Patent system in crisis

The European patent system, which has been following the US model of expansion over the last decade, is starting to come into crisis. While the problems of the US system are clear (one million pending patents and no good understanding how to fix this), the European system has been operating on the basis of "so far so good": we see similar issues starting to show in Europe, and there are still great pressures to expand the patent system, and no serious proposals for fixing the problems this has already caused and will cause.

For me, the patent system has suffered mission failure. The explosion in patent volume, the fall in patent quality, and the rising tide of litigation all point to fundamental problems with the structure and economics of the patent system.

When confronted by such accusations, the response of the patent industry has generally been, "we are the experts, you can trust us". Well, my daughter will learn (she's still just three) that anyone who says this is usually the last person to trust.

The patent industry has been quite arrogant. It has lobbied for laws, and patent expansion, based on faith and imitation rather than hard data and empirical proof. It pushes for new models like EPLA - the European Patent Litigation Agreement - which would open the taps to more bad patents, and which focus on solving symptoms (making litigation "cheaper") rather than problems (making patents less conflictual, so there is less litigation to start with).

Public opinion is not blind to this arrogance. The notion that "the patent system is evil" has been spreading slowly but surely. Many people believe - correctly, in my opinion - that the current patent system serves a wealthy elite, that it is fundamentally unfair, unbalanced, and unethical.

As public support for the patent system falls, so does political support. Politicians are tired of a decade of fighting over subjects like software patents. The question of the patent system is a main plank of the German presidency of the EU. It will figure in other political campaigns.

So, can we simply scrap the patent system? Some people would like this. But it's my opinion that we need a working patent system. There are several reasons.

First, the patent system is the only plausible repository for our technological knowledge. If we are, in many industries, continually reinventing the wheel, it is because a well-organised library of knowledge, written as clean textual descriptions of "inventions" (and possibly "discoveries") is absent. If we can use the patent system to build a good store of prior art, we have satisfied one of the original reasons for creating the notion of patent.

Second, there must be a way to reward inventors for publishing their work. It is undeniable that investors and bankers like to see a tangible record of a technology firm's inventions. Patents can provide this without becoming harmful.

Third, for some parts of a technology's life cycle, monopoly may be a good thing. This is very delicate because applied too early, or for too long, monopoly destroys the value of technology, but applied for just the right period, it can help to promote it. The question of the lifespan of patents is central to understanding their value and danger, in my opinion.

So what is really wrong with patents today?

To take Lee Hollar's formulation: they are granted too late, they cover too much, and they last too long.

And as for the patent system itself, with an economic model that rewards those who make the most, and worst patents, we have some serious questions of fairness, balance, and ethics to address.

To move forwards, we need to do more than consult the experts. It's not an exageration to say that most patent experts are happier making money from the current system (at whatever the cost to society) than to look at the problems I've highlighted.

What we must do is bring industry, academia, and civil society together in a forum, which brings us to the EUPACO conference.

There are some keywords to think of, as you consider the patent system and proposals for change.

  • Democracy: who should make laws, and enforce them.
  • Competition: why is patent examination not opened to the market?
  • Transparency: who owns patents, how are they licensed and litigated?
  • Automation: in 2007, paper-based processes should be eliminated.
  • Economics: what are the real economics of patent behaviour, and how can these be changed?
  • Ethics: are rich and poor equal in the eyes of the patent system?

To conclude, I'll explain what I'd like from a new patent system. It should be web-based, easy to use, and deliver instant patents that I can pay for with my credit card. These patents should be very cheap, and provide me with a very clear form of property that does not expose me to litigation, nor force me to litigate against others. My patents should not prevent independent re-invention, and they should last just long enough to let me bring my products to market and develop them. They should not prevent other people from making new open standards. I want something to show my associates, bankers, and investors.

Thank you.

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