The United States’ system for patenting new innovations isn’t working and needs to be reformed, intellectual-property experts and business leaders said last week in Boulder.
The system has come under fire as the explosion of technological innovation during the past decade has dramatically increased patent filings.
One result is a proliferation of “bad” patents that protect inventions that aren’t really new or innovative, or are just plain obvious. Not surprisingly, patent-related litigation also has mushroomed.
“The proliferation of patents is out of control,” said Tom McGimpsey, general counsel for McData Corp., a network- storage company based in Broomfield. “It’s the perfect business storm.”
Boulder venture capitalist Brad Feld suggested the government do away with all software patents. He said the main reason software companies obtain patents is to defend themselves against infringement suits.
“Software companies would be dramatically better off without a patent system,” Feld said.
McGimpsey and Feld were among more than a dozen legal and business experts who discussed problems with the patent system in a symposium Thursday at the University of Colorado law school.
Not everyone agreed that the system needs an overhaul. Boulder-based Cellport Systems chief executive Pat Kennedy said the U.S. system remains far better than Europe’s more stringent system.
“Every patent I have there is challenged. … It’s killing me. It’s a great way to stifle innovation,” he said.
Of particular concern among some panelists is the ability of patent holders who don’t produce anything to extract large settlements from companies by threatening to shut down their operations.
The maker of BlackBerry personal e-mail devices recently agreed to pay such a patent- holding company $612 million to end a four-year legal battle.
“We need to recalibrate the system so that the patent owner is entitled to something proportionate to what they actually invent,” said Stanford University law professor and patent specialist Mark Lemley.
The U.S. Supreme Court is considering whether to make it more difficult for some patent holders to force accused infringers to stop production.
Congress also is weighing measures to increase the scrutiny that proposed patents receive. The idea is to approve fewer, higher-quality patents.
Lemley suggests that the government establish a “gold- plate” patent to offer better legal protection than standard patents.
“You ought to be able to buy yourself a really rigorous examination,” he said.
Competitors also should be given the opportunity to challenge a newly granted patent to ensure its quality, Lemley said.
But Kennedy, whose company patents and licenses wireless technology, said such reforms are likely to hurt inventors.
“Lawyers are the problem” with the patent system, he said.
Staff writer Greg Griffin can be reached at 303-820-1241 or ggriffin@denverpost.com.
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