Wednesday, May 6, 2009

Patents can hinder innovation

Recently I was involved in a startup that after commencing discovered patents that they may be infringing. Basically, the owner of the patents had tried to setup a business and failed. Now however, the owner is in a position to profit (or recoup investment losses) if they could sell the patents, or alternatively bring a claim against the startup (or anyone else) once it launched.

My understanding is that the intention of patents is to foster innovation by granting a limited monopoly so as to encourage the investment required. However in this case, the patent holder has failed to bring their "innovative" idea to market and is stifling others in doing so by the risk of an infringement claim.

Similar issues are covered in Grove Says Patent System May Have Same Flaws as Derivativesand Former Chief Executive of Intel Believes Patent System Has to Be Altered.

1 comment:

Steven Shaw said...

Patents and probably copyright law (certainly as it exists today) are terribly injust! Check out the work of Stephan Kinsella and perhaps the Against Monopoly website.