With the recent furore surrounding Apple v Samsung, can we ask are the patents in question actually damaging innovation and investment? Would we as consumers be in a better place if patent law discriminated among the different types of inventions that need patent protection?
The use of software patents to threaten litigation and force settlement payments, rather than to develop or commercialise the patented invention has been reported in our previous blog on Twitter’s Innovators Patent Agreement.
US judge Richard Posner recently dismissed a case in the US District Court where Apple and Motorola sued each other for alleged smartphone infringement. Posner stated there was no point in holding a trial because it was apparent that neither side could show they had been harmed by the other’s patent infringement. Posner normally would never appear in this lower court, his appearance might suggest that he wanted to do something directly about the “dysfunctional patent system” in the US.
In a recent article Posner discussed that while patent protection does provide an incentive for innovation in the pharmaceutical industry, other industries (such as software) do not have the same expenses regarding testing (drug trials can run for years). The expanded drug testing period can mean that ten years or so may have passed since the drug was patented, the patent monopoly allows the inventor to recoup his investment in the remaining term of the patent. Drugs are often easily and cheaply copied, patents prevent competitors who have not incurred the expenses on testing copying and undercutting prices.
Products such smartphone technology, the combination of successive innovations resulting in product improvement, don’t incur the same invention costs as drugs and don’t have the same long delays after patenting before revenues are generated. Or is that really the case? Microsoft’s R+D expenditure (9.8 billion over the last year) exceeds that of any pharmaceutical company. Apple would certainly argue that lengthy periods are spent in developing new improved technology that can be fully commercialised. And technology can be easily copied, looking at the counterfeiting industry in China for example.
But the gadgets we use today evolve at a remarkable rate, unlike drugs available to treat disease. Is getting to market first not advantage enough? This means the first company will have the association of the product with its name in the public’s mind. And the first company to market will have a head start at reducing production costs and making improvements. We hope there is always going to be a new improved gadget available to consumers, good for our choices and wallets. But if a patent blocks competition within the patents scope and the company holds enough patents to monopolize the market, isn’t this defeating the point of patents encouraging innovation and leave us as consumers with less choice?
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