Kappos Offers Fact-Driven Analysis of the Software Patent System

Against the backdrop of an ongoing debate in industry and policy circles about the impact of software patents on innovation and the economy, US Patent and Trademark Director Dave Kappos this morning argued that the patent system works well. His remarks came in a keynote address at the Center for American Progress, which is worth reading or watching.

As anyone who has followed the public debate is aware, critics assert that software patents are overly broad, approval processes are inconsistent, and patent trolls -- broadly defined -- are misusing the system. They also argue that aggressive litigation of questionable patents stymies innovation, increases costs, creates uncertainty, and puts smaller inventors at a disadvantage.

Kappos' answer to all this was spot on: Before you declare the patent system is "broken," take a look at the facts.

First, the PTO has made great strides in improving patent quality. The recently enacted America Invents Act, now being implemented, adds critically important new tools to ensure that patents being granted are of high quality. The AIA provides new ways for the public to bring key facts to an examiner's attention before patents are issued. And it creates new ways to challenge patents after they are issued -- with decisions to be made within 12 months. These steps will help cut down on opportunistic litigation, which remains a serious problem.

More broadly, Kappos argues the facts do not bear out the assertion that the software patenting system is broken or that it needs "fixing" by either diluting the availability of software patents or eliminating them entirely. Were we to do either, our economy as a whole would suffer. Software patents are key to innovation throughout the economy, from energy-saving smart building technologies, to making possible delicate surgical procedures, to enabling sensing devices that forecast and track major storms.

BSA absolutely believes America's patent system is the best in the world, and it is continuing to improve. The AIA constituted an important step forward, as has the suite of the changes now being implemented at the PTO to improve quality. In overseeing such improvements, Kappos has conducted a careful analysis of how the system is functioning -- and his findings are telling. In his remarks, he noted:

We know that inconsistency in software patent issuance causes uncertainty in the marketplace and can cause threats of litigation that in turn can stifle innovation and deter new market entrants.

At the USPTO, we recognize this as a serious concern, but we also observe that the various dire reports and commentary have omitted a critical component -- the facts. So we decided to get the facts, undertaking our own study to look at the US patents involved in some of the highest-profile litigation among major firms in the smartphone industry. We found that in the vast majority of these cases, over 80 percent, the courts have construed the software patents at issue as valid. And an ongoing look at statistics in USPTO bear out a similar conclusion -- rejections in software patent applications taken to our appeals board are upheld at a slightly higher rate than for the office as a whole, and those few decisions appealed to the Federal Circuit are affirmed 95 percent of the time. So to those commenting on the smart-phone patent wars with categorical statements that blame the 'broken' system on bad software patents, I say -- get the facts -- they don't support your position.

Get the facts -- a useful idea for any public debate.

Read the rest of Kappos' remarks on the PTO website, or watch the video hosted by the Center for American Progress.

This post was also featured on BSA's blog, BSA TechPost.