Patent Judges Completely Out Of Touch With How Much Patents Hinder Technology Innovation

from the and-that's-sad dept

Some scholars have collected facts and figures. For example, a 2008 book by James Bessen and Michael Meurer attempted to compute the costs and benefits of the patent system to various industries. They found that benefits significantly exceeded costs for the pharmaceutical industry, but the costs of litigation exceeded the benefits of holding patents in many other industries. Their work suggests that the patent system has become a net disincentive to innovation in those industries. The problem was particularly severe in software.



Strangely, Michel singled out Bessen and Meurer's book as an example of a text that relied too much on anecdotes and not enough on data, declaring it "very disappointing." We pressed him on this. Michel conceded the problem was less that it was too anecdotal and more that he disagreed with the book's premise—that high litigation costs were a sign the patent system wasn't working.

Judge Michel seemed unaware of the depth of the software industry's dissatisfaction with the patent system. He suggested the patent system's critics were relatively marginal figures not representative of the views of the broader technology industry. And he didn't seem to understand the dynamics of the patent arms race currently affecting the software industry. "If software is less dependent on patents, fine then. Let software use patents less as they choose," Michel said. "If other industries are terribly dependent on patents, then let's not wreck the system just because software people are unhappy."

Rader and Michel's perspectives are likely skewed by the fact they spent their time on the bench surrounded by patent lawyers (who by definition work with firms that have the resources to hire patent attorneys). For the typical software-producing firm, patent lawyers are simply too expensive. Most firms never get patents, and they typically settle patent claims rather than taking them to court. As a result, Judges Michel and Rader rarely hear from smaller firms for whom the patent system is nothing but a burden.

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Last year, we were quite disappointed (but not surprised) to see former CAFC Judge Paul Michel argue publicly that we need many more patents to encourage innovation. He went so far as to suggest a tax credit for getting patents. He also argued that more patents would mean more technology jobs -- ignoring pretty much all of the research out there. CAFC, of course, is the appeals court that handles most patent appeals cases, and since its establishment has been a major part of the problem. You can trace the massive expansion of bogus patents to CAFC's views on patenting, expanding what was thought to be patentable, and generally doing tremendous harm to the important limits on such government granted monopolies.Tim Lee recently got to talk to Michel following a talk he gave, and what becomes clear is that Michel is completely out of touch with how much of a problem patents are in the tech world today . Lee knows this subject better than probably anyone else, and when he tried to dig in on key points, it was obvious that Michel's knowledge of what actually is happening in the industry is based on myths and imagination, rather than reality. For example, when Michel pointed out that he's "a facts and figures guy" rather than one who focuses on "anecdotes and assumptions," Lee quickly points to James Bessen and Michael Meurer's comprehensive book on why patents hurt the tech industry. Michel does not appear to have actually read the book:Indeed, anyone who claims that the Bessen and Meurer book is about anecdotes either hasn't read it or is lying. It goes through so much data and so much evidence that, at times, it's a daunting read. But what Lee's discussion with Michel shows is that, while he insists he's not about "anecdotes and assumptions," that appears to be what he's entirely about. This comes to light quite clearly when Michel finally suggests that if software patents are so bad for innovation, that software companies can just "opt out":I don't know if Michel has ever spent any time around the startup community, but the vast majority of entrepreneurs I talk to would absolutely love to "use patents less." But they can't. Because there are all sorts of patent lawyers and trolls who get patents on all sorts of crap and then sue these companies. You can't just opt out. How the hell do you opt out of getting sued by a bogus patent troll?Lee notes that current CAFC chief judge Randall Rader was at the same event and complained about how unfortunate it was that "the patent system [is] coming under attack." We've written about Judge Rader before , and he seems equally out of touch -- simply refusing to believe that there are significant problems with the patent system. As Lee notes, these judges don't actually have the slightest clue what actually happens in the world of technology and innovation. Instead, their worldview is filtered through the very distorting lens of patent attorneys who profit off of the system:It would be nice if there were some way to teach judges about what's actually happening out in the world, rather than the very, very distorted view they get on the bench.

Filed Under: cafc, jim bessen, michael meurer, paul michel, randall rader, tech industry