An Interesting Juxtaposition of Patents and Microsoft

Two interesting reports appeared in the past few days.  First there's a good article on Microsoft encouraging patent reform.  As a company spending outrageous amounts of money on lawyers filing patents, it makes sense to reform the system.  The top companies applying for patents in our industry tend to top the 2000-3000 applications mark.  At an estimate of $12,000-$15,000 per patent to the lawyers for writing clever applications, that means these companies are each spending on the order of US$40M/year to add to the patent portfolio.  Sort of takes your breath away. 

Then they get into the other side of the coin so to speak with their intellectual asset strategy, and how they use intellectual property to best advantage.  As reported in the article, Microsoft is in a fairly constant state of patent litigation, much of it inbound.  Deep pockets makes one a good target. 

Among the patent changes Microsoft proposed directly quoted from the article:

• Halt the diversion of fees earmarked for the U.S. Patent and Trademark Office (PTO) to other government uses.
• Allow third parties to submit "prior art" information to patent examiners during the patent process itself, rather than only after a patent has been issued.
• Allow third parties to challenges patents "administratively," rather than just through litigation in order to help weed out questionable patents, as currently is permitted in Europe.
• Create a special court that would consolidate and hear all patent cases at the federal district level in order to improve consistency and predictability of patent litigation.
• Reform the standard used to measure "willful infringement," via which claimants are currently allowed to collect treble damages.
• Increase "harmonization" and collaboration across international boundaries.
• Move to a "first-to-file" system, rather a "first-to-invent one," thus following the patent procedures to which most other countries adhere.

While the list of proposed changes is pretty good, they tend to focus on getting good patents out of the system.  It's unclear that they address the problems around the length of time to get a patent out of the system, which means they will still be caught so to speak shipping products not knowing whether they're infringing or not.  So they may still be getting sued as much.  While such litigation may close more quickly under a reformed system, there is still that pesky need for lawyers.

The other report of note in the space is Stephen O'Grady's blog discussion of Microsoft and patents around the Mono project.  He points out that it is conventional wisdom that is getting in Microsoft's way with respect to things they could do with patents to support mono. This would encourage C# to be seen as a cross-platform environment as the language continues to be hammered by the likes of java and cross-platform open source environments.  Indeed, why can't Microsoft make the same sort of strategic intellectual property play that IBM has recently.  There are even more creative intellectual asset plays Microsoft could make in this space.  Unfortunately, they are bound by the very practices that made them successful.  And this might be why they see patent reform as more better patents (not necessarilly) faster as the way forward, rather than getting truly creative in their intellectual asset strategy. 

 

Comments

[stephen o'grady]

agreed on all counts, i think. what i find intriguing is the dynamics between innovation and patents, and importantly, how few people are actually looking at that. most of the commentary on patents these days is agenda driven - MS's being the most recent example. maybe it's time that we asked - again - what patents are for, who they're supposed to protect, and what relationship they should have with innovation. if we can dispassionately answer those questions, i think many of the potential changes to the existing patent system would become obvious.