The embattled company, regularly on the receiving end of numerous patent actions, has called on the government to adequately fund the US Patent and Trademark Office (USPTO) and establish a special court qualified to hear infringement cases.
Brad Smith, who as Microsoft’s general counsel oversees may of Microsoft’s legal defense actions, has called reform vital to ensure the patent system strikes the right balance in promoting technology innovation and economic growth.
Smith’s remarks, and Microsoft’s rather bold political stance, comes just days after the European Union (EU) Council of Ministers adopted its own legislation to standardize software patents in Europe. Critics, though, have argued the new rules introduce the potential for US-style patent cases over software IP.
According to Smith, the number of US patent applications has tripled since the 1980s to 350,000 each year while the annual number of infringement actions has more than doubled to 2,500, up from 1,000 during the 1980s.
Microsoft itself is no stranger to patent infringement cases. On Friday, Microsoft reached a settlement with Burs.com who’d accused Microsoft of stealing its ideas in streaming media. A separate case brought by Eolas Technologies Inc case, meanwhile, Eolas claims Microsoft illegally used patents in Internet Explorer around plug-ins that it owns. A US appeals court this month returned the case to a lower court for re-trial reversing an earlier $520.6m award to Eolas against Microsoft.
Unsurprisingly, Microsoft believes the system currently fosters a patent litigation lottery. To end this Microsoft said Congress should provide the USPTO with adequate resource and stop the practice of diverting significant levels of funding from the USPTO. While patent USPTO fees have recently increased, the funds it has raised have been channeled into other areas of government, according to Microsoft.
Microsoft… urges that steps be taken to put a permanent end to all fee diversion from the USPTO. This, more than any other proposal, offers the best hope for addressing patent quality, Smith said in prepared remarks to the American Enterprise Institute.
The company believes a special court should be created to consolidate and hear all patent cases at the federal district level. The court would enforce patents created under a new system. That system would enable companies and individuals to alert the USPTO about questionable patents during the review process itself. Currently, patents can only examined once granted through means such as legal action. Challenges should also be mounted administratively rather than using litigation.
Finally, Microsoft believes there should be increased collaboration with patent offices in other nations to help drive harmonization of the global system for patents. Collaboration should include mutual recognition by the USPTO, European and Japanese patent offices the world’s three largest patent office operations.
