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Tin-plated patents December 10, 2008

Posted by Brian Schar in General.

In an earlier post, I wrote in favor of a registration-based patent track, in which patents would be registered like copyrights and have no presumption of validity.  One might call these tin-plated patents, rather than gold-plated patents.

One downside of this system is the potential for abuse by patentees who register patents with absurdly broad claims and then attempt to obtain a license.  For example, ignoring the thousands of patents worth of prior art for the sake of discussion, a patent with a claim directed to “a medical device, comprising a stent” is the type of absurdly broad claim that I would expect at least one patentee to register and assert.  At a minimum, any law that enabled a registration-based system should prohibit enhanced damages for willful infringement of a registered patent.  The law could simply prohibit holders of a registered patent from licensing that patent.  But that is a draconian penalty, given that such a claim could not withstand an early motion for summary judgment.  Nevertheless, there is an economic penalty in fighting an asserted patent claim, and an unscrupulous patentee could attempt to sell a fully-paid-up license to an absurd claim for an amount equal to or less than the expected cost of litigation up through that early motion for summary judgment.

Despite that example of bad behavior, I would expect most drafters of registered patents to search the prior art and self-examine the claims, or contract that examination out to professional searchers or other law firms, in order to obtain defensible claims.

Perhaps a solution to the problem of potential abuse of registered patents is a “pre-Markman” phase of litigation, prior to discovery of any kind; indeed, discovery should be expressly prohibited during this phase (other than the relatively minor discovery associated with motions to dismiss, change venue, and so forth).   During this pre-Markman phase, the court would determine if the claims are anticipated or obvious over the prior art.  Of course, the cost of doing so would be significantly greater than the cost of obtaining a standard, examined patent from the USPTO, but the process would be completed significantly faster. 

Another possibility is that patentees with registered patents would voluntarily undergo a reissue proceeding in which actual examination would take place by the USPTO for the first time.  (The law could also compel such a reissue proceeding for registered patents prior to assertion in court.)  In a sense, this is the ultimate in deferred examination, in which examination does not take place until litigation is expected.  Such a procedure would also save patentees a lot of money, potentially, because only that small minority of patents that ever goes to litigation would ever be examined.


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