That was the
premise of a famous TV
advert run by The Economist, the weekly newspaper read by
liberal-minded politicians, businesspeople and bankers. Well,
if you do find yourself sat next to the former US Secretary of
State and Nobel Peace Prize winner, don’t worry:
you can now converse about patent reform. The Economist last
week published a leader column provocatively titled "
Time to fix patents" and a longer cover story "A question of
utility" (right). As the newspaper notes, it is at least
being consistent: as long ago as 1851, it
argued for patents to be abolished.
The newspaper does not go that far today, but it does urge
radical changes, including shorter patent terms for some
technologies; better mechanisms for challenging them; a
strengthening of the obviousness requirement; and a
use-it-or-lose-it rule (which may or may not be the same as
compulsory licensing).
Its
position has been widely criticised, including it must be said
by people who have an interest in the present patent system
being maintained. One of the most detailed critiques came on
the IP Watchdog blog, where Gene Quinn (left)
described the article as "full of inaccuracies and outright
falsehoods" and concluded: "The Economist owes its readers a
sincere apology for this entire article. Getting something so
fundamentally wrong, when it is so easily researched, is
astonishing."
Perhaps the definitive criticism of the article though comes
from the latest WIPO data, which shows that patents
are growing by up to 10% per year: according to the latest
figures, there were 9,338,179 patents in force worldwide in
2013, compared to 7,526,841 in 2010. If the patent system is
bankrupt, why are more and more inventors using it? And why are
countries such as China desperate to get on the patent playing
field?
Groundswell of opinion
Are patents granted too slowly, or too
quickly? Are they too expensive, or too cheap? Is it too hard
to challenge patent rights, or too hard to enforce them?
Having said that, The Economist clearly strikes a chord with
many readers. At the last count, its leader column had been
liked 6,300 times on Facebook, and many of the 200 or so
comments posted on its site are positive. That represents a
groundswell of popular opinion against the patent system, which
is also evident in the US reform debate and the opposition to
multilateral treaties.
Moreover, even many supporters of patents would agree that
the system is not functioning as well as it could or should,
transparency and quality need to be improved, and the whole
process could be more efficient. When it comes to remedies,
though, things get difficult: Are patents granted too slowly,
or too quickly? Are they too expensive, or too cheap? Is it too
hard to challenge patent rights, or too hard to enforce
them?
 |
| Huawei was the
number 1 PCT user last year |
The Economist is right to say the patent system overall is
expensive (something that those inside the business often gloss
over). But the more important question is whether it provides
good value. If you’re spending even $10 million on
a drug patent, but the product it protects is worth $5 billion
a year, or if (like one in-house counsel I spoke to recently)
you have an annual budget of $100 million and rising, the
answer is almost certainly yes. But if you’re
an SME surviving on bank loans and sleepless nights, then every
extra $1000 of fees feels like a nail in your corporate
coffin.
Innovation comes in many forms, and patents only protect
some of them. As Jeff John Roberts said in Fortune
(in response to The Economist): "[A] big part of the problem is
that lawmakers have come to see patents and innovation as the
same thing. They’re not." If you asked the average
person in the street to name the world’s most
innovative companies, they would probably suggest Google,
Facebook and Apple before Huawei, Qualcomm and ZTE (which were
the top three
companies for PCT publications in 2014).
In the long term, patents might indeed become less useful,
as innovation becomes quicker (so the 20-year term becomes
irrelevant), more incremental, more dependent on crowd-sourcing
(think of smartphone apps) and more software-dependent (look at
the open source movement). Perhaps other IP rights such as
copyright, data protection and trade secrets will become more
relevant than patents in encouraging and rewarding this
innovation. In an ideal world, other incentives such as prizes
and charitable donations would also play a part –
though that has yet to happen on a large scale.
In the short term, though, to paraphrase Winston Churchill:
Patents are the worst means of promoting innovation, except for
all the others that have been tried.