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NEW YORK, MONDAY, OCTOBER 8, 2012
ALY’S CSOUTH
Phillips to Mr. Ricci’s firm. And
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port a sluggish Southern Europe, had focused
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mes
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“I
have
where grants and subsidies too to allow computers to understand
had set aside for research and de
ften vanish in graft that the gov- human speech. In 2006, he had patents that can prevent you
velopment
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Late Edition
rnments appear unable — or un- co-founded a voice recognition from practicing in this market,”
lawyers
and court
fees.
Today, sunshine
giving way
to
willing — to prevent. And it helps company, and eventually execu- Nuance’s chief executive, Paul
clouds, cool, high 60. Tonight, overWhen
the
first
lawsuit
went t
cast,
a
passing
shower,
chilly,
low
llustrate how the financing has tives at Apple, Google and else- Ricci, told Mr. Phillips, according
47. Tomorrow,
cloudy, aMr.
little rain,
trial
last
year,
Phillips
won
high 60. Weather map, Page C8.
yielded relatively little of the pro- where proposed partnerships. to executives involved in that
In
the
companies’
only
court
ductive investment that might Mr. Phillips’s technology was conversation.
room face-off, a $2.50
jury ruled tha
ject,beBegun
in
VOL. CLXII
. . No. 55,918Europe© 2012 The New York Times
NEW YORK, MONDAY, OCTOBER 8, 2012
now
helping
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Mr. Ricci issued an ultimatum: Mr. Phillips had not infringed on
even integrated into Siri itself beas
it
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eco, Is a Symbol
a broad voice recognition paten
nomic ditch.
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In Italy,
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But it was too late. The suit had
money “did tremendous damage
cost $3 million, and the financia
because the funds were used baddamage was done. In December
HEL
DONADIO
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aid
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ghway, begun
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WASHINGTON
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oward
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e of construction
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WASHINGTON
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ain ravines
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advances
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dealing
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in or the
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ing toward the capability to build
mbodies lythe
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e that is lyendemic
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BILL
ing its citizens, leaving Calabria
strategy that served
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Virginia
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THE
iECONOMY
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y, has systematicalthe70company
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hen
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ay
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ernments
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verishly to restore
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pany,
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h Southern
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cember, Mr. Phillips agreed to sell his company
as $20 billion was spent on patent litigation and
to Mr. Ricci. “We were on the brink of chang- patent purchases in the last two years — an
ing the world before we got stuck in this legal
amount equal to eight Mars rover missions.
muck,” Mr. Phillips said.
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sands of executives and companies caught in
big-dollar patent purchases exceeded spending
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ownership of concepts, rather than tangible
creations. Today, the patent office routinely approves patents that describe vague algorithms
or business methods, like a software system for
calculating online prices, without patent examiners demanding specifics about how those calculations occur or how the software operates.
As a result, some patents are so broad that
they allow patent holders to claim sweeping
ownership of seemingly unrelated products
built by others. Often, companies are sued for
violating patents they never knew existed or
never dreamed might apply to their creations,
at a cost shouldered by consumers in the form
of higher prices and fewer choices.
“There’s a real chaos,” said Richard A. Posner, a federal appellate judge who has helped
shape patent law, in an interview. “The standards for granting patents are too loose.”
Almost every major technology company is
involved in ongoing patent battles, but the most
significant player is Apple, industry executives
say, because of its influence and the size of its
claims: in August in California, the company
won a $1 billion patent infringement judgment
against Samsung. Former Apple employees say
senior executives made a deliberate decision
over the last decade, after Apple was a victim
of patent attacks, to use patents as leverage
against competitors to the iPhone, the company’s biggest source of profits.
Apple has filed multiple suits against three
companies — HTC, Samsung and Motorola Mobility, now part of Google — that today are responsible for more than half of all smartphone
sales in the United States. If Apple’s claims —
which include ownership of minor elements like
rounded square icons and of more fundamental
smartphone technologies — prevail, it will most
likely force competitors to overhaul how they
design phones, industry experts say.
HTC, Samsung, Motorola and others have
filed numerous suits of their own, also trying to
claim ownership of market-changing technologies.
While Apple and other major companies
have sometimes benefited from this war, so
have smaller partners. In 2010, Apple acquired
Siri Inc., the company behind the software of the
same name. The stock price of Mr. Ricci’s company, Nuance, which had by then become Siri’s
partner, rose by more than 70 percent as iPhone
sales skyrocketed. Some former executives at
Vlingo, Nuance’s old rival, remain bitter.
“We had spent $3 million to win one patent trial, and had five more to go,” said a former Vlingo executive who spoke on condition of
anonymity because he had signed confidentiality agreements. “We had the better product, but
it didn’t matter, because this system is so completely broken.”
Mr. Ricci declined to be interviewed. Others at Nuance said they were simply protecting
their intellectual property.
“Our responsibility is to follow the law,” said
Lee Patch, a vice president at Nuance. “That’s
what we do. It’s not our fault if some people
don’t like the system.”
Today, Nuance is a giant in voice recognition. Apple is the most valuable company in the
world. And the iPhone is wrapped in thousands
of patents that keep companies in numerous
court battles.
“Apple has always stood for innovation,”
the company wrote in a statement in response
to questions from The New York Times. “To
protect our inventions, we have patented many
of the new technologies in these groundbreaking and category-defining products. In the rare
cases when we take legal action over a patent
dispute, it’s only as a last resort.
“We think companies should dream up
their own products rather than willfully copying
ours, and in August a jury in California reached
the same conclusion,” the statement said.
At a technology conference this year, Apple’s chief executive, Timothy D. Cook, said
patent battles had not slowed innovation at the
company, but acknowledged that some aspects
of the battles had “kind of gotten crazy.”
“There’s some of this that is maddening,”
he said. “It’s a waste; it’s a time suck.”
The evolution of Apple into one of the industry’s patent warriors gained momentum, like
many things within the company, with a terse
order from its chief executive, Steven P. Jobs.
A Patent Warrior’s Education
It was 2006, and Apple was preparing to unveil the first iPhone. Life inside company headquarters, former executives said, had become a
frenzy of programming sessions and meetings
between engineers and executives. And, increasingly, patent lawyers.
From Models to Flowcharts
When the nation’s patent system was born, most inventions were
mechanical. Some say the patent system now struggles in a digital world,
where innovations like software are often based on abstract concepts. The
patent office initially refused to patent most software, arguing that it was
an idea or law of nature, like math. But several court cases changed that
view, and today software patents are often so broad and vague that
they theoretically give inventors ownership over much more than a
single invention.
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George B. Selden’s patent 549,160 was for
a lightweight internal combustion gasoline
engine for road vehicles. While some major
auto companies paid license fees on this
patent, others such as Henry Ford, refused.
Patent 5,193,056 for a computerized
strategy of managing mutual funds was
invalidated by a federal court because it
was a mental process or business method.
The Court of Appeals reinstated it, opening
the floodgates to patenting software and
methods of business.
From Models to Flowcharts
K TIMES NATIONAL MONDAY, OCTOBER 8, 2012
When the nation’s patent system was born, most inventions were
mechanical. Some say the patent system now struggles in a digital world,
where innovations like software are often based on abstract concepts. The
patent office initially refused to patent most software, arguing that it was
an idea or law of nature, like math. But several court cases changed that
view, and today software patents are often so broad and vague that
From Page A1
give inventors ownership over much more than a
decades, they argue, athey
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Sources: U.S. Patent and Trademark Office
Patent Wars Among Tech Giants Hold Do
has been corrupted by software patents
used as destructive weapons.
Vlingo was a tiny upstart on this battlefield, but as recent litigation involving Apple and Samsung shows, technology giants have also waged wars
among themselves.
In the smartphone industry alone, according to a Stanford University analysis, as much as $20 billion was spent on
patent litigation and patent purchases
in the last two years — an amount equal
to eight Mars rover missions. Last year,
for the first time, spending by Apple and
Google on patent lawsuits and unusually big-dollar patent purchases exceeded
spending on research and development
of new products, according to public filings.
Patents are vitally important to protecting intellectual property. Plenty of
creativity occurs within the technology
industry, and without patents, executives say they could never justify spendMUTUAL FUND DAT
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THE NEW YORK TIMES
DANIEL ROSENBA
software often effectively
grant U.S.
ownerSources:
Patent and Trademark Office
THE NEW YORK TIMES
ship of concepts, rather than tangible
The United States Patent and Trademark Office in Alexandria, Va. The office is known
creations. Today, the patent office roustaffed and plagued by turnover, and employees concede that some of their work is
tinely approves patents that describe
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1993
Just months earlier, Apple reluctantly
agreed to pay $100 million to Creative Technology, a Singapore-based company. Five years
before, Creative applied for a broad software
patent for a “portable music playback device”
that bore minor similarities to the iPod, an Apple product that had gone on sale the same year.
Once the patent was granted to Creative, it became a license to sue.
Apple settled three months after Creative
went to court. “Creative is very fortunate to
have been granted this early patent,” Mr. Jobs
said in a statement announcing the settlement
in 2006.
Privately, Mr. Jobs gathered his senior managers. While Apple had long been adept at filing
patents, when it came to the new iPhone, “we’re
going to patent it all,” he declared, according to a
former executive who, like other former employees, requested anonymity because of confidentiality agreements.
“His attitude was that if someone at Apple
can dream it up, then we should apply for a patent, because even if we never build it, it’s a defensive tool,” said Nancy R. Heinen, Apple’s general
counsel until 2006.
Soon, Apple’s engineers were asked to participate in monthly “invention disclosure sessions.”
One day, a group of software engineers met with
three patent lawyers, according to a former Apple patent lawyer who was at the meeting.
The first engineer discussed a piece of software that studied users’ preferences as they
browsed the Web.
“That’s a patent,” a lawyer said, scribbling
notes.
Another engineer described a slight modification to a popular application.
“That’s a patent,” the lawyer said.
Another engineer mentioned that his team
had streamlined some software.
“That’s another one,” the lawyer said.
“Even if we knew it wouldn’t get approved,
we would file the application anyway,” the former Apple lawyer said in an interview. “If nothing else, it prevents another company from trying to patent the idea.”
The disclosure session had yielded more
than a dozen potential patents when an engineer, an Apple veteran, spoke up. “I would like to
decline to participate,” he said, according to the
lawyer who was at the meeting. The engineer ex-
plained that he didn’t believe companies should
be allowed to own basic software concepts.
It is a complaint heard throughout the industry. The increasing push to assert ownership
of broad technologies has led to a destructive
arms race, engineers say. Some point to so-called
patent trolls, companies that exist solely to sue
over patent violations. Others say big technology companies have also exploited the system’s
weaknesses.
“There are hundreds of ways to write the
same computer program,” said James Bessen, a
legal expert at Harvard. And so patent applications often try to encompass every potential aspect of a new technology. When such applications
are approved, Mr. Bessen said, “the borders are
fuzzy, so it’s really easy to accuse others of trespassing on your ideas.”
The number of patent applications, computer-related and otherwise, filed each year at the
United States patent office has increased by more
than 50 percent over the last decade to more than
540,000 in 2011. Google has received 2,700 patents
since 2000, according to the patent analysis firm
M-CAM. Microsoft has received 21,000.
In the last decade, the number of patent applications submitted by Apple each year has risen
almost tenfold. The company has won ownership
of pinching a screen to zoom in, of using magnets
to affix a cover to a tablet computer and of the
glass staircases in Apple stores. It has received
more than 4,100 patents since 2000, according to
M-CAM.
And as patent portfolios have expanded, so
have pressures to use them against competitors.
In March 2010, Apple sued HTC, a Taiwanese
smartphone manufacturer that had partnered
with Google. Apple did not talk to HTC before suing. Negotiations were not part of the strategy,
according to a former executive. “Google was
the enemy, the real target,” the executive said.
It was one of seven major smartphone and
patent-related lawsuits Apple has initiated since
2006. The suits have focused on two large companies, HTC and Samsung, both Google partners,
which together account for 39 percent of American smartphone sales. Apple has also filed countersuits against Nokia, as well as against Motorola Mobility, which is now owned by Google and
accounts for 12 percent of sales.
In addition, the company has filed two declaratory judgment actions asking the courts to
rule on the provenance and validity of patents.
Over the same period, Apple itself has been sued
135 times, mostly by patent trolls interested in its
deep pockets.
Apple is not alone. The number of patent
lawsuits filed in United States district courts
each year has almost tripled in the last two decades to 3,260 in 2010, the last year for which
federal data is available. Microsoft has sued
Motorola; Motorola has sued Apple and Research in Motion; Research in Motion has sued
Visto, a mobile technology company; and in
August, Google, through its Motorola unit, sued
Apple, contending that Siri had infringed on its
patents. (Google dropped the suit last week,
leaving open the possibility of refiling at a later
date.) All of those companies have also been
sued numerous times by trolls.
Patents for software and some kinds of electronics, particularly smartphones, are now so
problematic that they contribute to a so-called
patent tax that adds as much as 20 percent to
companies’ research and development costs,
according to a study conducted last year by two
Boston University professors.
Supporters of suits initiated by Apple say
that the litigation is vital to the company’s success and that Apple is sued far more often than
it sues, as do all major tech firms.
“If we can’t protect our intellectual property, then we won’t spend millions creating products like the iPhone,” a former Apple executive
said, noting that some of Apple’s patents, like
the “slide to unlock” feature on the iPhone, took
years to perfect. The concept “might seem obvious now, but that’s only after we spent millions
figuring it out,” the executive said. “Other companies shouldn’t be able to steal that without
compensating us. That’s why the patent system
exists.”
But others challenge that logic, given the
huge profits the technology industry enjoys.
Apple collects more than $1 billion a week in
iPhone and related sales. “I am skeptical whether patents are needed in the software industry
to provide adequate incentives,” Judge Posner
wrote in an e-mail.
One consequence of all this litigation, policy
makers and academics say, is that patent disputes are suffocating the culture of start-ups
that has long fueled job growth and technological innovation.
“Think of the billions of dollars being
flushed down the toilet,” said Ms. Heinen, the
former Apple general counsel, who left the company and paid $2.2 million in connection with a
federal investigation of stock option backdating.
“When patent lawyers become rock stars, it’s a
bad sign for where an industry is heading,” she
said, adding that she had no issue with the lawyers themselves.
There are some indications that the big
companies themselves are growing weary of
this warfare.
In its response to The Times, Apple addressed “standards-essential” patents, which
companies are obligated to license to competitors at reasonable rates, and wrote that it was
“deeply concerned by the rampant abuse of
standards-essential patents by some of our
competitors.”
“Standards-essential patents are technologies which these companies have volunteered
to license to anyone for a reasonable fee,” the
statement said, “but instead of negotiating with
Apple, they’ve chosen to sue us.” Samsung, Motorola, Nokia and HTC have sued Apple, claiming it violated standards-essential patents.
Another sign of fatigue is the frequency
with which executives and lawyers from Apple
and Google speak to one another about patent
disputes. Earlier this year, Google proposed a
cease-fire, according to people familiar with the
conversations. And when Google withdrew its
Motorola suit last week, it was widely seen as a
peace gesture.
But Apple has been hard to pin down, said
one person from Google who was not authorized
to speak publicly. “Sometimes they’re asking for
money. Then they say we have to promise to not
copy aspects of the iPhone. And whenever we
get close to an agreement, it all changes again.
“Our feeling is they don’t really want this to
end. As long as everyone is distracted by these
trials, the iPhone continues to sell.”
Apple declined to comment on the negotiations.
The Patent Bureaucracy
The application by Apple that eventually became patent 8,086,604 first crossed desks at the
Patent and Trademark Office on a winter day in
2004.
In the next two years, a small cast of officials
THE NEW YORK TIMES NATIONAL MONDAY, OCTOBER 8, 2012
mave
nd-
Fighters in a Patent War
reawto
arseith
gle
, it
Apple has been involved in 142 smartphone patent lawsuits — and
in six instances, suits with multiple plaintiffs — since 2006. A
majority of patent suits within the smartphone industry are filed by
so-called trolls, companies that exist solely to sue. But tech giants
have also traded lawsuits among themselves.
wn,
was
mehen
py
ver
all
ant
dison-
ne-
Mobile phone lawsuits filed since 2006
Each arrow represents a lawsuit involving a
mobile patent. In some cases, when
multiple firms are plaintiffs or defendants, a
single suit is represented with multiple
arrows. The circles are sized according to
the total for each company.
NOKIA and APPLE
Research
in Motion
104
In 2009, Nokia sued Apple for patent
infringements and Apple countersued.
In 2011 the companies settled some
cases, with Apple reportedly agreeing
to make a one-time payment of $600
million and future royalties to Nokia.
Nokia
106
HTC
121
KEY
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among the
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Motorola
127
Google bought Motorola
Mobility in 2011 for
$12.5 billion, largely for
its patent portfolio.
HTC and APPLE
Apple filed suit against phone maker HTC in
2010 in a move widely seen as directed at
Google, which had partnered with HTC. At the
time, Apple’s chief executive, Steven P. Jobs,
said in a statement: “We can sit by and watch
competitors steal our patented inventions, or
we can do something about it. We’ve decided
to do something about it.”
Eon
109
GOOGLE and APPLE
Apple
SAMSUNG and APPLE
Apple and Samsung are
suing each other around the
world. In August, a California
jury awarded Apple $1
billion. The same day, in
South Korea, a court
delivered a mixed verdict
that, in part, ruled in
Samsung's favor. A week
later, in Japan, Samsung
was the winner.
148
ion
ro-
Many of Apple’s lawsuits are seen as proxy fights
in its battle with Google, which created Android,
now the dominant smartphone operating system.
Apple has not sued Google directly, though it has
sued its partners, including HTC and Samsung,
and has countersued Motorola Mobility, now a
division of Google.
Samsung
127
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Source: LexMachina
Most of Technology Patents’ operations seem
devoted to suing 87 companies, including most
major telecommunications firms, for violating
patents regarding sending information over a
digital network.
When possible, subsidiaries were counted as the parent company. In some instances, suits and countersuits have the
same case number and so may be counted as only one case. These are the top 10 litigants as of the end of 2011.
awarded an Illinois company effective
ownership of many of the basic systems
that power the Internet. That firm sued
a number of tech giants, persuading
many to sign multimillion-dollar settlements, until a jury declared some of the
fringed on Apple’s patent because it featured a “Google quick search box” that
allowed users to enter one search term,
either typed or spoken, that returned
results simultaneously from the Internet, contacts stored on the phone and
holds 100 patents — including for the
software behind the reverse aging in
the film “The Curious Case of Benjamin
Button” — and has about 100 more applications pending.
Patents are crucial to his business,
THE NEW YORK TIMES
Schultz, an assistant professor who
helped design the license.
But to really make a difference, such
ideas require the participation of large
technology companies, and the incentives to cooperate are small. So some
spent about 23 hours — the time generally allotted for reviewing a new application — examining the three dozen pages before recommending
rejection. The application, for a voice- and textbased search engine, was “an obvious variation”
on existing ideas, a patent examiner named Raheem Hoffler wrote. Over the next five years,
Apple modified and resubmitted the application
eight times — and each time it was rejected by
the patent office.
Until last year.
On its 10th attempt, Apple got patent
8,086,604 approved. Today, though the patent
was not among those Vlingo and Nuance fought
over, it is known as the Siri patent because it is
widely viewed as one of the linchpins of Apple’s
strategy to protect its smartphone technologies.
In February, the company deployed this
new patent in a continuing lawsuit against Samsung that could radically reorder the $200 billion
smartphone business by giving Apple effective
ownership of now-commonplace technologies,
software experts say.
Patent 8,086,604’s path to approval “shows
there’s a lot wrong with the process,” said Arti K.
Rai, an intellectual property expert at Duke University School of Law who reviewed the patent
application for The Times. That patent, like numerous others, is an example of how companies
can file an application again and again until they
win approval, Ms. Rai said.
When Apple submitted the first application
for 8,086,604, the iPhone and Siri did not exist.
The application was aspirational: it described a
theoretical “universal interface” that would allow people to search across various mediums,
like the Internet, corporate databases and computer hard drives, without having to use multiple
search engines. It outlined how such software
might function, but it did not offer specifics about
how to build it. It suggested that some people
might speak a search phrase rather than use a
keyboard.
The ideas contained in the application would
blossom at Apple, Google, Microsoft, Nuance,
Vlingo and dozens of other companies. All the
while, the application traveled quietly through
the patent office, where officials rejected it twice
in 2007, three times in 2008, once in 2009, twice in
2010 and once in 2011.
The patent office has a reputation for being
overworked, understaffed and plagued by em-
ployee turnover, and employees concede that
some of their work is subjective.
“When I get an application, I basically have
two days to research and write a 10- to 20-page
term paper on why I think it should be approved
or rejected,” said Robert Budens, a 22-year patent examiner and president of the examiners’ labor union. “I’m not going to pretend like we get it
right every time.”
To receive a patent, an invention must be
novel (substantially different from what exists),
not obvious (one can’t patent a new toaster simply by expanding it to handle five slices of bread),
and useful (someone can’t patent an invisibility
machine if invisibility is impossible).
“If you give the same application to 10 different examiners, you’ll get 10 different results,”
said Raymond Persino, a patent lawyer who
worked as an examiner from 1998 to 2005.
After patent 8,086,604 was first rejected in
2007, Apple’s lawyers made small adjustments
to the application, changing the word “documents” to “items of information” and inserting
the phrase “heuristic modules” to refer to bits
of software code. A few years later, the inclusion
of the word “predetermined” further narrowed
Apple’s approach.
These changes had little substantial impact,
said experts who reviewed the application for
The Times. But the patent office slowly began to
come around to Apple’s point of view.
Though submitting an application repeatedly can incur large legal fees, it is often effective.
About 70 percent of patent applications are eventually approved after an applicant has altered
claims, tinkered with language or worn down the
patent examiners.
One consequence is that patents are sometimes granted for ideas that already exist.
In 1999, for instance, two men received a patent for a crustless, sealed peanut butter and jelly
sandwich. (The J. M. Smucker company acquired
the patent and used it to sue other food makers.
In 2007, after press scrutiny, federal officials canceled the patent.)
A year earlier, the patent office had awarded
an Illinois company effective ownership of many
of the basic systems that power the Internet.
That firm sued a number of tech giants, persuading many to sign multimillion-dollar settlements,
until a jury declared some of the patents invalid
last year.
in 2007, Apple’s lawyers made
guing that 17 of Samsung’s smart-
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RICHARD A. POSNER, federal appellate judge
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For Apple’s 8,086,604, the examiners finally June, a judge banned sales of Samsung’s Galaxy
relented last December and issued a patent.
Nexus phone, validating 8,086,604 and ruling that
“Apple got another warhead in its arsenal, the phone infringed on Apple’s patent because
but there’s no big invention here,” said David J.
it featured a “Google quick search box” that alPratt, president of M-CAM, the patent analysis lowed users to enter one search term, either
firm, who analyzed the application for The Times. typed or spoken, that returned results simultaThe patent office declined to discuss neously from the Internet, contacts stored on the
8,086,604. Officials pointed out that the agency’s phone and recently visited Web sites. (The ban
7,650 examiners received more than half a milhas been stayed while under appeal.)
lion applications last year, and the numbers have
Searching for Fixes
kept climbing.
Some experts worry that Apple’s broad
By all accounts, there have been improvements in the patent office since David J. Kappos patents may give the company control of technologies that, over the last seven years, have
took over as director in 2009. In an interview, Mr.
been independently developed at dozens of
Kappos said the lengthy back-and-forth between
examiners and Apple was evidence that the sys- companies and have become central to many
devices.
tem worked.
“Apple could get a chokehold on the smart“It’s called the patent office,” he said, noting that issuing patents is the agency’s job. In a phone industry,” said Tim O’Reilly, a publisher
statement, the agency said it had spent the last of computer guides and a software patent critthree years strengthening policies to improve ic. “A patent is a government-sanctioned mopatent quality. Besides, Mr. Kappos said, “we re- nopoly, and we should be very cautious about
alize that only a handful of these patents will be handing those out.”
Others say the system works fine.
really important.”
“Intellectual property is property, just like
However, patent 8,086,604 has proved very
important. In February, Apple sued Samsung in a house, and its owners deserve protection,”
said Jay P. Kesan, a law professor at the Unia California court, arguing that 17 of Samsung’s
versity of Illinois. “We have rules in place, and
smartphones and tablets violated 8,086,604. In
ffice had
they’re getting better.
“And if someone gets a bad patent, so
what?” he said. “You can request a re-examination. You can go to court to invalidate the
patent. Even rules that need improvements
are better than no rules at all.”
Five years ago, Congress was debating
how to fix the patent system when an inventor named Stephen G. Perlman went to Capitol
Hill.
Mr. Perlman worked at Apple in the 1980s.
Today, he runs a start-up incubator called
Rearden in San Francisco. He holds 100 patents — including for the software behind the
reverse aging in the film “The Curious Case of
Benjamin Button” — and has about 100 more
applications pending.
Patents are crucial to his business, Mr. Perlman said, particularly in raising money from
venture capitalists and deterring large companies from copying his innovations. “When we
file a patent application, it’s a big deal,” he said.
When Mr. Perlman went to Congress, he
brought ideas to protect small inventors. He
wasn’t alone in suggesting solutions. Thousands of companies, from start-ups like Vlingo
to large technology firms, have argued that a
well-functioning patent system is essential to
their success. The problems with the current
system are so pervasive, they say, that the
courts, lawmakers and Silicon Valley must find
their own fixes.
One option is judicial activism. This year,
Judge Posner, in an Illinois federal court, tossed
out patent arguments made by both Apple and
Motorola Mobility in a 38-page opinion that dismissed a lawsuit between the two companies.
Cleaning up the patent mess, Judge Posner
said in an interview, might also require reducing the duration of patents on digital technologies, which can be as long as 20 years. “That
would make a big difference,” he said. “After
five years, these patents are mainly traps for
the unwary.”
Ideas have also come from policy experts
and Silicon Valley. The Federal Reserve Bank
of St. Louis recently published a working paper
calling for the abolition of patents, saying they
do more harm than good.
Another idea is to create different classes
of patents, so that some kinds of inventions,
like pharmaceuticals, would receive 20 years of
ironclad protection, while others, like software,
would receive shorter and more flexible terms.
A third suggestion was made by the Internet company Twitter, which released an “Innovator’s Patent Agreement” this year intended
to give software engineers some control over
how their creations are used. Under the terms
of the agreement, companies pledge that patents will be used only for defensive purposes.
“We’re just trying to do something modest,” said Benjamin Lee, Twitter’s legal counsel.
Similarly, law school faculty at the University of California, Berkeley, have proposed
a “Defensive Patent License” in which companies would contribute patents to a common
pool that shielded participants from litigious
aggressors. Companies would be allowed to
participate as long as they did not become
first-strike plaintiffs. The benefit is that “you
don’t have to worry about your patent being
weaponized” and used to attack competitors,
said Jason M. Schultz, an assistant professor
who helped design the license.
But to really make a difference, such ideas
require the participation of large technology
companies, and the incentives to cooperate are
small. So some frustrated engineers have become outspoken advocates for reform.
Mr. Perlman, the independent inventor, for
instance, was hopeful his voice would be heard
on Capitol Hill. But alongside Mr. Perlman were
hundreds of lobbyists from high-tech corporations and the pharmaceutical industry, which
often push conflicting proposals. Big technology companies, in general, want to limit the
financial damages juries can award for minor
patent violations, while drug makers want to
make sure they can sue for billions of dollars if
a single patent is violated.
These and dozens of other narrow battles
have paralyzed Congress’s ability to make real
changes, lawmakers and lobbyists say. The
last attempt, the America Invents Act, which
was passed last year, achieved mostly administrative fixes, like making it easier for outsiders to challenge a patent’s validity.
The new law did make one fundamental
change. Since the patent system was overseen
by Thomas Jefferson, the United States has
awarded ownership of an innovation to whoever created the first prototype, a policy known
as “first to invent.” Under the America Invents
Act, ownership will be awarded to whoever
submits the first application, or “first to file.”
The shift, inventors like Mr. Perlman say,
makes life harder for small entrepreneurs.
Large companies with battalions of lawyers
can file thousands of pre-emptive patent applications in emerging industries. Start-ups,
lacking similar resources, will find themselves
easy prey once their products show promise.
That is the concern of people like Mr. Phillips, the voice recognition specialist and onetime Siri partner who founded Vlingo. “Startups are where progress occurs,” he said in an
interview. “If you spend all your time in court,
you can’t create much technology.”
In June, Mr. Phillips started work at his
new employer, and former courtroom adversary, Nuance. Theoretically, his job was to help
manage the companies’ integration and find
new technological frontiers to explore. With a
background at M.I.T. and Carnegie Mellon, he
is widely acknowledged as one of the most innovative thinkers in computer speech.
But he spent much of the summer on vacation, recuperating from the last six bruising
years. And in September, he quit. He plans to
leave voice recognition altogether, he has told
friends, and find an industry with less treachn
erous patent terrain.