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The Economist on Patent Reform

ar1550 writes "The Economist recently posted an opinion piece on the state of patent systems, describing not just the mess that is the USPTO but flaws present in Europe and Asia. From the article, "In 1998 America introduced so-called 'business-method' patents, granting for the first time patent monopolies simply for new ways of doing business, many of which were not so new. This was a mistake." The article also describes the difficulty of obtaining legitimate patents. "

32 of 315 comments (clear)

  1. One-sided article by stratjakt · · Score: 5, Interesting

    The article only presents one side of the picture, albeit, the slashbot side.

    But, what about the other side? What was the motivation for allowing business method patents? There must have been some reasoning behind it.

    Anyone?

    --
    I don't need no instructions to know how to rock!!!!
    1. Re:One-sided article by Thangodin · · Score: 4, Insightful

      Actually, they address both sides--the need to encourage innovation as well as the need to reward it. The problem now is that legitimate patents can be too expensive, and too many illegitimate ones get through. The system is buckling under the load of spurious IP speculators. Your likelihood of getting a patent now may have less to do with how good or novel the design or process is, and more to do with how many lawyers you can afford.

    2. Re:One-sided article by Anonymous Coward · · Score: 5, Insightful

      Considering you're an obvious troll (you used the word 'slashbot'), I debated whether to answer you..

      What was the motivation for allowing business method patents?

      Someone convinced the Supreme Court that a business method was "science", and therefore worthy of patent protection.

      The problem this faces is that a business method, by definition, is it's own reward.

      Patents are supposed to further innovation by rewarding the inventors. The argument is that if you didn't reward the inventor, then they would not spend the time to make the invention.

      But a "business method" that actually works is it's own reward - no further incentive is required, because the "inventor" gets (wait for it) *BETTER BUSINESS*. There is absolutely *NO* benefit to society for disallowing others to use said 'invention' without paying their competition a license fee.

      In this case, allowing patents on "business methods" is actually *retarding* innovation, because it prohibits someone from independantly coming up with a similar method.

    3. Re:One-sided article by Jumbo+Jimbo · · Score: 4, Informative
      The motivation for allowing business-method patents, described in this paper from Harvard Law School is that innovations were too easy to copy - essentially the same motivation behind the original idea of patents.

      It seems that a good idea in principle may have resulted in legislation that is not working in practice because of a flawed framework / companies taking advantage (your choice). Not that I agree with the idea of business-method patents in the first place, but this may make the idea behind them clearer.

    4. Re:One-sided article by Scott+Wood · · Score: 5, Insightful

      If I spend time and money devloping somthing why shouldn't I have a way to protect what I create?

      The ability to protect what you create is not a right; it is a privilege granted by the public to the creator for a specific purpose. If the public does not feel that a particular sort of creation is sufficiently valuable as to warrant protection, then you don't get to protect it. Keep in mind that one of the major reasons for patents is to prevent secrecy from being used as an alternative; it's a lot harder to keep business methods secret, and thus the public is not getting as much out of granting such patents.

      So I'm writting software for buisness methods. A double whammy. According to a number of people on thee forums I shouldn't be able to make money at what I do

      You can protect the software itself with copyright. It's the methods themselves that require a patent to "protect".

    5. Re:One-sided article by ignavus · · Score: 4, Insightful

      "If I spend time and money devloping somthing why shouldn't I have a way to protect what I create?"

      Because "protect[ing] what I create" costs the community money and time and bother, and creates all sorts of externalities ... so the community feels that this welfare mentality (the world owes me a living) should come at a cost - you get protection IF your "somthing" contributes to the common good by advancing science or the useful arts.

      Many patents fail this public utitlity test. Indeed, the current patent regime fails this test. That is the problem.

      The community doesn't have to shoot itself in the foot just because gun-sellers want to sell bullets and doctors want to get fees for treating gunshot wounds. And it doesn't have to erect a patent regime just because business feels it would make more money that way.

      You stand on the shoulders of the whole history of western civilisation - when you pay the developers of the alphabet, the English language, common law, etc ... then you can complain about others ripping off *your* world-changing ideas. (Oh, your ideas weren't that dramatic, anyway?)

      Or maybe you'll get the clue that civilisation is a co-operative thing ... not a business method for making a quick buck. You share a few ideas, you get back a whole culture. Not a bad deal really.

      The world has already given you a heck of a big start in life - perhaps *you* owe the world a living.

      --
      I am anarch of all I survey.
  2. Patent bubble will lead to burst by IgD · · Score: 5, Insightful

    I see this patent buisness model as no different than the other booms (biotech, dot com) that all busted. Plain and simple, the patent business model means making money without any productivity. Instead of Network Solutions, we will have Patent Solutions so you can patent the 100 different ways to breath. There is no way this business model can succeed. Reform is coming sooner or later.

    1. Re:Patent bubble will lead to burst by ites · · Score: 4, Interesting

      It will burst but the timescales are not the same as for most other bubbles.

      The difference is this: other bubbles work by inflating the prospects of future returns on investment, creating a pyramid scheme in which new investors are lured by the prospect of huge rewards while old investors sell out and actually make the rewards. When the pool of new investors runs out, bubble bursts and granny loses her savings.

      The patents bubble is not based on this model at all. Rather, it's a scheme by which a small group of people have turned the law into a tool for extortion. As long as they don't extort more from the system than it can bear, the business of patents will continue. At a certain moment the tax that this creates on normal business activity will cause those economies which allow it to become uncompetitive and thus die.

      The end-game for the patent players is to get a global hegemony because then uncompetitiveness does not matter any more. But this is highly unlikely: the advantages to small countries of having unfettered technology will outweigh any advantages of being compatible with the USA's "policies".

      So we'll see about 5 more years of fighting for positions, then 10-15 years of ruthless extortion during which technology advancement suffers and stagnates, and then revolt by either government as they start to see the impact on economic growth and tax income, or by smaller to middle-sized businesses as they find themselves unable to operate normally.

      A better parallel would be the monopolised telecoms industries in the west, which lasted for 50 years or so, and which caused serious hinderence to technological progress until they were dismantled by regulators.

      The patent business will be dismantled around 2025, at the earliest. From 2010 to 2025, if you are a small independent technology producer you will have three choices:

      1. illegality, black-market.

      2. join a patent club and pay the costs (equivalent to merging with a larger business).

      3. relocate to a patent haven such as Liberia.

      Options 1 and 3 are pretty similar since any business using foreign software which violates patents will be subject to penalties.

      And it won't be sufficient to say "this software does not violate patents", you will need a certificate of conformity, period. Like selling a car.

      It's a sad prognosis for OSS, which is my main business, but I think it's inevitable. Money talks, and we are seeing a true gold rush here.

      --
      Sig for sale or rent. One previous user. Inquire within.
  3. How to benefit the consumer. by rice_burners_suck · · Score: 5, Funny
    I have an interesting idea: Pass new legislation that makes it ILLEGAL for an individual or small business with less than 1000 employees to obtain a patent. Then, only large businesses can obtain them. Further, some additional clauses in the legislation will require that such small businesses, if they wish to license the patent, will have to pay additional monies besides the license fees, such as additional taxes, penalties, and fines, which the government will spend on fancy furniture and catering for patent office employees. Any patent application filed by a corporation with 20,000 employees or more, or at least 5 billion dollars in liquid assets, will be automatically approved. Corporations smaller than this will have to go through a patent approval process, the complexity and expense of which will be inversely proportional to the size of the corporation. Thus, a corporation with the minimum 1,000 employees will have to endure the most difficult patent approval process, and a corporation with, say, 10,000 employees will go through a process only half as difficult.

    This will balance out the patent system and make the system fair for all involved. Clearly, such a patent system will benefit the consumer.

  4. If we got rid of currency and patents and lawyers by omghi2u · · Score: 4, Funny

    If we got rid of currency and patents and lawyers, think how happy the world would be.

    We could do things for the sheer GOOD of doing them, people would be creative for creativity's sake. Just think Star Trek and don't tell me I'm wrong.

    Thanks, commrade!

  5. A different angle by TheMeuge · · Score: 4, Funny

    Give these guys a break ;) They're just trying to help out the ailing hordes of patent lawyers. I mean if one could no longer patent the very process of 'post-factum patent squatting litigation', what would happen to the poor folks?! Personally, I have filed a patent for the "process of gaining permission for sexual activity with a previously unknown person through the use of mood-altering and/or intoxicating substances". Upon the patent being granted I expect to file no less than 10'000 lawsuits/day for patent infringement, mainly around college campuses.

  6. This a nice smoke screen by Balaitous · · Score: 5, Interesting

    IMHO, this editorial piece is a strategic smoke screen to put the emphasis on "patent reform" in front of the growing movements that challenge the scope of patentable subject matter. In the recent Geneva Conference on the Future of WIPO, the USPTO, WIPO and US Trade representative all supported "tuning generic patentability criteria", while critics supported excluding software, information processing, gene sequences and vegetal varieties from patentability. Guess which has more chance to bring the system back to reason ? Guess which is supported by the big patent portfolio holders ?

  7. the problem isnt so much the system by Phil246 · · Score: 4, Insightful
    its the people who willingly abuse it
    patents, when applied for and granted PROPERLY are a good thing. However when they`re just used to cover your bases, so you can wait for some unlucky person to come along and try to do what youve patented, you can slam him with a lawsuit.

    i think it was suggested a fair few stories like this back by someone for a use it or lose it style system, although it would create more lawsuits short term. it might just reduce the lawsuits which wait for a company or person to become nice and fat, for skimming.

    The best solution would be to have those staff at the US patent office especially, but also other patent offices around the world to have the time, staff, training and ability to scrupulously check every single application.
    perhaps barring those who apply for dodgy patents for a year or two? might be a little extreme to do that but its an idea at least.

  8. Re:In developing countries... by Anita+Coney · · Score: 4, Insightful

    The first rule of Capitalism: Without competition, there is no Capitalism.

    --
    If someone says he and his monkey have nothing to hide, they almost certainly do.
  9. Frivolous Patents by P-Nuts · · Score: 4, Interesting

    As TFA seems to state, the principal problem in the patenting system is that it is too easy to get a patent granted on what, after a lengthy legal trial will probably turn out not to have been patentable. The difficulty is that patenting stuff is already a bit expensive, putting off people who aren't big corporations. So how can a better vetting system be introduced to force patent offices to look harder at each application for obviousness/prior-artiness?

    The article suggests that competitors could perform this task if the application process were made more open. This makes the patent process somewhat similar to obtaining planning permission (putting up notices saying what you plan, and giving people a chance to object in some period of time).

    One thing seems certain, that only if more patents are rejected by the patent office, will people file fewer frivolous patents. But as the system stands, the patent office has little incentive - they just want to collect their fee without too much hassle. Only by changing the system so that the patent office suffers each time a patent it granted is later found in court to be dubious, will they be motivated to improve the quality of the vetting procedure.

  10. Crazy idea: accept all patents by srowen · · Score: 5, Interesting

    I'm not the first to propose this idea, but...

    Today in the US, patents are submitted to the USPTO, where they are researched and approved or rejected. If approved, they are presumed valid, unless/until someone else challenges it and requests a review.

    The USPTO is overwhelmed and in no position to accurately judge the validity of every one of these patents.

    So why try? why bother reviewing them upfront? The USPTO could accept all patent applications, catalog them, make them public, but do not endorse them as valid until proven otherwise.

    When patent conflicts arise, as they do today, companies can ask the USPTO to rule on the existing patents. At that time, all parties have a chance to supply relevant evidence to the USPTO about the patent's validity or invalidity.

    The plus side is that the USPTO stops pretending it can deal with all this work effectively. It only spends effort on patents that companies think are worth fighting over (and before litigation).

    The downside is that companies must publicly submit information about their patentable ideas without a guarantee that they will receive a patent. But, that is a healthy incentive to avoid spurious patents, which is missing today.

    What do you guys think?

    1. Re:Crazy idea: accept all patents by srowen · · Score: 4, Insightful

      The hope is that this all goes through the USPTO first, not the courts. Let's say I think your patent is invalid -- we ask the USPTO to review the patent then. The USPTO doesn't bother reviewing your patent until someone cares about it, that's all -- thereby saving the expense of reviewing the 99% of patents that nobody ever looks at again.

      Hopefully the USPTO then has more resources to really make good patent decisions about the "important" patents. Plus, under this system, the challenger can present evidence agains the patent's validity, and cheaply.

      It's not going to avoid lawsuits entirely -- if the USPTO thinks your patent is valid but I still don't, I can still throw lawyers at you. But hopefully the USPTO decisions will be more informed, and therefore, more easily upheld in litigation, and therefore reduce the amount of litigation over bad patents.

      Not a complete solution, but an intriguing proposal I think!

  11. Good News by dfn5 · · Score: 5, Funny
    business-method' patents, granting for the first time patent monopolies simply for new ways of doing business

    I'm going to patent the business model of treating employees like shit. Then I'll sue every company for patent infringement.

    --
    -- Thou hast strayed far from the path of the Avatar.
  12. One simple patent reform by Anita+Coney · · Score: 4, Insightful

    Keep business and software patents, but put the burden on the patent holder to prove it's valid (i.e., useful, novel and not obvious) in any subsequent trial or hearing.

    And if the patent holder loses, it has to pay all of the challenger's legal costs.

    --
    If someone says he and his monkey have nothing to hide, they almost certainly do.
  13. Re:Who wrote it? by trigeek · · Score: 5, Insightful

    Typcially, the name "The Economist" is regarded as qualification enough. It made quite a row when they endorsed John Kerry for President, considering their staunchly fiscally conservative point of view.

    --
    Sometimes I doubt your committment to SparkleMotion!
  14. Actually by Prince+Vegeta+SSJ4 · · Score: 5, Interesting
    Business Method Patents have historically been frowned upon. Patents 'traditionally' revolved around a single theory - that they were meant to protect actual devices or physical tech.

    One could also argue that there is no need for this type of patent, there have always been innovative accounting methods, financial instruments or services, even without the protection a patent affords. However, teh counter agruments were that due to rising costs, it becomes increasingly harder to create this innovative ideas and processes. Further, one could say that those that create these processes work just as hard as those who create physical technology. Why discriminate solely on the basis of subject matter.

    Again, another counter argument can be made. When determining 'the cost' to business, what does cost actually mean. Is it more costly to a single business, when there idea is not patentable? Is it more costly to business as a whole, where they are excluded from using a patented method?

    Really, IMHO, there are no definite answers. But I just wanted to inject some of the thoughts which go into this type of patent.

    For more info, see: Patent Law and Policy: Cases & Materials, Second Edition by Robert Patrick Merges

  15. I have a patent idea by ajs318 · · Score: 4, Funny

    I have an idea for a robbery technique. I was thinking to patent it, as it depends on a recent change and so there cannot be any prior art. I don't see why the criminals should be the only ones making money out of crime! Let them steal goods and money, for sure, but they'll have to pay me royalties if they want to do it the way I thought up.

    However, then I thought it might be better to phrase the claim as a technique for being robbed instead. This ought to be more lucrative. The perpetrator may not get caught after all, and the victim probably is insured anyway.

    --
    Je fume. Tu fumes. Nous fûmes!
  16. Re:Who wrote it? by goldspider · · Score: 5, Insightful
    "It made quite a row when they endorsed John Kerry for President, considering their staunchly fiscally conservative point of view."

    Not too surprising, really.

    Now I'm no economist, but when it comes to the balance sheet, "Tax and Spend" makes more sense to me than "Just Spend".

    --
    "Ask not what your country can do for you." --John F. Kennedy
  17. would this fix the bulk of the problem? by Anonymous Coward · · Score: 4, Interesting

    I wonder would the following simple addition to patent laws fix the bulk problem:

    Basically, keep things as is, but limit the patent term to,say, 5 years. After that patent owner can extend it to the full 17 year term but make the extension EXPENSIVE (say, 40K per patent).. Basically, the idea is that 5-7 years of goverment protection should be enough to prove/disprove commercial viability of almost anything...And if idea is commercially viable, then 40K is not that much money, and if a patent is not viable, even IBM is unlikely to pay 40K for a useless piece of paper...

    Of course, an (intended) side effect is that most companies will stop filing valueless patents.
    (as 5 years is too short a term to bother and full term is too expensive)...The problem of submarine patents would simply go away...

  18. How to evaluate the patent system by swillden · · Score: 5, Insightful

    The article points out that we need a way of evaluating whether or not a patent system is meeting its goals of fostering innovation. The article suggests:

    Patent offices also need to collect and publish data about what happens once patents are granted--the rate at which they are challenged and how many are struck down. This would help to measure the quality of the patent system itself, and offer some way of evaluating whether it is working to promote innovation, or to impede it.

    That's a good idea, but I think there's a better way to determine if the patent system is successful at promoting innovation: analyze how the patent database is used. The stated goal of the system is to provide inventors with a short-term monopoly in exchange for public disclosure of their inventions, in order to spur more invention. That makes sense, right? If you get good ideas out in the public where people can see and build on them, you'll generate even more ideas, some of which will also be good. Ideas spark ideas.

    This implies that if the patent system is working, you should see inventors perusing/searching the patent database on a regular basis, in search of good ideas to spark their thinking, or in search of solutions to specific problems they're trying to solve in their own inventions. I imagine a scene something like this:

    Engineer: Hey, boss, you know that tricky database search problem we've been trying to solve? I just spent a few hours searching the USPTO site and I came across patent #123456789. It's a *perfect* solution! It'll not only address the problem we had, but it will make our product even more flexible and easier to use.

    Manager: Great! Get me the contact information for the patent holder and I'll contact them to check into licensing terms. If they're reasonable, this could save us a bundle in development costs. We've put several hundred man-hours into this problem already. Maybe the patent owner will have an implementation they'd like to license us, too.

    Engineer: Sounds good. I'll tell Jim to shift his focus to tracking down that nasty memory leak, on the assumption that the search problem is solved. Meanwhile, while I was looking through the patent database I also came across another patent which we can't use, but which gave me another interesting idea...

    Does anyone use the patent database like this? No. Especially not with software patents. In fact, in every corporation I know of the attorneys explicitly tell developers *not* to search the patent database, as it's generally better to remain ignorant, both to avoid allegations of "willfull" infringement, and also because it's just a waste of time. Most patents are contestable anyway, and even for the ones that might hold up in court it's generally more cost-effective to just cross-license using your own patent arsenal.

    I think the measure of the patent system should be whether or not its required disclosures are observably fostering innovation. If not, it's broken.

    --
    Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
  19. Re:Who wrote it? by yerfatma · · Score: 5, Insightful
    I believe the Economist politically has a similar readership demographic to ./ as well.

    I believe you might be confused. My father subscribes to The Economist. I read /. While you don't qualify your perception of /.'s political "demographics," I would suggest The Economist is somewhat more pragmatic and a little further to the right than /.

    I do enjoy the idea random /. posters would be questioning the bonafides of The Economist. I realize they only print on dead trees and they have a weird editorial policy you're unfamiliar with, but last I checked the had a slightly higher barrier to entry than the hoops one has to jump through to post on /.

  20. Re:Who wrote it? by Hatta · · Score: 5, Insightful

    A lofty article without some kind of qualifications to back up is pretty useless.

    It's the ideas in the article that matter, not who said them. Appeal to authority is a common fallacy.

    --
    Give me Classic Slashdot or give me death!
  21. No Patents for "Self-Disclosing" Inventions? by radtea · · Score: 4, Interesting

    The article references one of the traditional justifications for patents: that an inventor is granted a time-limited monopoly in exchange for full disclosure of the invention.

    But with regard to software patents, particularly ones like Amazon's one-click patent, there are many inventions that are effectively self-disclosing: if you see that it is done, you know how it is done.

    I wonder if it would be possible under U.S. patent law to challenge these patents on this basis? I strongly doubt it, but the very fact that such inventions are patented is a measure of how badly the patent system needs reform.

    Ideas are not property, and patents do not grant property rights. They grant monopoly rights in exchange for something else. What is the "something else" in the case of things like the one-click patent? What are we, the public, getting that we would not get otherwise?

    --Tom

    --
    Blasphemy is a human right. Blasphemophobia kills.
  22. Re:Who wrote it? by edremy · · Score: 5, Insightful

    It made quite a row when they endorsed John Kerry for President, considering their staunchly fiscally conservative point of view.

    I think you actually mean "It made perfect sense that they endorsed John Kerry for President, considering their staunchly fiscally conservative point of view." Bush is a walking fiscal nightmare- no intelligent businessman should support someone whos entire economic policy amounts to "Charge it!"

    The Economist's endorsement of Kerry was the most damning commentary on Bush's presidency I've seen. The election cover was sheer brilliance: "The Incompetent or the Incoherent". I love the magazine- it's the last bastion of intelligent conservatism out there.

    But then again, don't mind me, I'm just bitter. I didn't leave the Republican party- it left me.

    --
    "Seven Deadly Sins? I thought it was a to-do list!"
  23. Re:Not if you are a supply sider by Mattcelt · · Score: 4, Interesting

    the only thing keeping us going is confidence in our economy

    The only thing that has kept the economy going since the eradication of the gold standard has been its constituents belief in it. (Or more abstractly, it could be argued, its belief in itself.)

    This is aided by the idea that the basic unit of the U.S. economy, the U.S. Dollar, is backed by the "full faith and trust of the government of the United States of America", whatever that means. (For one thing, it means that all Americans are insured for money in the bank for up to $100,000.)

    Remember too, that Alexander Hamilton was an enormous proponent of the government operating in a deficit - he felt, among other things, that the debt of a government to its people would incur some accountability (no pun intended) beyond Jefferson's espoused "natural law". One could argue that a government's responsibility to its people is flexible and changing ("...but some animals are more equal than others"), but owed money is owed money in any monetary society, which helps keep the government in check (again, no pun intended).

  24. Re:All property is theft?? by naasking · · Score: 4, Insightful

    If you create something, it is yours. If individuals, acting in the name of The Public, choose to steal that which you've created, thats another matter. But you don't keep what is your creation by permission, you retain it untill it is stolen.

    Who created numbers? Who created mathematics? Language? Ideas cannot be owned. There is no such thing as "stealing" an idea, except in the ramblings of a few confused souls. The moment you transmit an idea to someone else, whether by vocal communication, pictures, software, or the written word, you relinquish control of that idea. You no longer have control.

    Patents, copyright, and trademarks (so-called IP law) were instituted to extend the owner's control past the point of transmission, to encourage them to continue creating. It is an artifical limitation placed on a person's ability (as is most law).

    If you wish to retain absolute control of your ideas, then don't breath a word of it to anyone else, ever. But don't be surprised if someone else comes up with the same idea.

    Ideas are not property, IP law merely treats it as such. Sometimes, this abstraction is well founded, sometimes it's not. There is no shame in discussing its failings.

  25. My $.02 by ebrandsberg · · Score: 4, Insightful

    The system of patents was developed in a time when there were few people where were experts in a particular area, and the chances of them coming up with the same idea at the same time was slim, because the chances of them working on the same questions was slim. It did still happen sometimes though. Now, however, with our factory education system, there are dozens of people all working on the same issues and they come up with the same solution. The original idea was to protect the inventor from someone using an idea that they developed. Now, the same idea is probably patented at the same time many, many times during almost any parent's review process, which idealy would invalidate a patent on it's own. Why? Because obviously the solution was obvious to someone knowledgeable in the area of technology to have developed the idea at the same time. The patent system has outgrown it's usefulness and needs a major overhaul so that only those truly unique inovations can be patented. In these days, give enough resources, anybody can come up with a solution for nearly any technical problem, it's the true innovations that need to be protected. For example, the idea of an integrated circuit could be patented, but the idea of using a slightly different material to improve performance on it's own is questionable. Through trial and error, you can find what works best and doesn't, but the original idea itself is unique. Same with nearly every other "innovation" in technology today. The advancement of knowledge and problem solving should have raised the bar for patents, but it hasn't, instead the bar has been lowered.