03.20.11

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New Cracks in the US Patent System

Posted in America, Law, Patents at 6:11 pm by Dr. Roy Schestowitz

Co-authored with G. Forbes

Floral frame

Summary: A debate which the patent lawyers frame as revolving around innovation is in fact just a risk to people’s lives and a driver of cartels

THERE is plenty of evidence to support the allegation that the USPTO is a defender of monopolists rather than a catalyst of innovation it pretends to be. Monopolists lack an incentive to innovate since this may disrupt their dominance or production pipeline. The New York Times is currently presenting this sob story from billionaires who profit from patents suits in life-or-death situations. It conveniently omits the real consequences of granting and encouraging drug patent monopolies. “$10 drug now $1500 after FDA grants monopoly” says this headline about a new observation that we covered in TechBytes a week ago.

Even the director of the USPTO is admitting that the assumed correlation between patents and innovation may be illusionary. A new article illustrates:

David Kappos, director of the United States Patent and Trademark Office, says the United States needs new ways to measure innovation and also to give fast-track status to green technologies.

First, Kappos says his office is looking at new ways of measuring innovation. After all, open-source software, which explicitly rejects traditional intellectual property rights, powers large parts of the technology industry, such as the Android mobile operating system. Additionally, corporations often take out huge pre-emptive patents to prevent competition from forming.

As we stated a few days ago, the US claims to be addressing the problem with the patent system. However, since reducing the backlog (possibly by speeding up the approval process) is the wrong path to take, there is no indication of what can actually be done to abolish bad patents, such as the ones described here:

“For the next 45 days, Webvention is willing to license the ’294 patent for a one-time, fully paid-up licensing fee of $80,000.00 for a non-exclusive, company-wide right to use Webvention technology,” the company wrote to one of its targets.

The Federal Trade Commission has a new report titled “The Evolving IP Marketplace,” that ponders how to deal with these troublesome entities, based on a series of patent conferences that the agency held. And the vague language often associated with patents (like the above) is identified as a big part of the problem.

It is increasingly evident that patents are being used as an architect for cartels, which in turn use thickets and perceived threats (at times litigation) to block competition. This is just one more sign that patents are a tool for monopolies to squash smaller competitors. To a certain degree, there is a similar unbalanced situation in relation to copyright laws. They too can be abused, warping “copyright enforcement” into a glorified censorship weapon. “Copyright Bullying is in the DNA” is a short new example of the impact of this issue from Glyn Moody. He continues to emphasise the message that copyright is not encouraging new creative works. As he sarcastically puts it:

Yeah, we really need Draconian copyright laws to protect (dead) artists from this kind of evil infringement.

We shall revisit this later.

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