Patent Failure: Has the Sun Set on the Day of the Patent?: patent troll, This American Life, Ira Glass, Silicon Valley, technology, innovation, intellectual property

In his third appearance on EE-Tech-News, Experts Exchange Marketing Coordinator Matt Stanford discusses the link between patent lawsuits and stifled innovation.

For those of us (myself included) who unabashedly label ourselves Ira Glass fanboys or fangirls, the title of this post likely struck a chord of familiarity. Inspired by this week’s episode of This American Life “When Patents Attack,” I felt compelled to share and further explore the influence that patents have had on the tech industry, for better and for worse and whether or not it’s time to revisit the way we look at intellectual property.

When Patents Mattered

Originally intended to spur innovation, patents are key to the industrial prowess of the comparatively young United States. As Glass puts it, “Patents are so foundational to the American way of life that they’re in the Constitution.” Indeed, Article I, Section 8, Clause 8 gives the U.S. Congress power “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.” Enter Eli Whitney’s cotton gin, Cyrus McCormick’s mechanical reaper, John Deere’s steel plow, Thomas Edison’s light bulb, and countless other inventions responsible for blazing the trail and bolstering the American economy. It’s doubtless that all of these inventions played a pivotal role in U.S. history, yet it’s even more of a certainty patents made all of these inventions as effective as they were. Or, as Glass illustrated in his broadcast,

If there were no such thing as a patent, Eli Whitney would have had to keep his invention in a dark room with no windows, so nobody would steal his idea, and then people would bring him their cotton and he’d spit it out for them, all processed, on the other side. Instead of that we have thousands of cotton gins, everywhere. Patents make it safe to share and to innovate.

Patently Trollish

Unfortunately, in recent years, the use of patents has not been quite so noble. As is the case with many well-intended products and policies, people have found ways to utilize patents that are far contrary to the historical use and purpose of its inclusion in the Constitution. Directing listeners’ attention toward Silicon Valley, Glass and company show how it has become commonplace for “patent trolls” to patent and hoard useful technology, make no products, and look for companies to sue for violating those patents.

(A patent troll, by the way, is the endearing name given to the individuals and companies that participate in the aforementioned, questionable scheme. For example, while a company like Experts Exchange uses its patent to protect its long-coveted Q&A method, a patent troll obtains, but does not use, a patent for the sole purpose of suing those who actually want to use the technology.)

This new use of patents has begun to replace their former role as a shield with a more aggressive role as a sword. In fact, looking again at Silicon Valley, Glass suggested that most, if not all investors and innovators in that part of the country “would tell you the patent system is doing the exact opposite of what it’s supposed to.” Case in point, only a couple weeks after coming to the States, Spotify finds itself facing a lawsuit for (you guessed it) patent infringement. Accused by former rising star PacketVideo of violating its patent—which protects a “Device for the distribution of music information in digital form”—Spotify has now become the latest victim of this commerce-killing scheme. And the kicker: PacketVideo didn’t even author this patent, but instead purchased it a few years ago only to lie in wait for an unsuspecting company like Spotify. Instead of reassuring innovators that their ideas won’t be stolen the second they go public with an invention, patents have stifled and shelved technological innovation for fear of being hit with a lawsuit. And the current patent lawsuit trend is not encouraging.

Over the past two decades alone, patent litigation in the United States has increased by an alarming 230%. While some of this may be attributed to the idea that America is an “innovation economy,” the combination of this concerning litigation rate and the stories of Silicon Valley patent trolls shared in the broadcast seem to indicate that something else is at work. As fewer and fewer companies hold more and more patents—almost 8% of all patents going to ten elite companies since 1977—these massive entities suddenly have an extraordinary amount of resources at their disposal to ward off competition. And the best way to ensure intellectual hegemony? Utilize those resources though the threat of lawsuits to those who challenge that dominance. The only factor that’s more disconcerting is the fact that companies have caught onto this game and are acquiring patents for the sole purpose of making money when others actually make products.

Attack Aftermath

Tragically, the resulting climate in the world of patents—especially in Silicon Valley—is one of hesitation and reluctance, which could not be happening at a more inopportune time. Such a climate has created a devastating chain reaction that ultimately undermines the country’s global competitiveness as a result of stagnating innovation and an environment that is anything but business friendly. In fact, things in the nation’s tech capital were so harsh that Glass and his team found it nearly impossible to find one company that hadn’t faced a patent suit.

Increased consumer costs and an intimidating job market as fallout from over-active patent troll activity as well as the continued concentration of financial and intellectual wealth among elite companies should make us take a long hard look at whether the patent—at least as we currently know it—has outlived its usefulness. Perhaps it’s time to define these pieces of intellectual property in stricter terms to prevent this (unintended?) abuse. Unless, of course, higher costs and unemployment is an acceptable price for this new way of doing business.

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Patent Failure: Has the Sun Set on the Day of the Patent?

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