Pesky Patents

June 23rd, 2014:

When I was young, all of the adults I looked up to made great efforts to make sure that I learned to share and play nice with others. They taught me compromise and negotiation, and most of the time everyone was happy in the end because of it. I don’t think I was alone in this because (as I remember) most kids in elementary school were pretty good at the whole sharing thing. 

Then college rolled around and in one of my freshman engineering courses I learned about Intellectual Property. The concept of intellectual property (IP) seemed to go against everything we learned as children. Surely, parents would not accept the argument, “I thought to dig a hole in the sand first, so Jimmy isn’t allowed to sit in the hole with me.” Everyday US courts, however, hear lawsuits filed against individuals or companies that are infringing on another’s Intellectual Property.

I certainly am not suggesting that we abolish the US Patent system; there are plenty of arguments for this system to remain in place (such as the need to ensure the ability to recover the initial investment to create the patent).

But I am suggesting that the system can be improved.

At their core, the strength of a patent lies in its claims. These claims are written very carefully by patent lawyers (of which I am not) in order to be intentionally broad for a number of reasons. The first reason is to ensure that slight changes in design do not require a new patent to be filed (completely reasonable). The second is to have the widest blanket of protection. A perfect example of these overly broad patents came to light in May. Amazon was awarded a patent titled “Studio Arrangement” which has become known as the “photos against a white background” patent. The photography world exploded with disbelief and anger with the broadness and implication of Amazon’s patent.

I believe this second reason is one of the most severe faults with the US patent system. Individuals and companies write broad patents in hopes that they will catch others infringing on these claims and sue them for damages.

A more recent issue facing the patent system is the increased number of patent infringement lawsuits from Non-practicing entities (NPE). These firms do not actually make products or use the patents in their IP portfolios. Instead, they exist solely to make money from litigations against others. These NPE’s (also known as Patent Trolls) make no contributions to society as a whole and can stunt innovation.

In 2012, a Boston University (BU) study looked at the direct costs from lawsuits by NPE’s and concluded that these lawsuits cost firms a whopping $29 billion. (With that much money you could completely cover the costs of hosting the 2014 World Cup… twice). Ironically, just over a year later, Boston University filed a suit against Apple, calling for the immediate ban on the sales of all iPhones, iPads, and Macbook Airs. Their claim was that these products use a “highly insulating monocrystalline gallium nitride thin film,” which was technology patented by BU in 1995 and expires in 2015.

Non-Practicing entities aren’t the only firms involved in lawsuits. Apple and Samsung have been in and out of court in the past, each suing for billions of dollars in damages (with most of these suits being in regard to products that are now obsolete). It seems to me that Apple and Samsung could have done better things with their money, rather than continuously suing each other. I can only imagine the new products we would have if they had invested those legal costs into R&D. After years in court and billions of dollars in rulings, Apple and Samsung (also Google) agreed to stop the constant litigation and focus their efforts on patent reform: a large step in the right direction.

I believe that some patents, especially in the tech world, need to have shorter terms. The patents at the very basic levels of technology cannot continue to belong to one entity for decades if the industry as a whole depends on it. In many cases, these patents are licensed to the huge tech firms that we all know and love, but these agreements cost money and time. Thus, slowing innovation and widespread adoption of the technology. 

In a bold effort to accelerate the adoption of electric vehicles, Tesla CEO, Elon Musk, announced, “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.” In the June 12th blog post, Musk goes on to explain that Tesla would be made stronger as their technology becomes widespread.

I don’t have all of the answers on patent reform, but I do know that something has to change.  We have to find a way to eliminate patent trolls and frivolous lawsuits. We also need to have patents written to protect the spirit of the invention, rather than “everything we can possibly snatch up that is similar to the invention,” and we need to applaud the companies that are moving in the right direction.

- Mechanical Engineer David Tortoriello, Goddard Technologies

Sources:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2091210

http://www.bu.edu/today/2013/bu-sues-leading-tech-firms-for-patent-infringement/

http://www.cnbc.com/id/101750395

http://www.teslamotors.com/blog/all-our-patent-are-belong-you

http://en.wikipedia.org/wiki/Patent