Patent Office is Under-Performing

Protecting Their Intellectual Assets: Appropriability Conditions and Why US Manufacturing Firms Patent (or not)

I read this paper by W Cohen, R Nelson, and J Walsh.  It was published in 2000.  It confirms a lot of things that we all know.  They present evidence that patents are used primarily for reasons other than what the Patent Office was created for, and that the Patent Office is probably not achieving it’s goals.

Patents are currently filed for two primary reasons:
   1) To block a competitor from getting the patent and suing you.
   2) So that if you get sued over a different, unrelated patent, you can counter-sue with an arsenal of equally unrelated patents.  

According to the USPTO, their purpose is to

“promote the progress of science and the useful arts by securing for limited times to inventors the exclusive right to their respective discoveries (Article 1, Section 8 of the United States Constitution)”

However, Cohen, Nelson &Walsh present compelling evidence that these days, companies rely heavily on secrecy and time-to-market as their primary competitive differentiation to advance science, and that patents offer little, if any additional “progress of science”.  Although the paper doesn’t show it, I postulate that patents actually hinder progress of science due to all the wasted resources that go to lawyers instead of R&D.  (e.g. Blackberry builds a phenomenal, billion dollar business, and lawyers, who produce & invent nothing, steal $600M).

The fact is that the patent office is no longer necessary.  Businesses don’t even value it.  While there may be some isolated cases where it helps individual inventors, by-and-large it is excessive and wasteful.  As a society, we would all benefit from more scientific progress if we just left inventions laissez-faire.

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