Russel Winder's Website

UK Government, Patents and SMEs

It seems increasingly clear that, despite all the rhetoric about small- and medium-sized enterprises (SMEs) being the centre of innovation, and at the heart of the economy, the UK government handles the issue of patents in such a way as to keep big companies happy.

In case you weren't already aware, a patent is a tool for a government to give an inventor a monopoly on exploitation of an invention, as long as the invention is documented and made public. Part of the "SME rhetoric" about patents is that it gives "the little guy" an opportunity to have an invention exploited by others whilst obtaining a revenue from that exploitation via licencing fees. Of course this is complete rubbish. Patents are a tool for big companies to use against their competitors - being in the patents game requires significant funds and only big companies have sufficient to play the game.

I recently spotted an article on The Register which referred to a PDF file of an open letter by the SME Innovation Alliance to the UK government. This is an interesting double damnation of the government regarding patents and innovation. Their main argument on patents is that SMEs do not have the financial muscle to enforce their patents, i.e. big companies can simply exploit the patented invention and not take out a licence, and there is damn all the SME can do. Basically big companies have enough finance to be able to ensure that an SME (or an individual inventor for that matter) runs out of money before any case comes to court. They can therefore steal an invention with equanimity.

Their second point is that the government should stop funding university research and instead given the money to SMEs for product development. Whilst there are some serious faults with the way "innovation" is funded by the UK government, not funding the universities is not the answer. However that is a different issue to the patents one.

Back to patents: So now even SMEs are highlighting the fact that patents are tools for big companies and that SMEs have little or no ability to work within the patents system. One is therefore drawn to one of two conclusions:

  • The UK government (and indeed the USA government as all the arguments apply the same, or in fact more) is implicitly (well explicitly now given the way they have responded to the SMEIA) colluding with big companies to ensure no SME manages to ruin the big companies' ability to control the economy.
  • The patent system should be scrapped as it is explicitly an "anti-trust" system, and therefore violates all the competition laws that are on the statute books.

None of this is explicitly about software patents, it is about patents in general, but if software became patentable in the UK as it is in the USA, it would be a clear indicator that the UK government is backing total control of the software industry by the big companies, excluding SMEs from any contribution. The UK government is proposing to update all the laws on intellectual property, will they favour SMEs or big companies?

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