The fundamental flaw of the current patent system is that it assumes that invention is reductionist rather than holistic in nature.
The system works ok for pharma because reductionism is difficult to apply there. That is, chemical formula of a particular drug cannot be reduced to the sum of its parts. In other words, an H2O (water) molecule is not the sum of two atoms of hydrogen and one atom of oxygen. Rather, everybody "naturally" understands that water is a different substance. Therefore, if you have a patent on hydrogen you can't sue the inventor of water.
In information technologies reductionism rules. People think that iPhone is successful because it has the mutli-touch screen as its part. (This is due to the causal thinking bias explained in Kahneman's book.) The public discounts the fact that multi-touch was available before iPhone but was not successful commercially. iPhone made multi-touch a successful component because consumers want phones with a multi-touch screen.
Steve Jobs and his team created a new "water" - the iPhone - that is a totally different "substance" than its parts. But the patent system treats multi-touch and other technological pieces of iPhone as more important than the iPhone itself. Thus, we have patent wars where those who invented the new "water", those who stole it and added flavors, and those who knew how to make hydrogen, are treated the same.
Understanding this system-level flaw helps us (me) put together good IP/invention strategies. At a certain point the bug becomes a feature.
tags: patents, system, synthesis
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