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Innovating the Laws of Innovation: A Study of Modern Patent Law

ABSTRACT
Patents are one of the great driving forces behind knowledge innovation in today's
society. They provide incentives for new inventions and technologies, ensure that credit is
given where due to creators and developers, and encourage creativity in the production of
new knowledge through public availability of previously-existing patents. However, with the
rise of modern technologies, especially those in the software and medical industries, current
patent law is proving unwieldy and highly prone to abuse. The purpose of this research is to
analyze the problems inherent to patent law (specifically in the United States, where most
large patent disputes take place), and give recommendations as to how change may be
enacted for the better.

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INTRODUCTION
Patent law has existed in one form or another for hundreds, if not thousands of years;
the first formal patent code was in fact established as early as 1474 in Italy1. The primary
purposes of patents have historically been to protect intellectual property and to encourage
innovation in engineering and invention, by both incentivizing new processes and
encouraging others to design around existing patents in order to produce new
methodologies. These purposes are carried out through the patents provisions of exclusion:
No one other than the entity which filed the patent can produce, sell or research further on a
patented invention.
Up until recently the current patent system composed of those systems which
emphasize first-to-file as opposed to first-to-build has proven sufficient in propagating the
spirit of the law. Inventions were composed of innovative methods of combining existing
knowledge; a famous example of such would be a secure signal transmission method
designed partly by Old Hollywood star Hedy Lamarr, which involved using synchronized
piano rolls to rapidly change radio frequencies2. Unfortunately, with the rise of software and
other computer-related patents, along with readily-granted patents on medical breakthroughs,
patent law has started to show its age and its inflexibility. Patent reform measures must be
undertaken in order to resolve these issues.

Granstrand, Ove. The Economics and Management of Intellectual Property. Cheltenham: Edward Elgar Pub,
2000. Print.
2

This technology is known as frequency-hopped spread spectrum; in the original implementation as described
in the patent, two synchronized piano rolls on independent devices played at the same time, switching to
different frequencies as the piano rolls rotated.

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BODY
Computer-related patents have a very strong nature of interdependency, with
computers themselves being composed of many inventions, without any one of which the
system would collapse. The first sign that something was up was in the early 1990s when
companies were started whose sole purpose was apparently to amass patents. This seemingly
innocuous behavior proved to be a major blow to research and development practices in the
early 2000s, when the consumer electronics industry boomed dramatically. These small
companies had the sinister plan of waiting until much larger companies infringed on, and
then became successful from, their filed but unused patents. Because of the interconnected
nature of software patents, it was inevitable that they would be caught in the net. The result
was a rash of patent lawsuits (mostly in the United States, specifically in Texas) that
continues today, forcing companies to either spend millions of dollars on settling the cases
that, due to current patent law, they have no chance of winning, or still spending millions
anyway and plenty of time and effort researching patents and hiring lawyers to help them
avoid the traps that these companies had set up for them. In 2001, these companies would
famously be called "patent trolls" by Peter Detkin, then assistant legal counsel to Intel
Corporation. One specific example of this patent trolling is a famous case from December of
2011, in which Digitude Innovations sued nearly the entire consumer wireless
communication industry for several infringed patents that it did not even own until two weeks

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before their case was filed.3 Such expensive frivolities are a significant obstacle to any
innovation in the computer industry.
The problem continues with the filing of highly inclusive or ridiculously obvious
patents that somehow end up passing in offices. Apple for example has, through court action,
successfully achieved an injunction against Samsungs smartphone and tablet series in
Germany, effectively banning them for sale. The reason for such court action was that
Samsungs user interfaces appeared far too similar to those of Apple, including simple
features such as a bottom application bars, four-by-four grids of icons in homescreens, and of
course curved icons all of which apparently were covered under patents that Apple had
filed4. There are many more examples of patent law allowing such small things to be covered
under exclusion rights, and even more examples of how such are abused, either for
anticompetitive reasons or for cold cash. In addition, large numbers of interrelated patents are
often filed defensively, which are intended to defeat practices of designing around patents;
these so-called patent thickets5 are a serious abuse of the spirit of patent law, which
encourages designing around existing patents to discover and refine methodology.

Digitude acquired four patents from Adaptec, Mitsubishi and Apple two weeks prior to litigation. The
company has no actual products, and instead appears as an "Intellectual property licensing company."
4

In a rather obvious but somehow successful attempt to manipulate the courts, the Apple legal team
presented modified images of the iPhone and offending Samsung devices side by side in order to illustrate how
Samsung violated Apple patents. One must note however that the iPhone uses a 4:3 aspect ratio in its screen
while Samsung uses a 16:9 aspect ratio this translates to Samsung phones being longer and more slender
than their Apple counterparts. In order to emphasize the apparent violation of patent law, however, Apple's
lawyers manipulated the images and squashed the Samsung phones' forms, making them appear to be the
same aspect ratio as the iPhone with no attempt to hide the accompanying distorted buttons and icons
onscreen.
5

The striking image of a dense web of trees through which it may be hard to proceed, is a strong visual
metaphor for the "patent thicket."

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Even without abuse of patents, the issues with patents extend to the field of medicine.
Several companies can afford to produce drugs cheaply at significantly reduced prices for
developing countries, but because these drugs are patented and covered under exclusion
rights, the less fortunate parts of society are unable to benefit from innovation and research,
which can only be felt in the form of expensive drugs that are massively marked-up by
medical research corporations which sell them6. Thankfully this issue is in the process of
resolution, as the World Trade Organization has limited power to enact compulsory licensing
of medication to developing countries.7
These problems are not soluble without patent reform. Against patent trolls, a viable
defense mechanism would be a requirement for either intent to use or intent to develop, in
which companies filing patents would be required to show off any concrete usage or
development of their patents after a given time, such as a year or two years. This would
prevent patent trolls from hunkering down with a sack of patents that they will not use except
in illicit patent monetization models, as Digitude explicitly described in a press release. In a
hypothetical example of this, consider the fictional company UrinAll. UrinAll has
successfully filed for a patent for "anechoic urinals," which involves placing studs along the
inner curvature of a urinal in order to reduce back spatter of urine. Under current US Patent
and Trademark Office (USPTO) regulations, which are listed on its website, UrinAll would
have exclusive rights to production for the anechoic urinal for twenty years. A proposed
amendment to such regulations, which implements the requirement for intent to develop, will
6

Anyone who has purchased generic drugs over equivalent branded drugs will be very much aware of the
marked difference in price between the two, with no change in efficacy. In most cases, generic products are
the result of the expiration of exclusion rights of the drug's developer, and production by other companies at
cheaper prices being legalized as a result.
7

" Compulsory licensing of pharmaceuticals and TRIPS". World Trade Organization. Web. Accessed March 10,
2014. < http://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm>.

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force the patent to come under observation for, say, two years, during which the company
must show a working prototype of the anechoic urinal, or at least show concrete evidence that
it is under development. Without the fulfillment of these requirements, the patent would
automatically be rendered invalid, and the intellectual property released into public domain.
For problems with the kinds of patents that are filed, frivolous patents such as very
simple multitouch gestures and silly things like attempting to patent the wheel should be shot
down after being reviewed. Patent offices should be more restrictive in the kinds of patents
that they allow to pass, as well as scouting out possible patent thickets and observing them
for difficulty in bypassing. An example of more rigorous patent review procedure would be a
prioritization of certain parts of the examination process, in which emphasis is placed on nonobviousness patentability checks, PHOSITA or "Person Having Ordinary Skill In The Arts,"
and analysis of prior art.
Non-obviousness a similar term "inventive step" is instead used in European courts
requires that patents should not be possible to create using knowledge that is common to
PHOSITAs, who are hypothetical skill-level generalizations of the practitioners of a field in
which a patent under review resides. If a PHOSITA can produce this patent using his or her
"ordinary skill" (closely defined in most cases), then the patent is invalid because it is
obvious to those who are capable of thinking it up. This is in fact implemented in most patent
systems internationally, but a cursory glance at the kinds of patents that pass through these
checks will show that non-obviousness checks are inefficiently implemented. If they were
correctly done, patents on the wheel would never have made it through.
Prior art, on the other hand, requires that information about an invention should not
be in the public domain at any time prior to the filing of the patent. This is simple enough, but
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it too is inefficiently implemented; it is theoretically possible to have disallowed Apple's

multitouch patents from entering the system because extremely similar "multitouch" gestures
were shown in the 2002 film Minority Report, making it a prior art case8.
Finally, the WTO has taken the right course of action in allowing mission-critical and
health-related patents to be compulsorily licensed to cheaper manufacturers for the benefit of
poorer societies. This must eventually become the case for other patents.
There is the clear counterargument of course that significant patent reform would
reduce the protection of intellectual property and of innovative practices as a whole, but as it
is, patent law is preventing innovation from happening at all, while ensuring that not many
gain access to the fruits of progress. Such reforms will work in favor of innovation in the long
run, as companies are given free rein to design and manufacture without fear of stumbling on
rocks placed by trolls and hostiles on their path.
Another counterargument would be that patent reform would be inefficient and take
far too long to implement, and therefore patent law should instead be abolished. While on
paper this sounds good for freedom of information, the loss of the incentive to invent new
things will be felt strongly as companies would become reluctant to spend money on
innovation, due to the lack of a guarantee that they will benefit from the time, effort and
expense of research and development. "What good," so shall go their logic, "will innovation
on our part be, if everyone else gets to use it once we release it?" Patent law must be evolved
and adapted to fit the circumstances, not simply abolished, and the additional time and effort

The multitouch gestures in the film Minority Report are actually closer to gesture-based operation that is
present in some advanced widescreen televisions, but the gestures that the movie depicts greatly resemble
pinch-to-zoom and multi-finger swipe touch gestures that are common to modern smartphones.

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needed to do this will be a mere drop in the bucket relative to how much more empowered
industries shall become after patent law becomes viable once more.
CONCLUSION
Ultimately, the letter of patent law must be changed in order to uphold its spirit.9 The
old system might have worked long ago, but the kinds of inventions that are being generated
today are not conducive to being handled by archaic legislation.
In addition, unscrupulous companies are now taking advantage of patent law to
prevent competition and secure exclusive rights to profiting from their intellectual property.
Because only large companies have the ability to fight prolonged patent disputes with each
other, smaller companies who step on these patent traps will end up being forced to yield a
trend that would ultimately discourage innovation across the board. Furthermore, companies
are actually being started for the sole purpose of acting as patent trolls, which is a clear and
dangerous abuse of the patent system.
Change is fairly easy to implement on paper; the mechanics of the proposed
recommendations are already part of the spirit of patent law, and there is growing discontent
with the many abuses of it that are reported on everything from consumer technology journals
to mainstream media. Of course, in reality, it takes plenty of public support and more
informed legislators to actually work, but the lack thereof is another tale for another time.
BIBLIOGRAPHY

"Letter of the law" versus "spirit of the law" is a debate that often takes place in the interpretation of the
Constitution. It refers to whether the law is to be interpreted as exactly written in the Constitution, or if it is to
be interpreted with the intentions of the writers of the Constitution in mind.

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" Compulsory licensing of pharmaceuticals and TRIPS". World Trade Organization.

Web. Accessed March 10, 2014. <
http://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm>.
Aamoth, Doug. "Apple Sues Samsung, Samsung Vows to Counter (Icon Fight)". Time
Magazine.. Web. April 19, 2011. <http://techland.time.com/2011/04/19/apple-sues-samsungsamsung-vows-to-counter-icon-fight/>.
Barton, Ruth. Hedy Lamarr: The Most Beautiful Woman in Film. Kentucky: The
University Press of Kentucky, 2010. Print.
Granstrand, Ove. The Economics and Management of Intellectual Property.
Cheltenham: Edward Elgar Pub, 2000. Print.
Gruener, Wolfgang. "Patent Troll Sues Nearly the Entire Mobile Industry". Tom's
Hardware. Web. December 5, 2011. <http://www.tomsguide.com/us/patent-infringementlawsuit-patent-troll-license,news-13400.html>.
Hargreaves, Ian. "A review of Intellectual Property and Growth". Intellectual Property
Office. Web. May 2011. < http://www.ipo.gov.uk/ipreview.htm>.
Sandburg, Brenda. "Inventor's lawyer makes a pile from patents." The Recorder, July
30, 2001. Print.
"2141.03 Level of Ordinary Skill in the Art [R-6]". United States Patent and
Trademark Office. Web. Accessed March 7, 2014.
<http://www.uspto.gov/web/offices/pac/mpep/documents/2100_2141_03.htm>

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"35 U.S.C. 103 Conditions for patentability; non-obvious subject matter". United
States Patent and Trademark Office. Web. Accessed March 7, 2014. <
http://www.uspto.gov/web/offices/pac/mpep/documents/appxl_35_U_S_C_103.htm>

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