Every week, it seems like at least a few of the tech blogosphere's top news stories have something to do with patents. From patent auctions to patent troll lawsuits that, at worst, threaten to put individual innovators out of business, it seems that patents have become one of the biggest sources of headaches in the tech industry.

According to billionaire internet entrepreneur and investor Mark Cuban, the chaos created by software and process patents has some very big negative effects: it's costing the U.S. economy jobs and spurring a "Patent Arms Race" that will inevitably impact consumer prices. But he's proposing a solution: eliminate the process patents that are used to 'patent' software.

As Cuban sees it, eliminating these patents will not only help create jobs and benefit consumers, it will relieve some of the burdens currently shouldered by the patent and court systems, saving taxpayers money in the process.

While there is a risk of throwing the baby out with the bathwater, if one looks at just how crazy the software and process patent landscape has become recently, it's hard not to think that Cuban's suggestion might be worth considering. Which is probably one of the reasons it's attracting attention.

Some, of course, will complain that eliminating process patents would be an overreaction that harms individuals and small businesses the most. It's an argument that should be taken seriously, but the unfortunate reality is that individuals and small businesses are currently faring the worst under the current system.

Many of the patently absurd patent shenanigans are being carried out by 'non-practicing entities' (read: patent trolls) that build up patent portfolios that they can license to others. Rather than spend millions litigating, large companies often settle with these entities, providing them with the money they need to fund lawsuits against parties that don't settle. Those parties usually often consist of individuals and small businesses that can't afford to settle or fight. Case in point: Apple wants to step in and stand up for its developers in their battles against Lodsys because it knows most developers can't afford to fight Lodsys. Apple, of course, has a real incentive to do this because some developers outside of the United States are now avoiding the U.S. App Store lest they open themselves up to a lawsuit.

On the flip side, individuals and small businesses are less likely to be able to defend their own patents. After all, the average cost of litigating a patent dispute now reportedly exceeds $1m, meaning individuals and small businesses without supersize bank accounts can't ever expect to have the ability to protect their patent rights. A patent that can't be defended, of course, is not worth the paper it's printed on.

The bottom line: if you don't have lots and lots of cash, you realistically can't play ball in today's patent system, which has become little more than a high-stakes game for monied interests. Until the United States Patent & Trademark Office proves that it's capable of filtering out dubious patent applications before they're granted, Mark Cuban's 'throw the baby out with the bathwater' solution may unfortunately be the best one out there.

Patricio Robles

Published 9 August, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)


Martin Soler

I thought there was something with trademarks that one had to use them regularly in order to keep them. Patents should have the same, if someone is hoarding patents and not actually creating those "inventions" then he should loose the right to have them.
That will force the patent trolls to WORK and not just sue people to make money.
But I'm no expert and that's just my opinion.

about 7 years ago


Melody Crowe

Our small but growing technology company has been the subject of a patent lawsuit by a much larger firm as a means to curtail competition and basically bankrupt our company. We do not infringe but the court let's companies file these lawsuits like they are throwing stuff at a wall just to see if anything will stick. The little company must defend itself and patent attorneys cost over $500 per hour! So much for encouraging free enterprise and competition.

almost 7 years ago

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