Site icon Duncan Bucknell

The patent system is not broken stop bleating understand the real issues and get on with business

Ok, I get it that lobbying can be an important part of an overall strategy and so hats off to those who have created some fog around a seemingly broken patent system.

However, things have gone just a little too far now – and unfortunately all of the hyperbole is focused on the United States.

To summarize Kenneth Lustig’s recent Forbes article on the topic:

(and thanks to David Kline for sending it on):

  1. The US patent system has for a long time driven economic growth;
  2. Non Practicing Entities (NPE’s, ‘trolls’, whatever…) have been around since the very early days of patent systems [in fact it was designed for them – consider the earliest patent statue in Venice];
  3. Patent rights are meaningless without the ability to enforce them – which is the same for all property rights;
  4. There has not been an explosion in the number of patent suits.  The number of patent suits that go to trial is about 100 which is the same as 10, 20 and even 30 years ago.  [Note that some commentators would say that NPEs do most of their damage before trial with threats etc.]
  5. The number of patent suits filed in the smartphone industry today is less than one fifth of those during the ‘telephone wars’ in  Alexander Graham Bell’s time.

What is interesting though when you take all of this in context, is that most of the angst is focused on the United States where almost all NPE lawsuits happen to be.

The reason for the lawsuits, as I’ve said before, isn’t the patent system itself, guys.

It is a lot more to do with the size of the US economy (it’s worthwhile to have a try at one of these suits) and some peculiarities of its justice system, including no right to attorneys fees for a prevailing party, triple damages for willful infringement, incredibly expensive discovery and a proliferation of contingency firms – all of which make NPE lawsuits much more likely.  (People say that the overall tort litigation rate is higher than elsewhere as well – please let me know if you have the data…)

Given that the US Constitution might have to be looked at closely to deal with some of these, then maybe it’s not going to be such an easy task…

Perhaps its better then to understand the terrain you’re working with, and get on with business.

[Image credit: EIDave]

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