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Tech patents seen as hampering innovation

Oct. 8, 2012 at 10:28 PM   |   Comments

NEW YORK, Oct. 8 (UPI) -- The U.S. software patent system is so flawed that it often stymies innovation when software patents become weapons used to crush competition, experts say.

In the smartphone industry alone as much as $20 billion was spent on patent litigation and patent purchases in the last two years, with spending in those areas exceeding spending on research and development of new products, they said.

Current patent rules, intended for a mechanical world, are inadequate in today's digital marketplace, and patents on software often effectively grant ownership of concepts rather than actual physical creations, allowing patent holders to claim extensive patent rights against seemingly unrelated products built by others.

"There's a real chaos," said Richard A. Posner, a federal appellate judge who has helped shape patent law, in an interview with The New York Times. "The standards for granting patents are too loose."

Patents for software and some kinds of electronics, especially smartphones, are now such a problem they've created additional expense dubbed a "patent tax" that can increase the research-and-development costs for companies as much as 20 percent, studies have found.

In addition, experts say, patent disputes hamper start-up tech companies that have often been sources of job growth and innovation.

"Think of the billions of dollars being flushed down the toilet," said Nancy R. Heinen, who was Apple's general counsel until 2006.

"When patent lawyers become rock stars, it's a bad sign for where an industry is heading."

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