Patent by definition is the exclusive right given to the inventor of a product/process by a sovereign state for a limited duration in return for the complete disclosure of the design. Patent empowers the inventors/assignees, accelerates multiple invention in the field, encourages competition, triggers new ideas and develops the world. Patent also give a certain period of anonymity for the inventor, which in turn helps to reduce competition during product commercialisation. Now as an inventor and as an engineer who worked in small start-up firms, I must express the fragility of this patent architecture.
In today’s world, an inventor or a small firm can easily develop a product. But the cost of patenting is enormously high. In Britain alone, a single patent costs around £25000 (including a patent attorney fee, private search fee and other legal charges). Let’s not forget that a complete product is a complex mechanism and it needs multiple patents to be registered. If these costs are met and the product is developed completely, the next stage- cost of bringing the product to the market is enormously high. If the potential of the product reaches the ears of certain big companies, they start black herding/ politically pressurising the small firm’s owner to give in to a deal. For these reasons, small firm has to seek the support of large firms and investors. These business agreements are enabled through licensing options wherein the purchasing firm agrees to pay a large sum and a royalty fee on every product they sell. Sounds like a pretty good deal. But the problem comes when the purchaser fails to meet their ends of the agreement terms.
Once the product hits the market and the product runs successfully, the purchaser in many cases handles numerous techniques to immobilise and collapse the licensing agreement. They reverse engineer the product, if it is held under a trade secret. If it’s a patent, they ‘design around’ the existing product such that the degree of ambiguity is strong enough to override the patent. This saves the purchasing company months of developing time and costs. They also engage in selling copied cheap duplicates from an exporting country like China, thereby sinking the royalty fee. In these cases, even the certificate of contested validity, and doctrine of equivalents proves to be futile owing to the legal costs encountered. Advanced cases exist where the purchaser buys off the parent company, and then strips of the parent company, lays-off its employees and sell their products under their own banner with some modifications. Thus the owner of the small company goes defunct. Other cases of license infidelity and royalty fee scrapping methods exist and are ethically illegal.
Law permits the inventor to appeal in the court, but the legal costs are enormously high. The ‘loser pays cost regime’ offers less support as the inventors bank balance runs out before the case runs its full course. Multimillion dollar corporations understand this weakness and so, infringe patents and circumvent the agreement terms without moral or legal responsibilities. The protection for the inventors needs to be reassured. New laws and amendment to existing laws are essential. Also the court processes could be accelerated and the circumventing or delaying options should be destabilized. Ensuring the immunity for the small companies from being black herded is crucial in distributing the wealth instead of pooling it. All these needs strong political will to be materialised. I strongly believe that protecting and supporting the inventors are essential in growing the world sustainably. World is in a higher state of entropy due to economic and political inequalities. Few steps like these can count to make huge changes in bringing this entropy down and make life fruitful to all. We don’t have to be charities to do this. Even profitable business can make a significant change to the society.