Overhauling The U.S. Patent System?

Like Lynne Kiesling, I’ll believe this when I see it. The patent system, indeed, the entire system of how intellectual property is “protected” in this country needs a massive overhaul.

Although Congress has long considered the patent system a shambles and has attempted to pass corrective legislation several times in the past, the issue is so sprawling and integral to the U.S. economy that progress has come slowly and in grudging increments. But lawmakers in the current Congress have vowed anew to clean up a system overwhelmed by frivolous patent applications and expensive lawsuits.

Witnesses at Thursday’s hearing painted a bleak picture of that system. Adam Jaffe, a Brandeis University professor and author of a book on the subject, described the system as “out of whack.” Instead of “the engine of innovation,” the patent has become “the sand in the gears,” he said, citing widespread fears of litigation.

BlackBerry users will remember the lawsuit last year that almost shut down their addictive handheld devices, an example Jaffe raised in the hearing. BlackBerry maker Research in Motion settled with patent holder NTP for $612.5 million.

While the above is all true, there are some pretty serious special interests that have a huge stake in seeing the system not change. The problem with the way intellectual property is handled in this country is that it creates monoplies. Creating a state-sanctioned monopoly is usually not a good idea and undertaken lightly. However, not thinking through changes to the system for protecting intellectual property is typical in this country. Take for example the Sonny Bono bill. This bill’s sole purpose was to extend existing protections of various forms of intellectual property. The sole reason for this was to allow the owners of these properties, which interestingly included the late Sonny Bono, to extract additional rents. Any mouthings about promoting more production of intellectual property were nothing but outright lies. After all, the extension applies to things created in the past and we can’t change the past.

My guess is that current patent holders and intellectual property lawyers will form a formidable force that will act against any changes that will either reduce the complexity of the system or jeopardize the monopoly profits of current patent holders. The RIAA provides a pretty good data point supporting this view.

See also, this CNet article for different positions on this issue. My preferred approach would be to develop a system along the lines of that advocated by David Levine and Michelle Boldrin. Their approach is quite radical in that they advocate getting rid of intellectual monopolies entirely.

Since there is no evidence that intellectual monopoly achieves the desired purpose of increasing innovation and creation, it has no benefits. So there is no need for society to balance the benefits against the costs. This leads us to our final conclusion: intellectual property is an unnecessary evil.–link

FILED UNDER: Congress, Economics and Business, Science & Technology, US Politics, , , ,
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.


  1. I have over two dozen patents as either sole inventor or co-inventor. I have been through this rodeo a few times. I recently enabled a company to get a patent that had been pending for five years. When we finally go through, I found that of the 300+ patents that patent examiner had worked on in his career, that was only the third patent he had granted. And even with that granted patent, companies with several orders of magnitude more resources see the profit potential and seem to be maneuvering to violate it. And it isn’t clear that we would have enough resources to fight them off, so we may end up having to ‘liquidate’ the company by selling it to patent lawyers who specialize in suing large corporations.

    I have also had patents granted in less than 6 months from first idea on paper to patent office notification. That was because the field I was inventing in was extremely sparse. I think we cited less than 10 previous patents and they were more ground work for some of the stuff than really on point. So it wasn’t a better mouse trap, it was the idea of catching small rodents with a mechanical device.

    And finally there is the infamous “Peanut butter and jelly sandwich without crust” patent. Were enough fancy words made the patent examiner’s eyes glaze over and the patent was granted.

    I guess I would like to see changes but I am afraid there are a lot of people who don’t know what they are doing who will be getting involved. One change should be the truly revolutionary vs the incremental. A ‘simple’ change would be to build an expert system to do the search of the patent compared to other patents. This would allow inventors to get an automated review of a patent idea quickly, lower costs for the patent office and provide a better reference of what has gone before (compared to the current system which was really designed to work with people using quill pens).

    When you talk about vested interests, recognize that not all patent holders have the same vested interests. In areas of rapid innovation, such as semiconductors or communications, they want to limit derivative patents off previous work. Because someones pie in the sky idea 10 years ago can be found to read enough on someone elses current best seller. In more staid areas, they like the way things work now.

  2. EvilDave says:

    Ahh, your article does a wonderful job of mixing up _patent_ and _copyright_. The two are separate. The two are not the same. The two have almost totally separate lobbying groups (meaning there is little overlap on the Venn diagram). The RIAA doesn’t care about patents. And the BioTech industry doesn’t care about copyrights.
    Yes, they are both “IP” but only the same way that a car and a horse are both personal property. Just not the same thing. Not the same set of laws by any means. Not the same people granting/enforcing rights.

    The main problem isn’t that Congress views it as a “shambles” as the article states, but that Congress views the Patent Office (PTO) as a cash cow, which they raid all the time. You want better patents? Fund the PTO! Get more Examiners and allow them more than 8 hours per case. It is pretty blindingly simple.

    Now you want better copyrights. Well, those don’t go through the PTO. They operate under a totally separate system. Like having your car go though the DMV and your horse though the Dept of Ag.
    Copyright (at a minimum) needs 2 fixes: (1) registration to get copyright [vs attachment on creation], and a a much much shorter term [say 25+25 years past creation].
    Now eventually we need to get the “copy” out of copyright as the Internet and computers are just copy machines. That means existing copyright is like legislating against gravity. But the 2 main reforms would bring it back into something more reasonable. Copyright is by far the most twisted and corrupted of the 3 big IPs (patent, copyright, and trademark. trade secrets being the non-Federal 4th IP)

    But to reiterate, you are mixing forms of IP. They aren’t the same your arguments make no sense because you obviously understand a little but not really want you’re talking about.

  3. jpe says:

    Lessig’s solution on copyright is simple and elegant: go back to the old renewable copyright system (as Evil Dave supports) and charge a nominal fee, so that corps have to actually value the copyright.

  4. Director Mitch says:

    I hate it when people with no background on patents start complaining about them.

    First, as we turn into a society with little manufacturing base, what we are turning to is intellectual property. Anybody can make an Apple ipod – they are all made in China after all – it is the fact that it is protected by both patent and trademark that a bunch of knockoffs aren’t taking Apple out of business.

    Second, as you state:

    > My preferred approach…getting rid of
    > intellectual monopolies entirely.

    Well, unfortunately for you there is that little thing called the “Constitution”, which states:

    The Congress shall have the 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;

  5. Steve Verdon says:

    Evil Dave,

    Yes I know copyright and patent aren’t the same. You can see that when I write about protecting intellectual property in general (hint: look at the second sentence). Both systems are a mess and need serious change.

    The RIAA doesn’t care about patents. And the BioTech industry doesn’t care about copyrights. Yes, they are both “IP” but only the same way that a car and a horse are both personal property. Just not the same thing. Not the same set of laws by any means.

    Actually, since the market for cars and horses aren’t different in a meaningful sense, I fail to see any meaningful distinction here.

    But to reiterate, you are mixing forms of IP.

    And you apparently can’t read. Pretty early in my post I noted that the protections for IP in general are messed up, and I think we can learn things about different forms of IP by looking at what is going on with copyright and/or patents. Both sets of laws do essentially the same thing, grant temporary monopoly status to the holder of the IP.

    Director Mitch,

    So I take it you support state sanctioned monopolies and oppose competition? Funny how the defenders of capitalism will often claim it leads to greater innovation…but to do so must invoke the antithesis of capitalism: the State. Contradiction much?

    Well, unfortunately for you there is that little thing called the “Constitution”, which states:

    Yes, and the Contstitution can also be changed.

    And did you stop to think that corporations might game the system so that they actually stifle competition and innovation and drive up prices to earn economic rents?

    What I hate is when people who don’t know anything about economics start spouting off…kind of like you.


  6. RJN says:


    The State is not the enemy of Capitalism, it is the man-made matrix of law, custom and rule that protect the Capital and its fruits.

    The Preamble to our Constitution is so beautiful, and concise, I thought I should see it again.

    “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

    If I had any talent I would somehow paraphrase W. J. Bryan’s Cross of Gold speech except that it would be a Cross of Economics speech.

  7. Steve Verdon says:

    I know all anarcho-capitalists and most minarchist would disagree with you on that assessment RJN. As for Bryan’s he favored inflation as a way to help debtors and take wealth from those who saved…via the State’s powers over the monetary system. Not exactly the best example you could bring forth, IMO.

  8. Dave Schuler says:

    Steve, the Constitution would not need to be amended. The clause quoted above grants to Congress the power to create patents and copyrights. It’s not a mandate that it do so.

    The Supreme Court has historically granted the Congress enormous (IMO excessive) latitude in its regulation of intellectual property. I’m quite sure that, if Congress were to elect to abolish patent or copyright or shorten (or, heavens forfend, lengthen) their terms, it would pass Constitutional muster.

    My own view is that copyrights should be drastically shortened and the entire structure of patents changed so that their term was calculated completely differently than it is now.

    Another issue with patents, in particular, can be corrected strictly through regulation: the Patent Office should be much more skeptical about patents than it is now (particularly WRT business process and software patents, both of which I think are execrable). As the pace of technological change increases, it becomes ever harder for the Patent Office to avoid granting a patent to the equivalent of the wheelbarrow.

    Unfortunately, the Patent Office seems to be much like the AKC. Just as the AKC is in the business of registering dogs and, therefore, seeks more dogs to register, so the Patent Office is in the business of granting patents.

  9. Steve Verdon says:

    Unfortunately, the Patent Office seems to be much like the AKC. Just as the AKC is in the business of registering dogs and, therefore, seeks more dogs to register, so the Patent Office is in the business of granting patents.

    Ha! As a dog lover, I like the analogy…although I maybe one of the few who gets it.

    By the way, glad you got your dog back. I tried to leave a comment on your blog, but my internet connection was acting up. I know how it feels to find a dog missing. We went through precisely the same thing, but we never got our dog back.

  10. CaveMan says:

    Everyone thinks they are a patent expert.

    Fact is, the patent system has been working fine, consistently bringing us most of the best that technology has to offer for a great price. Lynne Kiesling would still be talking with her yentas on a brick sized cellphone if it weren’t for patent law.

    Also, Brandeis might as well be Berkeley as far as respect for business and property rights is concerned. I would take anything Jaffe has to say with a large handful of salt mined from Siberia.

  11. Karl Marx says:

    I think we should do away with Intellectual Property

  12. Ghost of Charles Duell says:

    “Everything that can be invented has been invented.” Charles H. Duell, U.S. Commissioner of Patents, in 1899.

    Patent Office Commissioner Henry Ellsworth’s 1843 report to Congress states, “The advancement of the arts, from year to year, taxes our credulity and seems to presage the arrival of that period when human improvement must end.” (Are you reading this Dave Schuler?)

    However, Duell’s 1899 report documents an increase of about 3,000 patents over the previous year, and nearly 60 times the number granted in 1837. Further, Duell quotes President McKinley’s annual message saying, “Our future progress and prosperity depend upon our ability to equal, if not surpass, other nations in the enlargement and advance of science, industry and commerce. To invention we must turn as one of the most powerful aids to the accomplishment of such a result.” Duell adds, “May not our inventors hopefully look to the Fifty-sixth Congress for aid and effectual encouragement in improving the American patent system?”

    I’m sure these guys were as confident as Dave Schuler that “the pace of technological change” has reached some kind of peak. Yet they continued to advocate for a strong patent system. You all know the rest of the story. If people like Schuler and Verdon had thier way back then, we never would have seen the development of the laser, the transistor, or you-name-it.

    Go back to your homes people, go back to your families, go back to your lives, put the Blackberry down, get back to your jobs and your work. Life, and the patent office, will go on.

  13. Steve Verdon says:

    Fact is, the patent system has been working fine, consistently bringing us most of the best that technology has to offer for a great price.

    Well there are some who say that there is no evidence for this position.