Our broken patent system stifles innovation, benefits only tech gorillas

Former Sun CEO Jonathan Schwartz has written a super article detailing how Apple, Microsoft and Kodak all threatened to sue Sun.

Sun responded to the Steve Jobs and Bill Gates threats with powerful counter-threats. Basically, Apple was infringing on Sun patents, Sun on Apple patents, Microsoft on Sun patents, and Sun on Microsoft patents. The tech gorillas smartly all decided to hold their fire.

Ironically, the only successful suit — costing Sun over $100 million — was brought by Kodak, which sued because it had little technology for Sun to countersue. “Kodak had acquired a patent from a defunct computer maker (Wang) for the exclusive purpose of suing Sun over an esoteric technology, Java Remote Method Invocation.” A home-court jury in Rochester, NY ruled for hometown favorite Kodak.

Bottom line: In technology, everything — even idiotic stuff that fails the “non-obvious” patentability test, like one-click checkout — has been patented, so it’s virtually impossible to produce anything of value without violating patents. Consequently, only the biggest tech firms with giant patent portfolios are able to innovate without fear of being sued. Conversely, “patent trolls” — who produce nothing of value but seek to suck money from value-producing firms through lawsuits — are well positioned to profit by stifling innovation because they cannot be counter-sued.

I blame the patent system for allowing such long and generic monopolies over ideas. The justification for patents is to encourage innovation by rewarding innovation. By so richly rewarding pseudo-innovation, our current patent system erects barriers to innovation at every turn.

I also blame the US Patent & Trademark Office (USPTO) for approving millions of “innovations” not worthy of protection because they’re not truly innovative. Of course, the USPTO is under-staffed and under-paid, so the ultimate blame for their failure resides in Congress and the presidency.

Posted by James on Wednesday, March 10, 2010