A great read, this book is a damning indictment of the way patent law has evolved in the USA. The message for innovators is that unless you are in chemicals or pharmaceuticals, the patent system is a net negative, not just for you but for the whole industry. The authors calculate the net contribution patents make to profit, as a fraction of R&D spending, for several industries. The returns are great for chemicals and pharma, close to 60%. But for all others its -7%.
Why? Well the courts seem to have screwed up badly in dealing with situations where notice was poor. In the case of physical property, ownership rights are clear and well signalled: even if we’re neighbours, the chances of me building my shed/house on your property are very low because the boundaries are very clear and/or quite easy/cheap to ascertain. But if you get a patent registered, and its claims are worded vaguely enough, then I might well infringe inadvertently.
It works OK for chem and pharma because there are formulas that limit the scope of the claim. But its a minefield for patents on software and business methods. Which of course encourages some to craft patent applications in ways that allow them to ambush innovators after they become successful. After the book was published, the Rambus case was finally killed off by the US Supreme Court, so the outlook remains bleak.
Lynne and I have been in