The Patent System Is Hindering Innovation And Needs To Be Fixed

A whole bunch of you are sending in one of the first mainstream articles I've see on patents that gets almost (but not quite) everything right. The Economist has a wonderful piece that clearly explains why patents are hindering, rather than helping innovation. It notes the difference between innovation and invention -- and how patents quite often can hinder the former. It discusses how patent thickets get in the way of innovation, and the focus on using patents to force through massive cross-licensing deals simply adds transaction costs and reduces efficiency in the market. The solution to all of this put forth by the Economist is mostly the same thing we've been suggesting for years: bring back a real test for "obviousness" that gets rid of obvious patents -- though, it falls short in not suggesting an independent invention test for obviousness. The only other areas where I'd say the Economist article falls short is (1) simply assuming that patents do work in pharma and biotech -- when there's evidence that's not true, (2) assuming that a ruling in Bilski alone might clear up the obviousness issue and, finally, (3) its parting suggestion that programmers focus on copyright monopolies, rather than patents. Still, it's about as good a piece on this subject as you might expect to see in such a mainstream publication.

Source : The Economist, 8/2/10