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Ask Slashdot: When Is Patent License Trading Not Trolling?
LeadSongDog writes "A piece in yesterday's Forbes offers arguments on why not all 'Non-Practicing Entities' are 'Patent Trolls.' Comments here on such businesses are often critical. Is there a right way to trade in patents for profit without abusing the process?"
From the article: "The Founders’ decision to foster non-practicing entities and patent licensing proved crucial to America’s rapid technological progress and economic growth. Patent records from the nineteenth century reveal that more than two-thirds of all the great inventors of the Industrial Revolution, including Thomas Edison and Elias Howe, were non-practicing entities who focused on invention and licensed some or all of their patents to others to develop into new products."
I'm of the opinion that if you didn't create it, and your entity exists to do nothing than extort people for royalties on your patent ... you are a patent troll.
Lost at C:>. Found at C.
okay we have 3 different groups to deal with
1 inventor type that don't market anything (they invent and then sell to a Maker)
2 Makers that have on staff inventor types (they make stuff "with our patented..."
3 Leech types that just beg, borrow , steal and Buy patents (Holding Corps that only send bills around)
Trolls are type 3 not type 1
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He made his students' research into actual working inventions. That's what patents are supposed to cover - the working form, with all of the show-stopping problems worked out enough to have a functional device. Pure research isn't patentable, because without an application it just adds to the pile of useless facts about the world.
You do not have a moral or legal right to do absolutely anything you want.
More of less the article says that NPEs encourage innovation by allowing people to sell patents. Everyone agrees that patent trolls/ NPE by being willing to buy patents help to make having a portfolio of patents a valuable asset. That's not a point in question. The point in question is whether the damage NPEs cause exceeds the benefits of their funding since the money for those buys comes from lawsuits. And Forbes doesn't even attempt to answer that question. Lots of terrible things often have some side advantages that don't come close to covering the downside of the terrible thing.
The problem is junk patents.
Imagine you invent a device that pulls water out of the air for free (unlike anything cold, which will do it for $$$). Anywhere. Even in a desert. This is a great innovation. I have zero problem with you selling your patent to someone else. The problem I have is that right after you invent this, a horde of lawyers will storm the patent office and patent things like drinking water that came from your device. Watering a lawn with water that came from your device. Making beer with water that came from your device.
The problem is the ridiculous deluge of patents for trivial and obvious things. They litter the business landscape and make it impossible to solve any real problem without tripping over them as you solve 100 trivial problems in obvious ways along the way. Cuz you know, who ever would have thought that the optimal number of clicks to buy something in would be 1? That must have taken a talented team of web developer (singular) literally hours to do.
How exactly is Edison a bad example of how the patent process works? Whether we agree with his methods on farming work out and paying employees to invent things for him, we must recognize the fact that through this system he used that he both made money, and benefited mankind through his shops and his laboratories where his employees advanced human knowledge.
And isn't that the point to the patent system?
To advance our technology and to advance those who invent? The people all along had an option to not work for Edison and strike out on their own, but they chose to stay in the laboratory. That was their choice, and I would argue therefore that the process worked great back than. As for today, that is a different topic of conversation because things are slightly different today than they were in Edison's time.
Until 1880 this was not a problem.
Up until that point, there was a requirement of production of a working model, also known as a Reduction To Practice. After 1880, you could patent whatever, and get away with never having produced anything other than the speculation that your idea might be reduced to practice using some future engineering or technical ability which did not exist at the date of filing.
One common alternative method of patent reform is to bring back this requirement, and to place the model in escrow. In the limit, this permits future study of the model, whether it be hardware, or a process patent for software. This would incidentally remove patent protection from soft processes, such as business model process patents, which people tend to find very objectionable as abuses of the patent system.
In theory what a NPE does is actually quite admirable. You're an inventor and you invented something and you have a patent and big companies rip you off. They know you can't afford to fight them so they just do what they want. So you sell your patent to someone like Intellectual Ventures who goes after the big companies for you. Now no one can make your widget bolt without paying you, as it should be.
And look what's happened - even giant companies are scared shitless to defend against patent lawsuits. In that respect, the idea worked.
In practice though what happens is minute, even trivial things get patented and NPE's go looking for people to sue, using a byzantine series of shell companies and borderline gaming of the legal system. Whereas the inventor of the widget bolt has to make the exact specifications of how his bolt works open to the public (who could also just figure it out by looking at it) software companies don't have to make the source code of their patented inventions available to anyone.
NPE's to me are like the NRA or PETA - organizations/concepts which started out with noble intentions (responsible gun ownership, don't torture animals) and just strayed way off the mark.
Schnapple
It lists Qualcomm as an NPE!?!?! WTF!?! I guess it's because they don't FAB the chips themselves.
Qualcomm sells chips THEY DESIGN using their IP, they just CONTRACT OUT the device to others to build. How is that NOT an Practicing Entity?!? They also license out their patents for worldwide standards (WCDMA) that they may not have any part in the manufacture of the devices that use that standard.
So by the Authors' definition of NPE, Apple is also an NPE because they contract the assembly of their I-devices to other companies and don't actually FAB their A7 processors?
Meh.
"How much would we have to pay 'the Patent Holder' for licensing of their shitty little patent?" ...
"$50 million a year, sir."
"What's contract killers going for on Silk Road?"
"$15k/head"
"How many patent holders?"
"Six are listed."
"let's save ourselves over $49 million bucks. Fire up Tor."
If you were me, you'd be good lookin'. - six string samurai
This is what some media commentators ignore when they try to tar all non-practicing entities with the same brush as abusive patent trolls.
NPEs (non-practicing entities) are people who don't manufacture products based on their patents, they just license the patents. Patent trolls are a subset of NPEs who abuse the patent system by blackmailing the public and companies with obvious, non-innovative and/or overly broad patents. The point being, not all NPEs and their patents are evil.
Yeah, Edison profited off the research of his students, and everyone around him......a bad example to be used if they want to prove patents are useful.
And an even worse example if you want to show that NPEs are useful today. That fact that independent inventors were useful a century ago is irrelevant. They play very little role in modern innovation. Many companies refuse to even talk to independent inventors, because knowledge of their patents can expose the company to liability. What most NPEs do is sit on the patent and wait for someone to independently come up with the same innovation, and then demand payment. They are just parasites.
they just license the patents.
You make it sound like they hire a salesperson to go around and market their patent to potential customers. Or maybe you think the customers search for useful patents to license and then contact the inventor. Neither of these scenarios is common. What is common, is for the NPE to just sit on the patent, wait for someone to independently come up with the same innovation, and then demand payment. This is not contributing anything positive to the process.
What most NPEs do is sit on the patent and wait for someone to independently come up with the same innovation, and then demand payment. They are just parasites.
Exactly the problem. We need to consider whether patents really encourage innovation, or whether the state of the art is more of an inevitable progression. As a thought experiment, it's easy to look at Einstein and think that maybe the world would be very different without him. But the alternate view - and the one that seems more likely - is that someone else would have discovered special relativity... that he simply came to the natural conclusion that many others working on the same problem would when presented with the same facts.
Some patents probably do deserve to exist. There are probably drugs that would never have been developed without a patent. Not because the science is novel, but because so much money was required to develop it. But a thought experiment costs nothing - an idea by itself is usually worthless. A guy could come up with an idea for a clever gear arrangement that will save 1% of the energy that goes into a drive-train. But until he actually builds and demonstrates the idea, it is not worth anything. We need to refocus patents on the doers and less on the thinkers. When people actually making something can't progress the state of the art because someone else had an idea, we have a problem.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Patents slowing down progress by discouraging use and hindering competitors is not new, but has been going on since the beginning of the patent system. The beginning chapter of Against Intellectual Monopoly details the case of the steam engine, where progress in efficiency and adoption of the steam engine was effectively halted for the duration of Watt's patents, only to take off right after they expired.
Once Watt’s patents were secured and production started, a substantial portion of his energy was devoted to fending off rival inventors. In 1782, Watt secured an additional patent, made “necessary in consequence of ... having been so unfairly anticipated, by [Matthew] Wasborough in the crank motion.” More dramatically, in the 1790s, when the superior Hornblower engine was put into production, Boulton and Watt went after him with the full force of the legal system. During the period of Watt’s patents the U.K. added about 750 horsepower of steam engines per year. In the thirty years following Watt’s patents, additional horsepower was added at a rate of more than 4,000 per year. Moreover, the fuel efficiency of steam engines changed little during the period of Watt’s patent; while between 1810 and 1835 it is estimated to have increased by a factor of five. After the expiration of Watt’s patents, not only was there an explosion in the production and efficiency of engines, but steam power came into its own as the driving force of the industrial revolution. Over a thirty year period steam engines were modified and improved as crucial innovations such as the steam train, the steamboat and the steam jenny came into wide usage. The key innovation was the high-pressure steam engine – development of which had been blocked by Watt’s strategic use of his patent.
The above is just a short section, they go through the case very thoroughly (with references), and it is worth a read. Interestingly, the steam engine is often quoted by patent proponents as an example of patents working like they are supposed to.
The next step to turning a "licensing organization" into a legitimate business is to have it advertise its portfolio, in a market analogous to Programmer's Paradise, rather than remain silent until ambushing real businesses with threatened litigation.
Imagine if you got ads instead of C&D letters! "We hear you're working on nails for building houses in hurricane-prone areas. We can save you tons of expensive R&D and get you to market quicker if you license our patent that documents the measurements and manufacturing process for Hurriquake® nails."
Patents were useful in a time where the written word was expensive to produce in quantity and ideas could easily be lost. This is just not the case anymore. Our population alone has put us into the million monkeys on typewriter range.
Cheap storage VM.
Edison is known to have attempted to use the power of his patents to suppress behavior he didn't like making him possibly the earliest known troll. That's why the movie industry cranked up in Hollywood CA; it was far enough from Edison to avoid enforcement of his patents on motion picture cameras/projectors.
we must recognize the fact that through this system he used that he both made money, and benefited mankind through his shops and his laboratories where his employees advanced human knowledge.
Why must we recognize that? Do you have evidence to suggest that he wouldn't have made a similar or greater amount of money in a system with no patents? As far as I know, no such evidence exists; if we required proof that a policy is effective before we could implement it, patent/copyright laws would be long gone by now.
Da derp dee derp da teedly derpee derpee dum. Rated PG-13.