Spurring innovation by fixing the US patent system
The key to US competitiveness on a global scale is innovation, right? That message is being said over and over again, so it must be right! Then why does the US patent system impede progress? The patent system has long been called broken. Some of the more colorful writing on this is by Henry Nothhaft, serial entrepreneur and current Chairman of Silicon Valley miniaturization company, Tessera Technologies.
In Mr. Nothhaft’s blogs on HBR and in his book, “Great Again: Revitalizing America’s Entrepreneurial Leadership” (co-authored by David Kline), he argues that patent office delays have made it extremely difficult for new ideas to get to the marketplace. The problem stemmed from the fact that since 1992, the US Patent and Trademark Office (USPTO) stole from Peter to pay Paul, diverting the profits from the patent office to other uses. Given the national debt crisis and the mounting US deficit, I guess they didn’t steal enough.
Mr. Nothhaft articulates the serious backlog of patents, resulting in sometimes up to seven years (or more) to get a patent issued. During this time a startup is expected to raise money, build product and enter the market on what assuredness that they have strong barriers to competition?
On Monday The Economist blog site had a post entitled, “Patents Against Prosperity,” which talks about how innovation is stymied by a standard business practice of egregious patent infringement suits. The article cites the recent episode of NPR’s Planet Money, “When Patents Attack,” an informative and entertaining primer on “the way America’s patent system squelches competition, slows innovation, and enables egregious predation through the legal system.” The episode outlines the prevalence of patent trolls and is well worth listening to. One interviewee on the program calls the patent system a “killer for creativity.”
Obama’s pick in 2009 to lead the USPTO out of the mess is David Kappos. And he has initiated some great things so far, but we of the startup community are in a hurry! Please heed the warnings, Mr. Kappos, and help our efforts to raise America out of the economic doldrums and into a leading position with innovation and disruptive technologies at the forefront.