Disclaimer: I'm an intellectual property litigator. About 60% of my docket involves patent litigation (usually relating to the tech sector, although I've litigated patents in almost every industry), 15% involves IT outsourcing disputes (usually relating to ongoing, long-term service transactions relating to the implementation and servicing of software systems), 15% involves non-competes and misappropriation of trade secrets, and 10% involves trademarks, design patents, trade dress, and the like. I think this post and your comments in particular are fascinating and interesting, so you'll have to forgive me if I geek out on you. :)
I think public disclosure is one of the fundamental principles underlying the patent system that is missing in this discussion. We create limited monopolies by granting the right to restrict the use and sale of a particular invention not just because we want to promote innovation and individuals and/or companies won't create things without the incentive of a monopoly (an assumption that I have a difficult time believing), but because we want people to publicly disclose their creations so that others can figure out how something was made and make it better, faster, stronger, etc. People and companies have always made things without the incentive of a monopoly. Full stop. They usually protect those inventions by limiting disclosure of how they did it. The patent system is used to incentivize disclosure by granting a limited monopoly over the claimed invention. Its why claim construction and Markman is so important. You only get a monopoly over what you disclosed. Full-stop.
Which brings me to the "diminishing returns". Plenty of people say that we need patents, just for brief periods. This implies a calculation is being made - the cost of the patent is worth the benefit of what it provides. While I grant a sense of reasonableness to these arguments, I haven't seen anyone attempt to provide this calculation.
I don't think its possible to actually provide such a calculation. How do you measure the benefit of disclosure of any patent without the benefit of hindsight? Some patents will be more beneficial than others. How can you predict that without the benefit of hindsight? Who gets to decide if its beneficial or not? Congress? A jury? The Courts? The PTO? Individual patent examiners?
I think the patent term (which is currently 20 years, with a 6 year 'look-back' for damages once you file a complaint for infringement) is society's attempt to (1) reasonably balance the cost of the patent versus the benefit it provides to society by disclosure of the invention and (2) provide an efficient and predictable system that companies and individuals can rely on to make decisions.
Do I think society got it wrong? Is the twenty year term too generous? In my opinion, yes, particularly in the tech industry. Twenty years ago, we didn't even have cell phones. Now we have cell phones that would put a twenty-year-old computer to shame. Would it be possible to conduct studies across industries in order to determine the "most reasonable" patent term for each industry in light of the fact that the purpose of the patent system is to facilitate innovation through disclosure? Sure. But, IMO, any such calculation would necessarily involve variables and assumptions that would make finding the "one true calculation" exceedingly difficult.
At any rate, thanks for the fascinating discussion. Your steam engine link at mises didn't work earlier, but I'm going to try it again later. It sounds very interesting.
Also if you're interested in keeping up with patent law (generally), the blog Patently-O is pretty darn good at keeping track of current events (be they legislative, administrative, or judicial).
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Date: 5/4/12 02:59 (UTC)I think public disclosure is one of the fundamental principles underlying the patent system that is missing in this discussion. We create limited monopolies by granting the right to restrict the use and sale of a particular invention not just because we want to promote innovation and individuals and/or companies won't create things without the incentive of a monopoly (an assumption that I have a difficult time believing), but because we want people to publicly disclose their creations so that others can figure out how something was made and make it better, faster, stronger, etc. People and companies have always made things without the incentive of a monopoly. Full stop. They usually protect those inventions by limiting disclosure of how they did it. The patent system is used to incentivize disclosure by granting a limited monopoly over the claimed invention. Its why claim construction and Markman is so important. You only get a monopoly over what you disclosed. Full-stop.
Which brings me to the "diminishing returns". Plenty of people say that we need patents, just for brief periods. This implies a calculation is being made - the cost of the patent is worth the benefit of what it provides. While I grant a sense of reasonableness to these arguments, I haven't seen anyone attempt to provide this calculation.
I don't think its possible to actually provide such a calculation. How do you measure the benefit of disclosure of any patent without the benefit of hindsight? Some patents will be more beneficial than others. How can you predict that without the benefit of hindsight? Who gets to decide if its beneficial or not? Congress? A jury? The Courts? The PTO? Individual patent examiners?
I think the patent term (which is currently 20 years, with a 6 year 'look-back' for damages once you file a complaint for infringement) is society's attempt to (1) reasonably balance the cost of the patent versus the benefit it provides to society by disclosure of the invention and (2) provide an efficient and predictable system that companies and individuals can rely on to make decisions.
Do I think society got it wrong? Is the twenty year term too generous? In my opinion, yes, particularly in the tech industry. Twenty years ago, we didn't even have cell phones. Now we have cell phones that would put a twenty-year-old computer to shame. Would it be possible to conduct studies across industries in order to determine the "most reasonable" patent term for each industry in light of the fact that the purpose of the patent system is to facilitate innovation through disclosure? Sure. But, IMO, any such calculation would necessarily involve variables and assumptions that would make finding the "one true calculation" exceedingly difficult.
At any rate, thanks for the fascinating discussion. Your steam engine link at mises didn't work earlier, but I'm going to try it again later. It sounds very interesting.
Also if you're interested in keeping up with patent law (generally), the blog Patently-O is pretty darn good at keeping track of current events (be they legislative, administrative, or judicial).