Saturday, December 03, 2011

[bticlbft] Patent chains

Following up on History and Monopoly patents.

A firm has received a monopoly-class patent on technology P to make into a product X.  Later, but before P expires, it applies for a monopoly-class patent on Q to use P and Q together to make a product Y (perhaps an improved version of X), and presents this business plan to the patent office.

The problem is there is no way to use Q to make a useful product without also using the patented P, so no other firm will be able to compete (or apply) to use Q.  Owning one patent puts you in position to be the only one with a business plan for the next.

This chain could be extended arbitrarily forward in time, as well as could be a web of interlocking patents.  This one firm gets to control the direction a technology develops, which may be an overall suboptimal route ("path dependence").

A patent office could choose not to grant Q, then allow P to expire, then reexamine Q (with multiple applicants).  Society would suffer the loss that Y (or some other application of P plus Q) is not developed sooner.

We are weighing that loss against the loss in efficiency of having only one applicant for Q.

Would it have helped if the patent office, foreseeing this scenario, granted a shorter patent on P?

Update: solution

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