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

[ShanghaiBill]

The question here is incorrect.

The question is also misapplied. Trevor Baylis is not a good poster child for "ripped-off" inventors. First of all, he did not invent the wind up radio. He just invented a more practical way of storing the energy (using a constant force spring). But his business partners decided his spring was too expensive, and replaced it with a conventional crank and used batteries to even out the power (the article calls this a "tweak"). In other words they did not use his invention. To suggest he is being "ripped off" because he is not receiving royalties from someone not using his patent is pretty silly.

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

[fuzzyfuzzyfungus]

I don't know whether there was any really nasty interpersonal knife-twisting and violatation-of-not-actually-contracts-but-verbally-they-felt-like-them in that specific case(which my account for some of the bitterness swirling around it; but I certainly wouldn't want to be 'guy with a clever mechanical power-smoothing technique' in a world where supercaps have become downright cheap, and the demands of digital electronics of various flavors have driven serious improvements in DC-DC conversion and various techniques for bludgeoning ill-mannered input power into nice clean low-voltage DC...

The question that I'm left with is whether the spring arrangement was simply too expensive in absolute terms(ie, even if the 'intellectual property' were valued at zero, is the BOM cost of the spring +simpler electronics just higher than dumb crank + more sophisticated power conditioning apparatus) or whether this is a case where the patent holder, by holding out for more than he was worth, encouraged people to 'innovate around' the patent.

Re:Of course it protects the small investor

[XaXXon]

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

Also, this is why there are independent and dependent claims in a patent. Basically you can have part of the claim be rejected but not other parts, as long as you properly draw the line when you're writing the patent.

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."

That is by no means a given in the U.S. It depends on many factors. The only time it is automatic (and not even all of those times), is if it came from work you do for the company, in the normal course of your duties as an employee, for pay, and there are no other agreements.

If it is something you did on your own time, it only belongs to the company if you have a specific agreement saying that any inventions you create while in the employ of Company X belong to Company X. (Such agreements do exist, though I would never sign one. My father got screwed over by one of those. He threw his own time and expertise into inventing a tool that is now in common use, but the company got the patent rights because he had signed that sort of agreement.)

Otherwise, if it is something you did on your own time, it is yours. But you might have to prove it in order to keep it.

Re:Of course it protects the small investor

[Jane Q. Public]

"... and violatation-of-not-actually-contracts-but-verbally-they-felt-like-them in that specific case..."

Here is a little bit of Contract Law 101:

If you agreed to something in good-faith negotiation, and there is "consideration" on both sides, and it doesn't otherwise violate law, then it's a contract. It doesn't have to be on paper. That piece of paper is nothing more than evidence of your contract; it is not, in itself, the contract. (Though it must be said that it can be pretty powerful evidence.)

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

[Stormthirst]

And worse, all the major companies tend to cross license with each other. So the big boys don't sue each other as often as they should (round corners etc not withstanding). This puts the little guy at an even bigger disadvantage as they don't have a large patent portfolio to leverage.

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

[Jane Q. Public]

"So your manager could pay you to do something, which you could then patent and sue him for using?"

Yes. Very much so. It can happen and has happened.

If you are an employer, and you want someone's expertise outside their "normal duties", it behooves you to draw up a separate contract for that, if you have any aspirations of getting a patent out of it (and there is no other agreement).

Re:Of course it protects the small investor

[Jane Q. Public]

"I think you defeated your own argument with "He says he will pay your normal wages if you take some time during your shifts to find a way to make it better."

You might think that, but you'd be wrong. IANAL, but this was pretty clear in my Contract Law classes at university. It has to be part of the employee's "normal duties", or else you need a separate agreement.

The courts have repeatedly ruled that mere compensation is only part of the formula. If you ask somebody to perform special skills that fall outside their normal duties as an employee, you have no claim to a patent on their invention, unless you have an agreement that specifically says so.

That is why I used the example that I did. There is no way in hell anybody could reasonably consider mechanical engineering to be a "normal duty" for a burger flipper.

Part of the reason for this rule is that it prevents companies from hiring mechanical engineers to flip burgers, then expecting to get mechanical engineering skills out of them for a burger flipper's wage.

Re:Of course it protects the small investor

[erroneus]

I don't suppose it would help to mention that this story is in the UK? That the inventor went into business with a partner who tweaked the invention to "charge a battery" instead of directly powering the device(s) and so they created a new patent and he lost control of his invention.

There's more than patent law at play here though I would say he would have a strong case to sue the partner as they merely made an adaptation on his patent and so he is still entitled to some of his patent claims.

But this is how the system(s) work now.. the people with the most knowledge of the system(s) and the least amount of moral integrity will win out.

Re:Of course it protects the small investor

[DKlineburg]

Ok. So someone invented this thing called a virtual shopping cart. Another company "tweaked" the code slightly and had a shopping cart themselves. This sounds familiar. So which is right? You can tweak it? You can't Tweak it? How much Tweaking is a new design?

I think I read about this on /. actually. I think some people might have even said the person claiming to have the original idea was a patent troll? I'm not saying which side is right. I don't know if I have an answer honestly. But you have to think, isn't the exact same argument?

Re:Of course it protects the small investor

[ShakaUVM]

>Can get a patent on "A thing that does stuff"?

This patent will not cover Windows 8.

Re:Of course it protects the small investor

[Hognoxious]

I am a lawyer and I can advice you.

I think the word you're looking for is invoice.

Re:Of course it protects the small investor

[TheRaven64]

When I worked for a big R&D firm, their basic rule of thumb was that a patent that you care about needs between £100,000 and £1,000,000 of capital sitting around to protect it. For a big company, you can amortise this, because you are unlikely to need to defend more than a few patents at a time. If someone infringes your patent, and you don't have a million sitting around to take them to court, then your best (financial) bet is to sell the patent to a patent troll that does. The big companies know this, and so won't have a problem infringing patents owned by small companies - if it becomes a problem then they'll offer to buy the company for less than the value of the patent, knowing that the smaller company doesn't really have a choice. They'll also offer very one-sided cross-licensing agreements (license this one patent to us and we'll let you use 10 of ours. Yes, ours are all likely invalid, but it would cost you more than you can afford to get them invalidated in court...).

Re:Of course it protects the small investor

[twebb72]

On the other hand, if you saw something you thought could be improved and worked on it in your own time, that is yours.

Until you realize that the court fees will bankrupt you because you're being sued by McDonald's. I think this thread has totally lost the spirit of the article.
If you patented an invention that was remotely related to McDonald's, while on the clock or off the clock, while being employed by them or not; you LOSE in court. Period.

Re:Of course it protects the small investor

[Hognoxious]

Perhaps you should google "England is not the USA", "repealed", and "Law Reform (Enforcement of Contracts) Act 1954", fatty?

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.

Re:Of course it protects the small investor

[Jane Q. Public]

"If you patented an invention that was remotely related to McDonald's, while on the clock or off the clock, while being employed by them or not; you LOSE in court. Period."

Not so. And if fact that's a pretty bad attitude.

Example: you know that "burp tank" in your car? The one that catches the spillover when your radiator gets hot, then allows the cooling system to suck it back when it cools off?

The guy who invented (and patented) it took it to every major automobile in the WORLD (at the time): General Motors, Chrysler, Ford, BMW, Daimler (that was before the Chrysler merger), Toyota, Honda, etc. They all turned him down. Yet... the next model year, guess what? Amazingly, they ALL had burp tanks.

I saw him interviewed on TV. At the time of the interview he had sued 7 of those companies, and gotten a settlement every time, averaging $1,000,000 each. After his lawyer was paid. He said he had 12 more companies on his list.

Yes, it is possible to fight the big boys and win in patent court. Sure, the guy was getting settlements, not judgments, but that's only because the big auto companies KNEW they would either lose, or spend more money that it was worse defending themselves.

Re:Of course it protects the small investor

[Rogerborg]

The purpose of patents is to encourage and enable inventors to invent. If they have to spend all of their time and money dealing with lawyers and accountants and marketeers, then the system is broken.

Re:Of course it protects the small investor

[MobyDobie]

I would be amazed if winding something up to charge a battery were patentable. The article is, i believe, misleading. He invented a specific device, not the idea of using wind-up to power electrical devices. Winding things to make electricity is a pretty standard technique, as is using a rechargeable battery. People have been doing both for many years. I would be amazed if this combination had not been done before many times, and would not be obvious (and therefore unpatentable) even if it had not. The reason he probably got a narrow patent (wind-up + radio) is that is all he could get or was entitled to. He is. Not entitled to wind-up to charge a battery (which in turn might be connected to anything including a radio), nor wind-up to do anything else that involves electricity. What he seems to be doing is now claiming his narrow patent should allow him to control a much broader range of devices, including unpatentable ones. He is the troll here, much like software patent trolls who invent some specific imaging technique, and then claim it allows them to control all images on the Internet or whatever.

NO

[Anonymous Coward]

They can't afford a lawyer.

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

[rudy_wayne]

I'll be the first to admit that the entire patent system is a horrible mess that is now doing more harm than good. But this story is about something entirely different.

Out of 250 claimed "inventions", which include such nonsense as a "self-weighing briefcase", he invented one item, 20 years ago, which took off and sold fairly well, but has now been replaced by newer technology. Apparently he seems to think that he should be able to live forever on the royalties from that single 20 year old patent.

Re:Wrong Premise, Approach from a Different Angle

[Anonymous Coward]

Not quite. His invention was storing the energy from the wind up in an efficient spring design. It was not the wind-up part itself. The manufacturer changed it to a battery system and cut him out. That is it. Even under his proposed solutions, which include a novelty requirement and much longer terms to patents, he wouldn't be covered. This is because his improvement was from cruddy batteries to a clockwork type spring system; their improvement was from clockwork type spring system to modern batteries. So, for him to win, you need to argue that the switch from battery to spring was a novel change, such that it is a completely different product, but the change from spring back to battery was not, such that it is a completely different product. I don't see how a rational person could say that one is and the other isn't.

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.

I can't be the only one who googled

[doctor woot]

Eel Pie Island to make sure it was a real place and not some shit Apple Maps invented.

Re:I can't be the only one who googled

[anagama]

FYI, akin to bathtub girl. Click only if you wish to be grossed out.

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.

Short answer.

[Anonymous Coward]

No.

I'm not trying to be sarcastic, but under current U.S. law, it's nearly financially prohibitive to defend against a claim.
At this first to file is utter nonsense, too. Very bad. Let's throw out prior art.

Not entirely related, but in the early 80's I was acquainted with author. He was approached by Disney to turn one of his
books into a movie - paid him cash-money up front, too. Well, he's thinking 1-2 years... Still haven't seen the movie.
There are companies stockpiling ideas out there like Real Estate - except'n they really ain't real. That's were the
current suite of laws have led us - to this incredible stagnation. Oh, it'll take some time before the wheels finally grind
to a halt, but they will....

CAPTCHA = locust - there's never just one...

Re:Short answer.

[ridgecritter]

AC is correct. First to file vs. first to invent has nothing to do with prior art. A big provision of the America Invents Act takes effect on March 16, when US patent law changes its primary priority criterion from FTI to FTF. In anticipation of which I'm spending nights and weekends until then getting our company's invention backlog filed so somebody doesn't beat us to an invention by filing an application at 00:01am March 16.

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.

Re:Tax net liquid value of assets not activity

[the eric conspiracy]

You do know that patent fees are on a sliding scale depending on the size of the patenting entity?

http://www.uspto.gov/web/offices/ac/qs/ope/fee100512.htm#maintain

What kills the independents are the legal costs. They are generally 3 orders of magnitude larger.

Patents are not a license to print money

[Grond]

A patent is not a substitute for a viable business model. One cannot simply receive a patent and wait for the money to roll in, especially not as technology changes around you, quite often in order to work around your patent.

In this case, in 1991 Baylis invented a generator that was based on storing energy in a spring, then using a system of gears to release that energy steadily to power various devices such as a radio. But by 1995 wind-up radios were on their way out and by 2000 they had been entirely replaced by battery-based radios. His invention was a flash in the pan.

So Baylis had a nice idea, made some decent money off of it, but failed to turn that into a sustainable career. Now he wants the entire UK patent system modified in order to rescue him from his misfortune.

Patents == Waste

[Murdoch5]

A Patent doesn't protect an inventor, it protects the idea! If the inventor can't sell, market or project his idea then it's not the systems fault they go broke. Blaming the patent for not working doesn't give the inventors a sense of business. inventors can't just be tech guys, they need to also be buisness guys

he failed, not the laws

[um... Lucas]

He said it himself:

"“I was very foolish. I didn’t protect my product properly and allowed other people to take my product away."

He was foolish. Enough said. If you don't take advantage of the laws and protections that you're afforded, and then you get screwed, it's not a failing of the laws, it's a failing of the inventor.

Hard to enforce a patent under $100 million

[Animats]

Speaking as an inventor with six patents, it's hard to enforce a patent until you have $100 million in infringing activity. In practice, almost everybody who gets a royalty deal gets about 5%, +- 2%. (There's a whole theory of IP valuation, but it's not taken very seriously.) So 5% of $100 million is $5 million. Expect legal fees of about $2 million. So you make about $3 million, best case. It's fully taxable, so you get to keep about $2 million. The odds of winning a patent case are about 30%-40%, So the expectation is about $700K on $100,000,000 in infringement.

I've licensed two patents. One I swapped for stock in a startup, and that came out very well. There I wrote one of the startup's products. A straight licensing deal on another made me about $400K after taxes; that was partly about getting my product off the market so it didn't compete with theirs. I'm working on licensing the other patents.

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.

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

[darkmeridian]

This is absolutely not true, and I'm a pretty cynical guy. Law has not been a civil profession in quite some time; it's now a business. Law firms have the incentive of winning at all costs because that's how they get future business. There are no expensive lunches between opposing counsel. Rather, there are very expensive and nasty letters going back and forth about how the other guy's client is the most evil guy in the entire planet, and their claims are completely frivolous, how they're going to get stomped on if this goes to court, but for the low low price of $XX you can avoid the litigation, etc. Lawyers love to cover their asses, and they want to show their clients what complete badasses/assholes they are to the other side.

In your fantasy scenario, the patent owner gets an injunction. Do you know how big a deal that is? Once that happens, the evil corporation's business is dead in the water. Right away. Do not pass go. Also, don't you think that evil corp's clients wouldn't realize that they can buy it from the patent owner because they can't buy it from evil corp anymore?

And if you file chapter 7, you lose all the ridiculous profits that the infringing products made; you can't just take the profits, stick it into your pockets, then claim you're judgment proof as a company; that's a fraudulent transfer. The products also require assets (factories, etc) to manufacture. All that shit doesn't just go away. The bankruptcy court will absolutely take into account the current litigation between the parties, and the Trustee, who is appointed by the court and takes a percentage of the money he recovers for the creditors will absolutely hunt down every single penny because he likes money. He also hires his own law firm as counsel when unwinding all the crazy transactions, so he wins twice, but that's a scam for another day.

But if evil corp wants to import the products, you can get the court to enjoin that company as well, and believe me, courts absolutely hate it when you try to play shell games to avoid a court order. Judges have egos and they're not going to let the CEO just get away with it.

So all in all, your fantasy scenario is completely impossible and not indicative of any case that has ever happened. But hey, since when has the truth mattered?

Hero

[Anonymous Coward]

Trevor Bayliss is considered something of a British hero for his inventions. He gets wheeled out on TV whenever they want to portray the classic eccentric British inventor (and whenever James Dyson is too busy). The fact that he's broke will surprise a lot of people.

But to be honest, he shouldn't be this position -- he has sufficient public image that he ought to be able to make a living on the public speaking circuits. Okay, so he wouldn't get the kind of money from it that Tony Blair is raking in, but he ought to be able to keep the wolves from the door. (for 'wolves', read 'estate agents')

Re:My family's Experience

[Anonymous Coward]

May sound fake but I guarantee it is REAL.

My Great Uncle ended up living on Social Security. His process involved using "soaps"

To his credit ~Was THE FIRST HUMAN to scientifically discover the toxicity of plutonium. He was the lab guy, on the Manhattan project who fed Plutonium to lab rats on the order of a few parts per billion. The next day the lab rats were dead, so he then fed the dead rats to the beetles, as they would leave they bones intact so they can study how much of the heavy metal reached to bones. The Following day the beetles were dead. and he was quickly shuffled off to another lab there in Rochester.

Oh here are some of his later patent #'s 4679627 , 4648449, before he retired. at least 2 of them. He even was THE person who created teh oil eating bacteria, How? he used a high potency UV light to scramble bacteria DNA, and observed the effects. He was the first person to deliberately alter the DNA for scientific purposes and file a patent

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.

Sob story, but ultimately lacking.

[SuricouRaven]

Condense the human interest story down, and what you have isn't entirely surprising: It's the story of an inventor who has decent enough technical skills to invent, but not the business skill to successfully profit from his invention. He has a patent, yes - but the patent does him no good because it is narrow enough that an alternative technology came along.

I'm sure I'm legally simplifying the issue, but as best I can see his patent is for a mechanism that uses human power to wind up a clockwork mechanism to drive a compact dynamo. When batteries got more practical and cheaper, the 'clockwork' part was no longer needed. Now, if he were a businessman he would have made the patent as over-broad as he could and patented 'a mechanism for generating electrical energy from human input' or something like that, along with 'human powered radio,' 'human powered torch,' 'human powered general purpose charger' and so on.

People here might start looking for some middle ground: A way to legislate patents broad enough to protect lone inventors, but not so broad as to be useable. But this middle ground doesn't always exist. It doesn't in this case, because what he invented isn't really that great. All he did was take a hand-wound clockwork mechanism (Older than steam!) and connect it to a little dynamo (If Faraday patented that, it's expired). It doesn't exist in the more general case because, outside of some highly specialised areas*, most 'inventions' can be easily re-implemented using alternative designs - and the only way to stop that happening is to allow patents so broad they don't cover technology, but concepts. Putting us back in troll-friendly territory where we are today.

The problem isn't in the implimentation of patents. It's in the concept. It just doesn't work very well. A fundamentally flawed idea. Perhaps we need to get over this idea that the 'lone inventor' has a right to benefit from their work. It sounds great to our sense of fairness, but what it really comes down do is an exclusive right: There's a social cost to making patents half-way effective, and the innovation that results from giving inventors a financial incentive can be very easily outweighed by the innovation lost when small or medium entities are unable to enter the field at all because some sharp businessman realized he can file patents on things broad enough that they are impossible not to infringe** or trivial and numerous enough that they can be used to wage a financial war of attrition against any competitors***.

*Where the implementation is the invention, such as in drugs... and even then, a rival could probably find a similar molecule that shares the same or close-enough functional area.

**One of the ones in the h264 pool describes the concept of a program that accepts video input and outputs the video in encoded form. Not any internal implementation, or even clever maths. They patented the very idea of an encoder. It could probably be invalidated by prior art, but that's the point of a patent pool: There are so many, no-one could afford to fight them all.

*** Rounded corners, swipe to unlock.

It's far past when I should be sleeping on a normal night, and I was up until 5am last night playing Re-Volt with friends. I'm probably going to look over this rambling tomorrow and be unable to figure out what I was trying to say.

I emailed Freeplay about this...

[IoQuaTiX]

It is simply not true that Trevor’s Intellectual property was ripped off or copied in any way, by Freeplay or anybody else.

* Trevor conceived the idea of a mechanically powered radio.
* Trevor formed, and was a shareholder in, a company called Baylis Generators limited.
* This company registered a patent covering Trevor’s concept of a “clockwork” radio.
* The company Baygen, later called Freeplay, was founded to develop, make and distribute the radio in 1994/5 in Cape Town South Africa.
* Baygen/Freeplay paid a royalty to Trevor’s company for the use of the patent.
* Freeplay made radios covered by Trevor’s patent until about 2000.
* In addition to receiving a royalty, Trevor received a consulting fee from Freeplay.
* Technology moved on and the spring based clockwork radio became out-dated. The new technology was to recharge a battery via a generator. A large number of Chinese manufacturers ( we are talking about 100 + different companies) entered the market and “wind-up” products using this simple method proliferated. Trevor’s patent became out-dated, and the whole market was flooded by these cheap Chinese products. These in no way contravened Trevor’s patent, or any of Freeplay’s efforts at technology development. It was a free-for-all, with new ideas, and the competition was heavy.
* Trevor sold his shares in the company that held the original patent, and this company was eventually absorbed into Freeplay.
* Trevor moved on to found another company Trevor Baylis Brands plc. Trevor sourced many different products from China, and branded them under his own name. He marketed them on his own website and through other channels. Trevor refers to this range of products in his marketing material as “Next Generation”, and Trevor became an enthusiastic, independent player in the next generation of “wind-up” products, actively endorsing the next generations’ virtues and improvements.
* Freeplay continued to develop technology, and focussed on innovation and quality products. It maintains its reputation for integrity, quality and as the premium brand in the sector.

Re:Patent trolling should become a crime

[TFAFalcon]

Any fee that could deter a patent troll would also make it impossible for small inventors to ever file a patent.