opinions-political-patents

Difference between revision 1 and current revision

No diff available.

http://www.slate.com/id/2135559/?nav=tap3#ContinueArticle


In response to [http://www.economist.com/printedition/displaystory.cfm?story_id=5014990 The Economist survey on patents, 2005]

Madame or Sir -

You posit that the patent system creates a "market for ideas" in which intellectual labor can be specialized. The benefits of this system must be weighed against the costs.

First, the benefits are overstated. Of the patents that are actually novel, many are granted for innovations that would have occured regardless of the existence of the patent system.

Second, patents are frequently used against people who independently thought of an idea, rather than against people who copied an idea from the patent holder. This has no economic benefit to the community and makes innovation much more costly and legally risky, especially for small entities.

Third, you admit that the (American) patent office is not successfully distinguishing novel inventions from non-novel, but you seem to assume that this is a minor problem that can be easily fixed. But what if distinguishing novel patents from patent spam would require hiring so many more highly-qualified patent examiners that it would cost tens of trillions of dollars? Is the cost of the patent examiners worth the benefits of the system?

  Bayle Shanks
  San Diego, CA, USA

Longer version

Madame or Sir -

You posit that the patent system creates a "market for ideas" in which intellectual labor can be specialized. The benefits of this system must be weighed against the costs.

First, the benefits are overstated. Of the patents that are actually novel, many are granted for innovations that would have occured regardless of the existence of the patent system. In fact, this paper finds that argues that software patents are actually associated with lower R&D spending: http://www.researchoninnovation.org/swpat.pdf.

Another example: your survey provides many quotes from executives who say they get patents only in order to have bargaining chips to prevent being sued by other companies, but few (only Myhrvold?) example(s) of an executive who says that the return from patents is causing him to spend more money researching than he otherwise would (and http://slashdot.org/article.pl?sid=04/11/14/2310211 provides a different view of even his venture).

In other words, your sources are saying that the patent system is not providing the incentive to drive innovation, but rather is simply increasing friction (in the form of lawyer-hours needed to do business).

Second, patents are frequently used against people who independently thought of an idea, rather than against people who copied an idea from the patent holder. This has no economic benefit to the community and makes innovation much more costly and legally risky. As a software programmer, I am told that every program I write is likely infringing on a couple of patents.

Besides being a waste of lawyer resources, this situation helps entrench large corporations like Sun and HP which have their own battery of patents (and trade with each other) against small corporations which have only a few (witness what happens when a supposedly innovative startup threatens HP with a patent: Mr Beyer "occasionally ends up getting them to pay him instead"). Raising the barriers to entry is probably not good for innovation.

Third, you admit that the patent office (at least in America, of which I am most familiar) is not successfully distinguishing novel inventions from non-novel, but you seem to assume that this is a minor problem that can be easily fixed. Remember that in order to distinguish novel-ness, a patent examiner must have deep knowledge of the domain of the patent, as well as a lot of time per patent. Note that the number of patent applications per year is increasing.

I think few would argue that the patent system would be a good idea if the patent office was not able to distingish novel ideas from old ones. But what if distinguishing novel patents from patent spam would require hiring so many more patent examiners that it would cost tens of trillions of dollars? Is the cost of the patent examiners worth the benefits of the system? (Note that schemes like allowing the public to challenge patents merely pushes some the cost of examination onto the public, an "unfunded mandate").

Expansion of some of these arguments are available in the bibliography of http://fare.tunes.org/articles/patents.html, in this paper and others by these authors: http://levine.sscnet.ucla.edu/papers/intellectual.htm, in James Boyle's arguments: http://www.law.duke.edu/boylesite/, in Josh Lerner and Adam B. Jaffe, "Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What To Do About It,", this pwc report (page 50): http://www.pwc.com.nyud.net:8090/Extweb/pwcpublications.nsf/docid/EC6DE73A846581CE80256EFD002E41FB/$file/pwc_rethinking_european_ict_agenda.pdf, and in many papers that you can find by browsing Google Scholar for "patents": http://scholar.google.com/scholar?q=patents&ie=UTF-8&oe=UTF-8&hl=en&btnG=Search.

  Bayle Shanks
  San Diego, CA, USA