Is the Patent System Broken?

NYY Times: Does the Patent System Need an Overhaul?

Two professors conclude in a new book that a couple of unrelated and seemingly innocuous administrative reforms of the patent system have caused a shift away from encouraging innovation in favor of exploiting patents largely for lawsuits.
Josh Lerner and Adam B. Jaffe have written a book with a title: “Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What To Do About It,” to be published in November by Princeton University Press.

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Adware Patent

Jupiter analyst Gary Price wonders if NetZero has really been granted a patent for adware: NetZero patents…AdWare?
NetZero filed for the patent in April 2000 and, last month, was granted a patent for High volume targeting of advertisements to user of online service

Disclosed is an ad server and local device that interface for selecting advertisements to be viewed by users of an online service based upon user activity. The local device preferably stores a targeted activity list of activity identifiers and associated advertisements in memory, preferably in cache memory. The local device monitors the activity on the local device and compares the activity to the identifiers in the targeted activity list. If the activity matches one of the identifiers, the local device causes one or more advertisements to be played.

Will this lead to patent infringement litigation against Claria and WhenU in addition to copyright and trademark (the IP trifecta)?

Soft Patents

In a Federal Reserve Bank of Philadelphia working paper, James Bessen (Research on Innovation and Boston University) and Robert M. Hunt (Federal Reserve Bank of Philadelphia) find that software patents do not lead to an increase in software inventions: An Empirical Look at Software Patents

The authors found that during the 1990s, all else equal, firms who increased their focus on software patents tended to reduce their R&D intensity relative to their peers. This suggests that in the 1990s, software patents substituted for R&D. This negative relationship was found only in certain industries, specifically those industries noted strategic patenting.

Full Text (pdf): An Empirical Look at Software Patents (Mar. 2004). See also the less technical The Software Patent Experiment from the same authors.

Digital Camera Patents

NY Times: Kodak Accuses Sony of Patent Violations on Digital Imaging

In a suit filed Monday in Federal District Court in Rochester, Kodak, which is struggling to make its brand name synonymous with digital photography, just as it once was with film, charged Sony with infringing on 10 patents that were issued to Kodak from 1987 to 2003. The patents covered various aspects of capturing, storing and displaying both still and moving digital images.

Does an enterprising reader want to spend a few minutes digging through the USPTO site to find out what these patents are for extra credit? I’m mildly curious, but otherwise occupied with some initial interest confusion issues…

AT&T sues eBay over patent

News.com: AT&T sues eBay, PayPal over patent

The suit, filed in federal district court in Delaware, claims that eBay and PayPal’s online payment systems infringe on AT&T patent No. 5,329,589, “Mediation of transactions by a communications system.”
That patent, according to an AT&T release announcing the suit, describes “transactions in which a trusted intermediary securely processes payments over a communications system such as the Internet. The use of a trusted intermediary ensures that one party will not have to disclose sensitive information, such as a credit card number or bank account number, to the other party to the transaction.”