TMCNet:  The Dallas Morning News Jim Landers column [The Dallas Morning News]

[September 13, 2011]

The Dallas Morning News Jim Landers column [The Dallas Morning News]

(Dallas Morning News (TX) Via Acquire Media NewsEdge) Sept. 13--WASHINGTON -- The U.S. Patent and Trademark Office has a backlog of more than 700,000 patent applications waiting to be assigned to an examiner. Another half-million applications are being worked by a staff of 6,000 examiners.

As a result, inventors wait an average of 34 months to find out if their ideas will be protected from copycats.

A bill approved by Congress last week could improve things by giving the patent office funds to hire more examiners and by changing the basic patent rules so the first inventor to file now wins the argument over who came up with the idea.

The bill passed the Senate just before President Barack Obama's jobs-creation speech, and Obama praised it as "reform that will speed up the outdated patent process, so that entrepreneurs can turn a new idea into a new business as quickly as possible." Change in patent law has been slow in coming. Current law dates to the 1950s. Since then, technology development has accelerated to the point where "by the time a patent is approved, oftentimes the technology is moot," said Gene Irisari of Texas Instruments' Washington office.

Hiring more examiners might also deflect some of the criticism against the patent office for protecting ideas that don't deserve it -- such as the patent granted several years ago for a crustless peanut butter and jelly sandwich.

While the bill may help clear the backlog at the patent office, it promises less of an impact on patent litigation. Patent attorneys generally agree first-to-file will make applications easier to judge. But court battles over patent violations, sometimes with billions of dollars at stake, will continue.

In the late 1980s, Texas Instruments successfully battled several Japanese electronics firms over patent royalties for semiconductors. Victory created a multimillion-dollar revenue stream, opening the eyes of other companies to the potential.

Between 1989 and 2010, the number of patent cases in federal courts tripled to about 3,400 a year. Most are settled to avoid the high cost of litigation. Cases that go to trial usually last at least a year, and sometimes quite a bit longer.

Most irksome to large companies that deal in new products all the time -- such as information technology firms and pharmaceutical makers -- are patent violation claims filed by "patent speculators," also known as patent trolls, said Mike McKool, founder and chairman of the Dallas law firm McKoolSmith.

"Those who buy patents as a cost of litigation to force settlements ... that's what causes people to get upset," McKool said. "They'll settle a case for $400,000 or $600,000 rather than pay the millions it might cost to defend the case." Patent speculation has become big enough to attract a new class of investors looking to cash in on litigation, said Dallas patent attorney Steven Ross of the Ross IP Group.

"There are companies out there that some might call trolls that will buy patents and use them as an investment," Ross said. "One of the ways to get a return is by getting fair value from infringers." Ross is not happy with the changes promised by the new patent legislation, including the first-to-file rule.

"You could hear somebody talking about a new invention in an elevator. If you file first, you're the one who can get the patent on it, not the guy who came up with the invention." Fred Telecky, senior vice president and patent counsel with Texas Instruments, said the new rule puts U.S. patent filers in the same position as inventors seeking patents elsewhere in the world.

"Everybody has to conform to the same standards," he said.

___ (c)2011 The Dallas Morning News Visit The Dallas Morning News at Distributed by MCT Information Services

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