This week, David Kappos, head of the US Patent and Trademark Office, gave a speech at the Center for American Progress where he dismissed critics of the patent system, telling them to "give it a rest already." He insisted that his office was doing a great job, and was the center of American innovation, citing various stats to back up his claim.
On Ars Technica, Timothy Lee does a masterful job of fact-checking the patent boss's claims, driving a Mack truck through the logical flaws in his argument:
"Our patent system is the envy of the world," Kappos said. In his view, the key question in the patent debate is "do we demand today's innovation on the cheap via a weaker patent system that excludes subject matter, or do we moderate today's consumption with a strong patent system so our children enjoy greater innovations?"
This argument ducks the central question in the software patent debate: do patents, in fact, provide a net incentive for innovation in the software industry? Many entrepreneurs say that just the opposite is true: that the disincentive to innovation created by the threat of patent litigation dwarfs any positive incentive effects created by the ability for a firm to get patents of its own.
Empirical evidence backs this up. For example, in a 2008 book, the researchers James Bessen and Michael Meurer found that for nonchemical patents, the costs of patent litigation began to exceed the benefits of holding patents in the 1990s. Software and business patents were particularly prone to litigation.
More recent research has estimated that litigation by patent trolls costs the economy at least $29 billion per year, and that figure may be as high as $83 billion.