Article 1, Section 8 of the U.S. Constitution says that Congress has the power:
To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;
Back in 1790, the patent examiners who considered each application were the secretary of state, the secretary of war, and the attorney general. Receiving a patent was a notable honor, reserved for important inventions.
In 1793, Thomas Jefferson defined the criteria to patent as
Any new and useful art, machine, manufacture or composition of matter and any new and useful improvement on any art, machine, manufacture or composition of matter.
Today, we say for an idea to be patentable, it must be:
Patents made it possible for great inventors such as Alexander Graham Bell, the Wright Brothers, and Thomas Edison to invest their sweat and genius into expensive new creations. With a patent, an inventor has the government’s guarantee that he can sell his innovation for a limited time without competitors being able to copy the product. After all, why spend money on R&D for new, innovative products if knock-off companies can instantly copy them?
“The patent system added the fuel of interest to the fire of genius.”
And then something happened. I don’t know exactly when, but patents — especially software patents — have gone off the rails. It took 46 years to reach the 10,000th American patent, but today, there are more than 10,000 patents granted every three weeks. Perhaps patents could be given out as Cracker Jack prizes—after all, the US Patent and Trademark Office already approves more patents per year than boxes of Cracker Jacks sold at Dodger Stadium each year.
A notable change happened in 1991, when the U.S. patent office was no longer funded by the general tax fund and had to start sustaining itself entirely on fees from “customers.” This framed poster at the patent office’s headquarters gives insight into the office’s mentality:
Our Patent Mission:
To Help Our Customers Get Patents
The more patents, the more fees the patent office collects, and the more innovations we stimulate, right? But what happens when big corporations harvest thousands of patents for the sole reason of locking out competitors? What happens when competitors have to merge with each other to actually make anything? What happens when a cottage industry of patent hoarders waits for the right moment to strike, then demands that anyone who makes 3D games pay a tax? Or anyone who makes a spreadsheet program?
Entrepreneurs are faced with a minefield of seemingly obvious things they cannot implement out of fear of patent lawsuits. Meanwhile, IBM was awarded 2,941 patents in 2005, marking its 13th straight year as the #1 company in volume of patents (it had a much better year in 2004 with 3,248 patents).
What in the world are all of these patents? It’s not exactly the light bulb or steam engine these days. In 1991, Amazon’s CEO Jeff Bezos patented the “1-Click buy” (patent number 5,960,411). That’s the concept where a website already has your stored credit card info, so you can click on a “buy now” button to buy it in one step. This landmark patent was widely criticized, and Jeff Bezos responded by saying that the patent system, as it stands, is broken.
If he didn’t patent this, his competitors would, and they’d use it against him. Bezos is “playing to win” in the game of business, and I can’t fault him for that, but even he pointed out that the rules of the game itself are broken and need to be fixed.
Patents currently give the patent-holder a twenty-year government-sanctioned monopoly. Twenty years might have made sense in 1790, but it certainly doesn’t in the realm of internet (or game) technology. Bezos said that perhaps three years would be a more reasonable number in the internet sector.