It's not surprising after thinking about it for a minute, but it did startle me to read that the FTC measures innovation by the number of patents issued.
> In addition, the final rule is expected to help drive innovation, leading to an estimated average increase of 17,000 to 29,000 more patents each year for the next 10 years under the final rule.
I've always thought of that as representing a stifling of innovation.
> I've always thought of that as representing a stifling of innovation.
The short lifetime of patents and the requirement that you publish detailed information about the invention significantly mitigates this. If they were measuring innovation by the number of copyrights filed, then I might agree with you.
For a lot of industries 20 years is an awfully long time to the point of complete irrelevance - and that "detailed information" is often vague enough to be unusable. Combine that with an overly-broad range of patent-able things and an overworked USPTO granting clearly invalid patents, and in practice (at least in the tech/software world) it's doing more harm than good.
Patents are no longer about protecting R&D investments. They have become more about patenting the vaguest concepts possible, in the hope of making a profit when someone else does an actual invention which somehow stumbles into your patents' wording.
Patents are no longer about protecting R&D investments.
Patents are always the tool of the moneyed and the lawyered, which is not the same thing as protecting R&D investment. There are exception, such as the guy who spent 12 years suing car companies over the windshield wiper, but that actually proves the rule because of time spent. It even apparently cause his marriage to break down. [1]
> Kearns sought $395 million in damages. He turned down a $30 million settlement offer in 1990 and took it to the jury, which awarded him $5.2 million; Ford agreed to pay $10.2 million rather than face another round of litigation.
I don't know when exactly it happened but you can be 100% sure anyone complaining about fiat currency has no idea what fiat currency actually is, has something to sell you, and if you don't get out soon enough you'll be standing there listening to them misunderstand Nixon at you.
Seems like kind of a non sequitur. Who would keep the money purely liquid? GP was pretty obviously talking about if it were invested, which statistically would have beat inflation using even pretty conservative options/funds. Using the 4% rule, it would have yielded $1.2m annually in 1990 value, and adjusted up for inflation every year thereafter. That's more than $2.8m/year in today's dollar.
Not only that, but in the odd scenario where it was "kept liquid", or kept purely in cash, it'd be worth $30m in today's money, not $100k. It's not clear where the $100k figure is even coming from. Even $100k/year doesn't make sense in any context I can derive.
What? That's not how inflation works. Even left to rot in a bank account it would still be 30 mil today. Not worth as much as 30 mil in 1990 but still worth as much as 30 mil in 2024 because it is still 30 mil.
The only way I can think of it making sense is if @syklep is from a country with a currency that has inflated 10% every year with respect to the dollar for the past 60 years, and that they assumed you'd buy local currency with the $30m when you get it and now would try to sell it back for dollars.
I don't think that currency exists though. The closest current example I can think of is if you're Argentinian and you bought $30m worth of Argentinian pesos in 1992 which would be worth ~$35k today. But that is due to relatively recent hyperinflation, not yearly 10% inflation, 10 years ago it would still be worth $4.3m, 15 years ago $8.8m.
You'd have to be seriously asleep at the wheel (or being strong-armed by local law enforcement, unfortunately) to keep your liquid currency parked in a hyperinflationary currency.
Maybe software patents require releasing the source code and last for a shorter term related to the pace of technological change. Then the incentive to share the advance is preserved instead of everything being a trade secret.
I think Linux is a strong counter argument. And software might be simple to recreate, but it’s a shame to have so many smart folks spend time reinventing the wheel instead of building on each others work.
But the value in Linux is not the innovation but the sheer effort to (re-)create it. Patents don't protect that at all, copyright does (not that I am arguing for copyright, it also causes more problems than it solves).
Aren't the details of algorithms usually secret? E.g. my understanding is that the primary value that Tik Tok brings to the table is their recommendation algorithm.
There is no such thing as a software patent.
There is no such thing as a rubber patent.
There is no such thing as a steel patent.
There is no such thing as an electricity patent
There is only ... a patent.
OK fine, but there are patents covering applications of rubber, steel, electricity, and software.
So either you think "well it's not a software patent, it's a patent that covers the application of some software" is a useful point to make, or you're being pedantic for pedantry's sake. To the former, I don't think that makes a difference to someone being sued by a patent troll.
Well no system can work that way - if judges in court were overworked and making invalid judgements, then the legal system would fail no matter what kind of laws you have and no matter what police does
These are pretty strange arguments. Why should an overworked USPTO lead to more patents? That assumes that the default is to grant the patent. If the default is to reject the patent, then an overworked office would not lead to more patents.
An overworked Supreme Court does not lead to more Supreme Court decisions.
> Why should an overworked USPTO lead to more patents? That assumes that the default is to grant the patent. If the default is to reject the patent, then an overworked office would not lead to more patents.
Former USPTO patent examiner here. I'll answer why an overworked USPTO will lead to more patents at present, but I make no claims that it should be this way.
The effective default is to grant patents. Why? Because the examiner has a finite amount of time for each application and has to have some sort of justification for a rejection. Unless there are some formal problems with the patent application, "I couldn't find prior art" means that a patent will be granted. Examiners could try "official notice" to basically say that they don't think it's novel or non-obvious without providing a reference, but that's easily defeated by attorneys. Examiners must provide a clear justification for a rejection.
If the amount of time an examiner has is too low (and it's far too low), that increases the chance that no prior art will be found, and consequently increases the chance that invalid patents will be granted.
Contrast that with the Supreme Court: The Supreme Court can decline to see a case. You can't do that as an examiner. You can try to have an application transferred, but that will just give it to another overworked examiner!
> The effective default is to grant patents. Why? Because the examiner has a finite amount of time for each application and has to have some sort of justification for a rejection.
The path of least resistance makes appearance once again. If we don't understand that this guides the default final state, we would argue about nothing constructive.
There were some enjoyable parts, but I personally thought the job was quite stressful because of the high quota. Psychologically, I found it difficult to reduce my quality of work enough to meet the quota. Many examiners at the USPTO can knowingly reduce their quality to an appropriate level, but I wasn't one of them. (Others don't care about quality or aren't able to discern good quality from bad.)
I stopped for the simple reason that the job was far too difficult, and poorly paid on top of that.
Suppose an institution is overworked, it has two options - long queue or rush the job.
Courts understand their role is important, so you have a long wait, but they d0 the job properly.
Patent office, perhaps, rushes the job. Now whether they issue too many or too few patents is maybe equally bad, in my view, it’s screwed up either way.
The problem is, it is in the interests of the wealthy and powerful that both those things be true—that the USPTO be so overworked they can't adequately review most patents, and that the default be to grant the patent.
And the wealthy and powerful use that wealth and power to influence how government functions.
I think full audited accounting of research costs should be included in the patent filing and that the patent should end either after 20 years or until profits from the invention (including payments from other companies licencing the invention) match 10x the costs.
And the maximum payout on violating a patent should be the remaining profit to end the patent.
Differences between industries then look after themselves.
Oddly all patent creators realize that extended Cabo vacations are the best way to brainstorm, and private Jet flights help with collaboration. Obviously only affordable by wealthy companies.
"short lifetime" is relative. Had Apple been granted a patent on the idea of a smartphone the same year they released the iPhone, that patent would only expire in three years.
There are some industries where due to slow-moving markets the 20 year patent period is still sensible, but for most sectors we would be better off with a 5 or 10 year patent period to account for the increased speed of innovation.
Apple did not invent the smart phone. The invented several features that make them useful (even their version one lacked apps), but others made smart phones before them. What Apple really did was make them useful by eliminating several of the things that made them annoying not not useful before.
> What Apple really did was make them useful by eliminating several of the things that made them annoying not not useful before.
that’s literally every patentable invention ever, though.
Remington didn’t invent the hunting rifle… they didn’t even invent the first self-loading or lever action rifle, probably.
“removing the annoyances and downsides that make a previous approach infeasible or impractical” is more charitably described as “a useful innovation that advances the field”.
Now, the problem is that a lot of patents are issued for things that someone else already has done, so the recipient of the patent isn't actually advancing the state of the art. But on the face of it, "removing the annoyances and downsides that make a previous approach infeasible or impractical" is literally what patents are supposed to be granted for.
In theory maybe, but in practice it seems like the opposite. The current growth of the 3D printer market is in part directly tied to the lapsing of several key patents in the area.
Further, most patents may contain key details, but they also intentionally contain as much broad information as to create a massive exclusionary zone, not to mention burying any legitimately useful information.
20 years is not short! 20 years might be appropriate for capital-intensive innovations (e.g., in pharma), but definitely not for industries where innovations are not typically capital-intensive. E.g., 20 years for cryptography and software patents is a disaster.
not if patents become a weapon against actual innovation - which it has devolved into being today.
Far from being made to progress science and the arts, patents have become a method for which large corporations can add moats to competition. Things like codecs for video/audio, which are purely mathematical expressions, have been patented. Genes and molecules, even tho they might occur naturally, can be patented (a very tenuous form of invention - it's discovered, even if not naturally occurring!).
And not to mention design patents.
I say the entire patent system needs to be abolished, or at least, made such that only applicable to physical mechanisms, and not software, nor biological systems.
They're short relative to other IP (like copyright), and short relative to inventions that have long R&D and cost recovery timelines. If $NEW_DRUG takes 5 years to develop, 5 years to trial, 5 years to market, and 5 years to profit...20 years isn't all that long.
If the invention takes 3 weeks and $0, yeah, 20 years is a long time.
…then the patent can be invalidated on the basis that it is obvious.
If the invention is commercially valuable, then invalidating it (or just pretending it doesn’t exist until you get sued, then invalidating it) can make more sense than licensing it.
A related issue is that there are many, many patents that most people (e.g., competitors) mostly ignore, because everyone, including the patent owner, knows that they would be invalidated if challenged.
Respectfully, how do you define the current patent terms as “short”? Sure copyright is much worse, but innovation regularly happens on the scale of months! The current term of 20 years seems incredibly long to me, and it’s not clear that even at 5 years patents would provide more benefit than harm.
Most of the purported benefits of patents seem based on theories that most people don’t understand. We all take some received knowledge about their supposed operation, and usually proponents of patents know nothing about how powerful innovation in open source and other patent-free spaces can be.
Any patent that fails to “teach” the innovation can be challenged and will likely prevail if it’s an egregious gap. That’s the public benefit part, in writing.
Both things - that the number of patents measures innovation, and that they serve to stifle it, can be true at the same time. Under a fixed patent regime, the more innovation there is, the more individual patents are necessary to stifle it. Of course, if we allow the patent regime to vary, then if it changes to make patents easier to acquire then that means less innovation.
However, it's true that this property - of being a valid measure, but interventions to change it having the opposite effect on the inferred variable - is a very unfortunate one in a metric.
I'd say the number of patents filed and granted by practicing entities of small to mid-size would be a pretty good measure of innovation. I think patent fees and complexity should be progressive, esp if you have working hardware and don't just flip the patent to a troll.
a patent is a legal restriction affecting what others are allowed to produce. a person/group hit by such a restriction may elect to not produce the (innovative) thing they otherwise would have.
so that's the viewpoint in which patents may be "the antithesis to innovation". i won't argue which one's correct, just providing it here since you requested.
Patents also require disclosure of how something is done, and the history of innovation in the Western world has been one of iterative improvements on patented inventions so as to be granted a new patent.
Software arguably is not suited for a patent system, but patents have worked well for centuries.
So... yeah a patent restricts what others can produce. But parents are supposed to be for things that are novel, which means if it's unlikely for someone else to produce it to begin with. Parents are supposed to help encourage people to innovate. I do think to many patents are given and many aren't novel enough. But I do believe, at least historically, they led to innovations.
I also don't think software works be patentable
That fewer patents are filed is not an absence of evidence. It's evidence that fewer patents are being filed. If one believes patent filings are correlated with innovation (which is debatable either way), then it is (non-probative but still significant) evidence that fewer innovations are taking place.
> If one believes patent filings are correlated with innovation
This is exactly the claim I'm taking issue with. The OP implied that the legal definition of innovation was "patents filed" and implied that this is somehow meaningful, and I'm saying that the absence of patents is not evidence of a lack of innovation.
Well those are all measurable quantities, and you can measure them in proportion to their economic importance - like house insulation is a big change if you live in cold climate, etc.
I am not saying it’s easy, but economics is full of complex measurements, financial derivatives, and god knows what. Maybe they should spend some effort measuring the real world.
They do stifle innovation when one company locks up a huge portfolio of them. Forcing the employees who came up with the patentable ideas to sign non-compete agreements prevents them from working on anything related to those inventions elsewhere.
Wonder ultimately how this will be handled once the Chevron Deference case is ruled on by the Supreme Court. The interpretations I've seen from other sources is that this will be overturned if the courts decide against the principle
> I've always thought of that as representing a stifling of innovation.
Sadly, over my long career as a tech startup entrepreneur, my experience has been that your assumption is correct the vast majority of the time. Now when I teach or mentor young tech entrepreneurs I'm often explaining why they probably don't want to prioritize filing patents as part of their startup strategy. While there are certain exceptions, especially in pharma, biotech, materials science or medical fields, the years it takes for a patent to become enforceable and then the upfront cost + further years required to actually get a judgement, make patents largely ineffective in most startup contexts. There's also substantial uncertainty as to whether a startup can get the patent granted at all. After that, there's the challenge of getting it granted in a form which remains defensible and can't be easily worked around. Many people don't realize patent examiners can refuse to grant a patent unless the applicant narrows the claims.
Conversely, as a tech startup these days you do need to worry about patents potentially being used against you. The majority of tech patent cases are giant vs giant fighting over turf, a large incumbent trying to kneecap an emerging startup competitor (usually filing suit to make the startup unattractive to investors for a year and never intending to actually go to court) or patent troll vs everyone. Personally, I had both a giant trying to stop my startup's Series A funding and several patent trolls. Despite having no actual merit, the giant's suit did freeze our Series A and we nearly died. After seven months we'd demonstrated we could survive without a Series A so they dropped the suit (of course) but by then they'd cost us more than half our cash in just defending an obviously sham claim. As one investor told me, "Yes, it's clearly a bullshit claim but it will still cost serious money and a lot of founder attention over the next 18 months to get it thrown out and that, unfortunately, tips this deal over our risk threshold." And responding to the constant patent trolls just burns up startup founder attention and scarce cash in nuisance legal fees.
Despite the old-school trope of "garage inventor patents invention, makes fortune", frankly, from the perspective of fostering typical tech startups, you'd probably prefer a world where there were no patents outside of pharma, medical, bio, etc.
I wonder how frequent that is, the "We've pointless patents. And legal budget larger than your last round. Thank for playing, goodbye." It seems a reoccurring theme.
But as for the usefulness of patents to startups, at least with material-science-y hardware, I've heard possession of a defensive patent portfolio described as "table stakes" for existence, with enforceability et al being secondary.
It was interesting watching patents and unicorn dreams shape VR. Instead of years of commercial ferment exploring low-hanging niches, we wait for monoliths to eventually create maximally-hard mass-market consumer tech, and will then backfill easier niches, eventually. An industrial policy optimized for pharma, yielding pharma-shaped industries.
Pardon my language but the patent thing has turned into a **** measuring contest, and serves no useful purpose.
When I worked at FAANG you had a whole class of PE engineer who literally couldn’t build anything to save their lives. But they would constantly file patents with a frenzy like IT guys rack up certifications. Of course when the patent office gets an application from $FAANG they approve it.
And people who aren’t in the know just see patent on the resume and keep hiring these people thinking they are the next Elon Musk or something, unfortunately.
https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule...
It's not surprising after thinking about it for a minute, but it did startle me to read that the FTC measures innovation by the number of patents issued.
> In addition, the final rule is expected to help drive innovation, leading to an estimated average increase of 17,000 to 29,000 more patents each year for the next 10 years under the final rule.
I've always thought of that as representing a stifling of innovation.