Patents do not protect small firms, says trade body
High-tech SMEs will find it almost impossible to enforce them, says SMEIA
Patents do not give protection to inventive small businesses because they are impossible to enforce, an organisation claiming to represent small technology companies has said.
In an open letter (two-page/486KB PDF) to Government ministers, the group said that small and medium-sized enterprises (SMEs) are not able to take advantage of the protection offered by patents.
"Some of your ... announcements demonstrate Whitehall's continued ignorance of the real issues facing Britain's largest group of innovators, SMEs," said the letter from the SME Innovation Alliance (SMEIA) to Chancellor George Osborne and Business Secretary Vince Cable.
"A false assumption is made that an SME holding a patent will have 'protection' for their related investment in R&D and any resultant innovation," said the letter.
"For high-tech SMEs ... a patent is almost impossible to enforce," it said. "It does not require another review of IP [intellectual property] to establish this particular unfair fact yet again; it requires immediate change."
SMEIA chair John Mitchell told the Daily Telegraph that smaller companies could not afford to defend themselves in court and that a "patent defence fund" should be made available to them so that they could afford to take part in major patent suits with large corporations.
"Although no one likes to hear the truth about how the big business of today can simply hijack British inventions, taking billions from our economy and many jobs, action is required to rectify matters," said the SMEIA's letter.
The government said last month that it would carry out a six-month review of IP laws to try to encourage internet-related business.
It said that the review would focus on issues of IP enforcement and licences and would attempt to find ways to help companies exploit their creations.
"The future of the economy lies in the highly skilled technology sectors. For many of those companies, their intellectual property is their most valuable asset," said Baroness Wilcox, a minister at the Department for Business, Innovation and Skills (BIS), when the review was launched. "We must ensure the intellectual property system helps not hinders those companies."
The SMEIA also called into question whether university research leads to as much business innovation as it should, and proposed direct government funding for technology-focused SMEs instead of government lending to banks, which then might or might not lend to SMEs.
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Thats only the start...
Fighting against someone infringing your patents is a tiny part of the problem for small firms.
The initial problem is it cost real money to create the patents in the first place. Its not difficult to rack up legal bills of £5k-£10k per patent. If you can't afford to do that then you can fall foul of someone a few years later creating a patent for something you've already developed. Then you've got the nightmare situation of demonstrating prior art.
Which brings me to my next point. Large companies throwing often bogus patents at anyone that comes close to the solution. As a small company its hard to defend although the larger companies tend to prefer to pick on other large players.
And finally, patents can be a major hindrance to raising venture capital. VC want to say patents but not only that , they want to see that your offering isnt infringing on other patents. Patent checks can also be an extremely expensive activity if you intend someone to provide an "Opinion" that ther are no infringements.
Then there are those dormant patents that are waiting to trap companies. The idea has not been implemented, the patent is vague and all the patents have done is hamstrung anyone that is actually trying to produce something for real.
I understand the need for patents on things like drugs where the cost of research and then drug approval necessitates your effort is protected. But there isnt a place for software patents, they hinder innovation rather than promote it.
What did you say little man?
Hello, Mr. BigCorp. We have this great new product we've patented. Would you like to license it?
Well hello Mr. SME. We'll certainly take a look at it.
- time passes -
Hello again Mr. BigCorp. It looks like your newly announced product will infringe on our patent.
Hello Mr. SME. It looks to us like your main and only product infringes on over 100 of our generic and overly broad patents. Would you like to license them for an extortionate amount, or shall we meet in court where you can discuss the matter with our lawyers (who last year got a bonus larger than the total value of your company)?
i think that this situation is perfectly intentional.
large corporations stomp all over the little people, like taking candy from a baby.
if a 'little' individual (who's not well funded) invents something potentially profitable then the corporates are able to use their substantial resources to do as they please, because the lowly individual (or small company) can never afford such a battle, and would effectively get wiped out. besides, you'd be amazed at the lies and fake 'proof' that the wealthy are able to produce.. because money talks.
let's not forget that it's _Individuals_ that innovate and invent. and so large corporates would want to throw their weight around to ensure ownership of said potential profits, to the best of their ability. fair or otherwise. in fact fairness has nothing to do with companies, which only exist to make profit.