Patent Crisis and The Age of Open Source Ideas

By, Alex Iskold

Courtesy of- www.readwriteweb.com

September 25, 2008

We live in an age when success of innovation is mixed with unprecedented failures. On one hand we're reinventing the web, fighting for a greener future and building genomix. On the other there are housing bubbles, credit crises and war.

The technology patent crisis is important to our future. For decades the patent law served its purpose. Inventors used copyrights, trademarks and patents to protect their work and launch their innovations. But today's technology intellectual property system is a failure - unable to keep up with the speed of innovation, it's fallen apart.

The result? We live in an age of open source ideas. We freely borrow and build on each other's solutions. At first glance this may seem fine, but there are important consequences that may change the way we innovate. What happens when a big company copies a startup? What happens when dozens of startups copy each other?

In this post we work through these and other questions, in attempting to understand where intellectual property in technology is heading.

The Good Old Patents
 The word patent comes from Latin and means to lay open. Patents were established as the means by which inventors disclose their products to the public. In a typical process the inventor would write down the steps, or the algorithm, for the creation and send it to the patent office for consideration.

Once granted, the patent serves as a protection for the invention. Legally, no one is allowed to copy the invention; instead, they're required to license it and typically pay royalties.

The patent is granted for a limited, usually lengthy, period of time. After the patent expires, the innovation becomes essentially public and now can be used by anyone. So the protection that inventors enjoy comes at a cost, for they eventually have to give up their invention.

Previously, when facing the choice between disclosing an invention or not, people did so more often than not. The reason: the time span the patent held was sufficient to make money because of the exclusivity guaranteed by the patent.

The system worked quite well when the world was slower, but the recent acceleration changed everything. With time to market being much shorter, the patent system instantly become ridiculous and obsolete.

The Patent Crisis
Here's a simple scenario. A startup produces an innovative idea and works with a patent lawyer to file a patent. This takes a considerable amount of time (a few months at least) and a substantial amount of money ($25K+). But the startup does it anyway and after the patent is filed, people feel comforted that their idea is safe.

Right? Of course not! Not even close. Any patent filed today will take 4-6 years to approve. In the current era where a week is a long time and a year is an eternity, the time to process a patent is unbearably long. Because of this gap, filing a patent appears useless. While you can threaten based on a pending patent, people are unlikely to take it seriously.

To read the entire article click here