Richard Posner Gets It Wrong
President Barack Obama has encountered a torrent of opposition for his use of Four Little Words: “You didn’t build that.” The President used these words to show that private success rests on public infrastructure. But in so doing, he slighted the importance of private initiative and innovation. The pushback has been enormous.
Right now, the patent system is also under major attack by progressives who think that the way to industrial progress lies through an expanded public domain. The fashionable attack on patents is just one part of the full-scale attack on market institutions that has led to an economy mired in 1.5 percent annual GDP growth.
The anti-patent sentiment has just been fueled by a remarkable opinion by Judge Richard Posner, as I explain further in my weekly column for Hoover's Defining Ideas.
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Oct '10
Re: Richard Posner Gets It Wrong
I'm willing to believe that Judge Posner skips some steps in his reasoning - it wouldn't be the first time. But I don't understand Prof Epstein's argument. It seems to be along the lines that, if we start from the assumption that the patent system works, then we can conclude that the patent system works.
But why should we start with that assumption? Why does the patent system get labelled (at least indirectly) a market institution? Surely the opening move is to explain why this particular allocation of (state created) property rights is best, and by what criteria. Then we can measure what actually happens against these assumptions.
Vanishingly rarely, in my experience, are decisions to patent an 'invention' made for reasons of recouping investment in R&D. They are rather made for reasons of defence (the others have patents, so we need them too) or offence (the others have patents, so we need them too). That is, a major reason in practice that patents are registered is to credibly play the patent litigation game. This is a game that favours the big over the small, and, frankly, the less over the more innovative.
Nov '10
Re: Richard Posner Gets It Wrong
Why not borrow from Locke's Second Treatise and have injunctions/damages be a possibility only in those cases where the patent holder has actually tried to make use of his invention by either bringing it to market or selling it to someone who can? The analogy between farmland and invention isn't perfect, but it does illustrate the one objection that fuels most people's dissatisfaction with the current system: staking claims to ideas that you have no intention of implementing winds up creating social losses. You can patent a design that, while feasible, isn't in use for whatever reason. Example: I'll get a patent on a tablet that uses projectors to create a 3D interface. Neat, and currently possible, but prohibitively expensive. Now I just have to sit and wait for the technology to mature to where it can be made cheaply, and for a company to attempt to do so, and then I sue the pants off of them. I can grab up all the intellectual land and just sit on it.
*mostly applies to inventions obvious enough that the company would have come up with them independently, making them analogous to a natural resource.
Edited on July 31, 2012 at 2:20pmJun '12
Re: Richard Posner Gets It Wrong
Slightly off-topic, but here's my contribution:
Patents have become included under the broader label of "intellectual property," along with trademark law and copyright law, very different disciplines. Nevertheless, the I.P. umbrella has led to many, embarrassingly including myself, to confuse the three, and lump all three together when using rhetoric that tries to lay blame on any of the three for perceived industrial or market injustices.
Apr '11
Re: Richard Posner Gets It Wrong
I have a general question, for Mr. Epstein or any layer reading this. How does one determine the past losses incurred by a patent violation. or example in the case in question here Apple v. Motorola. How could Apple prove that costumers Motorola aquired with a product that violated Apple's patents would in the absence of the Motorola product have purchased Apple products. Is it not reasonable to assume that perhaps these individuals faced with the lack of a Motorola product would simply have not bought anything in this particular market? If that is the case than Apple would have had not extra costumers in the absence of Motorola products and therefore no extra revenue, than what they already collected.
What is the basis for assuming that there was loss incurred.
May '11
Re: Richard Posner Gets It Wrong
Blindingly unnecessary and redundant title: Posner Wrong.
It becomes even more obvious when he writes about technology. I was never so disturbed in my law school experience as when reading his opinions as he struggled to pretend he had an understanding of the modern technology around him.
Apr '12
Re: Richard Posner Gets It Wrong
What if patents were recognized on the balance sheet. Than larger, strategic buyers would buy the smaller companies for their hard work to develop patents.
May '12
Re: Richard Posner Gets It Wrong
The "patent troll" issue may be overstated-- but the "trademark troll" isn't. Everything these days is being protected under the guise that it's registered trademark. At least the rationale for patent protection is that it encourages the production of some new innovation. Where trademarks are concerned, the mark doesn't add anything to the product's utility or durability. Let's start the IP reform in the granting of trademarks.
Jun '12
Re: Richard Posner Gets It Wrong
Hear, hear. There is a difference between the unfortunately highly-regulated pharmaceutical industry and the thankfully less-regulated software industry. A relative of mine inSilicon Valleyrecently received his first patent while working for a major company. He recounted how the company encouraged him and his coworkers to be as vague as possible in their application. Meanwhile, there are plenty of chemically similar drugs approved, but that doesn't seem to bring the pharmaceutical industry much harm.
The best solution would probably be a reformed patent office. But that would be a much harder thing to put into place, as it might require better management instead of better laws.
Aug '10
Re: Richard Posner Gets It Wrong
The real problem with patents today is that the patent office is incompetent when it comes to evaluating software patents, and the barrier for filing such patents is very low. Patents are being issued which are overly broad or which 'protect' trivial ideas that anyone would think of when working that particular problem. "One click shopping" should be no more patentable than the notion to use a big sign to attract shoppers.
My engineering team is periodically tasked to go through our code and find 'anything patentable'. So we have to stop development and spend time going through each new feature of the software to determine if it has a 'unique idea'. Some of the patents we've submitted are ridiculous, and we're sure that they'll be rejected, but to our surprise they sail through.
The company doesn't care about building new products fom the patent. These patents go into their war chest, which is used as a weapon against other companies. The other big companies do the same, and we endlessly sue each other, then settle. The real result is that new startups without their own patent warchest are frozen out of the market.
Feb '12
Re: Richard Posner Gets It Wrong
I am IS manager in pharmaceutical company (and spent years at software vendors before) - so I was exposed to both software and pharma patents. I am very nervous to find myself on the opposite side of Mr Epstein. You write "...especially in the areas of software and business method patents." I think this changes Posner's point. The opposition to patents (quite universal, as I can see) is specifically limited to those areas. So many patents in those areas don't pass smell test from obviousness and prior art perspective. To take just one example, a dozen of patents were rejected on review in Oracle v Google lawsuit. Patent Trolls like Lodsys and Interval Licensing describe the "invention" in such vague terms that Computer Science freshman's midterm is very likely to violate some patent.
There are other means to protect software - copyright, trade secret, etc. Just like Mozart never patented his operas (and today's copyright owners do just fine without patent protection), patenting software is equally unconscionable.
May '10
Re: Richard Posner Gets It Wrong
I've spent a lot of time in the IP area (the core of my current job) for the last 16 years. I think that Judge Posner is actually closer to being correct here than is Prof. Epstein (who is usually right about everything else, except when he disagrees with John Yoo). Software patenting (as opposed to code copyright) should be curtailed, business method patents probably ought not exist. At a minimum, they should be curtailed substantially not by an ethically compromised Congress but by a commission operating similarly to BRAC.
Conservatives are struggling here with the intersection of property rights and use of government and crony regulators to protect incumbent (large, rich, etc.) businesses. The pendulum is too far moved toward the big boys right now, it needs to go back toward the middle.
For basic enabling patents in certain broad areas, a feasible solution is required licensing as with the recording industry, where "covering" a song has a set royalty. This provision was originally put in place to prevent RCA Victor from becoming the Google of music publishing due to their patents on recording gear.
And for solid medical reasons, pharma patents need to be drastically changed.