Understanding the complexities of the patent system

Researchers from Fordham University in the US, led by Jane Freilich, say there might be a “replication crisis” in the patent filing system. That’s not a good thing.

When a replicability crisis appeared in psychology and medicine about 10 years ago, it shook those disciplines to their foundation.

Regarding psychology and medicine, it was discovered that almost none of the world’s most famous social science studies were based on robust, repeatable evidence. When academics revisited those studies, the initial findings either could not be reproduced or, when they were, yielded wildly different results.

Given that most government policies over the past 100 years have been informed by the results of those social science experiments, finding out now that many were probably bogus is concerning, to say the least. Freilich’s research showed the same problems may be replicated in the corporate world as well.

When her team assessed the experimental criteria of about 500 life sciences patents, Freilich found that 90% of the granted patents likely did not work.

“The empirical finding is a crisis not only of replicability, but also of patent law, and has important implications for patent doctrine, theory and policy,” the paper said.

According to the study, only 45% of existing patents were supported by even the most rudimentary experiment. The remaining 55% had little more than a whisper of hypothetical evidence.

Freilich pointed to the “first to file” system as the proximate cause of the fuzzy results since it incentivises inventors to rush their filing applications by submitting the broadest skeleton idea to a patent office to obtain the earliest possible filing date.

In other words, due to this structure of the patent system, companies may be hamstrung into using quick and dirty experiments to satisfy patent office criteria for the filing date, few of which may be “replicable” in later testing.

To be clear, Freilich’s research focused on patents in the life sciences, so the findings probably won’t apply to manufacturing or technology. However, the patent system is the same for every industry, which implies that many patents may be based on questionable evidence.

Patent examining officials aren’t stupid. They won’t be allowing weak applications to pass under their noses. So, what’s going on?

Because of the “first to file” system, companies often use a shotgun approach when submitting a provisional idea. They will have a rough concept but won’t be sure what the final model might look like.

Out of 20 or 30 possible versions added into the filing, only one or two will turn into a formal patent with all the bells and whistles of a solid, commercialisable invention. That’s probably why it appears there are so many filings that have little evidence backing them up – they weren’t supposed to.

The full journey to register a patent family can cost upward of $US1 million in fees to maintain and/or defend the patent family over its lifetime. So, the plan is usually to put a pin in many broad versions of the idea early on, and then double down on a final iteration when the testing is complete. Of course, from the outside, this would look like 29 failed patents for one success.

Many companies think of patents as a kind of force field protecting them from competition for a period. To release a new idea without such a shield would be like turning up to a gunfight with a knife, or so goes the conventional wisdom.

The promise of monopoly certainly incentivises innovation. After all, the deal a company makes with a government when filing a patent is to fully disclose the ‘best method’ to get their invention to work. In return, the government attaches property rights to the idea which lets the inventor exclude others from making, selling, or using the invention for a given time.

The patent system makes sense because the moment a new idea enters a market, rival engineers will begin working on alternatives that are better, less expensive and more reliable. And every single one of those ideas will also be defended with patents. It’s an arms race.

There’s a time and place for patents, but they aren’t a default strategy. Thomas Jefferson thought patents were bad – until he started inventing dumbwaiters and plant hybrids and filed his own patents which exposed how useful they were.

Applying for a patent can be a complex and expensive process. But there are other paths to commercialisation. For example, exclusivity doesn’t really matter for the strategy of licensing.

In fact, all the established players are licensed to each other’s patents in some form. Even Microsoft is a licensee of Apple’s software, and vice versa. The logic behind a licensing strategy is that it’s generally better for everyone (including the public) if the players fight it out in the market, not in court.