If you are a regular reader of either this blog or Brad’s, you know that we hate business method and software patents. Lately, perhaps even more frustrating than the patent system itself, we’ve been particularly annoyed by several articles that claim that these types of patents are good for innovation. Of course, none of the authors of these articles disclose that they have personal gains associated with keeping and / or enhancing the current system, but I won’t regurgitate the entire debate today.
(If you missed it, please see this WSJ Op-Ed responding to the idea that we should increase the amount of patents granted, or this post which attempts to fairly describe the results of a Berkeley patent survey which has been purposely misconstrued by some authors).
Today, however, I’m happy to highlight a recent article from leading patent scholars John Allison, Mark Lemley and Joshua Walker entitled (the) “Vast Majority Of Software Patents In Lawsuits Lose.” In summary, they said:
We designed this study to explore the effects of repeat play on litigation behavior, contributing to a literature on the economics of civil procedure as well as the substance of patent law. But what we found was dramatic and unexpected: The patents and patentees that occupy the most time and attention in court and in public policy debates — the very patents that economists consider the most valuable — are astonishingly weak. Non-practicing entities and software patentees almost never win their cases. That may be a good thing, if you believe that most software patents are bad or that NPEs are bad for society. But it certainly means that the patent system is wasting more of its time than expected dealing with weak patents. And it also suggests that both our measures of patent value and our theories of litigation behavior need some serious reconsideration.
This is fascinating for several reasons. The most important is that these patents, which cost a lot of money to file and receive and even more should litigation occur aren’t worth much. Even economists (who traditionally seem to love patents of all types) should agree that there are a tremendous amount of deadweight losses associated with the current regime.
The survey also gives insight in how to deal with patent trolls and non-practicing entities. The survey suggests that if one is able to support the litigation costs to fight a troll, they have a very good chance of winning. Unfortunately, due to the massive costs associated with troll litigation, 90% of more cases settle. But perhaps this changes over time if this latest article becomes influential.
Bottom line: a lot of folks have felt that most software patents are of poor quality. This is the first study that backs up this intuition with real data. This survey indicates that the social benefits of software patents are low ( and maybe even net negative value). When you throw in the abuses and opportunistic behavior from patent trolls and NPEs into the mix, it’s more clear than ever that this system is completely broken.
I’d highly encourage you to read a great summary from Techdirt on the survey.