Friday, October 12, 2012

The Patent, Used as a Sword

New York Times (10/08/12) Charles Duhigg
; Steve Lohr

Federal judges, economists, corporate executives, and others say flaws in the U.S. software patent system are hampering innovation. They also note that software patents are being used as litigation weapons. An assessment by Stanford University found that as much as $20 billion was spent on patent litigation and patent purchases in the last two years in the smartphone industry alone. Public filings reveal that for the first time, spending by Apple and Google on patent lawsuits and large patent purchases exceeded spending on research and development in 2011. Critics say the patent office frequently grants patents that describe obscure algorithms or business methods without patent examiners demanding specific details on calculations occur or how the software operates. This enables some patents to be so broad that patent holders can claim extensive ownership of apparently unrelated products built by others. Companies are frequently sued for violating patents they never knew existed or never thought might apply to their creations. "The standards for granting patents are too loose," argues federal appellate judge Richard A. Posner. Large technology companies generally want to curb the financial damages juries can award for minor patent violations, whereas drug manufacturers want to ensure they can sue for billions of dollars if a single patent is infringed.