Friday, January 23, 2015

Why Patents Get Revoked (MINDEF vs Entrepreneur)

It's pretty shocking to hear about MINDEF picking on defenseless entrepreneurs. That's the type of headline that grabs attention, and I've been following the developments with interest from business school abroad, where I am currently learning about entrepreneurship.

One of the recurring comments I've read on the many articles is people questioning how the courts could just invalidate a patent. I'm not an expert on this topic, nor on the specifics of this case. But since I've been having some headaches with patents myself for a school project, I thought I could share a broader perspective on what patents are supposed to do.

A fully-deployed Battalion Casualty Station (BCS)

But first, an observation. I was rather amused by MINDEF's example that "Just as there are many smartphone designs and manufacturers who do not infringe each other's patents..." What comes to my mind is the numerous lawsuits that Apple has filed against Samsung and Google, and now Samsung is filing against Xiaomi. Patents are messy, and these have gone on for years. But what I am glad as a phone owner is that Apple's patents did not prevent others from making smartphones with touchscreens, even as they are still fighting over the details.

The purpose of patents is to encourage innovation, which will benefit all of society. Patents achieve this by providing inventors/entrepreneurs the incentive to invest their time and effort to develop ideas, with the assurance that they have some legal protection against others just plagiarising them and profiting at their expense.

From the entrepreneur's perspective, you want to file a patent as broad as you can. For example, to patent the idea of a phone with a touchscreen. Or as a specific Apple example, to patent the musical note on the icon of a music app. This helps to prevent other companies from competing with you. However, the flip side of protecting the entrepreneur is that we also want to encourage some degree of competition, so that it does not become a monopoly. Is it fair that anyone else creating a music app cannot put a music note on it? If the patent is too broad, the patent owner can set a very high price and society does not benefit fully from the invention. And therefore, there are avenues for new entrants to challenge the patents if they are too broad.

In my own experience, my project team is studying the problem of falling among the elderly, which results in injury and death. There is an incumbent MNC that has produced a device for them to call for help if they fall. But it is so expensive and ugly no one wants to carry it. Yet, they have patents in place that prevent competitors from creating better products. In the end, these patents are hurting the elderly, by preventing them from getting the help they need.

It's easy to sympathise with the elderly, because they are the little people in this example, victimised by the corporate giant. The roles appear reversed between the entrepreneur vs MINDEF. But ultimately, the people who need the invention are those who might benefit from emergency medical assistance. I have no idea who is right or wrong in this case, but I thought it is useful to explain why overturning a patent does not necessarily mean that the patent holder is being victimised. There is a due legal process for this. And that is what happened to Apple, when their attempt to prevent others from using music notes on their icons was overturned in the courts.

Updated 24 Jan - The Legal Perspective

I got a legal perspective via comments on Facebook from Douglas and Clara that I thought was worth including here.

"Firstly, it is likely that mindef had an infringement indemnification clause in the agreement with the supplier. Hence the suit against mindef was defended not by mindef but by the supplier in mindefs name. Secondly, the fundamental reason for patent protection is that the invention is the result of an inventive step. Thus if there is no inventive step a patent would not be granted. Ting's invention imho lacked an inventive step. The actual invention (as opposed to what mindef is using - see SCDF model) of sides that lift up to form a roof has been in use in many application such as food trucks and RVs for many years. Ting merely used that existing concept for a new purpose. And that lacks the necessary novelty that will enable patent protection to be given. That a patent was granted means that it is a weak patent. Thirdly, patents can always be challenged. And for weak patents or those which lack novelty, patent protection will be revoked."

"Plus IPOS only tightened up its patent application process on 14 Feb 2014. Before that, it was procedural more than anything else. Even if your product or idea didn't merit a patent, you can still successfully apply for one."

Among the "Ten Things You Need to Know" from the above URL, this is the first bullet point:

"It will no longer be possible to obtain a patent for an invention which is deemed not to be patentable."

Pretty shocking that this implies that before Feb 2014, you could still patent and idea deemed not to be patentable!

Full Disclosure: The writer is an employee of the SAF. But I am currently studying and have no involvement or special knowledge of this case whatsoever.