When considering patent policy there are two principles one must always bear. The first is something many economics and business majors will readily identify as the Tragedy of the Commons. The other is something that exists solely in the realm of patent law. It's called the Tragedy of the Anticommons.
The Tragedy of the Commons is a concept that if good ideas are undervalued, people will quit producing them, due to lack of motivation. In many respects it's what's happened to news papers. Too many of them put their product on the internet for free. Why would anyone buy the paper when he or she could get the news for free on the net? This, in turn, drove down revenues to the point where newspaper companies had to cut staff, diminishing their product. The entire concept of the Tragedy of the Commons is that patents should issue for good ideas in order for them to be properly valued, in order to motivate inventors.
The Tragedy of the Anticommons is the exact opposite. It results from a society that's so overprivatized that there is never any ingenuity for fear of infringement. It's the result of a society overpatenting stuff, or at the very least, patents that are too broadly enforced.
The reason I bring this up, is that while Mark Cuban is one of the brightest business men of the past 25 years, his suggestions on patent reform are plain awful. He writes from the point of view of someone who understands perfectly the Tragedy of the Anticommons, but fails to recognize the incentive inherent in the modern patent system. He's rightfully concerned about a system that's badly clogged and backlogged, but instead of improving it, Cuban proposes eliminating it.
Ending software patents would be one of the dumbest things America could ever do. Without such IP, the 1990s wouldn't have happened. The idea that copyright protection is more than enough relfects Cuban's fundamental misunderstanding of what each is. A patent protects an invention; a copyright protects a work of art. It also seems that Cuban fails to recognize that thanks to Walt Disney, copyrights are likely perpetual; patents have 20 years (or 14). Take for example, the Super Mario Bros. game. I'm going to assume for the sake of argument that it was the first 8 bit platformer, even though it wasn't. The idea of Super Mario is copyrightable; his story is; the characters are; their images are; and even the exact instruction sequence of the program would be. But the idea of taking 8 bits of memory to create a platformer that you could play on your TV is not art. It's an invention. The codes specific to that game are both. The point is that whoever came up with that idea deserves to be compensated for it. Whoever creates the next platformer on 8 bits (which is not copyrightable) should have to pay that dude a royalty. At least for 20 years or so.
I agree with Cuban that business process patents need addressing. However, Cuban must think all patents by process are business only. And that's not true. A lot of them have to do with means of creating things used by lots of people. They don't last forever, but whoever comes up with a better way of doing something should get to do it, exclusively for a little while- it may the only advantage he ever has. It's not like processes can always be bought and sold- sometimes time is the only asset patents afford.
I agree with Cuban that patent trolls need to be reigned in. I disagree that the reform does nothing. By eliminating first to invent, that immediately gets rid of a lot of the interference. Once something is filed, the race is over. I also disagree that China is "beating" us because their patent system is better. Again, if China doesn't afford value to its IP, its IP will soon be worthless. And that's assuming that they are, in fact, winning. Maybe I'm hopelessly naive, but I'd like to think that one reason the US has been #1 in the world's economy is because of innovation. China uses our businesses. They use our technology. They use Google...and Apple...and McDonald's. One reason we struggle is that we bear the risk of putting such products and businesses out there (for every one that succeeds, there are 1,000 that fail miserably, and unfortunately America has to fund those failures and pick up the tab when too many go under). Make no mistake, China may own the mortgage on the farm, and they might even be sharecropping, but America still does the planting and farming.
Instead, here's what I propose. First of all, a lot of patent trolls buy up technology that isn't being used, or buy IP from insolvent companies that the companies weren't using. What patent law needs is something akin to the doctrines of laches or adverse possession. It already has something called inequitable conduct. The problem is that the party accusing it must prove it up, as it's an affirmative defense, and prove it by clear and convincing evidence. We need a "use it or lose it" law. Also, infringers can get slapped with punitives when they behave egregiously- in some cases, the law provides for trebles. Egregious acts of patent trolling should have the same penalty.
Many states have consumer protection laws with pretty strong teeth. Many of them also have a "loser pays" clause in there to prevent frivolity. Something tells me if they did this in the event of certain infringements, you wouldn't see as much chicanery.
Secondly, I don't mind abbreviated patent rights for biotech and software, as both areas are more rapidly changing and more abstract than other patent areas. However, in return, there should be a "rocket docket" process for getting issues involving such technology to- and through- court.
Statute of Limitations and/or Repose. Currently, a patent's enforceability is its term plus 6 years. Set a 5 year limitation and a 10 year repose. In cases involving bad faith, it'll be unlimited, and subject to treble damages and a criminal penalty.
State courts have things like associate circuits and limited actions to dispose of smaller matters in short order. If you lose at that level, you can always appeal to the district or circuit court. There should be something like this for infringement. Smaller issues of infringement can be dealt with administratively. The idea of losing small at the administrative level instead of big in Fed Court might be incentive for some infringers to give in. The concept of an administrative review for smaller matters, coupled with "losers pay" in Big Boy Court might give Plaintiffs in infringements incentive to take advantage of the smaller court, and even possibly settle.
Cuban is correct in assertion that the patent system is too clogged up. He errs in thee solutions he proposes, because they take away many of the incentives essential to the systemt itself. Instead, what the system needs are less incentives for committing industrial espionage, and lesser rewards for large companies that wage attrition wars against smaller entities.
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