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it's capitalism - as long as iot's within the bounds of the law it's all about competition and squeezing your competitors out

That's not what capitalism is about, capitalism encourages competition. What you're proposing, monopolies, is what what Adam Smith the Father of capitalism was opposed to. He didn't even like patents calling them a necessary evil. To Adams capitalism provided a fair or equitable and optimum outcome for everyone.

Falcon

First disallow software patents, software is already protected by copyright.

I'd take it further. Disallow patents (ie. interference by the government in the citizen's business) for all areas where it cannot be scientifically justified that patents are a clear net win for society. In other words the onus is on the patent office to justify their costly existence, not on us to justify that they shouldn't.

I don't know whether patents are needed or not but that's why I came up with my proposal. Adam Smith called them a necessary evil.

Have patent times varying by field, again scientifically justified. e.g. if we have pharmacy patents at all it might be justified having the time length extended by the length of testing.

"Drug industry spends nearly twice as much on marketing than on research and development". "An alternative to pharmaceutical patents". Also pharmaceutical companies don't do all the research, for instance the NCI, National Cancer Institute spent $183 million to develop Taxol, a drug for cancer chemotherapy, then sold all the "rights" to use the testing data to Bristol-Myers Sqibb for $43 million. This was in the late 1980s, by 2000 it was estimated BMS made $1 billion a year by 2000 on Taxol sales.

After that if the patent holder wants to keep the patent then require them to pay a royalty, the first five year extension would cost say 5% of the average of revenue the product had generated the first five years.

Too easily gamed. Form two companies. One sells the product with the patented technology at minimal cost to the second company. Use structural impediments to make sure nobody else will buy it. Second company makes all the profits.

That's Hollywood accounting. Simply require anyone who can afford it to be able to buy whatever it is to be able to buy it from the manufacturer.

Another way to reform the patent system is to require patent holders to release a product utilizing the patents within a couple of years of the issue of them.

Too easily gamed. Sell a hand made, useless product at a ruinous cost that nobody in their right mind would buy. Keep patents on the shelf indefinitely doing that.

If a corporation does that it's liable to be sued by stockholders, aren't some Yahoo! shareholders suing or threaten to sue Yahoo! for it's refusal to accept MS's offer? Maybe what you're meant was that one company sets up another one to manufacture a product who then sells it exclusively the the first one. Simply make that illegal. What I said about Hollywood accounting above addresses it as well.

Reading the rest it appears you oppose patents "entire patent edifice". To a degree I am too, for instance I don't like the thought one person can be prevented from selling something they came up with independently but someone else received a patent on it first, however companies and people have to have a reason to spend the tyme and money to invent something. As Adam Smith said patents are a necessary evil.

Falcon

But this system still won't help to sink patent trolls, moreso it would actually give an incentive to patent trolls:

File or buy Patent A, but then don't have any revenue on it, because this is taxed.

I covered this when I said "require patent holders to release a product utilizing the patents within a couple of years of the issue of them." If they don't sell a product using a patent then they loose that patent. Then a proper financial analysis should show they'd make more money by selling as much as they could with a decent profit margin than by setting a high price.

Taxes on patents related to revenue are a boon to submarine patents.

Submarine patents are avoided by this requirement as well.

(On the other hand taxes which aren't related to revenue are a problem for small companies with minimal revenue because they wouldn't be able to finance holding a patent).

Ah, I address this by saying the patent holder pay a royalty on the revenue. Anybody who can't afford to manufacture the item itself could in one way or another, say with a fixed cost or profit margin, pay a generic or no name fabricator. From what I understand this is pretty standard in electronics with components and ICs. Heck not even Apple builds their own equipment, my MacBook Pro was shipped from a third party factory in Shanghai. Apple designs things then has someone else actually build them.

Falcon

PS: Actually at first Thomas Jefferson and James Madison opposed them. Eventually TJ was convinced they could help and he sat down with an Actuary table and calculated a term of 14 year with one 14 extension possible. Adam Smith thought they were a necessary evil.

Even if you do patent something, if someone else makes a similar thing from scratch, and sells it for less or makes it free, well tough, you shouldn't be able to sue them for it. If you find that you have competition, you improve your own product, things should be sold by their value, not by destroying competition.

Adam Smith thought pretty much the same. He called patents a necessary evil.

"I doubt it, Adam Smith was against patents and copyrights, except for a limited tyme period, instead he believed in selling a better product at a lower cost. He equated monopolies as a mercantile system and he was dedicated to defeating this system. He wanted to replace it with that Invisible hand, a free market where there was a voluntary exchange."

1) I didn't claim that he WOULD or WOULDN'T -- the key word was COULDN'T.
2) He wasn't against Patents and Copyright at all. This is incorrect. He didn't like them, but much like Thomas Jefferson, he accepted their usefulness and was in favor of granting them.

http://adamsmithslostlegacy.com/2006/08/wretched-spirit-of-inaccurate.html
http://adamsmithslostlegacy.com/2005/10/patents-are-monopolies.html

"No. I am trying to prevent you from making money from MY technology.

You mean the technology I developed INDEPENDENTLY. You may of put work into it but so did I. You and your patent however would say my efforts mean nothing."

Why did you recreate my work when you could more cheaply offer to license that work from me? Why didn't you look into it before undertaking your work? To determine if someone else was already undertaking similar work, or holding a patent. Seems inefficient to me. Also sounds like a case of tough-noogies. You have the opportunity to discover if I already hold a patent and license it -- it is your legal responsibility to either do so, or to be prepared to pay the costs at trial.

"Ever hear of Trade secrets? If you're invention is a trade secret it's already protected. Now how did that large company learn about it? Perhaps you didn't get a sign non disclosure agreement? Or did you but whoever violated it?"

I'm a small-time inventor. I work out of my garage, and I don't have a lawyer to draft an NDA for me. OR, maybe I got drunk at a bar and told someone what I was working on... or maybe I just started building and selling my widgets and the company in question takes it apart, sees how it works and makes there own without investing as much in development. Etc.

Trade secrets only apply to things that you are able to keep a secret... like the recipe for Coca-Cola. I can prevent the VP of Operations from selling that recipe to Pepsi, but if I publish it in a book, I cannot protect it anymore. If someone else figures out my recipe on their own, I cannot protect it.

"Maybe they build cheap ones that don't last long, then you can offer a higher quality product that last a long tyme. Kind of like Levi Strauss did in the 1800s."

Levi Strauss' jeans were patented -- or at least parts of them, like the rivets, that made them more durable and a better quality product.

"And you're saying the same thing with your patent. Because you got a patent my tyme and effort means nothing.

We're just going around in circles. Like you I supported patents at one tyme however someone who did a better job of explaining the problems than I can with patents convinced me otherwise, unfortunately I don't have the ability he had. So I think we should agree to disagree."

We're going around in circles because you are putting forth the preposterous notion that one who re-creates a patented work (and should have known that work was patented) ought to be compensated for work that was an infringement from the outset. That's like saying that I ought to pay you to trespass on my land because you spent three hours scaling the wall around my property.

For the sake of me not spending any more time during class lectures in this thread, I'll agree to disagree. But you should know: it is spelled "time."

"I doubt it, Adam Smith was against patents and copyrights, except for a limited tyme period, instead he believed in selling a better product at a lower cost. He equated monopolies as a mercantile system and he was dedicated to defeating this system. He wanted to replace it with that Invisible hand, a free market where there was a voluntary exchange."

1) I didn't claim that he WOULD or WOULDN'T -- the key word was COULDN'T.
2) He wasn't against Patents and Copyright at all. This is incorrect. He didn't like them, but much like Thomas Jefferson, he accepted their usefulness and was in favor of granting them.

http://adamsmithslostlegacy.com/2006/08/wretched-spirit-of-inaccurate.html
http://adamsmithslostlegacy.com/2005/10/patents-are-monopolies.html

"No. I am trying to prevent you from making money from MY technology.

You mean the technology I developed INDEPENDENTLY. You may of put work into it but so did I. You and your patent however would say my efforts mean nothing."

Why did you recreate my work when you could more cheaply offer to license that work from me? Why didn't you look into it before undertaking your work? To determine if someone else was already undertaking similar work, or holding a patent. Seems inefficient to me. Also sounds like a case of tough-noogies. You have the opportunity to discover if I already hold a patent and license it -- it is your legal responsibility to either do so, or to be prepared to pay the costs at trial.

"Ever hear of Trade secrets? If you're invention is a trade secret it's already protected. Now how did that large company learn about it? Perhaps you didn't get a sign non disclosure agreement? Or did you but whoever violated it?"

I'm a small-time inventor. I work out of my garage, and I don't have a lawyer to draft an NDA for me. OR, maybe I got drunk at a bar and told someone what I was working on... or maybe I just started building and selling my widgets and the company in question takes it apart, sees how it works and makes there own without investing as much in development. Etc.

Trade secrets only apply to things that you are able to keep a secret... like the recipe for Coca-Cola. I can prevent the VP of Operations from selling that recipe to Pepsi, but if I publish it in a book, I cannot protect it anymore. If someone else figures out my recipe on their own, I cannot protect it.

"Maybe they build cheap ones that don't last long, then you can offer a higher quality product that last a long tyme. Kind of like Levi Strauss did in the 1800s."

Levi Strauss' jeans were patented -- or at least parts of them, like the rivets, that made them more durable and a better quality product.

"And you're saying the same thing with your patent. Because you got a patent my tyme and effort means nothing.

We're just going around in circles. Like you I supported patents at one tyme however someone who did a better job of explaining the problems than I can with patents convinced me otherwise, unfortunately I don't have the ability he had. So I think we should agree to disagree."

We're going around in circles because you are putting forth the preposterous notion that one who re-creates a patented work (and should have known that work was patented) ought to be compensated for work that was an infringement from the outset. That's like saying that I ought to pay you to trespass on my land because you spent three hours scaling the wall around my property.

For the sake of me not spending any more time during class lectures in this thread, I'll agree to disagree. But you should know: it is spelled "time."

It's a constitutional right to property -- 4th Amendment (check it out).

Amendment 4 - Search and Seizure:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

I must be blind, no matter how many tymes I read or search the text of the 4th Amendment I don't see anywhere in it where "intellectual" never mind "intellectual property" is mentioned once. Nor do I see "intellectual" anywhere else in the USA Constitution.

I would have little incentive to develop my water-heating technology without a patent

May I suggest you read Adam Smith, the Father of Capitalism, sometime. He opposed patents generally. He described patents as "necessary evils, to be handed out sparingly" .

Without Patents, my technology (if marketable) would surely be recreated by some large corporation who would have no reason to pay me a royalty.

Who do you think owns a lot of patents? Those same corporations, well they don't really own the patents so much as patents are assigned to them by the employee who earned the patent. Or something like that. Without patents it would be harder for large corporations to exist.

The patent rewards it's creator, and encourages creation by ensuring the ability of the creator to earn money from his creation.

By giving one person a monopoly, especially for software and algorithms, others are in fact barred from further creations along the same line. General ideas should never receive any "protection", in a small number of cases at most only a specific implementation should be protected.

In regards to the Nobel winner's assertion that software patents reduce or restrict creation, I think he is wholly and completely wrong on this matter.

Again read Adam Smith sometime. "Patents were a conspiracy against the public" he said.

mankind has (thanks to property rights) been able to develop quite an expansive portfolio of technologies.

Far more software has been created without patent protection than software has been patented. Heck it's only been recently that any software was patented. How could all of that software been created without patents?

1) If I have a software patent, I would certainly be interested in developing derivative technologies of my OWN product.

And you'd be able to prevent a multitude of others from doing the same, the more people working on it the more things progress.

2) Patents can be a) licensed and b) transferred -- if YOU want to develop a product that derives from MY technology, you need only approach me with your idea and come to terms with me on a royalty for your use of my patent.

Or you can compleatly refuse and leave me with nothing. However without a patent then anyone else could make improvements without your approval.

Oh? I would be *very* curious to see *any* sources you can find to back up the claim that John Nash somehow debunked Adam Smith.

If Nash disproved Smith, it certainly wasn't covered within the 100-300 level econ. courses I took.