Archive for December, 2011

The End of the Patent System

Tuesday, December 27th, 2011

There is a thing I’m pretty good at, and that’s playing Cassandra. I’ve got a knack on realizing what “unforeseen” impact and unwanted side-effects legislature will have. And usually after the shit hits the fan I can tell you “I told you so”. So this post here is to make sure I can say “I told you so” in a few years ;).

Well, this is what the patent system will look in the end. Essentially, we’ve got two possibilities:

  1. Finish the bugger off. Abort it. Ditch those government-granted monopolies for good, so innovation can prosper once again.
  2. Continue as before. Pump more money and resources into a machine for corporate-warfare.

The patent-system is a relatively modern law; some countries adopted something like it in the early 18th century, but most followed up only at the end of the 19th century, often on foreign pressure (well, it’s not easy to explain why you should pay patent-holders in e.g. France if you want to export there, while not having the same stick to punish French imports into your country, see? Incidentally, that’s what patent law boils down to…).

There had been lively debates about it then, with the gist of it being “we can very much do without it and it doesn’t help innovation, but if the other country is doing this to us, we should do the same to them…”.

Of course, all these debates and the evidence that a patent-system as such has profoundly NO impact on innovation have been forgotten long ago. The patent-system has found its proponents, first of course among lawyers, which swayed the public opinion around to “it’s necessary and it’s needed for innovation” (a propaganda produced superstition).

Only in the last few decades, patent-proponents made a land-grab in widening ever more the definitions on what’s patentable: processes instead of just products, software, business-processes and genomes. And with that finally tripped onto the toes of people which until then had nothing to do with patents, and who started to realize that there is something wrong with patents. And some others noticed too, how nicely patents can be used to kill their competition.

Nowadays, with the patent-wars in the mobile sector, it’s plain to see that there is something fundamentally screwed about patents. And if we don’t stop the whole mess, it’s also quite clear where this will lead to: The patent tax.

Simply put: Everyone producing anything (apart from art) will need patents. These might be patents one owns, but these won’t be enough. Since patents do not grant a positive right (If I have a patent, it does not grant me the right to make something, since this something could be covered by other patents as well; it only grants me the right to withhold someone else from making it without paying me) but only a negative one, everyone will need to license an arbitrary number of patents from everyone else.

There is (or will be), from a macro-economic point of view, absolutely nothing to be gained from patents. For the inventors neither, they will only get some small cut for their patents back, from what they will have to pay for licensing all those other patents. In fact, the only winners in this game are the patent offices themselves, and the lawyers.

There are estimates that about 20% of the cost of any mobile phone are patent costs even now. This will, or already has, spread to all other possible devices and patentable matter: computers, cars, planes, finance (business methods!), housing, agriculture, health-care and so on. And of course, you can expect this percentage to rise. In the end, what we will have is at least a 20% lawyers-tax on everything.

Do you really think this is a prospect for a sustainable society? All entities producing anything of value having to pay taxes to lawyers? A strange world indeed..