The patent system needs to be changed in some way. When people talk about monopolies, they seem to rarely mention that the government enforces awful patents. And you don't even need to make the thing, just patent it!
I'm not sure if it's fair to R&D costs to gut patents entirely, but I'd like to see them weakened considerably. Patent trolls should not exist.
Glad to see justice in this case.
Edit: Watched Shenzhen: The Silicon Valley of Hardware, was interesting in regards to loose IP rights.
> The patent system needs to be changed in some way.
But is has. It's the changes in the patent system in the past decade that is forcing this patent troll to shut down. To wit:
* The US changed from first-to-invent to first-to-file. This reduces opportunities for patent trolls to patent obvious stuff that other people invented.
* Bilski and Alice have very firmly shut down the motherlode of crap arising from the State Street decision. Business method patents, and "do X on a computer" are quite invalid.
* Inter partes review makes it easier to challenge patents, and SCOTUS last year upheld it as constitutional.
* Venue shopping to get that one court that will always rule in favor of patents got a lot harder, as the TC Heartland case says you can only define the residence of the corporation as its place of incorporation.
* Prior use defense: if you used a method before it was patent, you don't have to pay to license the patent.
I think there are some other reforms that could be made (the big one is moving from one fixed term for all patent categories to varying it by industry), but life has gotten much harder for patent trolls.
> * Prior use defense: if you used a method before it was patent, you don't have to pay to license the patent.
This is perhaps the best way to actually protect yourself in some business situations where enforcing the patent and getting it in the first place is going to require too much effort for the given use case. You can just post a sealed copy of the invention to your solicitor, then crack on with making the product. If someone beats you to market and wants to sue you for copying their patent then you should be covered nicely, you have hard evidence you have not stolen 'their' idea.
You also don't have to publish for the world to see what your key invention is. If it is a manufacturing technique that is required to make an existing product more affordably then you can keep your invention secret that way.
> The patent system needs to be changed in some way
It needs a lot of changes. One simple but important fix would be to revert the 1991 budget change that made the USPTO run on fees instead of taxpayer funds. This dramatically increased the incentive to approve shit patents, something borne out in the pre-91 and post-91 data:
Wasn’t there a time when you had to actually present a prototype of the thing you wanted to patent to the patent office?
I think the patent system needs a little work, yes, but I think it’s often conflated with the bass ackwards copyright law in the US. Used together, the two give you the ability to perpetually remain the proprietor of your “invention” because your invention is only ever distributed as a licensed work. This is directly at odds with the purpose of the patent system in the first place.
Patents are supposed to 1) reward inventors, during a limited, exclusive, window, for their inventions, and 2) reward society for curating good inventors by giving everyone access to the details of the invention immediately so our collective knowledge increases. It’s not meant to be used to build your corporate fortress. However, the patent into copyright strategy is how purely digital content behemoths survive. So good luck.
Shipping & Transit LLC had not only a prototype, but also a product:
Jones developed this into a service called BusCall, which had some modest success.
I think the actual solution is simply improved patent review. The patent system is broken because there are so many bad patents; if only truly innovative stuff was patented, I think a lot of the reasonable criticism would become a lot less reasonable.
But without additional funding, improved scrutiny at filing time would also dramatically increase the cost of acquiring a patent, which is already expensive for individual inventors.
The FDA charges pharma companies for drug reviews (https://www.nature.com/articles/nrd1774), and it works but leads to an appearance of a conflict of interest. They could just make the filing fee equal to what it costs to do a review.
Steko's comment might be a good place to continue that particular conversation. Such an approach would require careful design of incentive structures so that patents remain accessible without making the status quo of bullshit patents even worse.
A free market can produce some positive outcomes wherever you have multiple entities competing with each other. For all other tasks, it is the best to have the government handle the situation. The moment you find yourself saying "The free market can only fix this problem if the government first grants a monopoly to one of the participants" then you are really saying "This situation would be better handled by the government." This especially covers most research, where it is best to have the government do it.
Sure, OTOH, Disneyland can give ~85,000 paying guests concurrent non-exclusive use of the property with them being really happy with it. AirBnB being the wrong mechanism and/or your house being a suboptimal property for concurrent paid licensed use doesn't change the fundamental analogy between IP and real property.
That's called an apartment building. Or a large house with many bedrooms. Both happen all the time.
In fact, just last weekend I let 20+ people into my house for a party. The notion of privately owned property didn't suddenly become absurd at the beginning of that party...
"Exclusive right to use" is not unique to intellectual property, nor is the ability to scale a piece of private property from 1 user to N concurrent users.
Maybe some kind of change that preserves patent holders exclusive use of something they invented, without allowing them to extract royalties or licensing fees. Seems the former is the stated purpose of patents but the latter is how they get abused.
The common argument against that is that it would destroy honest patent holders, like individual inventors (who don't necessarily can or want to build a whole company to pursue a particular invention) and R&D focused organizations like labs and universities.
Patent is a monopoly in exchange for public disclosure. There is no societal benefit today from such a disclosure, so there is no point in granting the monopoly.
One valid use case for patents is medical research, where you do invest considerable resources in finding a drug formula that works. That said, it could be handled on the FDA certification level instead.
I think it's an excellent business model and even has the incentive to help and encourage small time inventors who do not otherwise have the budget or know-how to implement or protect something the invent.
Otherwise, corporations with huge budgets are the only ones that benefit from the patent system.
But this comes with a big "if".
IF the patents were actually novel. IF the patent office was actually doing its job and enforcing its own rules that a patent should be for something novel and non-obvious to people in the applicable industry.
Helping out "small time inventors" is the convenient, reasonable explanation for patents. It's pure PR. In reality, patents benefit large players far more than small ones. It's just even more reinforcement of the status quo. Make no mistake--it was designed that way from the outset, much like all structures of systemic power.
People say patents just need to be reformed, but I think it's a hopelessly outdated system. It's a relic. It's not the nineteenth century anymore. To say we just need to review patents more carefully and only grant them to deserving and truly novel ideas is naive. The span of fields of specialization is far too wide--who would pay for such an army of specialized patent clerks for every branch of technology? How would you prevent regulatory capture when only the industry they regulate has that kind of expertise? How do you prevent bribery and corruption? It's impossible. We have a terrible patent review system because that is the reality of patent review.
Assets get sold off at an auction. Some company controlled by the same owners bids $2 or $2000 or something comparably irrelevant for the patent portfolio, because only a patent troll needs these trash patents, and all the other patent trolls already have their packs. The creditors of the insolvent get these pennies, but the previous owners continue their patent trolling business under a new company and name with the same bad patents.
That doesn't make sense to me, if the company declares the value of its assets as being lower than what it is, it means the creditors get a proportionally bigger share of the assets to cover their nominal debt that has a fixed value.
The only assets are these patents which will be sold at auction for pennies on the dollar. The creditors will get nothing. The lawyers running the scam will get contracted by the new holding company and the game will begin again.
But won’t the bankruptcy court be auctioning off these assets? Who cares what value the company says they’re worth when we’re about to find out the actual market value?
Bancruptcy court only gets involved when it has been determined that the company doesn't have enough money to pay off all their debts.
Currently the company is undergoing volunatry liquidation, a phase during which they try to come to an agreement over their outstanding debts with their creditors, and try to make deals to prevent the worst case of having any outstanding debts at the end. At the same time they liquidate all their assets, so they can pay their creditors. You usually have better negotion skill/market insight/etc., so you can sell your assets at a higher price than the bancruptcy court would.
Usually, you would auction off the assets for the highest price in order to prevent insolvency, but here it seems they thought it would be better to try and defraud the creditors of their money.
Oh sorry, you are probably right there. I don't know the US system in detail and from a quick search, it looked like ch.7 would be the same stuff I've had experience with in Germany.
That doesn't work, because if the next company won the case their winnings would be effectively capped at $2. Judges look at the sale and licensing history of patents to set damages.
The point is that they don't want to go to court, they send demand letters and ask for a license fee under explicit or implicit threat of litigation, hoping that in a majority of cases their targets would pay because even if they have a good chance of winning, or the damages would be low, the litigation itself is too costly and risky.
Would this be beneficial if the aim is to monetize by: securing a guilty verdict in an infringement claim with the intent being to prevent the infringing party from using the patented technology in the future, as opposed to collecting damages for prior infringement?
One plausible thing I've heard is that the weakening of software patents has entrenched the position of the big tech monopolies. Quite simply, it's difficult new startup to establish itself (without getting bought out by the big companies) because it can't protect its product / ideas with patents, and is thus going to get outcompeted by larger tech companies with better funding and better brand recognition (the value of brand recognition cannot be overstated, as it greatly reduces the need to engage in costly marketing).
Quite the opposite. For every weapon X that is touted as helping the little guy, consider how many X the large guys have stockpiled.
It is far more likely that you’re going to get sued by a large corporation or troll and go out of business because your innovative idea “infringes” like a whole lot of other things that you can’t afford to fight in court. They are nice to let you pay a ransom fee — look up the story of IBM and Sun Microsystems[1]. They could just bankrupt you using the legal system.
MIPS and ARM were both founded or went from small players to big players based on patent protection. Xerox, and everything it spawned (GUIs, email, networking) was built on its copier patents. It was a fairly small photography company before that.
Is it? I would answer that question by asking whether it would've been great if Xerox hadn't patented the copier. I think the answer is no, because we probably wouldn't have gotten Xerox PARC and everything it invented if Xerox was immediately thrust into race-to-the-bottom competition with clone copiers. (Note: Xerox and PARC rapidly went downhill after a DOJ antitrust lawsuit forced Xerox to license its copier patents to Japanese competitors.)
What if Xerox had patented the GUI? Maybe Microsoft and Apple would've had to pay to license it instead of just stealing it from Xerox. What innovations did we miss out on because PARC never made any money off GUIs?
PARC never made any money not because Xerox didn’t patent things but because they didn’t value those things and shut it down.
In my opinion, patents slow down innovation in any fast moving field like software. This isn’t the 1800s. If we abolished patents in pharma, we could have cures developed for the long tail!
Xerox shut down PARC because it lost its patent monopoly and had to start competing with Japanese copier makers. Competition is awful for R&D-intensive innovation. (When was the last time Lenovo or HP invented something? Who does R&D now? It’s companies like Google that have moats in the form of network effects around their users and data.)
If we abolished patents in pharma we wouldn’t have cures for anything. Nobody will blow half a billion dollars on R&D for an easily copied drug without some sort of moat.
Exactly. We don’t need John Galts attracting a billion dollars when we have tons of small collaborators contributing far less than a billion dollars. And the results are freely available.
Isaac Newton said he stood on the shoulders of giants. What if had to rent those shoulders, or worse had no access?
If what you say is true (“why would anyone do anything big”) how was science done for years, in every field other than Pharma? How did Wikipedia beat Britannica and the Web beat AOL if capitalism is better?
Look up Clay Shirky’s ted talk Institutions vs Collaboration
Competition and moats are a nice system but in the long run collaboration is simply better!
Innovation is more expensive than ever. For example, each new generation of microprocessor costs exponentially more than it did back when Fairchild and Intel were starting out. Physics has morphed from something Isaac Newton could do with some relatively inexpensive tools to something that requires the financial resources of nation states with supercomputers and particle accelerators.
The things that make modern life, well modern: jet engines, AIDS cocktails, micro-processors, electric cars, satellites, nuclear reactors, omnipresent telecommunications, etc., are well outside the reach of "collaboration." Collaboration among amateurs doesn't even move the needle. Genuine useful progress is for the most part the province of big institutions with roomfuls of PhDs. And those require billions upon billions of dollars. And that money has to come from somewhere: defense contracts, irrational VCs, governments, and yes, patent monopolies.
The more expensive it is, the more I'd like to socialize the costs instead of putting all the eggs in one basket and then having private ownership of something huge
Did a top-down Britannica being sold door to door, the pinnacle of capitalism applied to encyclopedias, beat Wikipedia? Did encarta? Why did Wikipedia win?
I'm not sure if it's fair to R&D costs to gut patents entirely, but I'd like to see them weakened considerably. Patent trolls should not exist.
Glad to see justice in this case.
Edit: Watched Shenzhen: The Silicon Valley of Hardware, was interesting in regards to loose IP rights.
[1] https://www.youtube.com/watch?v=SGJ5cZnoodY