Nobel-winning economist: end software patents and cut patent protection to 10 years

Gary Becker

America’s patent system has been under fire for years but, in recent months, the criticism has grown louder than ever. There are currently six bills before Congress to fix the problem of “patent trolls” and now a leading economist is calling for even more dramatic measures.

Gary Becker, a Nobel-prize winning professor at the University of Chicago, stated this week that the U.S. patent system is “too broad, too loose, and too expensive” and called for the end of software patents:

Disputes over software patents are among the most common, expensive, and counterproductive. Their exclusion from the patent system would discourage some software innovations, but the saving from litigation costs over disputed patent rights would more than compensate the economy for that cost.

Becker’s comments, which he made on a blog he co-authors with famous judge Richard Posner, noted that many innovations — such as Einstein’s theory of relativity, Darwin’s theory of evolution, or Keynes’ economic models — are ideas that can’t be patented because doing so would impede scientific discovery.

Becker also suggested that patent protection could be reduced from 20 years to 10, even in industries like pharmaceuticals that depend heavily on patents.

Patent troll problem worse than ever

Part of the need for reform, Becker says, comes as result of patent trolls (shell companies that don’t make anything but use old patents to sue those that do) engaging in “hold ups.”

The economist’s comments echo those of Judge Posner, who has blasted the patent system as “dysfunctional” and, this week, noted: “The problem of patent trolls is a function in part of the promiscuity with which the patent office has issued patents in recent years.”

Posner added that “Trolldom is becoming increasingly profitable” and still growing.

The new criticism from Becker and Posner adds to a growing swell from Congress, President Obama and many small innovators who are sued by trolls but can’t afford to go to court.

On the other side are those like Dan Abelow, a self-styled inventor and owner of business method patents who is affiliated with prominent trolls like Lodsys. Abelow defended his behavior in a recent PandoDaily article and, on Twitter, advocates his vision of innovation. Here’s a screenshot of the musings from the man whose patents are being used to sue dozens of small inventors:

Dan Abelow Twitter screenshot

The newest attempt to rein in the business method patents like the ones favored by Abelow comes by way of Reps. Darrell Issa (R-CA) and Judy Chu (D-CA). Their bill calls for an affordable review process to challenge suspect patents outside of the courtroom.

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