Grove Discusses Patents at Inventors Hall of Fame Conference

Andy Grove, former co-founder of Intel, spoke at a National  Inventor’s Hall of Fame event on May 2, 2009, and made some interesting comments about U.S. Patent Law.

See Grove Says Patent System May Have Same Flaws as Derivatives.

Grove makes the point that the modern patent regime fosters a disconnect between the actual research and development companies engage in to create new products, and the patents that are issued by the PTO. Rather then issuing patents that flow from actual product design and manufacture, obtained to help a company preserve its competitive advantage in the marketplace, patents are issued and then scooped up by companies that monetizing them through licensing and litigation. He argues that this creates a speculative market in patents that are as unrelated to actual economic production as derivative are to actual investment.

The comparison is interesting, though it surely breaks down on a closer look.  I don’t think anyone sees a market for patents that could lead to an overleveraged speculative bubble. However, the disconnect between R&D and patents should be explored more. Part of the quid pro quo of the patent system is that in return for a limited monopoly on the patent, the public receives a full and public disclosure of the patentees’ invention, ultimately adding to the world’s store of knowledge. Does this actually work out for the majority of patents that are issue, or even litigated?

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