Our Blind Spot for Inventors ...and How Universities Can Remove It

United States Secretary of Commerce Carlos M. Gutierrez, among other things, is in charge of the Patent and Trademark Office.  Yesterday the San Jose Mercury News published this piece by Gutierrez identifying three specific areas for Congress to focus on in considering patent reform:

• Damages Apportionment
• Post-Grant Review
• Patent Application Quality

In two previous posts, I have blogged about Damages Apportionment.  Lately, I have been working through a very good paper by J. Gregory Sidak, which gives some convincing responses to the Lemley and Shapiro arguments that damages apportionment is a necessary response to the problem of Cournot complements.  In a nutshell, asymmetric bargaining power between patent owners and groups of potential licensees may more than make up for the inefficiencies of negotiating with multiple complementary input suppliers. 

This is a complex problem, and it makes sense for us to be very careful about making changes in this area of the law.  Nobody really knows how damages apportionment will prospectively affect the value of patents.  Nonetheless it seems reasonably certain that implementation of damages apportionment would effect a net redistribution of wealth from inventors to licensees.

Post-grant review, by driving up the cost of the patenting process, is also likely to favor large applicants over small ones, especially independent inventors.

Improving patent quality is probably the only reform item proposed by Gutierrez that does not definitively cut against smaller entities and independent inventors.  This is because the quality problem in terms of raw numbers must be more the fault of large entities than small.  My personal experience suggests that startup companies put far more resources into putting together good patent applications than the larger, publicly-traded corporations that are often interested more in having a huge portfolio for defensive/cross-licensing problems with other large publicly traded corporations.

In all of these discussions of patent reform, who's looking out for the dispersed group of small entities and inventors?  Only the universities that are the home for many of these inventors have the resources to get a chair at the table in negotiating patent reform.