Let's Call Junk Patents That Kill Innovation What They Are: An Innovation Tax

benjamin franklin

Whenever people say we ought to abolish software and business process patents, people either think you’re a weird, free-love hippie, or they think “hm, that’s interesting” but it’s a boring and technical issue. 

It’s a marketing problem. Talking about software patents instantly makes people snore. 

So let’s call software and business process patents what they are: an innovation tax. 

Because that’s what they are. They make innovation more expensive, like a tax. And like a tax, it hits everyone: big companies and startups. Indeed, it’s intended to function like a tax, because the whole point is to give ideas a price.

So not only is the term innovation tax accurate, it’s more useful. It makes you sound like a red-blooded, common-sense pro-business type instead of a dorky, lawyerly hippie. 

But just if we’re not clear, let’s go over the arguments about software and business process patents. 

  • Patents are legal, government-enforced monopolies over creations designed to incentivise innovations; while tehre’s nothing wrong with patents per say, it’s important to remember that they’re the exception, not the rule;
  • Software and business process patents do not protect inventions as much as the building blocks used to build inventions; it’s the equivalent of protecting not songs, but chords;
  • The vast majority of software engineers, who should be the first to benefit, are against software patents;
  • Because the US Patent Office is overwhelmed, a bunch of extremely broad patents have been granted, which makes patent trolls racketeer everyone from startups to big companies (this is why it’s an innovation tax);
  • Companies spend billions on patents in a fruitless arms race against each other instead of spending it on new products (again: tax); 
  • Other legal protections exist to protect against blatant copying, like copyright; patents are much broader;
  • Plenty of industries see plenty of innovation without patent protection: somehow despite the unavailability of patentability the fashion industry has not stopped innovative, people have access to plenty of clothes of all kinds, and fashion companies don’t go bankrupt; recipes are also unpatentable, and we haven’t seen many chefs go bankrupt because the recipe for duck confit is out there;

We won’t get into the broader argument of whether all patents should be abolished. But we haven’t ever seen a good argument for why software or business process patents, which protect ideas rather than inventions, should stick around.

And we should call them what they are: the innovation tax.

Drop that at your next cocktail party: “Are you for or against the innovation tax?” Not that many people will be against, we bet.

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