Patently foolish
We've written here about how some of the technology giants have become patent machines, gaining patents for all manner of things that seem like minimal breakthroughs, often more on techniques rather than actual inventions. In an excellent article in the Washington Monthly ("The Monopoly Factory", June 2005), the causes of this depressing situation are laid bare.
The point of the patent system is to give the inventor of something truly new a twenty-year monopoly on his discovery. But the common practice now is what the article calls "rent-taking", basically squatting on a not very original idea and charging fees to others who might well have come across the idea on their own.
And the U.S. Patent Office is easy to fool. As the article explains, once you combine that ever more complex and technical nature of most patents with an increasing volume, you have big trouble. Add to that, the fact that Patent employees are incentivized to get through a large number of cases quickly.
That's particularly true when you consider the amount of time examiners are given to deal with these hundreds of documents. According to the FTC report, each examiner has “from eight to 25 hours to read and understand each application, search for prior art, evaluate patentability, communicate with the applicant, work out necessary revisions, and reach and write up conclusions.” Says one former examiner who left the patent office last year, “We were under a lot of pressure to get the patents through the system, so as a result, the quality of examining them goes down. You're not spending as much time as you should because you basically just want to get them through.
Stressed out patent people are quickly snapped up by intellectual property law firms who use them the help them guy the system. And it's easy to hire them, as the law firms can pay a lot more than the government.
The article shows one example of a company blocking progress in breast cancer research by staking its claim to a dubious patent (since rejected in Europe) and threatening to sue anyone who comes up with any new advance. The result has been that the cost of breast cancer testing is considerably higher since there is no competition.
We could add several more in the technology area, including a claim by a small company called Creative Technology. That company has a patent for "song-navigation technology" it claims is used in the Apple iPod digital musical player. They are threatening to sue. Their patent covers something both trivial and obvious, basically the hierarchical organization of songs by type, artist, and album. Apple, of course, has the means to defend itself in court, if need be.
In every areas, the bigger the company, the greater its ability to play the patent office and to tie up smaller competitors. That's another good reason for become a dominating power in a market.
