The folly of early filing in patent law

Hastings Law Journal

Volumn 61, Issue 1, 2009, Pages 65-129

  Cotropia, Christopher A ^a  

^a UNIVERSITY OF RICHMOND   (United States)

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EID: 73949124384     PISSN: 00178322     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (456)

1. Press Release, Intellectual Ventures, Intellectual Ventures Files 500th Patent Application 2 (June 26, 2006), www.intellectualventures.com/docs/500apps. pdf.
2. Id.
3. Id. at I; Intellectual Ventures-Frequently Asked Questions, http://www.intellectualventures.com/Faq.aspx (follow "How do you come up with your invention ideas?" hyperlink) (last visited Oct. 4, 2009) ("IV's [Intellectual Venture's] invention efforts center on 'invention sessions' which are multidisciplinary brainstorming events focused on a particular set of issues and possible solutions. IV typically hosts several 1-2 day invention sessions per month.").
4. Intellectual Ventures-Frequently Asked Questions, supra note 3;
5. Malcolm Gladwell, In the Air: Who Says Big Ideas Are Rare?, New Yorker, May 12, 2008, at 50;
6. Michael Orey & Moira Herbat, Inside Nathan Myhrvold's Mysterious New Idea Machine, Bus. Wk., July 3, 2006, at 54 (describing the brainstorming technique used to produce inventions).
7. See Patents, CONSUMER ELECTRONICS DAILY, Jan 16., 2009, (IBM becoming the first company to pass the four-thousand-in-one-year mark).
8. Id.
9. See IBM Intellectual Property and Licensing, http://www.ibm.com/ ibm/licensing/(last visited Oct. 4, 2009) ("In addition to delivering these innovations through its products and services, IBM maintains an active patent and technology licensing program.").
10. See KEVIN G. RIVETTE & DAVID KLINE, REMBRANDTS IN THE ATTIC: UNLOCKING THE HIDDEN VALUE OF PATENTS 58 (2000) (stating IBM's licensing revenue as $1 billion annually); Gideon Parchomovsky & R. Polk Wagner, Patent Portfolios, 154 U. PA. L. REV. I, 8 (2005) ("[S]ince the mid-1990s, IBM has avowedly followed a portfolio-focused patenting strategy, which yielded a more than 400% increase in patent-related revenues (to about $1.5 billion, or about a quarter of total corporate receipts) even as the research and development budget was slashed...."); IBM Intellectual Property and Licensing, supra note 7.
11. See, e.g., Frederic M. Scherer, The Political Economy of Patent Policy Reform in the United States 28-29 (Harvard Univ. Kennedy Sch. of Gov't, Working Paper No. RWP07-042, 2007), available at http://ssrn. com/abstract=963136.
12. Blair Silver, Controlling Patent Trolling With Civil RICO, II YALE J. L. & TECH. 70, 72 (2009).
13. See, e.g., John R. Allison et al., Valuable Patents, 92 GEO. L. J. 435, 435-36 (2004) (labeling the question, "The Case of the Disappearing Patents").
14. See Edmund W. Kitch, The Nature and Function of the Patent System, 20 J. L. & ECON. 265, 269-70 (1977) (describing the early filing nature of the U. S. patent system).
15. See infra Part III. A.
16. See, e.g., Michael Abramowicz, The Danger of Underdeveloped Patent Prospects, 92 CORNELL L. REV. 1065, 1066-67 (2007);
17. Ian Ayres & Gideon Parchomovsky, Tradable Patent Rights, 60 STAN. L. REV. 863, 867-69 (2007) (describing the "line of analysis" that patenting activities such as IBM's lead to detrimental patent thickets); Nicholas Varchaver, Who's Afraid of Nathan Myhrvold?, FORTUNE, July 10, 2006, at 110 (describing industry concern over Intellectual Venture's potential assertion of its large patent portfolio).
18. See, e.g., John F. Duffy, Rethinking the Prospect Theory of Patents, 71 U. CHI. L. REV. 439, 440 (2004);
19. Kitch, supra note 12.
20. Kitch, supra note 12, at 265-66, 278-79.
21. Id. at 276-79.
22. Duffy, supra note 15, at 444, 475-80.
23. See infra Part III. A.2.
24. See infra Part III. A.1.a.
25. See infra Part II. A.1.b.
26. See infra Part III. B.
27. See infra Part III. B.2.
28. See infra Part III. B.2.
29. See infra Part I. A. (explaining the constructive reduction to practice doctrine and the utility requirement for patentability).
30. See 35 U. S. C. §§ 102-103 (2006) (setting forth the patentability requirements of novelty and non-obviousness); infra Part I. B.
31. See Patent Reform Act of 2009, S. 515, III th Cong. § 2 (2009).
32. See id.; infra Part I. C.
33. See infra Part III. C.1. (explaining how more patent applications overburden the USPTO, which impedes the USPTO's ability to thoroughly review each application, resulting in erroneous determinations of patentability).
34. See infra Part III. C. 1.
35. See infra Part III. C.2.
36. See infra Part III. C.2.
37. See infra Part III. C.3.
38. See infra Part III. C4.
39. See JAMES BESSEN & MICHAEL J. MEURER, PATENT FAILURE: HOW JUDGES, BUREAUCRATS, AND LAWYERS PUT INNOVATORS AT RISK 8-14 (2006).
40. See infra Part IV.
41. See infra Part IV. C.
42. I WILLIAM C. ROBINSON, THE LAW OF PATENTS 91 (Boston, Little, Brown, & Co. 1890) ("An inventor, in the meaning of the Constitution, is one who has himself conceived the fundamental idea of the invention.... To him and to him only can a patent lawfully be granted.").
43. 35 U. S. C. § 102 (f) (2006) (barring patent protection if the applicant "did not himself invent the subject matter sought to be patented").
44. See id. § 102 (g). Notably these two steps of invention-conception and reduction to practicecan occur simultaneously. The typical scenario is that a complete formulation of the invention does not take place until reduction to practice is completed. See, e.g., Amgen, Inc. v. Chugai Pharm. Co., 927 F.2d 1200, 1206 (Fed. Cir. 1991) ("In some instances, an inventor is unable to establish a conception until he has reduced the invention to practice through a successful experiment. This situation results in a simultaneous conception and reduction to practice.").
45. "Conception is the 'formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice.'" Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376 (Fed. Cir. 1986) (quoting I ROBINSON ON PATENTS 532 (1890))).
46. See Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1228 (Fed. Cir. 1994) ("Conception is complete only when the idea is so clearly defined in the inventor's mind that only ordinary skill would be necessary to reduce the invention to practice, without extensive research or experimentation. "); Oka v. Youssefyeh, 849 F.2d 581, 583 (Fed. Cir. 1988) (noting that conception requires an idea as to the invention's structure and an operative way of making it).
47. Mergenthaler v. Scudder, II App. D. C. 264, 278 (D. C. Cir. 1897). This is mainly for proof purposes. See Burroughs Wellcome, 40 F.3d at 1228 ("Because it is a mental act, courts require corroborating evidence of a contemporaneous disclosure that would enable one skilled in the art to make the invention. ").
48. See Medichem, S. A. v. Rolabo, S. L., 437 F.3d 1157, 1169 (Fed. Cir. 2006).
49. See Cooper v. Goldfarb, 154 F.3d 1321, 1327 (Fed. Cir. 1998).
50. See, e.g., Warren H. Willner, Origin and Development of the Doctrine of Constructive Reduction to Practice, 36 J. PAT. OFF. SOC'Y 618 (1954).
51. See Hyatt v. Boone, 146 F.3d 1348, 1352-54 (Fed. Cir. 1998) (noting that the application must meet the written description requirement for the filed claims to be considered constructive reductions to practice); Bigham v. Godtfredsen, 857 F.2d 1415, 1416 (Fed. Cir. 1988) (indicating that a patent disclosure must meet the requirement of 35 U. S. C. § 112 to constructively reduce to practice a particular claim).
52. 35 U. S. C § 112 (2006) (articulating the disclosure requirements).
53. See Hoffmann-La Roche, Inc. v. Promega Corp., 323 F.3d 1354, 1377 (Fed. Cir. 2003) ("'Constructive reduction to practice' is a legal status unique to the patent art. Unlike the rules for scientific publications, which require actual performance of every experimental detail, patent law and practice are directed to teaching the invention so that it can be practiced.")
54. See Lawson v. Bruce, 222 F.2d 273, 278 (C. C. P. A. 1955) ("There is no requirement... that a party relying on a constructive reduction to practice to establish priority of invention must show a specific working example to support the compound claimed.").
55. In re Gay, 309 F.2d 769, 774 (C. C. P. A. 1962).
56. See AK Steel Corp. v. Sollac, 344 F.3d 1234, 1244 (Fed. Cir. 2003) ("[The specification itself need not] necessarily describe how to make and use every possible variant of the claimed invention, for the artisan's knowledge of the prior art and routine experimentation can often fill gaps, interpolate between embodiments, and perhaps even extrapolate beyond the disclosed embodiments, depending upon the predictability of the art.").
57. Pfaff v. Wells Elecs., Inc., 525 U. S. 55, 60 (1998) ("The primary meaning of the word 'invention' in the Patent Act unquestionably refers to the inventor's conception rather than to a physical embodiment of that idea."). This is why it is often said that "[c]onception is the touchstone of inventorship. " See Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1227-28 (Fed. Cir. 1994).
58. Dan Burk & Mark Lemley, Policy Levers in Patent Law, 89 VA. L. REV. 1575, 1653-54 (2003) (noting that the written description requirement is "a sort of 'super-enablement' requirement" in the biotechnology field).
59. 35 U. S. C. § 101 (2006).
60. Fuller v. Berger, 120 F. 274, 275 (7th Cir. 1903) (articulating the test for utility as questioning whether the invention "is incapable of serving any beneficial end").
61. See Juicy Whip, Inc. v. Orange Bang, Inc., 185 F.3d 1364, 1366 (Fed. Cir. 1999) ("The threshold of utility is not high."); Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555, 1571 (Fed. Cir. 1992) ("To violate § 101 the claimed device must be totally incapable of achieving a useful result....").
62. Justice Story articulated the requirement as excluding those inventions that are "injurious to the well-being, good policy, or sound morals of society." See Lowell v. Lewis, 15 F. Cas. 1018, 1019 (C. C. D. Mass. 1817) (No. 8568). However, even this view of utility-excluding only inventions with "negative" utility-has lost favor with the courts. See, e.g., Juicy Whip, 185 F.3d at 1366-67 (cataloging cases where patents on gambling devices, which are arguably socially harmful, were found to meet the utility requirement).
63. Duffy, supra note 15, at 453 ("Simply put, patent law has no aversion to awarding commercially worthless property rights."); Kitch, supra note 12, at 269 ("The patent application need not disclose a device or process of any commercial value, only a version of the invention that will work.").
64. See In re Chilowsky, 229 F.2d 457, 462 (C. C. P. A 1956) ("[I]n the usual case where the mode of operation alleged can be readily understood and conforms to the known laws of physics and chemistry, operativeness is not questioned, and no further evidence is required.").
65. See I DONALD S. CHISUM, CHISUM ON PATENTS § 4.04 (I) (2009).
66. In re Swartz, 232 F.3d 862, 863-64 (Fed. Cir. 2000);
67. Fregeau v. Mossinghoff, 776 F.2d 1034, 1038 (Fed. Cir. 1985). The presumption is usually only overcome in patents making remarkable claims. See, e.g., Swartz, 232 F.3d at 864 (affirming the USPTO's determination that a patent claiming cold fusion was not operable).
68. Kitch, supra note 12, at 269 (noting that the lack of a commercial worth requirement allows "the applicant [to] proceed from the first positive results to the patent office").
69. Burk & Lemley, supra note 54, at 1644-45.
70. Id. at 1644.
71. Brenner v. Manson, 383 U. S. 519, 534-35 (1966).
72. In re Brana, 51 F.3d 1560, 1567 (Fed. Cir. 1995).
73. In re Fisher 421 F.3d 1365, 1369-71 (Fed. Cir. 2005).
74. Id. at 1376.
75. 35 U. S. C § III (b) (2006) (defining the provisional application).
76. Id.; id. § 119 (e); 37 C. F. R. § 1.53 (c) (2) (2008);
77. Robert A. Migliorini, Twelve Years Later: Provisional Patent Application Filing Revisited, 89 J. PAT. & TRADEMARK OFF. SOC'Y 437, 441-42 (2007).
78. Migliorini, supra note 71, at 439 ("The primary purpose of implementing the option for provisional application filing was to give U. S. inventors the opportunity to obtain an initial filing date that does not serve as the basis from which the 20-year term of patent protection is measured.").
79. Changes to Implement 20-Year Patent Term and Provisional Applications, 60 Fed. Reg. 20195, 20205 (Apr. 25, 1995) (to be codified at 37 C. F. R. pts. I, 3).
80. See Migliorini, supra note 71, at 444.
81. Another benefit of provisional filing is that it may allow an applicant to obtain an earlier priority filing date at a relatively low cost then [sic] may be otherwise available if filing nonprovisionally. The filing fee is $100 lower than a non-provisional filing, and more importantly, there are no excess claims fees.
82. Id. The average attorney fees for preparing a provisional application is $4384 compared to $9412 for a relatively complex nonprovisional application on a mechanical invention. AM. INTELLECTUAL PROP. LAW ASSOC., AIPLA REPORT OF THE ECONOMIC SURVEY 2007, at 1-78 to -79 (2007) [hereinafter AIPLA REPORT].
83. 35 U. S. C.§ III (b) (2).
84. "Because of the numerous challenges presented by patent claim drafting, the Supreme Court long ago recognized that a patent specification is one of the most difficult legal documents to draw with accuracy." Robert D. Katz & Steven J. Lee, Advanced Claim Drafting and Amendment Writing for Chemical Inventions, in SIXTH ANNUAL PATENT PROSECUTION WORKSHOP: ADVANCED CLAIM AND AMENDMENT WRITING 335, 339 (PLI Patents, Copyrights, Trademarks, & Literary Prop., Course Handbook Series No. G4-3977, 1996) (citing Topliff v. Topliff, 145 U. S. 156 (1892)).
85. 35 U. S. C.§III (b) (I).
86. See id. § 102 (a), (g) (denying patent protection if certain events occur "before the invention"); id. § 103 (a) (determining obviousness from the perspective of a PHOSITA "at the time the invention" was made); Mark A. Lemley, The Changing Meaning of Patent Claim Terms, 104 MICH. L. REV. 101, 106 (2005).
87. See 35 U. S. C. § 102 (a). The definition of prior art expands to include activities after the date of invention. See id. 5 102 (b).
88. Id. § 102 (a).
89. Id. § 103 (a).
90. See id. § 102 (e).
91. The determination of priority is actually more complex. See id. § 102 (g) (defining the standard for determining priority between two inventors of the same technology); Cooper v. Goldfarb, 154 F.3d 1321, 1327 (Fed. Cir. 1998) (articulating the standard in reverse, noting that "priority of invention goes to the first party to reduce an invention to practice unless the other party can show that it was the first to conceive of the invention and that it exercised reasonable diligence in later reducing that invention to practice"); ROBERT P. MERGES & JOHN F. DUFFY, PATENT LAW AND POLICY: CASES AND MATERIALS 440-41 (3d ed. 2002).
92. 37 C. F. R. § 1.657 (a) (2008);
93. Brown v. Barbacid, 276 F.3d 1327, 1332-33 (Fed. Cir. 2002) (articulating the rebuttable presumption that the filing date is the invention date).
94. Supra note 84.
95. Christopher A. Cotropia, Patent Law Viewed Through an Evidentiary Lens: The "Suggestion Test" as a Rule of Evidence, 2006 BYU L. REV. 1517, 1585-87.
96. See Cooper, 154 F.3d at 1330;
97. Allen v. Blaisdell, 196 F.2d 527, 529 (C. C. P. A. 1952);
98. Cotropia, supra note 86.
99. 37 C. F. R. § 1.131.
100. Loral Fairchild Corp. v. Matsushita Elec. Indus. Co., 266 F.3d 1358, 1361 (Fed. Cir. 2001).
101. Cooper, 154 F.3d at 1330.
102. See Mark A. Lemley & Colleen Chien, Are the U. S. Patent Priority Rules Really Necessary?, 54 HASTINGS L. J. 1299, 1317 (2003) ("Indeed, our analysis suggests that in more than half of the cases in which the senior party won a priority contest, and more than a third of total cases, the senior party needed to do no more than prove its filing date, suggesting that the entire proceeding was a waste of time."). But Lemley and Chien did find that, while first filers won in a majority of USPTO and district court proceedings, junior parties fared better on appeal. Id. at 1312-13 (including possible explanations for such a discrepancy).
103. See Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d 1368, 1371 (Fed. Cir. 1998) (detailing the factors for evaluating the physical evidence and oral testimony required to establish corroboration).
104. 35 U. S. C. § 102 (b) (2006) (invalidating a claim if the claimed "invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States").
105. See id.
106. MERGES & DUFFY, supra note 83, at 541-42 ("As the inventor continues to delay filing, more and more material becomes potentially relevant under § 102 (b).").
107. Id. (noting that an inventor who files within one year of inventing "has nothing to fear from § 102 (b) because no references qualify under § 102 (b) that do not also qualify under§ 102 (a) ").
108. 2 DONALD S. CHISUM, CHISUM ON PATENTS § 6.01 (2008).
109. See id. There is some flexibility in the form of the experimental-use exception. See, e.g., Atlanta Attachment Co. v. Leggett & Platt, Inc., 516 F.3d 1361, 1365-66 (Fed. Cir. 2008).
110. See, e.g., Pfaff v. Wells Elecs., Inc., 525 U. S. 55, 64 (1998) (noting that one of the purposes of § 102 is to "confin[e] the duration of the monopoly to the statutory term"); Pennock v. Dialogue, 27 U. S. (2 Pet.) 1, 19 (1829) ("A provision, therefore, that should withhold from an inventor the privilege of an exclusive right, unless he should, as early as he should allow the public use, put the public in possession of his secret, and commence the running of the period, that should limit that right; would not be deemed unreasonable.").
111. See Brad Pedersen & Vadim Braginsky, The Rush to a First-to-File Patent System in the United States: Is a Globally Standardized Patent Reward System Really Beneficial to Patent Quality and Administrative Efficiency?, 7 MINN. J. L. SCI. & TECH. 757, 764-65 (2006).
112. See Patent Reform Act of 2009, S. 515, IIIth Cong. § 2 (2009).
113. Pedersen & Braginsky, supra note 100, at 772. Given the results of Lemley and Chien's empirical study on inventorship disputes, the U. S. system already de facto acts as a first-to-file system.
114. See Lemley & Chien, supra note 91, at 1312-13.
115. See Kitch, supra note 12, at 265-66, 278-79 (setting forth the Prospect Theory of patents).
116. Id. at 269-70.
117. Duffy, supra note 15, at 444.
118. Kitch, supra note 12, at 266.
119. Id. at 269 ("The second important feature of the patent system which makes it function as a prospect system are rules which force and permit application early in the development process.").
120. Id. at 266.
121. Id. at 276.
122. Id. at 278-79.
123. Id. at 277-78.
124. Id. at 276-77 ("[T]he patent owner has an incentive to make investments to maximize the value of the patent without fear that the fruits of the investment will produce unpatentable information appropriable by competitors.").
125. Id. at 277-78.
126. Id. at 279.
127. Robert P. Merges & Richard R. Nelson, On the Complex Economics of Patent Scope, 90 COLUM. L. REV. 839, 872-77 (1990).
128. Id. at 877.
129. Mark A. Lemley, Ex Ante Versus Ex Post Justifications for Intellectual Property, 71 U. Chi. L. REV. 129, 135-37 (providing examples of his argument under copyright law).
130. Id. at 137.
131. 119-Id. at 141.
132. Abramowicz, supra note 14, at 1095-96.
133. Id.
134. For example, one could imagine an early filing system that provides narrow rights and therefore allows rivalrous development and decentralized control of improvements to the originally patented technology.
135. See WILLIAM M. LANDES & RICHARD A. POSNER, THE Economic STRUCTURE OF INTELLECTUAL PROPERTY LAW 294 (2003) ("The standard rationale of patent law is that it is an efficient method of enabling the benefits of research and development to be internalized, thus promoting innovation and technological progress.");
136. CRAIG A. NARD, THE LAW OF PATENTS 28-29 (2008) (describing the ex ante incentive-to-invent theory of patent law.)
137. See NARD, supra note 123, at 29;
138. Kenneth W. Dam, The Economic Underpinnings of Patent Law, 23 J. LEGAL STUD. 247, 247 (1994) (noting that it is important to recognize the primary problem that the patent system solves: "This problem, often called the 'appropriability problem, 'is that, if a firm could not recover the costs of invention because the resulting information were available to all, then we could expect a much lower and indeed suboptimal level of innovation. ").
139. 125-Yoram Barzel, Optimal Timing of Innovations, 50 REV. ECON. & STAT. 348, 352 n. 11 (1968).
140. Id. at 349.
141. Id. at 353 n. 11.
142. Kitch, supra note 12, at 269-70.
143. Id. at 276-79.
144. Id. at 265-66.
145. Id. at 278-79.
146. Donald G. McFetridge & Douglas A. Smith, Patents, Prospects and Economic Surplus: A Comment, 23 J. L. & ECON. 197, 198 (1980).
147. Id. at 198-201.
148. See id. at 198.
149. Id. at 203;
150. Mark F. Grady & Jay I. Alexander, Patent Law and Rent Dissipation, 78 VA. L. REV. 305, 316-17 (1992).
151. Duffy, supra note 15, at 443.
152. See R. Polk Wagner, Information Wants To Be Free: Intellectual Property and the Mythologies of Control, 103 COLUM. L. REV. 995, 1001 n. 19 (2003) ("There is a rich literature (dealing principally with patents) suggesting that an analogous tragedy may result from, for example, patent races-where multiple parties 'race' to create a patentable invention, thereby reducing or eliminating the benefits of the advance through unnecessarily redundant effort.");
153. Suzanne Scotchmer, Incentives to Innovate, in THE NEW PALGRAVE DICTIONARY of ECONOMICS AND THE LAW 273, 275 (Peter Newman ed., 1998) ("The literature has produced two views of patent races: that they inefficiently duplicate costs, and that they efficiently encourage higher aggregate investment.").
154. See JEAN TIROLE, THE THEORY OF INDUSTRIAL ORGANIZATION 400 (1988) (indicating that a patent race loser may develop another, beneficial product);
155. Grady & Alexander, supra note 135, at 316-21.
156. See TIROLE, supra note 138;
157. Grady & Alexander, supra note 135, at 316-21.
158. Giovanni De Fraja, Strategic Spillovers in Patent Races, 11 INT'L J. INDUS. ORG. 139, 140 (1993);
159. Jennifer F. Reinganum, A Dynamic Game of R and D: Patent Protection and Competitive Behavior, 50 ECONOMETRICA 671, 671 (1982).
160. Supra note 140.
161. Duffy, supra note 15, at 443, 475-80 (analogizing early patenting to a Demsetzian auction-a government-run auction where each franchise can bid in terms of price and quality of service for exclusive access to consumers).
162. 143-Id. at 444.
163. Id.
164. Id. at 468.
165. Abramowicz, supra note 14, at 1079.
166. Id.
167. Id. at 1079-80.
168. See id.
169. See id.
170. Id. at 1081-82.
171. See M. HENRY HEINES, PATENTS FOR BUSINESS 1-8 (2007).
172. Development post-patenting is not a given, particularly if the patent is filed early. See infra Part III. C.2.
173. 154-See Burk & Lemley, supra note 54, at 1581-89 (noting the diverse nature of innovation across technological industries).
174. For example, some companies are very structured in their development processes, using formalistic development processes such as the traditional STAGE-GATE or PACE process. See, e.g., Greg M. Ajamian & Peter A. Koen, Technology Stage-Gate: A Structured Process for Managing High-Risk New Technology Projects, in THE PDMA TOOLBOOK FOR NEW PRODUCT DEVELOPMENT 267 (Paul Belliveau et al. eds., 2002).
175. See ROBERT G. COOPER, WINNING at NEW PRODUCTS 35-37 (1986) (reporting on the "number of underlying themes and recurring messages" that emerge from studying multiple companies' newtechnology development experiences).
176. See MERLE CRAWFORD & ANTHONY DI BENEDETTO, NEW PRODUCTS MANAGEMENT 26-33 (8th ed. 2006) (describing the "phases" of new product development);
177. Robert G. Cooper, A Process Model for Industrial New Product Development, IEEE TRANSACTIONS ON ENGINEERING MGMT., Feb. 1983, at 2, 2-11 (articulating a seven stage development process).
178. See COOPER, supra note 156, at 49-63 (describing both the technical and market information generated at each stage of the development process). The term "product configuration" is used loosely to label a technical variation of a product or service that is the part of a new-technology development process.
179. See CRAWFORD & DI BENEDETTO, supra note 157, at 33 (noting that the process is really "an evolving product, or better, an evolving concept that, at the end, if it is successful, becomes a product" (emphasis omitted)).
180. See COOPER, supra note 156, at 49 (describing the idea "stage" of development).
181. Id. (noting that "market-pull ideas" are "generated by the marketplace-a competitor's new product, recognition of unsatisfied customers' needs, or direct requests from customers").
182. Id. (identifying "technology-push ideas" as those "generated by research or a serendipitous discovery").
183. Id. at 55-57 ("Preliminary assessment is the first stage at which significant resources are spent to gather information regarding the feasibility of a project.").
184. These later "stages" of development can include a concept definition stage, a development stage, a testing stage, and a trial stage. Id. at 57-63.
185. Id.
186. See Emmett W. Eldred & Michael E. McGrath, Commercializing New Technology-I, RES.-TECH. MGMT., Jan-Feb. 1997, at 41, 42-44 (discussing the targeted technology feasibility point (TFP) for new technology development). Technical uncertainty is usually very high at the beginning of any new technology development. Id. at 42.
187. Id. AT 42-44.
188. See TOM KELLY, THE ART OF INNOVATION 103-06 (2001) (emphasizing that "doing"-such as building prototypes-is crucial to fully developing innovations);
189. STEFAN H. THOMKE, EXPERIMENTATION MATTERS 23-25 (2003) (noting how experimentation generates technical information and reduces technical uncertainty);
190. Cooper, supra note 157, at 2-11 (describing the later stages of product development, including the development, testing, and trial stages, all of which take a concept and use tools such as prototyping to generate more technical information about a potential new product).
191. Cooper, supra note 157, at 2-11.
192. See THOMKE, supra note 168, at 25 (discussing the uncertainty in achieving large, cost-effective production of a new technology).
193. See CLIVE L. DYM & PATRICK LITTLE, ENGINEERING DESIGN: A PROJECT- BASED INTRODUCTION 92 (2d ed. 2004) (identifying the need to define "interface performance specifications" and ensure they are met).
194. See id. (noting that interfacing technologies with other systems is "extremely hard in practice, " and thus it is helpful to get as much information about how the various technologies interact).
195. See COOPER, supra note 156, at 58-62 (describing how market studies and consumer testing influence the "design requirements for what constitutes a better product").
196. See id.
197. See Michael Abramowicz & John F. Duffy, Intellectual Property for Market Experimentation, 83 N. Y. U. L. REV. 337, 342-43 (2008) (describing the field of market experimentation and arguing there should be some intellectual property protection for activities).
198. See COOPER, supra note 156, at 54-57 (suggesting such quick initial marketing analysis as a targeted phone survey).
199. Id. at 57-63 (including in such larger scale market testing a pilot production run where the product is made and sold in a test market).
200. See id.
201. See, e.g., CHARLES W. LAMB, JR. ET AL., MARKETING 337-38 (8th ed. 2006);
202. JAMES M. MORGAN & JEFFREY K. LTKER, THE TOYOTA PRODUCT DEVELOPMENT SYSTEM 125-31 (2006) (documenting the development of the Toyota Prius);
203. Cooper, supra note 157, at 8 (describing the "Preliminary market assessment" stage of development where information is collected on market size and market segments).
204. See Robert G. Cooper & Elko J. Kleinschmidt, An Investigation into the New Product Process: Steps, Deficiencies, and Impact, 3 J. PRODUCT INNOVATION MGMT. 71, 73-76 (1986) (observing that in over 250 new product launches, seventy-five percent included an initial market assessment and twentyfive percent included a detailed marketing study).
205. see LAMB, supra note 179, at 339-40;
206. Cooper, supra note 157, at 9 (discussing the end of the concept stage of development, where market studies are done to "gauge... market acceptance of the new product: interest, liking, preference, and intent to purchase").
207. See CRAWFORD & DI BENEDETTO, supra note 157, at 71-72 (discussing how "technology familiarity" with "existing platforms" influences new product design).
208. See LAMB ET AL., supra note 179, at 347 (mentioning compatibility of a new product as one of five influencing factors on the product's market).
209. See KELLY, supra note 168, at 103-06.
210. See COOPER, supranote 156, at 54-57;
211. Cooper, supra note 157, at 9 (describing the use of a prototype to do consumer market testing).
212. See supra Part I. A.1.
213. See supra Part I. A.1.
214. See supra Part I. A.1.
215. See supra Part I. A.1.
216. See supra Part I. A.2.
217. See supra Part I. A.1.
218. The experimentation must simply not be undue. See Impax Labs., Inc. v. Aventis Pharms., Inc., 545 F.3d 1312, 1314-15 (Fed. Cir. 2008).
219. Kitch, supra note 12, at 270-71.
220. CFMT, Inc. v. Yieldup Int'l Corp., 349 F.3d 1333, 1338 (Fed. Cir. 2003).
221. See supra Part I. A.1.
222. See supra Part I. A.1.
223. CFMT, 349 F.3d at 1340.
224. Even Kitch admits that "[m]any inventions, including many important ones, are patented in a commercially significant form." See Kitch, supra note 12, at 271.
225. Id. at 270-71.
226. As Kitch puts it, all that is required is an invention "that works." See id. at 270-71.
227. See, e.g., COOPER, supra note 156, at 49 (defining the difference between technology-push and market-pull ideas).
228. Eduardo S. Schwartz, Patents and R & D as Real Options, 33 ECON. NOTES 23, 24 (2004) (identifying estimated cash flow as one of the uncertainties at the time of patenting).
229. See CRAWFORD & DI BENEDETTO, supra note 157, at 30-34.
230. See Janice M. Mueller, The Evolving Application of the Written Description Requirement to Biotechnological Inventions, 13 BERKELEY TECH. L. J. 615, 617 (1998);
231. Arti K. Rai, Intellectual Property Rights in Biotechnology: Addressing New Technology, 34 WAKE FREST L. REV. 827, 834-35 (1999);
232. Margaret Sampson, Comment, The Evolution of the Enablement and Written Description Requirements Under 35 V. S. C. § 112 in the Area of Biotechnology, 15 BERKELEY TECH. L. J. 1233, 1262 (2000).
233. Burk & Lemley, supra note 54, at 1644-45.
234. See Duffy, supra note 15, at 453 n. 53 (giving examples of where the utility requirement could be met for a biotechnology invention, even if the invention has no commercial value).
235. See COOPER, supra note 156, at 50-63. That is, as they obtain more technical information about the new technology, they also get more market information. Marketing information is generated while proceeding technically for a very practical reason-companies who are making decisions to spend more resources to nail down the technical attributes of a given product want to make sure that each additional dollar spent is worthwhile.
236. Abramowicz, supra note 14, at 1075 ("Someone who owns a patent cannot be sure how profitable commercialization of the patent will be or even how much it will cost to complete the commercialization process."). Abramowicz makes this observation based on Shaun Martin and Frank Partnoy's "Patents as Options" theory.
237. Id. at 1073 n. 23 (citing Shaun Martin & Frank Partnoy, Patents as Options, Videotape Presentation at the Washington University School of Law Conference on Commercializing Innovation (Nov. 4, 2005), available at http://law.wustl.edu/CRIE/index.asp?id=1737). Martin and Partnoy analogize patent rights to real options, particularly a call option-the ability to decide at a future date to exercise the patent exclusivity option by commercializing the claimed invention or asserting the exclusivity right via litigation.
238. Id. at 1073-74. The Author has expanded on this analogy. See Christopher A. Cotropia, Describing Patents as Real Options, 34 J. CORP. L. 1127 (2009).
239. 209-See infra Part III. C.3 for a discussion of another patent
240. Abramowicz, supra note 14, at 1075-76 ("The future, however, tends to become clearer as we move toward it.").
241. See infra Part III. B.2.a.
242. See infra Part IH. B.2.b.
243. See infra Part II. B.2.
244. See infra Part II. B.2.
245. Kitch, supra note 12, at 270 ("[I]t is risky not to immediately seek a patent....").
246. MERGES & DUFFY, supra note 83, at 541 ("[WJhile being the first to invent creates a right to a patent, the statutory bars can destroy the right if the inventor waits too long to file an application. ").
247. See Duffy, supra note 15, at 462-63 (providing the example of multiple people racing to invent the telegraph).
248. 35 U. S. C. § 122 (a) (2006).
249. Id. § 122 (b).
250. See Mark Lemley, Ignoring Patents, 2008 MICH. ST. L. REV. 19, 21-22.
251. See, e.g., 35 U. S. C. § 102 (a) - (b).
252. Id. § 122 (b) (2).
253. Kitch, supra note 12, at 270 ("Since the commercial use or publication [that creates a statutory bar] may be by others, the bar is not within the inventor's control.").
254. See id. (noting that at the early filing stage, the "practical significance of the innovation may be but dimly perceived"); supra Part III. A.3.
255. See supra Part I. A.i.
256. See, e.g., JEFFREY G. SHELDON, HOW TO WRITE A PATENT APPLICATION § 1.5 (2009) ("There are some reasons for delay in filing. It is unusual that these reasons will overcome the aforementioned reasons for filing promptly.").
257. See Nard, supra note 123, at 30-31.
258. See Cotropia, supra note 208, at 1137 ("This exclusive use of the invention allows the patentholder to commercialize the invention and sell it at a supra-competitive price.").
259. Abramowicz, supra note 14, at 1079.
260. See William Johnson, Managing Uncertainly in Innovation: The Applicability of Both Real Options and Path Dependency Theory, 16 CREATIVITY & INNOVATION MGMT. 274, 276 ("The further away an opportunity is in time, the greater the options value on it will be, but the less the resources applied to manage it.").
261. Abramowicz, supra note 14, at 1079.
262. See Dennis D. Crouch, The Patent Lottery: Exploiting Behavioral Economics for the Common Good, 16 GEORGE MASON L. REV. 141, 142 (2008).
263. 233-Abramowicz, supra note 14, at 1079.
264. 37 C. F. R. § 1.16 (a) (1) (2008).
265. Small entity filing fee is $165.00. See id.
266. See AIPLA REPORT, supra note 74, at I-79 (noting the average cost for a relatively complex mechanical invention). The cost decreases as the technical complexity decreases.
267. See id. at I-78 (reporting the average cost for a minimally complex application to be $7012).
268. The filing fee for a provisional application is $220.00, see 37 C. F. R. § 1.16 (d), and the cost of preparation is about half that of a utility-$4384, see AIPLA REPORT, supra note 74.
269. The current average pendency before the first office action is 22.6 months. See U. S. PATENT & TRADEMARK OFFICE, PERFORMANCE AND ACCOUNTABILITY REPORT FISCAL YEAR 2006, at 21 (2007), available at http://www.uspto.gov/web/offices/com/annual/20o6/50304-table4.html.
270. See 35 U. S. C. § 122 (2006).
271. See Universal Oil Prods, v. Globe Oil & Refin. Co., 322 U. S. 471, 484 (1944) ("As a reward for inventions and to encourage their disclosure, the United States offers a seventeen-year monopoly to an inventor who refrains from keeping his invention a trade secret.").
272. Robert M. M. Seto, A Federal Judge's View of the Most Important Change in Patent Law in Half-a-Century, 11 J. TECH. L. & POL'Y 141, 163 (2006) ("For example, if early prosecution suggests that a patent is too hard to obtain from the patent office, the applicant may opt to abandon the patent application, and because the application is still secret, he can retain the trade secret and protect it from discovery as a trade secret.").
273. See, e.g., 35 U. S. C. § 102 (a).
274. Cf. id. § 1102 (g).
275. See Gideon Parchomovsky, Publish or Perish, 98 MICH. L. REV. 926, 928 (2000) ("From a practical standpoint, the strategy of preemptive publication is made possible by the lag that exists between the time a firm obtains sufficient research results to effect a change in the prior art and the time it perfects the invention. ").
276. See 35 U. S. C § 102 (e).
277. Ronald J. Mann, Do Patents Facilitate Financing in the Software Industry?, 83 Tex. L. REV. 961, 990 (2005).
278. Id. at 990-91;
279. Parchomovsky & Wagner, supra note 8, at 26-27 (describing defensive patenting strategy);
280. see Bronwyn H. Hall & Rosemarie Ham Ziedonis, The Patent Paradox Revisited: An Empirical Study of Patenting in the U. S. Semiconductor Industry, 1079-1095, 32 RAND J. ECON. 101, 104, 125 (2001).
281. Mann, supra note 246, at 990-91.
282. See Xuan-Thao Nguyen & Jeffry A. Maine, Giving Intellectual Property, 39 U. C. DAVIS L. REV. 1721, 1739 (2006). The benefit of such donations has decreased due to legislation.
283. Id. at 1748-49.
284. Parchomovsky & Wagner, supra note 8, at 31-42 (articulating the benefits to either scale-or diversity-based patent portfolios).
285. Id. at 37 ("In an environment where individual patents are increasingly of questionable value, it is the patent portfolio that is assuming the role of providing meaningful patent-type protection in the modern marketplace.").
286. See supra Part III. A.
287. See supra Part III. A.
288. See supra Part III. A.2.
289. Cecil D. Quillen, Jr. et al., Continuing Patent Applications and Performance of the U. S. Patent and Trademark Office-Extended, 12 FED. CIR. B. J. 35, 38 (2002) (noting that these follow-up applications make up a significant percentage of pending patent applications).
290. 35 U. S. C. § 120 (2006);
291. Mark A. Lemley & Kimberley A. Moore, Ending Abuse of Patent Continuations, 84 B. U. L. Rev. 63, 67-69 (2004) (explaining the continuation process). A special form of continuation, a request for continued examination, works in a similar way to a continuation. See 35 U. S. C. § 132 (b).
292. 257-See 37 C. F. R. § 1.113 (2008) (defining a final rejection); Lemley & Moore, supra note 256, at 64.
293. Lemley & Moore, supra note 256, at 67-69.
294. There are other reasons, such as trying to convince the examiner to allow an already filed set of patent claims. Id. at 64.
295. See 35 U. S. C. § 120;
296. Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1560 (Fed. Cir. 1991) (noting that newly added claims must be described and enabled by the original specification).
297. See Mark A. Lemley & Carl Shapiro, Probabilistic Patents, 19 J. ECON. PERSPECTIVES, Spring 2005, at 75, 81-82 ("Two of the most common practices used by patentees to increase their chances of winning the patent lottery are continuations and a proliferation of closely related patents.").
298. See Lemley & Moore, supra note 256, at 64.
299. See, e.g., Gentry Gallery, Inc. v. Berkline Corp., 134 F.3d 1473, 1479 (Fed. Cir. 1998) ("[The patentholder] admitted at trial that he did not consider placing the controls outside the console until he became aware that some of Gentry's competitors were so locating the recliner controls.").
300. Lemley & Moore, supra note 256, at 81 ("In some industries, notably biotechnology and pharmaceuticals, firms typically keep a continuation application pending during the entire lifetime of the original patent.").
301. See 35 U. S. C. § 120.
302. See id.
303. See id.
304. In re Klein, 5 U. S. P. Q. (BNA) 259 (Comm'r Pat. 1930).
305. See, e.g., PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299, 1310-11 (Fed. Cir. 2008) (limiting the continuation-in-part's claims that are not supported by the earlier disclosure to the continuation-in-part's filing date).
306. See 35 U. S. C. § 102.
307. These are all typically considered to be of the same "family" of patents.
308. See supra Part III. B.1.
309. See supra Part III. B.1.
310. See supra Part I. A.1.
311. See supra Part III. B.1.
312. See supra Part III. B.1.
313. See supra Part III. A.
314. See supra Part III. B.2.
315. See Doug Lichtman & Mark A. Lemley, Rethinking Patent Law's Presumption of Validity, 60 STAN. L. REV. 45, 46-47 (2007) (identifying the resource problem faced by the USPTO to effectively review the growing number of applications);
316. John R. Thomas, Collusion and Collective Action in the Patent System: A Proposal for Patent Bounties, 2001 U. ILL. L. REV. 304, 314 ("[T]he average time allocated for an examiner to address one application is understood to be between sixteen and seventeen hours. Given the complexities involved in parsing an application, conducting a prior art search and drafting an Office Action, this period is surprisingly short.").
317. See Beth Simone Noveck, "Peer to Patent": Collective Intelligence, Open Review, and Patent Reform, 20 HARV. J. L. & TECH. 123, 132 (2006) ("[T]he USPTO still cannot hire quickly enough to keep pace with both the demands of the job and the attrition rate.").
318. Thomas, supra note 279 (noting that examiners are allotted sixteen to seventeen hours per application).
319. See supra Part III. B.2.
320. See, e.g., Parchomovsky & Wagner, supra note 8, at 31-42 (discussing the prevalence of "scale" portfolios).
321. Carl Shapiro, Navigating the Patent Thicket Cross Licenses, Patent Pools, and Standard Setting, in 1 INNOVATION POUCY AND THE ECONOMY 119, 121 (Adam B. Jaffe et aL eds., 2001) ("[O]ur patent system, while surely a spur to innovation overall, is in danger of imposing an unnecessary drag on innovation by enabling multiple rights owners to 'tax' new products, processes, and even business methods."); Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 SCIENCE 698, 698-99 (1998) (arguing that an increase in private intellectual property rights in biomedical research may reduce the total amount of such research).
322. Lemley & Shapiro, supra note 261, at 81-82.
323. See Parchomovsky & Wagner, supra note 8, at 35-36.
324. Id.
325. See MERGES & DUFFY, supra note 83, at 647; Cotropia, supra note 86, at 1525 ("Exclusive control over these minor developments would act as roadblocks, creating disincentives to future inventors. Many patents on small technical advances make it extremely difficult and 'expensive to search and to license' these patents in order to produce further innovations.").
326. See Lichtman & Lemley, supra note 279, at 47 (noting that the presumption of validity makes "defendants face an uphill battle persuading the courts to overrule that errant determination. ").
327. See John R. Thomas, The Responsibility of the Rulemaker: Comparative Approaches to Patent Administrative Reform, 17 BERKELEY TECH L. J. 727, 731 (2002) (detailing these detrimental effects).
328. See Jason J. Chung, Note, Patent Pendency Problems and Possible Solutions to Reducing Patent Pendency at the United States Patent and Trademark Office, 90 J. PAT. & TRADEMARK OFF. SOC'Y 58, 63 (2008).
329. 35 U. S. C. § 154 (a) (2) (2006).
330. See id. § 154 (b) (establishing the adjustment of the patent term due to USPTO delays).
331. 294-See Posting of Dennis Crouch to Patently-O, Extending the Patent Term: Most Patents Are Extended Due to PTO Delay, http7Avww.patentlyo. com/patent/2008/03/extending-the-p. html (Mar. 14, 2008, 13:00 CDT) (establishing that most patent terms are extended due to USPTO delays).
332. See 35 U. S. C.§ 154 (b).
333. See supra Part II. C.
334. See Mazer v. Stein, 347 U. S. 201, 219 (1954) ("The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in 'Science and useful Arts.") (quoting U. S. Const, art. I, § 8)). There are other theories as to the ultimate value of patents. Patents facilitate the disclosure of inventions, and the disclosures add to the public knowledge.
335. See Rebecca S. Eisenberg, Patents and the Progress of Science: Exclusive Rights and Experimental Use, 56 U. Cm. L. Rev. 1017, 1028 (1989) ("The incentive to disclose argument, which has been more popular with the courts than with commentators, rests on the premise that in the absence of patent protection inventors would keep their inventions secret in order to prevent competitors from exploiting them. Secrecy prevents the public from gaining the full benefit of new knowledge and leads to wasteful duplicative research.").
336. See NARD, supra note 123, at 30-31 (noting patent law's role "in inducing the transformation of inventions into downstream, commercialized products").
337. See supra Part III. A.
338. See supra Part III. B.1.
339. Cotropia, supra note 208, at 1134 ("Many have made the general analogy-describing in broad terms how operationally a patent, particularly the accompanying right to exclude and the predefined patent term, behaves like a real option. "); see Abramowicz, supra note 14, at 1073 n. 23 (citing Martin & Parnoy, supra note 208).
340. The exercise price is "the amount of money invested to exercise the option if you are 'buying' the asset (with a call option)." TOM COPELAND & VLADIMIR ANTIKAROV, REAL OPTIONS: A PRACTITIONER'S GUIDE 6 (2003).
341. See Cotropia, supra note 208, at 1135-39 (describing in detail the components of the exercise and purchase price of a patent option).
342. See id. at 1135-37.
343. See id.
344. Id. at 1137-38. As time passes, the value becomes more identifiable. See Abramowicz, supra note 14, at 1091.
345. See Cotropia, supra note 208, at 1137-38 (identifying this commercial way to exercise a patent option); Dam, supra note 124, at 247 (noting that patent exclusivity allows the patentee to commercialize at a price to recoup research and development costs).
346. See Abramowicz, supra note 14, at 1091 ("When patenting is relatively inexpensive, it may be worthwhile to obtain a patent even when the chances that the patent will be practical to develop are very low."); Cotropia, supra note 208, at 1135-37 (describing the low option price of a patent right).
347. See supra Part III. B.1.
348. See infra Part III. C.3.
349. See supra Part I. A.1.
350. See supra Part III. A.1.
351. See Abramowicz, supra note 14, at 1083 ("Imposing minimal requirements for obtaining a patent will decrease both the price of the patent option and the chance that the option will never be exercised.").
352. Id.
353. Id.
354. Id. at 1090.
355. Johnson, supra note 230, at 276.
356. Abramowicz makes an additional argument that supports the conclusion that early filing leads to underdevelopment. He argues that the earlier the filing, the more likely a patent holder will wait longer to commercialize and, in the end, possibly never commercialize. See Abramowicz, supra note 14. at 1090-91. Abramowicz observes that, while each year without commercializing loses the patentee potential profit, the additional year also begets more information and more certainty as to the potential commercial worth of the invention. Id. Abramowicz notes that choosing to wait can continue until the patent expires, and in turn the option to develop expires. Id. While this may be the case, it seems unlikely that since patents give the holder the option to delay commercialization, the patent holder will delay past the inherent optimum time to commercialize. That is, when the invention becomes beneficial to commercialize, the patent holder will commercialize even if they could wait longer. See id.
357. See supra Part III. C. 1.
358. See supra Part III. C. 1.
359. See supra Part III. C. 1.
360. See Martin & Partnoy, supra note 208;
361. see also Cotropia, supra note 208, at 1138-39, 1147 (furthering this discussion).
362. See infra Part III. C.3.
363. See infra Part III. C.3.
364. See, e.g., eBay, Inc. v. MercExchange, LLC, 547 U. S. 388, 389-90 (2006).
365. Kitch, supra note 12, at 266.
366. Id. at 276.
367. See supra Part III. C.2.
368. Cotropia, supra note 208, at 1138-39, 1147;
369. Martin & Partnoy, supra note 208.
370. Brenda Sandburg, Trolling for Dollars, RECORDER (S. F.), July 30, 2001, at 1 (describing the term as defined by its creator, Peter Detkin, then assistant general counsel for Intel Corporation).
371. See Martin & Partnoy, supra note 208;
372. see also Cotropia, supra note 208, at 1138-39, 1147 (identifying assertion as an alternative way to exercise a patent option).
373. Supra note 331.
374. Martin & Partnoy, supra note 208; see Cotropia, supra note 208, at 1138-39 (noting that the difference may be even greater, given that commercialization may involve the additional cost of assertion because "some level of assertion of the patent right may be required to keep the market clear for the patentee's product").
375. See Cotropia, supra note 208, at 1138-39.
376. The value of the option may be less when it is exercised through assertion as opposed to commercialization, but not in all cases.
377. Sandburg, supra note 330.
378. See, e.g., Robert P. Merges, Introductory Note to Brief of Amicus Curiae in eBay v. MercExchange, 21 BERKELEY TECH. L. J. 997, 997 (2006).
379. Jeremiah Chan & Matthew Fawcett, Footsteps of the Patent Troll, 10 INTELL. PROP. L. BULL. i, 5 (2005).
380. Merges, supra note 337.
381. Jason Rantanen, Slaying the Troll: Litigation as an Effective Strategy Against Patent Threats, 23 SANTA CLARA COMPUTER & HIGH TECH. L. J. 159, 160 (2006).
382. Chan & Fawcett, supra note 338, at 5.
383. Merges & Nelson, supra note 115, at 907 (using the term "tollkeeper" to identify a patentee that does not assist the real-world development of the invention but simply takes license revenue for that development).
384. See Brief of Amicus Curiae Yahoo! Inc. in Support of Petitioner at 2-3, eBay Inc. v. MercExchange, LLC, 547 U. S. 1015 (2006) (No. 05-130).
385. Id. at 6-7.
386. Michael J. Meurer, Controlling Opportunistic and Anti-Competitive Intellectual Property Litigation, 44 B. C. L. REV. 509, 509 (2003).
387. See Christopher A. Cotropia, Patent Claim Interpretation Methodologies and Their Claim Scope Paradigms, 47 WM. & MARY L. REV. 49, 65-69 (2005).
388. See Christopher A. Cotropia, Patent Claim Interpretation and Information Costs, 9 LEWIS & CLARK L. REV. 57, 59-60 (2005).
389. Id. at 90-91.
390. Id. at 77-81.
391. See supra Part III. B.2.
392. 35 U. S. C. § 120 (2006).
393. See, e.g., Vas-Cath, Inc. v. Mahurkar, 935 F.2d 1555, 1564-65 (Fed. Cir. 1991) (holding that drawings from a design patent can support, and give an earlier filing date to, a later filed utility patent).
394. Robert P. Merges, Software and Patent Scope: A Report from the Middle Innings, 85 TEX. L. REV. 1627, 1672 (2007) ("Patents are surely playing a role in the age-old battle over 'shelf space' in this competitive industry.").
395. See Christopher A. Cotropia, "After-Arising" Technologies and Tailoring Patent Scope, 61 N. Y. U. ANN. SURV. AM. L. 151, 171-73 (2005) ("[T]he broader the patent scope, the more protection the patent holder receives and the more competing products she can exclude.").
396. See Gerard N. Magliocca, Blackberries and Barnyards: Patent Trolls and the Perils of Innovation, 82 NOTRE DAME L. REV. 1809, 1829-30 (2007) ("As noted earlier, a vague patent makes it harder for defendants to determine the scope of its protection and hence unwilling to take the risk of going to trial.").
397. See Brief of Amicus Curiae Yahoo! Inc., supra note 343, at 6.
398. Cotropia, supra note 346, at 79-82.
399. Id. at 90-91.
400. Id.
401. BESSEN & MEURER, supra note 35, at 8-11 (concluding that the fuzzy and unpredictable boundaries of patents prevent them from "work[ing] well as property").
402. Paul J. Heald, Optimal Remedies for Patent Infringement: A Transactional Model, 45 HOUS. L. REV. 1165, 1170-71 (2008) ("The primary function of patent law is ill-served if the property right embodied in the patent has poorly defined boundaries and therefore does a poor job of reducing transaction costs.").
403. BESSEN & MEURER, supra note 35, at 10 ("There is thus no reliable way of determining patent boundaries short of litigation. ").
404. Id. at 34-35 (noting how clearly-delineated property rights encourage investment into the protected property).
405. See, e.g., Christian A. Chu, Empirical Analysis of the Federal Circuit's Claim Construction Trends, 16 BERKELEY TECH. L. J. 1075, 1096-97 (2001) (finding a growing trend of reversals of claim interpretation holdings).
406. See David A. Fitzgerald II, Note, Saving Alternative Dispute Resolution in Patent Law: Countering the Effects of the Patent Troll Revolution, 23 OHIO ST. J. on DISP. RESOL. 345, 360 n. 76 ("One of the ways patent trolls abuse the patent system is by filing continuing applications on their vague patents in order to extend the patent term long enough to have a big corporation infringe the patent.").
407. BESSEN & MEURER, supra note 35, at 8-13.
408. Abramowicz, supra note 14, at 1106-10.
409. Duffy, supra note 15, at 471-72; see Abramowicz, supra note 14, at 1082 (noting that Duffy considers moving filing later "but ends up offering the opposite recommendation: that patents should be granted at a very early stage when they are mere patent prospects"). Duffy explains that filing is moved earlier "based on the need to avoid duplication, not on a quixotic hope of limiting rivalry to preserve rents." Duffy, supra note 15, at 498-99.
410. Abramowicz, supra note 14, at 1107.
411. Id.
412. Id.
413. Ted Sichelman is a notable exception, recently proposing a two-tier patent system, with initial patents and then a commercialization patent. See Ted Sichelman, Commercializing Patents, 62 STAN. L. REV. (forthcoming 2010) (on file with the Hastings Law Journal). Sichelman's solution goes much further than the one proposed here, creating a whole new patent right and various doctrinal changes to handle this new right (as well as the rights granted under our current system. Id. In contrast, my solution is much more targeted and, as will be explained, requires few changes to the current patent system. Another potential front-end solution is limiting continuation practice, as proposed in recent rules from the USPTO. See Changes to Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications, 72 Fed. Reg. 46, 716-843 (Aug. 21, 2007) (to be codified at 37 C. F. R. pt. 1).
414. Notably, these changes, if they ever go into effect, see Tafas v. Doll, 559 F.3d 1345, 1364-65 (Fed. Cir. 2009), only address the "file often" problem, not the "file early" problem.
415. These could be potential solutions, but their bluntness has the potential to do more damage than good because they are not, as with an actual reduction to practice requirement, tuned to the problems of early filing or to the actual invention at issue.
416. 3A DONALD S. CHISUM, CHISUM on PATENTS § 10.06 (2005).
417. See supra Part I. A.1.
418. Frazer v. Schlegel, 498 F.3d 1283, 1288 (Fed. Cir. 2007) ("The filing of a patent application is a constructive reduction to practice of the invention disclosed therein. ").
419. Inequitable conduct provides a self-verification mechanism for statements made to the USPTO, allowing examiners to rely on the threat of patent unenforceability to ensure that statements, such as the success of an actual reduction to practice, are true. See Christopher A. Cotropia, Modernizing Patent Law's Inequitable Conduct Doctrine, 24 BERKELEY TECH. L. J. 723 (2009).
420. See Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1353 (Fed. Cir. 2008).
421. For example, if some of the claims were not reduced to practice, then those claims would not be eligible for examination.
422. The concept of deferred examination is nothing new. See Changes to Practice for Petitions in Patent Applications to Make Special and for Accelerated Examination, 71 FED. REG. 36, 323, 36, 323-24 (proposed June 26, 2006) (proposing a deferred examination system, although not keyed off an actual reduction to practice requirement).
423. See 15 U. S. C. § 1051 (b) (2006);
424. Barry S. Wilson, Comment, Registration of Trademarks by the Intent-to-Use Application, 12 J. CONTEMP. LEGAL ISSUES 110, 110-15 (2001) (describing the ITU process).
425. See 15 U. S. C. § 1051 (d); Todd Jacobsen, Trademark Application Abandonment Under the Lanham Act, 12 J. CONTEMP. LEGAL ISSUES 120, 121 n. 7 (2001) ("Failure of an ITU applicant to file a timely statement of use also amounts to abandonment of the application. ").
426. The defined period in which an initial application must be converted for examination by actual reduction to practice can be changed depending on the invention's technological area. A good starting period would be to use Japan's deferred examination period of three years-giving certainty to those wondering if an initial application is going to be examined while providing time for inventors to complete the reduction to practice process. See Japan Patent Office, Procedures for Obtaining a Patent Right, http://www.jpo.go.jp/cgi/ linke.cgi?url=/tetuzuki-e/t-gaiyo-e/pa-right.htm (last visited Oct. 4, 2009).
427. Deferred examination has this benefit of not utilizing examination resources until examination is elected. See Matthew L. Goldberg, The Viability of Stimulating Technology-Oriented Entrepreneurial Activity in China, Taiwan, Japan, and South Korea: How Regulations and Culture Encourage the Creation, Development, and Exploitation of Intellectual Property, 1 INT'L L. & MGMT. REV. 1, 21 (2005) ("Japan has a deferred examination period for patents. Under this rule, a patent application is examined only after a request for examination is filed.").
428. See, e.g., Slip Track Sys., Inc. v. Metal-Lite, Inc., 304 F.3d 1256, 1267 (Fed. Cir. 2002) ("Testing is required to demonstrate reduction to practice in some instances because without such testing there cannot be sufficient certainty that the invention will work for its intended purpose."); Scott v. Finney, 34 F.3d 1058, 1063 (Fed. Cir. 1994) (relying on a videotape of a prototype of the invention in operation to establish actual reduction to practice).
429. See, e.g., Mahurkar v. C. R. Bard, Inc., 79 F.3d 1572, 1578-79 (Fed. Cir. 1996) (describing the prototypes built by the inventor and the specific tests he performed to determine whether the invented catheter would work well in humans).
430. See, e.g., Slip Track, 304 F.3d at 1265 (viewing the inventor's real-world tests of a prototype of his invention to help walls withstand environmental forces through the eyes of a PHOSITA).
431. See Abramowicz, supra note 14, at 1075-76 (noting that each additional year gives more certainty as to the invention's worth).
432. See King Instrument Corp. v. Otari Corp., 767 F.2d 853, 861 (Fed. Cir. 1985) (noting that to be an actual reduction to practice, the testing does not need to establish that the invention is in a commercially-satisfactory stage of development).
433. See supra Part III. A. 1-2.
434. See supra Part III. A. 1-2.
435. Goodrich v. Harmsen, 442 F.2d 377, 383 (C. C. P. A. 1971) (emphasis omitted).
436. 393-See KELLEY, supra note 168, at 106-17 (explaining how building a prototype assists the development process and providing examples from Amazon. com and Apple);
437. THOMKE, supra note 168, at 50-51 (arguing that testing and experimentation is crucial to the successful development of new technologies).
438. This situation-acquisition of uncommercialized patents by patent trolls-has occurred before. "Since the dot-com collapse, bankruptcy auctions have been a fruitful source of electronics and software patent rights" for patent trolls. J. P. Mello, Technology Licensing and Patent Trolls, 12 B. U. J. SCI. & TECH. L. 388, 392 (2006).
439. See Cotropia, supra note 347, at 83-87 (arguing that the use of invention-specific information in the specification minimizes information costs, making determining claim-meaning more efficient).
440. The underlying assumption, that we need to provide patents for small inventors, is not a given. See BESSEN & MEURER, supra note 35, at 173-83 (noting that it is unclear whether patents give much value to small inventors).
441. CHISUM, supra note 374, § 10.06 (2) (a).
442. See King Instrument Corp. v. Otari Corp., 767 F.2d 853, 861 (Fed. Cir. 1985).
443. See Barmag Barrner Maschinenfabrik AG v. Murata Mach., Ltd., 731 F.2d 831, 838 (Fed. Cir. 1984). "Some devices are so simple and their purpose and efficacy so obvious that their complete construction is sufficient to demonstrate their workability." E. Rotorcraft Corp. v. United States, 384 F.2d 429, 431 (Ct. CI. 1967).
444. See, e.g., Williams v. Adm'r of the Nat'l Aeronautics & Space Admin., 463 F.2d 1391, 1399-1400 (C. C. P. A. 1972) (finding a laboratory test of a component of a claimed spin-stabilized, synchronous communications satellite sufficient to establish an actual reduction to practice).
445. See Coffee v. Guerrant, 3 App. D. C. 497, 499 (D. C. Cir. 1894) ("A perfect invention does not necessarily mean a perfectly constructed machine....").
446. DSL Dynamic Scis. Ltd. v. Union Switch & Signal, Inc., 928 F.2d 1122, 1126 (Fed. Cir. 1991).
447. Id.
448. Lemley, supra note 117, at 141 (noting that the prospect theory makes more sense "when control over subsequent development is a necessary part of the incentive to produce the pioneering invention in the first place, as is arguably true with pharmaceuticals").
449. Burk & Lemley, supra note 54, at 1678-80 ("[T]he inventor can have patent protection for any given molecule only after a substantial investment has already been made in isolating and characterizing the molecule.").
450. 421 F.3d 1365, 1369-73 (Fed. Cir. 2005).
451. There is still a concern that is worth noting. If a reduction to practice is a requirement, the creation of improvements-inventions that build upon already-patented technology-may be tougher to come by because actual infringement of the earlier patent would be mandated to meet the patent requirements. 35 U. S. C. § 271 (a) (2006) (indicating that "use" constitutes infringement); Christopher A. Cotropia & Mark Lemley, Copying in Patent Law, 87 N. C. L. REV. 1421, 1432-33 (2009) (describing the blocking patent situation arising from a patent on a base technology and the attempt to develop and patent an improvement). I thank Clarisa Long for this insight. This concern is likely minimal because an inventor can still file a patent application prior to reduction to practice and then engage in the typical blocking patent bargaining. The single use/infringement requirement to start examination is also so de minimis that the minimal remedies available are unlikely to spur a lawsuit or deter most improvements. Finally, if this is a real problem, then it is one that should already be plaguing those fields governed by the heighted utilty and enablement requirements, where a de facto actual reduction to practice standard is being applied.
452. See supra notes 404-06.
453. Filing ends the typical patent race. See Duffy, supra note 15, at 499-500.
454. Kitch, supra note 12, at 265-66.
455. Others have suggested a market for ideas, albeit before a patent application is filed. See Oren Bar-Gill & Gideon Parchomovsky, A Marketplace for Ideas?, 84 TEX. L. REV. 395, 399-402, 421 (2005) (arguing for an idea auction, where if the high bidder in the development stage fails "to produce a patent or product within a given period, say two years" the idea is placed into the public domain).
456. See supra Part III. C. (noting how early filing both hampers commercialization and increases patent terms).