Today’s Wall Street Journal Online carries a very interesting article that should also be on page 14 of the printed edition, titled "Patently Absurd". The article shows how the patent system, once set up to further innovation and strengthen economy, now does the opposite — and is becoming a threat to the U.S. economy.
Starting from the patent litigation of NTP against BlackBerry maker Research in Motion (RIM). NTP seeks "$450 million or more in payments to" from RIM, while "NTP offers no product that competes with BlackBerrys. It sells nothing at all."
As Wall Street Journal further writes:
Patents are supposed to protect intellectual property and spur
innovation, and once upon a time in America they did. But like
everything else the legal system touches nowadays, U.S. patent law has
been hijacked so that it now operates nearly in reverse, deterring
research and penalizing innovation.
Testifying before Congress last June, Josh Lerner, a Harvard Business
School professor, summed up the problem: "In the past two decades, the
U.S. has strengthened patent rights, while weakening the standards for
granting patents." The result is that the patent system is fast
becoming a detriment to U.S. competitiveness, not to mention basic
fairness. So if your BlackBerry ever does go dark, don't curse the
company. Blame the lawyers.
WSJ also quotes other cases, involving BCGI and even Microsoft, which has recently fallen victim to the patent monstrosity it helped unleash in the U.S. — and still does outside the United States.
What WSJ fails to recognise is that the basic weakness is not only in the way patents are granted, challenged and enforced, although the U.S. system (like many others) has severe weaknesses in these areas. The fundamental weakness is in overburdening the patent system, by letting it reach outside the areas in which it can be a useful tool by extending it to algorithms, vague ideas, business models and software.
All of these areas do not have hard physical demarkation lines, one of the necessary prerequisites for patents to be useful. All software patents apply to all areas in which software might be used, not just the area for which a certain application was originally concieved. A patent that originally covered game console software suddenly becomes an extortionist’s gold mine because it happens to cover an algorithm that nuclear power plants are critically dependent upon.
Also, software incorporates thousands of incremental ideas, each of which becomes effectively blocked innovatively and economically for decades when patents are granted. Since software patents require nothing but a lawyer to write highly complex descriptions of vague ideas which one might concieve possible one day, even if one has no idea how to implement them at the moment, companies like NTP are spreading patent minefields in our collective future, to be triggered by the first company to build successful business on an innovation that the patent holder was not capable of achieving themselves.
Only strong and effective limits on the patent system can avoid the problems we experience today. That is why we need to push back the limits of patentability to where the patent system can be useful, and revise the working of the system to do an effective job at furthering and promoting innovation.
Unfortunately, the global trend — mainly pushed forward by the United States, often supported by Japan, European Union and Canada — still appears to be geared towards a further extension of the patent system and thus a worsening of the situation. The blockade of the United States to establish a WIPO Evaluation and Review Office (WERO) in the Development Agenda (DA) discussion is a very good indication of this.
The WERO is the single most important part of the DA discussion, and while the original Friends of Development proposal called it "WIPO Evaluation and Research Office", I believe "WIPO Evaluation and Review Office" is more to the point. We need a review of these policies on a global level before mindlessly copying the U.S. system to the rest of the world.
As usual, it is the weakest on whom the price is most taxing and who suffer the most from injust and ineffective systems. If the United States are already feeling a negative economic impact of the system, how do you think the economy of, say, Namibia will be doing with such a system?