. While this may sound good and inspiring, this same type of bounty system has been attempted before, but has been unsuccessful because it is difficult to impossible to locate a single reference that would strike down an issued patent. Furthermore, because the criteria used to determine whether submitted prior art is worthy of a bounty is so subjective it would seem quite unlikely that such a plan will succeed. At least that is what prior efforts to create a system to do the same thing has shown. Despite what many seem to think, money is a real incentive to taking down bad patents, but why would anyone expect someone to undertake the daunting task of locating prior art references and weaving together arguments in the hopes that some entity will appreciate the value of what has been uncovered and pay accordingly? It would be far wiser to simply fund reexamination of high profile questionable patents by a team of trained patent attorneys.
The conclusions are clear. While there is nothing wrong with paying to collect prior art references there is an extreme lack of incentive in the Article One business plan because the criteria for awarding the bounty are subjective and ambiguous. Furthermore, rather than paying a bounty the far better model is to hire competent researchers, such as former patent examiners and experience patent attorneys, to do the research, put together claim charts and file reexamination requests. If you want to stem the tide of patent trolls and bad patents the statistics demonstrate overwhelmingly what the solution should be, but as yet no corporations have seen the wisdom in doing this, even those who rail against patent trolls on a daily basis. I know this to be true because my firm has created proposals for using reexamination strategies to combat patent trolls and our proposals have gone no where even though they have reached upper level management at key Fortune 1000 companies. Thus, I have to wonder whether they really want to combat patent trolls or if they are only interested in a weaker patent system in general.