Infographic: How patents hinder innovation

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Patents may have been created to help encourage innovation, but instead they regularly hinder it. The US Patent Office, overwhelmed and underfunded, issues questionable patents every day. "Patent trolls" buy too many of these patents and then misuse the patent system to shake down companies big and small. Others still use patents to limit competition and impede access to new knowledge, tools, or other innovations.

It’s no wonder that small businesses and individual inventors find it almost impossible to make the patent system work in their favor, often leaving them without any defense against competitors with giant patent arsenals and litigation budgets.

How Patents Hinder Innovation - an EFF infographic

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8 Comments

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Steve Stites | March 7, 2012
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I think that we should make a distinction between software patents and other types of patents. Software is covered by both copyright and patent law. If we abolish software patents then the existing, well established copyright protection for software works very well. The intellectual property environment for software will be vastly improved if we abolish software patents and only use copyright.

Other fields that have patents do not also have copyright. If we abolish patents all across the board then many areas of intellectual property would have no intellectual property rights at all. The only field other than software that I think would benefit from abolishing patents is patents on genes. For every other field I agree that patent reform without entirely abolishing patents would be the best approach.

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Steve Stites

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Christopher Brown | March 13, 2012
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As a software developer and holder of multiple patents, I wholeheartedly agree that software patents should be eliminated, retroactively. My code is already protected by copyright; patenting the underlying algorithm seems only an unnecessary hindrance to innovation (none of my patents relate to software).

While I agree that further patent reform is necessary, what I would propose in the short-term is a simple 'rule' to be applied to all patents - that the maximum amount of money a patent holder can be awarded in an infringement case is no greater than the reasonable expectation of what the patent holder could have earned had the infringement not occurred. In other words, unless the infringement results in real monetary damages, there is no reason for the inventor to receive any monetary reward. Put another way, no inventor should be able to receive more through litigation than what he or she could have received through direct commercialization or licensing of the invention. This would not only eliminate 'patent trolls' (since a troll is, by definition, not engaged in direct commercial activity and therefore could not show actual monetary damage from the infringement) but would also result in 'infringement' being very narrowly defined; infringement itself would be insufficient to sue, the patent holder would need to show that reasonable monetary damages resulted. Without the ability to show actual damages, or that blatant theft of intellectual property had occurred (a potentially criminal offense) the infringement would simply be considered 'fair use' and not restricted. In this way, the patent would protect the inventor seeking to commercialize a new product or technology, but would not create an incentive for trolls and would not unnecessarily hinder innovation or fair use of new ideas.

This seems to me to be a relatively simple way of 'tweaking' existing patent law that would eliminate trolls, reduce patent filings (by reducing the monetary value of a patent) and the risk of inadvertent infringement, and encourage more rapid innovation by clearing the minefield of existing but not-commercially-viable patent claims.

Patents can protect their inventors without hindering innovation, if the patent's sole purpose is to protect the inventor's commercial endeavors from his immediate competitors (which I believe was the original point of the patent process 200 years ago) and allow the inventor to generate profit through his or her own actions and innovations. Beyond that, however, all ideas should be open to fair use.
infringement

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Erick Robinson | March 11, 2012
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Good point. This assumes that no patents are valid or worthwhile. Many inventors need the patent system because it is their only chance against large corporations. Further, companies need patents to protect their technology against competitors. That said, there are certainly some bad patents out there, and the percentage of such patents is higher in the software realm.

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wsc | March 13, 2012
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<cite> [Erick Robinson] "Many inventors need the patent system because it is their only chance against large corporations."</cite>
No inventor can afford patent "protection" nowadays. Patent, in other words "right to hire lawyers, who will sue infringer", valid worldwide, costs you around one <strong>million</strong> dollars (WIPO way; for patent's life). Patent can be filled separately, country by country - ransom then doubles though. Now patents are "large corporations" weaponry <strong>against</strong> sole inventors and startups, mainly.

Being lawyer's real el dorado too. Patent filling, be it good or bad, be it novel or trivial, be it about something important or about square wheel - always pays the lawyer. 100.000 fillings x circa 40.000USD (WIPO, 1st). Of that, some 10 (ten) of granted patents will ever pay a dime to sole inventor, some 100 (a hundred) will pay a grand to the "investor", who "invests" money in filling, because inventor has no 40k to burn. Some thousand will help one "big corpo" to fight, or truce, with other "big corpo".

Anyone who thinks, that world's 50k lawyers, living on that system and sucking from the industry over $10 billions in legal fees yearly, will ever let it change is IMO daydreaming.

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Colin Hope-Murray | March 13, 2012
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I agree with both comments. What is important is the thought behind the measure (patent or copyright) which is to nurture and protect, to which the words "through to maturity" or an equivalent limitation ,may be an appropriate addition. All too often we get fixated on the measure, and apply binary support, without going back to the originating issue that the measures were meant to address.

Thankfully Open Source licensing offers an alternative to the patents route, and by providing public copyright negates the legal, financial and innovation constraints that patents predominantly attract.

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Unidentified | March 13, 2012
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Companies are not allowed to defend themselves, they're required to either hire lawyers, or suffer automatic default-judgement against them.
Lawyers will not take on any patent cases without a $20k up-front retainer, and a warning that a trial will cost $100k+. (that's *after* the $100k+ spent reaching that point).
The system is broken.

I *own* software patents, and I'm ashamed!

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Paul Sherman | March 13, 2012
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A lawyer who tells you that a trial will cost $100K+ is lying to you. On average, a patent litigation suit costs $2-4 million and if you are dealing with a Patent Troll, double that. The reason for the increased costs with Trolls is that they have very little incentive to settle. They do not want cross licensing agreements and do not have patent related earnings that can be attached in a countersuit.

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RG | May 1, 2012
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All of these comments are great. They seem to present a logical case for change in the patent system. Can these comments be used; presented to the legislators, US Patent Office, etc. to fight for a clear and clean renovation of the current patent laws to benefit inventors and software developers in the way the original laws were intended to? In other words who will lead the fight!

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