Sho Nuff - I think this is the step that typically is seen as a problem for many:
How could someone who knows nothing about photography determine that? Likewise, a lot of these software patents. How can a patent officer, knowing very little about programming, determine that something like, say, solving the quadratic formula in HTML be "non-obvious"?
The fields of science are numerous and it is impossible to have each patent examined by a true "expert" in each field.
That being said, most Examiners become subject matter experts (in a fashion) after spending enough time examining.
Take me for example. I have a background in chemistry and materials science. I spent some time developing stealth tech for the navy. Largely involved depositing magnetic thin films and developing new ferromagnetic particles. After doing that a while I joined the PTO as an Examiner. The powers that be looked at my background and said "Hey, that guy knows something about magnetic thin films! Send him over to the magnetic recording art unit." At the time I knew diddly squat about magnetic recording. But after reading about it for 8 hours a day for almost 4 years, I pretty much knew everything there was to know about a hard drive, perpendicular and horizontal magnetic recording, and about 15 different types of thin film deposition. Within about 15 minutes of looking at the claims of an application I could identify pertinent prior art references with respect to most of the elements, and identify which elements I had not seen before. I would then proceed to search for the "missing" elements, and in about 5 hours I could whip out an office action. In my time at the PTO my allowance rate was a whopping 17%. I'm not proud of that low number. I'm just stating it as fact. There was tons of prior art in the magnetic recording space, so it was very, very difficult to get anything through. And what did get through was generally narrow and/or supported by a declaration asserting "unexpected results."
But like many examiners, I left for the greener pastures of law practice (looking back that was a mistake, but that is a story for another day). That type of "brain drain" happens a lot at the PTO. So much that I would wager that of the 5000 patent examiners at the USPTO, probably 2/3 of them have less than 3 years of experience. That is a problem. A big problem. Particularly when you need experienced people to do the job in the time frame they are asked to do it.
That being said, other posters have raised the argument that the PTO is doing a reasonably good job. Sure, there are some bad patents out there. There is no question that sometimes the PTO lets something through that it shouldn't. But relying on those outlier cases to support arguments that the whole system is in a shambles is a mistake. Its taking the old saying "the squeaky wheel gets the grease" and turning it on its head, particularly when you consider that of the so called "bad" patents, relatively few have any impact on society as a whole.
OK, amazon patented a method of photography. And without searching the prior art I can't comment on whether the patent is valid or not. But if its truly a bad patent, there are myriad ways to challenge it that do not require litigation. Post grant review, inter parties review, reexamination, etc. Any of those tools can be used to revisit a "bad" patent and potentially invalidate it.
Finally, it is not as though patents are magically enforced. It takes time and effort to detect infringement. And then there is a business decision to be made. Because patent litigation is not just expensive to the defendant. It is expensive for the patentee as well. And there is no guarantee the patentee will win
even if the patent in question is rock solid and it looks pretty certain that the defendant is infringing. Such is the nature of litigation. So. High expense. No guarantee of reward. Most patentees look at those facts and make an objective decision as to whether it is even worthwhile trying to enforce a patent. And in many cases, they opt for some other remedy. If they didn't, every patent lawyer would practice litigation and we would all be filthy rich litigating any one of the several hundred thousand patents that are in force at one time.
To summarize:
1. PTO examination is a first line of defense.
2. PTO examiners may not initially be subject matter experts, but can develop into such over time.
3. PTO examiners do occasionally make mistakes (though not as often as many people believe).
4. The PTO is fighting an uphill battle against brain drain.
5. There are a variety of options to invalidate a patent
6. Patent litigation is very expensive and often viewed as a last resort.