Do Patent Laws Really Protect Small Inventors?

whoever57 writes "Patent trolls like to claim that patent laws provide a way that small inventors can create products and benefit financially from their invention. One such inventor faces selling his house, despite inventing a product that has sold tens of millions worldwide. From the article: 'Inventor Trevor Baylis says he faces having to sell his house after failing to make money from his wind up radio and is now calling for the government to step into to protect inventors. “I’ve got someone coming around in the next couple of weeks to do a valuation on my house,” says Trevor Baylis, as he walks into the sitting room of his home on Eel Pie Island, in Twickenham, south-west London. “I’m going to have to sell it or remortgage it – I’m totally broke. I’m living in poverty here.”'"

Comments

Of course it protects the small investor

[SerpentMage]

The question here is incorrect. The premise is whether or not it protects the small investor. Answer is yes. What the small investor can't do is afford a law team to defend the patent. This is the crux of the entire patent problem these days.

Re:Of course it protects the small investor

[SerpentMage]

Before somebody says, "well your answer is wrong", remember this. If you had infinite sums of money could the patent be defended? Yes. Thus the problem is not the patent system per say, but the courts that cause these problems. Simply put what needs to be fixed is the fact that lawyers with big sums of money do not have an advantage that lawyers with small sums of money.

Re:Of course it protects the small investor

[rtfa-troll]

The question here is incorrect. The premise is whether or not it protects the small investor. Answer is yes. What the small investor can't do is afford a law team to defend the patent. This is the crux of the entire patent problem these days.

You are partly right. However, in this case the problem has started earlier and it really is the inventor. If you work in a big company and you come up with an invention your idea will go into the patent but you will put it through a patent expert. That person will take your work and turn it into something you don't recognize (there have been quite a few comments like that on Slashdot). What they are doing is taking your idea and generalizing it. They will ask "why did you use a spring" you will say "to store the energy". They will now take that patent and change it to say "in the preferred embodiment then energy will be stored in a spring, however one skilled in the art can also see that other methods of energy storage such as lifting a weight could also be used". Then, when the company changes your idea to use a battery instead that will fall under "other methods of energy storage".

This is before you even get to the stage of losing out due to lack of lawyers to fight in court with.

Re:Of course it protects the small investor

[SerpentMage]

Ah thanks... Sorry I mistyped... And your answer is to call me a moron! Cool, good for you! Thank-you for adding to the conversation.

Re:Of course it protects the small investor

[rtfa-troll]

Actually the other point would have been more clever. The inventors themselves very rarely end up owning the patents and defending them. It's more the companies that buy the patents in off the inventors in one way or another.

Re:Of course it protects the small investor

[Gaygirlie]

The question here is incorrect. The premise is whether or not it protects the small investor. Answer is yes. What the small investor can't do is afford a law team to defend the patent. This is the crux of the entire patent problem these days.

That's not the whole answer. A small-time inventor can't protect himself/herself from patent trolls and patent-hoarding entities simply because they do not have the cash or other resources to do that. As the system stands it places the entities with huge arsenals of patents in a completely unreachable position and these small-time inventors at the rock bottom, favoring the established entities and basically telling small-time inventors not to bother at all. As such the issue is two-fold: they can't protect themselves, nor can they protect their own patents, leaving them all open and vulnerable.

Re:Of course it protects the small investor

[gmanterry]

The question here is incorrect. The premise is whether or not it protects the small investor. Answer is yes. What the small investor can't do is afford a law team to defend the patent. This is the crux of the entire patent problem these days.

No. this is the problem with American society now. Unless you are wealthy you can not win if someone with more money attacks you in the legal system. Even if you are 100% in the right the opposition can use their resources to drain what little money you might have and win any legal battle by just delaying and causing you to spend more money you don't have. This is not justice but it is the way the system works.

Re:Of course it protects the small investor

[icebike]

He had already licensed the technology. He wasn't holding out. It was a simple bill of materials problem as you surmised.

He failed to notice the electronics age obviated the need for a spring as an energy storage method.

Since all he actually held a patent on was the clockwork for releasing spring tension, when that method became un-necessary, he lost out.

John Hutchinson, chief technology officer at Freeplay, said Mr Baylis had voluntarily sold his shares in the company and that technology had moved on, leaving his original patent outdated.
He said: “Freeplay developed its own technology and by 2000 no more clockwork radios were made. The method was to use human power to recharge a battery.

I fail to see what his complaint in here. Competitors aren't using the ONLY thing his 40 year old patent covered.
He had stock in the company that was making radios with his invention, and sold it. Had he held on to that
he would still be making some money, or at least have a nest egg.

I see nothing to complain about here.

Re:Of course it protects the small investor

[theVarangian]

Before somebody says, "well your answer is wrong", remember this. If you had infinite sums of money could the patent be defended? Yes. Thus the problem is not the patent system per say, but the courts that cause these problems. Simply put what needs to be fixed is the fact that lawyers with big sums of money do not have an advantage that lawyers with small sums of money.

Precisely... lawsuits in general are something the average citizen cannot afford if they drag on for any length of time. The legal system has become an instrument of extortion for rich people people with money to burn.

Re:Of course it protects the small investor

[Jane Q. Public]

"If you work in a big company (i.e. an employee), it is not your patent."

Let me give you a real example of what I was saying above. Just hypothetically:

You work for McDonald's. Your contract says you were hired as a "cook" (you flip hamburgers), and there is nothing specific in your work contract about patents.

Later, your manager somehow finds out about your degree in Mechanical Engineering, and asks you to give some thought toward improving a piece of equipment in the restaurant. He says he will pay your normal wages if you take some time during your shifts to find a way to make it better. In the process of working on that milkshake machine, you invent a gadget or process that makes it 50% more efficient (whatever that means for milkshake machines).

McDonald's does NOT own any rights to the patent, because Mechanical Engineering is not "in the normal course of your duties" as a hamburger flipper. Even though you were specifically asked to do it, for pay.

Re:Of course it protects the small investor

[rtfa-troll]

This has already happened. Try reading some random patents one day and you will see that you probably don't understand what they are about. This is especially true once you know that the only bit which matters, legally, is really the claims. Have a look at just the first claim (the first is normally the most general claim) of a random patent and see if you can understand what the original idea was. The original aim of the patent system was to ensure that inventions were recorded that might otherwise disappear when their inventor died. This has been subverted so that now the aim of most patents is to block competitors from a wide range of activities related to a product or even product idea.

Re:Of course it protects the small investor

[deimtee]

I think the company would argue that, and possibly win. Every employment contract I have ever seen has a line in there about "other duties as directed". If the manager asked you to improve it, and you did it while on the clock, it would probably come under that clause.
On the other hand, if you saw something you thought could be improved and worked on it in your own time, that is yours.

Re:Of course it protects the small investor

[hairyfish]

Yes. You get what you patent. It needs to be as general as possible without being so general that you can find prior art.

Can get a patent on "A thing that does stuff"? This should pretty much cover me for everything that is yet to be invented for the rest of time.

Re:Of course it protects the small investor

[Jane Q. Public]

"I think the company would argue that, and possibly win."

Companies HAVE argued that, and lost. That's why I wrote it.

Admittedly, "normal course of your duties" can be a gray area. But that's why I used a pretty clear example: it cannot be reasonably argued that mechanical engineering is a "normal duty" for a burger-flipper at McDonald's.

And they've tried the "other duties as directed" bit too. Sorry, but it won't wash. Normal means normal.

Re:Of course it protects the small investor

[Aceticon]

I'm sorry, but if A depends on B and B is broken, then A is broken.

If I make a car that can be bought for $100, but requires a special fuel additive that brings fuel costs to $1000 per galon to work it is in fact NOT a cheap car.

As long as the patent system depends on an uneven and unfair legal system to work (and no measures are taken to ameliorate that), then it is an uneven and unfair system. No amount of excusing and "blame it on the other guys" will make up for the system having been setup in such a way that it relies on a flawed process (and is progressivelly being made even more so).

Or to go back to the car analogy, if I made the car such that it requires ultra expensive fuel additives, it's my fault, not the fault of the maker of the fuel additive.

Re:Of course it protects the small investor

[ranulf]

There are several problems here that could have led to his predicament.

Firstly, he filed an overly narrow patent - the charging a battery application is an obvious extension to his original design that he should either have generalised his patent application slightly or field another patent for charging a battery via a wind up device. Whether the company he worked with came up with the later invention or another company did, he still wouldn't have made money from the second invention, because he didn't patent it.

The second problem is that it sounds as if he negotiated a bad business deal. If his original product sold millions, then a relatively low-per unit royalty should have easily cleared all his debts. I suspect he sold the idea for this product to the company as a one off so that he could carry on inventing, keeping those ideas to himself. In this case, the company has no obligation to him and they would logically do R&D to see what else they could develop. Had he negotiated differently, he could have been an employee of the company, carrying out further R&D and being named on the patents. Obviously, he made the gamble and chose wrongly on this occasion.

I feel for the guy, but it sounds like he didn't pay enough attention to the business side or had too much optimism for his future inventing potential. He should probably have involved a patent lawyer earlier on in the process. Perhaps even as a inventor and not a salesman himself, he should have hired someone to pitch the product to investors to get the best deal. But either way, knowing how to capitalise on an invention is just as important as the invention itself. It's never enough to just file a patent and hope the money rolls in.

NO

[Anonymous Coward]

They can't afford a lawyer.

No

[Anonymous Coward]

http://en.wikipedia.org/wiki/Betteridge's_law_of_headlines

Wrong Premise, Approach from a Different Angle

[eldavojohn]

Quick disclaimer: I am not an anything.

Do Patent Laws Really Protect Small Inventors?

No. Nor have I ever heard anyway claim that as being their primary function. Let's adjust that to say that patent laws are designed to promote innovation and invention by disproportionately reward the production of ideas compared to the actual work and creation being done. This, in theory, helps any size of inventor put in R&D monies to chase a high reward. And, yes, I do think they have been successful to some extent in doing this although there is plenty of evidence that they have gone too far as of late. They've also been applied to things that probably shouldn't be patentable like genes and software.

One such inventor faces selling his house, despite inventing a product that has sold tens of millions worldwide.

Pardon my anecdotal apathy but so what? Plenty of Americans squander money like it's nobody's business. I'd imagine there are tons of engineers out there that are brilliant inventors but either don't want to or fail to deal with money in a responsible manner. Hell, I've recently been collecting sketch card art and just totalled up my last six months spending. What the hell was I thinking?! American athletes can make millions in a single year and still end up penniless before the age of retirement!

From the article: 'Inventor Trevor Baylis says he faces having to sell his house after failing to make money from his wind up radio and is now calling for the government to step into to protect inventors. “I’ve got someone coming around in the next couple of weeks to do a valuation on my house,” says Trevor Baylis, as he walks into the sitting room of his home on Eel Pie Island, in Twickenham, south-west London. “I’m going to have to sell it or remortgage it – I’m totally broke. I’m living in poverty here.”'

Okay so this inventor is house broke -- he's got nice clothes, the article doesn't say he works three jobs. That leaves me a little curious so I inspected the article which had hilarious counter intuitive subtitles:

He built a home on Eel Pie Island in the 1970s for £20,000

Wow! That bit is interesting! So he lives on an island in the Thames in London?! Okay, I'm going to go ahead and gather that property taxes must be insane. Could he afford a house in the country? I mean, is he selling a house that he can no longer afford to buy a house in a cheaper neighborhood or is he genuinely poor? Which is it?

The property also has a pool (Paul Grover)

Uh, okay so add energy and water bills to the above.

The prolific inventor earns money as an after-dinner speaker (Paul Grover)

Okay so, has he tried getting a 9 to 5 job? I hate to be a dick but I don't think you can invent a particular modification of a radio in 1991 and a shoe that charges cell phones among "250 products" and expect to coast through life smoking a pipe and getting a bennie here or there for dinner speeches. I mean, those were the two most notable inventions?

Furthermore how do his business mistakes equate to a breakdown of the patent system:

Due to the quirks of patent law, the company he went into business with to manufacture his radios were able to tweak his original design, which used a spring to generate power, so that it charged a battery instead. This caused him to lose control over the product.

Man, I wish PJ would deconstruct this so I knew what was going on. So what that tells me is that the novel part of his invention was the spring that generated power directly to the radio? And when the company found a different way to do that, they cut him out? Yeah, companies are going to try to screw you anyway they can. The problem is that this screwing could go the opposite way too. I mean, a

Re:Wrong Premise, Approach from a Different Angle

[openfrog]

From the article:

Mr Baylis has been lobbying for the patent system to become more robust and to turn the theft of intellectual property into a white-collar crime that carries a prison sentence... Currently patent infringement is considered to be a civil matter in the UK rather than a criminal matter... ...Students need to be taught about intellectual property in schools...

Mr Baylis is representing himself as the small guy (incorrectly claiming the invention of the crank radio), making the exact case that the big guys are currently lobbying the government for.

If Mr Baylis had been what he pretends he was, with the laws he is advocating for, he would have risked ending up in prison on top of losing his house.

Answer: It Depends

[Anonymous Coward]

It depends.

On one hand, it seems that a small inventor should be able to develop, market, and sell an invention without a giant corporation coming along, copying the idea, and selling the same thing for cheaper, in higher quantities.

On the other hand, it is damn near impossible to develop, market, and sell an invention today without "infringing" upon untold numbers of patents. Large corporations can play this game with their legal departments and large financial resources, but the small inventor is pretty much fucked.

The only people winning at this game are the lawyers. Follow the money.

It's a sorry and pathetic situation and I hope the western world's economy pays dearly for it in the years to come.

Tax net liquid value of assets not activity

[Baldrson]

Patent fees are the only asset tax imposed by the Federal government -- and they fall directly on those least capable of paying them at the same time as they fall on those we should least expect to pay them.

Taxing the net liquid value of assets at modern portfolio theory's risk free interest rate, rather than taxing economic activity, is the way out of this abominable situation in which independent inventors are put through the meat-grinder.

Of course, the wealthy will oppose this in every way since they currently benefit from the protection of their property rights without having to pay for that protection, while those producing wealth pay the taxes.

This means political solutions are out of the question.

So, rather than having the corrupt, evil, stupid and/or ignorant drag down the rest of us into political economic Hell, all inventors should demand sortoracy: Sorting proponents of political theories into governments that test them.

No, Hell No, They Can't, They Won't.

[cozytom]

Lets say someone invents the best thing ever, better than anything you could imagine. This thing will make people want to be with you, or leave you alone, as your preference. It will make food taste better, and you will be happy for the rest of your life if you use this thing. This person gets a patent on it, and sets up a factory to build these things. This person has a perfect business plan, the product price includes the R&D costs, some blue sky, and he pays employees a fair wage.

Evil company X decides this product is easy to make (they read the patent, it was easy to figure out) so they set up a factory across the street, and sell the same thing at a lower price. They don't have any R&D (other than a read of the patent), they pay lower wages, and use cheaper packaging.

No big deal you say, he has a patent on it. Ok, he calls his lawyer, and says, I need an injunction, and I want an infringement suit and I want treble damages. Law being a civil profession, his lawyer calls the evil companies lawyer, and they go to lunch (which our hero is paying for). His lawyer comes back, and says evil company X wants to go to trial. Our hero believes he will win, so of course he says yes, lets do it, we will get the injunction, and treble damages, I'll borrow money from whoever to pay for this adventure.

The lawyers all have a few more lunches (not at McDonalds I can assure you), and they chat and scheme, and make a court date. Aha, in 7 months, there will be an initial trial to determine if the injunction can happen.

During the 7 months, our hero has to sell his house borrow against the factory, lay off employees and pay the rest a little less. Evil company X announces a HUGE profit, and is setting up a second factory in Europe. The evil CEO now wants to live in France to educate his daughter, so he buys a chateau.

Well the trial happens, and sure enough, our hero wins the injunction. Cool, now it is on to the civil phase, and the trial for the damages is scheduled for 9 months from now. The customers have all but forgotten our hero's products, and he doesn't have any money to advertise, or build new products, it is all tied up in lawyer fees (and lunches).

Well, dang, evil company X has also run out of money, since they could sell anything, and they have this factory, and a second one in Europe, lawyers and employees to pay. But the CEO didn't sell his chateau, or stop educating his daughter, he just let the corporation file chapter 7 sells the factories to pay the lawyers, while he kept his money separate. He has partnered with some middle eastern investors and is helping them start a lesser evil company Y that makes the same product. This lesser evil company will use a factory in France and build a new factory in India, selling all over Europe and Asia importing the product into the US.

The civil trial begins against evil company X, and no one from evil company X shows up. The judge rules in favor of our hero, awarding them 80 bazillion dollars, which becomes 240 bazillion dollars because it was willful infringement. Our hero is happy, and asks his lawyer to begin collection. The lawyer finds that evil company X has filed chapter 7 liquidation, and has no assets, so there will only be a judgment against them, but no real money will change hands. Because the liquidation happened before the civil judgement, it will be difficult to get anything.

Meanwhile lesser evil company Y is importing this wonderful product into the US advertising and selling in the same stores as our hero's product. Our hero asks his lawyer to get another injunction, but this lawyer is no fool, wants his money up front still. Our hero doesn't have the assets to get any more money.

Yes our hero was right, the patent protected him from honest people. The patent system doesn't protect anyone from a dishonest company. The legal system is slow, and painful. It can take years to be proven right, but still never see any money for being right.

Work a day, eat for a lifetime

[fox171171]

Apparently he seems to think that he should be able to live forever on the royalties from that single 20 year old patent.

He probably has friends in the music industry.