Jim Bessen is a Lecturer in Law at Boston University School of Law and spoke today in the Berkman Center’s Luncheon Series on “Patent Failure,” the title of his new book with Mike Meurer. Jim is the author of the first WYSIWYG software in 1983.

Jim starts by reminding us of the justification of property rights because of their enhancement of economic growth. He then questions whether patents are property since property rights for patents aren’t always easy to define and assign. He shows the e-data patent (on kiosks in music stores, granted in 1985) and the battle to assert this patent over ecommerce, which Jim sees as beyond the original scope of the patent (the courts didn’t). This is problematic because of vagueness: going to court to enforce property rights is expensive, and courts aren’t that predictiable about how they will rule on high tech patents, and innovators might not realize their risk of infringing patents.

They note this creates an incentive for patent holders to be deliberately vague about their boundaries, especially since technology changes and so rights can change in ways the original inventor never intended. And there are a lot of patents to check - too many for most businessmen or innovators.

Patents provide incentives to invest in innovation, to commercialize them and to trade them, but high tech patents seem to be litigated about 10 times those in other industries. He shows how the number of software patents is accelerating so we are in for a tough future with our current system, since in industries outside pharma, the patent system is not creating big rents, and thus doesn’t create the promised big incentives from property rights. Jim and Mike wonder whether, even in Pharma where it seems to be working, it might still be the wrong approach.

He doesn’t really know how to fix this but suggests firmer limits of patents with abstract ideas like software, noting that the law already requires definiteness in patents, although it is only enforced in a limited way. He also suggests greater transparency in the patent approval process so that the way the claims are interpreted is more clear. Mike favors limiting the continuation process to reduce the ability of patent holders to rewrite patent rights over time, and reducing the overall number of patents perhaps by creating much higher renewal fees to flush out less valuable patents.

Jim’s remedies are not with patent office reform but with patent quality - he suggests this requires very deep changes. Jim makes an analogy to tangible property rights in that they are heavily circumscribed, and patents need to be similarly circumscribed.

Crossposted on I&DBlog