MSM Noticing That Patent Gridlock Stunts Innovation

trichard tips a column on the editorial page at that most traditional of mainstream media, the Wall Street Journal, arguing the point (obvious to this community for a decade) that the US patent system costs more than the value it delivers. The columnist is L. Gordon Crovitz and here is an excerpt: "New drugs require great specificity to earn a patent, whereas patents are often granted to broad, thus vague, innovations in software, communications, and other technologies. Ironically, the aggregate value of these technology patents is then wiped out through litigation costs. Our patent system [is] a disincentive at a time when we expect software and other technology companies to be the growth engine of the economy. Imagine how much more productive our information-driven economy would be if the patent system lived up to the intention of the Founders, by encouraging progress instead of suppressing it."

Comments

ORLY?

[Anonymous Coward]

we-could-have-told-you-and-did dept is right

MSM?

[Anonymous Coward]

Am I ultra-unhip because I didn't know this was an acronym for "MainStream Media" without having to figure it out?

Re:MSM?

[mcpkaaos]

Considering the first line of the summary says "mainstream media", I think this does in fact mean you are ultra-unhip.

I suggest you get in line right now for the new iPhone and stay there until your hair naturally spikes itself and you sprout a pair of Oakleys.

Re:MSM?

[Mesa MIke]

Don't worry.
Being ultra-unhip is the essence of geekdom.
Hip geeks are just poseurs.

Re:MSM?

[TubeSteak]

I suggest you get in line right now for the new iPhone and stay there until your hair naturally spikes itself and you sprout a pair of Oakleys.

I'm holding out for the next iPhone, in the hopes that I'll also sprout a pair of Birkenstocks.

There's a reason for the gridlock.

[techno-vampire]

From what I understand, patents are not supposed to be granted for ideas, or methods, only for implementations. If this principle were followed, you couldn't patent, let's say, the RSA public key encryption scheme, although you could patent a program that implements it. Patents (in the US, at least) were never intended to cover such things as business methods, algorithms or "doing $FOO with a computer." If we stopped letting people get patents for things that should never have been allowed, and invalidated that type of patent the moment anybody tried to enforce it, the gridlock would go away. If you want to protect your programs, use copyrights; that's what they're for. If you want to protect your business methods, use existing trade secret protections. Use patents to protect things, because that's what they're for.

Re:There's a reason for the gridlock.

[QuantumG]

Actually, patents are supposed to cover methods and apparatus, and they always have.

When you're granted a patent it is supposed to cover *how* something is done. Unfortunately a lot of patents are so broad as to actually cover *what* is being done. These patents should be denied.

Re:There's a reason for the gridlock.

[hardburn]

The trouble is that software blurs the distinction between a device (patent) and a work (copyright). The distinction used to be easy. If you had a new type of engine, you got a patent. If you wrote a book, you got a copyright. But software is kinda like writing a book (so it should be copyright), yet it is used to build the internals of an infinitely modifiable machine (so it should be patented).

This is going to get worse as home 3d fabrication like RepRap becomes more common. Software is now being used to build a physical object, thus eliminating the patent/copyright distinction. At a TED conference, an MIT professor talked about a fab method they apparently have going in the lab, where computation is done by arranging molecules; in theory, you could compute yourself a new car. Just imagine what that will do to the patent/copyright distinction.

The end result is that a new form of IP will have to be developed that will combine copyright and patents. In the US, this is probably going to take a constitutional amendment, which almost dooms the effort from the start.

Re:There's a reason for the gridlock.

[cpt kangarooski]

I disagree.

The purpose of patents is to incentivize the invention, disclosure, and bringing-to-market of novel, non-obvious inventions which would not have been otherwise. It's not a reward for a job well done, or a particularly tricky bit of inventing. I suspect that Rivest, Shamir, and Adleman would have invented, disclosed, and brought-to-market RSA even if patents were not available to them (which was the case everywhere else in the world, in fact). In fact, this is probably true for the vast majority of inventors in the computer field.

If they're willing to work without that incentive, it is wasteful to grant it to them anyway. It doesn't matter whether the invention was on the cusp of becoming obvious to everyone, it matters whether or not the invention would have come about but-for the possibility of patenting it.

Re:There's a reason for the gridlock.

[cpt kangarooski]

There's really no problem at all. The thing is, there's no requirement that a piece of software be protected only under one legal regime. The regimes do not overlap, but they can each protect different aspects of the same software.

In copyright, there is the idea/expression dichotomy, which results in copyright protecting the implementation of an idea, but not the underlying idea itself. In the case of software, this would mean that all of the algorithms of a program would be uncopyrightable, but the way in which they were written would be copyrightable. So long as you write them a different way (or write them the same way independently, without having copied; or write them the same way due to some functional consideration, such as the dictates of efficiency, of a particular platform, language, etc.) you're fine. For tangible objects there is also the utility doctrine, which prevents the working parts of machines, for example, from being copyrightable.

Patents, OTOH, protect inventions, however they happen to be embodied. So if you invented some bit of functionality, the patent would apply regardless of whether someone copied what you did, or independently came up with it. It would apply whether their code was bit-for-bit the same, or whether they implemented the same invention in a totally different way which still fell under the patent. Of course, if they can achieve the same end result by a different method, then that's not infringing.

So in sum, copyrights are used to prevent people from copying particular bits of source or binaries, but patents are used to prevent people from making identically functioning software, regardless of copying.

Software patents are bad because they're so wasteful, not because they're ill-defined. They're not incentivizing invention, disclosure, and bringing-to-market in the computing field, and are probably hindering it. Since patents are meant to cause more of those things, at the least public cost, the best option for software would be to not offer patents. In the future, we can reexamine the field to see if the natural incentives present are no longer sufficient, and the artificial incentive of patents should be added. But right now, it's a bad idea. Ditto for business methods. That's also such a naturally fertile field that we don't need patents.

Re:There's a reason for the gridlock.

[davester666]

That seems to be how the drug companies are artificially extending their patents by finding new uses for their drugs or patenting the drug with a different coating on it.

Idea vs. implementation?

[tepples]

From what I understand, patents are not supposed to be granted for ideas, or methods, only for implementations.

Every idea is an "implementation" of a more general idea. There are 1. video games, then 2. puzzle video games, then 3. puzzle video games with falling blocks, then 4. puzzle video games with falling blocks that can be rotated, then 5. puzzle video games with falling blocks that can be rotated and line up x-in-a-row of the same color, then 6. puzzle video games with falling blocks that can be rotated and line up x-in-a-row of the same color to eliminate floating blocks. Nintendo has a patent on 6. So where does "idea" stop and "implementation" begin?

Re:Idea vs. implementation?

[Anpheus]

This still makes it confusing, if that were the case, then that's copyright. Not a patent.

I think patents need to be brought into Newton's era. You can only patent implementations of mechanisms that perform some physical process. Novel methods of performing some process would be protected, but not the end result.

So you could patent -a- process to produce a particular drug, but not that drug. If someone else goes to the lengths of finding an alternate and viable method of producing a drug, then sorry.

You could also patent -a- process to perform floating point math in a CPU, but not the floating point math itself or the result of any particular operation. If someone else figures out how to do the same thing, meh.

Copyrights should protect creative works, trademarks protect those who engage in trade and patents protect processes.

Copyright = uniqueness of creative work
Trademark = uniqueness of trade identity
Patent = uniqueness of process

The costs of patents

[starseeker]

Businesses spend MASSIVE amounts of money either filing patents for offensive/defensive activities or trying to work around them. I would be very interested to see an accounting of a) what percentage of patents actually result in a license b) what the cost in terms of employee and lawyer time was to create the current body of patent work (plus the fees of course), c) the number of decisions to NOT make a competing product due to patent issues, d) the number of patent cases resulting in a patent being invalidated e) the number of patent cases settled out of court for less than the legal fees to challenge the patent f) (this is complex) the number of patents with BOTH cases settled out of court for less than potential legal fees and with existing patent licenses before the litigation and finally g) the ratio of licenses taken out on a patent to the number of observed workarounds (and patents on the workarounds) done by companies to avoid said patent.

If the ratio of a to b is very small, it would mean that there would have to be MASSIVE returns on license fees to justify the money paid to create patents. Otherwise we the customer are footing the bill for the horse and pony show.

c is hard to document, but every instance where it happens is one less competitor and in a capitalistic system that means less pressure to drive down prices on a product. The idea is of course to offer the patent holder a limited monopoly in exchange for publishing the idea, but the fact remains the customer loses on this deal UNLESS the invention would not have been published/implemented WITHOUT the patent system. Impossible to know I suppose, but food for thought.

Every instance of d is a waste of money in terms of all the effort to get the patent, the time of the patent office working on it, and whoever is forced to fight it. Ouch.

e needs to trigger a close examination of the patent - if the settlement is just to avoid going to court, it must mean that either the company doesn't think they'll make more in a lawsuit even if the patent is valid, the patent holder can't afford a battle either, or the defendant is not going to pay out of pocket just to invalidate a bad patent when its cheaper to settle. In the latter case, it is a waste of economic resources.

f is a possible way to get a handle on how often the first possibility for e happens - if they have successfully licensed it (not cross-licensed as part of a stand-down agreement between big players but actually had someone pay for the right to use it) and still took the lesser fees it might be at least a suggestion there could be validity in the patent.

g is simply a waste. Bright, talented minds try to work out a way around some idea, when they might be working on new features, products or inventions. Sometimes you get new ideas working around patents, but a lot of it is just monumental silliness. The consideration is avoiding the patent, not the best engineering solution.

If somehow all of these costs could be totaled up, I would be very interested to see what the end number would be.

Dead On

[JBG667]

Hallelujah! The main purpose of patent and IP law was to promote innovation by ensuring that those who innovate are able to reap sufficient financial benefits commensurate with their invested work. It was to do this IN THE INTEREST OF THE SOCIETY. However, over time, greedy corporations and overzealous lawyer twisted and bent this law to protect interests of individual corporation at the expense of the society at large. This has to be undone.

Re:Dead On

[mjs0]

Well said!

At the end of the day the real test of whether something should be patentable or not should be related to the reason patents were instituted in the first place...to incent investment in R&D by rewarding that investment in innovation. The reward, in the form of artificial protection from competition for a limited time, is enough to ensure the investor(s) profit from the investment. Obvious or not, if a company or individual has invested significant time/money in a program aimed at solving a problem and come up with a new and unique (even if obvious by hindsight) solution they should be rewarded not for the idea, but for the investment, thus incenting investment in innovation.

The fundamental problem with the patent system today is that it has been warped over the years into something it was not intended to be. Remember, the patent system is not something that has to exist; it is something that we as a society agree to have in order to incent individuals and companies to perform activities that are of benefit to society. Patenting of business processes, software patents and incidental patents (my own personal winner for least deserving) are all the result of this move away from the original intention. Combine this shift with the allegations of overworked and wrongly incented employees and the patent system certainly looks broken

There appear to be two basic uses for the patent system that unfortunately are sometimes at odds with each other.

1. Reward investment in deliberate innovation...The benefit to society is clear...by granting a temporary monopoly on an innovation, individuals and companies are incented to invest in areas that would otherwise not have a decent return on investment due to the ease of duplicating any innovation.
2. Retroactively profit from incidental innovation...The benefit to individual companies is clear in the form of profits...however the benefit to the general economy and society is less clear but possibly present in the form of eliminating duplication of effort. A company or individual can retroactively identify innovations (that were not the primary goal of the investment) and patent these in order to license the technology to others. The societal benefit of this activity is significantly lower than (1) and certainly does not require or deserve the massive incentive that a patent delivers in the form of a monopoly on that innovation.

[Aside: When I worked for a large s/w company we were encouraged to regularly trawl through our developed code for potentially patentable algorithms, this is clearly a case of (2) not (1)]

Surely the only useful purpose for a patent system is to incent companies to make investments that would otherwise not have been made. If a company got a clear benefit from an investment and would continue to benefit whether granted a patent or not then there is no point in society (i.e. the rest of us) granting them a patent! What they have is a trade secret that should be protected by other laws (copyright?); it should not be a patentable innovation. Other companies should have the right to make a similar investment to develop a similar solution (or license the technology/solution from the original company if that is agreeable and makes more economic sense)

Today, if a company has a trade secret that they feel they could make money off they typically have to patent the trade secret (even if only defensively) and then license it. This behaviour (licensing developed solutions) should be incented but not using the same system as that which incents investment in innovation.

So how about taking this approach...

• Patents should be returned to their original goal...a way to incent innovation by protecting those innovations that result from deliberate investments in R&D.
• Encourage a parallel system that allows companies to profit from incidental innovations if they have value. A way of facilitating the offering of such incidental innovations as commodities

Just to be clear . . .

[pembo13]

What is the value that it currently delivers?

800 generic drugs backlogged at the FDA

[DrHanser]

From here:

I mentioned the Hatch-Waxman Act (PDF), which was passed in 1984. The Act was supposed to speed up the adoption of generic drugs when the patents behind name-brand drugs ran out. This happened at first, but as pharmacy has expanded, the Act has created a bottleneck at the FDA. It is speculated that the bottleneck is Big Pharma itself: creative lobbying seems to have resulted in a reduction in the budget for the Office of Generic Drugs -- which in turn has limited its capacity to approve generic drugs to some 400 per year.

Unfortunately, I can't seem to find which drugs' patents will expire without a generic equivalent to take its place -- I suspect that none of them are massively profitable by themselves -- but all told, the market value of these 800 drugs is a whopping $78 billion per year for their manufacturers. For comparison, the entire generic drug industry is only worth just over $22 billion -- even though it accounts for over half the prescriptions dispensed each year in the United States. Broken down, that's almost $100 million per drug...

Staggering numbers.

Patents generate great value

[EmbeddedJanitor]

Just ask the USPTO and patent lawyers!

The patent system is run by the USPTO + lawyers primarily for their benefit. They control it and their "experts" will drive any future changes in patent processes. From their perspective it is generating great value and there is very little motivation for change.

USPTO generates a healthy profit for Uncle Sam too. USPTO makes the same on a low quality or a high quality patent. All that matters is volume. Therefore the system favors cranking out many low quality paptents.

Cranking out patents generates good income for lawyers too. But the real money comes in when a patent is contested. This happens mostly when the patents are low quaility. Therefore patent lawyers score more out of low quality patents than high quality patents.

Therefore the whole system is set up to provide better revenue by generating many crap patents. Don't expect the system to change any time soon!

Re:Patents generate great value

[Aceticon]

Internationally, the number of patents issued in a country is often cited as a proxy for Innovation.

Thus there are even political reasons to keep issuing patents to ideas - it means that the US is praised as the most "innovative" country on Earth since more patents are issued in the US than anywhere else.

Re:Patents generate great value

[Kooshman]

To my understanding, the USPTO is entirely aware and quite unhappy with the recent turn of events. For better or worse, it does not have much influence over how the system works, leaving the decisions to the political machinations of others-- ostensibly, well-funded lobbiers and greedy legislators. And the latter hold most of the blame.

You see, the USPTO used to be funded out of the general coffers, leaving the patent fees as a nice little christmas bonus that served mostly to keep people from wasting the PTO's time. Then, our legislators decided that it would make better fiscal sense to let the fees fuel the Office itself rather than shuffling things back and forth. But wait, there's more! The PTO only gets to charge the legislature-set rates, and then its coffers get raided for 10% of their earnings. So now the patent system gets screwed up because our Beloved Congressmen figured out a way to make a bit of money off the deal.

Thus, the PTO has to float itself off of fees-- but can't set the fees to costs, or even hold on to all the money once they've received it. This is why they have to work on a strict quota system; there's no space to make allowances for things like, say, the size of the patent application. A 20-page peanut de-sheller gets the same time as a 200-page biofuels refinery.

Oh, and if the party trying to get the patent appeals a decision? (implicitly, a negative one) That time doesn't get added to the quota. See the problem now? When they have to figure out some giant software patent (or other useless/obvious/previously designed idea), turning it down creates more work that they don't have time for. So the examiners don't have time relative to the size of the claim, nor do they get time allocated for them to go through and fight the appeal when they turn it down. The system naturally leads to allowing exactly the outcome seen here; the Office itself has merely responded to outside pressures and control.

So, if there's anybody who's been most directly screwed with the patent system, it's the PTO (and its stalwart examiners). And it's our fault, because the fundamental, systematic problems came because of greedy, reprehensible legislators riding high on massive voter apathy.

Re:Patents generate great value

[damburger]

In the Soviet Union in the 1950s, sofas kept getting bigger and bigger because furniture factories had their productivity measured by how much wood they used...

Re:Patents generate great value

[mavenguy]

While you make some good points I must comment on some of them to give some perspective from my view as a former patent examiner who started back in the 1970s and, after a hiatus, is back on the "other side" as a patent agent.

The essence of my complaint with your comment is the tone that posits the poor, poor PTO against the greedy and corrupt politicians and applicants. While I agree that, at least as that applies thoroughly to the politicians there is plenty of blame to laid at the feet of the self perpetuating PTO management, the so-called permanent bureaucracy, who survive and select their successors from political administration to political adminstration, from Congress to Congress.

The production system, set up in 1960s as "goals" and given real teeth with the introduction of the Performance Appraisal Plan formulated in response to Carter's Civil Service Reform effort assigns an average "expectancy" in each art area against which examiners are measured (anything less than 90% is unsatisfactory; falling below that generates first an oral warning to get it above by three months; failing that a written warning with another thre months; failing that, being fired) the achievement is an average; examiners are not measured on an individual application basis, so an examiner is free to allocate his/her production requirment as he/she sees fit. Obviously if more time is spent on more difficult cases, less time must be spent on other cases, simple or not. Examiners get credit toward their production for each first action on the merits (FOAMs) and each action in the nature of a disposal (allowance, abandonment, examiner's answer for an appeal). Examiner's can write off some time for specified tasks, but all remaining time is "examining time") and is figured in calculating production. And, if the applicant appeals, the examiner writes an examiner's answer to the applciant's appeal brief and gets a disposal count. The case goes up to the board and returns after decision; if reversed or affirmed in part the examiner passed the case to issue but gets no further count; if affirmed it just gets noted and sent to abandoned files (court appeal is possible but that is very rare).

Because measuring things like search adequacy, rejection/allowance judgement are somewhat subjective but metrics sucha s production, workflow standards are objective and that meeting or exceeding the latter contribute to the "good" of reduced pendency management of the patent examining corps has be, at a fundamental level, been based on these metrics. Any issues with quality primarily arise from outside pressure, which management responds with all kinds of initiatives such as "quality review" or "second pair of eyes" but nothing to do with really improving search effectiveness or giving more average time pre case so that the best prior art is likely to have been developed in most of the applications.

Currently outside quality criticism (cat pointer, swinging on swing) have lead to a reject,reject, reject mantra, which has had the effect of lots of crap rejections being cranked out; lots of cases have been pending even longer because lots of non-final rejections comming from newbies who are not finding good art and just keep sending out easily refuted rejections after being goaded by supervisors to get better art and to keep making new (yet still junk) rejections. Management is in a trap of their own making from decades ago and now they can't even dig themselves out of it despite an unprecedented hiring orgy which scoops up lots of low production newbies, many of whom don't last more than two or three years. And, in any case, most managers doen't realize this, and just insist that examiners are lazy, incompetant dolts who (with the rare exception of those promoted into management) can't meet their simple, common-sense demand to just crank out thoroughly search and argued actions in the time allotted, preferably less so as to reach the Office goals for reducing pendency. Although all top civil service managers came from the examanin

It Helps Secure Venture Capital

[mosb1000]

If you're starting a new business, having a patent goes a long way toward convincing potential investors to become actual ones.

its very simple to me

[SirSlud]

The patent system is a privilege to encourage publication of invention while granting a limited-term monopoly on licensing that invention.

Like the copyright system, it has been twisted by special interested groups into some kind of right whereby creators of art and technology and knowledge deserve some kind of lifetime monopoly. Throw in companies, works for hires, NDAs, etc and suddenly you have the very thing both systems were founded on to combat: a semi-feudal permenant monopoly on inventions and works of art.

I like to think of it this way - most people think it'd be unfair of somebody to be able to create their own Mickey Mouse merchandise. But certainly, Disney has reaped enough benefit from the original artistic creation, and certainly, if the character is so ingrained into our cultural fabric, it seems asinine to say only one company should be legally granted the permission to re-tell/re-interpret the stories? If the laws many companies sought came into effect, they would have been sued out of existence by their own original creations. That's what limited term means. After awhile, its not your story to tell. With respect to patents, it's the same thing - longer term, wider and more vague claims.

Everyone agrees that inventors/authors should be able to protect their work. It's just that when the terms of that protection get too strong, shrewd capitalists just can't resist, and always work on tipping the legal tables in their favor.

And screw the founding fathers - the acknowledgment that patents and copyright can encourage intellectual and cultural progress pre-date the US by centuries. What has been lost is the concept of balance and compromise. It's a political minefield politically within the context of the American Dream. Somewhere along the line, people started confusing right to private property with right to earn.

Degrees of reification

[jd]

Reification is the process of taking something abstract and making it more concrete. It's a useful concept to use, when talking about implementations versus specifications. Ok, can we specify a level of reification at which something can sensibly be called an implementation? If the answer is yes, then it doesn't matter if you can reify the concept further.ed

Now, what can we say about the abstract? Well, there are (a) generalizations, and (b) there are specifics missing, without which the specification cannot be converted into a narrow set of possible implementations. Abstract data types, for example, say nothing about the language they would be written in, how they are to be implemented, or even what the actual programmatic interface will be.

Let's say we narrow some things down. We've defined implementable data types, we've defined the primary programming language and (if need be) dialect, we've defined a style (eg: procedural vs. functional vs. OO vs. 5th Generation), we've defined at least one target architecture (be that a specific JVM or a specific piece of hardware), we've defined the exposed API and we've defined some means of testing compliance to these requirements in a computable, programmatic fashion.

You now have something you can white-box test. That's close, but I don't think it goes quite far enough. Let's add one more requirement: A sufficiently large range of externally-used functions, internal APIs, data types and invariants are also defined such as to produce a high level of confidence through testing that what has been written is indeed what was designed.

THEN you have something that's as solid as, say, a car. You can always add extras to a car, so that is still "abstract" in some sense, but it's solid enough. You can test the controls within the car, and perform basic observations on things like whether the engine is running, to establish that it is indeed a car and not a pile of scrap. I would argue that software could be considered "implemented enough" once it had reached the same level of solidness and reality as a model of car from the manufacturer.

Software Copyrights is plenty! see Phoenix BIOS

[zQuo]

Copyright should be plenty to protect software. The original IBM PC had a PC BIOS firmware that was the stopping block for creating PC clones.

http://en.wikipedia.org/wiki/Phoenix_Technologies

Phoenix went through an elaborate clean room process to create a non-infringing BIOS implementation that could be proven to be an original work and not a copy. The effort they went through (and all of us benefit!) was probably more expensive than writing the original BIOS. It was worth it as it led to all the PC clones, but consider the effort involved to overcome just a software copyright.

If they had software patents back then, not only would the clones not have been available, but broad patents on all the ideas implemented in the BIOS would have tied up almost all subsequent BIOS type firmware, so that almost no personal computer could have been built at all! Including the Mac, Amiga, etc. Software is an implementation of an idea, and the ideas should not be patented. Software copyrights are about protecting the implementation, and that is plenty of protection.