Why Do States Need Patents In The First Place?

from the head-scratcher dept

The Software Information Industry Association is asking the Supreme Court to examine whether states are immune from patent infringement lawsuits. Lower courts have ruled that states are immune from patent infringement lawsuits. But at the same time, states apparently can obtain patents themselves and sue the very same private companies for patent infringement. The SIIA is asking the Supreme Court to level the playing field. It argues that if states are going around demanding licensing revenues for their own patents, it’s not fair for them to turn around and claim sovereign immunity when they infringe other peoples’ patents. That seems like a sensible argument to me, although I’m no lawyer.

But the story brings to mind a more fundamental question: why are states allowed to obtain patents in the first place? The usual policy argument for patents is that they promote the common good by giving people incentives to invest in new technologies. But this argument doesn’t really make sense when we’re talking about a state government. States are already supposed to be spending taxpayer dollars to promote the common good, so they don’t need extra incentives to do so. And they already have access to tens of billions of dollars through taxation, so they don’t need a way to raise capital. If spending more taxpayer dollars on research promotes the common good, then states have the ability to do that regardless of whether they can get a patent for it. And if a new technology is developed with taxpayer dollars, all taxpayers should be allowed to use it without paying still more money in royalties.

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Comments on “Why Do States Need Patents In The First Place?”

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Howard Plumley (profile) says:

Patents for States - wrong

I work at a major research university and it proves daily the definition. A ‘university’ is what happens to a great college when the educators lose interest in their students. When the ‘dollar’ is more important than the job, then ‘greed’ is in charge. And this site reminds us quite frequently that ‘Greed = stupid’.

Brett (user link) says:

State research is for the state's taxpayers

There are arguments on both sides, but one argument for state patents is that the research is for the benefit of the state’s taxpayers. Any budget strapped state could benefit from licensing deals with corporations. States are under no obligation to provide their research to entities in other states, unless the research is using federal money.

MATT says:

Re: State research is for the state's taxpayers

You know, I like this idea but I suspect that absolutely none of the benefit would trickle down to the taxpayers. It’d be incredibly hard to track and with such lack of accountability I would not expect a state to be responsible with the money, plus the debate not only of “where is my taxpayer money going” but now “where my state investing their profits” creates a duality of trying to satisfy political and economical interests at the same time. Essentially its like turning the taxpayers into stockholders with not enough shares for each individual’s interest to be recognized.

This = fail.

Paul (user link) says:

Re: people win, companies lose

your assumption doesn’t make sense, or at least leaves out why it would make sense. how can something benefit only a certain portion of the population, but not others? if the benefit to the average joe is less taxation, then companies are just as likely to see a decrease as well. however, the state’s primary purpose is to its citizens and companies aren’t citizens. so, companies don’t really ‘lose.’ i highly doubt the states are coming up with patents that every company in that state wants to use in the first place. the company would only ‘lose’ if it wants to use said patent. and again, its not losing. they pay taxes for a different set of reasons than citizens do. while it might get used for the same purpose at times, it doesn’t imply that they should reap the same benefits.

Brett (user link) says:

Lack of accountability = fail

@MATT, you are absolutely right. Lack of accountability = fail. It would be too optimistic of me to argue that instituting accountability would be easy. However, I personally want my state looking after its economic interests so there is not the colossal fail like the Michigan State Gov budget crisis that resulted in a shutdown.

The lawyers may pocket a good deal of the proceeds, but state patents would also reduce the likelihood that patent hoarders patent the same thing and try to sue companies blind that would have otherwise licensed it from the state. Reduce the likelihood, as we have seen patents be granted with loads of prior art.

Whether state patents are good or not can definitely still be debated, but I’m not aware of any good arguments supporting the opinion that states should be responsible to entities in other states (barring federal funds).

KD says:

States can be patent trolls, too

Brent, I think you need to rethink your statement that state patents would provide much defense against patent trolls. I believe I’ve seen more than one case where a state-held patent was on the plaintiff end of a typical patent troll lawsuit. Washington State University, if I remember correctly, is one of the examples, though the formal name of the troll is something like Alumni Research Partners (I’m sure that isn’t exactly correct).

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