FTC Takes A Hard Look At Patents and Competition and Innovation

Yesterday the FTC issued its report entitled To Promote Innovation: The Proper Balance of Competition and Patent Law & Policy. This is the culmination of 24 days of hearings held between February and November 2002, which involved more than 300 panelists, including representatives from large and small technology companies, economists, antitrust and patent specialists, law professors, and inventors. I attended some of the hearings held at Berkeley and they were fascinating. While I don't agree with everything in the report, it really does a bang up job summarizing the testimony and presenting additional research and then makes some very bold recommendations for patent law reforms. The FTC "gets it" that far too many worthless patents sneak out of the Patent Office, and without helplessly bashing that agency suggests ways to see more of these little moles whacked. For example, they propose a new procedure to review issued patents, shy of litigation. Perhaps most importantly, they suggest changing the burden of proof to invalidate a patent from "clear and convincing" all the way down to "preponderance of the evidence." They also suggest strengthening the test for nonobviousness. Most importantly for my work this week, they suggest changes in when a patentee can obtain treble damages for "willful" infringement. The Report is over 300 pages but the Executive Summary is a must-read for anyone interested in patent system reform.