On March 5, the Washington Post reported that “the government is about to start opening up the process of reviewing patents to the modern font of wisdom: the Internet.” The National Law Journal reported on a preliminary stage of this project last fall. Sheri Qualters, “ Patents on Web may cut lawsuits,” NLJ, Oct. 9, 2006, at 7. While there has yet to be an official announcement from the U.S. Patent and Trademark Office (PTO) about the “Peer to Patent” Project, a great deal of discussion of the program is already available, where else but on the Internet. See, e.g., www.dotank.nyls.edu/communitypatent. While the concept has the attraction of using the power of the Internet to solve resource problems at the PTO, it is quixotic to think that volunteer peers can provide a uniform and consistent review of all patent applications. There are simply too many filings, even for the Internet.

‘Peer to Patent’

In 2006, the PTO’s 4,000 examiners received a record 332,000 patent applications. “The tremendous workload has often left examiners with little time to conduct thorough reviews,” the Post reports. In its efforts to improve on what some have criticized as a “broken system,” the PTO will run a pilot “peer review” program from May 2007 to May 2008. During this time, applicants to the Patent Office Technology Center 2100 (Computer Architecture, Software and Information Security) can submit their applications for inclusion in the program. Initial reports are that approximately 250 applications will be made available on the Internet for approved “peer reviewers” to comment on. Applicants that agree to subject their applications to this program are promised an accelerated review. There is no indication what “accelerated” means, but currently applications in this technology do not get examined for 30 months or more.

Comments from a community of approved reviewers will be used by examiners. The system purportedly resembles the one used by Wikipedia, the user-created online encyclopedia. The peer reviewers with the most useful information will receive “gold stars” from the PTO.

Will large numbers of competent reviewers sign up to be peer reviewers? If so, why? It is one thing to have the notoriety of “top reviewer” for books on Amazon.com, but will there be a comparable honor to being a “gold star” patent peer reviewer? Highly rated sellers on eBay make money. Will the reviewers get paid? Is this a way for big software companies to raise the bar of patentability against competitors and small inventors?

More than six years ago, in the wake of public outcry over the Amazon one- click patent, Amazon founder Jeff Bezos co-founded Bounty Quest, an Internet-based service that posted patents with a bounty to be paid for anyone who found evidence showing the patented invention was not new. Conceptually, Bounty Quest had the same “if you build it, they will come” philosophy as this peer review program. However, unlike Bounty Quest, where bounties were often $10,000 or more per patent, the PTO expects reviewers to provide their service without any monetary reward, at least from the PTO. Some companies may hire people to be peer reviewers and to scrutinize the applications of competitors and potential patent “trolls.” Yet does this make economic sense? Bounty Quest no longer exists. Will the peer review program suffer the same fate due to lack of participation by applicants or reviewers?

In his paper “Rational Ignorance at the Patent Office,” 95 Nw. U. L. Rev. 1495 (2001), Professor Mark Lemley of Stanford Law School challenges the common assertion that the PTO does a bad job of examining patents. Lemley cites to data showing that very few patents are actually litigated or licensed. Thus, he concludes, society is better served by placing more resources into thorough study of only those patents that are asserted. The group developing the peer review program-the Institute for Information Law & Policy at New York Law School-mentions this paper on its Web site, saying that the program does not cost the PTO or inventor anything and it helps reduce the “significant costs and chilling effects that the overhang of uncertain patents subject to challenge creates in the industry,” costs and effects that Lemley, the institute says, did not measure.

Nevertheless, the concern of uncertainty is not with all filed applications or the more than 170,000 patents granted in 2006, but rather with a small number of granted patents, perhaps 2% or less, that are part of licensing and litigation activities. Indeed, concern relates more to patents included in “licensing opportunity” letters sent to dozens, even hundreds of companies. Companies receiving these letters worry about being pulled into an uncertain lawsuit involving an unclear and uncertain patent. Often patent licenses are acquired regardless of the true merits of the patent.

It is unlikely that a peer review system will result in a community of skilled peers large enough to improve the “certainty” of the many patents issued annually. An alternative would be to create a peer review system for the nearly 1,500 patents litigated each year or the comparable number of patents showing up in licensing letters each year. Such a peer review would provide a threshold “certification” that patent owners would have to pass before filing suit, perhaps during a post-grant opposition procedure similar to one being proposed in Congress. This certification would shift evidentiary and cost burdens such that patent owners could not reap less-than-cost-of-litigation settlements as easily. Most importantly, it would give the community of peer reviewers a manageable number of patents to review and a chance to make a significant difference.

Paul S. Hunter is a partner in the Madison, Wis., office of Foley & Lardner who specializes in technology counseling.