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The Economist on Patent Reform
ar1550 writes "The Economist recently posted an opinion piece on the state of patent systems, describing not just the mess that is the USPTO but flaws present in Europe and Asia. From the article, "In 1998 America introduced so-called 'business-method' patents, granting for the first time patent monopolies simply for new ways of doing business, many of which were not so new. This was a mistake." The article also describes the difficulty of obtaining legitimate patents. "
The article only presents one side of the picture, albeit, the slashbot side.
But, what about the other side? What was the motivation for allowing business method patents? There must have been some reasoning behind it.
Anyone?
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IMHO, this editorial piece is a strategic smoke screen to put the emphasis on "patent reform" in front of the growing movements that challenge the scope of patentable subject matter. In the recent Geneva Conference on the Future of WIPO, the USPTO, WIPO and US Trade representative all supported "tuning generic patentability criteria", while critics supported excluding software, information processing, gene sequences and vegetal varieties from patentability. Guess which has more chance to bring the system back to reason ? Guess which is supported by the big patent portfolio holders ?
As TFA seems to state, the principal problem in the patenting system is that it is too easy to get a patent granted on what, after a lengthy legal trial will probably turn out not to have been patentable. The difficulty is that patenting stuff is already a bit expensive, putting off people who aren't big corporations. So how can a better vetting system be introduced to force patent offices to look harder at each application for obviousness/prior-artiness?
The article suggests that competitors could perform this task if the application process were made more open. This makes the patent process somewhat similar to obtaining planning permission (putting up notices saying what you plan, and giving people a chance to object in some period of time).
One thing seems certain, that only if more patents are rejected by the patent office, will people file fewer frivolous patents. But as the system stands, the patent office has little incentive - they just want to collect their fee without too much hassle. Only by changing the system so that the patent office suffers each time a patent it granted is later found in court to be dubious, will they be motivated to improve the quality of the vetting procedure.
I'm not the first to propose this idea, but...
Today in the US, patents are submitted to the USPTO, where they are researched and approved or rejected. If approved, they are presumed valid, unless/until someone else challenges it and requests a review.
The USPTO is overwhelmed and in no position to accurately judge the validity of every one of these patents.
So why try? why bother reviewing them upfront? The USPTO could accept all patent applications, catalog them, make them public, but do not endorse them as valid until proven otherwise.
When patent conflicts arise, as they do today, companies can ask the USPTO to rule on the existing patents. At that time, all parties have a chance to supply relevant evidence to the USPTO about the patent's validity or invalidity.
The plus side is that the USPTO stops pretending it can deal with all this work effectively. It only spends effort on patents that companies think are worth fighting over (and before litigation).
The downside is that companies must publicly submit information about their patentable ideas without a guarantee that they will receive a patent. But, that is a healthy incentive to avoid spurious patents, which is missing today.
What do you guys think?
One could also argue that there is no need for this type of patent, there have always been innovative accounting methods, financial instruments or services, even without the protection a patent affords. However, teh counter agruments were that due to rising costs, it becomes increasingly harder to create this innovative ideas and processes. Further, one could say that those that create these processes work just as hard as those who create physical technology. Why discriminate solely on the basis of subject matter.
Again, another counter argument can be made. When determining 'the cost' to business, what does cost actually mean. Is it more costly to a single business, when there idea is not patentable? Is it more costly to business as a whole, where they are excluded from using a patented method?
Really, IMHO, there are no definite answers. But I just wanted to inject some of the thoughts which go into this type of patent.
For more info, see: Patent Law and Policy: Cases & Materials, Second Edition by Robert Patrick Merges
I wonder would the following simple addition to patent laws fix the bulk problem:
Basically, keep things as is, but limit the patent term to,say, 5 years. After that patent owner can extend it to the full 17 year term but make the extension EXPENSIVE (say, 40K per patent).. Basically, the idea is that 5-7 years of goverment protection should be enough to prove/disprove commercial viability of almost anything...And if idea is commercially viable, then 40K is not that much money, and if a patent is not viable, even IBM is unlikely to pay 40K for a useless piece of paper...
Of course, an (intended) side effect is that most companies will stop filing valueless patents.
(as 5 years is too short a term to bother and full term is too expensive)...The problem of submarine patents would simply go away...
It will burst but the timescales are not the same as for most other bubbles.
The difference is this: other bubbles work by inflating the prospects of future returns on investment, creating a pyramid scheme in which new investors are lured by the prospect of huge rewards while old investors sell out and actually make the rewards. When the pool of new investors runs out, bubble bursts and granny loses her savings.
The patents bubble is not based on this model at all. Rather, it's a scheme by which a small group of people have turned the law into a tool for extortion. As long as they don't extort more from the system than it can bear, the business of patents will continue. At a certain moment the tax that this creates on normal business activity will cause those economies which allow it to become uncompetitive and thus die.
The end-game for the patent players is to get a global hegemony because then uncompetitiveness does not matter any more. But this is highly unlikely: the advantages to small countries of having unfettered technology will outweigh any advantages of being compatible with the USA's "policies".
So we'll see about 5 more years of fighting for positions, then 10-15 years of ruthless extortion during which technology advancement suffers and stagnates, and then revolt by either government as they start to see the impact on economic growth and tax income, or by smaller to middle-sized businesses as they find themselves unable to operate normally.
A better parallel would be the monopolised telecoms industries in the west, which lasted for 50 years or so, and which caused serious hinderence to technological progress until they were dismantled by regulators.
The patent business will be dismantled around 2025, at the earliest. From 2010 to 2025, if you are a small independent technology producer you will have three choices:
1. illegality, black-market.
2. join a patent club and pay the costs (equivalent to merging with a larger business).
3. relocate to a patent haven such as Liberia.
Options 1 and 3 are pretty similar since any business using foreign software which violates patents will be subject to penalties.
And it won't be sufficient to say "this software does not violate patents", you will need a certificate of conformity, period. Like selling a car.
It's a sad prognosis for OSS, which is my main business, but I think it's inevitable. Money talks, and we are seeing a true gold rush here.
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The article references one of the traditional justifications for patents: that an inventor is granted a time-limited monopoly in exchange for full disclosure of the invention.
But with regard to software patents, particularly ones like Amazon's one-click patent, there are many inventions that are effectively self-disclosing: if you see that it is done, you know how it is done.
I wonder if it would be possible under U.S. patent law to challenge these patents on this basis? I strongly doubt it, but the very fact that such inventions are patented is a measure of how badly the patent system needs reform.
Ideas are not property, and patents do not grant property rights. They grant monopoly rights in exchange for something else. What is the "something else" in the case of things like the one-click patent? What are we, the public, getting that we would not get otherwise?
--Tom
Blasphemy is a human right. Blasphemophobia kills.
the only thing keeping us going is confidence in our economy
The only thing that has kept the economy going since the eradication of the gold standard has been its constituents belief in it. (Or more abstractly, it could be argued, its belief in itself.)
This is aided by the idea that the basic unit of the U.S. economy, the U.S. Dollar, is backed by the "full faith and trust of the government of the United States of America", whatever that means. (For one thing, it means that all Americans are insured for money in the bank for up to $100,000.)
Remember too, that Alexander Hamilton was an enormous proponent of the government operating in a deficit - he felt, among other things, that the debt of a government to its people would incur some accountability (no pun intended) beyond Jefferson's espoused "natural law". One could argue that a government's responsibility to its people is flexible and changing ("...but some animals are more equal than others"), but owed money is owed money in any monetary society, which helps keep the government in check (again, no pun intended).