What’s the Deal with Patents?

Granted, they may not be the topic of your dinner conversation every night; they usually behave more like good wallpaper does, exerting their influence quietly and modestly in the background. But think of all the subtle ways they’re insinuated into daily life, from the patent numbers on the bottles of your prescription medicine to the ubiquitous Patent-Pending messages on everything from cat beds to milk crates to wheelchairs. Let’s face it, you probably have a little more respect for a patented product than for those that don’t display that proud distinction.

There’s a reason for that respect. Patent protection was deemed important enough by the founding fathers that they saw fit to ensure rights to that protection in Article I, Section 8 of the Constitution. Initially, the awarding of a patent was an occasion of great honor, as evidenced by the prestige of the first patent examiners: the Secretary of State, Thomas Jefferson; the Secretary of War, Edmund Jennings Randolph; and the Secretary of the Treasury, Henry Knox. These distinguished men granted the first U.S. patent on July 31, 1790, for a method of making potash (which is what…?, you ask. It’s a potassium compound, often made from wood ashes). Patents have been around ever since, and more and more of them are issued every year.

Patents: a Double-Edged Sword

Patent law is designed to encourage creativity and inventiveness and fuel the progress of science and technology. Indeed, many credit the strong U.S. patent system as one of the main reasons the United States is an international leader in technological development. Other technology leaders such as Europe and Japan have similarly strong patent systems – Japan, in fact, modeled its system on the U.S.’s.

The patent system is designed to be even-handed, providing protection for big companies as well as smaller businesses and individual investors (it even provides the little guys with some advantages, such as reduced fees). In fact, historically, many people have seen patents as geared towards the “underdog”: the small businesses and individuals who need a leg up in the marketplace to get new products and services introduced in the face of larger, better-funded competitors. In theory, patents allow individual inventors to reap the rewards of their risk in time and money spent on invention, and they prevent large, wealthy corporations from sweeping in and laying claim to others’ inventions.

Okay, patents are clearly important for all those inventors out there – from corporate research laboratories to the Nutty Professor – but what do patents mean to everyone else? For everyone else, patents are a double-edged sword. On one hand, patents constantly, albeit indirectly, benefit everyone else by encouraging introduction of new products and services that improve people’s lives: Claritin tablets, plows, Palm Pilots, tires, acupuncture needles, microprocessors, pile drivers…you get the idea. Basically, a strong and healthy patent system benefits everyone, at all levels, from the industrious tinkerer fiddling in his garage to the big corporations looking for a market advantage; from the small pool of patients who need a certain prescription drug to the vast body of consumers who use the telephone or television.

On the other hand, the benefits of a patent system come with a price. Patents do their work by preventing competition. That means higher prices for consumers on patented products. Have you ever noticed that drugs become cheaper after a generic drug is introduced? You can thank patents for the higher prices. (Of course, without the patent, you might have never had the drug in the first place).

In theory, with a working patent system, the innovation we get outweighs the price of reduced competition. If the system is broken, that equation gets thrown out of whack. Issue too few patents, and innovation is discouraged. Issue too many, and you are paying the price without getting true innovation.

That’s where BountyQuest comes in. By helping the marketplace sort out the difference between true innovation and false innovation, we hope to make the patent system work as it was originally intended – to benefit us all, without too big a price.