The folks over at EFF have launched a new site called DefendInnovation.org that seeks to get people to speak up about fixing the patent system, specifically around software patents. It puts forth a series of key suggestions:

1. A patent covering software should be shorter: no more than five years from the application date.
2. If the patent is invalid or there's no infringement, the trolls should have to pay the legal fees.
3. Patent applicants should be required to provide an example of running software code for each claim in the patent.
4. Infringers should avoid liability if they independently arrive at the patented invention.
5. Patents and licenses should be public right away. Patent owners should be required to keep their public records up-to-date.
6. The law should limit damages so that a patent owner can't collect millions if the patent represented only a tiny fraction of a defendant's product.
7. Congress should commission a study and hold hearings to examine whether software patents actually benefit our economy at all.

To me, number four is the key one and would fix a large number of issues with the patent system. I've been arguing for an independent invention defense for years. In fact, I'd take it slightly further. Since patents are only supposed to be granted on ideas that are non-obvious to those who are skilled in the art, the fact that there is independent invention suggests evidence that it is obvious to those skilled in the art, because multiple "skilled in the art" practitioners are arriving at the same obvious conclusion. Thus, such patents should be invalid, beyond just allowing the independent inventor a defense.

Some don't think the EFF is going far enough. Tim Lee put together a petition, asking the EFF to go even further and oppose software patents altogether. You could argue that point number seven gets towards that. In fact, you could argue that point number seven should be the whole ballgame here. The fact that we don't have any evidence that software patents benefit the economy should make the whole system a mockery. Either way, the EFF's response to the whole "abolish software patents" issue, is that there needs to be a first step:

Regardless of whether you think software patents should be abolished altogether or just reformed, the first step is recognizing that a one-size-fits-all patents system doesn’t make sense and that we need to treat software patents differently from other types of patents. Without that, no effort – whether reform or abolition – can be successful.

To be honest, as bad as software patents can be, I still do worry about hardware patents as well. So I don't think we should lose sight of the independent invention defense (or independent invention as evidence of obviousness) as a useful tool to fix many of the larger problems with the system. There are some other potential fixes out there as well, including something akin to an anti-SLAPP law for patents -- where it's clear that the lawsuit is an abuse of the patent system, just to try to get a company actually producing a product to pay. A big part of the problem today is how expensive a patent lawsuit is, and how difficult it is to get one dismissed without first having to spend upwards of a million dollars (no joke). That leads many companies to settle. This is, obviously, what point number 2 in the Defend Innovation campaign is about, but getting faster, anti-SLAPP-like dismissals would be a big help as well, as no company wants a big expensive lawsuit hanging over them.

Either way, it's good to see renewed emphasis on the problems of the patent system, especially after Congress and President Obama pretended that they'd "fixed" everything last summer with the patent reform bill that did very little (and probably made some things worse).

We've talked a few times about how attacks on new innovations in the name of protecting copyright can create massive chilling effects. For example, the increasingly questionable arguments against Megaupload have created a real chill for online cloud storage providers. That was likely manifest last week in the news that Dropbox was killing off its "public folders" feature in deference to its link feature, basically making the product less useful.

Matt Schruers, from CCIA has an interesting blog post up which ties actions like those done by Dropbox here with a new study showing how the chilling effects of bad copyright law can impact innovation. The full study (pdf) is actually something of a follow up to an earlier study we wrote about, which showed how good judicial rulings on copyright which allowed for greater innovation (such as the Cablevision ruling, which allowed cloud-based DVRs to exist) contributed directly to greater funding of innovation.

This new study, also by Harvard professor Josh Lerner, highlights the unfortunate opposite impact: the chilling effects on investment in innovation that comes as a result of anti-innovation judicial rulings. In this case, Lerner looked at specific rulings in the EU:

We analyze the effects of a court ruling in France and several court rulings in Germany on VC investment in cloud computing firms in these countries. These court rulings were seen as negatively affecting the development of cloud computing, and our findings confirm this view by showing that these rulings regarding the scope of copyrights had significant, negative impacts on investment. Specifically, we find that VC investment in cloud computing firms declined in Germany and France, relative to the rest of the EU, after the French and German rulings. Our results suggest that these rulings led to an average reduction in VC investment in French and German cloud computing firms of $4.6 and $2.8 million per quarter, respectively. This implies a total decrease in French and German VC investment of $87 million over an approximately three year period. When paired with the findings of the enhanced effects of VC investment relative to corporate investment, this may be the equivalent of $269.7 million in traditional R&D investment.

Combine these two studies and you can see how these chilling effects can be quite massive in terms of investment in innovation. Of course, investment alone is not the sole determinant of the pace or success of innovation, but it is a key factor. And scaring investors away from innovations can have a major impact on the public and the economy.