The Roberts Court innovation tax

Summary:By refusing to do its job there is a Roberts tax on all innovation, payable to the patent bar, until someone can knock heads together there and get them to provide clarity.

By refusing to rule on whether software or business method patents are constitutional in the Bilski case, the Supreme Court under John Roberts has, in effect, taken ownership of an enormous tax on innovation. (Picture from Wikipedia.)

That's right kids, a tax. Any fee required by government is descried by conservatives as a tax on business.

By refusing to do its job (four wanted to say the patents are no good, one wanted to say they're good, and four including Roberts opted for a shoulder shrug) there is a Roberts tax on all innovation until someone can knock heads together there and get them to provide clarity.

It's an unusual tax. It goes to lawyers and law firms, not directly to the government. But the Justices are all lawyers, so maybe that's no surprise.

How much is the tax? That's another fun point. We don't know. You can get hit with it at any time, from any quarter, as in these examples ripped from today's headlines:

  • Patent troll NTP, the folks who nearly sank the Blackberry, have now sued all the smart phone makers, claiming they invented mobile e-mail. These are the same patents that eventually won NTP a $612 million judgement from RIM.
  • Apple is claiming only it can make a smartphone with an interface that uses two fingers. Its suit against HTC has been expanded, and never mind that Google was working on Android years before the iPhone appeared.
  • Frontier, a phone company, now claims to own all Voice over IP, and has sued Google. This claim of "irreperable harm" came the day its idiot patent was approved, and many years after VOIP became a standard feature. (Russell's rolling in his grave over that one.)
  • Salesforce.com and Microsoft are suing each other, both claiming to essentially own the cloud. Money is raining on both sides' counsels.

How bad is it? So bad that Technology Review now says seed and venture funding in software should move abroad en masse to avoid the Roberts tax. Maybe they should.

It's true that bad cases make bad law, but in this case a good case made no law, because our highest court decided that the bank accounts of patent attorneys were more important than those of the software industry.

Something y'all can discuss while I take a needed weekend off.

Topics: Government, Banking, Government : US

About

Dana Blankenhorn has been a business journalist since 1978, and has covered technology since 1982. He launched the Interactive Age Daily, the first daily coverage of the Internet to launch with a magazine, in September 1994.

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