April 6, 2006
Today, Colorado Law School’s Silicon Flatirons Telecommunications Program presented a symposium covering the challenges faced by the current patent system.To critics of the patent system, it is a tax on innovation and a full employment act for lawyers. In an age where the importance of intangible assets increasingly overshadows physical assets, intellectual property is a high stakes part of today’s business landscape that is justifiably receiving attention from all quarters. There is little doubt that patents are growing in importance. In particular, technology companies are securing more patents than ever before, expanding their scope, licensing them in novel ways, and litigating about their validity and impact. For some firms, patent rights form not just the core, but the entirety of their business. To critics of the system, such firms—often called “patent trolls” because they demand royalties but do not actually create a product—are Exhibit A for why the system needs to be reformed.In the wake of studies by the Federal Trade Commission and the National Academies of Sciences, there are emerging lines of consensus about how the U.S. patent system can be improved. It is particularly important that technology and telecommunications firms, which account for around 40% of all issued patents, understand and help shape the directions of future reforms. For startup companies, the critical question concerning reform is whether the current patent system primarily facilitates an opportunity to succeed against entrenched incumbents or, alternatively, whether it primarily functions as a daunting barrier to entry in view of incumbents’ patent portfolios and willingness to sue. This conference evaluated the state of the patent system and surveyed avenues for reform. In particular, it analyzed how firms game the system by strategically acquiring patents in order to extract concessions from other firms that rely on standards including the patented technology. It also evaluated whether the Patent and Trademark Office’s (PTO) penchant for issuing bad patents can be remedied, perhaps with the aid of a post-grant review process. Additionally, the panels discussed strategies for keeping costs down during the litigation of patent rights, avoiding the impact of bad PTO decisions, and limiting the abusive use of injunctions. Finally, as to the effect of patents on innovation, the panels discussed whether the patent system’s value as a vehicle for protecting businesses and attracting investment outweighs its shortcomings as a strategic means by which established firms exercise control over the marketplace.The panels covered three issues surrounding the current patent system:1) Granting and Defining the Scope of the Patent Right: Of Bad Patents, Patent Trolls, and Responses to Abuses of the System2) The Patent Litigation Mess: Can It Be Cleaned Up?3) The Uses and Abuses of Intellectual Property: Facilitating Startups or Entry Barrier?For an article in the Denver Post discussing this SFTP conference, click here.