A Serious Problem: Posner on the State of Patent Law
A few weeks ago Judge Richard Posner dismissed (with prejudice) Apple v. Motorola, a key patent infringement case. You can read the opinion here, as well as fellow blogger Kathleen Hudik’s excellent analysis here. What followed is a unique look into the mind of one of the United States’ great contemporary jurists. In an article for The Atlantic, Judge Posner shared his thoughts (in the abstract, as not to comment directly on any forthcoming appeal in the Apple case) on the current patent system in the US. In short, the system is failing. I would be remiss to disagree.
Last month, I discussed how sometimes acting outside the (overly strict) law is necessary to facilitate innovation, especially in the rapidly developing world of intellectual property. Posner offers a similar argument from a different perspective—t he current format of our patent system inhibits innovation by overregulating and overprotecting patented ideas. Issues such as defensive patenting and patents trolls stifle creativity and encourage excessive and unnecessary litigation.
On a base level, let’s say there are two companies (A and B), both in the business of manufacturing widgets. Contemporaneously, A and B are developing a new type of widget that will revolutionize the market. While each company’s designs have certain similarities to those of the other, each design has unique features, and one design, let’s say A’s, is objectively superior to B’s. However, B is the first to file for registration . Who wins the patent? Under the current system B wins and A is excluded. Judge Posner does not like this, nor should he:
A patent race is winner take all. The firm that makes an invention and files for a patent one day before his competitors reaps the entire profit from the invention, though the benefit to consumers of obtaining the product a day earlier may be far less than the cost of the accelerated invention process.
By investing both time and capital to develop a new product, would-be innovators are effectively gambling that they can be the first to the finish line. The risk of not recovering their investment may discourage innovators from even attempting to develop new designs and products.
Apart from the financial and technological impact, over-patenting leads to a slew of frivolous litigation—as was the case in Apple. In the previous example, what happens when A, convinced it has the superior design, takes the widget to market anyway? The patent holder will likely sue for infringement and the case may wind up in front of a judge and jury with limited expertise. Posner remarks, “Judges have difficulty understanding modern technology and jurors have even greater difficulty . . . [plaintiffs] believe that jurors tend to favor patentees, believing that they must be worthy inventors defending the fruits of their invention against copycats.” Combine this issue with the financial burden of creating a patentable design and the preexisting procedural flaws of patent litigation (which unfairly favor plaintiffs)[1] and a developer or inventor has even less incentive to develop or invent.
The current patent system has made the development of new, useful technologies and designs within the United States severely limited. Hopefully, lawmakers will follow Posner’s lead and at least consider the need for patent law reform. The benefit derived from competition is too great to maintain the current over-exclusionary status quo.
[1] Posner notes that, unlike in copyright law, a patentee need not, in order to prevail in an infringement suit, show that the defendant knew he was infringing.
This post – like Posner's opinion – was obviously written by someone who has never worked for a technology company and has never dealt with patents in real life. In real life, it is never so simple that if "B is the first to file for registration…Under the current system B wins and A is excluded." First, that is NOT the current law. For another few months we are still a first-to-invent system, so if A could show he invented before B, even if A filed second he would still be the one entitled to a patent. However, even after we transition to a first-inventors-to-file system, it is still highly unlikely that the second filer would be completely excluded. As you state "each company’s designs have certain similarities to those of the other, each design has unique features." This would most likely result in differentiated patent filings, which often result in both companies being issued similar, yet patentably distinct, patents. This would be especially true if the innovations were truly groundbreaking, as A's patent filing would most likely be the only major piece of prior art to B. The result: the companies would bicker and fight and maybe even sue each other. However, 99% of the time it results in some kind of cross-license that is the result of an arms-length negotiation. In this way, both sides would continue to sell their product, and both sides would be rewarded for the time and money they invested to develop the product through payments on the license. That is how the patent system works in practice, and for most companies and inventors it is a fair trade off.
Joe- The I don't think you understood what this article is trying to achieve. It is over simplification of patent law attempting to make the point that we need to consider the system as it is flawed.
[...] For more on this, see my reaction to Posner’s comments in my July blog. Share About the Author: Author: Sean Braun Sean Braun is a third year at Washington College [...]