Forbes on The Patent System

Last week on the Forbes website Peter Cohan took a look at five reasons why America should scrap the current patent system. Notably, Cohan's analysis regarding how the system is currently being used are reminiscent of frequent contributor Jerry Newhall's thoughts on the New York knock-off bag ban from last year. From the article:

1. It does the opposite of its original purpose. The process by which Phillips was stripped of the fruits of his labor — that lets Apple profit from Siri – is a compelling example of how companies with deep pockets can turn the patent system into a weapon that accomplishes the opposite of its original purpose. Instead of allowing Phillips to profit from his invention, it let Nuance buy it after diverting Vlingo’s R&D budget to patent lawyers.

2. It rewards vague concepts rather than specific prototypes. Too often, patents are granted for general concepts described by inventors and with enough money to pay litigators, those concepts can be used to invalidate the work of engineers who build those concepts into real products. For example, the Times describes Apple’s Invention Disclosure Sessions in which, beginning in 2006, Apple lawyers started listening to engineers describe vague concepts — such as “software that studied users’ preferences as they browsed the Web” — and turned them into patents. Since genius is 1% inspiration and 99% perspiration, we should have a patent system that tilts the bulk of the rewards to those who do the perspiring.

3. Overworked patent examiners can’t do their jobs right. The Patent Office’s 7,650 examiners received “more than half a million applications last year, and the numbers have kept climbing,” according to the Times. The effect of this is that patent examiners have “two days to research and write a 10- to 20-page term paper on why I think [a patent application] should be approved or rejected,” as an experienced patent examiner told the Times. The standards for granting a patent may be sound but the Patent Office lacks the people to apply them.

4. Preemptive patent filings by big companies crush innovators. Apple’s application for patent 8,086,604 — now known as the Siri patent even though Vlingo and Nuance were not battling over it — was rejected nine times before Apple’s 10th tweak won it the coveted patent. This is just one example of how “large companies with battalions of lawyers can file thousands of pre-emptive patent applications in emerging industries,” according to the Times.

5. It diverts money from innovation. It is impossible to know how much better off consumers would be if the money spent litigating patents had been spent on paying engineers to design and build innovative products and services. But the $20 billion spent on smart phone litigation is nearly 23 times Apple’s 2011 R&D budget of $876 million.

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