I am sympathetic to the general point that many patents, and their potential for abuse, actively discourage innovation. But if we’re to solve the problem, it’s worth pinpointing where it lies – and the rise of the trolls is a symptom, not the cause.The whole system is a mess. I'm in the camp that believes ideas belong to humanity and not "the inventor" because the inventor couldn't invent if he had not had the benefit of a society that educated him and gave him the technological base for his "new idea". Instead, I would simply encourage business competition with business secrets. That worked find for the early stages of the industrial revolution because it was sufficiently leaky to allow innovation on a broad front. If governments want to spur innovation, then offer competitions with a prize.
The three pillars that enable patent trolling are: the existence of absurd patents; the forbidding cost of the legal process; and the business model of buying up patents as assets in their own right, rather than building blocks for innovation. National Public Radio’s This American Life recently discussed all three elements but focused on the last: the story is more compelling with a bad guy, after all. One contributor even compared patent trolls to a mafia collecting protection money.
The economists Joshua Gans and Scott Stern argue that there are formidable obstacles in the way of setting up a well-functioning “market for ideas”. The basic problem is that patentable ideas are supposed to be unique, and ideas are typically only useful as part of an accumulation of other ideas. As a result, negotiations over patents are vulnerable to “hold-up” as various intellectual assets are acquired. As an analogy, imagine trying to buy land to build a railway line: each property owner has the incentive to hold the entire deal hostage.
Here is an example of the idiocy that passes for "patents" in the US system. From an article in New Scientist:
A five-year-old kid from Minnesota has patented a way of swinging on a child's swing. The US Patent Office issued patent 6,368,227 on 9 April to Steven Olson of St Paul, Minnesota for a "method of swinging on a swing". Olson's father Peter is a patent attorney.An effective government would recognize the problem and pass the necessary laws to free up technology and innovation (and include a freeing up of culture from the idiocy of copyright laws to something that is less corporation-friendly and more artist-friendly).
The award has generated a mixture of chuckles and frustration at an overworked patent system unable to catch absurd applications. The patent covers moving a swing side to side or in an oval pattern. Children can get bored by swinging back and forth, or by twisting the swing to make it spin, the patent says.
"A new method of swinging on a swing would therefore represent an advance of great significance and value," it reads. Olson's alternative is to pull on one chain at a time, so the swing moves towards the side being pulled.
Peter Olson told New Scientist: "I had told him that if he invented something he could file a patent." His son had not seen sideways swinging because the swings at his school are closely spaced, so he asked his father to file the application.
The patent office initially rejected the application for prior art - citing two earlier patents on swings - but Peter Olson appealed, noting that neither was a method for swinging sideways. The patent was then issued.