Reforming U.S. Patent Policy: Getting the Incentives Right

127 The U.S. patent system comes under much criticism these days. In a lightning-rod case, the maker of the popular BlackBerry communication device, Research in Motion (RIM), chose to pay a $612.5 million settlement in order to avoid a courtordered shutdown. In this case, the judge supported a patent infringement case brought by NTP Inc. despite the fact that the U.S. Patent and Trademark Office (USPTO) had preliminarily ruled that all five NTP patents were invalid. Moreover, NTP did not provide email service or compete with RIM. In an April 2005 speech, Brad Smith, Microsoft’s general counsel, said that his company spends $100 million per year defending itself against thirty-five to forty lawsuits at a time. He observed a “need to ensure that high-quality patents are approved and low-quality patents are not.” Microsoft has called for patent law to be reformed in order to make it easier to challenge the validity of patents after they are issued and to reduce runaway patent litigation costs. The company has also cited a need to increase Keith E. Maskus