Once Again The Economist Thinks Patents Are Hindering Innovation And Need Reform

from the flip-flop-flip-flop dept

A bunch of folks I know who are focused on the problems of the patent system and who are pushing for patent reform have been eagerly sharing a recent Economist article discussing the problems of the patent system and how they’re hindering innovation and doing real harm. No doubt, it’s a good article that gets to the heart of many of the problems with the system. Some snippets:

Patents are supposed to spread knowledge, by obliging holders to lay out their innovation for all to see; they often fail, because patent-lawyers are masters of obfuscation. Instead, the system has created a parasitic ecology of trolls and defensive patent-holders, who aim to block innovation, or at least to stand in its way unless they can grab a share of the spoils. An early study found that newcomers to the semiconductor business had to buy licences from incumbents for as much as $200m. Patents should spur bursts of innovation; instead, they are used to lock in incumbents? advantages.


One aim should be to rout the trolls and the blockers. Studies have found that 40-90% of patents are never exploited or licensed out by their owners. Patents should come with a blunt ?use it or lose it? rule, so that they expire if the invention is not brought to market. Patents should also be easier to challenge without the expense of a full-blown court case. The burden of proof for overturning a patent in court should be lowered.

Patents should reward those who work hard on big, fresh ideas, rather than those who file the paperwork on a tiddler. The requirement for ideas to be ?non-obvious? must be strengthened. Apple should not be granted patents on rectangular tablets with rounded corners; Twitter does not deserve a patent on its pull-to-refresh feed.

Patents also last too long. Protection for 20 years might make sense in the pharmaceutical industry, because to test a drug and bring it to market can take more than a decade. But in industries like information technology, the time from brain wave to production line, or line of code, is much shorter. When patents lag behind the pace of innovation, firms end up with monopolies on the building-blocks of an industry. Google, for instance, has a patent from 1998 on ranking websites in search results by the number of other sites linking to them. Here some additional complexity is inevitable: in fast-moving industries, governments should gradually reduce the length of patents. Even pharmaceutical firms could live with shorter patents if the regulatory regime allowed them to bring treatments to market sooner and for less upfront cost.

Good stuff for the most part. Amazingly, the article even tosses out the idea that perhaps patents should be ditched entirely — and notes that back in the 19th century, the Economist itself argued against any patent system at all. However, it walks itself back from that edge pretty quickly:

One radical answer would be to abolish patents altogether?indeed, in 19th-century Britain, that was this newspaper?s preference. But abolition flies in the face of the intuition that if you create a drug or invent a machine, you have a claim on your work just as you would if you had built a house. Should someone move into your living room uninvited, you would feel justifiably aggrieved. So do those who have their ideas stolen.

That’s a weird way to reject its own idea, because patents aren’t about “feelings,” and the analogy of someone moving into your living room makes no sense, given the difference between rivalrous things (your living room) and non-rivalrous things (your ideas). And, indeed, the article defaults into the worst kind of patent support: the idea that patents are used to stop people from “copying” ideas, when that’s almost never the case (it’s almost always independent invention).

But the really odd thing about this is that the Economist actually seems to keep changing its position on patents. Back in 2010, it had a similar article arguing that the patent system was holding back innovation and that it needed serious reform to get rid of “frivolous” patents — including those for business methods and software. But then, oddly, in 2011, the very same Economist… argued we needed more patents and that they should be approved faster. That article bizarrely argued that approving more patents would undoubtedly lead to more jobs… based on absolutely nothing. And then… just months later, the Economist, once again, argued they were hindering prosperity.

So, yes, it’s great that the Economist is taking on this issue, but seeing as the magazine (which calls itself a newspaper) has a history of bizarrely flip flopping on the issue, it’s still a little difficult to take it seriously.

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Comments on “Once Again The Economist Thinks Patents Are Hindering Innovation And Need Reform”

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Anonymous Coward says:

But "The Economist" is totally biased in favor of moneylenders, mercantilists, and other parasitic grifters, not industrialists, small business, or the public.

I’m not surprised that YOU agree with it, though.

Best definition ever: “Economists, an irrational tribe of short-sighted mathematicians”
Found at: http://thetyee.ca/Opinion/2015/08/03/Perfect-Storm-Engulfs-Canadian-Economy/?utm_source=mondayheadlines&utm_medium=email&utm_campaign=030815

Hurry up and run the “Hobbit hole” / copyright story, I’ve got a quip!

Dark Helmet (profile) says:

Re: But "The Economist" is totally biased in favor of moneylenders, mercantilists, and other parasitic grifters, not industrialists, small business, or the public.

…..so you’ve formulated a response to a post you haven’t and cannot see yet. I can’t think of a better articulation as to why absolutely nobody should listen to you than you’ve chosen to author for yourself….

Anonymous Coward says:

But the really odd thing about this is that the Economist actually seems to keep changing its position on patents.

I’d say check to see who the authors of the articles are. Different authors would pretty easily explain the seeming split personality, and it’s not like it’s unusual for a news organization to employee people of markedly different views from one another.

Mike Masnick (profile) says:

Re: Re:

I’d say check to see who the authors of the articles are

The Economist is famous for not having bylines. There are no “authors” and often the magazine presents this as being because it’s a whole “team effort” and its stories reflect that. So, yeah, I think the flip flopping is still an issue, given the magazine’s general position.

OldMugwump (profile) says:

Re: Re: Zanny Minton Beddoes

The Economist has a new editor-in-chief, Zanny Minton Beddoes. (http://www.economist.com/mediadirectory/zanny-minton-beddoes)

She got the job in January of this year. Since then she’s made some big changes to the editorial stance of the paper (magazine, whatever) – all vastly for the better, in my opinion. This is the latest result.

(The editor-in-chief approves the opinion pieces at the front of the magazine.)

I’m really happy with her – she’s right on a lot of things.

OldMugwump (profile) says:

Re: the paper doesn't have an official editorial stanc

It does.


I’ve been a subscriber for about 30 years; some positions come and go, others stick around for a long time.

They’ve been steadily against the Drug War for all that time, and steadily for the British position on American guns (Americans shouldn’t have any).

Other things they’ve flip-flopped on, depending mostly on who is editor-in-chief at the time.

The most recent-but-one editor was John Micklethwait (2006-2014), who IMHO was the worst in a long time. He took a lot of stupid positions – he’s a real supporter of the status quo and powers-that-be, Wall Street Journal style.

But the new editor since 1/2015 Zanny Minton Beddoes is just great.

DNY (profile) says:

Good ideas in the leader, but...

The “leader” as The Economist calls their editorials is good, but doesn’t go far enough, since it ignores the analogous deleterious effects of copyright on the arts (and sciences). However, despite the stated position of the editors in the leader, the corresponding article on patents in the body of the magazine still shows signs of drinking the maximalist kool-aid: the feature is labeled “intellectual property”.

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