First rule of patents: Do no harm to consumers

With the introduction of Rep. Goodlatte’s (R-Va.) patent reform bill today, the march for patent reform is moving forward. But a small, though growing, chorus is trying to halt this march under the guiding light that changes to the patent system should “do no harm.” As owners of patents, they parrot the meme that change might negatively impact their possessions and even their property rights.

They would do well to revisit the fundamental reason for having patents. The Patent Office does not grant patents for the fun of it, or to make a few people rich. Patents are conferred in the service of a larger aim: the aim of ensuring that the people at large have access to technology in a fair, competitive, and innovative marketplace. In acting as such, patents fulfill the mandate of the Constitution that the legislative branch “promote the progress of science and the useful arts.” Patents are granted, ultimately, for the benefit of the public.
 
And today, we see a patent system that has forgotten this fundamental principle.
 

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Nowhere is this clearer than in the area of patent litigation, where patent owners sue technology companies to extract what some have called an “innovation tax.” Unfortunate developments in the standards for patent quality have made it remarkably easy for patent owners to assert vague, questionable patents against software developers, small businesses, and even true inventors, and because the cost of litigation is so high, those accused of patent infringement are forced to pay the patent owners not based on the merits of the patent but rather to avoid protracted litigation that would run their companies into the ground.
 
It should not be surprising that, when the law permits such abusive practices in litigation, greedy and scheming folks will build a “business” out of the abuses. That’s exactly what has happened: so-called “patent trolls” buy patents on the cheap and then threaten as many people as they can think of. So we have Innovatio IP Ventures suing coffee shops and hotels, Personal Audio, LLC threatening podcasters, and MPHJ Technologies going after just about anyone who uses a scanner.

Patent trolls get away with these destructive campaigns based on two facts. First, the vaguest, most unintelligible patents—the ones that contribute least to society’s store of knowledge—are the most costly to litigate and thus the most likely to trigger settlement payments. Second, small businesses, startups, retailers, and mom-and-pop stores are least able to put up the millions of dollars necessary to fight a patent case.
 
Both of these facts allow patent trolls to succeed, but neither of these facts help to advance the public interest. Indeed, the ability to assert incomprehensible patents against small businesses in order to demand a protection racket, the classic abusive practice by patent trolls, undoubtedly restrains innovation by harming our greatest innovators, the small businesses. Because of the patent litigation system in place today, the patent trolls are certainly richer, but society is just as certainly poorer.
 
So when numerous members of Congress, the White House, members of the judiciary, and commentators from across the spectrum all call for reasonable, logical reform of patent litigation, it should be a slam dunk argument. So it is alarming to me to hear a small cadre of voices for withholding patent reform, saying “don’t weaken intellectual property rights,” “patents could be inadvertently undermined,” or “do no harm” to the patent system—by leaving it alone and allowing the abuses to flourish, that firms like Intellectual Ventures spend huge sums of cash on lobbying to tie up these common-sense reforms.
 
Yes, there is a hypothetical possibility that tinkering with the patent system may have unintended consequences that could perhaps harm patent owners. But I see a different harm, a harm that is happening right now and that will continue absent any change: a harm to consumers, who are denied access to new, useful, and in modern life essential technologies, because of a system that allows patent owners to call the shots and dictate the marketplace. If we wish to do no harm to consumers, then we urgently need change in our patent system.

Duan is the director of Public Knowledge's Patent Reform Project, where he focuses on patent policy and promoting technological innovation.

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