Against Monopoly

defending the right to innovate

Patents (General)

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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Patent filings down? It must be hurting U.S. 'innovation'....

This article from CNN is amazingly funny, and not in a good way -

Recession's latest victim: U.S. innovation

Patent filings fell in 2009 for the first time in 13 years, worrying Silicon Valley that it is losing its place as the leader in global innovation.

NEW YORK (CNNMoney.com) -- U.S. innovation slowed this year for the first time in 13 years as the recession cut into budgets, and costs to protect inventions rose.

The number of patent filings in the United States fell 2.3% in 2009 to 485,500 from 496,886 last year, according to a preliminary estimate by the U.S. Patent and Trademark Office. That makes 2009 the first year since 1996 in which businesses and inventors filed fewer patents year over year.

"That's unfortunate because [patent filings] are a reflection of innovation," said David Kappos, director of the Patent Office. "Innovation creates so many jobs and so much opportunity for our country. It is absolutely key to our long-term success in the global economy."

Most blame the recession for the drop in U.S. filings. As a result, many companies are opting to hold off on bringing new ideas to market until the economy improves substantially

Read the whole article here.

Patently-O's reaction:

"I tend to attribute huge rise in patenting activity over the past two decades more to a perceived strengthening of the patent right and less to an actual increase in innovations. In recent years, court decisions and threatened action from congress may have reduced the perceived potential value of the patent right -- thus lowering demand. Perhaps now, applicants are filing fewer 'junk' patents."

I suppose when there is an astronomical increase in patent applications for the past decade-plus, any minuscule decrease is supposed to be from a lack of 'innovation', as though patent applications should be expected to automatically increase exponentially every year - just like housing prices.

So-called 'performance reports' from the Patent office going back roughly 15 years can be found here.

If the commerce secretary says so...

(via John Bennett) An article in the New York Times about the patent reform act before Congress. It is held up in a dispute over whether the owner of a patent of a small piece of a product gets to hold up the entire product for blackmail. Not that you would think eliminating this type of blackmail would be controversial...You know, if even the Commerce Secretary realizes the system is broken it probably is. Still Pozen has a point - while it would be best to eliminate the entire awful system, the trivial reforms that are proposed will be a mild improvement. The main problem I suppose, is that the improvement will only be mild, and everyone will be busy congratulating themselves about how they fixed it.

Supreme Court hears crucial patent case today

Bloomberg.com cites this figure in its coverage which speaks volumes -

Applications for so-called business method patents have soared over the past decade, from 974 in fiscal 1997 to a peak of 14,364 in 2008, according to the U.S. Patent and Trademark Office.

Some patents go "too far"--New York Times

The New York Times editorializes on patents today, in particular the application for one on a "method for hedging financial risk in energy trading" that is now before the Supreme Court link here.

It concludes, "Allowing an abstraction of this kind to be protected would take patent law too far."

Most of the argument misses the weakness of patents. Instead, it ends with "Patents perform a useful function, promoting innovation by ensuring inventors the right to profit from their creations for a period of time. But overprotection through patents is as dangerous as underprotection. It can stifle competition and infringe on the rights of non-patent holders. Not every bright idea should be protected as a property right."

The positive in this is that a main stream newspaper would question patents, observing the costs of overprotection except that it fails to mention that, in practice, they stifle innovation in contravention of the constitution.

However, those of us who have concluded that the whole system of patents and copyrights is systematically harmful and has to go, need to recognize that it is not going to happen by court cases, no matter how helpful. What is required is legislative change. That will require a political party, e.g., like Pirate Bay.

Judge OKs Challenge to Human-Gene Patents

Wired.com has the scoop:

A federal judge ruled Monday that a lawsuit can move forward against the Patent and Trademark Office and the research company that was awarded exclusive rights to human genes known to detect early signs of breast and ovarian cancer.

The first-of-its-kind lawsuit by the American Civil Liberties Union and the Public Patent Foundation at the Benjamin Cardozo School of Law claims that the patents violate free speech by restricting research.

Three cheers for the judge!

More to read (along with documents and decision from the case) can be found HERE.

UPDATE: CourthouseNews.com has more interesting tidbits regarding the lawsuit HERE.

Why it is frustrating being an economist

Because all studies say pretty much the same thing...and corrupt politicians chug along doing the opposite. Of course academics often speak softly.

Investments in Pharmaceuticals Before and After TRIPS by Margaret Kyle, Anita McGahan - #15468 (HE ITI PR)


We examine the relationship between patent protection for pharmaceuticals and investment in development of new drugs. Patent protection has increased around the world as a consequence of the TRIPS Agreement, which specifies minimum levels of intellectual property protection for members of the World Trade Organization. It is generally argued that patents are critical for pharmaceutical research efforts, and so greater patent protection in developing and least-developed countries might result in greater effort by pharmaceutical firms to develop drugs that are especially needed in those countries. Since patents also have the potential to reduce access to treatments through higher prices, it is imperative to assess whether the benefits of increased incentives have materialized in research on diseases that particularly affect the poor. We find that patent protection is associated with increases in research and development (R&D) effort when adopted in high income countries. However, the introduction of patents in developing countries has not been followed by greater investment. Particularly for diseases that primarily affect the poorest countries, our results suggest that alternative mechanisms for inducing R&D may be more appropriate than patents.


Are patent auctions an improvement?

STEVE LOHR gee-whizes in an aint-it-grand tone, about the wonders of an auction market in patents link here. He has several examples of inventors who can market ideas to others who develop, manufacture, and sell the product--after paying the patent holder a goodly licensing fee. His examples all involve patents with questionable justification. Are they really new innovations or obvious applications of ideas that have already been developed? Is a phone with a preprogrammed emergency number and a GPS truly innovative or an obvious variant for something which is already patented by someone else.

What Lohr fails to mention is that a patent is a government granted monopoly, constitutionally granted for the purpose of encouraging innovation. We are now into encouraging trade in legally granted but questionably innovative patents, as if that justifies the original grant.

"Wrangling over patents is beginning to move out of the courtroom and into the marketplace," he writes. "A flurry of new companies and investment groups has sprung up to buy, sell, broker, license and auction patents. And venture capital and private equity is starting to pour into the field." If you look at the court records, there is no let up in court wrangling--rather there is more than ever. Indeed, patent suits have become the great Relief for Lawyers Act.

Another example Lohr cites is a company with cell phone patents. The company has made a good deal of money from licensing but has not gone after the large companies who are presumed to have infringed their patents. Instead one may assume they will just get along by selling licenses on an exchange, with the implicit threat of suing little guys who usually find it advantageous to pay off rather than fight the case in court. Be safe, not sorry.

We've seen this before. They are called patent trolls.

Dilbert Says It All


Twitter sued for patent infringement

You just knew this was coming eventually:

TechRadium, of Sugar Land, claims it has patents to what it calls the "mass notification" concept. According to the complaint, tweeting infringes on its "systems and methods" of three patents.

More details at Wired.com here.

EU patent owners seek end to multi-jurisdictions for IP

IP owners show no shame in seeking out additional advantages from their monopolies and what they can get away with. The self-styled English newspaper (anywhere else in the world it is called a magazine), Economist (no The), informs us that patent owners in the 27 members of the EU are after a single patent grant to cover all the members link here. They plead that the extra costs make it too expensive for small companies to register their patents, thus stifling innovation. They also object to the differing interpretations that the various patent granting authorities make. Good points only if one accepts that patents are a good thing, rather than a means to extract monopoly profits and impede innovation. Anybody want to bet that they won't get their way?

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