The truth about how patents stifle innovation while destroying the small guys

Wednesday, July 10, 2013 by: J. D. Heyes
Tags: patents, bureaucracy, innovation

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(NaturalNews) I have often said that if the massive, ever-expanding Administrative State we have today existed 150 years ago, the U.S. might still be a second-tier power with moderate technology and a largely rural, under-educated population. That's because some of the most game-changing technology from the past century-and-a-half would never have been invented or introduced into the marketplace; the Administrative State would have completely stifled it.

The advances in modern weaponry; the telegraph and, eventually, the telephone; the modern interstate highway system we enjoy; the building of the railroads from border to border and coast to coast; the automobile (and the mass production of it); the airplane; the Internet - none of these would have been fully developed if the current U.S. bureaucracy existed back then.

'It's no wonder they find it impossible...'

The Electronic Freedom Foundation has developed a graphic that demonstrates exactly how the modern Administrative State - what talk show host Mark Levin calls the "fourth branch of government" - stifles or hinders innovation, largely through the U.S. Patent Office:

The US Patent Office, overwhelmed and underfunded, issues questionable patents every day. "Patent trolls" buy too many of these patents and then misuse the patent system to shake down companies big and small. Others still use patents to limit competition and impede access to new knowledge, tools, or other innovations.

It's no wonder that small businesses and individual inventors find it almost impossible to make the patent system work in their favor, often leaving them without any defense against competitors with giant patent arsenals and litigation budgets.

Let's say you have a new technology or an idea you want to bring to the marketplace. If you don't want a patent, fine, but then you risk a couple of things - one of the most important, someone else with more resources may steal your design and patent it themselves, possibly making a fortune off of your idea.

Now, if you do want a patent, you're going to spend years going through the process and about $20,000 in legal fees. You will ultimately end up with a patent, but you might not be free and clear of the process yet.

Why not? Because in the blink of an eye, you may wind up getting an "infringement letter" from one of those patent trolls EFF mentioned, which will cost you something like a hundred grand to fight.

If you don't get bushwhacked by a patent troll, you will get saddled with a licensing fee - and it could be very high. Are you willing to pay it "even if it's exorbitant and your product doesn't infringe or you think the product should be canceled?" If so, you could still face years and years worth of infringement letters and lawsuits, perhaps in perpetuity.

If you're not willing to face all of that then here is your other prospect - simply abandon your idea altogether and continue working a job you might just hate.

At that point, "the patent system claims another victim," says the EFF graphic. "Wasn't it supposed to encourage innovation?"

The solution, says EFF, is to reform the patent system or, better yet, get it completely out of the way of innovation altogether, and find a better way for inventors to a) bring their ideas to market; and b) protect their inventions from theft and phony interference.

'Big corporations learn the hard way'

The biggest problem, it seems, is that the Patent Office too often issues patents for things and concepts it should not have issued patents for. Some are humorous and innocuous but others are harmful, especially to U.S. industry, writes patent attorney Alex Chachkes, for C|NET:

Far less harmless are the sundry patents that are just as infirm but are directed straight at the heart of American industry. It costs millions of dollars in litigation fees to show that a patent should not have been granted, and most big corporations have learned that the hard way.

He also notes that the patent system has been hijacked by those seeking to game the system. In such cases, companies "often settle for princely sums rather than have a jury predisposed against big corporations, and with no technical knowledge, decide their financial future."

Today's patent system is part of the federal government's vast bureaucratic branch which, as it grows ever larger, is becoming less and less functional. It's why we don't have total food freedom, why we can't get labeling of GMO foods, why you can't grow whatever you want on your own land, and why the existence of some bug or creature on your property allows the government to tell you what you can and can't do with it.


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