The Economist Shouts: “Set Innovation Free!”

The cover story of this influential British magazine is “Set Innovation Free!”* The subtitle says what they really mean:

Time to fix the patent system.

In this blog, I’ve argued that the current patent regime retards overall innovation. It’s not aligned with empirical studies of creativity research. Patents are awarded to a single entity, as if that entity is completely responsible for the advance in knowledge. But research shows that all innovations are collaborative and distributed.

Defenders of patents will say: First, the potential reward of a patent provides an incentive to innovate. Why invest all the money in researching a new cancer drug if you don’t get the exclusive rights to market it? Second, in exchange for being granted a patent, you’re required to make your innovation public. This is supposed to help everyone else move forward faster with their own innovations.

The Economist  lead editorial argues that this is completely wrong. It cites evidence that, across industries and countries, stronger patent systems don’t lead to greater innovation. It points out that in most cases, patents never really become public, because patent lawyers have become very effective at writing complicated text that makes it impossible to tell what the real innovation is. Patents are expensive; it takes about $100,000 to go through the process of getting one. And yet, by some measures less than ten percent of these patents are ever used; the rest never make any money. So why spend the money to get patents? It’s subtle, but basically, it’s related to a finding from innovation research: that almost all new products involve tens, hundreds, of new ideas. New products are never  based on a single patent. So for lots of companies, filing a bunch of patents is a defensive strategy–it creates a “patent thicket” that prevents competitors from putting together all of the ideas they need to develop their own successful product. The current state of the technology sector is that all of the big players have their own patent thickets. So before anything new can be sold to the consumer, their lawyers have to get together and negotiate about their mutual patent thickets. (Yes, that’s the word that patent lawyers use–patent thicket. The fact that there’s such a word at all shows how big the problem is!)

The patent system rewards huge companies with deep pockets and lots of expensive lawyers. It blocks startups and entrepreneurs. Maybe there are exceptions? For example, pharmaceutical patents that emerge from university research labs, with a startup that’s funded by the university’s research office? But aren’t universities also big institutions with lots of lawyers? Patents do nothing for the little guy.

Patents are granted for too long. No technology company needs 20 years of protection for their idea. How many of you still own computers from 20 years ago?

Patents are granted for “new” “ideas” that are much too obvious: does Apple really have a patent on “rectangular tablets with rounded corners”? (Apparently, they do.) And yet, U.S. patent law says that to get a patent, your idea has to be non-obvious. I’ve written about problems with the non-obviousness doctrine here, and it’s a big topic of discussion among IP lawyers and scholars.

The Economist  cover story could be straight out of my book Group Genius:

Sharing brings huge benefits to society. Sharing leads to extra innovation. Ideas overlap. Inventions depend on earlier creative advances. There would be no jazz without the blues. Innovation today is less about entirely novel breakthroughs, and more about the clever combination and extension of existing ideas.

The chorus of creativity researchers shouts “Amen!”

*August 8-14, 2015 issue

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