Tuesday, September 11, 2007

House OKs revamp of patent system House OKs revamp of patent system

CNET News.com: House OKs revamp of patent system. There is a lot to complain about in the bill passed by the House. The big beneficiaries are the big software companies that have small patent portfolios. And the big losers are the independent inventors and the biotech/drug companies.

Probably the part of it that is going to take the most to get used to would be the "first to file". The U.S. has been a "first to invent" country for several hundred years, and that doesn't seem to have hampered our innovation. But Europe in particular, with its much lower rate of innovation has had a "first to file" system for a long time. Coincidence?

The problem with the drug companies versus the software companies with small patent portfolios is that the former use blocking patents to restrict entry into a field. This means that the company that gets the patent (typically because they actually discovered the drug) can recoup its R&D costs by keeping competitors out until the patent expires. Software and semiconductor companies, on the other hand, typically develop products that infringe patents from numerous parties, and the bill would significantly reduce their patent infringement exposure. That would be nice - except that the same law effectively reduces the bar to infringing drug patents, allowing generic manufacturers to potentially compete before the expiration of the patents protecting a drug.

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