Archive for May, 2010

A (Patent-)Law to promote the welfare of Lawyers

Saturday, May 22nd, 2010

I already wrote about it, on how Patents kill Innovation. If you’re looking for more background on some of the assertions in this text, they’re explained there.

Right now the german Bundesgerichtshof decided that it would be a good idea to allow software Patents, even if the European Patent Treaty says in Article 52 “The following in particular shall not be regarded as inventions … mathematical methods … programs for computers”. How did the BGH get the idea to rule on such a case in the first place, and not dismiss the whole affair as illegal and contempt of justice?

Either this is, according to Henlons Razor, an act of incredible stupidity, or there were some serious interests in the background lobbying. And in fact, those interests very much exist, and they’re very much part of the judical system itself.

As it happens, apart from Pharmacy, nobody will make money from Patents he applies for. Yes, this sounds like a very bold statement, but keep in mind that this applies to all of the patents of a field taken together; there might be financially successful patents among them, but this is eaten up by all the other patents which just cost money. No where does this money go to? Legal costs of course. So in all fields of enterprise except pharmacy, patents only fill the coffers of Lawyers, Attorneys, Judges and the Patent Office. It has been estimated that those costs make up to 20% of the final product price, making the patent system in the end just a tax-system which funels a tax of 20% to the legal system.

Obviously, those on the receiving end have a strong inventive to keep it this way, and won’t allow anyone to interfere with their rent. And most probably this is what happend with the BGH. As people in the legal system they are bound to know a lot of people also in the legal system, and those Lawyers and Attorneys will have biased views which they probably have communicated to the BGH. By now, the BGH is probably firmly convinced that patents are necessary for innovations to happen (or any suchlike hogwash).

Are you curious about that “Pharmacy exemption”? Well, the patent system works there (with its main effect) as intended, with some severe side effects. Patents are granted, the patents licensed to third parties, and the license-fees not only cover the legal costs but are high enough to make a decent profit. Not anticipated was that the big players in that field lobbied succesively “patents on prducts” and “patents on genome-sequences” into the law, plus that they wreck havoc on smaller players and on the general public, most noteably on the public in third world countries.

So even if patents on pharmacy work as expected when viewed from within the system, the idea of patents as such is inherently flawed in regard of innovation, development, economy and ecology. And if you’re a proponent of free markets, patents as “government granted monopolies” are an abomination anyway. Patents are an inherently mercantilistic idea (especially due to the fact that a patent does not allow you to produce any product, but allows you to forbid your competion to produce it), along the lines of such illuminaires as tariffs, subsidies and protective duties.