FTC Chairwoman Speaks On Growing US Patent Problem

ectoman writes "In a recent policy speech, Federal Trade Commission Chairwoman Edith Ramirez indicated that the FTC might be preparing to seriously address patent abuse in the United States. Mark Bohannon, Vice President of Corporate Affairs and Global Public Policy at Red Hat, has reviewed Ramirez's remarks, calling them 'some of the most direct and specific to date from a senior U.S. Government official regarding "harmful PAE [patent assertion entities] activities."' Bohannon writes that the FTC's proposed roadmap for patent reform 'is both ambitious and doable,' and he discusses how the agency could make its potential contributions to reforms most effective. The piece arrives one week after Bohannon analyzed other patent reform efforts currently ongoing in Washington—in a piece Slashdot readers have been discussing."

Comments

Patents cause progress stoppage

[Anonymous Coward]

Patents are more and more being used as weapons to stop any and all progress of any derivative idea that results from the base idea being patented. The system has been corrupted to stop many inventions that could save lives, and overall better happiness of mankind for the sake of the patent holders keeping their money-making works owned by their masters... FOREVER.

How can the patent process be used to give influence to create new ideas, works. There is none! no new antibiotics, no cures for illnesses, no new chemicals no nothing as long as the patent process is corrupted the way it is!

Case .. Mickey mouse... Q. E D

Re: Patents cause progress stoppage

[electrofelix]

Not completely.

One of the abuses with patents is the continuous application for patents on the same area with minor adjustments on previous patents in order to essentially prevent the original invention patented from being free from patents once the initial one has expired.

It's certainly more limited in scope because they can't just wait until the initial patent is almost expired, but it is a problem that could easily be solved if examiners were willing to say that minor alterations do not a new invention make.

Re: Patents cause progress stoppage

[Camael]

No, parent post has a point.

Let me illustrate this with actual examples where patent trolls sued small businesses for using a modern office scanner to scan documents to e-mail.

The Project Paperless via AdzPro letter-writing campaign is a kind of lowest-common-denominator patent demand. Patent-licensing companies are going after the users of everyday technology rather than their traditional targets, the tech companies that actually make technology. Smaller and smaller companies are being targeted. ...Project Paperless and its progeny don’t have any interest in going after the Canons and the Xeroxes of the world. After all, they have patent lawyers on payroll already and are in a far better position to push back. Project Paperless' spawn—AdzPro, AllLed, GosNel, and the others listed above—exemplify the new strategy. They send out vast quantities of letters, mainly to businesses that never could have imagined they’d be involved in any kind of patent dispute. They send them from anonymous and ever-changing shell companies. And at the end of the day, they either file only a few lawsuits—as Project Paperless did—or none at all, which has been the AdzPro strategy thus far.

“Going after the end users may ultimately be more lucrative for them,” said one patent litigator at a technology company that's closely monitoring the AdzPro situation. “If they extract a small amount from each possible end user, the total amount might well end up being a much larger sum than they could ever get from the manufacturers. The ultimate pot of gold could end up being much bigger."

Or other cases where frivolous suits were filed against small businesses for the use of technologies like WIFI .

In typical patent troll style, these shell companies (with names like AdzPro, FanPar, and HunLos) are asking businesses and users for a few thousand dollars—far less than what litigation would cost—as a licensing fee for using this basic technology. Unwilling or unable to lawyer up, most choose the more convenient route of settling ...
Over the past few years, we saw Lodsys threaten and sue a number of app developers for using technologies provided that companies like Apple and Google require their app developers to use. More recently, a patent troll called Innovatio has been suing restaurants, hotels, and companies for using WiFi. Yes, that’s right. WiFi.

My point is twofold: 1) Patents are being abused by patent trolls, who do not create, nor provide any incentive to creators and 2) Patent abuse is spreading to cause great distress to the general public. I'm sure that some of these businesses, when threatened, would opt to forgo the use of technologies such as scanners, WIFI etc. Scaring people off with frivolous lawsuits from using technology that could improve their performance, efficiency, efficacy or make their lives better is blocking progress.

Re:Patents cause progress stoppage

[Anonymous Coward]

Mickey Mouse is protected by copyright, not patent.

Copyright relates to works regarding mostly publication and display.
Trademarks relate to logos, names, slogans, and such.
Patents relate to inventions. You make a good point, but your example is inadequate.

Re:Patents cause progress stoppage

[AK Marc]

All 3 are IP, all 3 are broken (though to differing degrees).

Re:Patents cause progress stoppage

[t4ng*]

The music industry is a good example of that. With a single song you have a copyright for the owner of the musical score and a copyright for the owner of the lyrics (not necessarily the creators of the music and lyrics or the same owner for both). If anyone performs the song, you would need to pay a license fee to the owners for 75 years beyond the death of the author in some cases (often the owner had nothing to do with creating the music and none of the licensing fees go to the real artists or their families).

Next, you have a phonogram copyright on recordings of a performance (donated by a circle with a letter P inside it). This is the one that can go on forever. Record companies can release new copies of old music just before the old recording's copyright expires. The license fees to the owner of the song were already paid for the original performance, and since they are just re-releasing the same performance they don't have to pay another license fee. But they can claim a new extension to the phonogram copyright.

So, say you digitize a record whose copyright has expired and give it away for free on the internet. Record companies can muddy the waters enough to claim you just copied one of their re-releases instead of a public domain record. You are guilty until you can prove yourself innocent.

On the other hand, record collectors would say that without this behavior, old public domain recordings would be lost forever.

Re:Patents cause progress stoppage

[AK Marc]

http://en.wikipedia.org/wiki/Leo_Stoller for one.

Re:Patents cause progress stoppage

[AK Marc]

How about Nissan.com?

That you took the fact it took hundreds of cases and decades before he was prosecuted for bankruptcy fraud doesn't mean the system works. He won plenty before he started losing. He was just too insane to stop.

Re:Patents, not trolls, the problem

[Tough Love]

Patents and scumbags are both problems.

Good Start

[amiga3D]

Getting rid of software patents would go a long way towards correcting the problem. That's where the biggest abuse is.

Focus should be on the granting of patents

[Camael]

If you read her policy speech, her focus is on the need to rein in "Patent Assertion Entities" ("PAE"), defined as "a firm with a business model focused primarily on purchasing and asserting patents". And she talks about solutions such as making it easier/cheaper to defend against frivolous lawsuits etc.

She does not appear to address, or even acknowledge the key underlying problem with the patent system, namely that right now it is too easy to file for and obtain frivolous, undeserving, non-novel or obvious patents. All the powers the patent trolls have stem from the patents they are granted. Cut down on the number of patents issued and you cut down on the abuse that follows.

This will not only cut out the PAEs, but also lessen the ability of legitimate companies to kill off their competition by abusing their patents, such as when Samsung/Apple/HTC/Huawei/Motorola try to block the importation/sale of each other's products on the basis of patents.

Re:Focus should be on the granting of patents

[Anonymous Coward]

From TFA:

IV. PAE Harm is a Symptom of a Larger Problem

But Commission activity should be just one piece of a broader response. Flaws in the patent system are likely fueling much of the real costs associated with PAE activities. PAEs are good at monetizing patents. But effective monetization of low quality patents imposes a de facto tax on productive economic activity with little or no offsetting benefit for consumers

Re:Focus should be on the granting of patents

[ackthpt]

From TFA:

IV. PAE Harm is a Symptom of a Larger Problem

But Commission activity should be just one piece of a broader response. Flaws in the patent system are likely fueling much of the real costs associated with PAE activities. PAEs are good at monetizing patents. But effective monetization of low quality patents imposes a de facto tax on productive economic activity with little or no offsetting benefit for consumers

Expecting that parliament of whores, the US House, to pass anything meaningful while they wring their hands over how it might reduce their campaign warchests by $1 million, or less, is like believing the Tooth Faerie exists.

Re:don't throw the baby out with the bathwater

[AK Marc]

And the no-patent system worked fine for the thousands of years before patent was invented.

patents are not just being abused by trolls

[litehacksaur111]

Compaines are filing patents and then forming subsidiaries in tax haven countires. The companies licence the patent to the subsidiary and book all the profits in that low tax country. The companies then just show operating losses in the US.

Re:Let me guess - you dont understand software

[mjwx]

Software is almost entirely a mathematical construct. We dont allow patenting mathematical constructs because they are far too logical and replicable. Anyone looking to do the same thing will logically take the same path with no knowledge of any prior art.

So you dont understand patents, software or more likely, both.

Patents are meant to encourage innovation by providing a limited monopoly. The key words in there are "encourage" and "limited". Patents are not meant to provide a means of extorting other businesses nor are they meant to last for ever. The price of the limited monopoly is that the patent passes into the public domain after a set number of years. Patents are also required to be unique, code is too easily replicated by someone with no knowledge of the patented code to meet this requirement.

Then at we'd be back to enjoying the benefits of the system that worked rather well for hundreds of years.

LoL, you also dont know your history.

Patent systems are radically different to the systems you claim "worked" and we haven't had the same system for 100's of years. The current iteration started around 50 years ago with most of the abusive changes added in the last 20.

think about what you said. progress

[raymorris]

Think about that for a second. You want to trade the pace of progress in the sciences and useful arts that we've had for the last 300 years for the rate of progress for two thousand years before that? Really?

Three hundred years ago, 1713, life was much the same as it was in 300 BC. Our quality of life has improved so much more in the last few hundred years than it improved in the thousands of years before. Are you really wanting to go back to the days when everyone just worried about feeding themselves, because there was no hope of changing your life by creating something new that everyone could benefit from?

Granted, there were certain times, in certain places, where people made real progress long ago. Greece, for example, was unusually productive. It was also unusual in that Greece had patents 2,500 years ago, and it had citizens rather than subjects.

Re:think about what you said. progress

[Anonymous Coward]

How much of that progress is really because of the patent system?

Some people think a lot of that progress is because of tea:
http://en.wikipedia.org/wiki/Tea_in_the_United_Kingdom#Industrial_Revolution
Others think it is because of the potato: http://www.smithsonianmag.com/history-archaeology/How-the-Potato-Changed-the-World.html

With the potato more people could stop worrying about feeding themselves. When one farmer can feed more people it means those people can do other things.

Back then patents in the USA were for 14 years. If nowadays the rate of progress is really getting faster and communication & distribution is more efficient I would think patent and copyright terms should be getting shorter and shorter rather than longer.

Re:I patent the letter E be used on online

[mwvdlee]

Haha, I outsmart your IP. Sucks to am you!

Re:Anyone know what happened?

[peragrin]

There is a third point the other commentator missed.

Right now even big companies are spending tens and hundreds of millions of dollars fighting these trolls. Patent Trolling is a multi billion dollar industry.billions that are costing even big companies like microsoft enough money to show up on upper management's radar.