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The Problem Is Patents

The Problem Isn’t “Patent Trolls”

by THOMAS L. KNAPP

“As Apple prepares to defend itself against a multi-billion dollar patent infringement claim in Europe,” reports Apple Insider, “the company has aligned with rival Google in asking the U.S. Supreme Court to allow stiffer penalties for patent trolls who bring frivolous lawsuits.”

Well, it’s about time. But the problem with Apple’s position is that there’s no such thing as a patent lawsuit … or for that matter, a patent … that isn’t frivolous (“not serious in content or attitude or behavior”). It’s true that patent litigation has become more and more visibly silly over the last few years, but as a major player in the silliness (having, among other idiocies, applied for — and received! — a patent on rectangular devices with rounded corners) Apple doesn’t have much standing to complain about that. There’s not enough room in this column to really go into Apple’s other “intellectual property” howlers, but let’s name two:

Their flagship Macintosh line began as a lock, stock and barrel copy, from user interface to peripherals (ever heard of a “mouse?”), of Xerox’s 1981 Star terminal system. And they briefly sued (before settling with) Amazon over “rights” to the words “app store.” So please, let us break out the world’s smallest violin  for Apple’s angst over “patent trolls.”

Even if patents actually accomplished their advertised purpose — “securing for limited Times to … Inventors the exclusive Right to their … Discoveries,” as the US Constitution puts it — they’d be a very bad idea. The claim that one can own an idea is silly on its face, and not a claim that anyone would pay the slightest mind to were it not enforced at gunpoint by the state.

But the advertised purpose of patents is not their actual purpose

Their actual purpose is to restrain competition and limit innovation so as to provide economic advantage — monopoly pricing power, in fact — to established firms who, by virtue of their ability to pay off (pardon my indelicate language; I believe the word I’m looking for is “lobby”) politicians, bureaucrats and judges, can thereby indulge their desire avoid market competition on price or quality.

Decades ago, I worked for a well-known boat manufacturer. One summer, I spent several weeks as the “menial tasks” guy — hauling boats and trailers back and forth for modifications, that kind of thing — for the company’s newly hired boat designer as he worked to assemble a prototype “different enough” from the last boat he’d designed (for another firm) to avoid (or at least successfully fight) “infringement” claims. I don’t know how much this “patent compliance” runaround (and any ensuing litigation) added to the cost of each unit of the new boat, but there’s no doubt that it did affect the retail price.

In other words, patents are indirect taxes on consumers. Patent monopolists can charge higher prices because government suppresses their would-be competitors for them. And if those competitors do manage to bring products to market, those products are also more expensive because they’ve had to spend money on patent licensing, or on patent research to avoid “infringement,” or on insurance to protect themselves against patent litigation.

Apple’s complaint, in its essentials, is that patent “trolls” just buy up patent “rights,” then search for infringement to cash in on, rather than going to the trouble of making real products. But why shouldn’t they do that? If, as Apple would have us believe, patents are a legitimate market instrument, then the “trolls” are just exploiting that instrument more efficiently than Apple cares to, right?

The problem isn’t “patent trolls.” The problem is patents.

Thomas L. Knapp is Senior News Analyst at the Center for a Stateless Society (c4ss.org).