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More Calls for Patent Reform
ibi writes "On the heels of the PriceWaterHouseCoopers report about the threat of SoftPats to innovation, comes a book by a Harvard B School and Brandeis economics professor about how broken the patent system is in general. In short their book argues that the entire system is a (stunned silence) scam. (They actually call it 'a creator of litigation and uncertainty that threatens the innovation process itself' instead but that's cause you don't get tenure for using words like 'scam'.) Interesting to see that its gotten so bad that a professor of Investment Banking at Harvard even thinks something oughta be done."
Does the Patent System Need an Overhaul?
By SABRA CHARTRAND
Published: September 27, 2004
SINCE 1793, the federal government has issued patents to inventors, giving them exclusive ownership of an idea as well as the right to prevent others from using it. Now some experts argue that achieving those rights stifles innovation. Two professors conclude in a new book that a couple of unrelated and seemingly innocuous administrative reforms of the patent system have caused a shift away from encouraging innovation in favor of exploiting patents largely for lawsuits. Josh Lerner and Adam B. Jaffe have written a book with a title: "Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What To Do About It," to be published in November by Princeton University Press.
Mr. Lerner, a professor of investment banking at the Harvard Business School, and Mr. Jaffe, a professor of economics at Brandeis University, trace this breakdown to the early 1980's, when a single federal appeals court was established to hear patent lawsuits, replacing 12 regional courts of appeal. Then in the early 1990's, Congress changed the patent office's financing, so the agency could pay for itself with user fees. From his home outside Boston, Mr. Lerner last week described the patent system, 20 years after the reforms, as mired in "the land of unintended consequences."
"Again and again in the patent system, we see people set out to do reforms with one thing in mind, but that have quite an unintended effect," he said. "The easier it became to get patents, the more people wanted to apply for them, and that led to a situation where examiners grappled with more patents to review, which led to them being pressed to do quicker reviews and a degradation in quality of patents issued." The patent agency has often struggled to keep up with the times. In recent years, the agency has confronted entirely new areas like biotechnology, software-related inventions, financial and business methods, Internet-based inventions and other information-technology innovations. Some of the changes designed to deal with these occurred amid extensive public debate. Others got little attention because they seemed like innocuous administrative reforms - like the ones that made patents easier to get, Mr. Lerner said.
But many of those patents caused a secondary reaction, he added. "The ability to litigate and expect to get substantial award from litigation increased," Mr. Lerner said. "So as a result we've got somewhat of a vicious cycle. Once you get one firm in an industry beginning a strategy of aggressive patent enforcement, it creates an almost inevitable response - an almost arms-race dynamic - where everyone else in the industry says, 'We better be doing the same thing.' " He suggested that these changes for the worse occurred because "there's a relatively small group of people in the D.C. patent bar, and they have a very powerful influence on how patent policy gets decided. There is a powerful incentive for them to keep a patent system that is complicated, and one that involves protracted, costly litigation." Also, Mr. Lerner said, businesses often fail to understand the importance of subtle changes in patent law.
"It is perhaps because of the complexity of patent issues, and because there is no long tradition of work by economists in this area, because a lot of corporations see it as second order relative to tax policy changes, for example, which directly affect their bottom line," he explained. "Patent policy has an indirect affect." The book lays out a strategy. "Our idea is that three things will potentially make a big difference," Mr. Lerner said. "First of all, this idea which may well have made sense in 19th century of a patent examiner being able to sit and in few hours figure out what a relevant technology is, and then go out and make a decision as to whether a patent should be granted or not, that really doesn't make sense in an era like today. "Second, to see the patent revie
Here's a relevent bit in the US constitution:
Unlike natural rights, people don't have exclusive rights to their "writings and discoveries" unless Congress grants it. The reason Congress grants that right is for the public good. If Congress chooses not to grant this right, it isn't taking anything away. It's just not exercising it's power to grant the right. And there's no "property" taken from the inventor in violation of the 5th ammendment.
-Dave