Is the U.S. patent system really in such disarray?

On October 7, a New York Times article subtitled “A System in Disarray” detailed the arguments against technology patents and their use as a “sword” to stifle innovation. According to Erik Sherman at CBS MoneyWatch, the Times falls into the same trap many others are, that of perpetuating several myths that, if left unchecked, would eventually call for a system overhaul instead of system tweaking.

  1. The publicity surrounding the high profile smartphone wars would make most readers think this is a relatively new phenomenon, when in fact inventors throughout history have realized the value of their patents was equal to their willingness to defend them.
  2. Apple’s trial court victory against Samsung might lead readers to think that Apple will now dominate the smartphone industry, limiting consumer options. Not so, as this blog has discussed before. For example, a coming battlefield will be in LTE communications, and a recent search revealed Apple has just 23 U.S. patents that mention LTE, while Samsung has 121 and ranks number 4 overall.
  3. Sherman cites a Morgan Lewis white paper that shows statistics on patent invalidity rates on actions brought in U.S. District courts: from 2007 to 2011, a whopping 86% of the patents litigated had claims invalidated. This is strong evidence that though it can be argued the original claims should not have been granted in the first place, the system itself is working.
  4. If number of patent filings is an accurate measurement of the state of innovation, the “stifling” innovation argument against the current patent system doesn’t stand initial scrutiny, as “the number of patent applications filed continues to increase every year.” There are, of course, other indicators of innovation.  For example, longer term, if R&D expenditures are being replaced by patent litigation costs, innovation will suffer.
  5. One argument against the huge outlays companies are putting into patent litigation is that those costs are somehow going to be borne by the consumer. So far, if the prices of smartphones are representative, that does not appear to be happening.