Let me play devil's advocate here, and explain why I'm not at all convinced this is a good idea. Getting rid of obvious patents, and patents for which there is prior use would be a good thing to do. No doubt the patent office is pretty poor at its job (see this post for one of many egregious examples). No doubt there is a lot of expertise outside the patent office that if it could be tapped into would help eliminate some of the obvious and redundant ones.
But: the U.S. Patent Office shows 417,508 applications in 2005.
*Is it realistic for that many patents to get public scrutiny?
*Do we want Linus Torvalds spending all of his time scrutinizing patent applications to see what is obvious and redundant - or writing great software?
The actual system is (at least initially) intended to be a voluntary system in which applicants can opt for public scrutiny. That would serve to keep the applications to be scrutinized within bounds. Realistically, if this is to make sense then patents that undergo this scrutiny have to have some higher legal standing than those that do not. It is obvious why the large software companies who are pushing the idea would favor this - however beneficent their motives, can we doubt that they are different than the rest of us? We all want patents for ourselves, but not the other guy. So initially, the system just seems a way of getting superior status for the large companies that choose to participate. Of course if it works, then everyone will want in - and now we are back to 417,508 applications. Worse - if we get all the patents going through the system, most of them won't get any scrutiny at all - but of course when it goes to court the claim will be that the patents were available for scrutiny and nobody said anything at the time, so, however ridiculous the claims, they must be recognized.
What do you think? Good system or bad?