The U.S. patent office was established in 1790 to "empower the people" in a sparsely populated emerging country. A man could build a business on invention, particularly as a single patent more often than not covered an entire product.

Now, some 300-odd patents cover a cell phone, many thousand a computer operating system. Patents blanket every product of economic consequence in a prolific manner. And nearly all of those products are made by large multi-national corporations, who most certainly could prosper, by dent of market power, without patent protection.

Drug companies, which rely exclusively on patent protection to fend off competition, are a possible exception. Americans pays more per capita for drugs than any other country, precisely because of its patent system. The latest, greatest - and most expensive - medical technologies are applied to those whose health is failing because of poor lifestyle choices. Two thirds of the population are fat folk, and almost one third are obese. That is inadequate justification for patent protection - so that drug companies can reap monopoly profits off the porcine populace.

The old saw no longer cuts that innovation in medical treatments would be stifled if not for patents. To the contrary, we have reached the point where medical research is blocked by patents (see, e.g. The Association For Molecular Pathology et al v. USPTO and Myriad Genetics).

Patents are supposed to serve a public notice function, but don't. The only public notice of a patent is a courthouse complaint of infringement, after the accused company has independently developed similar technology. There is no point to a patent system where companies assiduously avoid learning about new inventions of others. From the get-go, the patent system doesn't work to its intended purpose.

The U.S. patent laws have long been a bad joke with regard requiring invention to get a patent. What the law really protects is U.S. claim to invention, ignoring what foreigners may have done. 35 U.S.C. §102, which specifies which prior art applies as a bar to patentability, is a brain-numbing labyrinth that lets someone get a U.S. patent even though a foreigner invented it earlier, put wrote it up in a foreign language. International companies are thus well poised to steal the inventive foreign ideas of and patent them in this country.

Invention is inevitable - trial-and-error to improvement is practically human nature. The argument for patents is that they accelerate invention. But there is no hard evidence that this theory still applies in this country.

But there is a considerable pile of evidence that patents deter innovative products, and companies, most notably smaller companies that cannot compete because patents put them down, and get in the way of follow-up invention. It is the small companies in this country that employ most people, and foster much innovation. In most industries, large companies don't outperform start-ups, they swallow them through acquisition.

There has been a continuing outcry against software patents - loudest among software developers. As evidenced by their lobbying efforts to eviscerate patent protection, even the largest software companies, the heaviest portfolio holders, think little of software patents, for fear of what they don't already hold. Europe does not allow them. The U.S. does, under the legitimate logic that there is no rational basis for denying patent protection to favor only certain technologies, especially because products are often the outcome of innovation in several art areas.

It is nothing but caprice to decide that certain technical art areas deserve patent protection while others don't. U.S. law prohibits such, which is why the courts selectively kill patents deemed detrimental to corporate interests. What's good for business is good for America.

A central tenet to effective capitalism is meritocracy. Patents should be a great equalizer - the rewards of innovation go to an inventor, not the company that adopts an invention. Instead, the courts are the enforcer of this country's plutocracy.

The judicial benches are well stocked with corrupt judges more than willing to uphold capitalistic feudalism contrary to evidence and law. The CAFC and Supreme Court simply make the law what they like, ignoring precedent when they please. Conflicting precedents are awfully convenient for pulling off the shelf whatever is needed to rule "in accordance with the law," or at most at a bent angle that doesn't seem too obtuse. Patent law is fiendishly complex because of its taffy quality, purposely created by the higher courts to give them flexibility.

The Supreme Court's 2007 KSR v. Teleflex injected a strong dose of subjectivity into a standard that rightly should be entirely evidence-based. That ruling created Obzilla, a legal monstrosity that lets courts readily play favorites - almost always large corporations, if one is pitted against a pipsqueak (inventor or small company). The only patent fights with an air of fairness are against marketplace competitors in the same weight class.

In Odom v. Microsoft, the courts ignored the facts and the law in handily stealing a patent family worth over a billion, putting it in the public domain, to let Microsoft off the hook for a "patent tax" on a feature it claimed to invent, but did not (Microsoft tried to patent the exact same invention 4 years after Odom). Microsoft's defense was to spin slime about the inventor, which worked splendidly on the crooked, feeble-minded judges (CAFC included), who were already predisposed. That the patent was so valuable made killing it imperative; the greasy lies just helped it go down smoothly. Every seasoned litigator knows that the courts regularly rule by bias.

The CAFC was formed because circuit appeals courts created a cacophony of conflicting precedents. Yet the CAFC's own precedents are serpentine. Blackletter law was that "you get what you claim," up until last month's Retractable Technologies v. Becton, Dickinson and Company, where an openly crooked 3-2 panel decided instead "you get what you disclose," claim scope be damned.

The justification for patents is lost when innovation proceeds at a rapid pace irrespective of patent protection. Most computer-related products, including cell phones and entertainment devices, fall in this category - the one technical area where America still holds a competitive edge, not because of patents, but because so many bright minds apply themselves. Most product developers, especially the smaller companies, would agree that patents dampen follow-on innovation. The behemoth corporations just overwhelm the opposition; business as usual.

Patent Hawk has a continuing stream of clients defending small companies against patent assertions. The patents are only rarely valid in light of prior art, or even infringed, and the cost to the company accused is often crippling. The value of the patented technology in the product is seldom worth what it costs for the company to defend itself. As often as not, a smaller company is simply being crushed by a larger one, using patents as a cudgel.

The root of the patent problem lies with the granter: the USPTO. The patent office handed out patents like candy on Halloween until corporations started complaining about the raft of "junk patents" over which they were being sued. Ever a political creature, only then, beginning in 2005, did the patent office start to tighten up.

Over 90% of U.S. patents are invalid, even recently granted ones. Despite the supposed recent quality squeeze, the PTO remains a trashman in reverse - spewing out garbage that litters the economy. The patent office does a slow and pathetic job of examining patents. If the vast majority of granted patents were valuable, defensible invention, patents simply would not merit such controversy. The patent problem is firmly rooted at the patent office.

Patents have no place if society does not benefit from them as a whole. Whatever the calculus of the past, the scales tip against patents today.

The "sport of kings" in this country annually totes to hundreds of billions of dollars: in patent prosecution, examination, licensing, enforcement, royalties and sales. The real value of patents is equivalent to financial services - no real productive capacity is added; it's just money shuffling by overeducated desk jockeys. A large reason for this country's poor economy is the frittering in business areas dominated by lawyers and bean counters, rather than spending in development and production of goods and services.

Congress is about to pass the "America Invents Act," which will be happily signed by the Ignoramus-in-Chief in the White House. If you have any doubts about the U.S. plutocracy, the new Patent Act is ready proof - strongly pushed by the largest corporations, while abhorred by inventors, small companies, universities, and independent research labs.

Hal Wegner:

A Commerce Department White Paper coauthored by Patent Office Chief Economist Stuart J.H. Graham is basis for statements by politicians that the Leahy Smith America Invents Act will unleash "millions" of new American jobs. The premise is that the grant of patents stimulates jobs creation.

The coauthors seemingly endorse a statement they attribute to Federal Circuit Chief Judge Paul Michel (ret.) and Tessera CEO Hank Nothhaft that states (they say) that "according to our analysis of the data in the Berkeley Patent Survey, each issued patent is associated with 3 to 10 new jobs."

If the current backlog of 1.2 million pending patent applications were granted as patents, the Merges calculus leads to the conclusion that from nearly 4 up to 12 million new jobs would be created.

Michel and Nothhaft deny making the quoted statement: Bluntly, they state that they "never said there was a causal relations between patents and jobs."

The Chief Economist has won the preliminary stage of the debate because the President of the United States and leaders of both parties in Congress have endorsed the jobs creation message of the Commerce Department White Paper. Indeed, the Leahy Smith America Invents Act is about to be enacted into law.

In related news of government truth-telling - the Economist on August 6th:

On July 29th America's government statisticians published revisions to the past few years of GDP statistics. They showed that the 2008 recession was deeper than first thought, and the subsequent recovery flatter.

Peddling happy horse-hockey is an ingrained habit for politicians of every conviction. As investment is a confidence game, the Feds led on that things were better than they seemed. Hence the immediate outrage by government goons about S&P downgrading U.S. debt. (It is also telling that it took such a red flag for the investment rubes to catch on.)

In practice, democracy works as a con - pulling the wool over the eyes of the electorate to pacify the masses. The press play along to maintain access to the news generated by the inner circle.

That the America Invents Act is a weapon of mass employment is about as justified as going to war with Iraq because Saddam Hussein had weapons of mass destruction. The evidence isn't there - the government is simply peddling another fantasy.

Patents are not going to be abolished. The proposal is too radical, and too savvy. Dumping hundreds of billions in capital is practically anti-capitalist, even if it is an illusory (non-productive) asset, like many financial instruments which artificially boost GDP, though have no tangible value. Putting an army of lawyers out of business is beyond the pale for this lawyer-happy nation. But neither is this country going to recover its economic might, or its lost jobs, and patents will play their part in that.