Intel’s General Counsel, Bruce Sewell, had an interesting commentary piece in yesterday’s Wall Street Journal: Patent Nonsense (because it is from the Op/Ed pages, I do not think a subscription is required). On the day that the Senate Judiciary Committee renewed its consideration of the Patent Reform Act of 2007, Sewell makes many of the arguments that led to the changes proposed by the Act. Sewell argues that the number of patent law suits is increasing, damages awards are rising (he states that there have been at least four settlements or judgments in excess of $500M in the last five years) and the more and more "questionable, loosely defined patents" are being issued. Sewell’s remedies to these problems include:
- limiting damages to the patented component not the entire product (i.e., a patentee’s damages should be based on its patented engine component, not the entire car);
- strong post-grant PTO review;
- strengthening of venue requirements so that suits must be brought in a forum with an actual connection to the alleged infringement; and
- requiring a showing of actual bad faith for a willfulness finding.
Sewell also argues that the allegedly increasing number of "questionable, loosely defined patents" chills research and development in technology areas covered by the patents. But I am not sure this argument is correct. In my experience, a patentee, assignee or exclusive licensee with a broad patent tends to assert its patent when the technology is developed and a large chunk of the research investments have already been made. That is the point when the alleged infringers have developed a market and, therefore, potential damages. So, while I am all in favor of careful examination by the PTO (as are most people involved in this debate, I think), I am not sure that the problem with the broad, questionable patents is that they chill research and development investment.