Silicon Flatirons

A Center for Law, Technology, and Entrepreneurship at the University of Colorado

Re-Examining the Patent System

April 6, 2006

Co-Sponsored by the Intellectual Property Section of the Colorado Bar Association

To critics of the patent system, it is a tax on innovation and a full employment act for lawyers. In an age where the importance of intangible assets are increasingly overshadowing their physical counteracts, intellectual property is a high stakes business and receiving attention from all quarters. In particular, technology companies are receiving more patents than ever before, expanding their scope, licensing them in novel ways, and litigating about their validity and impact. For some firms, patent rights form not just the core, but the entirety of their business. To critics of the system, such firms, who are often called "patent trolls"--because they demand royalties, but do not actually create a product--are Exhibit A for why the system needs to be reformed.

In the wake of studies by the Federal Trade Commission and the National Academies of Sciences, there are emerging lines of consensus about how the U.S. patent system can be improved. For technology and telecom firms, which account for around 40% of all issued patents, understanding and helping to shapte the potential directions of future reforms are critically important. For startup companies, the critical question is whether the ability to patent new technologies provides an opportunity to succeed against entrenched incumbents--or whether those incumbents' patent portfolios and willingness to sue is a barrier to entry.

This conference will evaluate the state of the patent system and survey avenues for reform. In particular, it will evaluate whether there are opportunities to game the system by acquiring patents that enable firms to engage in a game of hold-up for those relying on standards that include the patented technology. It also will evaluate whether the Patent and Trademark Office's (PTO) notorious track record of issuing bad patent can be fixed, perhaps with the aid of a post-grant review process. As for the litigation of patent rights, we will discuss whether there are means of keeping costs down, avoiding the impact of bad PTO decisions, and limiting the abusive use of injunctions. Finally, as to the effect of patents on innovation, we will discuss whether they are valuable vehicles for protecting businesses and attracting investment--or means by which established firms can continue to exercise control over the marketplace.