Patent system in desperate need of reform

15 Aug

If it’s not a riot breaking out somewhere, it’s a patent dispute. And, just as there is likely a common cause behind these increasingly frequent episodes of civil unrest, so too is there obviously an underlying problem that is causing technology companies to sue each other on a weekly basis. With patents, it’s a case of the system being supremely outdated and messed up.

Reuters had a good story over the weekend that summed up what’s going on, with a specific look at how Apple is fighting a particularly effective patent war against Google. Apple recently won an injunction against Samsung that could prevent the Korean company from selling its Galaxy tablet, powered by Google’s Android, in the European Union. Samsung, in turn, is trying to get a ban on the sale of certain Apple products in the U.S. These are just two examples in a long list of similar patent skirmishes, going back several years.

To anyone besides patent lawyers, the escalating situation is absurd. When there are publicly traded companies that make revenue in no way other than suing for patent infringements (aka the patent trolls), there is obviously a problem.

As the Reuters article points out, frequent patent battles are bad for innovation because they can hold companies back from developing or launching products. Things are getting so bad that inventors are having to figure the inevitable legal costs – which will occur whether they infringe or not – into the prices of their products. That raises costs for consumers. Worse still, it can also put a chill on smaller inventors or companies who don’t have the funds to fight such battles.

Patents were originally created to encourage innovation. If an individual or company invented something, their government gave them a monopoly on that invention for a period of time in exchange for sharing it with the public. A patent simply bars anyone else from using or selling the invention, unless they get the rights – usually for a fee – from the patent holder.

Over the past century, patent law has become ridiculously complicated for a whole host of reasons, not the least of which is that the rules tend to differ by country. Moreover, every gadget contains scores of different technologies – a typical cellphone of a few years ago, for example, was comprised of more than 10,000 different patents. Today’s most advanced smartphones contain considerably more.

Both facts suggest that technology has far surpassed the law’s ability to govern it, given that the patent system was thought up when inventions were very simple and not multinational. Big-time reform is needed.

One possible, if somewhat radical, idea to start with might be to limit the ability of individuals and corporations to transfer or sell patents, especially in the event of bankruptcy. Google came off as a bit of a cry-baby when it complained about losing out on a sale of Nortel patents to a group of its rivals, including Apple and Microsoft, but the company was right in a way. Such patent sales can easily turn into anti-competitive gamesmanship.

While companies should still be rewarded with patent monopolies for their inventions, there really seems to be no reason to keep those protections alive if the company goes under. Doing so only creates an asset that can be horse-traded and then used to hold back other still-solvent companies. What would be the harm in allowing patents from bankrupt companies to be dissolved and then placed into the public domain? That might actually accelerate innovation and improve competition.

There is some urgency to simplify the system, what with the incorporation of technology into the human body on the horizon. Whether it’s mechanical appendages, stem-cell technology or even just bionic contact lenses, we will soon be blending with patented inventions. A human body containing 10,000 or more patents, like the humble cellphone, is a near-term possibility.

When that happens, the patent trolls won’t just be going after big, multinational corporations, they’ll be coming for you and me.

UPDATE: Wouldn’t you know it, Google has gone and bought Motorola for $12.5 billion in what it is widely seen as a defensive move in the patent wars. The fact that any company would have to make such a large acquisition (the deal increases Google’s employee headcount by about 60%), and the fact that this is far from the only large expenditure Google will have to make to fight such battles, really underlines just how messed up the system is.


Posted by on August 15, 2011 in apple, Google


10 responses to “Patent system in desperate need of reform

  1. Marc Venot

    August 15, 2011 at 3:53 am

    If patents become worthless in case of bankruptcy I guess we will not see again the meteoric rise of Nortel (at its height, Nortel accounted for more than a third of the total valuation of all the companies listed on the Toronto Stock Exchange).
    In the past the strange button (start/stop) at the bottom left on Windows was a direct consequence of a patent by Apple on the desktop. Now Microsoft came with a difference way to show the various “icons”.
    Why those litigations are “continental” (or regional)?

  2. Pavel

    August 15, 2011 at 8:42 am

    If you are against “patent trolls”, you are against patents in general. Everyone keeps pointing out that they are not producing anything, but everyone keeps forgetting about the small firms and independent inventors who would have hard time collecting royalties from large companies. They can sell the patents to a “patent troll” and let them do the job. “patent trolls” are not less legitimate than debt collectors or debt buyers.

    • hfiguiere

      August 15, 2011 at 11:28 am

      Nice Kool-Aid you drink buddy.

      “Patent trolls” are akin to the mob that knock at your door to ask you to pay for protection you don’t need… If you don’t then they will make sure you want protection after they left. Something like that.

      And the patent system is also broken when patent offices grant patent on ideas and concept, even when said concept have been in use prior. These are not invention.

  3. Alexander Trauzzi (@Omega_)

    August 15, 2011 at 9:13 am

    To anyone who actually understands how programs work, software patents are about as absurd as patenting air.
    The idea that you can take any simple operation and deem it “novel” by formally submitting a document saying you did it is ridiculous.

    People who support software patents can only do so blindly or willingly through an affinity for the greed that motivates them. It only takes a glance at some of the wording in software patents to see that they are just a cluster-bomb approach to anti-competitive behaviour.

    The only way to fix this is to ban the patenting of software. It is in fact completely redundant given the copyright system which – despite it’s own shortcomings – is a better starting point to ensure that the actual work isn’t abused, rather than the system.

  4. bwalzer

    August 15, 2011 at 11:15 am

    I wonder if it might be time to stop worrying about software patents in particular. The granting of software patents now seems to me to be a symptom of the general problem. That problem is that patent offices (the US one in particular) are allowing the patenting of things that are not inventions.

    Back in the day you could not get a patent on a process to create a complicated hole in wood if that process involved a jig saw. The actual invention would of been seen as the jig saw. The shape of the hole would of been considered an implementation detail. In the same way a program is just an arbitrary set of instructions to the invention sometimes known as the general purpose digital computer.

    So a ban on patents that do not involve an invention should be enough… Note that the problems of patent offices in other countries are often problems for us in Canada. It is fairly well known that the easiest way to obtain a Canadian patent is to first get a patent in the USA. Then it is relatively easy to use the existence of that patent to get a more or less identical Canadian patent. This tendency to respect the IP decisions of other countries means that the horror described in the post is spreading to more places.

    The eventual solution may have to be an international one. In the meantime we should adopt an isolationist approach to patents in Canada until things get better out there…

    • petenowak2000

      August 15, 2011 at 11:23 am

      I really like your suggestion. Perhaps if patent offices had higher standards there’d be fewer problems.

      • Alexander Trauzzi (@Omega_)

        August 15, 2011 at 1:36 pm

        I’m thinking that there’s really no need to patent software. If you’re worried about someone using it without permission, copyright and licensing is already there to serve the purpose.

        Can anyone think of an example of a valid software patent?

  5. Pablo

    August 16, 2011 at 8:23 pm

    Patent litigation is a solid business plan, period ! We do not require a reform with patent reform as I believe theft should be punishable, whether a chocolate bar from 7-Eleven or a patent infringement on a hardware device. Perhaps the culprits should have their fingers cut off, this method works well in the Middle East.

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