A little under a month ago, I spent my weekend writing about artificial creativity. Since then, I’ve been reading more about the overlap between copyright, patents and tech and – unsurprisingly – the more I read, the more out of my depth I feel.
Despite these grandiose feelings of naïveté, I recently came across an incredible paper
on innovation races by Ryan Hill and Carolyn Stein that I think everyone should read. Here’s their thesis – broken down into oversimplified tidbits.
Why do we need patents? Historically, patents are used to solve a double problem:
1) The problem of incentives. For scientists and tech afficionados, credit is currency. Patent offices are essentially the banks that distribute this currency on a first-come, first-serve basis – incentivizing firms to pour more money into research and development (R&D).
2) The problem of knowledge diffusion. Patents also encourage firms to disclose their inventions, chipping away at the default veil of secrecy most firms in the science-tech world operate under.
So far, so good. Patents mean more money for R&D, more innovation, more shared knowledge.
Cracks appear, though, we start to talk about clout. Hill and Stein researched structural biologists and found breakthroughs with higher reputational rewards (i.e. more clout) induced more competition and were completed quicker – but at a lower quality.
The pressure to get to the patent office first meant biologists shunned “careful, methodical work” for “quick, dirty experiments.” This slapdash innovation generally required refinement later down the line, leading to a vicious cycle of time and monetary inefficiency.
Patents discourage innovation in other ways, too. In the US, the cost of “patent trolls” – i.e. firms that lock up strategic patents to collect license fees and blackmail companies – makes up 13 per cent of R&D spending.
Case in point: Apple is a patent troll. It sued Samsung using a patent that claimed the slide-to-unlock feature was Apple’s invention despite contrary evidence. After battling it out in court for seven years, Samsung agreed to pay license fees to Apple to settle the case
For economist David Levine
, litigation costs and license fees like these = taxes on innovation that discourage the small(er) inventor.
Patents are necessary (everybody loves clout) but insufficient.
Here are a few suggestions I’ve pulled from people much smarter than me on how patent law can be tweaked to maximize innovation:
- Increasing how much credit we give to 2nd place inventors.
- Barring entry by competitors once one team has started working on an invention.
- ‘Use it or lose it’ rules to stop trolls from locking up patents.