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Companies Asked to Donate Unused Patents
Radon360 writes "There are countless patents that are promising but sitting idle, stowed in the corporate file room. In fact, about 90 percent to 95 percent of all patents are idle. Countless patents sit unused when companies decide not to develop them into products. Now, not-for-profit groups and state governments are asking companies to donate dormant patents so they can be passed to local entrepreneurs who try to build businesses out of them. "
The whole goal of filing tons of patents you won't develop is to wait for someone else to do the work for you. If you donate the patent someone else will complete the work but you won't get to capitalize on their success. (as was I'm sure the original goal)
If companies would be interested in doing something with the patents they could have enter sharing agreements with anybody willing, so they would split the money between the owner of the patent and the entity that actually does the work of implementing the patent.
I do not believe in karma. "Funny"=-6. Do good and forbid evil. Yours, Oft-Offtopic Flamebaiting Troll.
This is good. I was wondering what I was gonna do with my peanut-butter-powered horse launcher.
Table-ized A.I.
Take an old, dusty patent that isn't doing anyone any harm, and then give it to an entrepreneur who now has an incentive to sue anyone else whose product violates the patent.
The only reason it's possible to do business in the United States at all is because 90% of patents are left lying in a drawer rather than being rigorously enforced.
Bury them. Let them rest in peace.
Wouldn't it be a lot simpler to make patents only valid while the holder is actively exploiting them (ie using them to build the device in question - filing suits against anyone that looks like they might be using it shouldn't count) - allow a 3 year grace period between filing the patent and when they first start using it to cover developement to market window
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Many companies use patents defensively (or counter offensively). The company will patent technology or process X, though they may decide that it is better done internally with process Y. Or they may simply make the strategic decision that the effort and resources expended in pursuing profit in the patent are better spent pursuing something else. Nevertheless, the patent still has value to them because it gives them more options.
1. It helps deter competitors from launching patent infringement lawsuits against them, because they have patents that can be used in a counter suit.
2. It prevents competitors from utilizing the technology that they developed.
3. It gives them business options that they would not otherwise have if they didn't have the rights to the patent.
I doubt that most patents that are classified as being "unused" or "sitting around" still aren't providing some kind of value to the company that pursued them in the first place. It tends to be the nature of business that companies will look for ways to leverage their assets maximally. Besides, if the patents were valuable, the company would already have pursued licensing the technology to another person/company who can develop it into something viable.
120 characters isn't enough to explain it.
*hilariously, goes and plays a pinball machine called 'Devil's Advocate'*
Ah, those Simpsons. Anyway, problem:
Those patents gathering dust are DEFENSIVE patents. That's why they're gathering dust; they're the deterrent your company has just in case anyone starts violating the patent sharing agreements that prevail between the big players in many markets.
If you donate them to other institutions, they 1) are no longer a deterrent and 2) may no longer be covered by patent sharing agreements. Congratulations! You have plunged the world into an era of 0 technological progress, as companies find the existing patent detente is no longer enforceable.
It would be better to simply grant every company ever a patent on everything possi -- oh, wait, that is the USPTO's actual strategy.
Whence? Hence. Whither? Thither.
I've often wondered whether patents could be subject to a type of perpetual public auction in which anyone can make a binding bid on a patent. The price on the patent would be part of a delayed mark-to-market capital gains tax accounting system that would encourage companies to either monetize or sell patents because they would be paying taxes on those patents. Some small entrepreneurs might be "forced" to sell their patents (i.e., they owe the IRS $2,000,000 because they got a bid for $10,000,000), but then they'd get far more money from the high bidder than they could have if they kept the patent. High bidders would, in turn, have serious skin in the game and want to make money from the patent. Patent-horders would need to pay the gains taxes on their patent portfolios as if those patents where being economically used. I suspect the scheme would make it more costly to keep frivolous patents or to sit on a patent to prevent competitive innovation.
Two wrongs don't make a right, but three lefts do.
Wouldn't it be a lot simpler to make patents only valid while the holder is actively exploiting them
EXACTLY. How terribly naive to think that those companies that own many "stale patents" would donate their "valuable IP". Those who are truly interested in innovation rather than exploitation will make the effort to get the invention to market (either themselves or through actively pursuing licensing agreements with those that have the capital to do so). Those companies that are NOT interested in bringing the patented idea to market and are not evil parasites are already donating such patents to others (IBM for example).
All that are left are evil, parasitic submarine-patent holding companies. Such companies exist solely to make money without making an effort by holding innovation hostage. Such companies will not donate their IP simply by asking them politely. As you have suggested and I've advocated for quite some time, this illegitimate business model has to be outlawed in some way, and the best way to do this is to introduce the obligation to provide not only the description of the invention itself but an execution/delivery plan as well that describes the intended plan to bring the patented invention to market. The patent holder would be held to that plan, up to a maximum-allowable period of time (whichever is shorter). If the patent holder fails to deliver the patent would be permanently invalidated and the idea would be public domain.
Though much more patent reform is required, this single change would be a big step forward. Amazon may have been evil to file their stupid "one-click-online-purchase" patent but at least they actually brought the idea to reality. Submarine patents run completely counter to the spirit and purpose of patent law, are potentially damaging to the economy and global competitiveness of a nation and must be eliminated.
Perhaps giving companies a tax writeoff equal to the amount in revenues that a donated patent generates would work out.
The original article mentions that tax breaks were actually stopped because they were abused.
Companies asked to donate unused dollars.
Like that will happen
Here will be an old abusing of God's patience and the king's English.
Yeah, but come on. They threw the baby out with the bathwater.
It's curious how recently the writeoff was dumped. And dumped completely, rather than putting caps on the value of a writeoff or tinkering with the way a patent's value is calculated -- or working with the patent office to stop granting so many worthless patents. Clearly there's a public benefit in having companies release their unused patents; the knowledge is distributed and the free market can get to work immediately, rather than hanging around for the temporarily granted monopoly to expire.
Summoning the power of my tinfoil hat, I see the following: