Once Again The Economist Thinks Patents Are Hindering Innovation And Need Reform

Patents

from the flip-flop-flip-flop dept

A bunch of folks I know who are focused on the problems of the patent system and who are pushing for patent reform have been eagerly sharing a recent Economist article discussing the problems of the patent system and how they’re hindering innovation and doing real harm. No doubt, it’s a good article that gets to the heart of many of the problems with the system. Some snippets:

Patents are supposed to spread knowledge, by obliging holders to lay out their innovation for all to see; they often fail, because patent-lawyers are masters of obfuscation. Instead, the system has created a parasitic ecology of trolls and defensive patent-holders, who aim to block innovation, or at least to stand in its way unless they can grab a share of the spoils. An early study found that newcomers to the semiconductor business had to buy licences from incumbents for as much as $200m. Patents should spur bursts of innovation; instead, they are used to lock in incumbents? advantages.

[….]

One aim should be to rout the trolls and the blockers. Studies have found that 40-90% of patents are never exploited or licensed out by their owners. Patents should come with a blunt ?use it or lose it? rule, so that they expire if the invention is not brought to market. Patents should also be easier to challenge without the expense of a full-blown court case. The burden of proof for overturning a patent in court should be lowered.

Patents should reward those who work hard on big, fresh ideas, rather than those who file the paperwork on a tiddler. The requirement for ideas to be ?non-obvious? must be strengthened. Apple should not be granted patents on rectangular tablets with rounded corners; Twitter does not deserve a patent on its pull-to-refresh feed.

Patents also last too long. Protection for 20 years might make sense in the pharmaceutical industry, because to test a drug and bring it to market can take more than a decade. But in industries like information technology, the time from brain wave to production line, or line of code, is much shorter. When patents lag behind the pace of innovation, firms end up with monopolies on the building-blocks of an industry. Google, for instance, has a patent from 1998 on ranking websites in search results by the number of other sites linking to them. Here some additional complexity is inevitable: in fast-moving industries, governments should gradually reduce the length of patents. Even pharmaceutical firms could live with shorter patents if the regulatory regime allowed them to bring treatments to market sooner and for less upfront cost.

Good stuff for the most part. Amazingly, the article even tosses out the idea that perhaps patents should be ditched entirely — and notes that back in the 19th century, the Economist itself argued against any patent system at all. However, it walks itself back from that edge pretty quickly:

One radical answer would be to abolish patents altogether?indeed, in 19th-century Britain, that was this newspaper?s preference. But abolition flies in the face of the intuition that if you create a drug or invent a machine, you have a claim on your work just as you would if you had built a house. Should someone move into your living room uninvited, you would feel justifiably aggrieved. So do those who have their ideas stolen.

That’s a weird way to reject its own idea, because patents aren’t about “feelings,” and the analogy of someone moving into your living room makes no sense, given the difference between rivalrous things (your living room) and non-rivalrous things (your ideas). And, indeed, the article defaults into the worst kind of patent support: the idea that patents are used to stop people from “copying” ideas, when that’s almost never the case (it’s almost always independent invention).

But the really odd thing about this is that the Economist actually seems to keep changing its position on patents. Back in 2010, it had a similar article arguing that the patent system was holding back innovation and that it needed serious reform to get rid of “frivolous” patents — including those for business methods and software. But then, oddly, in 2011, the very same Economist… argued we needed more patents and that they should be approved faster. That article bizarrely argued that approving more patents would undoubtedly lead to more jobs… based on absolutely nothing. And then… just months later, the Economist, once again, argued they were hindering prosperity.

So, yes, it’s great that the Economist is taking on this issue, but seeing as the magazine (which calls itself a newspaper) has a history of bizarrely flip flopping on the issue, it’s still a little difficult to take it seriously.

Filed Under: innovation, patent reform, patents
Companies: the economist