How to End Abuse of Patents and Help Restore Economic Innovation

A new paper from Lincoln Labs' Derek Khanna lays out a great way to move forward in tech.


Lincoln Labs

Writing for Lincoln Labs, Derek Khanna has a great paper outlining the sources, costs, and necessary reforms of the current patenting process. Here's a short version:

Our liberty and economic vitality is jeopardized when so many industries are calcified by government-granted monopolies for non-inventions stifling potential innovations, and when patent trolls sue inventors and small businesses for operating Wi-Fi or for having a podcast….patent reform is an essential part of restoring economic liberty….

Patent trolls are a problem, but big companies are patent trolls too. Real reform requires fixing the underlying problem….

Design patents can also slow innovation and the economic argument for them is also dubious. Apple has a design patent on "slide to unlock" and rounded rectangles, preventing any new competitors in the smartphone market from creating phones with these features. They even threatened to sue Google when Google sought to implement a similar unlocking process with a 3 by 3 grid, forcing Google to adopt a 4 by 4 grid. Designs are regularly copied throughout the economy; that is how competition functions and is the reason designs are rarely protectable (fashion has minimal or no protection for example)….

Low-quality patents can be easily addressed with a few simple reforms, some of which include:

1. Increasing statutory patent quality requirements;

2. Providing greater Congressional oversight of the Patent Office for poor-quality patents;

3. Reforming the incentive structure at the Patent Office to favor high-quality patents;

4. Instituting a "second-pair of eyes" rule;

5. Reforming the patent examiner "prior art search" by specifically implementing crowdsourcing;

6. Creating an independent creation defense;

7. And strengthening Section 112 to ensure that patents are an instruction guide for how to build the invention rather than deliberately vague.

Khanna stresses throughout 

Madison was clear that the U.S. Constitution banned monopolies—unjustified restrictions on economic liberty—except for in two cases where the "benefits" narrowly outweighed the "costs." Those were for copyrights and patents because those monopolies were worth the substantial "costs" to business and liberty. Madison himself referred to these monopolies as the "sacrifices of the many to the few."

Read the whole thing, which stresses the original constitutional purposes of intellectual property laws such as patent and copyright.

In 2013, Reason's Zach Weissmueller explored how patent trolls kill innovation: