Adam Jaffe and Josh Lerner, authors of the new book, Innovation and Its Discontents: How Our Broken Patent System Is Endangering Innovation and Progress, and What To Do About It, lay the responsibility for this situation at the feet of the U.S. Congress, which set us on this path in 1982 when it created a centralized appellate court for patent cases, called the Court of Appeals for the Federal Circuit. A decade later, Congress compounded this folly by ordering that the patent office, which until then had been funded by tax revenues, instead fund itself through the fees it collects for patent applications. Together these two changes have resulted in a U.S. patent system that costs companies and individuals billions of dollars and millions of man-hours annually to obtain patents and fight frivolous lawsuits.
To inject some sanity back into the patent process, Jaffe and Lerner propose that, first, legislators create incentives and opportunities for parties to challenge the novelty of an invention before the U.S. Patent and Trademark Office grants a patent. Second, that the PTO provide multiple levels of application review, with examiners devoting successively more time and effort as an application proceeds to higher levels, a way to avoid wasting money on unimportant patents, while taking sufficient care to avoid mistakes where the stakes are high. Finally, in cases involving claims of patent invalidity based on the existence of prior art, replace juries with judges who could call on experts for guidance. The change would give parties threatened by invalid patents a better opportunity to make their case.
The first two proposals aim to make the PTO more effective at reasonable cost. The third addresses the reality that the best of all possible PTOs will still make mistakes, and so we need a court system that is capable of correcting them.
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