Posts Tagged: "patent system"

Libertarians believe in property rights and government protection of those rights as one of the few necessary requirements of government. Ownership of property and free markets leads to competitive production and trade of goods, which in turn leads to prosperity for all of society. Intellectual property is property like other forms of property, and so government must protect IP as it protects other forms of property because it too leads to competition and trade and prosperity. Libertarians should encourage a strong patent system and object to any “reforms” that limit intellectual property ownership or introduce more government regulation than is required.

Bruce Kisliuk: ”Those with more resources have some advantages in any litigation. That’s one reason a patent right is important, it can level that playing field a bit. Which is why I think the system will survive, maybe not thrive as some may wish but will survive, because you will still be able to protect. Technological progress marches forward and people aren’t going to sit and wait. So if you need patent protection you’re going to get what you can and you’re going to make sure you have a solid disclosure and work through the system as it stands when you’re working through it. To the extent you can try to put yourself in a position to be able to move left or right should the sea change. That’s the best, I think, anyone can do.”

Bruce Kisliuk: “I think over time that pendulum will swing back. I think the nature of the business is that it’s likely going to come by successive case law decisions, I think we’re going slowly see things come back. I think clarity on where the line is on eligibility will get firmer, and I think there will be a stronger appreciation of patent value. It might take some time, maybe by an example — and I hate to think this –because I don’t necessarily want something like this to happen, but government often reacts to disasters. They don’t necessarily see the subtleties. They wait until there’s a disaster and then they react to the disaster and I’d rather not see a true crisis, I’d rather see some course-correction.”

Jay Walker: “Any marketplace that cannot make a deal without filing a lawsuit in federal court is in deep trouble… The results of this mess are sad and unpredictable. There is less incentive to create long-term intellectual property. There is certainly more incentive to infringe if you can figure out what infringement is. There will be more secrecy and there will be less innovation or certainly a very different kind of innovation.”

Consumers benefit most when patents are strongest and act to block actors. When competitors are blocked that means they cannot simply copy and flood the market with knock-offs or products that at their core are essentially identical. Competitors that are blocked by strong patents have a choice. Either they ignore the patent rights and infringe, which is sometimes the choice made particularly when a small company or individual owns the patent and it is believed they can be bullied. Alternatively, competitors must figure out how to design around the patents in place and find new, creative ways to do what they want to do. When patents are designed around that is when paradigm shifting innovation can and does happen. Unfortunately, thanks to the Supreme Court and Congress we have a patent system that today incentivizes copycats and bullying of innovators.

Ashley Keller: ”I am mildly bullish, because we’re coming from such a low point that it is likely to improve from here. We just talked about the Supreme Court and the willfulness case. I also think that Europe’s unitary patent system is going to be an eye-opener, because it has the potential to be better than our system’s status quo. Competition is a healthy force, and the new system will drive innovation over there. People are going to pay attention to that, and as a consequence, it may improve things over here.”

It is quite surprising to see that with all of the work being done to strengthen the patent systems across Europe with the creation of the Unified Patent Court, we see The Economist recently publishing a number of authorless articles calling for dramatic curtail of patent rights – on the edge of abolishment… We are currently witnessing some patent owners enforcing their patent rights exclusively using the European courts, some of these are companies based in the United States. Now with the Unified Patent Court on the horizon, it is expected that we will see more enforcement actions in London, and Europe more broadly. This again is a clear sign that Europe sees value in a strong patent system and recognizes the importance of a patent owners ability to enforce those rights.

In the past decade, the patent system has been turned on its head. Inventors are now villainized as cartoon characters called patent trolls simply because they assert their hard-earned patent rights against corporations who steal their inventions. These infringing corporations have cleverly cultivated the myth that all patent owners are patent trolls by engaging high-powered lobbyists and public relations firms to loudly attack inventors. This toxic concoction of myth, media and money has gagged opposing voices effectively creating political cover for the government to make rapid and fundamental changes to patent law that skew the field toward big corporations at the expense of inventors and small innovation companies, including those high tech start-ups that are responsible for creating high paying jobs.

The majority shareholder of The Economist Group, the company responsible for publication of The Economist, owns patents. It seems very odd to us that most of the shareholder capital going into a publication that decries patents is coming from organizations who aggressively protect their own innovations through patents. This latest Economist episode has to raise an eyebrow, particularly as the U.S. Congress is soon set to return from the long August recess. Was this Economist article planted with the express purpose of breathing life into what is an increasingly lifeless push for additional patent reform?

The patent system is not a tool for entrenched interests to stifle competition, as so many professors seem to believe. Patents allow independent inventors and small companies to compete against better funded rivals, who would otherwise simply take away their inventions. Sadly, many publications, including The Economist, base anti-patent articles on the ill-conceived notions of academics. Alas, perhaps one reason our nation is in such distress is that so many policies are based on recommendations from those without any practical experience.

Confiscating other people’s property is hardly the way to stimulate prosperity or creativity. If it were, Venezuela would be one of the richest, most innovative countries in the world instead of a place where you can’t buy toilet paper. It’s not a coincidence that the handful of countries developing new drugs and the wonders of biotechnology are also those with strong patent systems. Patents and licenses are the life blood of many start-up companies that drive our economy. Rather than being a “tax on innovation,” a strong patent system is even more important today than when the Founding Fathers gave the protection of intellectual property a prominent place in our Constitution, preceding the Bill of Rights.

Chien argues that it is impossible for someone to donate their technology without fearing that another will get a patent on it and defeat the well-meaning donation to the public. Such a statement plays into urban mythology and preys upon those who are convinced that patent applicants can and do steal innovations and get patents instead of the rightful inventor. If that were actually true I’d be all in favor of opening up the patent system, whatever that means. Unfortunately, Chien builds her argument on a factually erroneous foundation.

Today, our patent system is faltering. For the first time in our history, inventors and their counsel are considered villains for defending hard-earned patent rights. Companies that steal patents from inventors are called our innovators. The innovation world has turned up-side-down. A few misguided decisions by the courts and the “so-called” America Invents Act of 2011 has made it a CEO’s fiduciary responsibility to steal patented inventions and massively commercialize them with no concern for patent rights.

To patent folks April 10, 1790 is the day that the earth shook, the heavens opened, and history was forever altered. 225 years ago, on April 10, 1790, President George Washington signed the first version of the U.S. patent act. It was the third Act of Congress. Madison, through a series of letters back and forth between Jefferson, who was in France helping Ben Franklin secure French support for the nascent US revolution, persuaded Jefferson that a limited monopoly on an inventor’s own creations was a good idea.

If a weak patent system were the answer you would expect countries that have a weak patent system, or no patent system at all, to have run away innovation. What you see, however, is the exact opposite. Those that want to dismantle the patent system or further weaken patent rights should bear a heavy burden to demonstrate the veracity of their claims. They should be required to prove that innovation at current levels will at a minimum be guaranteed to maintain at current levels if we are to take a leap of faith and disregard what history, common sense and the law of economics predicts will happen.