During my tech days, I co-authored four software patents. Each cost my startup about $15,000"”which seemed like a fortune in those days. I didn't really expect these to give me any advantage; after all if my competitors had half a brain, they would simply learn all they could from my patent filing and do things better. But I needed to raise financing, and VCs wouldn't give me the time of day unless I could tell a convincing story about how we, alone, owned the intellectual property for our secret sauce. We got the financing, and the plaques of the patents looked great in our reception area, so the expense was worth it. But there was definitely no competitive advantage.
Patents make a lot of sense in many industries; they are needed to protect the designs of industrial equipment, pharmaceutical formulations, biotechnology products and methods, biomedical devices, consumer products (toothpaste, shampoo, contact lenses, etc.), advanced materials & composites, and of course, widgets (lighting fixtures & elements, batteries, toys, tools, etc.). But in software these are just nuclear weapons in an arms race. They don't foster innovation, they inhibit it. That's because things change rapidly in this industry. Speed and technological obsolescence are the only protections that matter. Fledgling startups have to worry more about some big player or patent troll pulling out a big gun and bankrupting them with a frivolous lawsuit than they do about someone stealing their ideas.
New research by Berkeley professors Stuart J.H. Graham, Robert P. Merges, Pam Samuelson, and Ted Sichelman highlights the extent of this problem. They surveyed 1332 early-stage technology companies founded since 1998, of which 700 were in the software/internet space. Here is what they found:
Pam Samuelson, one of the co-authors of the report, says that her conclusion from the research is that the world may be better off without software patents; that the biggest beneficiaries of software patents are patent lawyers and patent trolls, not entrepreneurs.
Meanwhile, the U.S. patent system is clogged and dysfunctional. John Schmid, of the Milwaukee Journal Sentinel, analyzed U.S. Patent and Trademark Office data and found that as of 2009, there were more than 1.2 million patents awaiting approval"”nearly triple the number a decade earlier. In 2009, the patent agency took an average 3.5 years to deal with a patent request"”more than twice the 18-month target. What is most alarming is that the patent office automatically publishes applications online after the 18 months"”outlining each innovation in detail regardless of whether an examiner has begun considering the application. Competitors anywhere in the world can steal ideas. This effectively undermines the entire purpose of the patent system: the patent office is charging applicants serious money for giving it the privilege of giving away their commercial secrets.
To make matters worse, the patent office is rejecting applications at an unprecedented pace"”with fewer than 50% being approved, compared to 70% a decade ago. One estimate is that this costs entrepreneurs at least $6.4"?billion each year in “forgone innovation”"“legitimate technologies that cannot get licensed and start-ups that cannot get funded. So the agency charged with protecting U.S. intellectual property and aiding innovation is often doing the exact opposite.
Brad Feld, managing director at Foundry Group, says that we should simply abolish software patents. He believes that the system has spun completely out of control, with the vast majority of filings not passing the fundamental tests of a patent (that it be non-obvious, novel, and unique innovation). Copyright and trade secrets have historically been the primary protection mechanisms for software intellectual property, and they are still the best solutions. Feld notes that technology companies are now forced to divert huge resources to defend themselves from patent trolls rather than advance their innovations.
The founders of the United States considered intellectual property worthy of a special place in the Constitution"”"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." They had the concept right, but they surely never conceived of Amazon.com patenting clicks in an online shopping cart and methods for having an online discussion, or Microsoft patenting methods for activating double click applications with a single click. It's time to do as Brad Feld suggests: simply abolish these abominations.
Editor's note: Guest writer Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at the School of Information at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. You can follow him on Twitter at @vwadhwa and find his research at www.wadhwa.com.
Professor, you nailed this one also. Right in!
Ill second your opinion! Totally agreed with the article!
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It would be advantageous to start filing patents a decade ago. But that doesn’t mean, today isn’t the right time either. As they say, the right time to do business is not tomorrow.
A classic example of a mega company who likes to ‘patent-whore’ alot. http://2su.de/QFN
Yup, while at it, we should also abolish genetic engineering food patents.
this is nonsense.
the patent office is the only branch of the US govt that is profitable. the answer to a backlog in patents is to hire more patent examiners and grant more patents resulting in more patent fees.
the “professor” does not understand how the market works. it is self-evident that most innovation happens in countries with strong patent laws.
hey prof: stop deleting comments you dont agree with.
Hey “les madras”, the purpose of the government is not simply for profit as you project, so your comment is…irrelevant.
Les, can u please go back to your madrassa. You post the most senseless comments!
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Googles infamous licensed keyword patent 360. Did that patent cover keyphrases as well?
But he got VC funding with his patents then he says to the rest of us software patents needs to be abolished?
Tell that to the hard working Inventors that actually build systems only to see big companies look it over and copy. Not only does TC not give press to real innovative indie Inventors but now they are trying to convence us that we should just walk the earth with our pants down.
Nope, not buying it.
Agreed with all points except your justification of patents outside of software. Why is hardware different? Velcro or the retractable seatbelt deserves a patent monopoly but a CPC ad bidding system/concept does not?
The only patents that make sense to me are pharma because of government mandated testing and approval processes.
I think patents outside software are more justified because those industries move a lot slower, and there’s a LOT of money involved with R&D. And some of these patents are for products that sell for millions of dollars to large companies. In that context, patents make sense. But software just moves so damn fast and there is so little money involved with developing it, it’s just stupid and a pain in the ass.
Should never file a patent unless it’s a path breaking one..and there should be strict laws to prevent patent troll companies which are only engaged in filing suits against others rather doing any real work
Valid points. Even more damning is the fact that govt does little to address these concerns.
I reckon things are even worse in other countries.
If I become an entrepreneur, patents are one area I’ll hate doing but have to do any way.
I personally think you gloss over the utility of patents in related fields that you nonchalantly list.
Biotech *products*, pharmaceutical formulations? You should not be able to patent DNA sequences and molecules.
If patents were gone then the best products will succeed, not the first. That may be a good thing.
And only the largest and richest companies will produce them, with all small companies unable to compete because they cannot out-spend, out market or out-think(anymore) the larger companies, who can now excel with a “copy/paste” business model.
Small companies will become outside R&D units of larger companies, except the large companies don’t have to pay them for the R&D.
M&A drops off the face of the earth, as it’s unnecessary except for talent acquisition any longer.
Companies like Apple, innovative companies, all go out of business. As soon as they release the new ‘i-invention” it’s copied and released in days. (look to China for how fast this can happen.)
Yup… Sounds like a win for America and the entrepreneur to me.
What does iPhone have that wasn’t copied already by others? Even pinch to zoom was put into Android. Did that make them go bankrupt? No really.
The fact that Android, and other mobile OS’s can use them, too, is a great benefit for us consumers. Others would’ve been a lot more stagnant if they didn’t have some serious competition. They just have to work a little harder and innovate “more” to keep their customers now, that’s all. Poor them.
And yes software patenting is indeed stupid, because it allows stuff like “pinch to zoom” and other natural movements to be patented.
What if one company patents the most natural movements when using an interface? Then all their competitors would have to use some “un-natural” movements for interacting with their interface, which would lead to frustrating their customers.
Is that what we really want? Artificial legal protections that force people to use their product because it’s the only usable ones, since the others weren’t allowed to copy it?
Others would've been a lot more stagnant = Apple would've been a lot more stagnant*
Exactly. I’ve made this point for years.
What if Henry Ford had patented the Steering wheel, accelerator, clutch and brake positions, forcing every other manufacturer to use “innovation” in creating their user interface for cars?
Software patents are a complete farce. In my startup, we succeeded in spite of the fact that I refused to patent any of the IP we created. I knew we weren’t doing anything that any smart person couldn’t do, but we were doing it better, so we succeeded.
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