
Reforming the Patent System Toward a Minimalist System - phenylene
http://www.becker-posner-blog.com/2012/09/reforming-the-patent-system-toward-a-minimalist-system-becker.html
======
rayiner
From the blog post:

"Although ending the patent system is a clean solution to all the problems
induced by modern patenting, it clearly is not desirable given the importance
of industries like the pharmaceutical industry. Since this industry spends on
average hundreds of millions of dollars bringing to market a successful drug,
pharmaceutical companies would not invest such large sums without the
protection of patents (or without other benefits). Probably the best solution
would be to maintain the patent system on drugs and a few other products that
are expensive to innovate and cheap to copy, and eliminate patents on
everything else. In particular, this means eliminating patents in the software
industry, the source of much of the patent litigation and patent trolling."

I generally agree with this, but I think it's a little analytically lazy. I
think the Supreme Court was right to recognize that we should not just
categorically ban certain kinds of patents. Instead, we should articulate the
distinctions between the two industries and reformulate the patent eligibility
criterion in terms of this distinction.

~~~
jaekwon
We'd probably have better and cheaper drugs without the patent system. If more
companies can make and sell the same drug, more companies can also fund
research.

Patents should be categorically banned.

~~~
InclinedPlane
This is borne out of a massive incorrect assessment of the pharmaceutical
industry. It takes a tremendous amount of money to bring a drug to market,
billions. More if you count all of the drugs that are tried but fail to meet
expectations (of efficacy or safety). If you don't allow drug makers a window
of time in which to make back their R&D costs through high profit margins then
you simply will not see as many new drugs developed.

~~~
jkn
That's a rather one sided view of the problem. Just because patents presently
allow the pharmaceutical industry to fund R&D costs (estimates of which might
be inflated[1]) does not mean they are the only way. If the cost of patents
outweigh this one benefit, we should get rid of them.

First, not all research is done by the pharmaceutical industry. In the US,
they account for about 36% of research spending[2], behind the government
(38%, federal plus state plus local). Note that total funding by the industry
(not limited to pharma but including biotech and medical devices) represented
58% in 2007 but the role of patents in those industries is a different debate.
The remaining 4% are from foundations and charities.

Next, considering that pharmaceutical companies spend far more on marketing
than research and development (typically 25% vs 15% of revenues
respectively)[3] and considering that a large part of their revenues comes
from public healthcare anyway, one can wonder how hard it would be to replace
their R&D spendings with public funds, and get the money back thanks to
cheaper drugs,since generics are typically 20% of the brand price.

(BTW I wonder what part of these 15% of revenues spent on R&D is for important
research and what part is spent on looking for the next Botox)

Also patents could be replaced with public funding in ways that minimize the
impact on the industry, for example by granting prizes for the discovery of
important drugs.

[1] <http://news.ycombinator.com/item?id=4591766>

[2] <http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3118092/>

[3]
[http://www.plosmedicine.org/article/info:doi/10.1371/journal...](http://www.plosmedicine.org/article/info:doi/10.1371/journal.pmed.0050001?imageURI=info:doi/10.1371/journal.pmed.0050001.t001)

~~~
InclinedPlane
Sure, there might be many ways to fix the problem, but just getting rid of
pharmaceutical patents and doing nothing else is unlikely to help.

Also, be careful about misusing the statistic of "drug companies spending more
on marketing". A huge part of "marketing" is giving away free samples, which
are often used by doctors to help reduce the cost of drugs for low income
patients.

~~~
jkn
Ah indeed I read more in your comment than you actually wrote.

Regarding free samples, it's a good point that I overlooked. According to
reference [3] above, free samples account for 28% of marketing expenditures.
The remaining 72% still represent 18% of revenues spent on pure marketing. So
even if all free samples were used by doctors to help the poorer patients,
there is arguably more money spent on marketing than R&D.

------
ajb
Becker and Posner tend to make pairs of posts on the same subject. The OP is
from Becker, here is the corresponding post from Posner: [http://www.becker-
posner-blog.com/2012/09/do-patent-and-copy...](http://www.becker-posner-
blog.com/2012/09/do-patent-and-copyright-law-restrict-competition-and-
creativity-excessively-posner.html)

------
gojomo
Reform could also take the form of tightening the 'novelty' and 'nonobvious'
requirements. For example:

• independent invention should be an absolute defense for infringement, and
within a certain timeframe, evidence of obviousness as well

• allow a review process (perhaps when a patent is challenged) where a jury of
skilled practitioners is given the same motivating problem brief and a few
days to outline possible solutions. Anything they describe would be deemed
'obvious'

~~~
rayiner
I think proof of independent invention should at the very least establish a
presumption that the invention is not novel. The probability of a truly novel
invention being independently invented within some time frame is small enough
that we can assume for the purposes of a civil case that it negates novelty.

~~~
gojomo
I think independent invention speaks more to obviousness. Let's say facing a
new problem in a new market, five different teams all come up with something
unprecedented in the same year or two.

Such an invention was definitely 'novel' to the first group, and was also
'novel' (as far as they knew) to the other four teams. But given the state of
industry development, it was also 'obvious', because many of the teams that
needed it all came up with it in short order.

There's no "progress of the science and arts" benefit from giving an extra
monopolistic reward to a team that's just a little bit early (perhaps even
earlier than the invention can be deployed). There _might_ be a social benefit
from rewarding inventions that can only happen with the promise of the reward.

~~~
tzs
Keep in mind, though, that the requirement is non-obviousness to one of
ordinary skill in the art. Even if more than one team comes up with the same
thing in the same time frame, it might still be non-obvious if those teams
were geniuses and dozens of ordinary teams had also tried to solve the problem
and failed.

~~~
gojomo
In the context of standards that could or should be changed to reform things,
the traditional 'person of ordinary skill' standard need not be held as a
constant.

For example, 'obviousness' could be more expansively construed as being from
the perspective the kinds of people "skilled enough they are professionally
tasked with inventing new approaches".

The relative preponderance of teams finding a particular solution, versus
trying and failing, does seem relevant. (If 2-out-of-2-teams succeed, maybe
they are geniuses, but the 100% success rate cannot disprove the hypothesis
that the solution is obvious. If only 2-out-of-30 succeed, maybe there's
rewardable inventiveness there.)

Still, when there are 2 or more cases of independent invention, that should be
economically/legally relevant. This is especially true if one of the inventors
_didn't_ pursue a patent. While not be proof of traditional 'obviousness', it
is evidence that the invention was "evident enough to be discovered as needed
without patent incentives"... which sounds to me like the economically-ideal
standard.

(And wouldn't that be a nice counterbalance to the 'patent everything
defensively' scramble? That is: by inventing and using something _without_
patenting it, not only would you have an absolute immunity from infringement,
but also establish a presumption that specific practice was never deserving of
patent protection in the first place.)

------
khmel
Patents bring the following trade-off: inventor monopoly defendence vs. block
of progress\future use cases utilizing patent. So patents both are enforcing
and slowing innovation.

This could be fixed with with the following solution that will maximize public
good. There're no good reason for 20 years patent periods in some industries
with short cycle of product development, like software, mobile, cloud etc.
Cleraly, after first 3-5 years patents start to be either completely useless
or slowing down both patent holder's and external innovations. If company is
defended by patent, there's no urgency for innovation. This is unfair
advantage.

~~~
danielweber
The 2-3 year wait on getting a patent issued can be an eternity in software
while a competitor has ripped you off soon after you released. Anyone who has
been in that case would gladly trade a term of half the length for a granting
that took place twice as quickly.

I think software needs a new kind of protection, that issues faster, makes it
easier for other people to search, and expires sooner.

~~~
khmel
I agree

------
vevillas
I just recently wrote a paper on software patents. Although we could suggest a
shorter patent term, there are many practicalities in the process of granting
patents that makes it an inferior solution to abolish software patents
altogether.

Even without patents, we still have copyrights, "dress trade" and other
nuances of the legal system, before we really have a worry-free, innovative
environment.

God and the compilers bless the brave man to embrace such noble cause.

------
pg7
Oh, I can't wait to see how lobbyists and lawyers allow to dismantle the
patent system ;-) I'd like to give some constructive critic, however. So, I
propose the opposite approach. Let's make the whole system even more complex
and expensive for patent holders.

Maybe every patent application should be provided with a formal proof of how
much specific innovation has cost. Declared cost would be verified and
accepted by patent office. Consequently, the upper bound of possible damages
awarded during a litigation should be set to that amount of money.

Such approach should repel patent trolls twofold. First, since costs of
innovation in the software industry tend to revolve around 0, litigations
would not be profitable. Second, more troublesome patent application process
would decrease the number of issued patents and, statistically, increase their
quality, making patents less accessible and useful for patent trolls.

------
justincpollard
True innovation protects itself in most cases, depending upon the ease with
which a third party can copy it. In general, the threshold for what
constitutes innovation in software is much to low. The certain of Apple's
patents in its case against Samsung provide relatively good examples of this.
The "bounce-back" feature, while a nice addition to iOS, is not an innovation
that warrants patent protection. Nor is the "tap to zoom" patent.

~~~
rayiner
So there are two kinds of patents we're talking about here. One is a utility
patent, the other is a design patent. Most of the patents in Apple's suit
against Samsung are design patents. See:
[http://en.wikipedia.org/wiki/Design_patent#Comparison_to_uti...](http://en.wikipedia.org/wiki/Design_patent#Comparison_to_utility_patents)

The purpose of a design patent isn't to protect a novel invention that took
tons of R&D to develop. Rather it straddles the gap between patent law and
trademark law. The purpose is to protect the functional aesthetic of a
product.

They are two very different things. A a feature protected by a design patent
is _supposed_ to have no functional utility. If e.g. research showed that the
"bounce back" feature had the optimal visual feedback in clinical testing,
that would actually go to invalidating the patent. The reason they are
protected is precisely because they are so arbitrary. There is no need to use
something like the "bounce back" feature other than to copy your competitor.

~~~
nitrogen
I believe the bounce-back patent used against Samsung was a utility patent.

~~~
rayiner
That's what I get for quick googling instead of reading the court docs. It
doesn't really help that most of the sites reporting the suit use "design
patent" and "utility patent" interchangeably. :(

