Is the U.S. patent system in crisis? Apple, Google patent czars disagree

August 1, 2007, 5:25 PM UTC

Chip Lutton, Apple (AAPL) chief patent counsel, said at a conference at Stanford University that the United States patent system is not broken and he’s not sure there’s a crisis. He said there is, however, a “bubble market” in patents.

Lutton said much of the problem is that too many people are getting small, low-quality patents, and there’s no system for establishing their value. That often leads to patent cases where one party seeks an unnecessary injunction, potentially causing economic damage and feeding the bubble market in patents.

During a session at the AlwaysOn technology conference, Lutton and other panelists discussed the state of patents in the high-tech industry. Technology patents have become a hot topic over the past few years, as companies such as Research in Motion (RIMM) and Palm (PALM) have faced patent lawsuits over how their mobile devices work. Many companies in Silicon Valley say they feel the patent wars have gotten out of hand, with some startup organizations raising money simply to buy patents and sue those who they believe to be violating them.

Google’s (GOOG) Michelle Lee, associate general counsel and head of patents, disagreed with Lutton, saying she believes there is a patent crisis. The cases can easily cost between $2 million and $5 million to defend, she said. Lee said an overburdened federal patent office has trouble improving the patent process, because it doesn’t have time to thoroughly evaluate applications.

David Kappos, IBM (IBM) vice president and assistant general counsel for intellectual property law, said patent problem is most acute in information technology businesses. Life sciences companies, he said, tend to be happier with the way the system now works.

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