Investment Companies Backing Patent Trolls

greenbird sends us to Forbes for an account of billions in investments flowing to US patent troll companies. One example is DeepNines, who is suing McAfee over a patent that covers combining an IDS and firewall in a single device. The patent was filed on May 17, 2000 and issued on June 6, 2006. No prior art for that, no siree. DeepNines is funded by "an $8 million zero-coupon note to Altitude Capital Partners, a New York City private equity firm, promising in return a cut of any winnings stemming from the lawsuit. The payout is based on a formula that grants Altitude a percentage that decreases with a bigger award."

Comments

LOL PATENTS RULE LOL

[LOL PATENTS RULE LOL]

LOL PATENTS RULE LOL

Re:LOL PATENTS RULE LOL

[Joey Patterson]

How many investment companies are backing you?

Re:LOL PATENTS RULE LOL

[Anonymous Coward]

Ah, yes. A true patent troll.

Re:LOL PATENTS RULE LOL

[ShieldW0lf]

Allow me to introduce myself.

I'm an investor.

I like money, and I like stuff. I like money and stuff so very much that when you were out there studying the world we live in, or the arts, or technology, I was studying money, and the systems that move it around and attribute power to individuals in the system.

I know what patents and copyrights are for. They're so people like me can pluck your creations up and use them to squeeze money out of other people. Everyone in this industry knows thats what they're for, that's why we like them so much.

I do not want the system to be fair. I want it slanted towards me. I don't want fair reward for good work, if I did, I would have studied something that had a practical utility. I studied the art and science of fleecing suckers because that's what I want to do.

I am the one that is investing in the patent system, I want it to stay broken, and I will fight you tooth and nail to my last dollar to keep it that way.

Welcome to my world.

When common sense fails...

[Anonymous Coward]

...to fix the patent system, greed will.

Bloody leeches.

Re:When common sense fails...

[Anonymous Coward]

Well damn.

Re:When common sense fails...

[Anonymous Coward]

What's your gramdpa's phone number?

Re:When common sense fails...

[Anonymous Coward]

...the Aristocrats? ..... WTF?

Fuck man

[pak9rabid]

This is exactly why we need patent reform.

Sounds like good business

[gsergiu]

Seems like there's money to be made here. Probably google can shed some light on the situation, but where can one find what is needed to apply for a patent as a Canadian? I mean... wtf, RRSPs suck, getting a patent (on everything and anything) seems to be much easier.

Re:Sounds like good business

[FiniteElementalist]

This doesn't suprise me in the least that there is investment in these sorts of companies. Speculators will take bets on all sorts of different aspects of the economy. This could just be a don't pass bet on patent reform, since the trolls stand to make money or be bought out if their patent portfolios aren't overturned. Having a buyout target is good because a buyout will inflate the value of the stock.

Or, there is a possibility that this is just hedging against the effects of patent trolls. With hedging the investors could being trying to remove some of the risk of the targets of patent trolls by putting some money on the troll's position. This will dampen the effect on the portfolio as a whole either if trolls get their way or if not, as it is likely the stocks of the trolls and their targets will be negatively correlated.

If it is actually billions being funneled into trolls I doubt it is all hedging though.

Re:Sounds like good business

[j00r0m4nc3r]

But your entire business model hinges on the patent office not reforming. I think this scheme was invented by the lawyers, them being the ones who will ultimately profit the most from this.

Re:Sounds like good business

[Radres]

Why can't someone just patent being a patent troll?

Re:Sounds like good business

[iminplaya]

Speculators will take bets...

Here are the rules. Good luck.

Re:Sounds like good business

[Ihlosi]

Seems like there's money to be made here.

That's not the really important thing.

More important, from the investment company's point of view, is that there's a lot of money to be made in a very short timespan, after which any investments can easily be redrawn and moved to other, similar ventures. This allows for high, continuous profits to the investment company even if each single patent troll has only marginal success.

MOD THE PATENT TROLL DOWN!!!

[Anonymous Coward]

MOD THE PATENT TROLL DOWN!!!

Re:MOD THE PATENT TROLL DOWN!!!

[n1hilist]

+5 Punsightful.

Silly companies...

[FlyByPC]

...you don't feed trolls, you mod them down!

Re:Yay, I modded you down!

[Anonymous Coward]

Next time log out first. sigh.

Can somebody please pick up the slack for this fucking moron?

Prior Art

[qdygwakf]

Is there a clearing house for patent threats and corresponding prior art? A GROKLAW equivalent for prior art is clearly needed.

Re:Prior Art

[jkgamer]

If there isn't, maybe we should start one. And by the way, submit a patent request for the use of a website to assist in prior art searches for patents!

Re:Prior Art

[Timesprout]

Prior art is irrelevant to these people. In the Alcatel Lucent case MS believed they had legitimately licensed the patents they were later sued over and having acted in good faith could end up paying twice for the same thing. The whole decision, the amount awarded and the fact that it was also against sales in areas outside of US patent jurisdiction was seriously dodgy.

Re:Prior Art

[Temposs]

After a little Googling, it seems this would be a good place to start.

It seems to have a patent repository, a prior art voting system, and ways to figure out if your idea if patentable.

Re:Prior Art

[fat man with a monke]

Yes, but willful infringement is a whole lot easier to prove if you research beforehand. No research, no knowledge of prior art, no willing infringement.

Re:Prior Art

[kripkenstein]

Prior art is irrelevant to these people. In the Alcatel Lucent case MS believed they had legitimately licensed the patents they were later sued over

Umm, what? What is the connection between prior art and the supposed 'belief' Microsoft had that they did have a license?

Prior art can be used to invalidate a patent (or prevent it being issued in the first place). The Microsoft-Alacatel case wasn't about that. It was that Microsoft had a patent license from Fraunhofer, but the issue at hand - MP3s - consists of various functionalities (recording, playback, streaming, etc.), only a few of which were covered by Fraunhofer patents. Other functionalities were covered by Alcatel patents. Therefore Microsoft lost. It doesn't matter that Microsoft 'believed' they had a patent license, what matters is if they actually had a license to all relevant patents. The court ruled that they didn't.

Anyhow, regarding TFA, it is always good to see an article in a mainstream financial publication (Forbes) that is critical of patent trolling.

You can't build a solid economy on IP.

[Anonymous Coward]

In a decade or two we'll likely see that it's impossible to build a solid economy upon intellectual "property". Unlike manufactured goods, IP has no inherent value. At least the material used to make a tangible product is often of some worth, even as scrap. The same can't be said for a patent, or a trademark, or an industrial design. The only way value can be derived from such things is through the use of artificial monopolies and the threat of civil lawsuits and/or other punishment.

A drive through Detroit, Buffalo, or most of the US midwest clearly shows how the manufacturing capacity of the United States is essentially gone. In such areas you'll see abandoned factory after abandoned factory. What's left is minimal, and even those firms are being squeezed out by foreign manufacturers. On one hand, these investment companies can only really put their money in IP. America has very little left in the way of actual manufacturing. Investing in businesses that no longer exist isn't really useful.

But eventually America will have to face the fact that it produces nothing with intrinsic value. All it takes are countries like India and China deciding to ignore American and international IP law, and the main item of production (ie. IP) of the US drops to a value of nil. China and India will exhibit strong economies, due to their actual production of goods with intrinsic value. The economy of the US, built around goods without any intrinsic value, cannot remain strong.

Re:You can't build a solid economy on IP.

[Grishnakh]

Hey, aside from IP, you're forgetting about the other major output of the US economy: lawyers and legal work. If IP loses its value, we can just fall back on... oh, wait... never mind.

Maybe I'll just start investing in rupees.

Re:You can't build a solid economy on IP.

[iminplaya]

But eventually America will have to face the fact that it produces nothing with intrinsic value.

But we'll be dead by then, so screw it. Take the money and run, while there's still time.

Re:You can't build a solid economy on IP.

[Anonymous Coward]

But we'll be dead by then, so screw it. Take the money and run, while there's still time.

Dead in ten years? For most of us, that's doubtful.

We only need to look to India and China to see how quickly their economies have grown, even in just the past decade. Their economic growth has been immense. This is because those nations have begun to produce virtually all of goods that are then exported around the world. But their growth has, as mentioned earlier, essentially destroyed the manufacturing base of the US. Europe may not be far behind.

The extremely rapid rise of the economies of Asia may very well be mirrored by a similarly rapid decrease in the economies of the West. And this IP nonsense may even accelerate the process. As the standard of living (and thus the cost of production) rises in areas like India and China, bringing production back to the US may start to look financially viable. But if the producers have to face attacks from these so-called "patent trolls", then the cost may be far too great, and they'll continue to produce in India and China. This in turn will further push America towards an IP-based economy, which will no doubt place even more emphasis on IP litigation.

In essence, it will create a cycle where the lack of a solid manufacturing base will move the American economy towards intangible IP "production", but this increase in IP litigation will further reduce or inhibit the growth of the manufacturing sector, which in turn will push the US economy further towards an IP-based economy, and so forth.

Re:You can't build a solid economy on IP.

[Somnus]

That's crap. Lossy compression algorithms, for example, are clearly valuable, or people wouldn't use them. Intrinsic versus extrinsic is not at issue, but enforceability and the external consideration of profitability of research v. the public good of free information.

Just as the tractor replaced the plow, automation replaced the assembly line worker, so purely intellectual goods will replace tangible goods.

I predict just the opposite of parent. As China and India develop research regimes, they'll want the same IP protections that the US and Europe demand; they are violating IP now because it is expedient. As long as there is scarcity at all in our economy, IP will be with us.

Re:You can't build a solid economy on IP.

[king-manic]

Example: The Mechanical Loom, Back in the day it was incredibly valuable to have a copy of those plans to make this machine. What value does a copy have now? Ironically the US made it's wealth at first on natural resources but then from stolen IP from europe. The cycle is just repeating itself in Asia.

Re:You can't build a solid economy on IP.

[Watson Ladd]

If the factories are still there the capacity still exists. What is lost is the will to put the unemployed people on the unemployed machines, and make products that far to many people in America don't have. This is a symptom of the disease of free-market madness.

Re:You can't build a solid economy on IP.

[iminplaya]

Dead in ten years?

Listen, this is nothing new here. It's been going on for hundreds of years, ne, thousands. Unless there's an epiphany, or you get nuked, nothing is going to change. You will trudge on as dutiful as the Chinese do, and you will like it. That's the world being left to you. And chances are you will leave the same thing to your kids... and so on. This is the nature of nature. So, unless you are against nature, you will settle down, have a bunch of kids so there will be somebody to take care of you when you get old, and pay off your debts. And save the morality for when you catch your kid stealing a candy bar. And please do try to understand the true nature of this reply.

Re:You can't build a solid economy on IP.

[servognome]

China and India will exhibit strong economies, due to their actual production of goods with intrinsic value.

Selling to whom? If the US economy goes down it'll take India & China (US represents ~20% of their exports) with it.

The economy of the US, built around goods without any intrinsic value, cannot remain strong

The US produces IP because it's more value added. Any item you make has IP in it's design. The US has just seperated the IP generation from the item production - designed by Apple in California, built in China. If IP is not protected in China, then the US will go back to design in the US build in the US. It will also leave idle many Chinese factories that have depended on building US designed products.

Re:You can't build a solid economy on IP.

[maxume]

Pish posh. The US has plenty of manufacturing capacity. Only recently has China started to overtake the US in exports of real goods(points 4,5 and 6):

http://www.bbc.co.uk/blogs/thereporters/evandavis/ 2007/04/the_state_of_trade.html

Note that the US is the largest exporter overall. Even foreign companies build many of their cars here:

http://www.time.com/time/printout/0,8816,1004876,0 0.html
http://www.usatoday.com/money/autos/2007-03-22-ame rican-usat_N.htm

Re:You can't build a solid economy on IP.

[Anonymous Coward]

>That's crap. Lossy compression algorithms, for example, are clearly valuable, or people wouldn't use them.

Do they hold monetary value if you pirate them? Does compressing a Quicktime movie with a paid version of Quicktime make that Quicktime movie more valuable than one compressed with a pirated copy? Is the paid for copy of Quicktime more valuable than the pirated copy?

No.

Monetarily, if it's piratable, its value is the cost of pirating it. If the cost of pirating it is virtually nil, as with most all software, then it is worth nothing.

However, if you were to pirate the plans for a computer motherboard (a tangible good), making the pirate copy of it would cost you much more than buying an original. At that point, the value of the plans is the value the motherboard sells for on the open market.

And, of course, which country makes Quicktime? And which country makes the most motherboards? Following that trend, which country has the most value?

America USED TO produce tangible goods that cost a lot to copy. America even USED TO manufacture computers. Now Americans can only manufacture paper tigers. Have you checked the street pricing on origami? It's hard to make a buck on (now watch someone post an eBay link to some $10,000 art auction of a paper tiger...)

Re:You can't build a solid economy on IP.

[Anonymous Coward]

Selling to whom? If the US economy goes down it'll take India & China (US represents ~20% of their exports) with it.

Only an American would make such a stupid comment. There are over 2 billion people between India and China. There are 2 billion more in the immediate vicinity. There are just over 300 million people in the US. Europe only adds another 700 million people or so. Yeah, that's right. The combined European and American market is miniscule compared to that of India, China, and their neighbors. They'd take at most a temporary hit were their exports to America and Europe to be halted. And soon enough they'd be supplying their goods to their own citizenry and their neighboring nations.

The US produces IP because it's more value added. Any item you make has IP in it's design.

Yeah, but it's the manufactured item that holds the real value. You can have all the IP you want; if you don't have the capability to turn that IP into an actual product, you're economically fucked. And today it's America that has come to lack those manufacturing capabilities.

If IP is not protected in China, then the US will go back to design in the US build in the US.

Wrong. Oh, so wrong. Most of the factories in the US have been shut down for some time. The cost to bring them back into service would be extremely expensive. And even then, they probably couldn't compete on cost with the Asian manufacturers. Regardless of what your uninformed brain tells you, the major factor here is cost. That's what economics revolves around: cost.

It will also leave idle many Chinese factories that have depended on building US designed products.

Hopefully by now you see how foolish this argument is.

Re:You can't build a solid economy on IP.

[vux984]

That's crap.

No it isn't.

Lossy compression algorithms, for example, are clearly valuable, or people wouldn't use them.

No, they are clearly useful. That doesn't make it valuable. Value only shows up when there is scarcity.

That is why air, for example, which is essential to life is free. There is (currently) no scarcity.

A lossy compression algorithm, once thought up, is like air. There is be no scarcity of an idea once thought up, except through deliberate and artificial suppression.

At this stage, it takes little more to make an idea or algorithm infinitely available than a decision. In the past, replicating, ideas/algorithms/software/whatever and distributing them was enough of a chore that ideas algorithms and processes were literally scarce, and had value.

But today, in the 'internet age' the price of replicating and distributing information has dropped so close to zero that its almost irrelevant. The only thing that gives them any value, is our collective decision not to make 'unauthorized copies' in order to artificially prop up scarcity, and by extension prop up their value.

If we ever collectively chose not to, its game over for IP. There is nothing intrinsically scare about it (once created).

Re:You can't build a solid economy on IP.

[Jeff DeMaagd]

Last I checked, those countries also make plenty of manufactured crap with little to no intrinsic value.

Re:You can't build a solid economy on IP.

[Somnus]

You didn't read my post. I understand that freely available information is a public good -- it is precisely because data is cheap to replicate. The issue is incentivizing the research behind innovation.

Re:You can't build a solid economy on IP.

[radtea]

The issue is incentivizing the research behind innovation.

I think he did read your post and you're talking past each other.

He is pointing out that bits can be copied for free. You are pointing out that to prevent that we need robust laws to stop people from copying bits for free. I'm pretty sure he understands your point. He just thinks you're wrong.

Material goods are easy to protect from copying because they are relatively hard to copy. "IP" is inherently copyable at almost zero cost, and therefore has no market value unless that value is created by an artificial scarcity produced by extremely expensive laws, with all of their outrageous secondary effects like the creation of patent trolls. There is no evidence that "IP" when so protected can ever generate sufficient wealth to pay for the legal infrastructure required to maintain the required artificial scarcity, much less support the parasitic growths that that legal structure will necessarily attract.

It may be possible to generate sufficient artificial scarcity at a low enough overhead cost to create a primarily "IP" based economy, but it would be extremely foolish to bet the future of your country on it.

Re:You can't build a solid economy on IP.

[Somnus]

I completely agree with you that digital IP enforcement is a nightmare. However, we're talking patents here as well -- they are indeed costly to enforce, but it's not the same as "making water unwet" like with pure data.

I read his/her post as making the case that material scarcity is what should drive the law. That's totally besides the point: the issue is incentives for innovation production. Copyright and patents do create artificial scarcity (intended to be temporary) to achieve this end; what is a viable alternative?

Re:You can't build a solid economy on IP.

[Jeff DeMaagd]

Material goods are easy to protect from copying because they are relatively hard to copy.

You can say that, but for how long will this be the case? I don't think copying something is very hard right now, and the barriers seem to continue to go down.

What happens when anyone can copy anything? I'm trying to figure out the economic consequences of that when it is carried out that far. It doesn't seem as if a person can make money using their talents to improve on something. I'm skeptical that the equivalent of tip money can make it worthwhile, it would seem to turn artisans, engineers and designers into beggars like many OSS projects seem to be these days. I suppose musicians can make money with live performances, but would that actually be a money draw? Recorded media seems to have reduced the desire for live bands. Heck, if the wedding market is any indication, services like DJs are simply being replaced with the likes of playlists.

Re:You can't build a solid economy on IP.

[Jeff DeMaagd]

The "lack" of manufacturing in the US is overstated. There may be fewer manufacturing jobs, those still in manufacturing have generally increased in productivity. The manufacturing that has gone overseas is the lower skilled work.

http://www.newyorkfed.org/research/current_issues/ ci12-2/ci12-2.html

I'm not convinced that manufacturing is a panacea for anyone. Right now, it's largely based on consumerism, and "need" for the next big thing or keeping up with the Joneses when it's just not relevant and current behaviors are not sustainable on a global scale.

Re:You can't build a solid economy on IP.

[vux984]

You can say that, but for how long will this be the case? I don't think copying something is very hard right now, and the barriers seem to continue to go down.

For the foreseeable future at least. You can give me the complete specs on a Core 2 Duo chip, and I still won't be able to make my own for less than what it would cost to buy one.

Even the desk in my office, which I probably could 'copy' if I were really inclined to probably isn't worth it once you factor in the time, material cost, and tools cost.

What happens when anyone can copy anything?

Well then we live in "star trek utopia land", and everybody is happy and free; and we can all run pointless creole themed restaurants and serve food to people who got tired of asking the replicator for it themselves. ;)

I'm trying to figure out the economic consequences of that when it is carried out that far. It doesn't seem as if a person can make money using their talents to improve on something. I'm skeptical that the equivalent of tip money can make it worthwhile, it would seem to turn artisans, engineers and designers into beggars like many OSS projects seem to be these days. I suppose musicians can make money with live performances, but would that actually be a money draw? Recorded media seems to have reduced the desire for live bands. Heck, if the wedding market is any indication, services like DJs are simply being replaced with the likes of playlists.

If somehow energy and matter could be had in limitless quantities such that we could just run off a copy of anything we wanted from our replicator box, we wouldn't really need money because there'd be no reason to buy anything. Musicians would create music because they wanted to, or perhaps to pursue fame and celebrity. Artisans, engineers, and designers will create buildings for the same reasons.

At least that's the star trek version of such an "economy". Or maybe the whole thing will be reduced to a mad rush to obtain supplies of dylithium crystals, or Tiberium, or Melange....because that's the only thing left with any scarcity and value.

Personally I think if you give the average person limitless energy and the power to copy whatever they want, sooner or later someone will destroy the planet.

Re:You can't build a solid economy on IP.

[Anonymous Coward]

>> In a decade or two...

In a decade all the patents issued previous to 1997 will have expired, and their contents will have become public domain. In two decades all the patents issued previous to 2007 will have expired, and their contents will have become public domain.

Re:You can't build a solid economy on IP.

[ces]

A drive through Detroit, Buffalo, or most of the US midwest clearly shows how the manufacturing capacity of the United States is essentially gone. Not true. Plenty of manufacturing still happens in the US it just mostly isn't in places like Detroit or Buffalo anymore. Also whats left tends not to be vertically integrated for reasons of flexibility and cost.

Re:You can't build a solid economy on IP.

[sjames]

It may be possible to generate sufficient artificial scarcity at a low enough overhead cost to create a primarily "IP" based economy, but it would be extremely foolish to bet the future of your country on it.

It's an especially bad bet when other countries that produce actual tangible products might decide to declare IP protection null and void. Should they do so, only military action might potentially force them to reconsider. Even the shrub would hesitate to go to war w/ China. (for example). For a country that has a substantial capacity to produce actual goods that people want, such a decision might make sense at some point, especially if the IP holders try to charge more than a tiny fee and the third world develops far enough economically to be a good export market.

Funny thing about patents, they don't actually DO anything until someone with manufacturing capacity implements them. Too bad the U.S. is dumping it's manufacturing capacity.

Perhaps what the U.S. SHOULD be doing is working on cheap power and robotics so we can produce goods as cheaply as China.

The U.S. can declare actual production irrelevant all it wants but it can't make reality go away.

Re:You can't build a solid economy on IP.

[c0d3h4x0r]

Bravo. It's nice to see someone else who truly understands basic economics.

Lovely

[iminplaya]

I'm surprised this hasn't become a Vegas sporting event. It's got to be better than off track betting. I can see the old farts waiting in the Kino lounge for three years for verdict, while the guards are carrying out the cadavers of those who couldn't hold out. What a country!

How is this news?

[dreamchaser]

Newsflash: investments flow to companies that stand a chance at making money.

The problem is with current patent laws and the incompetence of the Patent Office with regards to IP. Companies exist to make a profit within the bounds of the law. The law is what we should be focusing on here, not the obvious fact that investors want to...wait for it...get a return on their investment.

Re:How is this news?

[wellingj]

What happen to the importance of the intent of the law, instead of the law unjustly applied.....
I'm so fucking tired of everyone (companies and people) trying to find loopholes so they
don't have to work hard. Whatever happen to doing a good job? When did everyone start to screw
eachother over? Maybe I just didn't notice it till now but it smells like poo.

Re:How is this news?

[dreamchaser]

It's been going on since before Hammurabi wrote down his laws. Maybe it's hard coded into our DNA at some level.

This is ridiculous...

[Anonymous Coward]

These lawyers are mining ideas as if they are some kind of intellectual resource to be extracted from the companies that are adding the *real* commercial value -- you know, by actually implementing something.

Oh, wait, I already claimed that intellectual territory ten years ago I have exclusive rights to develop it. You owe me money, and I've signed up a bunch of investors to push the case through the courts. What are you going to do? Tear down all your work now that you've built your business on it? HA! Pay up!

Commerce under these circumstances is like building hotels on beachfront property where nobody knows who owns the land or where the boundaries are. Best not to build there in the first place, even though that wouldn't exactly be good for business ("innovation").

Ugh...

[Hellken242]

This article actually makes me a little sick, especially this quote: "We are focused on obtaining jury verdicts," he says. "That's why we put our own money at risk, all the way from acquisition through appeal." Sad that an important and inherently useful system like the patent is being used to such evil ends.

Re:Ugh...

[HolyCrapSCOsux]

I think that it is more sad that we are using the legal system like a lottery. This is "Ambulance Chasing" refined to a whole new level.

There ought to be a law but there isn't

[philpalm]

Computer software geeks meet the Big Drug companies. If you Google enough you will find that the lawmakers were in bed with Big Drug Companies who wish that Patent rights laws were stronger.

As opposed to software and other user generated innovations that build upon the writings and methods of those who have gone ahead in the discovery game.
Computer development is linear, you can see how each company leapfrogs another and soon the king of the hill pushes everyone off of their mountain.

Drug companies claim that they discover a certain formula and test the hell out of all side effects before coming to market. They spent all that money and want to be reimburst for the money spent on failures and developments.

Two industries with different methodologies and financial successes yet both are in the same patent boat. There ought to be a law but a King Solomon hasn't decided nor is likely to solve it soon.

Re:There ought to be a law but there isn't

[Anonymous Coward]

Drug companies and software companies are in exactly the same business: High initial investment, low marginal cost. It costs $1B to identify a new drug, but $1 to stamp out a pill. It costs $1B to develop a major new software system (e.g. Vista) but $1 to stamp out a DVD image. Both industries rely on patents (and copyright for software) to create the artificial scarcity which allows them to sell their products for more than the marginal cost.

Re:There ought to be a law but there isn't

[MemoryDragon]

The king solomon solution in that case would be to cut the child... seriously, a total overhaul of the patent system is really needed not the reinforcement of the current one. There are various solutions to the problem, some have to deal with gradual patent times, getting rid of patents in areas which grew without them, and also try to cut down massively on things which patent trolls live on etc... the solutions would be clear without sacrificing the patent law in areas which grew with it (pharma industries) but the main problem is nobody has the balls to touch it.

Re:There ought to be a law but there isn't

[delt0r]

Drug companies use a *lot* of Governemnt funding. In fact they are tring to "recover" money they never spent in the first place. Well in the US anyway.

Is an idea worth anything?

[mi]

Yes, a pure idea — without implementation?

If it is worth anything, then it can be sold.

And the more such companies there are, who compete for ideas, the higher the price...

So, in principle, it is good news, that the buyers of ideas are well funded.

It sucks, that, in practice, the patents are often too broad, but the principle is great. One can market a patented idea with possible implementors without fear of seeing it stolen, etc.

Re:Is an idea worth anything?

[Anonymous Coward]

An idea -- even a really good one -- is usually worth nothing to the creator/inventor.

Getting a patent on an idea is worth a lot.

There's a big difference. It's why most of the mathematicians solving really difficult problems don't get rich from it; nor do the scientists testing the theoretical bounds of our knowledge. The person who gets rich is the one who takes the mathematicians' work and patents it (actually patents its "implementation," but they're essentially the same when we're talking about software patents).

This is a government-enforced monopoly on ideas, benefitting not the ones who come up with new ideas, but copycats and scoundrels. In theory, it's a nice idea... reward people for new ideas. In practice, it does exactly the opposite. It goes so far as to punish people if their ideas happen to be tangentially related to someone else's ideas, even by coincidence.

Quite the risk

[The Second Horseman]

If too much money from institutional investors or hedge funds gets tied up here, it could be really, really bad. The sort of thing that can make economies collapse. The LTCM mess in 1998 is a good example - there was a massive bailout organized. It couldn't be allowed to fail - it would've taken too many things with it. So, why not? If you're a big enough fund, you get bailed out. If you're not, you're never on the hook for more than a small percentage of what you grabbed. So when I hear about this stuff, it just seems like an amazing gamble. Barely better than investing in lottery tickets, really. Geez, bet people feel good about those 401k/403b fund right now.

Why not just buy lottery tickets?

[Weaselmancer]

Seriously. Investing in these kinds of companies versus millions of dollars in lottery tickets. What's the difference? About the same odds and the same payout.

Save yourself the trouble and the time in court and the lawyers fees - and just buy lottery tickets.

Re:Why not just buy lottery tickets?

[jon287]

It is actually illegal to buy large blocks of lottery tickets for this very reason.

living outside US I don't risk lawsuit ...

[Anonymous Coward]

... so I could write:

You bastards! You killed US corporate creativity!

Keep at it, USA!

[FFFish]

Soon you'll be an IP wasteland, completely bereft of innovation as those with ideas seek other countries in which to make their money, out of desire to avoid US patent litigation.

First you export your manufacturing labour. Now you're exporting your brains. WTF do you think you're going to do for business in the future?

Re:Keep at it, USA!

[servognome]

WTF do you think you're going to do for business in the future?

Export our lawyers.

Re:Keep at it, USA!

[Nimey]

Lawyer paratroops. Parachutes definitely optional.

Re:Keep at it, USA!

[kent_eh]

WTF do you think you're going to do for business in the future?

Export our lawyers.

Only if they can be exported to Golgafrincham

Re:Keep at it, USA!

[plasmacutter]

we'll export our bombs (grim i know), but once we run out of those (and we will), we'll do what the mexicans do to us, we'll jump your borders, marry your women, and take your jerrbs : )

Re:Keep at it, USA!

[infiniphonic]

Very shortly there will not be much business done in the United States. Most Americans will be absorbed into the Matrix very soon. The energy that our tubed bodies produce will be used to run the eternal server that Bill Gates consciousness has been transferred to. By that time the whole country will be painted the color of Windows 98 because Vista was not a hit and they had lots of grey and blue lying around.

Re:Keep at it, USA!

[kripkenstein]

First [you, the USA] export your manufacturing labour. Now you're exporting your brains. WTF do you think you're going to do for business in the future?

Easy question. There is one industry that is extremely successful and has no current risk of being outsourced. I am speaking of course of the entertainment industry, mainly hollywood (music has more overseas competition, for what hollywood produces, there isn't much). The Chinese may build the TVs, but US actors will be appearing on many of them.

Re:Keep at it, USA!

[Daychilde]

Yeah, because it's *only* the US doing this stuff... Mmm-hmm...

Re:Keep at it, USA!

[murph]

> First you export your manufacturing labour. Now you're exporting your brains. WTF do you think you're going to do for business in the future?

Brawndo.

Re:Keep at it, USA!

[wellingj]

I work in agriculture, and no mater what happens with any other line of business,
I'm pretty sure people will still need to eat. I'm not to worried.

So i guess I am in violation

[EmagGeek]

Since I have a single device, a linux box, running tripwire and iptables...

Well, Its real then!

[cabd]

Everybody here has been hyping about how lawsuits are going to become a revenue stream for cooperations. Welcome to 2007, where any lawsuit, as long as your wallet is deep enough, is funding.
Could this be the year when we see patent reform?
I really hope so, but my gut feeling tells me that it's not gonna happen, America. Too bad, so sad.
If I want to move to somewhere that has sane laws, does anyone have any suggestions?

BlackICE == Prior Art

[Anonymous Coward]

The BlackICE intrusion-prevention system put IDS and firewall on the same device. It shipped in 1999.

But, I patented that..

[Anonymous Coward]

I patented the process of investing in companies who patent things.. so now I can shut y'all down and license my process.

Re:Patent trolls get a bad rap on Slashdot

[Old Benjamin]

I think the real problem is Patents. No we shouldn't abolish them, but we should stop giving frivolous ones. http://www.freepatentsonline.com/crazy.html http://www.newscientist.com/article.ns?id=dn965 Google Ridiculous Patent for more Honestly we should have some common sense. Yes you can patent the lightbulb, or A new motor, but some of this stuff is ridiculous.

Wouldn't it be funny

[grasshoppa]

Wouldn't it be funny if it turned out that China & Co were actually waging economic terrorism on the states via these investment firm's taste for litigation?

The irony would be delectable.

How to export jobs from the US

[BillGatesLoveChild]

These absurd IP Laws and Congresses unwillingness to do anything about it will come back to haunt the What is the status of US IP Laws in China and India and other countries? Copyright is one thing, but US patent law has got completely out of control. If these countries don't sign on to US IP law (the way US client states like Australia have), they will make themselves more attractive centers for IT industry and investment.

Re:How to export jobs from the US

[plasmacutter]

"will make themselves"?

how about have made themselves..

the cs programs in the us have been gutted by outsourcing to those nations faster than inner cities were gutted by interstates.

now we have stories of "shortages" of it labor (with the unstated qualifier of 'willing to work at chinese/indian wages').

Uh, why not make sure it's invalid first?

[Blakey Rat]

One example is DeepNines, who is suing McAfee over a patent that covers combining an IDS and firewall in a single device. The patent was filed on May 17, 2000 and issued on June 6, 2006. No prior art for that, no siree.

Is there? I've never seen a combination device like this prior to 2000. Can anybody cite an actual example instead of just saying "no siree" and assuming we'd all just get in the mob and believe there's prior art?

Re:Uh, why not make sure it's invalid first?

[Tablizer]

Just make them two different devices that plug into each other really really easily. Thus, get around the "combining" patent. Silly patents require silly solutions.

Re:Uh, why not make sure it's invalid first?

[eli pabst]

Portsentry (an IDS) version Beta 0.61 was released at least prior to May 8 1999 (according to wayback) and although ipchains wasn't yet released, ipfw was still the linux firewall. So any one who ran PortSentry on Linux (or BSD) was running a "a single device that combined a firewall and IDS". I would bet there were prior IDS's that predate that as well.

Re:Uh, why not make sure it's invalid first?

[eli pabst]

I've never used it, but I believe the NetRanger device (now owned Cisco) did IDS monitoring and had firewall capability as well.

Here is a review dated 1999 talking a 2nd gen version and mentions both firewall and IDS capability and is truly a dedicated device:
http://www.networkcomputing.com/1023/1023f14.html? ls=NCJS_1023bt

Re:Uh, why not make sure it's invalid first?

[ces]

I set up a machine with snort, tripwire, portsentry, ipchains, and a squid proxy in late 1999, it even had the ability to make some changes to the ipchains configuration based on what the IDS was seeing. I believe there were also commercial products with such capabilities prior to May 17, 2000.

This levels the playing field.

[Ungrounded Lightning]

Up to now only the big guys could enforce patents. Patents were ignored in new designs. Portfolios of patents were accumulated to use as cross-licensing bargaining chips when another big player squalked.

This innovation - financing the suit for a cut of the potential payment via a bond - lets anybody with a patent play in the enforcement game without putting the rest of their operations at risk. A little guy can enforce a patent on a big guy. The investors take the loss if he loses, a cut if he wins. Meanwhile his capital is safe and his ongoing operations (if any) can continue. Risk is assumed by people with enough money to survive losses and experience in spreading it appropriately and balancing risk and reward to achieve reasonable investment income and security.

Of course that will change the game entirely: A player financing his suit this way has little incentive to agree to a payoff in the form of a cross-license. And the less operation he has for a counter-suit to disrupt the less opportunity there is for counter-blackmail. (Limiting case is for a "patent troll", of course. But for a small enough operation taking on a big enough opponent it might be a better deal to respond to a counter-claim by folding the actual operation and living off the proceeds of the patent suit.)

The result, of course, is that a large number of patents held by little guys that are being blatantly infringed by big guys will now become enforcible and trigger an explosion of such suits.

Possible fallout:
  - The big guys have to pay all the little guys for all the patents they've been blatantly infringing for years.
  - Companies (ESPECIALLY large ones) will have to start paying attention to patented prior art.
  - IP law gets rewritten to abort this scenario.

All of these - except SOME forms of the last - seem like they might end up being a good deal for the little guys.

Meanwhile the little guys have shallow pockets and aren't at significantly more risk from this than they already were from the big guys and the existing patent trolls.

Re:This levels the playing field.

[Omnifarious]

This leaves a field in which no idea is used until the patent expires, significantly slowing innovation. It actually hurts the little guy a lot more than the big guy.

I watch this happen in the CS field all the time. For example, I have some ideas that might possibly build on arithmetic compression. But I'm not bothering to develop them because arithmetic compression is patented, and I know it. Not only that, but people keep on patenting wider and wider circles of ideas around it. It's likely that the field won't be free enough of patent garbage for me to bother with until 2030 or so.

Which disappoints me, but it ought to disappoint everybody else a whole heck of a lot more. The thing is, people never really seem to notice something that isn't there that could be.

Re:This levels the playing field.

[Ungrounded Lightning]

This leaves a field in which no idea is used until the patent expires, significantly slowing innovation.

I hear 'ya. (Perhaps "levels the mine field" would be a better analogy.)

I agree that it leads to serious paralysis of innovation. I'd be willing to discuss whether it's harder on little or big guys but don't have the time at the moment. But I think we're on the same page about it being another brick in the wall for everybody.

Let us hope it also leads to significant reform - and not another ratchet-click for the big guys' lock on "IP law".

There's never enough room for all the pigs.

[twitter]

so purely intellectual goods will replace tangible goods. I predict just the opposite of parent. As China and India develop research regimes, they'll want the same IP protections that the US and Europe demand; they are violating IP now because it is expedient. As long as there is scarcity at all in our economy, IP will be with us.

"IP" laws are designed to create scarcity and the laws enforcing them will always be oppressive. A country that tries to build an economy on, "you can't do that because I say I thought of it first" is doomed. There will always be morally repugnant cases like life saving medicines that other nations will use as an excuse to exercise their freedoms. The "IP" nation will be forced to ever more hysterical and anti-social enforcement. Don't even bother with China and India as examples, first world nations want their freedom too.

The easiest example is software. M$ and other US companies would like to shut down or tax every other software company on Earth. They intend to do this with bogus patents and DRM'd hardware. If you think the rest of the world will allow themselves to be subjugated that way, you need to think some more. The US can threaten trade embargo and other measures, but it's not going to work.

Even in the most cynical case, where every country has it's own oligarchies, the competition between companies and industries will ruin any kind of "IP" empire. Such an arrangement would be devastating to the world economy and I can only hope we go towards free competition and away from government granted monopolies. The IP world you envision will be a dark age, where news is censored, history lost and technology stagnates for centuries. Taken to it's limit, you get a Byzantine system where everything is obsessively regulated but utterly lawless and a few constantly squabble for control of an ever shrinking pie. It is the death of civilization.

Re:There's never enough room for all the pigs.

[Somnus]

You've made the case that the current IP regime is broken (patents too easily granted, prior art, overly long patent/copyright extension), not that IP is fundamentally broken. [You may wish to read the other branch under my first reply.]

Specifically, software and drug patents are more contentious than machine and business process patents.

Re:There's never enough room for all the pigs.

[The Bungi]

M$ and other US companies would like to shut down or tax every other software company on Earth.

I hate to break it to you, troll, but "M$" is getting nailed by the very system you claim they enjoy. Ever heard of Eolas? I'd really appreciate it if you showed us a single instance of Microsoft (oh, "M$") using a patent offensively. That does not include FAT32, which is about as common a licensing scheme as it comes in the hardware world.

Microsoft plays the game the same way IBM and everyone else does to protect themselves from the patent trolls. The system is broken. Constantly harping on why "M$ is teh bad" like Stallman is not going to help much.

Re:There's never enough room for all the pigs.

[Kalriath]

It's twitter. He replies to EVERYTHING with something about how it's Microsoft's fault.

Re:There's never enough room for all the pigs.

[makomk]

You must've missed the whole "Linux infringes our patents" charade, the way they tried to avoid the patentability of software being challenged in a Supreme Court case (despite that it'd help their case), and the fact that the only reason that anyone implements the patented parts of FAT is that they have to if they want their devices to interoperate with Windows machines. The fact thay they're taking heavy damage from patent lawsuits doesn't mean that they don't want the current system to continue.

No news there. Greed is a loser.

[twitter]

Newsflash: investments flow to companies that stand a chance at making money. The problem is with current patent laws and the incompetence of the Patent Office ...

People who invest in greed are more often robbed than the intended victim.

This is the exact opposite of what you hope for.

[twitter]

... it is good news, that the buyers of ideas are well funded.

Such is the confusion of Intellectual Property. You can't talk intelligently about all of the specific protections created by government for Trademarks, Patents and Copyright at the same time, though each embodies original "ideas". Each protection is created to encourage a specific part of the economy and each has strict limits.

In the Patent case, what you are seeing is exactly the opposite of the intent of patent laws. Patents are granted so that people will share their inventions! People will always improve their craft in a free society. Patents grant an exclusive franchise to specific inventions - non obvious techniques for doing specific things. It's not just an idea and it should always be practical for it to be granted. Without the franchise grant, people would keep their improvements to themselves and the state of the art would stagnate. In theory, paptens encourage people to share what they know, so everyone is more productive. Patent trolls are taking out franchises on obvious inventions, or even methods, often with prior art to rob others. At the very least, they will encourage people to keep their methods secret. People abusing patents rob real inventors of their livelyhoods and cost all of us. At wost, they will destroy what's left of US industry and convert the country into a parasitic empire.

Ownership of ideas is a very dangerous and oppressive thing.

Re:Patent trolls get a bad rap on Slashdot

[slazzy]

I think it would be a good idea to pass a law which would revoke patents from companies where most of their active income wasn't produced from actually selling the product or service which is covered by the patent. That is - companies have to actually sell the product or service which they patented, if they don't, they can't sue anyone else for using it. As long as they actually sell the product or service which is patented, then they can sue other companies and collect royalties on the patent - but these royalties shouldn't exceed their own revenues for their own product. A law like this would make it impossible for the patent troll companies like Acacia Technologies [http://en.wikipedia.org/wiki/Acacia_Technologies] to exist. Since patents were created to protect inventors and encourage innovation, not discourage it! Patents aren't all bad, but software patents aren't really needed IMHO because copyright and trademark offer fair and reasonable protection I feel.

Re:Patent trolls get a bad rap on Slashdot

[mrsteveman1]

The problem with that is, there are companies who obtain patents for the sole purpose of ensuring that the technology is available for people to use. Apple does a bit of this, as do a number of other FOSS related companies. If you enforce patents to be used by their owner, you will actually hurt a number of groups with good intentions who help the community a great deal.

As an example, Novell, IBM, Phillips, Redhat, and Sony formed a company called The Open Invention Network, "The Open Invention Network (OIN) is a company that acquires patents and offer them royalty free "to any company, institution or individual that agrees not to assert its patents against the Linux operating system or certain Linux-related applications""

I think a better answer to all of this is to make it MUCH harder to get a patent, and narrow the definition given in the patent as much as possible. That seems to be the real problem, patents are routinely granted that cover things the entity applying for the patent didn't even come up with.

Patent is invalid -- prior art - 1999

[Anonymous Coward]

A company called Alteon Websystems Inc (acquired by Nortel in 2000) had a capability called WCR (Web Cache Redirection) which could be applied with a filter, that does EXACTLY what this patent claims. The feature had been in the product since 1998, maybe early 1999 at the latest. I deployed several web farms with this technology in early 1999, so I know its valid prior art. The WCR feature could be used to redirect ANY traffic, after it was passed through a set of firewall rules, a final firewall rule would forward it to a server.

Re:Patent is invalid -- prior art - 1999

[Anonymous Coward]

It makes me wonder where the people working for Alteon Websystems went after Nortel purchased them.

Interlectual property right?

[streetphantom]

Trolls with a high gloss, shiny finish? I thought of that years ago ! !

It's good and right that they suffer.

[twitter]

"M$" is getting nailed by the very system you claim they enjoy.

They not only enjoy patent nonsense, they helped make it so awefull to begin with. M$, though freely violating other people's work, has been a major backer of laws like the DMCA. Vista and the genuine disadvantage of XP should be enough to show you where they want things to go. Why you want to be dragged along and defend them at every step is beyond me. Like so many non free software schemes, software patents are so toxic and anti-social that they also harm those who sought to use them in the first place.

I'd really appreciate it if you showed us a single instance of Microsoft (oh, "M$") using a patent offensively.

I'd say the above linked rants of Mr. Balmer are terribly offensive. The SCO lawsuits are an example of M$ abusing copyrights by proxy. In the patent case, I can agree with some of the things a younger M$ said about patents and losers. They may not have meant those things when they said them, but they were fine words all the same. Those that can't innovate, litigate before they go out of business.

Re:It's good and right that they suffer.

[The Bungi]

terribly offensive

Yes, terribly offensive. Any idea when I might see some evidence that "M$" took someone to court over a patent? I'll be waiting.

Alternate View

[mike2R]

The US economy is moving towards the only area which has longterm viability - IP.

With the inevitable invention of machines capable of fabricating any item at a molecular scale, the US is fortunate that its economy has already started to transition away from the soon-to-be-obsolete area of manufacturing.

Not going to happen quite yet, but I bet we have Diamond Age type manufacturing long before we ever see an end to IP law.

Re:ATTN: SWITCHEURS!

[Anonymous Coward]

Trying to come up with a lunix variant of this popular copypasta, with not much luck. Any help please?

You Moron

[Anonymous Coward]

"Investors of weapon industries want return on their investment". So because the world is naturally moving towards world peace, lets call the arabs evil, start a few wars with a couple of countries and take their oil while we are at it. Because the investors want return on the stocks they bought from "Machineguns & Missles Ltd". Why Not? And lets lobby that on president Bush.

Re:ATTN: SWITCHEURS!

[Anonymous Coward]

If you've seen a girl naked (in person!) without paying for it, GTFO
If people can't actually see your scent wafting off your body, GTFO
If your neck isn't covered by scraggly beardhairs, GTFO
If you aren't willing to make it your life's mission to piss on people for not having the same technical taste as you, GTFO

You don't understand what it takes to be a real Lunix user.

End it as you see fit, I don't know what insult you'd like there.

Re:Patent trolls get a bad rap on Slashdot

[Daychilde]

Sounds very good, but consider:

1. Tiny company creates product

2. Large company infringed patent

3. Sales of large already established company are huge, but nobody knows small company, so they sell nearly nothing

They're totally screwed.

Again... your idea sounds great - but I don't think it would work the way you want it to...

The US software industry's suicide note

[jonnyj]

Despite enormous international pressure, software patents aren't enforceable in most countries and (cue gasps of astonishment from US slashdotters) there's actually a huge IT industry outside North America. Unless the whole world introduces software legislation, this is how I see the future:

In the next decade, a huge tranche of software will be developed that can't legally be used in the USA. Meanwhile, US software will become less innovative (due to fear of legal reprisals) and more expensive (due to legal costs and licensing fees) than software available in the rest of the world. Costs to US businesses will rise, as they'll be denied access to the most economical and innovative software. Often, two versions of critical business software (databases, operating systems, CRM systems, etc) will be produced - the full-featured world version and a crippled, feature-deprived US version. Mainstream US businesses will realise that they're at a competitive disadvantage and will begin lobbying against software patents. Finally, patents will be removed and the cheaper, better foreign software will flood the US market. US software companies will be as helpless as bowling pins and will drop even faster.

The process will take 10-20 years, so sit back and enjoy the show. Europe, India, Russia and China, please note: patents are the US software industry's suicide note.

Re:The US software industry's suicide note

[Anonymous Coward]

No, unfortunately the US will just pressure the rest of the world into introducing similar legislation on software patents. It's certainly been doing that within the European Union.

Re:This is the exact opposite of what you hope for

[mi]

Ownership of ideas is a very dangerous and oppressive thing.

Although I agree, that the current implementation of the Patent system in the US is buggy, the above-quoted statement is non-sense. Although buggy, the patent system works — and worked for centuries — driving innovation. As making things becomes easier and easier, designing becomes more and more valuable. An idea deserves no less protection, than physical goods or real estate.

Re:This is the exact opposite of what you hope for

[NoOneInParticular]

To re-iterate the GP, patents are not there to protect ideas, but inventions. Patent law explicitly forbids the patenting of ideas, even though the USPTO seems to ignore the law (viz. one-click patent). As for ownership of ideas, try to think this one through. If one can patent ideas, any random thought can be owned. So I can patent time-travel, more fuel-efficient cars than currently exist, mi's next twenty comments on slashdot, the cure for cancer, etc., etc. As I would own these ideas, anybody that actually invents one of these should pay me money, as the ideas are rightfully mine.

The age of innovation is over...

[Anonymous Coward]

...welcome to the age of litigation.

You can't eat IP.

[KwKSilver]

"purely intellectual goods will replace tangible goods."

Think so? What's the nutritional value of IP?

Re:You can't eat IP.

[Somnus]

You could make the same argument about tangible goods that are more sophisticated than food.

As our economy has evolved food productions has rightfully shifted to countries with cheaper labor, as our intellectual goods have a more far-reaching impact.

Re:Patent trolls get a bad rap on Slashdot

[johanw]

All these problems can be solved by simply abandoning the whole idea of patents. After all, in a true free market, why impose artificial monopolies that have proven to be contraproductive?

IP law is a sham

[kinglitho]

Imagine if Henry Ford could have patented the concept of a 4-wheeled vehicle powered by an internal combustion engine. How about if Sam Morse owned the rights to the concept of sending intelligible messages over a wire? GM wouldn't exist and we wouldn't have had telephones until the 1930s.

Patents exist for the protection of innovation. Putting two programs on the same machine is not an innovation.

Re:IP law is a sham

[goldstein]

Actually, Ford had a major fight with an early (and successful) patent troll.

http://www.bpmlegal.com/wselden.html

So what is an inventor to do

[FlyingGuy]

For example. Lets say I were a really damn good Theoretical Mathematician.

Lets say I come up with a Compression Algorithm that just screams. I mean its blazingly fast and can compress a 10 gig JPEG file down to say 10K in about 1 minute and on top of all that its lossless. Hand it an Oracle or MS SQL database and it can achieve 99% compression in mere seconds.

Now I have spent the last 10 years perfecting it, in utter and complete secrecy. My wife and kids barely see me because I am devoted every spare waking hour to this monumental achievement.

Now I can copyright the code that I have written, lets say its 10K lines of really solid C code. But as we all know there is more then one way write a given algorithm, and there are over a dozen languages to write it in. So anyone that has reverse engineered my binary, can re-create my program in another language, using different techniques, would be pretty much free of my copyright protection.

So now what am I to do? I have invested 10 years of my life to come up with this. I want some return on my investment. How can I achieve that when someone else will simply re-engineer my code to circumvent copyright? If I cannot protect the methods and structures I have created, what am I to do? What is my recourse to own my own work and control its distribution? What would be my incentive to make it better? What would be my incentive to work another 10 years creating something like say, the hottest gaming engine ever?

Re:So what is an inventor to do

[frogstar_robot]

If the likes of MS or Adobe are the ones doing the reverse engineering, the answer is "not much". A patent only gives you the ability to sue others for using your invention. It doesn't mean you are going to prevail when the large corporate drags things out for years. Don Lancaster has a different take on being anti-patent than the typical slashdotter. He basically maintains that for most inventions it isn't worth it. Because of the legal costs of defending it even a "million dollar idea" isn't worth patenting. A 50 million dollar idea MIGHT be worth patenting.

http://www.tinaja.com/glib/casagpat.pdf

Re:So what is an inventor to do

[kinglitho]

Leave out a key portion of the code on the distribution disk. Set up a registration server that will only download the code to a legitimate serial number. Then sell the disks for a reasonable price, say $10.00.

Being first to market counts for a lot these days, and by selling a the right price you will
(a) move a ton of product before anyone can reverse-engineer your code
(b) make it difficult if not impossible for a big company to compete -- they can't recoup their investment + overhead at that price
and (c) become the de facto standard which will block other players until something better comes along

In the meantime, you'll make a few million dollars (you wanted to be a billionaire? sorry), after which you can license the code to Adobe, MS, SAS, Oracle, etc., like LZW compression is, sit back and spend some time with the wife and kids.

Re:So what is an inventor to do

[arevos]

If you had such an algorithm, I'd suggest starting a remote storage business, as such a reduction in space could save an awful lot of money.

Or sell it to a company like Google under some agreement where they are the sole recipients of the algorithm. You'd probably make more money that way than you ever could on your own.

Re:So what is an inventor to do

[FlyingGuy]

Nope no algorithm here.

This is a pure hypothetical. What I am trying to illicit from the /. folks is an alternative or modification to the current system.

In principle I agree that most every software patent issued in the last 20 years is more then likely just trash. So the question is, How or What is a more appropriate method, device etc. to protect truly novel and unique work?

Re:So what is an inventor to do

[elFisico]

What if pigs could fly? :-)

The problem I see with that scenario: how can you be sure your algorithm is really OK unless someone else has tested it? Or has verified you mathematical proof? Substitute "compression" with "encryption" and it becomes the typical snake-oil-scenario that Bruce Schneier often reports about...

If you are a really brilliant mathematician, you will be on a grant from a university, right? So you are financially secure and will become famous for that brilliant idea. What else could you want? ;-)

Re:So what is an inventor to do

[arevos]

This is a pure hypothetical. What I am trying to illicit from the /. folks is an alternative or modification to the current system.

In principle I agree that most every software patent issued in the last 20 years is more then likely just trash. So the question is, How or What is a more appropriate method, device etc. to protect truly novel and unique work? I'd gathered that it was hypothetical ;)

My point was that your example of a pure algorithm could still make considerable money even in absence of a patent system, so perhaps patents aren't necessary at all.

Re:Patent trolls get a bad rap on Slashdot

[Duggeek]

Hear, hear!

Keep those mod-points coming, for PP has got it right. In fact, there should be concatenated mod-points; I would make PP “insightful”, “interesting” and “informative”! (That's it! We need a “+1 Hattrick”)

Patents are part of commercial trade insomuch as they protect the interests of people that genuinely come-up with (and pursue) good ideas. What did the patent-trollers do for innovation? What have they contributed? If there's one point to start addressing patent-happy firms, it's on the grounds that they didn't do squat for the market, let alone the consumer!

Yes... enter MSFT, and the matter gets a bit sticky... but I digress.

IANAL, but I do work with copyrighted materials on a daily basis.

Copyrights protect creative ideas in media; your web site is copyrighted, no? (If not, get to it! In windows, try holding down the Alt key and type 0169 on the number-pad at the same time, then release the Alt key and the © character appears. Use it!) Though copyrights protect published works, it's hard to call a software package “published” unless the source is included, no? In any case, when I see a splash-screen with a copyright statement, it only leads me to believe that the splash-screen art/presentation/animation is protected. Adjusting copyright law to be inclusive of software isn't out-of-the-question, however it would make protecting software quite a bit different. (Didn't comment your code? If there's not a copyright statement in all source files, then they're as good as Public Domain!)

Trademarks are about fair competition; something that obviously doesn't exist for most of the Pacific Rim. The other day, I bought a $1 gadget at the flea market with batteries sporting a logo, “SQMY” --in the same typeface and style as a popular brand, Sony. (if you were to see only the top of the logo, it's not unreasonable that you would think they said “SONY”) In America, if you started a software company called “Micrasalt”, emblazoned your logo in Arial Black, used very-close kerning and chiseled a small part of the ‘a’ away, you'd be neck-deep in trademark litigations. (Don't believe me? Try it!) How could this protect software? That's right, it can't. It protects corporate branding and identity, not products.

IMHO, the patent system is a mess. An out-dated system, first conceived for corporeal inventions, that's been bastardized into a form to cover abstracts of computer logic and doesn't even appreciate the fluid nature of code. Hell, there's even imperfections if you're patenting a physical product, let alone an abstract of electronic instructions.

Patent System Reform? Yes.

Software Patent System Reform? No... Software Patent moratorium.

Let the idea of Software Patents lapse and instead come-up with a new paradigm. Let the patent system do what it does best; protect the inventors of physical constructs from having their work duplicated without proper compensation. For software, start over!

What about a Registered Code Repository? Now that multiple OS platforms are becoming more feasible, wouldn't it make sense to protect 'wares at the fundamental source level? Take the idea of distro' repositories and apply protections to each package, (not that different from SVN) but with the real potential for legal enforcement added. Let it be headed by a competent body (like the USPTO, but as I said, competent) that oversees the sovereignty and uniqueness of each package. Apply the rules from PP to the mix (vis-a-vis, can't protect something that you're not currently selling) and add a dash of GPL (can't control, legally or monetarily, what software may or may not interact with yours on any basis; which frees the real innovation) and you've got the seeds of progress.

Keep using the crazy, mixed-up system we have now, and the Microsofts, Acacias and SCO's of the world will bog us down in so much litigation as to make progress irrelevant.

Is this legit?

[phorm]

promising in return a cut of any winnings stemming from the lawsuit

I really have to wonder how this is legal. Yes, I'm sure it is (lots of stupid things are), but a business based entirely on the principal of suing others seems to be a flagrant abuse of the court system. In fact, I wonder if that would be strong grounds for having cases dismissed, as defendants could argue that the plaintiff and it's patents exist not for any purpose of enriching society, but strictly for the purpose of restricting the growth that patents were supposed to promote. Didn't the judge in some recent RIAA cases basically state that the intent of the system was, in fact, being circumvented?

And to clarify, having a business based on suing people is a bit different from being a lawyer, etc. The lawyers exist as intermediaries to provide legal support, but do not actually make claims themselves (unless defamed/libelled/etc), so while their business is based around lawsuits, they are based around others' lawsuits which may, in fact, have solid foundation.

What's the difference between this and a Mafia

[Master of Transhuman]

don funding a hijacking operation?

"promising in return a cut of any winnings stemming from the lawsuit. The payout is based on a formula that grants Altitude a percentage that decreases with a bigger award."

This sort of thing - creating "nuisance patents" and bringing nuisance lawsuits for a cut of the winnings - should be illegal.

Sell a service, not the idea.

[SupermanX]

If you have something great, charge people to use it... don't sell the idea, sell the service. Let them log on to your servers... where you compress the data, and let others access it as needed. You now have the ability to do something your competitors don't...

This is how business works. If you can do a better job than others, you should be able to make money doing it. You should not be making money because you THOUGHT of a way to do a better job. People pay for results.... Sell them something that is valuable... a service, not something that they can make valuable (the idea).

Re:Sell a service, not the idea.

[FlyingGuy]

Nifty idea!

But I think it has some fairly obvious drawbacks, like bandwidth.

Perhaps a better idea would be to rent them a server with an encrypted file system that only delivers the work across ethernet. Even then I think it would still be a bandwidth issue, even on gigabit ethernet truly monsterous files take a long time to move around.

But I really think all this is beside the point. What I am looking for are ideas about how to protect your/mine/someone elses intelectual property. I can see you scenario working for a lot of things. Google apps such as the Word Processor & the Spreadsheet seem to work well over the net and this can apply to other applications, but when you get to something like photoshop in which even just the screen image that is drawn requires a HUGE amount of data to be fed to the graphics engine, I think it would break down.

I think it has to be a legal mechanism. Perhaps the patent systen could be reformed to say something like:

• You get a patent for 5 years unless you produce and sell x number of wigets, then its extended another n years.
• You cannot patent an idea. Your patent must be specific to a working model. The patent can cover the working model and its internal mechanisms ( in a fairly broad way ) so that my theoretical compression method cannot simply be duplicated with some minor code changes.
• Drugs can cover a particualr formula, but thats all that is covered and lets say we limit the lifetime of the patent to 10 years.
• Patent examination is performed by a peer comittee that has been in the industry for n number of years. The committee would be suitably large enough to prevent a given group from tilting the table. Each reviewer would not know whom the others were and they would be picked randomly from a pool of examiners and would be compensated accordingly.

Any ideas?

Re:Sell a service, not the idea.

[SupermanX]

Intellectual property can not be protected. That is the reality. Ideas are not something that you can restrict, nor should they be. The only thing that can be protected is the APPLICATION of an idea. No one can patent the concept of round... but you can get a lock on the wheel market. Numerical values, despite being useful, are not something that can be protected. You cant patent Pi, despite the fact that knowledge of it provides a great advantage. The value of information is that not everyone knows it. The ability to spread that information does not necessarily diminish its value... unless it can be found and used. If you publish a compression algorithm, along with thousands of similar algorithms, they are not of any value... unless they can be used. If it can be used in any number of ways... then it has no value (air is important, but it is free because it is plentiful). The value is in the use... and that is where the focus should be... not in the information (which is always free).

Re:Sell a service, not the idea.

[FlyingGuy]

I think you are skirting the issue. To say that you cannot patent an idea is surely ( or should be ) true. But everything flows from an idea, inspiration, experimentation, that AH-HA moment, whether its a mechanical device for say harvesting potato's or a particualr algorithm that contains a set of deta structures and methods ( say for calculating the value of Pi to a billion places very very efficiently) by which that idea is transformed into a product.

So how do we give the inventive person some protection? Some reward for all his or her hard work in developing this thing? The patent system used to do that. If a person invented something that was truly novel and had never been done before, then that person deserved legal protection in the form of a patent, by which said person had control over the manufacture and distribution of the invention. The idea was that this would lead to yet another invention by those crafty and smart folk, because they could gain from their hard work.

Is something built of steel that performs a task such as harvesting potatos that different from something made of complex mathematical formula's strung together to perform a given task such as calculate Pi or as in my hypothetical example, perform extraordinary data compression? I would argue that they are identical in that they both perfom work that surely a human could do since we have the capability of both harvesting potatos and calculating Pi.

So now lets tak this a little further. Lets say the patent works the way I think it should. My patent covers using a particular method, a mega dictionary and I use the methematical properties of a particual geometric shape to perform the requisit analysis, to perform my task. This is shown never to have been done before and it is indeed novel. My structure is unique as is my method. Now someone else could come up with a different structure and a different method to come to the same end result and thats fine as long as they are not using my structure and my method, because their method and structures would be novel.

Re:Sell a service, not the idea.

[SupermanX]

The patent system was never intended to protect ideas. Trying to make it do this is just problematic... and unrealistic. What the patent system CAN do is patent a process... or way of doing something. Let me give an example.

When the telegraph was invented... they used Morse code to send messages. The patent system could be used to protect THAT process. The use of a specific unique code to send messages. If anyone wanted to use Morse code, they would have to pay the patent.

What could NOT be patented was the ability to send messages using a series of electronic signals. If someone wanted to come up with their own version of Morse code, they could. It would not be protected by the patent.

The problem with today's patent system is that it DOES allow for the patenting of an idea.... despite the fact that it is not practical, nor is it viable. This means that people can patent the ability to send messages using a series of electronic signals. This is where we are today.

Many people get caught on the idea of originality. They also get caught on the idea of who came up with it first. The patent system is not about either of these. It is about granting economic rights to whomever meets the requirements set forth. The value of the economic rights is determined by the uniqueness of the patent.

What does this mean? Well anyone can patent anything... but for the patent to have any value, it must provide a tangible benefit to those that use it. If they do not believe it does, then they do not have to pay for it. The patent holder can then take his claim to court.. and establish the value of the patent. This value is determined not by its TOTAL worth (as is currently used) but by its unique value (the difference that the patent made).

In the example of Morse code. The value can be determined by the cost of the employees. The creation of a code that represents letters is not unique. It is a basic replacement cypher, and those have been done for centuries. However the application of a standardized code that is used across a wide spread area does have inherent value because of the training of employees. The cost of training employees at different stations in a NEW code, is the value of Morse code... not the cost of all the messages sent.

The value of invention is not in its existence... it is in its application. No inventor should be rewarded for creating potential. The reward for that is the ability to monetize that potential with an application... that is self rewarding. The inventor should be rewarded for their application, and granted a limited monopoly so that they can benefit from that application (so any patent that goes unused... does not provide value in of itself). There is no need to grant a monopoly on an application that is not being used... as this provides no benefit to either society, or to the inventor. This is why inventions used to require an actual prototype.... (i.e. if you cant build it, you cant patent the ability for someone else to build it either).

Re:Sell a service, not the idea.

[FlyingGuy]

I think we are in agreement, with a caviat or 2...

This is why inventions used to require an actual prototype.... (i.e. if you cant build it, you cant patent the ability for someone else to build it either).

I think they should again, regardless of what it is. If its a software patent, you have to provide a fully functional prototype ( again peer reviewed ) to get the patent grant, just like Phillip Kahn patented the Camera Phone way back when. He had a working prototype, it was large, klunky and ugly but it worked as described in the patent application and was therefor patented.

I think we could give a little space given the cost of development and give the applicant say 6 months to 1 year to present the examiners with a working model that functions exactly as stated in the application, but not a day more, no extensions, no slack. This would give the inventor time to shop it around for investors with full protection of patent law. If you can't raise the capitol in that amount of time and produce a prototype then you are free to re-apply within some pre-determined amount of time.