Posner on the Patent System in America
To Richard Posner, patent protection is less important in some industries than in others.
Last June, Judge Posner dismissed a case in which Apple and Motorola sued each other for alleged infringement of patents for smartphone components. The problem, according to Posner, was that neither party had properly calculated damages. “[G]uesswork,” he wrote, referring to Apple’s technical expert’s testimony, “does not establish a prima facie case.”
While the opinion is notable for the exacting standard it imposes on litigants estimating patent infringement damages, it is also notable as a product of Posner’s perspective on the American patent system.
“When you are dealing with products that have very short lives, you often don’t need patents because by the time competitors wise up, you’ve moved on,” Posner explained recently to the New York Times. In other words, incremental improvements in technology will take place with or without patent protection. In Posner’s view, patent protection for incremental improvements actually harms innovation because companies like Apple allocate more resources to litigation than new product development.
Posner contrasts the technology industry with the pharmaceutical industry, which he calls the “poster child” for the patent system. Pharmaceutical innovation would not be viable without patent protection because a pharmaceutical company’s cost of invention (hundreds of millions of dollars) relative to an infringer’s cost of copying is exceptionally high. A technology company’s cost of invention, on the other hand, is relatively small for incremental improvements.
With some exceptions, United States patent law treats all patented inventions uniformly. “This is, or should be, the most controversial feature of that law,” Posner says. Perhaps this belief entered his opinion in Apple, Inc. v. Motorola, Inc. last June. In any event, it remains to be seen whether the Federal Circuit will uphold Posner’s exacting damages standard, which some say sets the bar so high it could make smartphone patent wars economically irrational.
