Is The Government’s Attack on the
Patent System Killing Innovation?

IP News and Information

Most people are aware that innovation is really what drives the business world, as well as the global economy. Without new innovation the business world, as we know it, would eventually die. A large part of that innovation process comes through intellectual property, namely patents, which give inventors and companies that create and develop products the ability to protect their inventions and then capitalize on them. Companies both large and small have used patents to gain strength and leverage in the marketplace. In fact, for many small companies their real lifeblood has been their patents and the ability to protect them. But that status changing and it’s making things a lot tougher on the little guy.

Big Companies Have Even More Power

It used to be that one of the best for ways for a small company, or start-up to stay relevant was to use its IP to fight back against the larger companies that were infringing it. That served to keep some of the big guys in check and give the smaller companies a fighting chance. However, that is getting more difficult all the time and now we’re seeing big changes in the patent protection landscape that could be paving the way for the big guys to make it next to impossible for the small guys to succeed. In the past, start-up and small companies could defend their patents and protect what rightfully belonged to them, but now days it often takes deep pockets and a lot of legal expertise to win patent infringement cases.

Small Companies Feeling the Pain

In this current patent landscape many larger corporations are more apt to infringe on a smaller companies patent rights simply because its so difficult for a small company to do anything about it legally. They just don’t have the capital it takes to fight these kinds of battles. Additionally, even if the court does agree that infringement took place, it is often up to the court to decide the licensing amounts, which may or may not have a connection to the free market. Plus, because of these factors patents values have also decreased significantly and indeed some patents have no real value at all. Therefore, because of this changing landscape, many smaller companies simply have to step aside and let the big guys run them over.

Is the Innovation Ecosystem in Trouble?

All of this has happened because the government and the courts have made several key decisions over the last few years that have put more power in the hands of large corporations and less in the hands of the small guys. While the big companies may enjoy this new landscape, the damage could be severe. That’s because many of the latest and greatest innovations come from small or start-up companies. “Remember that new ideas and inventions are what drive the innovation ecosystem and without them, the ecosystem is likely to dry up much faster,” notes Arlen Olsen, president of IPTrader. So in essence, because of the court and government’s recent decisions that favor large corporations, the innovative spirit in the U.S. is facing a real crisis.