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INNOVATE OR LITIGATE

01 Mar 2010

Over the past five years developers have started to work in internet time, radically compressing traditional development timeframes. What concerns me is that a fundamental legal mechanism has not kept step with the pace of this change, and now threatens to stifle innovation: patent law. The growth of an idea happens over a long time, with three phases but the real innovations happen in the final stage: traction. Before the intenet generation we were working in lifecycles of 10 years or more; a timeframe well suited to patents, which are designed to guard inventions against theft and afford the time required for an idea to be developed to a point of gaining traction. Today, however, development and the speed of wide public adoption have accelerated to a point that the current patent system falls down in three main areas. 1. The lengthy patent process It takes one to two years to obtain a patent, which is too slow when companies are working in internet time; this is further compounded by the lack of an effective way to research pending patents. Ultimately a lot of time and money is being spent securing patents, and these resources are being diverted away from innovation. 2. ‘Blocking patents’ It’s one thing to patent an invention, especially where innovation would not be cost-effective without one; however there are patents being granted covering interface design, human/technology interaction, basic processes – even the human genome has been largely patented. A significant amount of patents are being granted covering widely used and fundamental building blocks, stifling any further innovation. These ‘blocking patents’ have the potential to delay technology advances, as we have seen happen in both the biotechnical and medical industries. Amazon patented the 1-Click ordering system, and in 1999 filed a patent infringement lawsuit in response to Barnes & Nobleoffering a 1-Click ordering option called ‘Express Lane’. The lawsuit took three years to settle. The solution: Barnes & Noble introduce a second click in their ordering process. The cost of litigation was significant and absorbed by consumers. Amazon still holds the patent for the 1-Click ordering system and licenses the ‘technology’.   3. How patents are being used Today, most patents are not being acquired to protect inventions from competitors, to get a short-term edge over the rest of the market; instead they are being obtained by large corporations, to build defensive patent portfolios. These are designed to prevent other people from suing them over patent infringement; to combat ‘blocking patents’.   The patent system is effectively limiting innovation to large corporations that have established sufficiently large patent portfolios to pose a credible threat of retaliatory patent lawsuits. The best any new competitor can hope for in this environment is to be acquired by one of these large companies, or establish their own patent portfolios – rather than creating innovative new products. In my opinion the patent system needs to get in step with internet time and prioritise patent applications where an invention has social value. Patents should not be issued where they will hinder even more valuable future innovations. I believe that if the patent system were fixed, holding true to its fundamental intention, it would unleash a wave of innovation that would not only revive the global economy, but better humanity as a whole. Consider what the current patenting of the human genome will mean to medical advancement over the next 20 years. It’s a grim outlook.