Patent Boss Admits That The Patent Office Keeps Getting Flooded By More And More Bad Patents

from the gee...-I-wonder-why... dept

The head of the US Patent Office, Jon Dudas, the same guy who was just hyping up a educational curriculum for children falsely claiming that any inventor "needs" to get a patent, is now complaining that the Patent Office is being overwhelmed with really crappy patent applications. You think? Lerner and Jaffe pointed this out years ago and it's not difficult to see why. With the USPTO approving tons of bad patents, and the courts all too often siding with the patent holder and expanding what's patentable, combined with people who have done nothing getting hundreds of millions just for holding a piece of paper, is it really any surprise that the incentive structure would push people to file for as many bogus patents as possible, in hopes of getting them through the obviously questionable process?

When you set up a system that rewards people for not actually innovating in the market (but just speculating on paper), then of course, you're going to get more of that activity. When you set up a system that rewards those people to massive levels, well out of proportion with their contribution to any product, then of course you're going to get more of that activity. When you set up a system that gives people a full monopoly right that can be used to set up a toll booth on the natural path of innovation, then of course you're going to get more of that activity. When the cost of getting a patent is so much smaller than the potential payoff of suing others with it, then of course you're going to get more of that activity. The fact that Dudas is just noticing this now, while still pushing for changes that will make the problem worse is a real problem. Patents were only supposed to be used in special cases. The fact that they've become the norm, rather than the exception is a problem, and it doesn't seem like anyone is seriously looking into fixing that.

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Satellite Abandoned Thanks To Patent On Lunar Flybys

from the promoting-the-progress dept

A ton of folks are all submitting different versions of this story this morning (from a variety of sources), but the original appears to be at Space Daily, where it discusses how satellite company SES Americom has to abandon a satellite that had a botched launch due to a ridiculous patent on the concept of a lunar flyby. Basically, what happened is that SES had a problem with a satellite launch, such that the satellite did not reach the proper orbit (it was intended to be a geostationary satellite used by Echostar). SES then figured out that it could get the satellite into a proper orbit by making use of a lunar flyby. That part is just basic physics. But, at that point, SES discovered that Boeing happens to own a patent on doing this sort of lunar flyby, despite the fact that you can't patent physics. As someone notes in the article, Boeing merely used some jargon to make basic physics appear as a "process." If that sounds familiar, you'll note that it's the same thing that many patent holders are doing to turn math into patents using software patents.

So, rather than just doing it and having to deal with patent infringement lawsuit, SES tried to play by the rules (no matter how ridiculous) and asked Boeing to license the patent. Unfortunately, the two companies are engaged in a separate legal matter that has SES suing Boeing for $50 million. Boeing took the opportunity to tell SES it would license the patent only if SES dropped the lawsuit. Apparently, SES figured that the $50 million was worth more than saving the satellite, and will instead try to collect the insurance for the botched launch, abandoning the satellite. This may get more interesting, as apparently a third party is interested in buying the satellite and potentially taking on Boeing (or maybe just licensing the very questionable patent). Also, the insurance company apparently was not aware of these alternatives and may push SES to take one of them. Either way, thanks to a patent on physics (which, last I checked, is not something "made by man") SES has felt the need to abandon a perfectly viable satellite. I'm sure that was exactly how the Founding Fathers expected the patent system to be used. Update: The patent in question is available here.

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How Much Harm Do Bad Patents Do To The Economy?

from the billions-and-billions-of-dollars-worth dept

We've been discussing how patents can have a serious economic downside (as was recognized by Thomas Jefferson and James Madison as they designed the patent system). It appears that some researchers are trying to quantify just how much damage bad patents are doing to the economy. Against Monopoly points us to a blog post at Technological Innovation and Intellectual Property that discusses the results of a preliminary study (pdf file) that estimates a loss of $22.5 billion due to bad patents. The researchers admit that the findings are preliminary, but it does create an initial framework by which to look at the negative impact of bad patents on the economy. Among other things, the paper lists out the following ways that bad patents harm the economy:

• Cause consumers to absorb monopoly prices over "inventions" that were already effectively common knowledge
• Direct resources away from productive research and instead towards strategic accumulation of patents already filed over innovations already deployed
• Divert resources to "defensive patenting" or securing offensive "blocking patents
• Direct research away from areas of existing patents that should not have been granted
• Direct resources toward acquiring and enforcing substandard patents and collecting royalties rather than other more-productive fields of economic activity.

We've seen all of these in action lately. And, of course, this doesn't even get into how much is thrown away in legal resources to litigate patents and defend infringement claims on patents that should not have been granted. Also, it's worth noting that the TIIP blog post reminds us that the author's own book Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk comes out next month.

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