7 patent reforms the White House should have proposed

This week saw a welcome announcement from the White House following up on earlier comments by President Barack Obama during an online video chat back in February where he condemned patent trolls. Based on a report prepared by the President’s Council of Economic Advisers, the National Economic Council, and the Office of Science & Technology Policy, the White House is advocating a set of reforms intended to address the scourge of patent trolls — companies that, in the president’s words, “don’t actually produce anything themselves,” but instead develop a business model “to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.”

Software patents represent a profound imbalance in the Constitutional social contract that justifies the granting of temporary monopolies — they convey almost no know-how to programmers while chilling the freedom of software developers to innovate. The current patent system grants these temporary monopolies for far too long. They promote greedy and anticompetitive behavior that blocks innovation and impedes the evolution of the 21st century’s participative software industry.

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It’s unfortunate that U.S. case law has allowed this to happen. It’s a disaster that trade missions have forced other countries (such as Australia) to enshrine them into law. The software industry flourished for years without such patents, even in the control-point-oriented economy of the 20th century.

That said, I’m a realist. As long as software patents are allowed to exist, companies risk shareholder actions if they don’t deal with them. Thus, most companies of any size are accumulating patent portfolios that probably include software patents. Although the absolutist idealism exhibited by many of us in the free software movement is laudable and provides a visionary goal, the truth is we’re far more likely to see modest reform of the patent system than a radical revision, and the elimination of software patents seems very unattainable.

Although there’s hope that the appeal in the CLS v. Alice case will eventually result in the Supreme Court undoing the worst of this case law, its extremist mantra has now been passed to foreign governments, with which the United States will eventually need to harmonize. Ultimately, I believe it will be the international echo of America’s own trade missions that trigger a full reform of both patent and copyright law.

We need to be ready: We’ve programmed the international market to come to us with demands that our evolved industry will hate by the time it happens.

As the Electronic Frontier Foundation notes, the reforms the White House proposes are good, but they probably aren’t enough. I was especially pleased to see Stanford University professor Mark Lemley’s comments about functional claims being taken seriously, as well as the proposal to out the real companies behind trolling and the proposal to protect product users from suits that ought only to target product makers.

Because these goals can all be achieved via presidential executive actions without involving the logjammed Congress, there’s real hope we’ll see fast action. But the other needed movement, which require legislative participation, are sure to be slower. Still, the proposal to stop use of the U.S. International Trade Commission as a second venue for trolls to attack their victims is especially good.

What else ought to happen? What regrettable but pragmatic reforms are needed while we wait for the root-and-branch revision that sweeps away software patents for good? The White House had to hold back from all-out assault on the patent system for fear of alienating pro-patent allies like Microsoft and IBM that will be pleased to see certain trolls restrained but still want to be able to go hunting with their own weapons of mass disruption. Here’s a list of further proposals I, as a non-lawyer, would like to see enacted.

Because most use of patents is to force licensing in an out-of-court settlement to avoid injunctive relief:

1. Limit the availability of injunctive relief to cases of prima facie willful infringement. It’s way too easy to get an injunction that forces your victim to stop shipping its product. Many royalty agreements come about as companies settle to avoid the inevitable injunction that appears in infringement suits; it’s rare for a case to go all the way to appeals or patent invalidation. I’d also prohibit injunctive relief if patent licensing is unreasonably withheld.

2. Make it easy for patent licensees to recover their license fees if a patent is invalidated. The settlements that companies make in such cases aren’t usually affected by the later invalidation of a patent. If licensing fees had to be refunded when patents were invalidated, I believe we’d see trolls wither and die; even if their blackmail worked, they’d have to pay back the ill-gotten loot. Treating the proceeds of forced settlement with invalid patents as fraud would allow a whole genre of existing law to be easily applied, as I explain shortly.

If we must have software patents, their term and applicability needs control:

3. Make them last no more than five years, renewable once (maybe, and only if actually used in products). Time scales in the software industry are so short that anything more than five years is effectively a lifetime patent. The patent system was never intended to grant lifetime rights. Two hundred years ago, its 17-year term was considered short enough to repay the innovator’s investment but not prohibit broad adoption; today, that term is too long for software.

4. Make them unenforceable against open standards. There could be an exception that allows enforcement of patents declared to the standards committee during the standardization process. That way, the mobile phone industry (which depends on such things) would be protected, standards participation would be encouraged, and we would all know which “standards” to avoid.

5. Give immunity to implementations created in clean-room conditions for interoperability. European copyright law allows reverse engineering for purposes of interoperability. Patent law ought to allow the same sort of freedom. It makes no sense to value interoperability and standards as a spur to a free market, then allow its monopolistic taxation with patent law.

Because software patents require far less investment than other kinds of patents, they should have to meet a higher standard:

6. Consider treating a failure to identify prior art more strictly. I got criticized by pro-patent readers the last time I suggested this, so it would need some strong safeguards, but it seems to me that because the main use of patents is to extract royalties without legal review on the basis of their existence, there should be a penalty for getting a patent that is later invalidated by obvious prior art.

7. Require sample code to be filed with the patent. Software patents currently provide nothing a programmer finds useful. They are effectively a description of how to prove a program is infringing, not a description of the know-how so that the knowledge of society is enhanced. Because the shared know-how is actually the foundation of the social contract that justifies patents in the first place, it seems obvious to me that software patents should include a viable implementation with an open source copyright license (BSD, perhaps) so that after patent expires its know-how is readily available.

Maybe these are naive suggestions — I’m not a lawyer, after all. I’d be pleased for actual experts to take the heart of these ideas and turn them into effective proposals. But I’ve no doubt that, while the sort of actions the White House propose need to be taken to chill the trolls’ business model, we need to go further.

The patent system is designed for the industrial society, a world of control points where the only role of citizens is to be consumers. Today, we live in a meshed society, where every citizen can be a maker-remixer-creator-consumer. The patent system needs reinventing for that new, meshed society, not just patching as if we still live in the old one.

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