Wednesday, May 02, 2007

Patent System Undergoes Reform

An article in the Wall Street Journal will have interesting ramifications for intellectual property holders and innovation. What impact will this have on the New American Business Model?

Just last week the Electronic Frontier Foundation requested a reexamination of a "bogus patent" by the United States Patent and Trademark Office (PTO)


By JESS BRAVIN
May 1, 2007; Page A3

WASHINGTON -- The Supreme Court made it harder to get new patents and to defend existing ones, giving new force to the law that denies patents to inventions deemed "obvious."

In a unanimous decision, the justices yesterday sided with critics who argue that lower-court rulings have given patent holders more power than Congress intended, potentially stifling innovation.

The ruling, the latest to roll back patent holders' clout, comes amid a sharp debate over how to maintain the nation's competitive edge while protecting those who labor to design cutting-edge inventions. Many of the developments that drive the economy are governed by patent law, an arcane field that has become a battleground in the larger debate about U.S. industrial strength.

The opinion could have especially big implications for technology companies, whose software programs typically are built through small improvements in prior designs. Also affected will be the growing and much-disputed field of "business method" patents, which are granted for abstract processes rather than specific devices.

Investors that buy up patents with the aim of obtaining royalties from alleged infringers -- known as patent trolls -- are sure to find slimmer pickings.

"What they're starting to put together here is a model for a 21st-century patent system," said David Kappos, who oversees intellectual-property law at International Business Machines Corp., Armonk, N.Y. "Closed proprietary innovation remains important," he said, but the court seems to be saying that patent law "can also accommodate 21st-century models that are more open, more collaborative."

I wonder how this affects Nathan Myhrvold (Intellectual Ventures), Ross Perot, Bill Gates , OceanTomo

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