The Economist Disagrees With The Economist: Argues We Need More Patents, Approved Faster

Patents

from the or-what? dept

Thu, May 12th 2011 7:30am — Mike Masnick

The Economist famously goes without bylines, in part to get people to focus on the content, rather than who's saying it, but if it's going to do that, shouldn't it be at least a little consistent? Just about a year ago, we were quite happy to see The Economist recognize that the theory of the patent system was broken. It was a good article, highlighting the differences between innovation and invention, and recognizing that more patents will quite frequently hinder, rather than help innovation. And yet... just last week, it decided to publish a story that seems to ignore all of that, and which assumes that more patents approved faster must be better.

It builds off of the budget debate in the US, questioning why the US would cut funds to the Patent Office, not for once recognizing that more patents might not be a good thing. Instead, it just assumes there is some direct causal realtionship between patents and jobs. I'm not kidding:

Last year the Patent Office granted 244,358 patents out of the applications it examined. Although you can debate how many jobs are created on average per patent, there is no doubt that, collectively, they are a useful contribution to an economy that is still struggling to grow.

Imagine, though, how much bigger that contribution might be had the Patent Office been able to process the applications that it has still not even looked at. There are more than 700,000 of these.

I would imagine it might lead to the employment of a few more lawyers, but not much more than that. The idea that patents create jobs is simply not supported by the evidence at all.

Thankfully, lots of people are calling The Economist out on this one. Paul Kedrosky, from whom I found the article, questions if the article is "clueless and out-of-touch." It's too bad the anonymous Economist author of the latter article didn't speak to the anonymous Economist author of the first article. Or, well, anyone who actually works in the field of innovation today.

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Filed Under: patents

22 Comments

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Capitalist Lion Tamer (profile), 12 May 2011 @ 7:40am

For that matter...
job applications create more jobs. If we'd just print up several million job application forms and they all get "approved," we'd instantly create several million more jobs. I'm guessing the ratio would be 1:1.
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Keith V (profile), 12 May 2011 @ 7:50am

"Imagine, though, how much bigger that contribution might be had the Patent Office been able to process the applications that it has still not even looked at. There are more than 700,000 of these."

Imagine it?!? I can't wait!!! $2000 to replace my $500 smart phone. The inability to innovate. Time frozen at the current state of technology because nobody can navigate the thicket.

I'll never have to upgrade! I'll have to waste time learning new features! What an awesome world!
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fogbugzd (profile), 12 May 2011 @ 7:58am

The article makes two assumptions.

1) There is a relationship between the number of patents issued and the number of jobs created.

2) The relationship is positive.
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Anonymous Coward, 12 May 2011 @ 8:01am

The slow rate of patent approval (or disapproval) in itself is a hinderance to innovation (irregardless of whether patents are good or bad). The entire process needs to enforce stricter quality standards and be faster.

For one, the glacial pace allows for submarine patents as the unlimited revisions can lead to substantive changes in the scope of a patent. It makes it hard for others to design around a patent (application) and leads to easy patent trolling behavior.

Second, it's a huge amount of uncertainty for everyone else in the industry. If I put in an extremely broad patent, the rest of the industry has to gamble for at least 2-7 years as to whether my patent is valid. You then have a bunch of poor choices to make as a competitor.

A. Do you go ahead and assume it's invalid and go ahead with product/process development and assume the increased legal risk?

B. Or do you wait and see if it's invalid, potentially slowing down or halting innovation for years and putting your company behind in development?

C. Or do you design around it, incurring unnecessary cost and time wasted for something you may not have even needed to do?
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Mike42 (profile), 12 May 2011 @ 8:05am

Faster IS better
The thing is, the FASTER the patent is granted, the SOONER it expires. Nothing pisses me off more than a software patent applied for in '96, but granted in '04, so prior art from '98 doesn't matter.

...And I just realized something. When a patent is "Applied for" in '96, does that mean it is there in it's final form, or is it being ammended while keeping the '96 date? Maybe this isn't such a lottery after all...
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Josef Anvil (profile), 12 May 2011 @ 8:19am

Ummmm Not Sure about this
Did the US revoke a few million patents back in 2001? Was that the cause of the massive layoffs ?

"Although you can debate how many jobs are created on average per patent, there is no doubt that, collectively, they are a useful contribution to an economy that is still struggling to grow."

Ummm... If you can debate how many jobs are created per patent, then how can you state there is no doubt that they are a useful contribution to the economy. How may jobs were lost on average per patent? I mean since we are doing a causal relationship, go back to 2001 and do the math.
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Michial Thompson, 12 May 2011 @ 8:20am

What needs are really needed
This is one of those problems that I agree with ALL sides on. The Patent Process needs to be faster, spending 5-10 years waiting for a patent to be approved is a bit rediculous.

BUT at the same time that the process is streamlined, it needs to be reformed too. Vague patents need to be trashed, patents on general business processes need to hit the trash, and bullshit patents on things that cannot be built with current technology at the the time of application should be trashed as well. The idea of using the patent system to speculate on obscure ideas and processes that may some day make you rich is getting old.

Most process and all software patents really need to be trashed or at least severely restricted in scope. Of all the talk on here about patents hindering development, these are the ones that I feel do the most damage in this area. The entire concept of "obvious" and "prior art" is not enough of a restriction on these. A LARGE majority of these patents are on nothing more than taking age old processes and changing them from a physical process to a computer based process. They get approved way too generously and cost billions in legal fees to defend against.

MOST Software Advances today have a foundation in taking an existing business process and automating it. Thank God most of the UI patents have expired, or we would all be trying to find unique menu structures and screen layouts to avoid stepping on those patents. ONE of the few good things that come from Microsoft and Apple was the concept of keeping all desktop applications structured similarly for ease of training and use.

I was actually in the software development industry when these patents were being used to kill off the small software companies.
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Anonymous Coward, 12 May 2011 @ 8:22am

We are the Economist. We are legion. We forgive. We forget. Expect us on newsstands.
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Mike42 (profile), 12 May 2011 @ 9:02am

Re: Faster IS better
It would appear that an AC answered my question while I was typing it. So what people could easily be doing is:

A. Create an overly broad patent.
B. Let it be denied, and wait a year or two.
C. Ammend the patent to use a new technology (or several) just coming out.
D. Get the patent, because it is now narrow enough for the USPTO.
E. Sue the person/company who actually created the technology.
F. PROFIT!!!

All of a sudden, the cries of, "well, it wasn't obvious when the patent was applied for" ring very hollow.
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Tofui, 12 May 2011 @ 10:53am

Re:
Absolutely! The need for *more examiners is directly correlated to *more patents, claiming *more "inventions" when most of these applications describe a concept or business model or behavior. Obviously the majority of these applications are not about an invention but about portfolio stuffing and legal maneuvering. If anyone really wants to save the tanking patent system they would support clearer, stricter guidelines so that the philosophical aspect of an examiner's job at the USPTO can finally end.
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Anonymous Coward, 12 May 2011 @ 12:21pm

The articles in The Economist address separate and distinct issues. One expresses a concern with various types of subject matter as to which patent law may apply, and the other that with a large backlog of pending applications the diversion of fees collected by the USPTO to the general treasury is viewed as counterproductive.

Your conflating the two leads to unnecessary confusion.
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Anonymous Coward, 12 May 2011 @ 12:56pm

more jobs... not small companies. some day our only chance its working for a big patent holder.
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Anonymous Coward, 12 May 2011 @ 1:49pm

The patent process will change when it becomes loud and clear that it is impacting corporate bottom lines. Right now it's a rounding error in the grand scheme of things. In the near future, given the 40+ suits in the mobile space (and growing monthly) it will impact several of the large players enough where lobbying for a change will show results.

Let's not forget how the current system if not changed can backfire later. Eventually China will reach parity with the U.S. and whatever policy they take will vastly outclass the United States policies.
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Derek Kerton (profile), 12 May 2011 @ 4:00pm

Re:
Good job splitting the assumptions.

Bisected as you have shown them, I am inclined to agree with #1.

#2, not so much.
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Lawrence D'Oliveiro, 12 May 2011 @ 7:50pm

Re: The entire process needs to enforce stricter quality standards and be faster.
Absolutely. Ideally, it should be 100% perfect and take zero time.
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Lawrence D'Oliveiro, 12 May 2011 @ 7:50pm

Re: The entire process needs to enforce stricter quality standards and be faster.
Absolutely. Ideally, it should be 100% perfect and take zero time.
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BearGriz72 (profile), 12 May 2011 @ 7:51pm

Re: Re: Faster IS better
/headdesk
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Lawrence D'Oliveiro, 12 May 2011 @ 7:51pm

Re: ... spending 5-10 years waiting for a patent to be approved is a bit rediculous.
So, should applicants be stopped from prolonging the process by filing �continuations�?
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ethorad (profile), 13 May 2011 @ 5:26am

Re: For that matter...
Maybe the contribution to the economy is that from the patent office itself.

As it only managed to process under 250k patents last year, to get through the extra 700k applications it would have had to hire almost three times as many patent examiners. That could make an appreciable dent in the unemployment rates.
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DannyB (profile), 13 May 2011 @ 7:19am

Let's try changing the PTO's incentives
To file a patent you have to pay a fee.

Make the fee very high if the PTO rejects the patent for any valid reason. (Novelty, prior art, non patentable subject matter, etc)

Make the fee very low if the PTO grants a patent.

This will both speed up the process of rejecting patents, and will significantly increase the percentage of rejected patents.

This will also give the PTO incentive to crowd source the finding of prior art, etc. In fact the PTO could pay a bounty to anyone who can show grounds that lead to rejecting the patent application. (eg, it will create jobs)
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Mike42 (profile), 13 May 2011 @ 12:11pm

Re: Re: Faster IS better
And just to make my point, a slashdot article published today: http://yro.slashdot.org/story/11/05/13/1814228/Small-Devs-Attacked-Over-In-App-Purchase-Button-Paten t?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Slashdot%2Fslashdot+%28Slashdot %29

It took 11 years to patent an upgrade button? Sure, they had the idea in 1992, they were just refining it until 2003. WTF????
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patent litigation, 16 May 2011 @ 4:17pm

patents=jobs
Actually, if you do just a little bit of research, you will find evidence for the jobs=patents argument. It is well known, and widely accepted as fact, that small businesses provide the bulk of innovation AND are the main sources of new jobs in America. While it's true that receiving a patent on an innovation is no guarantee of receiving VC funds that can help launch a fledgling startup company, it's also true that many VCs will not fund an invention that is not at least patent-pending, because they are in business to make money and want to know their potential investment is protected. Therefore, a startup with IP protection on its innovation(s) is more likely to get funded, and consequently more likely to survive as a successful business and hire employees.
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