“The first thing we do, let’s kill all the (patent) lawyers.” – William Shakespeare: Henry the Sixth, Part 2, Act IV, Scene II (sort of)
Where would our industry be without patents? Indeed, what kind of world would we live in if there were no patents or patent rights?
It would be a better place, that’s what.
It’s an idea worth exploring, if for no other reason than to inject some much-needed sanity into the current climate of patent trolling, erratic judicial rulings, laughably trivial “innovations,” ridiculous business plans, the chilling climate of IP litigation, and arbitrary definitions of what constitutes intellectual property. Growing up, we were taught that patents encourage innovation and protect inventors, but just the opposite is true. Far from being helpful, patents actually stifle invention, thwart competition, foster inferior products, and unjustly reward the mighty while enriching their lawyers. The time for patents has come to an end.
There are many fundamental problems with patents. First of all, patents are exclusionary. They don’t enable innovation; they prevent it. Second, patents create a winner-take-all mentality that’s neither fair nor useful; it’s also not enforceable. Patents have created an entitlement mentality where patent holders think all the money is theirs. They’re anti-competitive. Patents also reward idleness and prevent useful products from reaching the market. Patents cut off avenues of exploration and innovation. Patent laws, fines, and damages are imposed capriciously. And finally, patents are neither normal nor necessary. We’re merely accustomed to them – but that doesn’t make them a good thing.
1. Patents Are Exclusionary
Inventions improve products. Patents prevent those inventions from spreading and benefiting more products. Patent laws stand in the way of progress; they don’t encourage it.
Imagine if only Ford cars had steering wheels, only Toyotas had brake pedals, and only Volvos had forward-facing seats. What if the “user interface” was different on every car? Thankfully, none of these innovations was patented, and so they became widespread to the point of becoming standards. But it might have worked out differently. What if steering wheels were patented and only the patent holder could put steering wheels in their cars?
Patents are fundamentally exclusionary, not enabling. That is, a patent doesn’t tell you how to do something; it tells you how not to do something. The patent holder erects a fence around his idea or invention and says, “Keep out. No trespassing unless you pay me an arbitrarily high fee.” Like fences, patents are exclusionary. They aren’t intended to make a product better; they’re intended to make everyone else’s product worse.
If your neighbor builds a barbed-wire fence around the local gas station and charges everyone admission for the privilege of pumping gas, he hasn’t added any value. He’s merely become a pointless nuisance by inserting himself into the transaction and claiming a fee, because he can. And by being the first person to do this, he’s also won the exclusive government award to prevent others from doing it. Not only can he extract fees from everyone, he can prevent anyone else from competing with him by, for example, offering a lower fee.
2. Winner Takes All
Another harmful effect of patents is that they unfairly stifle competition. Instead of promoting creativity, they punish it – sometimes severely. How many runners would enter the Olympics if the penalty for coming in second (never mind third, fourth, etc.) was ritual execution?
Patents enforce a winner-take-all method of reward and punishment. The first person to file a patent (or in some countries, the first to practice it) gets all the rights, everywhere, for all time. Everyone else gets nothing. In fact, they get less than nothing: they’re punished for trying and being late.
Honoring the “winner” might seem fair at first blush, but how is this practice useful? It’s not even practical in an era where thousands of engineers around the world work on innumerable problems simultaneously. It’s quite likely that two or more people will invent the same (or substantially similar) solutions to the same problems. That’s what engineering is all about. In math and science classes, we’re taught to find solutions. We don’t punish the second person to write down the correct answer.
But that’s exactly what patents do. The second person to invent something is deemed less worthy by the patent office and thereafter eyed with suspicion. If you create a particularly inventive software routine today, what does it matter that someone in China wrote the same piece of code yesterday? Does that make your achievement any less useful, less impressive, or less valuable? And yet you’re considered a criminal if you try to use it.
Let’s consider the recent case of RIM (the company that makes BlackBerry devices) versus Visto. Supposing for the moment that BlackBerrys really do use technology that was previously patented by Visto; did RIM actually steal anything, or did their engineers simply discover the same tricks that Visto’s engineers discovered? And how many other engineers in other companies have probably discovered the same thing but, quite reasonably, thought little of it and didn’t rush to the patent office with lawyers in tow?
When the same/similar technology pops up in two (or even twenty) different companies, it does no good to prevent all but one of them from using it. How does that help consumers or advance the industry? How does this practice do anything apart from annoying and distracting otherwise hard-working engineers and diverting their resources?
Incidentally, the Visto lawsuit came just a few weeks after RIM paid a whopping $612.5 million to NTP for allegedly infringing its patents. Neither NTP nor Visto actually make anything.
3. Patents Are Not Enforceable
We’ve all heard the amusing tale of the U.S. patent commissioner who wanted to shut down the agency in 1843 because “everything that could be invented has been invented.” Too bad the story isn’t true. Back when patents covered mechanical devices like steam engines, it was pretty simple to decide whether an invention was novel or not. It was also pretty easy to tell if someone was stealing your equipment. But today, patents cover arcane concepts like software methods, semiconductor dielectric materials, financial formulae, and even business plans. How can a patent examiner hope to decide what’s novel and what’s not? Based on the number of patents that have been overturned or declared invalid, they can’t.
When a patent is granted and then disputed (which is a virtual certainty), it’s up to an ill-equipped panel of (usually retired) judges to decide what’s what – judges with no technical background who are being “educated” on the topic by biased lawyers who are themselves not technically competent and who have every conceivable incentive to embellish the facts for the benefit of their clients.
If it comes to a jury trial, a group of 12 bankers, real estate agents, retired housewives and crack addicts who either had a great sense of civic responsibility or weren’t smart enough to evade jury duty are asked to decide if one company’s anti-fuse architecture violates claim number 64 regarding oxide breakdown mechanisms, in what amounts to the world’s most expensive coin toss. Patent litigation is a crap shoot in many senses of the phrase.
4. Patents as Weapons
Patents are increasingly used as strategic weapons in a high-stakes game of corporate warfare. (Some might call it terrorism.) As we saw earlier, patents don’t enable progress, but they can block it. That makes them potent weapons for patent holders to use against corporations and, by implication, against the market at large. Patents have become swords instead of plowshares.
Like military strategists controlling the high ground, patent holders choke off the best access points and attack anyone who approaches. At best, they’re toll collectors. At worst, they’re patent trolls.
Entire companies are dedicated to just this practice. They have hundreds of employees who don’t produce a product and never intend to. Instead, they buy up obscure patent rights and use them to harass productive companies. Jury decisions are so capricious and unpredictable that it’s often cheaper (and certainly quicker) for the defendants to settle than to go to trial and leave the result to chance.
To combat this, big companies like Google, Hewlett-Packard, Cisco, Ericsson, Verizon, and others have formed a kind of patent troll counterterrorism force, buying up patent rights not because they need the technology for themselves, but to prevent others from wielding the patent rights against them. Nathan Myhrvold’s Patent Ventures LLC has a similar business model. How absurd that these companies should pay upwards of $5 million apiece just to ward off patent trolls. That’s money and effort that could have gone into actual innovation. And how distressing that any company should be spending money to prevent the spread of useful innovation.
5. The Knock at the Door
Imagine a stranger appears in your lobby and says, “We don’t know each other, and I’ve never helped you in any way, but I have this paper from the patent office that says I can extort fees from you for imaginary damages, even though you’ve committed no theft and I’ve suffered no harm.”
That’s right: even though you’ve committed no theft and he has suffered no harm.
Merely by inventing the same thing you did, but sooner, he controls the patent rights and has power over your invention. It doesn’t matter whether you’ve seen each other’s work or not. It doesn’t matter how original your work is. All that matters is that he has the patent and you don’t.
What crime have you committed by being as creative as another person? They didn’t arrest the second guy to run a four-minute mile. Buzz Aldrin, the second man on the moon, is still a hero. But arriving second at the patent office can be a federal offense. All the work you’ve done is taken away from you. It’s someone else’s property now. It’s a crime to even circulate drawings of it. You can’t build or even describe the very thing you developed in your own lab, on your own time, with your own money. Good luck explaining that to your boss, or your customers, or your new best friend, your parole officer.
Just because you came in second (or third, etc.) at the patent office, the patent holder gets the right to sue you and possibly drive your company out of business. It gets worse: he can also sue your customers, especially if they include your product in a product of their own. In fact, everyone downstream from you is tainted and potentially liable for patent infringement.
Dude, you’ve been pwned.
6. The Randomness Factor
Right now more than 100 different companies are fighting off patent-infringement lawsuits merely because they use text messaging. Nearly every chip maker in the world is accused of infringing various semiconductor patents. Online booksellers get sued for the design of their Web sites. How can any company, much less an underfunded startup, hope to operate amidst such an invisible minefield? One false step and – boom! – you’re destroyed by an enemy you never saw, and who never saw you.
It’s impossible to create any product or service of any value without stepping on someone’s patent. If the intent were to stifle progress, halt innovation, and extinguish entrepreneurial spirit, then the patent system has succeeded admirably.
7. Entitlement Mentality
American journalist and lifelong cynic H.L. Mencken once defined Puritanism as “the haunting fear that someone, somewhere is having a good time.” That also applies to patent holders. They seem strangely convinced that someone, somewhere must be stealing their money. This superstition that every idea is somebody’s property has become pervasive, and it’s fueled many a bizarre business plan and legal strategy.
As an example, the RIAA (Recording Industry Association of America) sued both XM and Sirius satellite radio companies for making TiVo-style radios that could back up to the beginning of a song you’d only partially heard. The RIAA cited “unfair competition” among the reasons and demanded $150,000 per song for every timethis feature was used. Why the group believes it loses $150,000 whenever someone in their car listens to a few extra seconds of a three-minute song is unclear. Evidently the latest track from 50 Cent is worth a lot more than 50 cents.
Exclusionary patent and IP rights have created this new mentality of entitlement. Patent holders seem to be saying, “If there’s any possible way I could be making any money from this, then no one else can be allowed to make money, too.” Competition and innovation are dead, replaced by draconian patent laws and capricious judicial decisions.
Sometimes the malfeasance is blatant, as in the case of Silvaco vs.Circuit Semantics Inc. (CSI). Silvaco claimed that CSI stole its EDA software, which was then sold into big companies like Intel and AMD that used it to design their chips. After suing CSI, Silvaco then waited… until Intel and the others had finished their chips using the tainted software. Then it pounced, asking for enormous damages from the deep-pocketed chip companies. Seven of the 12 defendants settled out of court, but Cypress Semiconductor fought back, and won. The court decided that Silvaco wasn’t interested in protecting its IP. If it were, it would have moved sooner instead of keeping quiet all those years. The court decided that Silvaco was really just interested in extorting money from CSI’s customers, who were wholly unaware of the situation and innocent of any wrongdoing.
8. Patents Halt Further Discovery
Isaac Newton said, “If I have seen further than others it is by standing on the shoulders of giants.” All scientific and technological progress is built on the work of others. Nothing stands alone; progress depends on those who came before us. But patents block off entire routes of inquiry. They saw off branches of the tree of knowledge by assigning ownership of those branches as if they were private property. Patent holders can prevent any further development of an invention by making it illegal to build upon their work. It’s up to the whim of the patent holder to decide when and how, and by whom, the future of the world’s technology progresses.
9. Stifling Innovation
In a free market, you get paid for serving your customers, period. If you provide something customers want (as defined by their willingness to open their wallets) then you’ve succeeded. If customers look the other way, then you’ve failed. It’s a very simple, almost Darwinian, system and it works.
Patents turn that idea on its head. They grant almost socialist rights to the patent holder, so that he gets paid whether he works or not. Patent holders never have to deliver anything to their customers, ever. But they do have the right to prevent others from doing so. So instead of improving the market, they diminish it – and get rewarded for it.
Remember, there’s no requirement for a patent holder to license his patent or use it in a product. Patent holders can keep it to themselves if they wish, effectively removing the invention (and all derivative inventions) from the face of the earth, forever. It doesn’t even matter if someone else independently invents the same thing tomorrow and wants to offer it for sale. The patent holder has the right to prevent duplicate inventions from seeing the light of day. Amazing as it sounds, they can prevent the market from benefiting from someone else’s work.
10. Neither Necessary nor Natural
Thomas Jefferson, who was himself no slouch at inventing, wrote, “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his [candle] at mine, receives light without darkening me.” His point is clear: just because you’ve provided knowledge to someone doesn’t mean he owes you anything. Sharing ideas is normal. It’s what makes us human. It’s disgusting to think we should be paid for it.
He goes on to say 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…” and that these ideas are “like the air… incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property.”
In his closing, Jefferson makes his distaste of patents clear. “In some other countries it [exclusive patent rights] is sometimes done, in a great case, and by a special and personal act, but, generally speaking, other nations have thought that these monopolies produce more embarrassment than advantage to society; and it may be observed that the nations which refuse monopolies of invention, are as fruitful… in new and useful devices.”
Embarrassment, indeed, Mr. President. Our hunger to convert all knowledge into property by assigning it an owner and a price tag is neither necessary nor natural. It’s not even profitable, in Jefferson’s estimation. By their very nature, patents stifle the flow of information among inventors, engineers, and programmers. They withhold improvements from the market and smother competition. They treat useful discoveries like a dragon’s greedily hoarded gold, shown only to a few and only for a fee. Better that the world’s great creative inventions be treated like other art forms: on display for all to see and enjoy, with plaudits and praise to the artist.
Life is not a zero-sum game: it’s not necessary for someone to lose when someone else wins. Knowledge, like art, can spread freely while everyone benefits. The advancement of society – of humanity – should not have a price tag on it.