Owning Your Mind: Intellectual Property’s Fatal Flaws

Posted by · October 27, 2011 12:16 am

At times, intellectual property can almost seem like science fiction. Yet there is nothing fictional about buying, selling, and trading ideas with no physical product whatsoever to substantiate them. Crazier still, the ones who own these ideas—but don’t act on them—are still able to sue those who actually do turn their ideas into marketable goods.

Welcome to the bizarre world of patents.

In recent decades, the historically defensive nature of these documents has unfortunately taken an aggressive, anti-competitive turn. Worse yet, a lack of serious attention to patent policy has only contributed their increasingly problematic use.

Patents’ Historic Usefulness

Incorporated into the United States Constitution for the purpose of encouraging innovation and protecting the ability of American entrepreneurs to profit from their own ideas, patents should not be considered an inherent evil, but instead a modernly abused tool. Without the duty given to Congress in Article I, Section 8 “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries,” it is safe to say that we would not be the same country—or world, even—that we are today.

No doubt, patents have and still do serve a purpose. The protection of innovation is no less a necessity now than it was then. Yet, what appears to have changed is the role of patents in meeting such a need. Instead of protecting those entrepreneurs that would play a major role in continued economic development—not to mention help the economy build its way out of a multi-year hiccup—patents have made a dynamic shift from insurance to deterrence.

The Modern Cost of Creativity

Rather than being a bastion of innovation across the entire economic spectrum, patents have become a means of securing financial success for an increasingly privileged few. No matter one’s personal interpretation of the Constitution—strict constructionists and pragmatists alike—the modern use of patents has become the antithesis of its original meaning or underlying purpose.

Consider the reality that ten elite companies account for nearly 8% of all United States patents granted since 1977. Pair that fact with the disturbing 230% increase in patent litigation over the past two decades, and what you’re left with is a few large entities claiming ownership over most of the ideas, many of which are never brought to fruition but are instead used to keep new competitors out of the market.

In other words, it takes more than a good idea and an entrepreneurial spirit to get into the club. Thanks largely to these “defensive patenting” tactics, attempting to join this elite club could prove quite costly. Meanwhile, consumers are left with about as many legitimate choices in the marketplace as they have in deciding whether to wash their clothes with Tide or Gain.

And yet, that’s still not the most disturbing thing about this trend.

The Moral Gray Area

As technology giants like Google and Apple battle it out over who owns which ideas and who can produce what and where, there are a couple questions that seem to be missing, the answers to which will likely draw a much clearer line between right and wrong when it comes to artificial persons claiming the thoughts and ideas of natural persons as private property.

Question #1: Whose ideas are these in the first place?

That is, given that artificial persons do not have brains and therefore cannot unilaterally fabricate the ideas by which they earn a profit, who are the real, tangible people that are coming up with these ideas? The idea of not being privy to one’s own thoughts should cause neck hairs of people across all political spectrums to stand on end. From the staunchest libertarian to the most collectivist Marxist, the thought of not owning one’s own ideas is a full-front assault on the most basic principles of private property and personal privacy.

Thinking of it in this light underscores the actual purpose of patents and reveals just how far we’ve strayed from it. Their purpose is to provide added security to something that is already innately private and to make people comfortable sharing their ideas without having them stolen.

What if Thomas Edison had invented the light bulb without being able to patent it? He would have been faced with two choices: He must either keep his idea a secret or risk losing all the invested time and effort to someone who steals his winning formula as soon as it’s revealed.

Question #2: What purpose do patents serve today?

That really is the million dollar question, isn’t it? If comparatively destitute entrepreneurs are rightly tentative about introducing new products to the market for fear of being sued by a massive corporation that claims to own the patent, how does current intellectual property policy protect modern Thomas Edisons and Cyrus McCormicks? With economic vitality so greatly dependent upon open and honest competition, one would think that giving living, breathing individuals more power over their own ideas would be a better for economic growth than to continue allowing faceless corporations to use these elusive documents as insurance against market newcomers.

Otherwise, the upward siphon of creative innovation will simply continue the slow, dreadful suffocation of individual innovation—the exact opposite of the purpose of patents.

That being said, the answer to the question seems rather clear. Today, patents are swords instead of shields. They’ve become a cornerstone for dominance rather than competition and a source of entrepreneurial hesitation instead of boldness.

And while the resulting stagnation is present across most economic sectors, its mal-effects are particularly notable in the tech industry. Popular Mechanics writer Rob Goodier refers to the phenomenon as “the patent arms race.” Using Google’s acquisition of Motorola Mobility and the Apple-Microsoft joint effort to outbid Google for Nortel’s 6,000-strong patent arsenal as examples, he observes, “To protect themselves, companies began buying up patent stockpiles—a practice that’s getting more intense.”

And that practice shows no signs of stopping anytime soon.

In fact, the America Invents Act, which U.S. President Obama signed into law back in September, does little to attack the root problem. The bill’s change from a “first to invent” system to a “first to file” system will actually make matters worse for small American inventors. Moreover, by tying the budget of the U.S. Patent and Trademark Office (USPTO) to patent fee revenue, chances are the office will be more generous in its patent granting practices, exacerbating the already-substantial problem with patent litigation.

Time for Real Reform

The road to patent reform won’t be easy, but it is simple. At least I think so. And the approach that should be taken, at least to start, can be explained in three easy steps.

First, prohibit the trade of intellectual property. That is, if someone—whether it’s a company or a living human being—comes up with an idea and chooses to patent it, no monetary value can be assigned to it. If the patent’s owner dies or goes out of business, the patent dies too.

Second, create an expiration date for patents that do not result in the production of a product. The purpose of a patent is not to collect, hoard, and sue, but to protect, produce, and profit. Instead of letting just anyone purchase a patent and use it as legal leverage, make patents back into a protection for real inventors by invalidating patents that have no corresponding product within a reasonable period of time.

Finally, require more concrete language in patent applications. This is consistent with an FTC study called “The Evolving Intellectual Property Marketplace,” which argues “raising patent quality will also be central to any solution.” To increase the language standard “would decrease the number of overbroad or invalid patents that can be asserted against products on the market,” the study continues.

And while I know that following these three steps wouldn’t create a perfect system, at least patents would start serving their true purpose again—protecting those who actually plan to act on their own ideas.

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  • tom kane

    Having had some experience of applying for patents I find it amazing that you say that people can have a patent granted (assuming this is the case) and not “work” the patent. So far as I know most governments world wide require a patienter to carry out the obligation of putting their patent to work and get their product available to the pubic. Failing to do this could result in loosing the patent to someone else. You must prove the “working” of your patent and pay fees to keep your patent valid. You really only get a “license” which can be withdrawn for many reasons.

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  • TerryAtOpus

    It would be a dangerous thing to have a patent die when it’s inventor did. That would be like putting a price on the head of our best & brightest!