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The Patent Mafia and What You Can Do To Break It Up
colinneagle sends this quote from an article about the ever-growing patent racket in the tech industry:
"The lawsuits are raging all across the tech world. Oracle sues Google, Yahoo sues Facebook, they counter-sue. Others threaten, others buy more patents and the circle goes round and round. Don't be fooled by the lawsuits between these tech titans though. The real cost that the patent mafia extracts from the tech world is on the smaller companies who can't afford to battle the Apples and Microsofts of the world. Their choices are far simpler. They can abandon their innovations or they can choose to pay and allow the Mafiosos to wet their beaks. Also, don't be fooled about who the real losers are here. The the real losers are you and me. ... So what do do? Here is my opinion. I would make it just as expensive for the offensive patent prosecutors. Just as the government put in the RICO act to combat organized crime, I would put a similar law in place on patents. RICO calls for treble damages. I would have treble awards of costs and legal fees. If a patent holder sues another entity for patent violation and that suit fails, the plaintiff who brought the suit should pay treble damages to the defendant. Three times what the defendant paid to defend."
RICO calls for treble damages. I would have treble awards of costs and legal fees. If a patent holder sues another entity for patent violation and that suit fails, the plaintiff who brought the suit should pay treble damages to the defendant.
I think that something far more bassic would work.
"Our two-party system is like a bowl of shit looking at itself in a mirror." - Lewis Black
Very good idea. Another problem that nobody seem to notice is that the patent system is the wrong way arround. In normal criminal cases it is up to the prosecution to prove that the defendant perpetrated a crime. Inocent until proven guilty.
The patent system works the other way around it is up to the defendant to prove that they have not violated a patent. Guilty until proven innocent.
Do not really make sense to me. How about you ?
FWIW, this is my personal opinion:
It would never happen. Today's purpose of patents is different from when the concept was created. The use today is to prevent a small or single owner nimble upstart from usurping the business of an incumbent elephant and potentially gutting the cash cow of it's shareholders.
The aforementioned incumbents would fight tooth and nail, with large campaign contributions and gifts, to prevent such a law from ever passing.
No sig. Move along - nothing to see here.
No, it's not. If I'm a small business with 25k in debt to start up and another 50k in debt to finance my new patent on my new product and then Microsoft sues me for violating their patent I can either capitulate and be out a minimum of 75k as my business disappears or fight with nearly no money to finance my operation.
Microsoft, on the other hand, can pay 5M to its lawyers to crush me.
If, somehow, I win my legal fees back I get to wait through round after round of appeals, have lost months if not years of product sales due to the injunction in place on me and have, in the meantime, defaulted on all my debts, losing my business. Yeah, not quite fair.
Just thinking about this, it might feed the patent trolls and mostly hurt small to medium sized companies.
If I'm a little guy and hold a patent that, say, Apple violates. I sue Apple and they simply say they spent a few million. It's a small amount for them but if I lose, I am bankrupt. So, it doesn't help the little guy.
So, my approach would be to "sell" my patent to a company I just formed for a couple of hundred bucks onllne and that corporate entity sues the big guy. If I win, that company has some scheme to pay me back the award. If I lose, I fold the temporary company and I'm out of pocket a few hundred bucks. Pretty close to the model used by patent trolls.
So, I can't see how this might be different...
Scenario: a "little guy" gets a patent. A "big guy" violates it. The little guy takes the big guy to court, and the big guy throws an entire legal department at the little guy, and essentially buys the result. The little guy then has to pay treble damages of the expenses of that great big huge legal department, and goes out of business because of the punitive award. As part of the punitive award as the little guy goes under, the ownership of the little guy's patent then goes to the big guy.
Want a patent held by a little guy? Willfully violate it, then bleed the little guy dry with protracted court proceedings. You'll get the patent through bankruptcy. And if the little guy doesn't defend his patent... free IP!
Think it through. "Automatic" damages means you create a system that can easily be gamed by armies of lawyers far better at manipulating the system they crafted than you, and ties the hands of the judge to prevent it.
Everybody gets what the majority deserves.
Suppose if I'm a small independent inventor with a patent, and Conglom-O misappropriates my patent. I only have kilobucks to spend on a lawyer, while Conglom-O has megabucks. Predictably, their expensive lawyers beat my bargain basement representation. Now I'm on the hook for 3 times what they paid for their defense? How is that any better for me than the abolition of patents?
Give me Classic Slashdot or give me death!
Why not just get rid of patents altogether, or at least software and business method patents?
This is my signature. There are many like it, but this one is mine.
for the little guy who invented something, say a more efficient engine, to sue the huge corporation that just copies their invention.
Since if he loses he gets hit with 3x the costs of the defendant's super expensive lawyers if he happens to get an idiot jury or made some technical error somewhere.
I have a simpler solution - only grant patents for things that are actually inventions. "A button which when clicked buys the product for the user using the credit card they entered previously and the shipping address they entered previously" is not an invention, for eample.
- Limit all patents to 5 years
- Abolish UI/Gesture and all software patents
- Abolish lifeform and seed patents.
What you are proposing is simply putting a band-aid on a bullet wound.
You have (ineffectively) treated a symptom of a broken system, and as others have pointed out, left the system ripe for abuse from the privileged still.
The system needs to be rewritten from the ground up. Unfortunately this will never happen. The broken patent system is just one symptom of a far larger disease, and that is the continued concentration of wealth and power in corporations. That concentration is little different than the robber barons, or lords over feudal serfs abusing their position. Until the people put down their bread, and turn off their circuses, these abuses will continue.
Spread the word, proclaim intelligently the injustice of the current system to all who can and will hear, write your congress critters, bitch and moan if you have to as well, but stand up too, and encourage all you know to stand up as well. Otherwise eventually you will have no legs to stand on, because those have been patented or outsourced too.
Silence is a state of mime.
Its worse. Microsoft steals your work, you sue them, they spend 1M to crush you, and under Submitter's plan you would pay treble damages.
No, the only plan I can come up with is to sell your patent to a troll with cash reserves in exchange for something like 10% of their winnings if they successfully sue MS. Lunacy like that is where we are headed, the blood sucking lawyers will make sure of it.
It sounds like a great idea, but here's the problem: if there were one or more bona-fide legal issues that required a jury trial to decide, and losers had to pay the defendant's legal fees if they lost, the doctor's lawyers would move for summary judgment to dismiss without prejudice for lack of demonstrating the means to pay the doctor's legal fees if you were to lose. ("Without prejudice" means you could come back and file a new lawsuit someday if you manage to scrape up the money to post a bond sufficient to cover the doctor's potential legal expenses before the statute of limitations runs out).
If you were lucky, you might be able to obtain the services of someone whose newly-invented role fell somewhere between bail bondsman and investor, who'd agree to underwrite your liability for the doctor's legal expenses in return for $10,000 up front and 70% of anything you were awarded.
Patent-wise, it's even worse. Let's suppose you're sued for infringement by EvilMegacorp. The first thing they do is seek an injunction to make you stop allegedly infringing. The next thing they do is move for summary judgment to make the injunction permanent until you can demonstrate that you have the means to pay their legal fees if they win. Or, let's suppose you're an inventor who patents something, and EvilMegacorp blatantly infringes upon it. You file a lawsuit against them, and they pull the same stunt -- they certify to the judge that they've put $20 million in escrow to cover your legal fees if you win, and move for summary judgment to dismiss unless you can do the same.
Put another way, lobbying for a change to make the loser pay is a dangerous strategy, because it ultimately gives large corporations with deep pockets yet another weapon to use against everyone else.
A far better strategy would be to reform the way licensing itself works and come up with a fair framework for low-ceremony compulsory licensing at statutory rates that are high enough to encourage both the patent's owner and potential licensor to negotiate directly, but are ALSO aggregate among the holders of all patents. In other words, if you invent something and someone says you're infringing their patent, you could pay something like 70% of your gross revenue into escrow, then walk away and let everyone who thinks they have a patent stake in it fight over the funds among themselves at their own expense without involving YOU... and any funds that are unclaimed after 18 years would automatically revert to you. If your product allegedly makes use of 490 patents, the owners of those 490 patents can duke it out against each other to claim their share.
I believe you misinterpreted this. I believe TFA is saying that only the plaintiff, NOT the defendant, would face this liability, which would greatly reduce the volume of frivolous and downright extortionist suits. I have felt this to be the correct approach for a good while now, though was unaware and interested to know about its previous application to organized crime.
I believe TFA is saying that only the plaintiff, NOT the defendant, would face this liability
Okay, lets say you (an individual or small company) sue Microsoft for stealing your patent. What will then happen is that Microsoft ties you up in court long enough to force you to drop the suit (or they just win outright), and then *you* might find yourself on the hook for triple damages when they counter-sue to recover their costs. It's still the same basic tort reform idea that has been proposed for years, and won't work for the same reason. It doesn't address the fundamental problem that in the U.S., you often get as much justice as you can afford and no more, regardless of which table you sit at in the courtroom.
Please stand clear of the doors, por favor mantenganse alejado de las puertas
You're right for more than just the reason you give. TFA also fails to understand that the patent system is structured to encourage litigation and to benefit the legal profession on both sides of a patent conflict. TFA's suggestion would do nothing to change this.
Ideally software and business method patents should disappear altogether, but if one is seeking alternatives then the first goal should be to limit the audience exposed to patent litigation.
That can be done in a number of ways, one being to exclude private citizens and corporations below a certain turnover from patent liability altogether.
This would encourage the creation of many small competing businesses and would be hard for megacorps to argue against, because all politicians pay lip service to supporting small businesses. Also, the turnover cap automatically ensures that competing corps cannot grow to the size of the patent holder, so arguments against it are really quite weak.
As you point out, the incumbents would still fight tooth and nail against it, but they would be on much weaker ground than today, and most importantly, lawyers would be presented with a much reduced population of potential victims.
Note also that the many calls to limit patent duration drastically, eg. to 5 years, would have exactly the same effect of reducing the number of people exposed to patent litigation. That idea is good too, but it doesn't level the playing field as well as a turnover cap would do. Perhaps both approaches should be used together.
"The question of whether machines can think is no more interesting than [] whether submarines can swim" - Dijkstra
Which is what happens in Australia - to stop frivolous lawsuits. A very recent example - AFACT vs iiNet, costs were awarded to iiNet meaning the MAFIAA had to pay their (multimillion dollar) legal bill.
... wait, what?
Patents are monopolies. Years ago, they were monopolies of action. Modern software and business method patents are monopolies of action, expression, and speech.
Monopolies are expensive. They damage free markets. They always drive up the cost of goods and services. They are taxes on market places. We have forgotten that patents are monopolies. Somehow the patent lawyers have convinced us that patents are a measure of innovation. This great lie has blinded us to the fact that patents actually measure the decay and destruction of free markets.
The second lie is actually more pernicious, since it blocks our pathway forward. Patents actually belong to society, not the patent holder. Patents are restrictions imposed on EVERYBODY BUT the patent holder. Patents are voluntarily imposed on a society, by that society, for the good of the society. If a patent was the property of the patent holder, it would be worthless, since no patent holder has the ability to enforce a patent. Only society has the ability to enforce a patent.
Since patents belong to society, then they can (and ultimately must) be managed for the good of society.
Once we dispel these 2 grand deceptions, the way forward is fairly clear:
I suspect we can ultimately fix almost all our patent problems by returning the patent office to central funding. Funding the patent office from patent fees has got to be our greatest mistake.
Miles
Fees are waived for the first 50 patents owned
ACME Corp creates ACME Subsidiary #000001 through ACME Subsidiary #999999 and sells 50 patents to each Subsidiary for $1.
It's admirable that you're protecting small-business, but it's a lawyer's job to exploit loopholes like this.
This is absolutely correct for process patents. This is a requirements of the 1994 TRIPs (Trade-Related Aspects of Intellectual Property Rights) treaty. Here is the text of Article 34:
Whether this applies to software patents I am not sure (IANAL). As business process patents, it may, though it's not clear to me what the "product" would be. In any case, this is clearly the direction in which the law has been moving.
Ironically, by the way, negotiation that resulted in TRIPs was initiated by developing countries who found their economic development was being retarded by patents held by developed countries. Once the process started, however, it was hijacked by an unholy alliance of the pharmaceutical and entertainment industries. Poor countries were then effectively forced to join by developed countries, who withdrew from GATT leaving a choice between losing access to western markets and enacting onerous patent and copyright laws. Because of the impact on the cost of drugs for poor people, patents are a life-and-death issue. IP regulations, meanwhile, are expensive to implement, particularly in countries that lack the legal expertise:
Software is already fully protected by copyright. That's enough IP to motivate people to write software and to prevent people from ripping off your code..
There is no "problem" except the will on the part of a certain court- the Court Of Appeals for the Federal Circuit (CAFC), IP lawyers, corporations and IP maximalists to subvert the patent system to their personal benefit .
It's really nothing more than an agreed-upon defiance of the meaning of very clear law, society's best interests and the express wishes of the vast vast vast majority of software engineers who are allegedly the "beneficiaries" of the system.
Software patents are bad law. IP lawyers are perfectly well aware of this fact which is why they expressly exclude legal arguments and algorithms for tax avoidance from being patentable- they're not going to have done to them what they've done to us.
Either the law will change of the inevitable consequences of the law will collapse the entire system of software creation in the US and anywhere else software patents are permitted, and by collapse I mean monopolist prices accompanied by a lack of innovation, along with a defection of creative types from the field.
If you want to get activist about things, then refuse to sell software in the US. Set up a company in France or the EU and sell only into non-software patent jurisdictions.
If enough of us do that, it will be game over for the lawyers since it will then be completely indisputable that software patents are in fact retarding innovation and driving creators OUT of the US- something the US could not bear the thought of since it's so contrary to our idea of our country.
No, the only plan I can come up with is to sell your patent to a troll
How about just getting rid of software patents? No lawyers, no courts, can't stop innovative startups etc. Large corporations work around the patents to implement the same functionality in any case (or just ignore them if they think they can out spend and crush you). Since they fail so spectacularly in their stated aims unless we feel a need to provide jobs for lawyers it's clear they should simply not exist.