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Hey. This First-to-File Thing Is Scary
Monday, August 15 2005 @ 04:57 AM EDT

Let's connect some dots. I'm sure you've heard about Apple being unable to get a patent on an element of its iPods because Microsoft beat them to the Patent Office and filed a patent on similar technology five months before Apple filed, but after iPods were already on the market. Microsoft is sticking the knife in and giving it a twist, by hinting that Apple can always just license their patent:
David Kaefer, Microsoft's director of intellectual property licensing and business development, said: "In general, our policy is to allow others to license our patents so they can use our innovative methods in their products."

"Our innovative methods?" That's got to hurt. Microsoft wouldn't mind $10 per iPod sold. You know that feels wrong. I know it. Microsoft must know it deep down, too, even if visions of sugarplums currently are lighting up their neurons in endorphin-flooded daydreams of a money stream to the end of time without having to do a lick of work for it. The very idea of paying Microsoft for each iPod sold must make Apple see red, and they put out this terse statement:

"Apple invented and publicly released the iPod interface before the Microsoft patent application cited by the (patent) examiner was filed."

I'm reading this sad tale, and all of a sudden, it hits me. What would happen to Apple in identical circumstances if Congress had already passed the Patent Reform Act of 2005? That proposed legislation, now working its way through Congress, proposes to change the US system to a first-to-file patent system, instead of first-to-invent. Zounds, I said to myself. Here's Exhibit A of how such a system would work, a real-life example of just how such a system could play out and what injustices it could enable. I'm not so sure this is such a great idea, fellas.

The article in The Independent explains the order of events:

Although Apple introduced the iPod in November 2001, it did not file a provisional patent application until July 2002, and a full application was filed only in October that year.

In the meantime, Microsoft submitted an application in May 2002 to patent some key elements of music players, including song menu software.

If we were already under a first-to-file system, Apple would be up a creek without a paddle. As it is, Appleinsider suggests Apple has a few options left:

It's unclear how Robbin and Apple will proceed in their attempts to secure rights to the iPod's software design interface. The United States Patent and Trademark Office allows a three-month window period for reply to the final rejection, in which Robbin and Apple can appeal the decision, request reconsideration, or file a continuation of their original application.

Now, I don't know all the ins and outs of this particular case, but let's assume that the reports are 100% accurate, although that would be a media first, and things happened just that way, and let's think about the situation under the first-to-file rule. Microsoft wins hands down, then, despite Apple being the earlier inventor. Are you sure you like that result? Not you, Microsoft. We know you are chortling. The rest of you.

The Patent Office may look deeper and realize what they've done, and hopefully justice will be done there, or in court later, but the only reason that can happen is because so far the US is a country with a law whereby a patent can be invalidated by prior art or proof of prior invention. While nothing is right about a system where Apple will have to spend maybe millions to straighten this out, at least they have the hope of being able to do so under the current system.

My question is, how could something like this happen under the current system? The Patent Office examiner never saw an iPod? And more pertinently, Microsoft didn't know about iPods, when it filed its patent? Puh-lease. And yet, do you feel 100% sure that Apple will win? The US patent system is an unholy mess, and the law in practice has become so bizarre and arbitrary and out of sync with the way the system was set up to work that you can't even predictably rely on a just outcome. Laws are supposed to at least be *trying* to bring about a just result.

Here's my next question... did Microsoft list the iPod, like they are supposed to, when they filed for their patent? You're not allowed to hide prior art. When you are applying for a patent, you have a duty of candor, as they put it, to list all prior art you know about. iPods. We're talking iPods. Is there anyone left on the planet who hasn't heard of iPods?

It's an affirmative defense in any patent infringement lawsuit, if the patent was gained by knowingly concealing prior art. It's called inequitable conduct, and it can result in a patent that isn't enforceable. What? Microsoft? Inequitable conduct?

And to those who claim that you can measure the success of the Patent Office by the surge in numbers of patents granted, may I say.... beep. Wrong. If you think I'm kidding that some say that, there is a press release on the home page of the USPTO right now that makes that assertion:

The U.S. continues to be the driver of ingenuity around the world, evidenced by the surge in patent, trademark and copyright applications from inventors and the resulting patents issued by USPTO. In 2004, the USPTO received more than 376,000 applications for patents, and patent applications have more than doubled since 1992. In fact, the USPTO issued more patents in 2004 than it did during its first 40 years.

So we have observed. You are proud of that? Did the US suddenly become a nation of innovative geniuses? It must be so, because patents are supposed to be granted only for innovations not obvious to those skilled in the art. So, 376,000 of such amazing works of genius in one year alone? See, guys, that's the problem. You're measuring by weight, not by quality, or, judging by the Apple mess, even by accuracy, even by the standards in the law. And you are causing pain and a true waste of resources as companies are forced to clean up the patent mess you are making by your profligate patent issuance policy. That's not good for the economy. You are also putting a wet blanket on innovation by compelling everyone to divert and spend huge sums to protect themselves from the conscienceless, which is a detour from innovation and an economic drag.

I gather the USPTO is beginning to get a glimmer that small and medium sized players are being left out of the patent orgy, because in the same press release, they call on all such to join in and patent everything they can, to protect America's economy, no less:

U. S. Under Secretary of Commerce for Intellectual Property Jon Dudas on Friday asked independent inventors to protect American ingenuity by safeguarding their inventions from intellectual property theft. Small businesses -- such as independent inventors -- are often at particular risk for IP theft, a growing problem around the world. Dudas urged attendees at the 10th annual Independent Inventor’s Conference to make patent, trademark and copyright protection a core part of their business strategy. This year's conference was held as part of the USPTO's observance of National Inventors Month.

“The strength of our nation’s economy rests on the ingenuity of American inventors,” Dudas said. “In the 21st century, securing protection for your inventions is almost as important as the invention itself.”

Right. Who's paying for all this? [Please note: if you are a FOSS developer, Red Hat will pay for you to file for patents that can be freely used by Open Source developers.] Microsoft says they spend $100 million a *year* to defend themselves against 35-40 patent infringement lawsuits. Every year. Have the rest of us got hundreds of millions for that? The more patents they issue, the more lawsuits there will be, you know. It's a package deal. The USPTO seems to think it's just a lack of information, not a lack of cash holding inventors back:
The USPTO is also currently conducting a nationwide awareness campaign that is providing information to small businesses about when to file for intellectual property protection, what type of protection to file for, where to file and how to go about it. The effort features outreach targeting industry sectors especially at risk of intellectual property theft, a Web site specifically designed to address the needs of small businesses, and informational materials informing small businesses about the problem and steps they can take to mitigate it. Materials and other information about the awareness campaign are available at

Maybe they'll find out at the seminars what the real problems are for smaller players. It starts with an "M". If you set up a system no one but rich people can take advantage of, it isn't just the small players who suffer. It's everyone, the public at large, and ultimately the economy they care about. These guys really, seriously, need to think about where innovation really comes from. It isn't from Microsoft. They generally acquire theirs, as far as I can make out, as competitive roadkill.

I hope all those who piously told us how wonderful it would be to alter patent law so that the first to file wins the gold ring (they phrase it that it would be desirable to harmonize with the 'rest of the world', as per the BSA, who supports the change, as does Microsoft) will now think again. Remember the iPod! It would mean that what has just happened to Apple will happen to you and you and you. Do you really believe that Microsoft and big entities with deep pockets like them can't beat you little guys to the Patent Office over and over? If I wanted to patent something, I'd have to sell all my worldly goods first to afford to pay for it. Most FOSS developers are in the same boat. That doesn't mean we have no innovative ideas that could benefit the world. Do you really believe only rich folks can innovate? Only megacorporations? Do we really want a world where no one may innovate unless they are rich? Think it through, everyone. Look at the track record. It's a concept that doesn't work for anyone but the Microsofts of this world, and as nice as Microsoft is, I think they have more than their fair share of money already.

Just so you are clear on what I'm talking about, here's the relevant part of Section 3 of the Patent Reform Act of 2005, as introduced in the House, and cunningly if not accurately titled, "Section 3: Right of the First Inventor to File":

(h) The `effective filing date' of a claimed invention is--
`(1) the filing date of the patent or the application for patent containing the claim to the invention; or

`(2) if the patent or application for patent is entitled to a right of priority of any other application under section 119, 365(a), or 365(b) or to the benefit of an earlier filing date in the United States under section 120, 121, or 365(c), the filing date of the earliest such application in which the claimed invention is disclosed in the manner provided by the first paragraph of section 112 of this title.

Here's a breakdown of what the legalese means. One snip:

This Bill changes the U.S. patent system from the “first to invent” type to the “first to file” type, and brings it in conformity with the rest of the world.

Under the existing U.S. patent law, the right to patent the invention belongs to the person who was the first to invent, not the one who was first to file for the patent. The rationale is that such provision protects the small individual inventor who cannot rush to the patent office to get a patent. A common criticism of the U.S. system is that in practice this provision gives rise to expensive litigation over who was first to invent, and therefore, favors corporations with big money. Besides it is out of tune with the rest of the world.

The supporters of the existing “first to invent” system argue that, the rush to file will negatively impact the quality of invention disclosures in the patent, and increase patent malpractice suits, since any delay on the part of the patent attorney could result in not getting the patent at all.

Here are some arguments from someone for the change:

Why there's a move to change: The U.S.'s first to invent rule is enormously complex, generates substantial litigation and complexity, and is out of step with the rest of the world. Determining who is the first to invent a particular matter is extraordinarily difficult, and the applicable rules are Byzantine even by the standards of patent law. A first-to-file rule -- based on what application gets to the Patent Office first -- is simpler, cleaner, and much more efficient. Moreover, a first-to-file rule will be accompanied by a change in the definition of "prior art," in order to protect an inventor who is beaten to the Patent Office. [UPDATE: On reflection, that last sentence is a misleading oversimplification. A change to the "first to file" rule will indeed require a change in the definition of "prior art," but the safe harbor that I describe also requires a change in the concept of "intervening rights" (whether or not expressed in such term).]

• Who are the winners? The system, the Courts, the Patent Office -- a first-to-file is much cheaper, easier, and simpler. The fast (read: the folks who have the money to patent early and often). Multinationals: No more bizarre US-only rules.

• Who are the losers? The little guy, who doesn't have the resources to file a lot of patent applications.

Well, that tells it like it is. He adds: "Oh, and the first-to-file rule might be unConstitutional." You think?

If this topic interests you, here's the best collection of resources I can find. Now, I'm not saying that there aren't some good ideas in the bill. There seem to be. In fact, Groklaw takes no position on specific legislation anyway. I just try my best to explain things. And so I've connected some dots I see between the very sad Apple story and the proposed bill, so you will understand clearly what is involved and how a first-to-file system works.

If you want innovation, the laws, whatever you write, need to work for individuals who may not have a dime but have a creative idea and need a climate where their ideas are allowed to flourish and breathe free. That's where innovation comes from, from people, from individuals.

Here's a good question to ask ourselves: could something like Linux happen again if you make the law say XYZ? Or, another question: if the law says XYZ, will it kill off Free Software/Open Source software? Those are good questions, precisely because GNU/Linux came from nowhere. A bunch of volunteers with no funding, no corporate or VC support, just ideas. And talent. And skill. And a willingness to work hard and to try something new. Microsoft didn't do it. They have set up a Linux Lab to try to figure it out, but they can't do it. No corporation did it or ever would. They still don't know how to do it themselves. Or even how to compete with it. But hasn't the world benefitted, even economically? Let's not kill off such golden geese by imagining that only megacorporations can innovate. Writing a law that benefits only them, while freezing out the little guy innovator, is saying that the world has no further need of such innovation. And you and I both know, that's not true.

Finally, I think you'll enjoy reading the excerpts from a UK patent decision that Axel Horn has put on his web site. It's interesting on another subject, the question of how to define the word technical in the EU patent context, but the part that is relevant to this discussion is what Peter Prescott QC, a former patent Examiner, now sitting as a Deputy Judge of the Royal Courts of Justice in London, had to say when rejecting two UK patent applications, GB0226984.3 and GB0419317.3, on the subject of patent proliferation:

I have pointed out that patents that are wrongly granted can be very expensive to challenge, and perhaps beyond the means or inclination of small and medium enterprises. An accumulation of patents of that sort (sometimes known as a "patent thicket") may be a serious barrier to entry.

The only safeguard against that wrong – and it is a wrong – is the vigilance of the Patent Office.

Here's a heads up to the Patent Office, so they can be vigilant. There's a guy who is trying to patent his would-be movie plots. Sigh. Could you please Just Say No?

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