Ideas on How to Change the Patent Law

The other day, I got an idea: What if we would change the Patent Law in the following way?

Imagine if the world would have only one central patent office, similar to a UN organization, and any country would have access to it. A web platform, as easy to use as your favourite social network app. Applying for patents would be simple as uploading a sketch and writing a simple explanation. Later on A.I. could help re-drawing images and writing the body of patent and more importantly suggest patent claims. Inventors would pay only a small patent fee to apply, in order to avoid spam, but, later on, any company that would like access to the patent database would pay a monthly fee that would allow for sustaining the International Patent Organization (IPON — the Philipino word “savings” or Japanese word for “score” or “blow”). IPON would have branches offices in each country, but it would have ability to do a worldwide (global) patent search, file patents and do payments (application filing) via the Internet.
For each invention, inventors would get 3% for the patent royalties.
Exclusive license agreement would not exist and any company could manufacture, with one condition and that is to pay royalties. Additionally, 5% would be paid to the RND institution (if any) that funded the research. Only inventors (people) could file and hold patents, and only if they have a working prototype. Only one institution/company could be filed as the RND sponsor.

Now, first, why such low royalties?

Nowadays, the highest royalties paid are in the range of 30%, and the lowest royalties are in the range of 1% (if we exclude those who never gained anything from their patents), but what is considered as the industry standard for licensing royalties for inventions is in the range of 3%. ^*1 Therefore, 3% is the average amount and probably the amount that would give inventors enough funds to continue with their inventions. What seems to be a low number, in fact, is a quite substantial amount, if we consider high production series.

Why only inventors?

People invent and receive patents, not companies. Companies are just organizations of people, but, at the end of the day, people invent things. By the complex patent laws and patent ownership — and especially the currently very popular non-disclosure agreements (NDA), the progress of our civilization is largely hindered. Sometimes, it is hindered so much that we have to ask how many crucial solutions have never seen the light of day, because of this.

Do you know any inventors? How many of them are successful? I know quite a few, and most of them have failed and lived to tell me a bitter story of struggle, endless bureaucracy, and failed monetary investments that never paid out. After a first patent, they were so exhausted that many other ideas they had simply died with them. The question is how many similar ideas are just laying in some patent office, completely forgotten? Statistics say that 97% of all patents never make any money. ^*2

Pollution, climate change, food shortage, droughts, landslides, energy crisis, and many other hard problems... How many of these problems could have been solved, at least partially, if we had different patent laws?

What would happen to the monopoly and competitive advantage?

Monopoly is bad, and we can see many evidences that it has failed us multiple times. Companies with too much power have a tendency to decrease the quality of products and services, in order to maximize profit for shareholders behaving as a money-making machine, in the process destroying the economy and having a negative impact on consumers. There are many examples: Comcast, Verizon, Microsoft, Google, Apple, BP, Exxon, and many others, at one point or another, showed canine teeth, weaseling money off their customers.

Tesla owner Elon Musk recently decided to give away all his patents for free, as he said Tesla cannot make it on its own, and the only way to secure a good outcome for the future is to allow competitors to enter the game.

Ending corporate ownership would mean full democratization of the market; anyone who wished could manufacture. Under those rules, things that would distinguish companies are quality of their products and efficiency of their manufacturing processes. Industries could become more vibrant and more inventive.

However, we would still need mechanisms to prevent people from making small changes and filing patents under their own names. One of the solutions could be to permit patents to be filed if the patent does not bring anything significantly new and/or manufacturers would still need to pay royalties to the original (base) patent owner.

Who will pay for expensive research?

Companies would still pay for research. Although, it is possible that companies would try to hide their secrets by never actually patenting anything, which could lead to frequent attempts of reverse engineering and patenting under other names. In order to get a return on investment, as they invested money into Research and Development (RND), inventors would list them as sponsors. That would entitle those companies to patent royalties of 5% — every company that manufactures the product would be required to pay royalties to both the inventor and the company that sponsored the RND research. Patent rights would not be transferable to other inventors or companies. What is significantly different is that, instead of salaries, social contract would change in favor of inventors.

Is a single, planetary patent office a bad idea?

Well, there is already a global market; there is no reason why we should not have single institutions that would work for everyone. IPON offices around the globe could exchange officials (patent officers from one country would work in another country) and, in future, it would be probably AI-driven, in order to prevent potential frauds at a national level. It would be easier to check a global database to see whether something already exists, and having prototypes could cut patent filing and approval times significantly.

There are many challenges we will experience in the next 20 years that may determine the fate of the human race forever. We have to learn to work together. Creating a global federation for invention could be one of those things.

What do you think about this idea?
Would it work, and what kind of issues can you envisage?
Can you improve on this idea?

Have your say, please comment...

---

---

Notes & References: