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How to Become a Patent Millionaire
An anonymous reader writes "SF Gate has an article about people who patent ideas for things they have no intentions of building, hoping to license technology or block competitors from doing something similar. As if the patent system weren't screwed up enough already."
This just chaps my hide. Why do people have to be such fuckwads. If you have a idea that you want to market then by all means patent it, but to patent it and have someone else all the legwork is just not cool.
This is a sig, there are many like it, but this is mine.
Of course, there are legitimate cases for filing a patent without means to produce the product. The inventor may not have the resources, and must have the patent in hand to round up financial backing. Where do you draw the line as to what is being developed and what is not?
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There are quite a number of companies that perpetuate fantasies that the ordinary person can make a lot of money by getting a patent on an idea, and then marketing it to companies. Things go so bad that Congress passed a law to control these invention promotion firms. A form for reporting abusive forms of these services can be found at http://www.uspto.gov/web/forms/2048.pdf
(It is sad to see people who paid $10,000 to have a really bad idea for a dishwasher written up in 10 pages of form paragraphs, and the promotion activity be limited to being told that GE and Whirlpool make dishwashers.)
The reason for the reporting that is required is that many of these companies had never had a patent issue and be licensed to anyone.
Sure, there are the rare exceptions, I know of a couple personally, but for each of those there are 100 people who shelled out $10,000 for pretty much nothing.
1) Start Lord Slepnir beverages. I'll need to scrounge around for startup capital, get a factory, distribution, find a way to market it, etc. If I fail, I have to declare bankrupcy, and wind up having my house and car repoed. If I end up making a lot of money off of it, I have about 7 years to grow enough to compete with Coke and Pepsi, who will push their own knockoff of this flavor as soon as the patent runs out.
2) I contact coke or pepsi and tell them I have a new flavor. They give me a lump of cash, they take all the risk (I'm not ruined if it fails), they market it, and I get a small royality check to live off.
SF Gate has an article about people who patent ideas for things they have no intentions of building, hoping to license technology or block competitors from doing something similar
How about people who buy land they have no intention of building on, hoping to sell it to others while blocking other people from building on this land?
You don't have to carry an idea through to fruition to patent something.
Example: I'm a chip designer. I design a new type of CPU and patent that. My patent is invalid because I don't own a fab and don't produce chips myself??? RIDICULOUS!
There's nothing wrong with patenting things you have no intention of building yourself.
Now, when the patent office gives patents for things that are obvious, overly broad, or other bogus patents, that IS A BIG PROBLEM.
If you have a patent, you have every right to make them yourself, sell it to someone else, or sit and DO NOTHING. It's intellectual property. You can do what you want with your propetry. It's still (mostly) a free country.
But don't confuse the two.
I think that people are more upset about people who patent things, perhaps obvious things, and have absolutly no intention of doing anything with said patent except for collecting licensing fees when somebody infringes on said patent.
Well, I tried to think up something funny as an example to my argument, but it didn't work out very well... the best I could come up with today was patenting eating cereal with a spoon so that you get milk with every bite (But I don't have milk with my cereal, so ha!)
There are only 10 kinds of people in this world... those who understand binary and those who don't
Monopolies are bad, because they stiffle competition and usually cause prices to rise. While patents on the other hand are good, because they stiffle competition and cause prices to stay artificially high through legal lack of competition. Yeah, I know that the idea of patents is disclosure, but for software shouldn't that include the source code? I really don't see how someone like amazon should be able to patent one click shopping, it just seems like the only reasonable way to do it,or even a business method at that. So which is it?, patents help or hinder competition?
That's a good point - supposedly, shouldn't there be a tighter restriction on patent applications that haven't been "reduced to practice" (as in your example)? Because if they'd enforce that, the problem would be largely solved, I expect.
-Looking for a job as a materials chemist or multivariat
Ah yes but then if my company is the only capable of implementing your patent I just wait for the patent office to void it then I can either patent it or start making it and thus deprive you of money.
Contast with cybersquatting, which requires no innovative thinking and serves no public good whatsoever. You're not registering an idea, you're registering a word (likely one that you didn't make up yourself). God, I can't believe I'm defending ICANN.
Exactly. Grant the patent and somebody else has to go to court. Deny the patent and YOU have to go to court...
Sorry, but PTO workers are gov-scale paid workers...there ain't enough in their salary to deal with all those lawyers. Better to pass the patent and pass the buck.
"But remember, most lynch mobs aren't this nice." (H.Simpson)
-- Joe
Yet if you buy a parcel of land with no intention of using it, but instead to let it appreciate in value and sell it later ... nobody will care. The ICANN example only really is different as there's the gray area involving domain names and trademarks.
In this case (patents) the problem isn't people who patent something but not develop it. It's in being able to get overly broad patents to begin with. If somebody gets a patent on something that *could* be reduced to practice (very specifically) and doesn't produce it themselves (because of time or budget) they still should be able to benefit as the inventor. However, if somebody just tries to stake claims by patenting things with no real (clear) idea how to ever reduce them to practice (and hoping somebody else will come along to finish their job) then that is something to take issue with.
My wife came up with an idea a while back for a product, and we're still trying to get a prototype built. When we went to do an online patent search, we discovered at least 8 or 9 potentially troublesome patents already in place for similar devices to ours. Upon closer inspection though, they all appeared to be filed by people who never sold a product based on any of them. In most of the cases, it looked like they were written up by other people like us, trying to piece something together from parts lying around the house. (One guy described how his unit functioned using such things as an aquarium water pump and a tire inner-tube, for example.)
I can understand why the people wanted to patent their ideas, but as others pointed out - it seems like these unimplemented patents should automatically expire after a period of time. (Perhaps 2 years is enough of a time-frame to say "Show evidence of progress, or the patent gets removed."?)
As it stands now, all of these existing patents place artifical limits on the ways we can opt to accomplish specific goals inside our final product. I'd prefer not to disclose exactly what we're trying to do, but just for example - if we want to heat and distill some water in our product, we might have to use a peltier device instead of a heating coil. Even if the heating coil is the superior solutuon, it might put our device into questionable patent territory, since another (fairly broadly worded) patent already describes a device not too different than ours, using a heating coil for this function.
Otis Elevator Company is the other classic story -- Mr Otis invented the safty brake (which automatically catches an elevator if the cable breaks) and patented the idea. He then gave free license to use the invention to any and all competitors, since it would save lives.
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Precisely. If we refused patents to inventors deemed incapable of implementing the described invention, then all we would hear about is how the Little Guy got ripped off by Major Corporation.
It happens far too much already, without giving the big guys another tool.
Often an inventor will do a lot of preliminary design, analysis, perhaps some initial feasibility testing. The patent document represents a collection of information, with major considerations outlined, that can be used to create a product. In way, that makes it very similar to source code.
Just because some people throw out ideas and barely flesh them out, doesn't mean that others should be penalized. It's much more efficient for a bright mind to churn out plans for new inventions, rather than force them to spend money and time building it. Let others buy it from you and build it, which will support you as you plan out more projects. This way a genius can get more than one invention out of a lifetime.
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Somebody with 40 billion dollar could make a lot of offensive patents. From zero to ifninity. And then due to the sheer volume use it as a leverage. Not that I am citing the favorite nemesis of slashdot... But think of it. 20 K offensive patents (300 million $) would not even cost a % of their treasure trove. And afterward they would have a big leverage even if 1% of the patents hit home.
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Case in point. My father was an engineer in the 30's and early 40's. He patented the first working variable pitch propellor. The first two patents were for designs that couldn't handle the stresses involved - he figured out how to solve both problems simultaneously. Chances are you've flown on a plane that used a variant of his invention. He tried to peddle the design but the company he was dealing with didn't like his terms so they just took the idea. The contingency lawyers he talked to wanted such a big slice of any payout that he didn't figure it was worth pursuing that avenue. My father didn't have enough money to fund a lawsuit and that was that. He did a bit more work after that - designed the landing gear for the DC-3 among other things.
It's worth noting that the article is talking about a lawyer patenting his own ideas. That perfectly illustrates who the patent system is set up to benefit.
IANAL (YET!)
So, first of all, a patent can easily cost $15K. Patent a few things that nobody wants and pretty soon, you've got through a lot of cash. Even if you do actually get a worthwhile patent, enforcing it is completely another manner -- your target company can tie you up in court for YEARS (costing tens or hundreds of thousands of dollars), at the end of which you may lose.
Secondly, you can't patent obvious or already existing technologies -- it's one of the reasons people can lose patent fights -- they patented something that somebody else invented or that anybody reasonably knowledgeable in the field would predict.
Finally, though, you can't just patent an idea -- it needs to be "reduced to practice." In other words, Wilbur and Orville couldn't just say "We have this great idea -- a flying machine. Please give us a patent on it." Part of the patent describes exactly how it works. Just patenting an idea while lying to the patent office that you've reduced it to practice is considered fraud.
Now, the problem with all this is that people regularly patent already existing ideas, they regularly patent obvious things and they regularly patent things that don't (or can't) exist. The patent office does not have the ability to make sure that every patent is good (cost, manpower, cost, speed of technology, cost, etc....) Instead, the USPTO effectively relies on patent litigation as a method of getting rid of crummy patents. Very inefficient and leads to people licensing technologies rather than spending the money to litigate obviously bad patents.
If you stake a claim in most states, you're required to do a certain amount of work on that claim - surveying, sampling, etc. in order to maintain your claim. If you fail to do the work, you lose your rights to the claim. This system was instituted back in the gold-rush days to prevent people from just staking up all kinds of property and never doing anything with it. In the patent gold rush, we could certainly stand to learn a few lessons from our past.
I wonder if one could actually use historic mining law as precedent in a defense against offensive patents?
nuke the moon
This has always been the problem with PTO.
The Device has to have been built and made to work. Otherwise the patent system can and is evolving into nothing more than a vast roadblock to progress.
The example in the article is the perfect example of why things should have to be built before they can be patented. We have a tv set that has a camera and connects people that are watching the show. This is a cheat. Its not enough to produce such a device. It completely misses the work and related inventions that would be needed to make such a thing work. Properly speaking its not even an idea its a description of an Idea.
Edison once said "Genius is one percent inspiration, 99 percent perspiration". The patent system is awarding people patents on the one percent.
The sucker mentality of the tort-reformer never ceases to amaze me.
Doctors are supposed to be one of the most well paid professions in existence. This simply begs the question: Why can't doctors afford their own lawyers? Why should anyone need to worry about a "lawyer tax". Doctors should be able to go toe to toe with lawyers when it comes to costs.
If that is not indeed the case, twits like you should first be asking why it is that Doctors can't just defend themselves.
What artificial constraint is forcing doctors to pay heinous premiums to insurance companies? Why can't they afford their own direct defense? If there isn't a formal review mechanism for claims, why is that?
If you want to know why Doctors are REALLY being run out of business, take a look at your own insurance statements.
You're too stupid screaming "kill all the lawyers" to notice the cartel behaivor of insurance companies.
A Pirate and a Puritan look the same on a balance sheet.
..as I understand it, is that the PTO gets more money if it actually grants the patent then if it refuses it.
Considering that it gets squat for federal money these days, you can see how this situation leads to the patenting of crap-on-a-stick and so forth.
So to fix this, do it the other way around. Charge slightly more should the patent examiner determine the invention is "obvious" and a lot more should it be determined that there is prior art.
I'd even be willing to give the examiners a direct incentive should they find prior art. (But set up an appeals process if you do that) This would discourage companies and individuals from patenting utter crap, and strongly encourage patent applicants to do a good search of the prior art, rather then (as now) choosing to avoid looking (because if you don't see it, you can say you didn't know)
That Jesus Christ guy is getting some terrible lag... it took him 3 days to respawn! -NJ CoolBreeze
Except that is not really an accurate picture of what the PTO actually *does.* You make it sound as if the PTO merely rubber-stamps any patent application that may have the least bit of potential trouble with lawyers. In reality, the PTO denies many more applications than it allows. For example, from 1996 to 2000 the PTO granted 372,079 patents to US companies and individuals. (http://www.uspto.gov/web/offices/ac/ido/oeip/taf/ us_stat.pdf) During the same period, PTO received 677,440 applications from US companies and individuals. Hardly the results one would expect from "better to pass the patent and pass the buck." And FYI, the average examiner deals with lawyers every day, on the phone and in person.
I don't mean to be argumentative - there is a lot that needs to be fixed with our current system - but it just seems too easy to me to dismiss PTO workers as mindless gov't drones, trying only to collect their paychecks......if that is not what you meant, then I apologize, but that is what it sounds like.....
We have to eat happy eggs from happy chickens.
I had an idea for a web site I like to call my technology wish list. Basically everyone can enter their ideas for products they would like to see, like "a wi-fi access point in a cell phone that my pda, laptop, and my car's on-board computer can use to connect to the internet" and then cross our fingers and hope someone decides to make it. Others could comment on and improve the ideas or tell the person that it already exists and where to find it.
If there is a patent case comes up involving one of the wishes then the postings might serve as prior art.
(If this web site already exists somewhere please post a link to it.)
Coding Blog
The reason an individual should get a patent he doesn't intend to build is to sell it. The purchasing company is then paying for the time and effort he took to develop a sound idea. This would be in place of paying their own people to do it.
Trying to patent what a company will probably develop later is simply squatting. Just as cyber-squatting is being dealt with fairly well through an international organization (ICANN), a similar appeals process should be set up by the patent office.
The difficulty is in establishing regulations and standards that define what patent-squatting is and how to identify it. Once somebody figures that out, they could patent it and sell it to the US patent office.
Say it my brother, good example about the problem with patents.
The inventors of the bar-code system probably didn't knowing infinge on Lemelson's patent, and therefor created their own invention seperate from what lemelson patented.
There is nothing wrong with obtaining a patent on something you have no intention of producing. The fact of the matter is that there are many great sources of legitimate innovation that operate exactly this way. Biotechnology companies that build a new drug and then sell it to pharmaceuticals to manufacture and market. Universities that obtain patents on technologies invented in their labs, and then sell the patents to industrials to realize their commercial potential. Research consortia set up to develop new technologies and then license them back to the companies who fund the consortia.
The list of these sorts of operations is long, and quite distinguished. There is a tremendous amount of legitimate innovation that results from companies and individuals being able to patent results of research and development, and license the patents to companies whose strength is manufacturing, not innovation.
The real issue with the 'inventions' described in the article is that they are really not inventions, but rather obvious combinations of technologies already released to the public. Most of these patents should have never been granted.
Try reading this 2001 paper by Mark A. Lemley:
http://papers.ssrn.com/sol3/delivery.cfm/SSRN_ID26 1400_code010313510.pdf?abstractid=261400
I found the conclusion especially interesting:
Unless there are a great deal more patents on obviously invlaid patent occur, the likelyhood of requiring a higher level of quality patent examination is not going to happen. The SPI database (www.spi.org) is certainly helpful, and we should encourage businesses to willingly participate, to everyone's benefit.
Also, my understanding is that both the USPTO and the Japanese Patent Office (JPO) are implementing changes in preperation of mutual recognition of patents by 2004. This means that patent applications validated in one country will automatically be validated in the other. This will certainly help the USPTO, which recieves its largest chunk of foreign applications from Japan. The US might also be relying on the fact that the JPO also has a much lower percentage of applications that are ultimately awarded patents.
With Japan's focus on shifting towards a knowledge economy, and Linux taking a significant role in shaping independent software industries, the next couple of years are going to be quite intersting.