The software industry has know for ages that patents stifle, rather than promote, innovation. Now the mainstream media are starting to get the same message. Here’s L. Gordon Crovitz in the Wall Street Journal:
For the third year in a row, Congress has just given up on passing a law reforming how patents are awarded and litigated. This despite growing evidence that for most industries, today’s patent system causes more harm than good. Litigation costs, driven by uncertainty about who owns what rights, are now so huge that they outweigh the profits earned from patents.
Companies as diverse as Verizon, Google, Cisco and Hewlett-Packard recently formed the Allied Security Trust to buy patents they may want to use some day and that otherwise could end up in the hands of “patent trolls.” These firms buy up old patents not to produce anything, but instead to work the system to extract settlements. A similar group formed against trolls to protect the Linux open-source operating system. A Google executive explained that helping to buy up and license patents is the “legal equivalent of taking a long, deep, relaxing breath.” Companies can rest easier, and legitimate inventors get paid for their work.
These corporate trusts seem like odd ways to protect products, but the memory is still fresh of the BlackBerry device almost being forced to shut down. Parent company Research in Motion paid more than $600 million in 2006 to settle a case. But in this and many other cases, companies can’t be sure whether or not they are complying with patent law. For example, by one estimate there are more than 4,000 patents that must be reviewed and potentially licensed by firms selling products or services online. The legal abuses arising from uncertainty are legion. More than 100 companies are being sued for alleged patent infringement by using text messaging internationally.