The other thing that occurs to me as I study Verizon’s patents is that patent law presents some huge problems from the standpoint of the rule of law. We libertarians frequently hammer home the importance of having laws that are clear and predictable. On network neutrality, for example, we point out that no one has been able to come up with language that unambiguously elucidates what is and isn’t allowed.
Yet every single patent is a miniature government regulation. If the FCC had issued regulations that looked like this, we libertarians (myself included) would be kicking and screaming about how unfair it is to expect people to comply with such vague requirements. Yet Vonage has had to stake the future of its company on correctly predicting how the courts will interpret phrases like:
software running on the central processing unit, causing the server to formulate and transmit a reply to a query for translation of a name specified in a second protocol received via the interface, wherein the software controls the central processing unit to include an address of a destination terminal device conforming to the first protocol associated with the name if the server receives the query for translation within a predetermined time window.
…and it goes on for pages and pages. That’s as bad as anything you’ll find in Snowe-Dorgan.
Yet for reasons that are opaque to me, because they’re issued by the USPTO rather than the FCC, and because we call them “patents” rather than “government regulations,” many libertarians don’t seem to find them troubling. But I don’t see a principled difference. If Verizon used its army of lobbyists and lawyers to push regulations through the FCC that drive Vonage out of business, that’s obviously a terrible outcome from a libertarian point of view. But if the company uses its army of patent lawyers to push a lot of overly broad patents through the patent office, and then proceed to sue Vonage out of existence for violating them, is that any better? It’s hard to think of anything the FCC has done in the last few years that’s been as detrimental to competition in the VoIP market as Verizon’s lawsuit promises to be.
So what’s the difference? One obvious difference is that patents are submitted and litigated by private parties rather than the USPTO itself. But it seems to me that if anything, this makes them even worse. Rent-seeking is a constant problem with any regulatory scheme. The FCC is deluged by telecom lobbyists trying to get them to insert this or that provision in the latest regulations. But the patent system cuts out the middleman and lets the rent-seekers write the regulations directly, with very little oversight by the bureaucrats. That means that the rent-seekers don’t have to even pretend their regulations are in the public interest.
I’m not sure what policy conclusions follow from this little rant. There do seem to be some types of patents—notably pharmaceutical patents—where the line-drawing and rent-seeking issues aren’t quite as severe. It certainly seems like the chemical formula of a drug would offer an good way to draw the clear lines that are essential for any genuine property right. After looking at a few dozen software patents, I’m convinced that drawing clear lines is impossible there, but I don’t know enough about other categories of patents to draw any broader conclusions.