Technological Innovation and Intellectual Property

Newspapers now regularly report patents granted for blatantly obvious “inventions.” Obvious patents pose a serious problem for society because they burden innovators with unnecessary legal action and they promote the growth of “patent thickets.” Some people argue that the patent office will fix these problems once it learns new technologies or once it gets more funding.

However, in “E-Obviousness,” Glynn S. Lunney, Jr. (Tulane) argues that the source of obvious patents in the U.S. lies with the courts, specifically the specialized patent appeals court. He provides evidence that the court has reduced standards, he explains what the court’s new theory appears to be, and he proposes a remedy.
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In “Why Not the Statute? Revisited,” Ronald D. Hantman also sees changes in the U.S. patent appeals court. Here, however, the changes are in the “doctrine of equivalents,” which guides how well patents can protect against inventions that are only somewhat different. Hantman reviews the case history and argues that the court has incorrectly allowed patents broader protection than the law intended.
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If patents are given for obvious inventions, perhaps people who independently develop the same invention should be protected against infringement suits. Such a defense applies for copyright protection. Stephen M. Maurer (Berkeley) and Suzanne Scotchmer (NBER, Berkeley and GSPP) consider the economic theory of “The Independent-Invention Defense in Intellectual Property.”
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Patent litigation has become very expensive. In the U. S. litigation costs can easily exceed $1 million. This is a substantial social cost that could be avoided if firms negotiated settlements before filing lawsuits and before going to court. Using empirical evidence to investigate firm behavior, Deepak Somaya (University of Maryland) explores the reasons firms do not settle in “My Strategy Says: ‘See You in Court!’ Determinants of Decisions not to Settle Patent Litigation in Computers and Research Medicines.”
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One concern about the World Trade Organization is that its treaty on Trade-Related Aspects of Intellectual Property Rights (TRIPS) may reduce access to affordable drugs in poor nations. All participating nations must grant patents on pharmaceuticals and some people fear that patents owned by multinational firms may lead to less affordable drugs. F. M. Scherer (Harvard University Emeritus) and Jayashree Watal (World Trade Organization) explore how access to drugs in poor countries can be improved under TRIPS in “Post-TRIPS Access to Patented Medicines in Developing Countries.”
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Many companies encourage their employees to participate in Free/Open Source software projects. Nikolaus Franke (Vienna) and Eric von Hippel (MIT) suggest one reason this may occur: Free/Open Source software is better at meeting their individual needs. In “Satisfying Heterogeneous User Needs via Innovation Toolkits: The Case of Apache Security Software,” they use a survey of Apache users to explore this hypothesis.
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