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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."
...you don't feed trolls, you mod them down!
Paleotechnologist and connoisseur of pretty shiny things.
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.
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.
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.
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.