6 ms·

I don't think you have to overcome the lobbying of IP holders, as they're also hurt by too many patents. The tech industry just needs to agree that we'd all be

by jseims 14y ago

I don't think you have to overcome the lobbying of IP holders, as they're also hurt by too many patents. The tech industry just needs to agree that we'd all be better off with a truce, and lobby to change the laws. Personally, I'd like to see no patents for software and business methods.

beagle3 14y ago
> they're also hurt by too many patents. But they also spent a lot of money to get (and maintain) these patents over the years, so while they might not try to fight a patent reform, there is no chance they will lobby for it: With all the pain they are enduring, the patent system STILL gives the big guys an edge on the small guys. > Personally, I'd like to see no patents for software and business methods. Me too. But patents (paid for already) have already been granted, so even if you stop granting them today you still have to wait 20 years for old ones to expire; and patent holders would (rightfully) demand their money back if you decide to expire them early. The only solution (which several people have apparently come up with independently) that I'm aware of that has a chance of working, is introducing a "cost-of-carry" for patents - if patents are property, tax them like property, at e.g. 1% of decalred value per year. Think your patent portfolio is worth $1B? That's nice. Pay $10M/year to maintain it. The value would come into play in estimation of damages (e.g., patent infringement limited to patent value per violator, or at most 3 times as much for willful infringement); and alternatively in an "eminent domain" style seizure - someone could take the patent away from you in return for 20 times declared value. The mechanics are non trivial, but can be solved in such a way that they create an incentive not to overstate the worth of a patent, yet still provide protection to inventors - and it would put old and new patents on equal footing.
- jedbrown 14y ago
  Some big players including Google and Microsoft are in favor of fairly drastic patent reform. The fact that they have to play the game (because that's how the legal system is set up) does not imply that they think the system is good for their bottom line. I'm in favor of a "King James I moment", revoking all prior patents. The problem with pure maintenance fees is that it does nothing to prevent overlapping patents. Also, truly innovative patents may not prove their worth for several years (this is sort of the point), but the original company may not be able to afford the huge fee during the early years. If a big company could just buy it for 20x whatever the inventor is paying for maintenance, the inventor can easily be shut out of the market.
  - nirvana 14y ago
    Google is not "playing the game" they are abusing the system far more than Apple does. They sued Apple for FRAND patents that, not only did they make promises on to get in to the standard, but that the license for was already aquired by Apple via Qualcomm which made the chips that used the inventions and which had a license. So, they are abusing both the FRAND standards and trying to double dip on exhausted patents. You can't accuse Apple of doing anything that abusive. Apple has been defending patents for inventions copied by people without a license and which are not standard essential. Basically it seems that to a lot of people since Google needed to rip off the iPhone for android, in order to compete, therefore patents are suddenly bad.
    - jedbrown 14y ago
      I was referring to quotes like "We think that these patent wars are not helpful to consumers. They’re not helpful to the marketplace. They’re not helpful to innovation." (http://www.forbes.com/sites/davidthier/2012/08/21/google-exec-calls-patent-wars-not-helpful-to-consumers/ http://www.forbes.com/sites/davidthier/2012/08/21/google-exe...) All of the companies have hoards of overlapping patents on technology that was not innovative in the first place. They "defend" their patents in court because that's the game. All the major players do this, not just in technology. When do you think "Coal-fire steam locomotive" was patented? http://www.google.com/patents/US4425763 http://www.google.com/patents/US4425763 (1984) How about three patents for technology so similar the author couldn't be bothered to change even one word of the title or abstract? http://www.google.com/patents/US6470844 http://www.google.com/patents/US6470844 http://www.google.com/patents/US6945207 http://www.google.com/patents/US6945207 http://www.google.com/patents/USRE40286 http://www.google.com/patents/USRE40286 Do you really think that Apple, who has been a notoriously slow adopter of NFC (http://online.wsj.com/article/SB10001424052702304830704577493261395358658.html http://online.wsj.com/article/SB1000142405270230483070457749...) really created any new technology in this patent that they were just awarded? http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.htm&r=29&p=1&f=G&l=50&d=PTXT&S1=(apple.ASNM.+AND+20120828.PD.)&OS=an/apple+and+isd/8/28/2012&RS=(AN/apple+AND+ISD/20120828) http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sec...
- czr80 14y ago
  Interesting idea, but it seems to give even more power to the big guys, who can easily afford to pay the fee.
  - beagle3 14y ago
    > Interesting idea, but it seems to give even more power to the big guys, who can easily afford to pay the fee. The devil is in the details. For example: When filing taxes for year Y (which is usually done in Q2 or Q3 of year Y+1), you have to assign a value to each and every one of patents you own, and pay the tax accordingly. Let's say Microsoft has only 1000 patents. If they valued each at $1M, the fee would indeed be a rounding error. However, it would also be much less frightening to competitors: $1M if sued is not such a big deal for a company in business. But they have 10,000 patents; and if they wanted to value each at $100M (as seems to be the case for things that go to court), it's suddenly $10B/year. Even Microsoft cannot afford that. The end result would be that they would actually examine their patent portfolio yearly, and assign value only to valuable patents -- which is the whole point of this exercise. On the other hand, if you are a small guy, and have a $1M patent, then $10K is something you should be able to easily finance. If not, then your patent is not worth $1M - or you don't have the means to enforce it under the existing system anyway (it costs at least $100K, and some people estimate upwards of $500K, to bring a patent case to court with a chance of prevailing. If you can't finance that, your patent is already worthless).
- yason 14y ago
  I also agree that holding patents should be taxed or some cost be incurred for owning patents. And the best way to determine the right value is exactly that what you wrote: the owner sets the price of the portfolio, the owner would pay the fees accordingly, and the licensing fee would be a percentage of the total value. And if refused a license, any potential licensee can buy the remaining years of the patent at the initial annual price (= portfolio value / portfolio lifetime). So if the patent has value but the inventor has set the price too low to save on fees, someone can buy it and make better use of it. And setting the price too high would have to be a reflection of the inventor's trust that the patent is worth it since the inventor is going to have to pay for it each year. If it sounds unfair between big companies and small companies and individuals, some relative pricing can be established using percentages of the inventor's turnover / annual income. Therefore, it will hurt you for 1% or something, no matter how wealthy you are or how big company you are.
- bjornsing 14y ago
  Of course there's a "cost-of-carry". It's called Patent Maintenance Fees [1]. 1. http://www.uspto.gov/web/offices/ac/qs/ope/fee092611.htm http://www.uspto.gov/web/offices/ac/qs/ope/fee092611.htm
  - beagle3 14y ago
    That's not really a cost-of-carry (in the financial sense), because it is independent of the value of the patent; It's just a delayed payment. And really, it is small - $10K over 20 years, some of it delayed (and you can "back out" in the middle). If you use professional help (a patent editor or patent attorney), you'll pay them at least as much, often 3 times as much, and you would do that upfront. By cost-of-carry, I mean that if a patent is worth $1B, it should bother you like any other $1B asset. Are you aware of any other $1B that you pay (on average) $500/year to maintain, and yet get police forces all over the US (local, feds, custom officials) to underwrite and execute said ownership for you?

by jseims 14y ago

beagle3 14y ago

> they're also hurt by too many patents. But they also spent a lot of money to get (and maintain) these patents over the years, so while they might not try to fight a patent reform, there is no chance they will lobby for it: With all the pain they are enduring, the patent system STILL gives the big guys an edge on the small guys. > Personally, I'd like to see no patents for software and business methods. Me too. But patents (paid for already) have already been granted, so even if you stop granting them today you still have to wait 20 years for old ones to expire; and patent holders would (rightfully) demand their money back if you decide to expire them early. The only solution (which several people have apparently come up with independently) that I'm aware of that has a chance of working, is introducing a "cost-of-carry" for patents - if patents are property, tax them like property, at e.g. 1% of decalred value per year. Think your patent portfolio is worth $1B? That's nice. Pay $10M/year to maintain it. The value would come into play in estimation of damages (e.g., patent infringement limited to patent value per violator, or at most 3 times as much for willful infringement); and alternatively in an "eminent domain" style seizure - someone could take the patent away from you in return for 20 times declared value. The mechanics are non trivial, but can be solved in such a way that they create an incentive not to overstate the worth of a patent, yet still provide protection to inventors - and it would put old and new patents on equal footing.

jedbrown 14y ago
Some big players including Google and Microsoft are in favor of fairly drastic patent reform. The fact that they have to play the game (because that's how the legal system is set up) does not imply that they think the system is good for their bottom line. I'm in favor of a "King James I moment", revoking all prior patents. The problem with pure maintenance fees is that it does nothing to prevent overlapping patents. Also, truly innovative patents may not prove their worth for several years (this is sort of the point), but the original company may not be able to afford the huge fee during the early years. If a big company could just buy it for 20x whatever the inventor is paying for maintenance, the inventor can easily be shut out of the market.
- nirvana 14y ago
  Google is not "playing the game" they are abusing the system far more than Apple does. They sued Apple for FRAND patents that, not only did they make promises on to get in to the standard, but that the license for was already aquired by Apple via Qualcomm which made the chips that used the inventions and which had a license. So, they are abusing both the FRAND standards and trying to double dip on exhausted patents. You can't accuse Apple of doing anything that abusive. Apple has been defending patents for inventions copied by people without a license and which are not standard essential. Basically it seems that to a lot of people since Google needed to rip off the iPhone for android, in order to compete, therefore patents are suddenly bad.
  - jedbrown 14y ago
    I was referring to quotes like "We think that these patent wars are not helpful to consumers. They’re not helpful to the marketplace. They’re not helpful to innovation." (http://www.forbes.com/sites/davidthier/2012/08/21/google-exec-calls-patent-wars-not-helpful-to-consumers/ http://www.forbes.com/sites/davidthier/2012/08/21/google-exe...) All of the companies have hoards of overlapping patents on technology that was not innovative in the first place. They "defend" their patents in court because that's the game. All the major players do this, not just in technology. When do you think "Coal-fire steam locomotive" was patented? http://www.google.com/patents/US4425763 http://www.google.com/patents/US4425763 (1984) How about three patents for technology so similar the author couldn't be bothered to change even one word of the title or abstract? http://www.google.com/patents/US6470844 http://www.google.com/patents/US6470844 http://www.google.com/patents/US6945207 http://www.google.com/patents/US6945207 http://www.google.com/patents/USRE40286 http://www.google.com/patents/USRE40286 Do you really think that Apple, who has been a notoriously slow adopter of NFC (http://online.wsj.com/article/SB10001424052702304830704577493261395358658.html http://online.wsj.com/article/SB1000142405270230483070457749...) really created any new technology in this patent that they were just awarded? http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.htm&r=29&p=1&f=G&l=50&d=PTXT&S1=(apple.ASNM.+AND+20120828.PD.)&OS=an/apple+and+isd/8/28/2012&RS=(AN/apple+AND+ISD/20120828) http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sec...
czr80 14y ago
Interesting idea, but it seems to give even more power to the big guys, who can easily afford to pay the fee.
- beagle3 14y ago
  > Interesting idea, but it seems to give even more power to the big guys, who can easily afford to pay the fee. The devil is in the details. For example: When filing taxes for year Y (which is usually done in Q2 or Q3 of year Y+1), you have to assign a value to each and every one of patents you own, and pay the tax accordingly. Let's say Microsoft has only 1000 patents. If they valued each at $1M, the fee would indeed be a rounding error. However, it would also be much less frightening to competitors: $1M if sued is not such a big deal for a company in business. But they have 10,000 patents; and if they wanted to value each at $100M (as seems to be the case for things that go to court), it's suddenly $10B/year. Even Microsoft cannot afford that. The end result would be that they would actually examine their patent portfolio yearly, and assign value only to valuable patents -- which is the whole point of this exercise. On the other hand, if you are a small guy, and have a $1M patent, then $10K is something you should be able to easily finance. If not, then your patent is not worth $1M - or you don't have the means to enforce it under the existing system anyway (it costs at least $100K, and some people estimate upwards of $500K, to bring a patent case to court with a chance of prevailing. If you can't finance that, your patent is already worthless).
yason 14y ago
I also agree that holding patents should be taxed or some cost be incurred for owning patents. And the best way to determine the right value is exactly that what you wrote: the owner sets the price of the portfolio, the owner would pay the fees accordingly, and the licensing fee would be a percentage of the total value. And if refused a license, any potential licensee can buy the remaining years of the patent at the initial annual price (= portfolio value / portfolio lifetime). So if the patent has value but the inventor has set the price too low to save on fees, someone can buy it and make better use of it. And setting the price too high would have to be a reflection of the inventor's trust that the patent is worth it since the inventor is going to have to pay for it each year. If it sounds unfair between big companies and small companies and individuals, some relative pricing can be established using percentages of the inventor's turnover / annual income. Therefore, it will hurt you for 1% or something, no matter how wealthy you are or how big company you are.
bjornsing 14y ago
Of course there's a "cost-of-carry". It's called Patent Maintenance Fees [1]. 1. http://www.uspto.gov/web/offices/ac/qs/ope/fee092611.htm http://www.uspto.gov/web/offices/ac/qs/ope/fee092611.htm
- beagle3 14y ago
  That's not really a cost-of-carry (in the financial sense), because it is independent of the value of the patent; It's just a delayed payment. And really, it is small - $10K over 20 years, some of it delayed (and you can "back out" in the middle). If you use professional help (a patent editor or patent attorney), you'll pay them at least as much, often 3 times as much, and you would do that upfront. By cost-of-carry, I mean that if a patent is worth $1B, it should bother you like any other $1B asset. Are you aware of any other $1B that you pay (on average) $500/year to maintain, and yet get police forces all over the US (local, feds, custom officials) to underwrite and execute said ownership for you?