Comprehensive Reform Against a Wall of Stakeholder Interests

Several sources are reporting on recent progress in moving patent reform legislation through Congress (see, for example, Patently-O -- always up to date on this issue).  The amount of time it has taken to get this close to substantive change in the law is truly striking.  I began writing about patent reform in 2004, and was seriously concerned that my work would be preempted by the legislation pending at the time.  Now, 2008 is upon us with the prospect for reform only slightly closer.

The conflict in patent reform is actually quite different than most types of legislation.  The sides are not clearly split among party lines or political ideology (i.e., conservative vs. liberal).  It’s primarily an industry-centered fight.  Computer related technologies generally favor more narrow enforcement while the pharmaceutical and biotechnology industries (joined by independent inventors) favor strong, broad rights.  The New York Times had a good summary on January 13.  The split comes from the fact that patents impact industries very differently.  Computer-related technologies primarily use patents as defensive mechanisms.  Conversely, the pharmaceutical and biotechnology industries claim to be dependent on patents as innovation incentive mechanisms (interestingly, this is the only industry segment that has been demonstrated to receive a positive R&D impact from patents).  Given these fundamental differences in how the patent system is viewed and use, it is not surprising that there is strong disagreement on reform measures.

On the other hand, there is little debate on either side that the patent system could be substantially improved in a number of ways.  There is actually broad support for some proposals (e.g., instituting a first-to-file rule).  The disagreement centers on measures that appear to strongly impact the enforcement of patent rights (e.g., damages calculation measures).  And so, to date, the controversy has stalled reform.  Perhaps the devil is trying to push through comprehensive reform in one big bill.  I have suggested that "incrementalist approaches" (following the well-known theories of economist Charles Lindblom) could produce better results with less tension.  The idea is to implement small changes very frequently — such as every year — to move the law closer to the social optimum and allow correction if the new rules don't work.   Due to the likelihood that gridlock may preclude such swift moves by Congress, I suggested that the courts may be the better forum for such reform.  One could argue that this has already been occurring quite nicely through the recent jurisprudence of the Supreme Court and the Federal Circuit.  Will legislative reform be as successful, or ultimately more damaging?