Another View On The Patent Trolling Situation: Patent Trolls Expose The Weaknesses Of The Patent System
from the things-get-worse-before-they-get-better dept
McDonough does argue that "patent dealers" are a good thing -- but for a very different reason than the lawyer we wrote about on Friday. McDonough's argument is that the patent dealers are highlighting some fundamental flaws in the patent system, and that's a good thing. The problem however, is that so far the response has been to try to stomp out patent trolling, rather than fix those fundamental flaws -- something I completely agree on. McDonough sees the two fundamental flaws of the patent system to be: 1) the USPTO issuing questionable patents to anybody who wants one and 2) the incentives that companies have to patent first and ask questions later, thereby leading to a patent thickets problem. Patent trolling exposes both of those -- but it's not the fault of the patent dealers, but the system that allows those patents to be so valuable in the first place. McDonough is also correct that the solutions being presented to block patent trolls don't really address those problems. They do try to get at the first problem by making it easier to provide prior art and to challenge a patent after its granted. The Supreme Court may also help if they change the rule for "obviousness" in patent evaluation. However, the patent reform being proposed actually tends to make the second situation worse, not better.
Following this, McDonough then attempts to defend the process of patent dealing in the absence of those problems with the system, and suggests that they generally benefit society, by creating a market for something where no market existed before. This is a common response -- and an interesting one, but does not hold up under scrutiny. Just because you can create a market in something does not necessarily make it more efficient. As we've pointed out, you could create a market for air -- something that people find very valuable -- but that's not going to make the market more efficient. It's going to create quite a net negative on society. That's because air is abundant, and trying to falsely limit it creates a huge amount of waste. People will need to pay for air to survive, and that money could better be served investing in other scarce things. The same is true for ideas. As Thomas Jefferson famously stated:
That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property.The patent system is trying to take an idea and limit it, and the overall impact, even though it creates a market, is similar to trying to create a market for air. The net impact is negative, because people need to spend extra where otherwise there would be no need to. You can pass an idea around and no one is any worse off. We can all breathe the air and no one is any worse off. So the idea that just because patent dealers create a market that's a benefit is not a compelling argument.
Finally, McDonough, in his comment to Techdirt, takes issue with our complaint that often the patent lawsuits that most upset us are cases where the invention was developed independently. He falls back on the law, saying that's not a defense under the law -- which is true (and which we've discussed in the past). The problem, however, is that this seems to go against the very nature of the patent system. As we've discussed recently there are some very compelling arguments as to why independent invention should be a viable defense against patent infringement. If the patent system is only supposed to promote progress of arts and sciences where it wouldn't occur naturally in the market, then you only want to protect non-obvious ideas (in fact, the patent system clearly states that it's only for non-obvious ideas). If multiple parties are developing the invention simultaneously, that suggests no government protection is needed -- as multiple parties all saw the market demand for the product and moved towards developing it. They can compete in the marketplace for their reward. So, no, independent invention is not protected by the current legal system -- but it should be. McDonough's followup claim that it would be impossible to determine independent invention is also not compelling. As with any other legal standard, you can provide all kinds of proof and evidence so that a judge or jury can determine if it's likely that an invention was independently developed or not.
James McDonough writes "Your recent posting, "Patent Trolls Foster Innovation? from the excuse-me? dept," which comments on patent trolls and their relation to innovation, misses the point a bit, but only because the article you are critiquing focuses on the wrong ideas. In fact, a much better explanation of the positive benefits of "patent trolls" is found in an article called The Myth of the Patent Troll: An Alternative View of the Function of Patent Dealers in an Idea Economy (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=959945) that has been circulating around the internet for the past couple months.
The point the "Myth of the Patent Troll" article makes is not necessarily that patent dealers foster innovation, but that 1) they are good for the patent system and 2) the "problem" of patent dealers, which Corporate America is trying to fix by lobbying Congress and submitting amicus curiae briefs to the Supreme Court, is not the problem at all. Patent dealers have merely exposed systemic problems with the patent system. The real problem is a combination of 1) the USPTO issuing questionable patents to anybody who wants one and 2) the incentives that companies have to patent first and ask questions later, thereby leading to a patent thickets problem. Yet, if you read the transcripts of Congressional hearings these two problems are being conflated with patent dealers.
Here is the real deal: As the patent system becomes more and more important to the economy, the previously latent defects are now becoming very apparent. A formal market for patents is clearly emerging, and as it emerges, the faults with the system are becoming more and more clear. Picture a bike with a tire that is slightly oblong. When riding the bike at 3 miles per hour, the wheel is turning slow, and the problems are not noticeable. It may seem that the bike is riding perfectly. But, once the bicycle gets up to fifteen or twenty miles an hour, that tire is going to cause major problems. The bicycle will start shaking like crazy. This is exactly what is going on with the patent system as a formal market emerges. Patent dealers, acting as market intermediaries, are exposing the defective nature of the patent system. To identify the problem as patent dealers, and to subsequently enact legislation to try to fix them, is like trying to say that the problem with the bicycle is that it can't go above 15 mph, not that the tire is oblong. Fix the tire!
And the comment in your article that states that the infringer in these cases almost always come up with the invention independently confuses me. The law is fairly clear. If you are the "first to invent," you get the patent. Even if the law "first to file" is still wouldn't matter. There is nothing in the law about independent invention. This does not factor into an infringement suit in any country in the world. Taken to its conclusion, your argument would make the patent system useless. Can you imagine trying to prove that somebody did not independently invent something? It would be nearly impossible. There is a doctrine similar to what you advocate in copyright law, but not in patent law.
In this same vein, you say that it is a rarity that the infringer actually stole the original invention. I like your optimism and faith in the honesty of Corporate America, but the truth is that this happens every day. There is a long history of Big Corporations stealing inventions and using them to their commercial advantage (see the Ford windshield wiper incidence for one such example).
I love reading your site and your commentary, and I hope you continue to bring issues like these to the forefront. Have a great day."