Wednesday, November 09, 2005

Patents Chilling Science?

SIPPA and AAAS recently conducted a survey on the effects of patenting on science. From the report:
Of the 40% of respondents who reported their work had been affected [by patents], 58% said their work was delayed, 50% reported they had to change the research, and 28% reported abandoning their research project. The most common reason respondents reported having to change or abandon their research project was that the acquisition of the necessary technologies involved overly complex licensing negotiations.
I don't know about you, but if I had to choose between preserving scientific research and preserving the patent system, the choice of which to keep and which to reform is pretty clear.

If you'd like things to change, maybe you should send a nice letter explaining these findings to your Senators and Congressional Representatives, and urge them to draft/support legislation that decreases the ability of patent-holders to stifle research and innovation (no, we aren't talking about backing this kind of patent reform). Perhaps you'd also like to suggest the independent invention defense.

43 Comments:

Anonymous Anonymous said...

Orrin Hatch is rumored to be drafting patent reform legislation (in addition to that already proposed). Perhaps he would be a good one to contact. But, keep in mind that you should contact your own representatives from the state that you currently reside -- constituency is important to the staffers that filter these things.

7:03 PM  
Anonymous Anonymous said...

It isn't new that we're always going against our own whishes... For example we want to preserve humans, but we're unable to stop fighting for different ideas... Even if you make a law that will allow scientific research to pass around the patents protection, then some will find a way to tell that a product is under scientific research, like a medicine, which will allow them to go around and not pay royalties and maybe produce a product that will get them rich... But here they forgot to pay the patent creator who thaught about "anything" that helped them to get this result.
Also, this is why we're having a trouble because we could create a product that could help humans but there are patents that forbbiden acces to certain things because they protect the ideas of someone, does this make sence that only one person blocks the whole humanity ? To my eyes it doesn't but who would ever want to get his inventions stolen ? Not me I can tell !
Even more, is the fact that usually patents are created by those who research because they get new ideas so they want to protect their work and then patent it. But if someone tries to use it they're blocked by the patent in anyway... That means the "creator" is blocking himself ! Wait does that makes sence ? No ! It doesn't... If I was a pure radical person then I'd say: "Hey ! ideas were here first so let's remove patents!" But that wouldn't help, we just need a pure rationnal arbiter that will not be influenced by any major party ( $_$ guys ) and this is like not possible anymore because our society runs with $_$ guys and is ran by $_$ guys....

8:11 PM  
Anonymous kenny said...

Ah, but the constitutional purpose of the patent system isn't that it provides royalties to inventors, the purpose is the "promotion of the arts and sciences."

We've become accustomed to a regime that has potential rewards for inventors that are vastly out of line with the incentives needed to create new technologies. Does a Amazon really need a 20-year monopoly on the idea of 1-click shopping in order to invent the technology? Or would they have invented such technology without the 20-year monopoly. My guess is yes, they would have, because there are already sufficient market incentives for them to do so without the goverment stepping in and mandating that none of their competitors can also implement this idea until 2019.

8:26 PM  
Blogger TM Lutas said...

It would be pretty simple to mandate that the executive must periodically survey the situation and if x% or greater of research is abandoned, y% or greater is delayed, or z% or greater had to be changed, the report shall include reforms to reduce the numbers underneath their limit values and the survey will be repeated yearly until you get results underneath the limit values. You could even mechanically adjust patent periods except if the Congress vetos it to lessen the negative effects on research. This provides a flexible system that takes into account both the interests of researchers and the interests of current IP holders.

This isn't rocket science, just a judicious application of negative feedback loops.

8:27 PM  
Blogger Stephan Kinsella said...

Lutas: spoken like a true engineer, totally brainwashed by the scientistic approach. You cannot compare such things; and the idea that the state is competent and unbiased enough to do it is sheer utopianism. Amazing. The only solution is to abolish patent law; but such a conclusion requires principles and normative thinking, not the engineer's tweaking or the utilitarian's belief in eternally weighing unweighable things.

8:47 PM  
Anonymous Anonymous said...

Orrin Hatch is rumored to be drafting patent reform legislation (in addition to that already proposed). Perhaps he would be a good one to contact.

Oh yeah, the guy who suggested private corporations should be able to destroy computers with pirated content on them. He's a real champion of the little guy when it comes to absurd IP restrictions.

9:20 PM  
Blogger Matt said...

Consider this - the only thing promoting pharmaceuticals research is that you can sell the drug for 500 times its cost when you develop it. Otherwise, no one would invest the billions it takes to develop a drug, and we would all be taking aspirin and sulfa antibiotics, for chrissake.

10:04 PM  
Anonymous kenny said...

matt, your assumption about the pharms might be wrong. For example, did you know that 80+% of all new drugs that make it to market were developed by publicly funded universities and research facilities? What does that mean? It means that /we already/ fund drug development with tax dollars because we believe it is an inherently valuable public good.

Meanwhile, the pharms are left to privately fund viagra and a few other high-profit "medicines."

If patents were abolished, or even just reduced in their monopoly power, we would still have drug development, both because it would be profitable, and because we would continue to subsidize it.

10:12 PM  
Anonymous Anonymous said...

dudes- RTFA.
"Within almost every scientific field, respondents from industry reported acquiring patented technology at a higher rate than respondents from
academia."- wow, that's not surprising.
IP affects you if you are trying to make a buck out of the research. If it is purely non-commercial academic, which is what universities are supposed to do, then you can infringe on whatever patent. The 'freedom to create' as the blogger puts it, is indeed a human right (depending on what you are creating some might argue)- but no one is taking that away- just your ability to make a very similar invention to a fairly recent one with the intention of making money. I'm not a lawyer, but I am a post-doc with two patents that I wrote and moved between countries. You guys might consider being pissed off about software/genetic material patents instead.

12:17 AM  
Anonymous Anonymous said...

You can do all the research you want; neither patents nor copyrights are intended to stop you.
If you want to make commercial use of the fruits of the research; typically 'sell someone something'; then you may need licenses under 3rd-party patents and/or copyrights to do so.
Usually the rights-holders want the 'sell someone something' to happen ... no-one makes any money if nothing gets sold ... so usually there is a mutually-acceptable price for the rights.

1:43 AM  
Anonymous Anonymous said...

Patents should have a short life, 2 to 3 years maximum, the time fot the idea creator to have a head start on a commercial use of his idea if he wants to use it. The main reason is that people should have the possibility to continue "thinking" ... After all, with more than 6 billion people on earth, an idea patented by someone has often already been discovered or may be discovered by someone else independently.

3:27 AM  
Anonymous Anonymous said...

A way around the current mess is to collect a patent tax on each product category. The tax revenue would be distributed to the patent holders, based on patent utility and usage in products.

Currently, companies with large tax portfolios collect royalties from companies that use their patents. Sometimes the royalties are so high that competition is inhibited. So, you see that, in effect, you are already paying a patent tax, except that it is collected mostly by large companies.

More at http://showcase.netins.net/web/stanlass/patents.htm

5:09 AM  
Blogger bitswapper said...

There's a much simpler way to reduce the degree to which patents stifle science that doesn't require that patents go away: revoke all rights for corporations. They can go ahead and exist and create jobs and organize all the activities to run a business, but have no rights under US law. No right to free speech, no right to privacy, no right to equal treatment, and etc. In essence, stop treating corporations as if they were corporeal entities, capable of bleeding and dying - treat them for what they are; entities with no internal moral code whatsoever. Nearly all of the patent stifling is being done by corporations, who have no interest in the betterment of science and humanity (even though those things will benefit them indirectly). After all, they are not by definition human.
Think about it - a supreme court decision in the middle 1800's (later regretted by those sitting judges) gave corporations many of the same rights as citizens. They had a chance to prove they would be good citizens, and some were. However, many were not, and the magnitude of the damage done to our society may well mean that we should not afford them the same valuable rights and standing as living, breathing, human beings.
This won't neccessarily make patent abuse go away, but maybe instead of 28% of research being canceled, it'll just be 5%.
Yes, revoking rights for corporations would turn things upside down, but since they enjoy more defacto rights than humans do, perhaps its about time. Abolishing slavery turned things upside down

5:16 AM  
Anonymous Anonymous said...

I agree, Patents should have a short life of 2 years and a price that will grow every two years. So the first 2 years would be 5K then to renew the patent it would be 25K, next one 125k, 625K, 3.1M... And use that money to finance research.

5:47 AM  
Anonymous Inventor said...

Patents Chilling New Businesses?

It's probably more lucrative these days for everyone to patent an idea (creating a market of patents) and restrict anyone than to invent or start a business to produce products for the marketplace (creating a market of products) which are likely to face several frivilous patent injunction/infringement lawsuits aimed to ground or get the inventor/seller go out of business.

6:00 AM  
Blogger Karl Hallowell said...

I'm not a lawyer, but I am a post-doc with two patents that I wrote and moved between countries.

Would those two patents happen to contain intellectual property owned by a university where you worked in the past? This was my first suspicion when I read this. If you did work supporting your patents while employed by a university especially if you used *any* university property in the process, those patents may be property of the university, not yours. OTOH, it is possible/legal to do and someone with a couple of patents is likely to know the ropes.

6:45 AM  
Blogger Karl Hallowell said...

I was quoting anonymous:

" I'm not a lawyer, but I am a post-doc with two patents that I wrote and moved between countries."

What is the deal? Blogger supports captchas, but not the italics tag?

6:48 AM  
Anonymous Anonymous said...

I patented the blog. I'm suing.

6:56 AM  
Blogger Mike said...

Patents and all 'intellectual propriety' law is obsolete and anti-intellectual. Its time to make a new deal on IP. I would prefer abandoning IP law but compromise is more possible. We have to lighten up on IP. If it doesn't happen were might have to develop and research off shore.

7:39 AM  
Anonymous kenny said...

IP affects you if you are trying to make a buck out of the research. If it is purely non-commercial academic, which is what universities are supposed to do, then you can infringe on whatever patent.

Untrue, untrue, untrue. Patent holders regularly threaten academics, even if their work is non-commercial. Patent holders also routinely shut down free/open source software projects, even though that is non-commercial. I know from experience; I was cease-and-desisted over some academic research I was doing in computer science and I had to remove from the Web the open-source research tool I had created to carry out the research.

There is no 'non-commercial' exemption clause in patent law that I know of. A patent is a government-granted monopoly -- it is not the right to sell a product. It is simply the right to exclude anyone from implementing any of the claims in the patent. A patent is an exclusionary implement, not a pass to go to market.

7:50 AM  
Anonymous Anonymous said...

Why not change the length of patents to reflect the pace and economics of any given industry. Software patents should be max 3 years if they are granted at all due to the fact that after only 3 years, your "invention" is outdated. If you haven't recouped your investment by that point, get out of the business because it's moving too fast for you.
Other industries such as materials or pharm. should get longer patents because of the higher dev. costs and slower industry pace.
30 years for the "one click" patent, give me a break.

8:00 AM  
Anonymous Anonymous said...


away: revoke all rights for corporations. They can go ahead and exist and create jobs and organize all the activities to run a business, but have no rights under US law.

The problem with this theory is that you can't do it without revoking all rights for all of the people working for the corporation.
Do you truly believe that if a corporation didn't have the right to free speech that their CEO wouldn't go out and speak for "himself"?

9:16 AM  
Anonymous Anonymous said...

revoke all rights for corporations. They can go ahead and exist and create jobs and organize all the activities to run a business, but have no rights under US law.

I agree that this may tip the balance too far in the other direction -- small-time inventors with dubious patents could hold the entire marketplace hostage. To fix that, you've got to both improve patent quality and give the corps at least some leverage against individual inventors.

Corporations definitely have more power and rights than they should -- they have more voting power than any individual (campaign funding), more sway with our elected officials (lobbying funds), can live forever, and generally exert more influence in every aspect of our lives than any individual can hope to. Re-aligning this power should be a priority, including patent reform.

Perhaps we can limit corps term for patents to be 1/2 that of an individual's?

9:51 AM  
Blogger Rems said...

someone got slahdotted :)

10:45 AM  
Anonymous Anonymous said...

Quoting Kenny:
For example, did you know that 80+% of all new drugs that make it to market were developed by publicly funded universities and research facilities? What does that mean? It means that we already fund drug development with tax dollars because we believe it is an inherently valuable public good.

That would be nice, if all the research WERE truly publicly funded. However, the reality is that much of the development research that does go on at these publicly funded university is done through grants from both the government and corporations. In both cases, the government and the corporations ask for shared rights in any resulting patents that may issue from the research. Oftentimes, the research is done in conjunction with researchers at private companies. The government may be altruistic in granting funds, but why would the company do so unless they would be able to make money off licensing fees in the future?

It would be great if tax dollars COULD fund everything that goes on at a publicly funded university/facility. However, the truth of the matter is, much of these funds AND students' tuition can barely pay for the day-to-day maintenance and salaries of these institutions, much less the tens of millions of dollars that each researcher requires to see their projects to fruition.

2:21 PM  
Anonymous Anonymous said...

Maybe - just maybe - we need to rethink this "free" society of ours. What happens in the natural growth of a system is that it out grows it's "package". Sure - anyone can come up with a new idea for how society work, then produce it, package it, and make everybody get in - but eventually - we all see how it works and outgrow it.

I think as a society we need "change" - desperately - and in the 90's - the Internet brought just that! Now the trouble is that we are trying to fit this entirely new medium in to our old system!

What we need are new, current, young leaders that don't work for corporations and aren't afraid to speak on behalf of the people. YES - we should take away the rights of corporations - THEY AREN'T PEOPLE! We also need to look in to all the existing corruption in our corporations and governments. The desire to be rich has become the ultimate goal for every westerner - and we simply cannot share a country and/or planet using that mentality.

I guess the real problem is - do we change what we have (our "system") - or scrap it and start over (which you cannot do without chaos).

What do you think? Does your "vote" count anymore? Why haven't any of these "corporations" that are supposedly on our side creating the ability to VOTE online!?

Just some random thoughts for the FED's to hunt me down over! I hope they bring me beer!

5:28 PM  
Anonymous jpip said...

"In both cases, the government and the corporations ask for shared rights in any resulting patents that may issue from the research."

Actually, the government can't hold patents. They can only file for SIRs. As for the sponsoring corp, it depends. Most major research universities now retain all patent rights for themselves, and won't accept funding that doesn't comply. More likely, the university will offer first rights to exclusive licenses to sponsors for any patents that they do obtain, but those rights don't come cheap.

"However, the truth of the matter is, much of these funds AND students' tuition can barely pay for the day-to-day maintenance and salaries of these institutions, much less the tens of millions of dollars that each researcher requires to see their projects to fruition."

Not so at major research universities (where the majority of these breakthroughs occur). For example, Harvard's endowment now sits at almost $26 billion. Yale's is at just over $15 billion. These organizations can conduct as much research as they want, and can be very selective about what outside funding they do choose. Granted, not every university is Harvard or Yale. But you have to be pretty heavily vested to do drug research -- this ain't the stuff of community colleges you know.

9:33 PM  
Anonymous kenny said...

Actually, the government can't hold patents.

That's right, and prior to a recent rule change, government sponsored research couldn't seek patent protection. The rule change was specifically for universities to add a revenue stream for some of their research. I'm pretty sure it is still true that the corporations can't patent work that is done with even a penny of government funding, so that means that the patents all get owned by the university.

9:38 PM  
Anonymous Anonymous said...

"Actually, the government can't hold patents. They can only file for SIRs. As for the sponsoring corp, it depends. Most major research universities now retain all patent rights for themselves, and won't accept funding that doesn't comply. More likely, the university will offer first rights to exclusive licenses to sponsors for any patents that they do obtain, but those rights don't come cheap."

You're right, the government can't hold patents. But for patents that they contributed funds to, they do reserve the right to use those patents without having to pony up licensing fees.

7:03 AM  
Anonymous Anonymous said...

Not so at major research universities (where the majority of these breakthroughs occur). For example, Harvard's endowment now sits at almost $26 billion. Yale's is at just over $15 billion.

But wasn't that previous post talking about publicly funded universities? By overlooking places such as the Univ of California system (Berkeley & UCLA for starters), U of Illinois, U of Michigan, U of Texas, etc., these are publicly funded university that have been in the news in the last few years for battling to try to keep the state legislatures from decreasing their public funding. All of these universities conduct massive amounts of research and they certainly aren't doing it on what the state is giving them. More than half of university presidents spend a portion of every working day trying to raise money for their institution.

Also, in regards to the massive endowments that places like Harvard & Yale have, endowments usually come with strings. Most of them time, the donors who set them up indicate what purposes the money generated by the endowment can be used for. It's not a blank check scenario where the university can use the interest off these endowments to do with as they like. For places such as Texas, where they've raised millions of dollars in the last decades in endowments, the major chunks of that money has been for creating a new Geology department, the business school, the college of education, etc. Not to knock those departments, but they aren't exactly prolific when it comes to developing new tech.

7:12 AM  
Anonymous Anonymous said...

But wasn't that previous post talking about publicly funded universities?

Yale and Harvard are private Universities which receive just as much public funding (via Darpa, NSF, etc) as public universities (if not more).

All of these universities conduct massive amounts of research and they certainly aren't doing it on what the state is giving them. More than half of university presidents spend a portion of every working day trying to raise money for their institution.

The picture is actually a lot rosier than what you've been told. Yes, public universities spend a lot of time fundraising and lobbying legislatures to give them more money. Most of those state tax funds are earmarked for tuition subsidization, not research. That doesn't mean that they don't have oodles of money in their endowment coffers. As you mentioned, some of the endowment money is earmarked, so that it can't be used for things like undergraduate scholarships, etc.

But a lot of it is just sitting there, a perpetual source of interest for the University to do with as it pleases. In the case of Harvard, I believe they earned over 11 billion on the stock market with their endowment funds last year. When institutions like this recruit faculty, one of their biggest pulls is that they can tell professors that they don't ever need to write a research proposal again if they don't want to, because the money is there waiting for them.

7:36 AM  
Anonymous Anonymous said...

cut teh crap, and start dig our own hole!

8:55 AM  
Anonymous Anonymous said...

Patents were originally concieved to protect the small inventor. Imagine that you were working by yourself in a small shop and have some breakthrough. Before patents were applied, as soon as you bring your product to market, a large company could take the idea and out produce and sell your idea faster than you could build a larger production system. The patent was installed to insure to some degree that the larger company would have to at least pay for use of your ideas. A 2 or 3 year patent coverage would not help a small company at all, it usually takes more than that to get all the ducks in a row. The problem now is that someone can come along and [facetious comment] patent breathing and no one can breath without someone trying to nail them down..

Politics also rears it's ugly head in the patent world. The first mechanical heart valve was invented by a kids TV show celebrity and yet, he was not allowed to take out a patent..Politics runs in scientific circles roo..

Everyone has the right to create, but the way IP is aet up now, no one has the right to sell anything they have created unless they have permission. (( pecent of anything one comes up with will include something that someone else uses in their creation..

Warren Hatch and others are in bed with the entertainment industry and only hear what they say. Much of what he is doing is going to spill out across all technologies and create havock for all..

Communisim/socialism is like digging a hole and the guy next to you is filling the same hole in. No one gets anywhere. Just as people in democracies eventually realize that they can be bought by the politicians promises of supposedly free things or vote them selves someone elses hard work, communist/socialist peoples realize that they can work less and less while still get the fruit of someone elses labor. Most political systems eventually slip to the lowest common denominator......

5:02 PM  
Anonymous kenny said...

Communisim/socialism is like digging a hole...

Exactly. And the current patent system resembles communism in many ways. For instance, one of the main tenets of communism is that centrally planned economies are more efficient than free market economies. Patent systems have the same belief; that instead of letting the market decide how valuable a new invention is, the government will centrally dole out monopolies on ideas according to arbitrary criteria, and then the owner of the patent can either retain a complete monopoly over what products are produced with the patent, or extort monopoly price-fixed royalties from the rest of the market.

The patent system also holds another striking resemblance to communism: arbitrary redistribution of wealth. Under the communist system, this is supposed to make things more fair, but really ends up concentrating wealth among the beauracrats, discouraging people for performing merit-based work. Under the patent system, this is supposed to make things more fair, but really ends up concentrating wealth among large corporations and patent trolls, discouraging people from bringing real innovation to the market.

Coming up with an idea is easy. Ideas are a dime-a-dozen. Implementing a good idea in a way that the market responds is where the real hard work is. The current system rewards the wrong thing. It rewards people for dreaming and submitting paperwork, not for inventing.

7:17 PM  
Anonymous Anonymous said...

A 2 or 3 year patent coverage would not help a small company at all, it usually takes more than that to get all the ducks in a row.

The answer to this is simple: don't disclose the big idea by filing a patent application until you are confident that you can get an implementation to market or license it within the 2 or 3 year window. This is the perfect use for Trade Secret, NDAs and their applicable protection laws.

Take all the time you want to get your ducks in a row. If your 'invention' is truly non-obvious, then you shouldn't be afraid that some competitor will independently discover it while you work. If, on the other hand, the patent you seek is on an obvious next-step, well, tough luck. That's where most of the poor quality patents are being granted these days.

I think this is an excellent suggestion -- expire patents prematurely for patent trolls.

8:09 PM  
Anonymous Anonymous said...

The idea of patents isn't what's wrong. Someone or aa company, spending hundreds of millions of dollars to get a drug to market. Or spending millions to invent a machine or tool to perform a function, and having exclusive rights to that for a set period of time is perfectly good.
.
It IS true that without this, nobody'd be stupid enough to sink millions of dollars and years to come up with any kind of product.
.
The problem is that it is WAY to easy to GET a patent. The stupidest most obvious things get patents. It's so easy that people have even patented things as a JOKE!
see:http://news.nationalgeographic.com/news/2005/11/1111_051111_junk_patent.html
Someome even patented an anti-gravity macine...what the hell!!!?

THAT is the problem!

11:38 AM  
Anonymous Anonymous said...

Since the MIAA and the RIAA with the help of their bed partners in congress made a copyright last for 99 years, all one has to do is copyright an invention instead of patent it...The person can then, with a one dollar renewal fee keep the invention under his/her family/corporate control until infinity comes to a halt..

4:33 PM  
Anonymous Anonymous said...

The nature of innovation has changed - it used to be that a patent was granted for a product or something which had a major function in a product. That prevented whole-scale copying of a design.

Nowadays many products consist of thousands of patented components. It's often simple to navigate around any particular patent if the designer knows that this is actually a patented. However, after the design has been completed and a product is in use it's often prohibitively expensive to get rid or change one component. This can give patent holders a huge hold-up power and the ability to extract unjustified amounts of money.

Small inventors often count on such a strategy to patent everything insignificant idea. Large companies have started to engage in similar practices not to sue others but as a defensive measure to have a bargaining chip if they do get used.

All together it's too easy to get patents and infringement penalties are too high.

4:30 AM  
Anonymous Anonymous said...

Patents promote innovation. This is a brutal fact. In exchange for a patent, the applicant for a patent has to disclose information on how to make the product to the public. If the applicant cannot do this, the applicant is not entitled to a patent. As a result, you can go to www.uspto.gov and see what any company is making right now in their "secret" research facilities. They can't hide it. You can then use this information to make a better product and you can patent the improvement. Most large corporations just cross-license between one another and it does not affect patents do not effect their revenue stream. If we did not have patents, everyone would keep their innovations a trade secret. Nobody would disclose anything and innovation would be stiffled. In other words, if we did not have a patent system, many of the technologies we know today would not be around (because the construction of their parent technologies would still be unkown except by the one company that made it).

Turning to these insane university research comments. Universities do not spin a profit on any of their research. Thus, they may infringe a patent, but the royalties are tied to revenue. As long as the unviserity does not make revenue, the universities damages will be minimal. The problem is that many universities monetize not only their research, but their patents. MIT, for example, makes more money in its licensing campaign than most corporations. Furthermore, most research is done with the intent to create start-ups in the area around the school. If a school invents a good technology, a start-up will instantly spring up down the street.

Now to all of these term questions. It currently takes roughly three to four years for a patent to even be examined (and four to five years to issue). A patent lasts for 20 years from filing. Patent applications publish within 18 months. Thus, you have many years to from the time someone applies for a patent until they get a patent. During this time you can negotiate for a relatively small royalty rate. You can feel free to make anything that is patented, but you're going to probably end up paying 10-15% (treble if you willfully infringe) of your revenue for a license. If your margin is greater than this, you can still turn a profit on such products. So, you should just take a license and make your product. Patents do not stop you from making a product. Any major product that comes out from any major corporation is probably convered by licenses to multiple third parties.

Finally, I want to touch on this idea of a patent troll. Someone that tries to make money off their patents but do not make a product. There is no such thing as a patent troll. The term was invented by large corporations that were stealing ideas from small inventors in order to turn the press against the small inventors. I am not going to name names, but many corporations have a policy of sorts to talk to small companies and steal their innovations. For example, a large company may hold 100 meetings a year with inventors/small companies and steal 20 of these ideas to turn say a $2B profit. They know that maybe only one of these 20 companies will sue for patent infringement and they know that they will only owe maybe $100M for the patent infringement. So, there is no reason for them not to infringe. I say that we should stop using the term patent troll -- a term that was started by the general counsels of all the companies that are known for anti-trust violations -- and start using the term IP thieves to describe large corporations that steal ideas from an inventor.

If an inventor comes up with an idea and publicly discloses how to make that idea in order to obtain a patent, if someone else reads the patent and learns how to make the idea and ultimately makes the product ... the inventor should be able to collect his 10% just like anyone else. The main problem, however, is that these inventors do not make products. Thus, large corporations cannot cross license with them. The result is that large corporations are frustrated and yell patent reform because they want to mazimize profits and just cross-license instead of paying the 10%.

The real problem is that the public does not now a thing about patents. And, these large corporations feed off this.

Another problem is that many CEOs, congressmen, and senators do not know anything about patents. This is why the Blackberry case went to $600M -- the CEO did not simply settle when it first started for a fraction of the cost (e.g., $20M). Instead of yelling for patent reform, the shareholders should start a class action for negligence against the CEO. I highly doubt his lawyers were telling him to continue the litigation in the beginning when a $20M license was on the table.

I just wanted to chime in and set everyone straight. This really is not a grey area that is up for discussion. This is black and white. Patents spur innovation. If you want to spend your time replying -- do not. Spend your time learning patent law and learning what is really going on.

1:21 PM  
Anonymous Anonymous said...

If we did away with patents, companies would not spend $100Ms to make new products. why? Because people would just steal them. 20 years is not a very long time in the corporate world. Patent terms are actually very short (especially since they are 20 years from original filing and a continuation may issue 15 years after original filing so the continuation only has a term of 5 years). There is no question that our patent system is directly responsible for the technology boom. Many corporations feel obligated to innovate in order to increase their patent portfolio. They publicly disclose these innovations so other companies can, in a day, learn exactly what is being done and how to do it.

One big problem is that it is harder for sole inventors to get patents than for corporations. Patent fees have been increasing steadily -- so much so that I'm sure corporate america is loving it. They can spend $5,000 on USTPO fees and they know many small inventors cannot afford this. This does not even include attorney time. If you do not get a top notch firm and spend roughly $10,000-$15,000 on your patent, your patent is most likely full of holes. Thus, you need to spend $25,000 just to get a patent.

The USPTO has also been hurting our patent system. By increasing claim fees, more people are filing more applications than just a single application with one claims. It is cheaper to file for 3 patents with 20 claims each than 1 patent with 60 claims. The USPTO is about to issue new rules on 1/1/2007 that absolutely nobody approves except for the USPTO. It essentially requires you to examine your own patent in good faith. The procedures you have to follow to do this will probably cost everyone an extra $10,000. This means that even less sole inventors will be able to file for patents. I guess I should take the time to say that the USPTO is one of the most profitable government agencies (at one point this decade, it was the second right behind the IRS). The USPTO should be lowering the price of obtaining a patent and should use the money they receive to give Examiner's more time to examine a patent. Right now, an Examiner has something like 12 hours to examine a patent. The USPTO makes a fortune off these 12 hours. The USTPO should give the Examiners twice as much time, should hire an extra 10,000 Examiners (not a measly 1,000), and make a rule that gives the Examiner an extra hour for every claim over 20 (as applicant's have to pay serious money for additional claims).

Don't worry though, the USPTO will be sued when the new rules come into affect as it is clear that many of them are unconstitutional (i.e., not allowing someone to file more than 1 continuation by including the language that you can't file for a continuation unless you could not have presented the claim earlier. YOU COULD HAVE always presented any claim). Every expert I know agrees that the USPTO will lose the suit and that the rules will be abolished. The USPTO needs to stop playing games and needs to examine patents themselves. 12 hours is not enough time for anyone to learn a new technology and determine if that technology is novel.

Also, to these comments of obviousness. The idea that you can patent anything that was not done before (no matter how trivial) so long as it was never discussed in the past is a cornerstone of patent law. Anyone that thinks something is "obvious" is merely using hindsight reconstruction and should be slapped on the wrist for not aknowledging the innovation. If it was obvious, it would not have resulted in a different, useful functionality.

I would love to see some sort of educated response to my comments. If you do not know patent law, do not try to pretend -- it is just wasting people's time. If you do not know the facts -- learn them before you make a comment.

1:43 PM  
Anonymous George said...

anonymous:

#1: Patents do not promote innovation just because you say that they do. The only brutal fact is that silly assertions like that do nothing to convince anyone of your points.

#2: The assertion that trade secrets would lock inventions away indefinitely is false. The truth is that virtually anything patentable will soon be independently invented or reverse engineered. Can you come up with a counterexample?

#3: You assert that royalties are tied to revenue. This is misleading at best. Patent holders don't have to license their patents, so in many cases there are obtainable rights at any price. Additionally, there are a large number of products which can now be made available for free (especially software), except that greedy patent holders have obtained monopolies over very obvious ideas.

#4: You say that because "It currently takes roughly three to four years for a patent to even be examined (and four to five years to issue)" that 20 years is reasonable. But this only illustrates how blind you are to the patent system morass that we are in. Wouldn't any sane person ask why it should take 5 years of the government's time to grant you your silly idea monopoly? Why should an inventor/discoverer be forced to waste 5 years wading through this mess? And if, during that interim, we're all free to just not worry too much about infringement, what's the point at all? It sounds like an incredible waste of everyone's resources and time to me.

But, hey, thanks for trying to "set us all straight".

11:47 PM  
Anonymous trenton43 said...

anonymous said: If we did away with patents, companies would not spend $100Ms to make new products. why? Because people would just steal them.

Wrong. If an idea is truly innovative and non-obvious, it will take years for others to figure out how to "just steal them." Those intervening years are a natural barrier for competitors, and no huge government beauracracy is needed to protect such innovation. As a bonus, inventors don't need to spend years of effort and pay the government and a lawyer to erect this type of barrier -- it is a natural consequence of their invention.

11:52 PM  
Anonymous Anonymous said...

quote: I would love to see some sort of educated response to my comments. If you do not know patent law, do not try to pretend -- it is just wasting people's time. If you do not know the facts -- learn them before you make a comment.

Dude, I'm sure you think your little post is an eruditic wonder and deserves a treatise in response. Sadly, it is not and does not.

I'll just point out two things: #1 your reverence for professional legal training is a dead giveaway that you are a lawyer or work for lawyers. And, #2, the fact that you make your living from lawyerly pursuits in the patent system means that you are tainted. Lawyers love how broken the patent system is, because it creates a tremendous amount of work and sucks a tremendous amount of money out of those who innovate.

Good for you.

11:59 PM  

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