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IP, Patent

The Nonobviousness Doctrine As An Innovation Tax

As the great patent reform debate rages, all participants basically agree that the patent office moves too slowly, is underfunded, and reform is needed.  That’s pretty much where the agreement ends.  Supporters of current reform efforts believe that awarding patents to the first person to invent is too unpredictable.  Groups that opposing the current reforms point out that the changes on the table simply eliminate a procedure that, according to its supporters’ own data, no one uses, and likely wonder how the supporters are deluding themselves into believing this will somehow help the PTO catch up on the backlog.

Regardless of the empty claims that the patent reform package will somehow encourage job creation, the easiest way to promote job growth via patent reform is to help reduce the backlog. While the additional funding certainly won’t hurt, a more dramatic effect can be achieved by fundamentally altering the way patent applications are examined by putting an end to the “non-obviousness” tax.  I’ve previously argued that PTO routinely draws arbitrary distinctions between obvious and non-obvious patent claims, and often only acknowledges the allowable claims after years of administrative bargaining.

By caving in after a decade of prosecution, the patent office sets a de facto policy turning non-obviousness as a proxy to award patents to the most persistent applicants, rewarding “rich” inventors with patents for arbitrary combinations of existing technology, while punishing (by implication) “poor” inventors that can’t afford multiple RCE’s and an appeal brief.

via A Radical Alternative Patent Reform Proposal: Eliminating The Non-Obvious Requirement

Recall in that article that the patent office decided that modifying a logo and uploading the modified logo to a webpage was obvious, but doing the same thing with an animated logo was not.

Since then, I’ve seen this patent owned by Gellyfish Technologies, which is presently being enforced against a slew of companies.  The Gellyfish patent is potentially relevant to a number of mobile devices using a single board to provide both a QWERTY keyboard and a telephone keypad.  Claim 1 of the patent recites:

1. A keyboard for use in a portable device comprising:
a alphabetic keyboard with at least one key for each English letter arranged in a qwerty pattern for producing an output recognizable as letters,
a numerical keyboard having at least ten keys arranged in a pattern identical to that of a standard telephone keypad with a first row including 1, 2, and 3 keys at the top and coincident with the right half of the top row of the alphabetic keyboard,
a middle row including 4, 5, and 6 keys below the first row, and the second middle row including 7, 8, and 9 keys and an ultimate row below the second middle row including a 0 key, and
a shifting means for shifting the function of keys between that of a alphabetic and numerical keyboards and keypads.

The priority date for this patent appears to be June 21, 2002, which was evidently some point after the introduction of RIM’s Blackberry.  We know this, because the inventor mentions Blackberry in the  background of the invention:

To type the numeral one (1) on a Blackberry®, for example, you must first push the Alt key then the Q key. To enter strings of numbers such as telephone numbers, this entry method is quite cumbersome.

The use of the phrase “shifting means” presumptively indicates that this claim element is limited to the corresponding structure in the specification:

Similarly, blue Fun key 67 and Num key 71 sets the keyboard into a “Num Lock” state. Pressing blue Fun key 67 and Num key 71 again clears the Num Lock state. Keys affected by Num Lock 39-41, 51-53, 63-65 and 72 have the blue highlight in the upper right of the key cap.

The “Num Lock” function is “similar” to the “Caps Lock” feature, where all key presses  are interpreted as if they were preceded by “Num” key.  The transaction history at the PTO indicates three rejections before the application was allowed.

Judging from the background, the claim language and the specification, it appears that the PTO found this patent to be non-obvious because of the use of a persistent “Num Lock” function, as opposed to the prior art device that required the “Num” key to be pressed in between each number entered.

Am I arguing from anecdotal evidence? Perhaps, but I think just about every patent attorney can easily think of several “head scratching” moments when trying to figure out why one claim was rejected while another was allowed.  In defense of the patent office, this is an inevitable result of an arbitrary, subjective patentability standard forced on us by a 160 year-old Supreme Court case.

This practice basically amounts to a patent tax, where inventors are forced to spend thousands in legal fees to battle with the patent office, only to finally get the Examiner to agree on an arbitrary distinction making an invention patentable.  The Supreme Court could aggravate this tax by lowering the burden for proving a patent invalid.

In other words, one century-old policy has evolved into a system that requires inventors to spend thousands of dollars to prove to the patent office that their invention is patentable, and a new policy can then undermine the examination process altogether by essentially giving no deference to this process at all.

If the court system and the public at large doesn’t trust the PTO to do its job properly, then the better policy would be to simplify the patentability question to something objective and measurable. In other words, PTO should examine applications for novelty only. This would drastically reduce the cost and length of patent prosecution, and make oversight of Examiners much easier. Meanwhile, the effect on patent quality would be minimal since the obviousness question appears to be answered in a relatively haphazard and arbitrary fashion.

In the end, eliminating the non-obviousness requirement would only eliminate the tax it imposes on patent applicants, and would generally improve the examination process.  Is it likely to happen? No. Not by a long shot. But it could be the reform that puts an end to the patent office logjam once and for all.



7 thoughts on “The Nonobviousness Doctrine As An Innovation Tax

  1. Patrick,

    Excellent points. I would also argue that the “nonobvious” requirement is unconstitutional. The layman’s explanation for nonobviousness is that it ensure that only “worthy” inventions receive a patent. The definition of an invention does not include or imply a nonobviousness requirement. The Constitution does not say inventors with “worthy” inventions shall have their rights secured. It states that the exclusive rights of inventors shall be secured.

    There is a similar constitutional problem with the first to file system. There is no such thing as a “first inventor to file”.

    Posted by dbhalling | April 19, 2011, 9:54 am
  2. That’s another good point.

    My admin law is admittedly very rusty, but there’s another doctrine dealing with federal agencies making decisions that are “arbitrary and capricious.” Non-obviousness may fit into that category as well …

    Posted by Patrick | April 19, 2011, 3:32 pm
  3. The non-obviousness requirement is an unconstitutional tax on patent applicants? That’s certainly a novel perspective. Rotsa ruck selling Congress and/or the Supreme Court on that one.

    Posted by D. C. Toedt | April 19, 2011, 5:11 pm
  4. @dbhalling, the patent and copyright clause of Article I section 8 doesn’t impose a duty on Congress to secure exclusive rights to authors and inventors; it grants Congress the power to do so. If Congress chooses to refuse to allow patents to be granted for obvious inventions, that would seem to be just as constitutional as a refusal to allow 100-year patents.

    Posted by D. C. Toedt | April 19, 2011, 5:21 pm
  5. D.C. Toedt —

    I’m not selling Congress anything. As for the Court, Hotchkiss is over 150 years old and they’re not about to change it.

    That said, if the goal is to reform patent laws to make the patent process more efficient, eliminating obviousness would bring about more impactful change than any of the current reforms. (Whether you believe it will be better or worse is a matter of personal opinion.)

    Posted by Patrick | April 19, 2011, 5:52 pm
  6. D. C. Toedt,

    Actually the Constitution does impose a duty on Congress to protect the rights of inventors. The phrase “shall” just means that the responsibility for protecting these rights is with Congress instead of the President or the Courts. The word “right” has to be interpreted as a natural right and the purpose of government for the Founders was the protection of our Natural Rights – not the redistribution of our income. For more information http://hallingblog.com/2010/09/11/could-congress-abolish-patent-and-copyrights/

    Posted by Dale B. Halling | April 20, 2011, 10:05 am
  7. This is somewhat off-topic, but relevant to Dale’s discussion of natural rights. Adam Mossoff recently gave a fantastic lecture to the ARI about the moral basis for patent rights stemming from natural rights theory.

    I’ll be writing more about this in an upcoming post, but for anyone who wants to view the lecture, here is the first segment (out of 8 total):

    Posted by Patrick | April 20, 2011, 10:09 am

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