Patents and oligopolies
One the of the recurrent themes of the new oligopoly is the hoarding of intellectual property. In music, copyrights are snatched up by the big music companies. Massive collections of digital photo archives have been collected. More and more creative professionals work under work-for-hire contracts, giving up all rights to their output. And content and brand names are zealously guarded by phalanxes of litigious attorneys.
Big business has been very adept at having governments extend such protections to almost ridiculous lengths. What was once instituted as a law to protect artists and their survivors for a few years has now become a hundred plus year protection scheme for corporations.
This extension of copyrights started in the US, but it has been the policy of the US government for years to push those protections internationally. In fact, US trade policy can be seen as a set of concessions by the US on tariffs and other protection issues for tangible, locally manufactured property, in return for other countries extending and strengthening copyright protections, an enormous boon for big media companies.
This movement is migrating from copyrights to patents. This is documented in a recent Wall Street Journal article called "Patent Ruling Irks Inventors, Aids Companies" (3/2/2005). A US appeals court ruling from last year made it harder for a company or an inventor to collect triple damages plus legal fees from a company for "willful infringement" of a patented idea or invention. The concept of willfulness has gotten far harder to prove without direct evidence (such as an email saying "Let’s steal this idea.")
What this means is that it reduces the incentives for attorneys to take on such risky suits. It means fewer caae, and it also makes truly wronged plaintiffs and their lawyers much more eager to settle out of court for whatever they can get. True, this will have the effect of cutting down on frivolous suits; but it will also make genuine suits by plaintiffs with limited funds significantly harder. It won’t very much hurt big corporate plaintiffs who want to sue rivals who steal their ideas. After all, that’s just part of the budget and most have lawyers on the payroll. And for those big companies, patent litigation has become an often profitable business strategy.
As the article puts it,
Without the threat of triple damages big defendants are less likely to settle patent suits if they think they can outlast smaller foes, says New York patent lawyer Paul Gupta, who calls patent litigation "the sport of kings" because of the costs involved. Meanwhile, with triple damages less likely, even large plaintiffs that win patent verdicts are likely to be more willing to settle rather than endure lengthy appeals.
Those expenses can be quite high, and that means that few lawyers are going to invest in an plaintiff that cannot pay the bills if they lose. As the article notes,
About 95% of patent suits are settled or dismissed; but, when a case actually does go to trial, defendants and plaintiffs each spend about $2 million, according to the American Intellectual Property Law Association.
The "willful infringement" rule was started in 1983 because judges once though that big companies would see patent infringement as a cost of doing business. The triple damages, it was thought, would lessen that practice. Now there is little incentive for big companies with legal staffs on call to hesitate about "borrowing" patented ideas and inventions, unless the patent owner is itself a well-heeled and lawyered-up rival.
