The Wall Street Journal Online just published an article titled Why Technologists Want Fewer Patents, which will apparently appear in the June 15, 2009, edition of the paper on page A13, under the heading “Opinion.” The article discusses the US Supreme Court agreeing to hear Bilski v. Doll, which will decide the fate of at least some business method patents, and may have significant implications for the patenting of software as well. The article does make one enormous error though, when it says that each year there are 500 million patent applications filed with the United States Patent and Trademark Office. This is obviously a mistake, and one that will likely not strike many as over the top. In reality, the USPTO has never had more than 500,000 applications in a single year. In fact, the largest number of applications ever filed were 495,095, which was the total filed during fiscal year 2008. During fiscal year 2009 there will likely be between 450,000 to 475,000 applications, so the Wall Street Journal op-ed page is off by several orders of magnitude. In my opinion this is quite problematic though because people who don’t know any better will read it and believe it. People will form beliefs based on what is clearly a ridiculous number of patent applications being filed, but the trouble is the Wall Street Journal claim of 500 million patent applications per year is off by a factor of 1,000.
I realize I am making a big deal out of something that most won’t care about, and I am certainly not perfect myself. I make mistakes like everyone else does, but when you are the paper of record in the United States and make a fundamental mistake like this I have to ask myself what else is being said that is wrong in the paper? In areas where I am intimately familiar, the popular press, including the Wall Street Journal, gets things wrong as often as they seem to get them correct. With respect to certain topics in the patent field I would even say that the popular press gets things wrong far more often than they get them right. This is extremely troubling. The patent system is being assailed from all directions, and although it should not be the case, people believe what they read. This is particularly true when reading an otherwise reliable source like the Wall Street Journal.
For those who might not believe me, allow me to quote the Wall Street Journal story:
The Patent Office now gets some 500 million applications a year, leading to litigation costs of over $10 billion a year to define who has what rights. As Judge Richard Posner has written, patents for ideas create the risk of “enormous monopoly power (imagine if the first person to think up the auction had been able to patent it).”
Also troubling is the quote from Judge Posner, who is considered to be a law and economics expert by many. I have to tell you, if Judge Posner really said what he is quoted as saying I have lost a lot of respect for him and I will never look at him as an expert on economics. The reality is that a patent does not grant a monopoly to anyone. A monopoly presupposes that there is a market in the first place, and a dominant player in the market in the second place. A patent neither ensures that you will have a dominant place in the market, nor does it guarantee that there will even be a market. If consumers are not interested in buying a product or services there is no market, and the sad reality is that for the overwhelming majority of patented inventions there is no market at all, so there could never be a monopoly, unless of course Judge Posner thinks it is possible to monopolize something that doesn’t exist.
I for one am sick and tired of hearing the purely fictitious argument that patents create a monopoly. Patents do nothing of the sort, and anyone who is fair minded and informed knows that. Patents are extremely fragile, but no one ever wants to talk about that or even acknowledge this completely true and verifiable statement.
Let me make this as simple as I can. Lets say that you have a patent on an ordinary Styrofoam coffee cup. Then after you get your patent issued I file and receive a patent on an improvement. This improvement I patent is an ordinary Styrofoam coffee cup with a lid that has a hole in it so that you can drink out of the cup without spilling it all over yourself. You own the base invention, and I own a substantial improvement. I cannot make, use or sell a cup with a lid, but neither can you unless you obtain my rights through license or acquisition. If you don’t want to do a deal, fine. Once your patent is expired I will simply start making, using and selling your cup with my lid, preventing you of course from making, using or selling a cup with a lid, because after all, the lid is mine.
The truth is that having a patent is great, but having someone else block you and prevent the improvement of your own invention is a real detriment to acquiring a patent and then sitting around doing nothing. Patents don’t harm innovation, they foster innovation because if you want to keep your patent portfolio from being poached by someone, like me in the above example, you need to continue to advance. If you fail to continue advancing your patent rights, others will advance it for you, thereby blocking you from making improved versions of your own invention. So whether you continue to invent to keep out poachers, or you sit on your laurels and allow me and others to improve your invention, improvement leads to rights and the possibility of rights cause competitors who did not win a patent on the base invention to constantly try and improve and advance the invention forward. This is exactly what the founding fathers intended to set up, a system where you can have exclusive rights, but rights which are fragile and susceptible to poaching by others.
Those of you who want to say patents create a monopoly, and those of you who want to say patents harm innovation, you really should get a clue before you criticize something you clearly don’t understand. As for those who think 500 million patent applications are filed each year in the US, you might want to check your facts and do a little more research, or perhaps stick with writing things you understand. Getting things wrong by a factor of 1,000 shows you don’t know enough about this area to even appreciate you were way off base, and those who proofed the article didn’t understand either. With a basic and fundamental mistake like this how can anyone take the remainder of the article serious?