Jack Chou commented yesterday on this blog about the patent arms race and the need for patent reform. On Monday, Google announced its $13B bid to acquire Motorola’s patent portfolio to defend Android, the latest example of companies spending billions on IP defense. I agree with him.
The Patent Office is a mess
Patents take years to be evaluated because the Patent Office is overwhelmed with increasingly technical patents across many fields. There are 1.2M patent applications awaiting evaluation. To put that in perspective, 7 million patents have been granted since the Patent Office’s inception in 1790. I make no mention of the billions of dollars spent annually on legal fees for patent disputes detailed beautifully in this infographic from Focus.com.
As a result, there have been claims the current patent system is hindering innovation and there have been many suggestions for patent reform. Most focus either on (1) streamlining the patent filing process or (2) removing patent protection from certain kinds of inventions.
A typical process improvement might shift the burden of prior art discovery to inventors. Today, the beleaguered Patent Office spends days researching previously filed relevant patents, called prior art, for each application. Requiring inventors or private companies to perform this research might speed the approval process along.
Fred Wilson, among others, has called for the elimination of the business process patents. These patents protect novel ways of doing things, not new technologies and are often quite broad, practically ensuring they will be used in patent litigation in the future.
That’s all pretty complicated. But I think patents have a more fundamental problem: they last for 20 years.
The first recorded patent granted in 1421 for an assembly to hoist materials across the Arno River, was granted for 3 years. 28 years later Henry VI granted the first 20 year patent for the production of colored glass.
Patents are designed to ensure that the inventor, who toiled away to develop an invention, has an appropriate time to profit from the innovation. In the days of colored glass and basic cranes, companies moved slowly and it took years to commercialize ideas. Hence the 20 year patent period.
It’s time for a change
Unsurprisingly, this 600 year old policy of 20 year patent terms is outdated. Startups bring technology to market in 3 to 12 months. Technology adoption life cycles are shrinking dramatically meaning inventors profit from their innovations faster than ever. The New York Times published a beautiful chart demonstrating this compression. Click on the image for a bigger copy.
Faster technology adoption means an inventor should be able to capture the market value of a patent in a shorter period than 600 years ago. Unfortunately, the World Trade Organization still requires patents to be respected for at least 20 years.
The benefits of shorter patent durations
If we reduce the lifespan of a patent, technologies (and business processes) could enter the public domain more rapidly than before spurring more innovation. Most of the patent battles I’ve watched have been over older patents fought by large incumbents or patent trolls seeking revenues from tech monoliths. IT’s speed of innovation is tremendous and our patents should respect its cadence.
Once patents expire, innovation blooms. The 3D printing revolution, exemplified by MakerBot, exploded because of key patent expirations. MakerBot makes 3D printers, also called Rapid Prototyping machines, that cost 95% less than their competition. MakerBot sprang onto the market in 2008 because the 3D printing patents filed in 1988 had expired. Think of how much change we’ve seen since 1988. No one had mobile phones back then!
A corollary to this previous point is shorter patent periods require incumbents innovate quicker. If the 3D printing patents had lasted 10 years, we might have seen MakerBot in 1998, or seen lower cost 3D printers ten years ago!
Respecting industry differences
Reducing patent lifetimes makes sense for IT but because Innovation cycles vary by industry, it may not be a valid policy across all sectors. Biotech companies struggling to pass through FDA trials require longer protection to recoup R&D costs. And the patent system should respect those particularities of industry. But I believe we should reduce the duration of software patents.
Determining the proper duration of a patent is a tricky issue but reducing the duration of a patent is one way of pursuing broad patent reform and spurring innovation while respecting the work of inventors.