I object to the patent system not because I don’t think ideas are worth protecting or patent offices make poor decisions but because it represents an unnatural, artificial and corrupt monopoly. It’s unnatural because it seeks to monopolise something that is not scarce or limited in supply. It’s artificial because it wouldn’t exist without specific legislation that puts it in place. Finally it is corrupt because there is no level playing field and the already-powerful can buy favorable treatment.
The patent system persists and must persist because companies have invested massively to carve out areas of that monopoly for themselves creating huge pools of future value. For example the pharmaceutical industry expects to lose $78billion in sales over the next 5 years simply from the natural expiry of old patents during that time. What does that imply for the the total value of the non expiring patents over that period?With that much at stake from a few old patents wouldn’t it make sense to invest a few billion to lobby for extended patent durations, broaden the fields of endeavour that can be patented or impose patent regimes on emerging companies? It does and companies do. What government would dare to face down the largest corporations on the planet, to be seen to be anti-innovation, a destroyer of value and of jobs?
Because of these interests the patent system can’t change from within and even if individual companies might want to break it making the first move is simply commercial suicide and they are forced to perpetuate the system just to survive.
I think the only way to remove this bad monopoly is to disrupt it from outside. I’m talking about a low-end disruption as defined by Clayton Christensen. Those kinds of disruptions are characterised by things that provide some of the benefits of the existing approach but at a dramatically lower cost and in a way that means the incumbents can’t compete without cannibalizing their existing revenue streams. We’ve just seen this play out in the music industry: online music started with a poorer experience (lower quality, hard to use, can’t display on your shelves) but was vastly cheaper (no physical distribution or stock costs) and the record companies resisted for years because to support it would mean cannibalizing their own physical music sales. The disruption is not over yet but I expect the outcome to be a massive diffusion of value away from the big 5 record companies out across the whole value network to new entrants resulting in a burst of new innovation.
So what’s the disruptor for the patent system? I don’t have the answer, but I have questions that might shine some light on an answer:
- Why is there a single provider of the monopoly – government? What would happen if there were competing entities that could provide protection of ideas?
- Is there a way to protect an idea through contract law? Perhaps a trade secret shared with licensees with non-disclosures. Independent invention would be allowable and exploitable.
- Are there patent pool systems that provide favourable cross-licensing terms in return for voluntarily reducing the term of any patents not donated to the pool?
- What about some kind of idea registry where it’s free to lodge an idea but you pay to browse and discover them? Companies could license an idea from the inventor via the registry which would compensate inventors. The Achilles heel here is that it doesn’t prevent external patent claims against the ideas in the registry.
- How can crowdsourcing of prior art become sustainable? Can the book and journal digitisation programs be cross linked to subsequent patent claims? How can the effort of doing this be rewarded?
- What is to patents as creative commons is to copyright?