Debunking Innovative Copycats and the Patent Monopoly

Many inventors operate under the misunderstanding that getting a patent is like owning Boardwalk and Park Place in the popular board game “Monopoly.” Increasingly, many journalists and patent haters are operating under the same fallacious assumption.  The carelessness with which the patent right is characterized by so many with only the vaguest of knowledge of the patent system leads to truly unfortunate consequences.  Inventors believe that if they obtain a patent the world will back up a money truck to their front door.  Patent haters think that a patent is evil and interferes with innovation.  Both claims are laughably naive.

First, I am an unapologetic defender of the patent system, which is hardly news to anyone who reads IPWatchdog.com. Those who argue against a patent system and say that patents inhibit innovation are intellectually bankrupt; willing to say anything no matter how wrong to achieve what they predetermined to be the preferred outcome. There is no talking to the anti-patent community because they simply ignore facts and reality. They prefer to wrap themselves around academic thought experiments rather than real, verifiable truths. They ignore the undeniable facts that when a country adopts a patent system economic progress follows. They balk at the mind-boggling successes of initiatives such as Bayh-Dole and argue for it to be dismantled, apparently convincing themselves that 7,000+ high-tech start-ups with millions of new jobs would have been created under the previous patent licensing regime which had been an abysmal failure by any objective standard.

Everyone promotes the virtues of innovation and the American innovator, which leads to the formation of a start-up business, which in turn leads to job creation and economic growth.  Yet at the same time patent haters keep their head firmly planted in the sand, actually failing to understand the basic definition of innovation.  Merriam-Webster defines “innovation” simply as “the introduction of something new.”  What is new about copying others?  NOTHING!  Thus, the undeniable truth is that patents do not hold up innovation, and those who are blocked by patents are nothing coming up with something new.  They are simply seeking to copy the work of others.

Why in the world would we ever want to protect copycats over innovators?  Manus Cooney, one of the top intellectual property strategists in Washington, DC, recently asked this question in an article published on IPWatchdog.com.  See Patent Verdicts we Planned For.  Cooney was writing about the near ridiculous rantings of those who believe the verdict that Android infringes Apple patents is a travesty.  Cooney wrote: “What the critics have not explained is how making it easier for a foreign company like Samsung to steal US-born innovation is in our long-term national interest.”  Amen!  And… by the way… why should it be a surprise that Android is a copy?  We all know it is a copy of the Apple operating system.  No one believed in the Apple system until it proved to be extremely popular, at which point in time the copycats came out.  Doing what someone has already done is NOT innovative.  It is the antithesis of innovative.  It is copying.  It is infringing.

[Inventors-Books]

The truth is a patent is an asset like any other business asset.  Some will be quite valuable and some will be marginally valuable and many will be worth little or nothing.  What matters is the quality of the patent and the breadth of the claims.  What you want is a broad set of claims that offers wide coverage, but not so wide that the claims are likely easily defeated.  Prolific Hall of Fame inventor — and billionaire — Dr. Gary Michelson once put it to me like this: “why would I want a claim that is invalid? That doesn’t help me. I want the broadest valid claim.”  See A Conversation with Gary Michelson.

There is a lot wrapped up in Dr. Michelson’s statement that goes a long way to explaining that a patent does not offer a monopoly.  First, if you want the broadest valid claim possible that has to mean that there is claim scope that you are not going after that could be supported by your invention because it is not likely patentable, or patentable after a meaningful challenge.  Thus, patent claims do not protect the grandiose thing you call your invention.  Patent claims, which are the only thing to which you are granted exclusive rights, cover a subset of what you invented, namely that subset that is unique and non-obvious when compared with the prior art.

This is an important thing to understand from many levels.  First, if you are engaging in bargain basement price hunting that will mean you will find a patent professional who has little time to do what needs to be done.  It is inevitable really.  The more time you can spend on a patent project the more detailed and better the results, but that should hardly be shocking.  That is true with virtually all projects, isn’t it?

The fact that it is the patent claims that provides the only exclusive right granted to the patent owner also underlies exactly how inventors get dupped into believing they have obtained more than they really have, and it also explains why the patent illiterate manage to convince themselves that patents provide a monopoly.  You see, the not so well kept secret is that those who know little or nothing never actually read the claims.  They look at the title of the patent and frequently nothing else.  Then after reading the title they fly off the handle about how it is ridiculous to grant a monopoly on this or that (in the case of patent haters) or they erroneously believe they have locked up the rights for a broad category of innovation (in the case of inventors).  Both are wrong, and wrong for the same reason.  Failure to read and understand the patent claims, which is nearly all that matters in an issued patent.

Unfortunately, turning a patent grant into cash is much more complicated than simply placing hotels on Boardwalk and Park Place, although you would never know that if you listen to the inventor who thinks his $1,200 patent will make them rich or the anti-patent community who is convinced that patents are the root of everything evil in the world.  Indeed, those who are against patents always seem to argue that a patent is a monopoly, or at least use those terms interchangeably.  Don’t be fooled into thinking that a patent is a monopoly.  Simply obtaining a patent will not result in the arrival of a money truck to your doorstep.

Just because an inventor has been granted a patent does not mean that there will be a market for the patent product, and without a market there can be no monopoly. The patent only gives the patent owner the right to exclude others from making, using, selling and importing. A patent carries with it no expectation for market success. Granted, if the product does have a market a patent can be a significant barrier to entry that insulates the patent owner from competition, but a patent in and of itself does not guarantee business success.

A patent only dangles the opportunity to achieve monopoly profits. This is due to the exclusive nature of the right and the ability to be the only player in the market. Again, a market is necessary, which means a product that people are willing to pay for is a pre-requisite. In the absence of a product that people want, and the business acumen to capitalize on a market opportunity, a patent will not result in riches.

Chief Judge Markey, the first Chief Judge of the Court of Appeals for the Federal Circuit, time and time again reprimanded scholars, attorneys and fellow judges for characterizing a patent grant as a conference of a monopoly. In Carl Schenck, A.G. v. Nortron Corp., 713 F.2d, 782, 786 n. 3 (Fed. Cir. 1983), Judge Markey stated:

Nortron begins its file wrapper estoppel argument with “Patents are an exception to the general rule against monopolies…”. A patent, under the statute, is property. 35 U.S.C. S 261. Nowhere in any statute is a patent described as a monopoly. The patent right is but the right to exclude others, the very definition of “property.” That the property right represented by a patent, like other property rights, may be used in a scheme violative of antitrust laws creates no “conflict” between laws establishing any of those property rights and the antitrust laws. The antitrust laws, enacted long after the original patent laws, deal with appropriation of what should belong to others. A valid patent gives the public what it did not earlier have. Patents are valid or invalid under the statute, 35 U.S.C. It is but an obfuscation to refer to a patent as “the patent monopoly” or to describe a patent as an “exception to the general rule against monopolies.” That description, moreover, is irrelevant when considering patent questions, including the question of estoppel predicated on prosecution history.

See also American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1367 (Fed.Cir.) (“The patent system, which antedated the Sherman Act by a century, is not an ‘exception’ to the antitrust laws, and patent rights are not legal monopolies in the antitrust sense of that word.”), cert. denied, 469 U.S. 821, 105 S.Ct. 95, 83 L.Ed.2d 41 (1984); Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152, 1160 n. 8 (6th Cir.1978) (“The loose application of the pejorative term ‘monopoly,’ to the property right of exclusion represented by a patent, can be misleading. Unchecked it can destroy the constitutional and statutory scheme reflected in the patent system.”).

Despite what you may have heard to the contrary, virtually no patent will lock up a market and hold others within the market hostage.  Certainly there can be foundational technologies that are of extreme importance, but those types of inventions are rare.  Most inventions are improvements or incremental advances of different magnitudes.  See Understanding Improvement Patents & Inventions.

It is also important for inventors to understand that patents are fragile rights.  When you define your invention you are essentially placing your stakes in the ground and defining the exclusive rights you now have.  It is hard to define your rights in the first instance with as much specificity and detail as required, while at the same time anticipating what others will do and how they might attempt to get around your rights.  Like most things in life, it is harder to do in the first instance than it is to get around or undo later.  Thus, when you have an innovation and you are making money basic laws of economics suggest that there will be others who will seek to enter your marketplace and compete.  It is that simple.

A patent does not guarantee you the right to exclude others from a market.  A patent provides you the right to prevent others from making, selling, offering for sale or importing an invention that is identical to what you have defined in the claims of your patent.  For that reason when you find an innovation that is lucrative you should not think in terms of getting a single patent, but if there is money to be made others will want into your market so you must think about continually innovating, pushing out the envelope of protection and obtaining more patents.

I tell inventors all the time to model themselves after success, not after failure.  One company that every inventor should learn more about is Apple.  See The Apple Way: Repeated Innovation + Patent = Domination. While they have made some bad business mistakes in the past, they are a true innovator and when they come across an innovation they patent it and continue to advance innovation and push out the envelope of exclusive protection.  This is an excellent model, and one that inventors can learn from.

The moral of the story for the inventor is this: you need to approach inventing as a business if you are going to make any money doing it.  As you proceed to achieve this goal always keep in mind that if it sounds too good to be true it probably is too good to be true.  The thought that a single patent can lead to a monopoly that unfairly or improperly holds an entire market hostage may sound like a good argument for those who hate patents, and it might sound very appealing for those who are inventors, but the truth is that like so many other things in the innovation space it oversimplifies reality to the point that it is simply incorrect.

The moral of the story for those in the anti-patent community is this: get a clue!  Why not do something radical like becoming informed on the topics on which you pontificate?  Treating patents like they hold up innovation is ridiculous.  You need to re-calibrate your definition of innovation and stop pretending that those who copy are innovators.  That is insulting and extraordinarily disingenuous even for folks who are constitutionally challenged by the truth.