UPDATED: See rebuttal opinion here...
Why would a company spend billions of dollars to build a microprocessor-manufacturing plant employing thousands of skilled workers in the U.S., if it could only protect its technology by obtaining patents in other countries? Why would a venture capital firm fund a social-networking service provider if the company could not obtain patents on its innovative software backbone, preventing others from easily copying it?
This is, however, a future some are promoting with continuing calls to abolish all -- or even parts -- of the U.S. patent system. Some of those proposals are in reaction to the so-called smartphone “patent wars” -- including the recent Apple-Samsung case -- and spring from sources as varied as lawyers to economists.
But here’s the thing: Patent disputes like this are a natural characteristic of a vigorously competitive industry.
And they’re nothing new: Similar skirmishes have historically occurred in areas as diverse as sewing machines, winged flight, agriculture, and telegraph technology. Each marked the emergence of incredible technological advances, and each generated similar outcries about the patent system.
Patents Are Healthy for Innovation and the Economy
If anything, patent skirmishes demonstrate the value that competing companies place on the innovations in their marketplaces.
#### Manny Schecter
##### About
[Manny W. Schecter](https://twitter.com/MannySchecter) is Chief Patent Counsel, Associate General Counsel, and Managing IP Attorney at IBM – the top annual U.S. patentee for the past 19 years. Schecter organized the patent quality initiative that became the Peer-to-Patent project, elements of which are now incorporated into the USPTO patent examination process under the America Invents Act.
We are actually witnessing fewer patent suits per patent issued today than the historical average, according to economic historian Zorina Kahn. The rate of patent litigation was twice what it is today compared to some decades in the mid-19th century.
Economists also tell us that 75 percent of a company’s value is attributable to its intellectual property (IP) -- and that IP-intensive industries contribute $5 trillion per year to the U.S. economy. These industries account for about 35 percent of gross domestic product and 40 million jobs, including 28 percent of the jobs in the United States.
Abolishing the patent system and the protection it provides is a step toward extinguishing the fire of genius, at a time when innovation is critical to our nation’s future.
Beware the ‘Software’ Argument
Perhaps in recognition of the economic need for patents, some pundits have now adjusted their calls for change to abolishing only software patents. The premise? That the growing number of software patents has caused a corresponding growth in software patent litigation.
But six of the 10 companies globally with the highest software revenues are U.S. companies, including the top three. In other words: The success of the U.S. software industry correlates with its use of software patents to protect its innovations. If patent litigation caused by the U.S. patent system stifled innovation, U.S. software companies would not be the most successful in the world.
>Patent disputes are a natural characteristic of a vigorously competitive industry.
And it’s not just software-focused companies. Software is increasingly the way innovation is implemented in *all *industries. Consider for example an automotive fuel efficiency invention that manages engine cylinder operation. A purely mechanical implementation would add too much weight, offsetting the improvements and eliminating the environmental benefits. But using software-controlled microprocessors results in enhanced efficiency, reliability, and safety … all at reduced cost.
The development of software was a technological innovation in its own right, one that enabled better and simpler implementation of inventions once limited to electronic hardware -- just as discrete electronics was a technological innovation enabling a paradigm shift beyond mechanics. Software is an important medium for innovations accessible to many who would not have been capable of innovating in electronic circuits or in mechanical devices.
If an invention is novel, the idea that it should be patent-protected in hardware but not in software makes no sense.
Eliminating patents for software will not enhance innovation or benefit our economy. Software is also the most easily appropriated type of intellectual property. Ever since U.S. courts made it clear that copyright is unavailable to protect their ideas, developers have sought to protect inventions embodied in their software via patents. Denying patent protection for software will cause these developers to look for other ways to protect their IP investment -- resulting in code that is less open, less accessible, and less interoperable.
Such balkanization would discourage many of the collaborative ingredients of the very software ecosystem that has had enormous economic and technological impact.
Software is increasingly the way innovation is implemented in all industries.Be Patient
The U.S. patent system has played a critical role in improving healthcare, discovering drugs that save lives, and creating devices that put the world’s information at our fingertips.
The strength of the U.S. patent system is a factor attracting development organizations to the U.S. from overseas in certain industries. Optimizing such a system -- which serves such a broad set of technological constituencies and has many variables -- will, necessarily, take time.
We’ve just begun implementing the America Invents Act: the most significant U.S. patent reform in our lifetime. Passage of this legislation required many years of hard-fought negotiation and compromise among patent system constituents. It was truly a bi-partisan, cross-industry accomplishment.
We need to be patient, let the system work, and observe the ultimate impact. So let’s stop talking about abolishing the patent system or certain kinds of patents.
Editor's Note: Given the enormous influence of patents on technology and business -- and complexity of the issues involved -- Wired is running a special series of expert opinions on "the patent fix*". ***This piece represents the perspective of one of the longest-standing companies in the series. **
Wired Opinion Editor: Sonal Chokshi @smc90