Patent News From PubPat and IBM

Thursday, February 05 2004 @ 07:33 PM EST

Contributed by: PJ

The Public Patent Foundation today argued before the nation's foremost patent court that patent law's requirement that a patent attorney be hired every time one becomes aware of a patent that may relate to their activity is "irrational and unjustifiably prejudicial":

"'Reading the duty to avoid infringing patents to require every company, regardless of size, to hire patent counsel ..., is simply unfair and unrealistic,' PubPat stated in its Amicus Curiae brief filed with the Federal Circuit Court of Appeals in the case of Knorr-Bremse v. Dana Corp.  'There are many reasons why a company might be aware of a patent but not obtain a legal opinion. One is cost.'  The brief cites a study from 1997 that determined the cost for retaining a patent attorney to provide a written opinion regarding a single patent can cost up to $50,000 or more."

Here is PubPat's press release:

PATENT LAW SHOULD STOP IMPOSING PUNISHMENT SIMPLY BECAUSE ONE CAN'T AFFORD AN ATTORNEY: PUBPAT Tells Federal Appeals Court of Harms Caused by Patent Law's Perverse Rule

Patent law's requirement that a patent attorney be hired every time one becomes aware of a patent that may relate to their activity is "irrational and unjustifiably prejudicial," PUBPAT told the nation's foremost patent court in a case argued today.

Named for the 1983 case that established it, the Underwater Devices duty requires any person or business that becomes aware of any patent to retain a patent attorney and seek a written opinion regarding whether or not they infringe the patent. Failing to do so leads a court to presume infringement of the patent was willful and to impose a penalty three times greater than for non-willful infringement.

"Reading the duty to avoid infringing patents to require every company, regardless of size, to hire patent counsel ..., is simply unfair and unrealistic," PUBPAT stated in its Amicus Curiae brief filed with the Federal Circuit Court of Appeals in the case of Knorr-Bremse v. Dana Corp. "There are many reasons why a company might be aware of a patent but not obtain a legal opinion. One is cost." The brief cites a study from 1997 that determined the cost for retaining a patent attorney to provide a written opinion regarding a single patent can cost up to $50,000 or more.

PUBPAT argued that the Underwater Devices duty causes two significant harms. First, it undermines the goal of patent law, to disseminate useful technical information, by encouraging scientists to avoid becoming aware of patents. Second, it unfairly prejudices small businesses because the cost of seeking numerous patent opinions is a substantial financial burden.

"Subjecting individuals and small businesses to greater liability simply because they can not afford to retain a patent attorney is a prime example of a disconnect between our patent laws and the public interest," said PUBPAT's Executive Director, Dan Ravicher. "Reversing Underwater Devices will be one step towards fixing our patent system, and we fully expect the Federal Circuit, having heard our arguments, to take that step."

PUBPAT's brief is available at http://www.pubpat.org/Educating_and_Advocating.htm.

PUBPAT WEBSITE LAUNCHED

Visit the newly launched Public Patent Foundation website at www.pubpat.org to learn more about PUBPAT and its activities.

Are pigs flying, or what? A Senior VP at IBM, Nicholas Donofrio, has an article, called "The Fallacy About Patents", on News.com, in which he says there must be a better way to encourage innovation than patents. He says IBM and other companies are looking into this issue and will be making legislative recommendations at a summit meeting later this year.

When IBM, the owner of reportedly more patents than any company in the world, says there must be a better way, I think we may safely take it to the bank that the current patent system really is broken. It will be interesting to see what their recommendations are, though. IBM's Donofrio looks at the big picture in his article:

"How can we move beyond traditional notions of R&D and intellectual property creation to nurture the intersections that lead to real innovation? Along those same lines, how do we measure innovation? A group of influential business and academic leaders (including IBM CEO Sam Palmisano) is committed to a broad-based national innovation initiative that will study critical aspects of this challenge and present concrete recommendations at a summit meeting later this year.

"Are we ready to rethink how we protect and reward those who spend time and resources to create something new and better? Currently, a sizable percentage of patent application fees are diverted away from an overburdened U.S. Patent and Trademark Office. When you consider that the licensing of U.S. patents contributed more than $150 billion to our economy in 2001, proposed congressional legislation that would end this diversion of user-paid fees to other agencies is the right step. IBM and nearly 100 other companies and 28 associations are supporting it--even though this legislation will cost us money."

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