Reinstated Lawsuit Sheds Light On The Problems With Commodity Prosecution

Sales Quota

“we see yet another example of the patent system catering to large entities that file at a rate several orders of magnitude higher than start-ups.”

 

Patrick Anderson Image  by: Patrick Anderson | August 7, 2017

A few months ago, I explained how common approaches by large companies have the effect of “commoditizing patents as, more or less, fungible assets.” The result of this “clog[s] the USPTO, delaying progress on more innovative patent applications [and] may be part of a vicious cycle that forces companies … to turn to the transactional market.” However, a recently reinstated lawsuit against L’Oréal could shed some previously unwanted light onto the ethics of such practices.

According to a report from the New Jersey Law Journal, terminated in-house attorney Steven J. Trzaska claims that his former employer required its patent lawyers to maintain a quota of patent applications, even if doing so meant filing applications on inventions that were not believed to be patentable. Needless to say, filing applications that the attorney himself believes not to be patentable would violate ethical rules enforced by both state bar associations and the USPTO, and Trzaska maintains his resulting termination is therefore unlawful.

Over at Corporate Counsel, practitioners were quick to disclaim Trzaska’s scenario as typical. David Arthur of Xerox Corp claimed that “most in-house attorneys facing such quotas have more than enough potentially patentable inventions from which to choose.” However, even the absence of a strict quota—or the creation of an ‘ethical’ system in which in-house attorneys are not penalized for refusing to file applications for unpatenable inventions—the problem is, in itself, the apparent synonymy of productivity and quantity. After all, if a company’s engineers fail to produce a number of inventions sufficient to maintain some minimum quotas, does it need as many patent attorneys in house? Knowing this, are patent attorneys nevertheless influenced to be more aggressive in their personal analysis of patentability?

Whether by design or by circumstance, we see yet another example of the patent system catering to large entities that file at a rate several orders of magnitude higher than start-ups. They can afford patents on a multitude of trivial advancements while struggling innovators scrape and save for just a single patent.

The USPTO’s own statistics bear this out. I’ll highlight two data points: from 2000 to 2015 issued patents grew 89% while issued patents among Individual US Inventors declined 15% over the same period.

For their efforts, small entities are rewarded with longer wait times, more expenses, and an unwarranted public perception tainted by the overwhelmingly more visible actions of these larger players (despite the fact that they make up but a small minority of all patent owners). You see now why we are all about #inventorsfirst here.

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