Can patents actually stifle innovation? - 11/22/13
As the recent case of the technology heavyweights battling over claims of infringement demonstrates, patent cases are high-stakes. The losing company must pay hundreds of millions in damages fees and faces billions of dollars of lost revenue. Speaking about the court case, a spokesman for the winning side stated that it was “more than patents and money. It has been about innovation and the hard work that goes into inventing products that people love.”
The process of applying for a patent is expensive and time consuming; however it protects and creates a market monopoly on the invention, which can be hugely rewarding for the patent holder. However, many businesses, who do not have the money to battle tenuous patent claims are becoming victims to so-called ‘Patent Trolls’. Patent assertion entities (PAE) are often non-manufacturing companies that buy the rights to libraries of patents in order to extract licensing fees. Depending on what side of the lawsuit you are on, the service a PAE offers is either invaluable or exploitative. Patents, usually so crucial to protecting invention, may now be the one of its biggest threats. There is a concern that these patent trolls could stifle innovation, as inventors hesitate to develop emerging technologies at the risk of facing financial ruin from patent litigation.
Two United States Senators have introduced a bill designed to prevent PAEs from launching frivolous lawsuits. However caution has been urged, as this bill could also impede companies and inventors filing genuine patent claims, though the fact that such a measure has to be introduced shows the extent of the trolling problem.
Whilst protecting inventions is essential, it could be argued that patents can also restrict innovation. 2014 has been predicted as the year of the 3D printing boom, as patents for a method known as laser sintering reach their end. As barriers to open innovation are lifted, competition increases and prices fall dramatically, which was seen when the patent for another type of 3D printing, fused deposition modeling, ran out. As China started to manufacture cheap versions and more companies started to develop their own printers, technology that once cost thousands of dollars suddenly became accessible to a wider audience.
Without patents, innovation in a number of industries would suffer. It offers financial protection should an idea be stolen and is often a ‘strategic necessity’. They are also the cause of a number of barriers to technology innovation in particular, especially when it comes to cost. Do you think that patent laws should be re-examined?