America’s patent system favors low tech, not groundbreaking innovation

By Gene Quinn
May 21, 2017

The U.S. patent system is not in a good place today. Patents are worth substantially less than they were a decade ago, patents are much easier to challenge thanks to the high kill rate of the Patent Trial and Appeal Board (PTAB), and some of America’s most innovative industries face questions as to whether their core innovations can be protected at all in the United States. Inventions in the life sciences sector and software have been hardest hit, and while many of those inventions are not protectable in the United States they can be patented in China, Europe, Canada, Australia and elsewhere. It seems America is pursuing a unilateral disarmament policy when it comes to patents and innovation policy, which makes little sense in the high tech world we live in today.

While the stagnant pace of progress is weighing on even the most optimistic within the industry, over the last year there have been some identifiable moments that have started to move things in a positive direction. The United States Court of Appeals for the Federal Circuit has on a number of occasions found software to be patent eligible, and in several important life sciences cases has seemed to move in a more positive pro-innovation direction. Increasingly, those walking the halls of the Capitol are finding a better reception in more offices, with more Representatives and Senators interested in patents, innovation and the national security issues and economic issues tied to these important matters.

Many of the biggest problems facing the patent system have been felt most directly by innovative startup companies, R&D companies and universities operating in the computer software and life sciences sectors. It is absolutely true to recognize that independent inventors and others not operating in the software or life science sectors have also been hit hard, but that has largely been as an indirect result of patents becoming devalued first and foremost in those sectors, which has sent a shockwave across the boarder market. Of course, the catastrophe of the property killing fields known as the PTAB has made it easy to challenge patents of all kinds, and that has mightily contributed to the devaluation and increasing disinterest in the patent system from those who have historically been among the most innovative contributors – the smallest players who are the biggest dreamers and who have the highest tolerance for risk.

It is becoming increasingly difficult to justify risking everything, as so many independent inventors, entrepreneurs and startups do with a patent system that tilts so heavily in favor of large corporations who simply do not respect property rights of others. Of course, who can really blame them? The law has increasingly become structured to incentivize the theft of intellectual property rights, particularly patent rights, so it should hardly be a surprise that theft under the more sanitary label of “efficient infringement” has become the new normal.

Still, it is worth noting that for many independent inventors the problems that plague so many high tech innovators are simply not an issue. Patent eligibility rejections, for example, are not generally a problem for anything that has a tangible manifestation, so if you are inventing something that might be sold on QVC, for example, you should not encounter the same uphill climb at the Patent Office that is being faced by others engaged in groundbreaking research involving artificial intelligence or new ways to screen for and identify cancer of all kinds at a much earlier point. As crazy as it sounds, the lower tech your invention the more likely you are to be able to get a patent. The higher tech your invention the less likely you are to be able to get a patent. That reality is, of course, backwards, but it is the common experience of patent applicants and patent practitioners alike. Indeed, statistics show that the Technology Centers dealing with mechanical inventions, electrical inventions, products, and designs, all areas where many independent inventors operate, are operating largely unchanged over the last several years.

So yes, the overall patent system is in decline and in need of some important improvements that will like a rising tide lift all boats. It is, however, important to keep in mind that for many the patent system is not the black hole it is for others. Therefore, before throwing away your patent dream it is worth thoughtful consideration about not only the current state of the industry with respect to the type of invention you have, but where the industry will and likely will head in the coming years.

Of course, it is important to stay vigilant and engaged. A rising tide really will lift all boats, so as the patent system gets better for the most beleaguered high tech software and life sciences companies, it will become better for all.

In the meantime, as you read about the truly mind-numbing stupidity coming from decision makers, whether it is MRI machines declared to be abstract ideas or diagnostics for various forms of cancer not being patent eligible, realize that the overwhelming bulk of this stupidity relates to inventions you cannot touch or operate in any real world sense. While America’s patent remains adrift, shift innovation into the real world if you are interested in a U.S. patent. Truly groundbreaking advances in computer technologies and in the life science sector should only be undertaken if you have a global patent strategy that does not require obtaining useful patent protection in the U.S.

 

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 7 Comments comments.

  1. Bemused May 21, 2017 11:44 am

    Gene: Great article but a sad commentary about the state of American innovation when a steadfast supporter of the US patent system like yourself has to suggest to patent filers that they should file for patents in non-US jurisdictions if they want to have any meaningful patent protection for their invention(s).

  2. Paul Cole May 21, 2017 12:06 pm

    It may be relevant to quote the CIPA brief to the US Supreme Court in Sequenom:

    http://www.scotusblog.com/wp-content/uploads/2016/04/15-1182.amicus.final_.pdf

    This case provides a paradigm example of the unwarranted disadvantages imposed by the Mayo/Alice framework on inventions underpinned by a fundamental discovery or breakthrough as compared to incremental inventions.

    The present breakthrough came from insight that maternal plasma or serum previously discarded as medical waste might contain detectable amounts of previously unrecognized nucleotide sequences, experimental demonstration that this was indeed the case, and the proposal for processes to detect paternal DNA as a practical application of that discovery. The subject matter claimed in claims 1 and 21 represents a commensurate scope of protection.

    However, under the Mayo/Alice framework as applied in the panel opinion, that advance is not enough. Whereas incremental inventors only have to make a single invention, for eligibility these pioneering inventors need to make two inventions. The return for the qualifying second invention is ashes: it is left open to others to find ways other than the second invention for performing the amplification and/or detection steps, after which those others can freely benefit from the fundamental discovery or breakthrough and the original inventors receive nothing.

    No such disadvantage is imposed on inventors in Europe and there is no credible policy justification for such illogical and harsh treatment, which was not meted out to James Watt, Samuel Morse or Alexander Graham Bell. A better rule is in The Telephone Cases, 126 U.S. 1, 531 (1888):

    It may be that electricity cannot be used at all for the transmission of speech except in the way Bell has discovered, and that therefore, practically, his patent gives him its exclusive use for that purpose; but that does not make his claim one for the use of electricity distinct from the particular process with which it is connected in his patent. It will, if true, show more clearly the great importance of his discovery, but it will not invalidate his patent.

    If the courts could get it right in 1888, they should do better now.

  3. Gene Quinn May 21, 2017 2:33 pm

    Bemused-

    Thanks. And yes, the state of the U.S. patent system is very sad. It is unbelievable to me that places like China provide a better climate for patents than the U.S. But for many types of invention, in terms of both getting a patent and enforcing patent rights, China has surpassed the U.S. in terms of predictability, stability and respect for property rights. Astonishing that American political leaders and jurists could have ever allowed that to happen.

    -Gene

  4. Benny May 22, 2017 5:32 am

    Gene,
    Follow the incentives.
    An IP climate where independent inventors can file, protect, and be assured of the stability of their IP is a climate where many IP attorneys will go without lunch. The opposite extreme is a battlefield where attorneys for both sides can routinely pitch their wisdom in court at n*100$/hour, where n is any number between 3 and 10. In short, there is a financial incentive in some corners of the profession, not just to maintain the current sad state of affairs, but to make it sadder. Incentives work. You want change, change the incentive, everything else will follow.

  5. John May 22, 2017 6:22 am

    Hi Gene,

    Before its too late, isn’t time for positive changes?

    Does the life sciences sector also include animal sciences and animal behaviour?

  6. SMK May 22, 2017 1:33 pm

    @4 Benny

    I agree with “look at the incentives”, but think your example is a little off (but only by one comma, though maybe two soon enough). IP attorneys can certainly cash in to the tune of millions of dollars in legal fees with greater uncertainty and more rampant litigation. But giant tech companies which shall remain nameless can save BILLIONS with a weaker, more chaotic regime. Get in fast, build a brand and name, corner the market and no worries about infringement coming back to bite you. I could give dozens of examples, but everyone already knows them. Follow the piles of cash that certain companies have hoarded, in some cases larger than the GDP of many, many nations around the world. It is no coincidence that three of the very few companies with market caps over a 1/2 trillion (yes, with a T) are tech companies.

  7. Tesia Thomas May 23, 2017 11:28 pm

    Seems like Inventors need to marry “low tech” with “groundbreaking research.”

    It’s assumed every simple mechanical and electrical technological advancement was “low hanging fruit,” plucked decades ago.
    Maybe but that’s assuming there’s a limit to those innovations. And isn’t innovation the result of surpassing current limitations in thought and processes?

    Look at industries with companies selling the exact same product for decades, policing trademarks because that’s the only differentiator and scrambling for cheap labor because cost is the biggest issue (besides brand recognition) when you’re selling the same exact product.
    These are also the companies that aren’t adept efficient infringers- nearly everything they sell is free of the art.
    As a bonus, if they do infringe, they’ll have to explain why they’re just now using a new product as they’re not exactly known for innovation…

    And, let’s take these simple mechanical and electrical technologies outside of the U.S.

    The U.S. should just get nothing. I thought capitalism was give and take. Well we inventors give our money (patent draft through issuance) and we take…oh no, we give more money (IPR, litigation.)

    Then the US won’t be the country ( along with Europe) everyone wants to patent in biggest it’s the largest market with minimal corruption.

    Soon we will be in tons of national debt to China and will have nothing great to sell to China besides, possibly, weapons.

    Because you know…the U.S. military respects ITAR/EAR restrictions until it needs to foster international unity. Already ITAR/EAR restricted weapons are a currency.

    Bullets will be worth more than bills if U.S. keeps screwing over inventors.

    Oh but you know, without adequate IP protections, inventors won’t want to invent anything for U.S. not even weapons. Especially since the U.S. just takes the patent under secrecy already!

    So, bullets will be worth way more than dollar bills. And they’ll be old bullets because no one cares to invent anything new.

    Old bullets can’t protect our state.

    Maybe I’m getting out of hand with this. But Washington needs to realize that no business or rather businesses that can’t compete in their own country won’t bring jobs to the country. Why spend/give here when there’s no take?

    And these deals with weapons to bring defense sector jobs won’t last because the MIC doesn’t run on pixie dust. They take TAX DOLLARS.
    Without “other”, non-military businesses making and selling non-weapons, that means no jobs and means no taxes!
    Are large software and biotech companies alone going to support the MIC with the taxes they pay in the US?

    China can easily knock off a drug or code and sell whatever it is (AI or generics) in the US, displacing US companies in their own backyard.
    This happens already when US companies don’t obtain patents globally. The infringing product will get through US borders somehow especially if they’re cheap and people in the US are unemployed ( thus wanting cheap products.)

    MIC is B2G. business to government.
    And the government doesn’t make anything.
    No product->no sales->no revenue->no taxes.

    China just partnered with Russia to outdo Boeing and Airbus on airships and jets. They can do the same with weapons.

    Yes! The incentive. What incentive?

    The US is digging it’s own grave in my opinion. Maybe my imagination is running wild with ramifications.
    I don’t think so.

    It used to be that the U.S. innovated and China produced.
    As current IP expires and these laws keep punishing inventors in the U.S. then China will easily be able to control innovation and production. What does that leave for U.S.?

    Any inventor with any sense whatsoever would stop giving to the U.S. patent system. And these mammoth software and biotech companies could easily just go where they already hoard their cash.

    Small businesses feed America.