RE: So what innovation is really being killed by patents?
>> I reckon quite a lot but you don't generally get to hear about most of it.
The problem now is that patents are largely a tool owned and used by big businesses. They amass **HUGE** quantities of them, and keep patenting every more varied derivations from the same basics - as well as new areas.
The problems are many fold :
1) They no longer work as intended. Many patents are so "wooly" as to be virtually useless in actually understanding what's going on - and so society isn't actually benefitting from publication as was intended.
2) Because of the sheer number and breadth of scope, it is impossible to do a full search and find all patents that may, or may not, apply to your new widget.
3) Because of 2, it is now almost impossible to make anything that doesn't infringe on someone's patent. Your only way of knowing is to see how many letters arrive accusing you of infringement.
4) The system is broken. When the letters do arrive, unless you are also a big business, with your own arsenal of patents, then you have just two options - shut up or pay up. In effect, it matters not whether you actually infringe on someone's patent, it will cost more than a small business can afford to go to court and win. If you do win, you will still be out of pocket as you won't get your legal bills paid by the other side - perhaps in part, not in full.
5) The system is broken. If someone does infringe on your patent, unless you are a big business (note the pattern here ?), then it's unlikely you'll be able to afford to defend it. In effect, a big business can just take your invention, steal it, and screw you in court until you run out of money and fold. It's happened time and time again.
The original idea behind patents was that in return for publishing details of your invention, and so enriching scientific knowledge in general, you got a limited time in which you could prevent anyone else using it without a licence from you. So if you came up with a great new idea, you could share it (society benefits) and you could also still benefit from it. This was seen as a win-win situation as it genuinely encouraged innovation as you actually had a chance to benefit before others just copied you.
Now it's stifling innovation. It's a brave inventor that tried to get anywhere now without backing from a big business. If you do come up with something genuinely new then it's expensive to get a patent and even prohibitively expensive to actually use it. Meanwhile, those same big businesses will almost certainly find a patent they can accuse you of infringing, and so can effectively shut you down - even you aren't at fault.
That brings us to the argument in the article - that Google was stupid not to buy Nortel's patents when it could have done. These days, as explained above, business is done like the cold war - you need to have enough weapons (patents) to shut down the opposition so that they'll be too scared to use their's against you. That was a big problem for Apple when it started making phones - people like Nokia have so many relevant patents that Apple could not avoid infringing on them, and not having anything to fight back with, Nokia (and others) could effectively name their price.
So the current patent system, especially in the US, is broken. The period of protection is too long. Patents are awarded too easily. It's too costly for small guys to get a patent. It's too costly for a small guy to enforce one. It's too expensive for a small guy to defend against an infringement charge.