According to the Washington Post, the U.S. Patent and Trademark Office is planning to launch a trial project in which outsiders will be able to comment on proposed patents that are working their way through the (incredibly time-consuming) patent application process. In effect, people will be allowed to post comments on patents and then other users will be allowed to vote on those comments, a la Digg.com.

This proposal is almost certain to bring out the anti-”wisdom of crowds” folks (yes, I’m talking about you, Nick, and your pal Andrew). After all, why would we let something as sophisticated as the U.S. patent system be opened up to the yobs and yahoos who pollute Digg.com and Slashdot and every other social network out there? Why indeed. Perhaps because somewhere out there is a person who knows something about one of the patents the USPTO is looking at, and can help the office decide whether there is prior art, whether the invention is too obvious, etc.

In the past, the problem (or at least one of them) has been that patent examiners are snowed under by applications and in many cases either don’t have the time or the expertise to ferret out evidence of “prior art,” which is patent lingo for an invention that is similar to the thing a person wants a patent for. In extreme cases, this can help produce multibillion-dollar patent infringement trials such as the one that tied up Research In Motion for so many years.

“For the first time in history, it allows the patent-office examiners to open up their cubicles and get access to a whole world of technical experts,” said David J. Kappos, vice president and assistant general counsel at IBM.

New York Law School Professor Beth Noveck, who helped spark the trial project (which relied on advice from CmdrTaco of Slashdot.org), says it will bring about “the first major change to our patent examination system since the 19th century.” And the Post story notes how ironic it is that the body looking over crucial technology patents is woefully lacking in actual technology — and in some cases is prevented from even using the Internet.

Update:

Tony Hung at Deep Jive Interests doesn’t think it’s such a great plan, and has come up with a whole pile of reasons why.

My friend Mike McDerment of SecondSite has a post up with some of his thoughts about patents, and it reminded me that I’ve been meaning to write one as well, but I’ve kind of been putting it off because it’s a complicated subject and I wanted to think about it a bit. Like Mike, I’ve been thinking about those kinds of issues a fair bit lately — Mike because he runs a Web-based services startup, and me because I’ve been writing about Research In Motion a lot.

Like Mike, my thinking (this time around at least) got jump-started by a great post from software designer, artist, venture capitalist and all-around Renaissance guy Paul Graham on the topic of software patents. It’s a long post, but it’s definitely worth reading if you care about the topic, and you should, because it will impact your life in some way eventually (and likely has already).

As Paul points out, if you’re against the idea of software patents — as many people are, including VC Brad Feld, who writes about it here — then you’re probably against the idea of patents in general, since much of what is being patented on the technology front is in some sense software. By the end, Paul seems to be arguing that patents are almost a necessary evil, in the sense that small companies need them to defend themselves from larger companies, like a nuclear weapons program.

Brad, meanwhile, says that they are “an abomination,” and that software patents — such as Amazon’s infmaous “one click” patent on buying things online — should be done away with entirely. Like me, he also turns to the military analogy:

“If we continue on the path we are on, patents will continue to increase in their overall expense to the system, everyone will feel compelled to continue to apply for as many (and as broad) patents as possible, if only for defensive reasons (one of Fred’s VC Cliche’s of the Week was “Patents are like nuclear bombs, you just got to have some.”) Let’s take a page from geopolitical warfare and focus on global disarmament, rather than mutually assured destruction.”

The Fred that Brad is referring to is Fred Wilson of A VC, who says that while he feels they are almost useless, he also advises his portfolio companies to apply for as many as they possibly can (this will make for interesting fodder when Mike and I talk with Paul Kedrosky and others about the issues surrounding VCs and startups at the mesh conference in May). In one of the best parts of a recent post on the topic, Fred sums up his feelings thus:

“I think of the patent system in our country a bit like the tenure system in our academic institutions. It protects ideas and people that may not deserve to be protected and it allows for underperformance and it stifles creativity and energy.”

As Fred and Brad and Paul also point out, one of the biggest problems with patents is that the U.S. Patent and Trademark Office keeps awarding them to things that are both obvious and not new (they’re not quite the same thing). One of the best examples is a recent New York Times story, which told the story of Geoff Goodfellow, who came up with the idea of sending wireless email to a mobile device in the 1980s and started a company to do just that, although the company failed. Later, a company called NTP would file a patent for just that technology and much later would successfully sue RIM for infringing it. TechDirt has an even more recent cautionary tale.

And what does Geoff Goodfellow say about why he didn’t patent his idea?

“You don’t patent the obvious,” he said during a recent interview. “The way you compete is to build something that is faster, better, cheaper. You don’t lock your ideas up in a patent and rest on your laurels.”

This is a column I wrote for The Globe and Mail

Did you hear that giant whoosh, like the sound of air escaping from an enormous balloon? That was the sound of several million BlackBerry users heaving a sigh of relief yesterday, after Research In Motion Ltd. announced that it had finally settled its four-year legal battle with U.S.-based NTP Inc., the company that sued RIM for patent infringement. And there might have been a few sighs of relief in there from co-CEOs Jim Balsillie and Mike Lazaridis, too, who knows — after all, the current settlement is substantially less expensive than the $1-billion to $1.5-billion (U.S.) that some analysts were projecting the Canadian company might have to cough up.

Plenty of RIM investors were relieved, that much is clear. The stock jumped by more than 18 per cent in after-hours trading, erasing about six months worth of selling in an instant and boosting the company’s market value by $2.4-billion. Some professional investors were also glad to see the millstone removed from around RIM’s neck. “I’m glad it’s over,” said Matt Kelmon, a U.S. money manager with 250,000 shares of RIM who said he had been expecting a settlement of as much as $1-billion. “It was definitely an overhang on the stock . . . it was a good call to get it out of the way.”

In many ways, the deal is a win-win for the Waterloo, Ont., company. Not only does RIM only have to pay $612.5-million, less than half the amount of cash it has on hand (it has been building a reserve to pay any final judgment), but it gets a definitive deal instead of a vague agreement to work out a deal, which is what it wound up with last time. And best of all, it puts an end to the uncertainty and doubt hanging over the company like a cloud the past few years.

The impact of that cloud on the company’s business has been all too tangible: RIM also chopped its estimate of subscriber additions by more than 13 per cent yesterday, in part because of the uncertainty over the case, as it has done in previous quarters. And the firm said operating profit in the latest quarter will fall well below expectations, too — as much as 17 per cent below what analysts were projecting, even before taking into account the cost of the legal settlement.

So what happens now? The simple answer is that RIM gets back to business, back to signing up new subscribers and new telecom partners, without having to soothe their fears about the outcome of the NTP litigation. There is also the chance that being free of that cloud of uncertainty might make Research In Motion a more appealing takeover target for someone like Microsoft — until now, the unsettled nature of the case made RIM a very unattractive acquisition. That said, with a market value of more than $13-billion and a trailing price-to-earnings multiple of about 40 times, the company is still far from cheap.

If nothing else, putting an end to the NTP case allows RIM to focus all its energies on remaining the market leader in the handheld e-mail market — and it needs all the energy it can get, as competition grows. Microsoft has released a new upgrade for its e-mail server software with BlackBerry-like functionality, Palm is offering similar services for its new Treo handheld devices — of which it sold almost as many in the most recent quarter as RIM sold BlackBerrys — and Finland’s Nokia is rolling out BlackBerry-style “push” e-mail features to its phones in the next year or so.

In other words, RIM still has a substantial fight on its hands, one that has been going on in the background while it waged its legal war with NTP. Now, at least, it can get both hands into the game instead of fighting with one of them tied behind its back.

Bringing up the subject of Research In Motion‘s legal battle with U.S.-based NTP can generate a pretty heated emotional response in some circles, and I’m not just talking about RIM’s Christmas party or one of co-CEO Jim Balsillie‘s poker night get-togethers. What began as little more than a nuisance lawsuit from an unknown company four years ago has become one of the biggest — and potentially most expensive — legal wars in recent memory.

Opinions on the case have quickly become polarized. Those who believe that NTP’s patents on wireless e-mail are invalid and should never have been issued in the first place see the lawsuit (and potential injunction against the sale of RIM’s products in the United States) as a form of legalized extortion. A great Canadian success story is being held to ransom, they argue, based on a mistake by the overworked and ill-informed U.S. Patent and Trademark Office. To this group, the battle between RIM and NTP is about fundamental issues of right and wrong, truth and justice.

Others, meanwhile, see RIM’s refusal to settle with NTP (or its foot-dragging on the terms of a settlement) as a symptom of the Canadian company’s hubris, an attitude that has arguably hurt not just the company but also its shareholders. Instead of agreeing to license the NTP patents early on in the process, they argue, RIM has left itself open to the threat of having to pay billions of dollars more than it otherwise would have, as well as losing customers and partners as a result of its intransigence. To this group, RIM’s battle might be right in principle, but wrong in practice.

To read the rest of this column, please go to globeandmail.com