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...Patent lawsuits have soared over the past decade, up about 58% since 1995. The patent office is drowning in filings; one recent application is for a napkin band printed with advertising. The office is getting known as an easy grader, awarding patents too leniently, to such things as basic medical tests and "business methods" like one-click online shopping. That stifles innovation and blocks new products from the market, according to some experts. "There's a consensus in academia and the legal world that the patent system is seriously out of balance and needs reform," says economist Carl Shapiro...

Author: /time Magazine | Title: Patently Absurd | 4/2/2006 | See Source »

eBay's fight against a Virginia company called MercExchange illustrates how small firms swat away at larger ones, at great cost to both. In 2001 MercExchange founder Tom Woolston, a former military pilot and CIA network engineer, sued eBay, claiming that the company infringed on three patents he filed in the mid-'90s, including one that set out methods for fixed-price online auctions (the so-called Buy It Now patent). In 2003 a jury ruled in Woolston's favor and awarded $35 million in damages...

Author: /time Magazine | Title: Patently Absurd | 4/2/2006 | See Source »

Then, while the case was winding through the appeals process, the patent office in 2005 issued "initial" rejections of all three patents. Woolston, who is appealing the rejections, says eBay's infringements and dominance of online auctions virtually killed off his auction site, MercExchange, and says nothing less than an injunction will satisfy him. "We want the injunction so eBay's power sellers come to our site," he maintains. You can imagine eBay's view of that position. The case is so important that eBay has hired big-name lobbyists in Washington, such as the Ashcroft Group, a lobbying shop...

Author: /time Magazine | Title: Patently Absurd | 4/2/2006 | See Source »

...have trumped eBay in terms of high-level access: it appears to have met with the patent office's general counsel, James Toupin, and another senior official, John Whealan. According to a document obtained through a Freedom of Information Act request and provided to TIME, RIM chairman and co-CEO Jim Balsillie was scheduled to meet with patent-office officials on Jan. 4, 2005, along with representatives from the U.S. Department of Commerce (such meetings are highly unusual). In February a Canadian government official contacted a patent-office lawyer to find out if the Canadian Patent Office should "exert...

Author: /time Magazine | Title: Patently Absurd | 4/2/2006 | See Source »

...wonder a MercExchange lawyer fumed in early March when the Buy It Now patent was reassigned to a new examiner after staff in the technology center had spent 21/2 years dealing with it. The new examiner rejected MercExchange's application after only a few days, although the shift may reflect the new way the patent office handles re-examinations in cases more than two years old, with an emphasis on speed...

Author: /time Magazine | Title: Patently Absurd | 4/2/2006 | See Source »

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