Robust Patent System is Key to Prosperous U.S. Economy

Five years ago this summer, Congress embarked on efforts to reform the nation's patent system. Members of the House and Senate introduced legislation focused on bringing patents into the global economy of the 21st century. After half a decade of debate and the recent emergence and growth of a middle ground on the issue in Congress, there's cause for optimism that the time for real progress finally has arrived.

Patent reform reflects a historical fact of life: The nation needs to update the patent system periodically to address technological change. The need for legal evolution is especially pronounced when new technologies reshape the economic and cultural landscapes. We've witnessed this phenomenon intermittently since the 1800s, when rapid industrialization led to patent controversies that erupted on the front pages of the nation's newspapers.

The nation is grappling today with new stresses on the patent system. The explosion in information technology, with intricate devices that sometimes contain hundreds of newly patented features, has helped lead to a tripling of annual patent filings over the past two decades. A globalizing economy has reinforced this surge, with companies around the world filing patent applications in the United States.

All of this has put broadened demands not only on the U.S. Patent and Trademark Office (PTO) but the country's federal judges and juries as well. When it comes to making important decisions, the American patent system arguably demands more of untrained, nonspecialists than any other legal system in the world. In one of Microsoft's recent cases--a technically complicated patent lawsuit with hundreds of millions of dollars at stake--the group of eight jurors failed to include even a single college graduate. But it did include two individuals who did not complete high school.

It's important to reduce the stresses on the jury system, in particular. This is one reason patent reform legislation aims to give the PTO new tools to strengthen the quality of its decision-making at both the pre-grant and post-grant stages. David Kappos, who heads the office, has wisely recognized that the PTO can take some of the pressure off the jury system if it accelerates its re-examinations of patents, especially when key patents head toward litigation. If the PTO can move faster than the litigation process, then its re-examination results can be considered by judges before a lawsuit runs its course.

It's also vital that district judges fulfill their evidentiary gatekeeper role. The current pursuit of "lottery ticket justice" can tempt expert witnesses to offer theories that are more creative than grounded in substance. The Federal Rules of Evidence require that expert testimony must be "not only relevant, but reliable." Few cases rely on this stricture more heavily than the calculation of damages in patent lawsuits. This is one reason that patent reform legislation has focused on damages issues in general and strengthening the gatekeeper role of judges in particular.

Ultimately, one of the lessons of history is that no single piece of legislation is likely to keep the patent system current. Progress comes through a combination of congressional action and judicial decisions.

This pattern is holding true in our time as well. The Supreme Court has increased its review of patent issues, using its authority to nudge patent law forward in careful increments. Even the passage of new legislation is unlikely to mean the end for this need, as important remaining substantive issues likely will require this type of judicial review.

In an increasingly competitive and global economy, the country's prosperity depends more than ever on a healthy patent system. Five years of discussion have clarified the issues. We should apply the lessons learned and urge that the patent system keep moving forward.

Contributing Author

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Brad Smith

Brad Smith has nearly 20 years of leadership experience in the web consumer, enterprise software and communication service provider industries, spanning sales and marketing, product...

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