Current US Patent Law Costs Jobs

Mark Cuban posted yesterday a nice rant If you want to see more jobs created – change patent laws which he followed up today with an excellent post on how the patent system should be fixed.

He wrote:

Google just bid $900mm to buy a patent collection. Those patents ended up being sold for $4.5BILLION dollars. That is money that for could have gone to job creation.

He is right. Microsoft, Apple, Oracle, HTC and Samsung are all spending billions of dollars on patent portfolios. The patent system is being leveraged for protecting market share and creating barriers of entry into the market. Small companies cannot safely enter the market anymore because of the unknown risk. Nobody is going to invest in that. How is that helping innovation?

He wrote today:

How does this impact jobs and job creation ? The thing about patent litigation is that it is unlimited and unquantifiable. There is absolutely no way to look at your business and say “this is where and what my risk is”

To me that sums it up. The mobile handheld market is one but there are other markets as well which are heavily protected by patents and are basically a minefield to go into. It is getting worse because big corp is patenting anything what they can find. Some examples: IBM has 25,000 US patents and adds 5000 US patents per year, Microsoft has 10,000 US patents and files 3,000 patents per year. Oracle and Apple are doing the same.

The current US patent system is not sustainable and is abused by large market powers. It needs to change and it needs to change quickly.

Thomas Jefferson wrote to Isaac McPherson on August 13th 1813:

Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from anybody. Accordingly, it is a fact, as far as I am informed, that England was, until we copied her, the only country on earth which ever, by a general law, gave a legal right to the exclusive use of an idea. In some other countries it is sometimes done, in a great case, and by a special and personal act, but, generally speaking, other nations have thought that these monopolies produce more embarrassment than advantage to society; and it may be observed that the nations which refuse monopolies of invention, are as fruitful as England in new and useful devices.

I agree.