Book review: Patent Failure

Authors: James Bessen and Michael J. Meurer
Publisher: Princeton University Press
Publication Date: March 2008

Patent Failure examines the current state of the American patent system based on the way it has traditionally been treated–as a type of property system. Using the yardstick of property rights and the economics they influence, Bessen and Meurer analyze the costs and benefits of patents to innovators. Their qualification: “If the estimated costs of the patent system to an innovator exceed the estimated benefits, then patents fail as property.”

The authors rightly point out that many of the criticisms of the patent system are anecdotal. We’ve all heard about the peanut-butter-and-jelly patent. So what are we to base reforms on then? Patent Failure answers that with empirical evidence, largely economic, but also from history, international comparison, and legal precedent. The book focuses quite a bit (some might say a bit too much) on the claims brought by E-Data, now a decade-old case.

For quite a few years, patents have been lumped in with the completely different systems of trademark and copyright under the title “intellectual property.” And, as the authors point out, the quotation marks have fallen away. Many, if not most, people now assume patents are property. But for certain industries, namely software, patents fail as a property system.

So what should we do?

That “for certain industries” part is a sticky point. I have to admit, it’s easy for me, and I suspect others, to forget that patents can work quite well outside of software. But because that’s where the controversy is, that’s where the media is, and so it’s the failures we hear about. Bessen and Meurer do plenty to build a separation, often making exceptions for chemical and pharmaceutical patents. Those types of patents come much closer to passing the patent-as-property test than software.

The authors then devote chapter 9 to “Abstract Patents and Software,” the entirety of which you can download as a book preview. They point out that “no other technology has experienced anything like the broad industry opposition to software patents that arose during the 1960s.” That is to say, this unprecedented opposition is coming from within the industry the patents ideally help protect. Software developers oppose patents on their own work. You simply cannot draw the same fence around the property lines of software patents the way you would around the property boundaries of the land you own. The authors conclude:

[Software patents] play a central role in the failure of the patent system as a whole. Any serious effort at patent reform must address these problems and the failure to deal with the problems of software patents–either with software-specific measures or general reforms–will likely doom any reform effort.

Like not giving away the end of the movie, I’ll leave it to you to read and form your own opinion of their recommendations that follow that chapter. You can also read excerpts and some interesting discussion about the book on PatentlyO, a patent law blog.

And if you’re interested in hearing more about the authors’ ideas firsthand, Michael Meurer will be presenting a session about Patent Failure at the Red Hat Summit on Thursday, June 19 at 11:30.

This entry was posted by Ruth Suehle on Thursday, June 12th, 2008 at 1:11 pm and is filed under Fedora, culture, review, truth. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.