Vivek Wadhwa, a technology entrepreneur and academic, writes in the Washington Post about what Silicon Valley tech firms – major Obama donors – want from President Barack Obama’s second term. Number 5 on the wish-list is a ban on software patents:
Legal battles over patents dominate the tech industry headlines. It’s not only Apple-versus-Samsung — smaller technology companies are frequently being trampled by patent trolls. As I’ve explained before, because of flaws in the patent system and government leaders’ misunderstandings, there is an arms race of sorts happening in the tech industry, which is sapping billions out of the economy and crushing technology startups. The larger technology companies have invested fortunes in their patent portfolios. But senior executives have said to me privately that they would rather disarm than waste the time and money they presently do on patent wars.
And with good reason. Evidence of the harm caused by software patents continues to mount, including a recent report from the Congressional Research Service that discusses the harm caused by the subversion of the patent system from a shield into a sword by “patent assertion entities”, a practice largely prompted by software patents:
First, patent litigation is expensive, and there is no quick or affordable way to get rid of a patent suit except to settle. Defendants frequently find settlement the most cost-effective option, even if they are certain that they are not infringing…
Second, where injunctive relief is available to PAEs, what commentators call the “patent holdup” problem arises as PAEs leverage the threat of an injunction in royalty negotiations to “capture far more than the intrinsic value of their invention.” Those wielding this power have described it as a “Damocles sword.” Patent holdup is said to be particularly acute in the IT sector because products incorporate dozens or even thousands of patented features or components, and the owner of any one of them can keep the entire product off the market…
Third, by contrast to their targets, PAEs have nothing to lose and much to gain by litigating aggressively. Unlike most other patentee-plaintiffs, PAEs pursuing infringement suits “do not risk disruption to their core business” because “patent enforcement is their core business.”
Patents are supposed to encourage innovation and we’re starting to be in a world where they might start to stifle innovation.