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JOHN E. SUNUNU | John E. Sununu

A patently good new law

By John E. Sununu
September 19, 2011

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TWO WEEKS ago, my column struck a nerve with the legal profession by employing Shakespeare’s line: “The first thing we do, let’s kill all the lawyers.’’ Today I come to praise lawyers, not to bury them — in particular, to praise patent lawyers.

The long-suffering patent bar finally had its day recently when President Obama signed the America Invents Act. Six years in the making, the new law was complicated, technical, non-partisan, and the product of serious negotiation. As a result, it received almost no coverage in the popular media. But it is as important to American innovation as any tax cut or “jobs’’ bill.

The law modernizes an institution that traces its roots directly to the Constitution. The Framers understood the power of innovation to advance technology, improve productivity, and create wealth, so Article 1, Section 8 empowers Congress “to promote the progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.’’ They saw development of new technology - “useful Arts’’ - as a continuous process, and recognized that the benefits of innovation were maximized when new ideas were shared to allow further improvements. Patents encouraged sharing by giving inventors exclusive rights to benefit from an idea’s commercial use, even as it was made public.

But not even Jefferson could foresee the complexity of today’s world: computer processors that utilize hundreds if not thousands of separate component designs on a single microscopic chip; hand-held devices that seamlessly combine hardware, software, and Internet-based applications; products that bring together, not several or several dozen, but several hundred unique, patentable ideas as a unified whole.

Time has also exposed weaknesses in the current patent law. Without clear guidance from Congress, the threshold for “novelty’’ has slowly eroded. Patents have been issued for business methods, concepts covered by one or more other patents, common-sense uses of existing products, and even tax strategies - a situation that invites widespread and unnecessary litigation. Development of a global marketplace and competition exposed the cost of divergence between the US patent system and those in Europe and Asia.

That’s where the lawyers come in. Over time, all sides adjusted to these inefficiencies. Businesses were built up around large and diverse patent portfolios acquired with the specific goal of finding and prosecuting unlicensed use. Companies that found themselves the target of lawsuits argued that these “patent trolls’’ were abusing the system. Inventors and patent owners - the trolls - retort that they were simply pursuing the letter and spirit of the law. (A disclosure: I am on the board of Boston Scientific and Time Warner Cable. Each has been both a plaintiff and a defendant in patent suits.)

More visibly, big tech firms began buying up their own massive patent portfolios. Thousands of patents held by Nortel and Motorola changed hands in billion-dollar deals; recently, Kodak put its own trove of patents on the auction block. These portfolios have an intrinsic value, but the transactions reveal a deeper truth about complex technologies. Bringing so many concepts together in a single product makes patent infringement more likely, and lawsuits inevitable. Holding large portfolios introduces the concept of “mutually assured destruction’’ to patent litigation. With competitors holding similar positions, settlements and cross-licensing becomes more attractive than protracted legal action.

The new law addresses these problems, not by outlawing litigation, but by adding clarity and definition to the system. US patents will now be awarded to the first to file an application, rather than the first to invent a new product; a filing date is far easier to prove in court that the moment of inception. “First to file’’ also brings our system in line with those around the world. Meanwhile, a new system for reviewing patents that have already been granted will provide faster decisions about a patent’s validity. And in a victory for common sense, much tougher standards for issuing patents will cut down on lawsuits over business methods and tax strategy - if not immediately, then at least over time.

The bill involves some tradeoffs. “First to file,’’ for instance, may bring about certainty, but some worry it could benefit larger corporations with ready cash to pay filing fees. The overall result, however, should be a better system: More certain and less expensive protection for inventors, and much less frustration for patent lawyers. That’s something we all can celebrate, even if no one hears about it.

John E. Sununu, a regular Globe contributor, is a former US senator from New Hampshire.