Patents on software and on business methods are fueling a huge war in the mobile industry and holding back innovation, according to a group of patent experts.
Patent holders -- many that don't make products -- are using software and business method patents to hold back small companies making innovative products, said some panelists speaking at an event sponsored by the Advisory Committee to the Congressional Internet Caucus.
While the US patent system works well in some industries, tech startups potentially have to deal with thousands of patents they could infringe, said Marvin Ammori, a technology lawyer and advisor to Engine Advocacy, a policy advocacy group for tech startups.
"The system isn't really conducive to innovating around all these patents," he said. "We've essentially set up a system that ... harms innovation, rather than promotes it."
Ammori called on the U.S. Congress to end patents for software and business methods. Until that happens, large tech companies will likely apply for large numbers of defensive patents as leverage against patent lawsuits, he said.
Recent patent disputes involving Apple, Samsung, Google and other mobile companies highlight the need for changes in the U.S. patent system, said Jorge Contreras, a law professor at American University. The America Invents Act, a patent reform bill passed by the U.S. Congress in late 2011, was a "small, baby step forward" in protecting businesses against patent lawsuits, he said.
But Adam Mossoff, a tech law professor at George Mason University, questioned whether the mobile phone industry has highlighted new problems with the patent system. Patent wars date back to the 1850s, when sewing machine makers sued each other over patent infringement, he said, and there have been patent disputes over airplanes, radios and other technologies when they were first introduced.
Innovation has continued in the industries that experience patent wars, Mossoff added. "Don't panic, there's nothing new here," he said.
Congress and patent critics should give the America Invents Act time to work, with several provisions of the law going into effect in mid-September, Mossoff added. The law creates new ways to challenge patent applications and patents granted by the U.S. Patent and Trademark Office.
New talk about patent reform will bring uncertainty to the tech industry, with companies questioning whether to invest new money in products they may not be able to patent, Mossoff said.
Mossoff also disputed the assertion by other panelists that there's a huge patent lawsuit problem in the U.S. Currently, about 1.5 percent of patents granted end up in litigation, he said, but from 1790 to 1860, about 1.65 percent of patents granted ended up in lawsuits.
Those numbers debunk the assertion that there was a "time when everything was easy and good" with the U.S. patent system, he said.
But part of the problem is that the USPTO is giving patents to a lot of questionable inventions and business methods, said Ammori and tech columnist Rob Pegoraro. The USPTO granted about 50,000 patents in 1964, and nearly 248,000 in 2011.
The number of patent applications began skyrocketing in the late '90s, Pegoraro said. "I think we're a pretty smart nation," he said. "I don't know if we've gotten five times smarter than we were in the 1960s."
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