Feb 22 2010

Annual Escalating Patent Fee Proposal

I love the stuff that ya’ll email me (or comment) after I write a post that challenge my thinking.  While occasionally the notes are hostile (which is mostly just entertaining), they are usually really thought provoking even when I disagree.  And, when they give me a new way to think about something, they are really satisfying.  For all of you out there that read this blog – you guys are great – thanks for helping me think!

Last week I got an interesting proposal to deal with the problem of patent trolls.  Here it is. 

“It seems to me as though the solution to patent trolls is a pricing issue.

If patents were to get progressively more expensive over time, a patent holder would have to weigh the financial return of a patent against the cost of maintaining it. For example:

Patent Fees
Year 1 — $1,000
Year 2 — $10,000
Year 3 — $100,000
Year 4 — $1,000,000
Year 5 — $10,000,000
Year 6 — $100,000,000
Year 7 — $1,000,000,000

The model above protects really valuable patents and sets patents that aren’t valuable free. Pharma could live with the fee schedule above, and software companies which have patents that are really core to a business would be protected for 4-5 years, an eternity on the Internet.”

What do you think?  What’s the fundamental flaw in this?