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Mouse Trap Economics: Give us a Billion Dollars Says the Judge on Behalf of the USPTO : Did Bilski Kill Sensible Patent Reform?

By Andis Kaulins

Beware of the consequences of Bilski.

Has Bilski killed patent reform?

Rick Merritt at The EE Times in Support for patent office rises as reform bill wanes reports on a story which has for all practical purposes been going on for 55 years now, namely the lack of any type of patent reform by U.S. Congress, as both houses persist in juggling pending legislation and ultimately getting nowhere.

It is just so much more fun and politically -- individually -- more useful for Congresspeople to waste thousands of Congressional man-hours uselessly grilling shoo-in Supreme Court nominees rather than getting down to business and doing what they are supposed to be doing in Washington, D.C., namely, solving the nation's problems.

Small wonder then that, Paul Michel, the retired (May 31, 2010) former Chief Judge of the U. S. Court of Appeals for the Federal Circuit -- the "specialized" appeals court for patents -- not content with the shambles left behind in the patent world during his tenure, in an op-ed to the New York Times together with Henry R. Nothhaft, now with a straight face recommends in Inventing Our Way Out of Joblessness that Congress should give the USPTO a "small" $1 billion shot in the arm to reduce its patent backlog of 1.2 million applications, a new kind of "bailout" for what Michel sees as the holy grail of releasing the economic power of currently pending inventions.

In a new kind of "mouse trap economics", Michel estimates that the $1 billion USPTO bailout would create as many as 2.25 million jobs over the next three years, a remarkable economic calculation by which every ca. $444 gifted to the USPTO would create 1 new job. Wasn't it the Alice in Wonderland economics believed in by the Bush Administration that for every $300,000 in tax cuts gifted to the rich, one new job would be created? Nothing of the sort happened. How baffled the economists should now be to learn how much easier they could have created new jobs just by giving much less money per desired job creation to the USPTO.

It remains a remarkable fact in spite of articles such as those by Michel, that there is no probative empirical evidence whatsoever that patents themselves greatly stimulate either the economy or the job market. INVENTIONS may do that, but this has nothing to do with patents per se, rather it relates to the exploitation and implementation of new ideas, which is necessary in nearly every business, and usually accomplished without patent monopolies.

The success of new start-ups such as Facebook shows that it is the ideas themselves, their implementation and their funding through venture capital that initially determine what happens with new INVENTIONS. The copyright, patent and trademark monopolies come later. Patents do not drive the economy.

Rather than fueling the economy, a good argument can be made that all of these monopolies stifle creativity and merely shuffle money into fewer and fewer pockets.

Outlandish analysis by persons such as Michel obscure the severe structural weaknesses that mark the American economy, an economy floundering as the result of decades of plundering of the economy by monopolies of numerous kinds, including patents, leading to an egregious inequality of income distribution, the outsourcing of large chunks of the economy to the third world and, when that was not possible, to cheaper and cheaper labor domestically.

No amount of invention will solve those problems, nor will the job market be healed by more and better mousetraps. The mouse is gone.

You want to jump start the economy into a whirlwind dash toward the future? How about if we close down the USPTO entirely and invalidate all patents and similar ill-conceived monopolies as of tomorrow? That would get things moving. You bet. It would stimulate a "free for all economic miracle". Right now, the economy is tied in chains. People such as Michel just keeping adding new links to those same chains to keep the economic -- and democratic -- giant beneath them from bursting out.

Full post as published by LawPundit on August 20, 2010 (boomark / email).