Intellectual Property

Is There a Solution to the Software Patent Crisis?

, The Legal Intelligencer


Larry Ashery
Larry Ashery

The best way to ensure that claims are clear is for the patent office to require clear language before the patent is allowed to issue. The U.S. Court of Appeals for the Federal Circuit has commented on this issue. In Halliburton Energy Services v. M-I LLC, 514 F.3d 1244 (Fed. Cir. 2008), the Federal Circuit stated, "We note that the patent drafter is in the best position to resolve the ambiguity in the patent claims, and it is highly desirable that patent examiners demand that applicants do so in appropriate circumstances."

Thus, most public opinion has been advocating for the USPTO to ensure that claims are non-ambiguous prior to the patent being granted.

Fee shifting.

One very popular proposal has been for the prevailing party of a patent litigation suit to be awarded attorney costs and court fees by the losing party. The thinking has been that "raising the stakes" of litigation will help to discourage frivolous patent suits. One bill currently before Congress would require the courts to award the costs and fees to the prevailing party "unless the court finds that the position of the non-prevailing party or parties was substantially justified." While this proposal has its supporters, it also has its opponents. Last month, the U.S. Supreme Court granted certiorari in two cases with questions relating to awarding of attorney fees to the prevailing party. Some members of Congress argue that Congress should not consider enacting legislation related to this issue while this issue is about to be reviewed by the Supreme Court. Further criticism has been made that the bill overrides the constitutional balance between Congress and the judiciary by instructing judges how patent cases should be handled. Fee shifting is a topic that has always received debate. On the one hand, it is argued that fee shifting is useful because it discourages a party with a weak case from filing suit. On the other hand, it is argued that the added risk of fee shifting may deter the assertion of valid claims.

Covered business method (CBM) program.

The USPTO currently offers post-grant review of "financial services" business method patents. There has been much public interest in expanding the program. In a letter sent to judiciary committee leaders Oct. 28, the Internet Association (which includes companies such as Amazon, Google, eBay, Verizon and Wal-Mart) joined with 23 other organizations representing tens of millions of American employees, urging that the patent office extend the CBM program to cover all software patents. In June, the White House issued a package of legislative recommendations, which included a request urging that the CBM program be extended to include "a broader category of computer-enabled patents." In October, the USPTO also announced support for expansion of the program.

As previously explained, defending an accusation of patent infringement can cost upward of $800,000, with costs often soaring into the millions. The CBM program provides a much lower cost alternative to challenge low-quality patents. Utilization of the CBM program can be achieved for about $100,000, or less than one-eighth of the cost of litigation.

In an unusual act of bipartisanship, House Judiciary Committee Chairman Bob Goodlatte, R-Va., Rep. Peter DeFazio, D-Ore., and others have sponsored a bill to address abusive patent litigation. This bill, which is called the Innovation Act bill, expands the USPTO's ability to conduct post-grant review beyond the financial services industry.

Of course, this proposal is not without concern. Some software companies have expressed fear that an expanded program would make it too easy for patent portfolios to be subject to broad attack. Also, some attorneys question whether the patent office has sufficient resources to handle expansion of the CBM program.

Discovery limits.

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