Described in an NPR This American Life podcast, patent trolls purchase multiple patents with the intent of suing any firm that ventures close to its tech rights. Because the way to fight patent trolls is to amass your own trove, the NY Times explains that Google sought Motorola for its (more than) 17,000 patents. Discussing the acquisition, a Wired blogger, uses the wonderful title: “Google + Motorola=Android Patent Troll Repellent.”
In this previous post, you can see Apple’s approach to patents.
The Economic Lesson
According to retired Harvard scholar David Landes, individual ambition, entrepreneurship, intelligence, luck, and an ongoing stream of new tools and technology fuel economic growth through technological progress. Our patent system usually nurtures the development of new technology. It is dysfunctional, though, when used for patent trolling.
I recommend Dr. Landes’s book, The Wealth and Poverty of Nations: Why Are Some Nations Rich and Others So Poor?
An Economic Question: Citing the 4 GDP components that follow, explain how new technology fuels economic growth.
- business investment
- consumer spending
- government spending
- net exports