Jaffe & Lerner, 2004, Innovation and Its Discontents

Earlier today, I spent some of my well-earned procrastination time looking for an easy-to-read reference on the economics of patent law. Quite quickly, I found a reference to the above-mentioned book by Adam Jaffe and Josh Lerner. Lerner is a professor at Harvard Business School and in my short time as a would-be economist, I have already encountered his name on numerous occasions.


And if the author's reputation were not enticing enough, the punchy subtitle - "How Our Broken Patent System is Endangering Innovation and Progress, and What to Do About It" - certainly closed the deal.


I invested a bit more of my procrastination time and found on Hearsay Culture, an interview with Prof. Lerner about that very book, and committed myself to spending the next hour listening. I heard him describe his experiences as a venture capitalist in the biotechnology industry and his realization that the industry is driven by patents (and patent strategies). I found myself nodding in agreement - my previous experience as an R&D engineer in a multinational technology company led me to the same conclusion.


The truth of the matter is that the current patent system is deficient. Savvy companies realize that protecting their business and intellectual property (IP) is not a straight-forward process, but requires investment of a great deal of resources. Therefore, the development of an extensive patent portfolio and the subsequent prosecution of their IP rights has become a core strategic function for all technology firms.


Fortunately, as Prof. Lerner outlines, the entanglements of the current system and the need for patent reform is coming to the forefront of legal (and economic) debate with some high-profile events. Most significant is Research In Motion's (RIM) settlement with NTP, Inc of US$612.5 million over technology used in their well-known BlackBerry devices. Tech companies are paying attention!


So, I'm looking forward to reading Jaffe & Lerner's book. I expect that it will confirm and elaborate on much of my past experience. But I also hope that despite the scathing subtitle, the authors will present fair and balanced viewpoints.


More to come...