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. "

Comments

One-sided article

[stratjakt]

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?

Re:One-sided article

[Anonymous Coward]

Considering you're an obvious troll (you used the word 'slashbot'), I debated whether to answer you..

What was the motivation for allowing business method patents?

Someone convinced the Supreme Court that a business method was "science", and therefore worthy of patent protection.

The problem this faces is that a business method, by definition, is it's own reward.

Patents are supposed to further innovation by rewarding the inventors. The argument is that if you didn't reward the inventor, then they would not spend the time to make the invention.

But a "business method" that actually works is it's own reward - no further incentive is required, because the "inventor" gets (wait for it) *BETTER BUSINESS*. There is absolutely *NO* benefit to society for disallowing others to use said 'invention' without paying their competition a license fee.

In this case, allowing patents on "business methods" is actually *retarding* innovation, because it prohibits someone from independantly coming up with a similar method.

Re:One-sided article

[Scott Wood]

If I spend time and money devloping somthing why shouldn't I have a way to protect what I create?

The ability to protect what you create is not a right; it is a privilege granted by the public to the creator for a specific purpose. If the public does not feel that a particular sort of creation is sufficiently valuable as to warrant protection, then you don't get to protect it. Keep in mind that one of the major reasons for patents is to prevent secrecy from being used as an alternative; it's a lot harder to keep business methods secret, and thus the public is not getting as much out of granting such patents.

So I'm writting software for buisness methods. A double whammy. According to a number of people on thee forums I shouldn't be able to make money at what I do

You can protect the software itself with copyright. It's the methods themselves that require a patent to "protect".

Patent bubble will lead to burst

[IgD]

I see this patent buisness model as no different than the other booms (biotech, dot com) that all busted. Plain and simple, the patent business model means making money without any productivity. Instead of Network Solutions, we will have Patent Solutions so you can patent the 100 different ways to breath. There is no way this business model can succeed. Reform is coming sooner or later.

How to benefit the consumer.

[rice_burners_suck]

I have an interesting idea: Pass new legislation that makes it ILLEGAL for an individual or small business with less than 1000 employees to obtain a patent. Then, only large businesses can obtain them. Further, some additional clauses in the legislation will require that such small businesses, if they wish to license the patent, will have to pay additional monies besides the license fees, such as additional taxes, penalties, and fines, which the government will spend on fancy furniture and catering for patent office employees. Any patent application filed by a corporation with 20,000 employees or more, or at least 5 billion dollars in liquid assets, will be automatically approved. Corporations smaller than this will have to go through a patent approval process, the complexity and expense of which will be inversely proportional to the size of the corporation. Thus, a corporation with the minimum 1,000 employees will have to endure the most difficult patent approval process, and a corporation with, say, 10,000 employees will go through a process only half as difficult.

This will balance out the patent system and make the system fair for all involved. Clearly, such a patent system will benefit the consumer.

This a nice smoke screen

[Balaitous]

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 ?

Crazy idea: accept all patents

[srowen]

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?

Good News

[dfn5]

business-method' patents, granting for the first time patent monopolies simply for new ways of doing business

I'm going to patent the business model of treating employees like shit. Then I'll sue every company for patent infringement.

Re:Who wrote it?

[trigeek]

Typcially, the name "The Economist" is regarded as qualification enough. It made quite a row when they endorsed John Kerry for President, considering their staunchly fiscally conservative point of view.

Actually

[Prince Vegeta SSJ4]

Business Method Patents have historically been frowned upon. Patents 'traditionally' revolved around a single theory - that they were meant to protect actual devices or physical tech.

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

Re:Who wrote it?

[goldspider]

"It made quite a row when they endorsed John Kerry for President, considering their staunchly fiscally conservative point of view."

Not too surprising, really.

Now I'm no economist, but when it comes to the balance sheet, "Tax and Spend" makes more sense to me than "Just Spend".

How to evaluate the patent system

[swillden]

The article points out that we need a way of evaluating whether or not a patent system is meeting its goals of fostering innovation. The article suggests:

Patent offices also need to collect and publish data about what happens once patents are granted--the rate at which they are challenged and how many are struck down. This would help to measure the quality of the patent system itself, and offer some way of evaluating whether it is working to promote innovation, or to impede it.

That's a good idea, but I think there's a better way to determine if the patent system is successful at promoting innovation: analyze how the patent database is used. The stated goal of the system is to provide inventors with a short-term monopoly in exchange for public disclosure of their inventions, in order to spur more invention. That makes sense, right? If you get good ideas out in the public where people can see and build on them, you'll generate even more ideas, some of which will also be good. Ideas spark ideas.

This implies that if the patent system is working, you should see inventors perusing/searching the patent database on a regular basis, in search of good ideas to spark their thinking, or in search of solutions to specific problems they're trying to solve in their own inventions. I imagine a scene something like this:

Engineer: Hey, boss, you know that tricky database search problem we've been trying to solve? I just spent a few hours searching the USPTO site and I came across patent #123456789. It's a *perfect* solution! It'll not only address the problem we had, but it will make our product even more flexible and easier to use.

Manager: Great! Get me the contact information for the patent holder and I'll contact them to check into licensing terms. If they're reasonable, this could save us a bundle in development costs. We've put several hundred man-hours into this problem already. Maybe the patent owner will have an implementation they'd like to license us, too.

Engineer: Sounds good. I'll tell Jim to shift his focus to tracking down that nasty memory leak, on the assumption that the search problem is solved. Meanwhile, while I was looking through the patent database I also came across another patent which we can't use, but which gave me another interesting idea...

Does anyone use the patent database like this? No. Especially not with software patents. In fact, in every corporation I know of the attorneys explicitly tell developers *not* to search the patent database, as it's generally better to remain ignorant, both to avoid allegations of "willfull" infringement, and also because it's just a waste of time. Most patents are contestable anyway, and even for the ones that might hold up in court it's generally more cost-effective to just cross-license using your own patent arsenal.

I think the measure of the patent system should be whether or not its required disclosures are observably fostering innovation. If not, it's broken.

Re:Who wrote it?

[yerfatma]

I believe the Economist politically has a similar readership demographic to ./ as well.

I believe you might be confused. My father subscribes to The Economist. I read /. While you don't qualify your perception of /.'s political "demographics," I would suggest The Economist is somewhat more pragmatic and a little further to the right than /.

I do enjoy the idea random /. posters would be questioning the bonafides of The Economist. I realize they only print on dead trees and they have a weird editorial policy you're unfamiliar with, but last I checked the had a slightly higher barrier to entry than the hoops one has to jump through to post on /.

Re:Who wrote it?

[Hatta]

A lofty article without some kind of qualifications to back up is pretty useless.

It's the ideas in the article that matter, not who said them. Appeal to authority is a common fallacy.

Re:Who wrote it?

[edremy]

It made quite a row when they endorsed John Kerry for President, considering their staunchly fiscally conservative point of view.

I think you actually mean "It made perfect sense that they endorsed John Kerry for President, considering their staunchly fiscally conservative point of view." Bush is a walking fiscal nightmare- no intelligent businessman should support someone whos entire economic policy amounts to "Charge it!"

The Economist's endorsement of Kerry was the most damning commentary on Bush's presidency I've seen. The election cover was sheer brilliance: "The Incompetent or the Incoherent". I love the magazine- it's the last bastion of intelligent conservatism out there.

But then again, don't mind me, I'm just bitter. I didn't leave the Republican party- it left me.