Two big announcements about patents hit the wires today. The first, covered by Dan Farber and others, which has the U.S. Patent and Trademark Office (USPTO) adopting the use of Web-based peer review and crowdsourcing in patent applications reviews, will change the nature of patents. The second, the introduction of LegalForce.com, provides the first marketplace for patents and intellectual property.
Now, how do we bring the two together, so that ideas in the patent process can be marketed, licensed or sold as they make their way through the review process? The USPTO can't be in the market-making business, but it can express information about patents in such a way they can be mashed up with market information to createWithout the economic connection, the USPTO's revolution is just a half-step toward change. a marketplace.
LegalForce is the more revolutionary of the two moves, if the USPTO can make information about the progress of a patent through the review process so that ideas that are increasingly likely to have market value can be priced higher than ideas that are not real innovations. The peer review process, as David J. Kappos, vice president and assistant general counsel at IBM told The Washington Post, "I'm sure there will be a degree of gaming. There always is."
The peer review system at the USPTO will award "gold stars" to helpful contributors, and may ultimately give some participants a vote that counts for more than others. Linking the results of contributions to market value would be a way to keep the process honest, because the market will be able to provide immediate feedback about the invention and reviewers' analysis.
Jim Moore of the Berkman Center at Harvard posts thoughtfully about the launch of LegalForce:
LegalForce is revolutionary because it helps the patent system do its good work for society. LegalForce brings the benefits of “long tail” and e-commerce and easy user-interfaces to intellectual property. Again, kind of like what happened to real estate.
Moore goes on to say that "innovation is helped by paying inventors, and hurt by rewarding companies that steal ideas." Peer review without economic links will expose the patent process to debate about whether the patent itself is worthwhile rather than the value of invention.
Putting these ideas together, by making all review progress and invention information at the USPTO available for use by a marketplace like LegalForce.com, will transform the patent review process completely. Could it be more than coincidence that they were announced on the same day?
Without the economic connection, the USPTO's revolution is just a half-step toward change.