Heresy of the week: The case for abolishing patents

If there’s one thing that unites the right, it’s respect for property. This includes intellectual property, which modern societies defend through legal mechanisms like the patent system.

And yet there’s a problem with patents. When they’re too broadly defined, they can act as a break on innovation and therefore growth. Ideas and concepts that should properly belong in the public domain are instead monopolised, enabling those who happen to own the property rights to extract economic rents from genuine innovators and entrepreneurs. Such rights are often sold on to third parties – known as ‘patent trolls’ – that specialise in this form of rent-seeking.   

In an article for the Washington Post, Timothy B Lee reports that one industry in particular is suffering as a result:

• The number of software patents has soared in the past two decades. In 1991, software-related patents… accounted for fewer than a quarter of all patents issued by the U.S. Patent and Trademark Office. In 2011, for the first time ever, software patents accounted for the majority of all patents issued:
• The rise in patent litigation is a more recent phenomenon. “The overall number of defendants in [patent] cases increased from 2007 to 2011 by about 129 percent over the 5-year period,” the GAO [Government Accountability Office] reports. “Lawsuits involving software-related patents accounted for about 89 percent of the increase in defendants during this period.”

Though the patent system is all about defending property rights, it is also a form of state bureaucracy – and, as we know, bureaucracies aren’t very good at regulating complex, rapidly-developing industries:

• “The GAO says that ‘many recent patent infringement lawsuits are related to the prevalence of low quality patents; that is, patents with unclear property rights, overly broad claims, or both. Although there is some inherent uncertainty associated with all patent claims, several of the stakeholders with this opinion noted that claims in software-related patents are often overly broad, unclear or both.’
• “Why is software-patent quality so low? The GAO speculates that ‘language describing emerging technologies, such as software, may be inherently imprecise because these technologies are constantly evolving.” Also, it says, ‘claims in software patents sometimes define the scope of the invention by encompassing an entire function — like sending an e-mail — rather than the specific means of performing that function.’”

So how do we resolve this dilemma – protecting legitimate property rights while ridding the software industry of its patent trolls? One solution would be to resort to ever more complex regulation:

• “The GAO suggests some modest changes to improve the quality of software patents, such as amending the law to ‘require more detail for algorithms’ in software patents.”

However, this suggests a future in which technological progress is held up while a growing army of expensive geek-lawyers argue over lines of code. Timothy B Lee argues for a very different course of action:

• “...eliminating software patents altogether. There’s little evidence that patents promote innovation in software, and a great deal of evidence that they hinder it.
• “And this is more than an abstract possibility. New Zealand voted to ban software patents this week. The European Union has been debating whether to allow patents on software for more than a decade, with a strong grass-roots movement pushing to disallow them.”

As the world becomes evermore connected by information and communication technology, with software becoming ubiquitous, we need to decide who we want shaping this future. It seems likely that those countries that opt for innovators and entrepreneurs over lawyers and regulators will have the best of it.