Fixing What Ails The U.S. Patent System: A Modest Proposal

Fixing What Ails The U.S. Patent System: A Modest Proposal
Post written by Scott Dietzen and Joe FitzGerald

Dietzen is CEO of Pure Storage, a $3 billion (value) startup in Mountain View, Calif. FitzGerald is its vice president of legal. 

We propose the following changes be considered to ensure that patents and the patent system help, not hinder, innovation:

• Shorten patent terms: Patents should only last five years from issuance; for patents related to drugs or medical devices requiring separate regulatory approval, publish the allowed patent application but only issue the patent when regulatory approvals are obtained to sell the drug or device. 
• Term of patent in the United States - Wikipedia, the free encyclopedia 
• The original patent term under the 1790 Patent Act was decided individually for each patent, but "not exceeding fourteen years".^[8] 
• The 1836 Patent Act (5 Stat. 117, 119, 5) provided (in addition to the fourteen year term) an extension "for the term of seven years from and after the expiration of the first term" in certain circumstances.^[9] 
• In 1861 the seven year extension was eliminated and the term changed to seventeen years (12 Stat. 246, 249, 16). 
• The signing of the 1994 Uruguay Round Agreements Act^[10] then changed the patent term from seventeen years from the date of issue to the current twenty years from the earliest filing date.
• If patents must be allowed to be “maintained” beyond year five (not recommended), allow it only once for a short time (two years at most) and charge a much higher amount for it than we do today. The current highest maintenance fee is $7,400 due 11.5 years into the patent term. We would recommend charging an order of magnitude more: at least $75,000, and preferably more.  This will encourage conversion to public domain for the majority of patents.
  Current fees: AIA_Section10_Table_of_Patent_Fee_Changes_1-14-13.xlsx - AC54_Final_Table_of_Patent_Fee_Changes.pdf
• Use it or lose it: Patent owners, like trademark owners today, should be required to show evidence that they have actually productized their patented invention within a time certain (e.g., 12 months from issuance). If not, then the remainder of the patent term should be forfeited. This approach will police the patent ranks and get rid of stale “paper” patents. Patents could be purchased by others in this time period, and the purchaser could provide the necessary evidence of use to keep the patent live.
• Tighten up on novelty: Require a clear statement in every patent application from the Patent Examiner explaining exactly why the patent is being issued.  If a party finds an earlier example of the “novel” feature, reexamination/inter-partes review is granted automatically on request of a party challenging the patent.
• Require acquired patents to be put to use: Allow patents to be sold, but only if the buyer can demonstrate plans to actually use the IP in question as expressed in the “use it or lose it” section above.
• Unite against patent assertion entities: Communities such as The LOT Network (in which Pure Storage participates) promote innovation by reducing the risk of litigation from PAEs and others who buy patents in today’s current open market. Until systemic changes like those proposed are adopted, the high tech industry needs to take the lead and do what it can to protect innovation. Any company can join LOT and help support innovation by limiting the impact of patents that fall into the hands of patent trolls or others that might use them to create a tax on innovative companies.