"Peer to patent": collective intelligence, open review, and patent reform.

• Author: Noveck, Beth Simone

TABLE OF CONTENTS I. INTRODUCTION II. THE PARADE OF HORRIBLES: INFORMATION DEFICIT AND PATENT QUALITY III. WHY TRADITIONAL PEER REVIEW IS NOT THE SOLUTION IV. "PEER TO PATENT": THE OPEN REVIEW ALTERNATIVE V. WHY OPEN REVIEW? A. For the Inventor B. For the Patent Examiner C. For the Peer Reviewer D. Public Benefits E. Possible Questions VI. CONCLUSION: INSTITUTIONAL COMPETENCE AND PATENT REFORM I. INTRODUCTION

There is a crisis of patent quality. Patents are being issued that are vague and overbroad, lack novelty, and fail the constitutional mandate "[t]o promote the Progress of Science and useful Arts." (1) Low quality patents generate excessive litigation and confer the economic rewards of monopoly on patent holders while providing little benefit to the public. (2)

This paper argues that access to information is the crux of the patent quality problem. Patent examiners currently make decisions about the grant of a patent that will shape an industry for a twenty-year period (3) on the basis of a limited subset of available information. Examiners may neither consult the public, talk to experts, nor, in many cases, even use the Internet. (4) Furthermore, applicants often fail to draft clear applications; they are not obligated to supply the patent examiner with information necessary to make an informed decision. (5) The burden falls on the United States Patent and Trademark Office ("USPTO"), whose employees must search for and find the relevant technological antecedents, known as "prior art," against which they compare and assess the claimed invention. (6)

As James Rumsey remarked in a letter to Thomas Jefferson in 1789, the issuance of patents is "more within the information of a board of academical [sic] professors, and a previous refusal of a patent would better guard our citizens against harassments by lawsuits." (7) Indeed, Jefferson, the first patent examiner, consulted with Joseph Hutchinson, Professor of Chemistry at the University of Pennsylvania, to seek his advice before issuing a patent on an alchemical process. (8)

By contrast, today's patent system replaces expert "academical" input with a centralized and isolated expert-bureaucrat evaluating applications on the basis of a legal fiction--from the viewpoint of the "Person Having Ordinary Skill in the Art" ("PHOSITA"). (9) These patent examiners are underpaid (10) and overworked. (11) They labor independently under a backlog approaching one million applications, (12) with no more than eighteen to twenty hours to review each one. (13) There is an absence of communication with the scientific community, and examiners are not required to have advanced degrees in the sciences. (14) With increasing automation, examiners have less need, and hence limited opportunity, to communicate with each other directly, resulting in a growing information deficit.

Rejecting input from experts and remaining unaccountable to the scientific community produces problems with information quality and transparency at the USPTO. The institutionalized isolation of expertise produces an information deficit that results in poor quality patents. The reluctance to use outside science translates into undue reliance on centralized structures of procedural expertise and decision-making. This distrust of outside knowledge is compounded by an inability to effectively and efficiently engage experts. Thus, the patent quality problem is, at least in part, a problem of information access. (15)

This dearth of information--striking in view of the explosion of informational resources created by the Internet age--cannot be solved through judicial review. At present, even though an overwhelming percentage of patent applications are granted (with some estimates as high as ninety-seven percent), (16) patent owners enjoy a presumption of validity. The Federal Circuit, the specialty patent appeals court, rules in favor of patent holders more often than not in infringement actions. (17) Yet contrary to prevailing theory, "Daubertizing" (18) agency decision-making by lowering the current standard of judicial review over USPTO decisions is too slow, too irregular, and too late in the game to solve the problem, (19) especially as judicial review cannot occur until examination concludes, which can take several years. (20)

Other reform proposals are also inadequate. Those that call for ex post solutions, such as post-grant administrative review to "gold-plate" important patents, (21) require improved mechanisms for accessing the information necessary to make the patentability determination. Similarly, proposals to change the statutory standards of patent examination, revisit the scope of patentable subject matter, or modify the definition of obviousness do not eliminate the need to address the information deficit. They also require extraordinary political capital to move through Congress. Even regulatory proposals that require applicants to search more thoroughly for the prior art still require significant political support and assume that applicants, including small inventors, have the ability to find all the relevant information.

What if we could reform the application process and guarantee better patents before costly litigation? What if we could ensure that only the most worthwhile inventions received twenty years of monopoly rights? What if we could offer a way to protect inventors' investments while still safeguarding the market from bad patents? What if we could give the scientific community a voice in determining whether an invention was truly novel or obvious? What if we could make informed decisions about the scientifically complex issues posed by patent law before the fact?

This Article addresses the contention that an information deficit is the central problem in the patent review process by proposing a new reform model that might revolutionize the process of patent examination. This proposal for open patent examination (nicknamed "Peer-to-Patent") separates scientific from legal decision-making. By means of an online network, the scientific community provides what it knows best--scientific information relevant to determining the novelty and non-obviousness of a patent application. With her deep knowledge of the pertinent statutory standards, the patent examiner then uses that input to make a legal determination of patentability. In this model, the patent examiner remains the ultimate arbiter.

This model for administrative decision-making has the potential to remedy the information deficit and improve patent quality. Its enactment requires no statutory or regulatory changes. By redesigning the model for patent examination, this proposal points the way towards a new approach for administrative law, not by altering statutory or judicial standards, but by improving agency institutional competence. It goes beyond traditional administrative practices like peer review by combining expertise with openness. The model also improves on notice-and-comment rulemaking by making citizen participation more open and collaborative and the legal decision-making process more transparent and accountable to a broad community of self-selected experts.

This Article focuses on patent examination as administrative practice. (22) It shifts the focus to the institutional competence of the agency and highlights new opportunities for patent reform. At this juncture, when neither Congress (23) nor the U.S. Supreme Court (24) is certain to enact patent reform, changing the administrative practices of the agency responsible for implementing patent law may be the best opportunity, not only to effect reform, but also to do so in ways that are data-driven and empirically measurable.

Current administrative structures have been constructed around certain beliefs, namely that centralized administrators have the best access to information, that expert bureaucrats are the only way to produce dispassionate decisions, and that making decisions in the public interest requires keeping the public at bay. This notion of bureaucratic expertise is premised upon a bygone reality, namely that the agency possesses the best information. We continue to trust in bureaucratic expertise that does not work rather than the collective intelligence that the Internet now makes possible. (25)

In the spring of 2007, the USPTO will implement the model of "Peer-to-Patent" open review as a pilot called Community Patent Review. (26) The pilot focuses on integrating an open peer review process with the USPTO, creating and amalgamating a vetted database of prior art references to inform examination, and developing deliberation methodologies and technologies that allow community ranking of the data forwarded to the patent examiner. Community Patent Review is the first social software project to be directly connected to and have an impact on the legal decision-making process. Several companies, representing more than six percent of the total number of new patents, including Computer Associates, General Electric, IBM, Microsoft, Hewlett-Packard, and Red Hat, have already agreed to submit their patent applications for examination under this open system. (27) Together with the Omidyar Network and the MacArthur Foundation, they will fund this program for the USPTO. (28)

We have arrived at a unique moment in history when five factors converge to make this kind of reform proposal possible: first, the state of patenting has become so problematic as to meet with almost universal opprobrium; second, the majority of patent applications are published after eighteen months whether ultimately granted or not, (29) providing the legal foundation for open review; third, expert public participation in the form of peer review is widely practiced in the public sector and therefore is a familiar model; fourth, we have social reputation and networking technology that makes open review on this scale possible; and fifth, we have the necessary expertise with collaborative...