Patent injustice for small software companies
Published: 29 Jun 2005 18:15 BST
"Generally what happens there is mega-company A's patent department decides they don't have enough patents on their books and it puts them at a disadvantage over their competitors. So they offer big cash incentives to their employees to come up with anything patentable," he said.
"The employees wanting the cash simply submit as many ideas as possible, often knowing full well these ideas are trivial, frivolous or have been done before and wouldn't stand up in court. The lawyers then reword the patents in as much technical language as possible to confuse the patent examiners and bang, you have a patent."
Although this is an accusation that the UK patent office vigorously denies, claiming that the quality of the patents it grants is higher than those granted by its European counterparts, the granting of trivial patents is inevitable when large companies are able to minimise the costs of filing patents through economies of scale.
Some say the patent office should carry out more rigorous prior art searches and should be accountable for the patents it grants, but this would raise the costs of filing applications — due to the additional time and legal fees incurred by the patent office — which would further disadvantage small businesses.
The costs of defending a patent
Even if a small company has the resources to file a patent, that doesn't necessarily mean that they will have the resources to defend it. A recent report on the Web site of the Intellectual Property Advisory Committee (IPAC) claims that the patent system has failed small businesses and "personal experience, anecdotal evidence and research indicate there is widespread abuse of patent system. The issues highlighted by the IPAC report include (i) wilful infringement of clearly valid patents owned by lone inventors and SMEs, and (ii) wilful exerting of clearly invalid patents against SMEs by larger organisations or wealthier SMEs." The report states that the typical small business does not have sufficient financial means to defend their patents or access to affordable intellectual property insurance.
This is a problem that the PRG's Mitchell has faced. Mitchell, who is the chief executive of UK software company AllVoice Computing, had spent several years fighting a patent infringement suit in the US against Lernout & Hauspie (L&H), the makers of Dragon software. He won the initial case, but soon afterwards L&H went bankrupt and he is now fighting a similar case against the company that bought the rights to L&H's software. "The cost of enforcing my patents has extended to millions of dollars and several years of my time," says Mitchell.
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