<a href="http://www.northmobilepost.com/wp-content/uploads/2012/09/patent_office.jpeg"><img src="http://www.northmobilepost.com/wp-content/uploads/2012/09/patent_office-150x150.jpeg" alt="" title="patent_office" width="150" height="150" class="aligncenter size-thumbnail wp-image-5456" /></a>
Patents have become a topic of great controversy lately. Large tech companies like Apple, Google, and Samsung have been waging a war over infringements, each claiming the other is copying them in some form or another. Apple takes most of the heat in this large scale battle, as it has taken the most aggressive stance against companies that have tried to compete in the smartphone field. Apple has recently won major cases against rival Samsung, with one judgement coming out to $1 billion. Now, Apple wants to have Samsung products taken off the shelves.
The struggle between these large corporations raises a very important question: are patents necessary? A recent article at <a href="http://www.theatlantic.com/business/archive/2012/09/the-case-for-abolishing-patents-yes-all-of-them/262913/">The Atlantic</a> makes the case that we might be better off without them. The article's writer, Jordan Weissmann, cites a paper from the Federal Reserve Bank of St. Louis in making his argument. The paper stated that while weak patent laws would be preferential, no patent laws at all would not do as much harm to the economy as previously thought.
The paper goes on to say that weak patent laws would be hard to maintain, as patent attorneys and patent holders would always be pushing for stronger protection. Any amount of patent law would ultimately end up with a mess like the one we have today. The paper also notes that some industries, like the pharmaceutical industry, would have to be exempted because of the cost of developing their product, which can run into the billions. Given the importance of the products they are developing, the government would have to step in and offer them some protection for their work, but an alternative to the current system could be developed.
The working paper was written by Michele Boldrin and David Levine. They maintain that we could not get rid of patents over night, but in gradual steps. Boldrin and Levine argue that a way to ease in to a period of no patent protection would be to shorten the terms of current patents.
Boldrin and Levine aren't the only prominent experts speaking up in favor of patent reform. Mark Cuban has been a notable critic of the current patent wars, speaking out against current system. Cuban made his billions through the sale of Broadcast.com, and is still a big investor in tech companies. In interviews, he has stated that the number of patent lawsuits companies face has been rising dramatically in recent years, stifling the industry.
People should be rewarded for their hard work, but that does not appear to be what the patent system is protecting these days. Instead, it appears that companies are trying to create and protect monopolies in a given field through use of the patents. In the past, companies just bought out the competition. Yesterday's mergers and acquisitions have morphed into patent litigation and cease and desist orders.
In the end, it is the customer who will suffer. Take the Apple vs Samsung lawsuit. There is no doubt that there are plenty of similarities between the two devices. The same thing could be said about the products offered by McDonalds and Burger King. In the free market, when you are successful, other companies will imitate you. As a business, it is your job to stay one step ahead of the competition.
Boldrin and Levine argue that companies only resort to patent litigation when their pace of innovation slows. Apple is a prime example of the phenomenon. Their last two offerings, the iPhone 4S and the iPhone 5, lacked the innovation of some of Apple's previous offerings. Couple that with the rise of Android based phones, and Apple was beginning to feel the heat of the competition. At this point, Apple should be working harder to innovate and one up its rivals, but instead it sought to have them removed from store shelves.
Despite stiffer competition and a relative lack of innovation, Apple is doing fine. Because it was the first major player in the field, it has become the brand most associated with the smartphone. The recent release of the iPhone 5 saw over 5 million units fly off the shelves in just 3 days. A
Boldrin and Levine may be on to something. Any amount of patent protection is bound to be exploited. The current system is stifling innovation and costing American businesses millions of dollars in legal fees. Some companies like Google have even resorted to buying "defensive patents" just to guard themselves against future litigation. That is not what the spirit of the law is all about. If the problem can not be corrected, perhaps it should just be scrapped altogether.