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How Patent Trolls Destroy Innovation
walterbyrd sends this story from Vox:
Everyone agrees that there's been an explosion of patent litigation in recent years, and that lawsuits from non-practicing entities (NPEs) — known to critics as patent trolls — are a major factor. But there's a big debate about whether trolls are creating a drag on innovation — and if so, how big the problem is. A new study (PDF) by researchers at Harvard and the University of Texas provides some insight on this question. Drawing from data on litigation, R&D spending, and patent citations, the researchers find that firms that are forced to pay NPEs (either because they lost a lawsuit or settled out of court) dramatically reduce R&D spending: losing firms spent $211 million less on R&D, on average, than firms that won a lawsuit against a troll. "After losing to NPEs, firms significantly reduce R&D spending — both projects inside the firm and acquiring innovative R&D outside the firm," the authors write. "Our evidence suggests that it really is the NPE litigation event that causes this decrease in innovation."
Fixed that for you.
"Patent trolls" is a propaganda term. It implies that there's a right and wrong way to own patents. In reality it's just that: Owning patents. Patents are a monopoly on ideas. That's the problem.
No. It's not respectable. Everything else you've said after that derives from a false premise.
Or maybe it's a matter of opinion and not a fundamental law of the universe.
systemd is Roko's Basilisk.
you need to fix your history line so it should correctly read, under Bush Jr the economy tanked then Obama got into power. I don't support Obama but I do hate it when people try to re-write history.
...I don't think this is limited to just patent trolls.
Yes, Hollywood, I'm referring to you.
Most things where laws are needed are a matter of opinion. Arguably, laws are merely a way of imposing an opinion on a world which naturally doesn't work that way.
Patents are choking innovation because everyone is afraid to create something that might end up costing them millions in legal fees because some company somewhere already has a monopoly on it.
It's plain CRAZY!
Patents should be removed completely and people should be allowed to create anything and everything they want even if it already exists. I would only punish those that blatantly duplicate/clone someone elses invention without their permission. However, if the invention is too simplistic in nature, which means it's something that cannot be done any other way I would even excuse it.
In all other respects this is what I think of patents
Patents are supposed to protect specific implementations, not vague ideas. If I patent a widget making machine, someone else can build a different machine that makes widgets in a different way and that's fine. Software patents are the equivalent of patenting the idea of a machine that makes widgets.
Patents are not inherently evil. If I get the idea for a new valve design that uses some obscure property of gasoline to make direct injection engines five percent more efficient then I deserve to be rewarded for that. But do I deserve a reward for taking something we already do and adding "via electronic transmission" without even detailing how exactly that transmission would work? Do I deserve a reward for taking the concepts of HTTP redirects and credit card processing and coming up with a redirect to a credit card processing software?
We have a few problems right now that need fundamental changes to how patents work in order to be resolved:
Firstly, there is a flood of patents far too great to allow patent examiners to examine each patent in detail. We can't solve this by adding more examiners; there's no money for that. We can't solve this by allowing an arbitrary backlog; sooner or later we'd get to a point where you'd spend longer for your application to be processed than the patent would last once approved, which would hurt legitimately useful applications. The current solution, just doing less work per patent, just means that more junk patents come through.
Additionally, we don't have enough experts. A patent on "storing a word processor document in a single XML file" (real patent) might not sound obvious to a patent examiner who doesn't have a deep understanding of IT but to an IT professional it's blindingly obvious; after all XML is a universal format and we store all sorts of other documents in XML form already. Still, a patent has been granted for this "innovation", most likely because the patent office can't afford enough IT experts to properly evaluate every IT patent. (Admittedly, the patent is specific enough that one can, with effort, create a non-infringing XML text document format. But it's still obvious.)
Of course it doesn't help that some granted patents are overly generic. Many patents just declare dominion over an idea, sometimes even without providing technical information on how to make the idea actually work. This can be hard to see for the examiner because of the relative dearth of domain experts.
Compounding that is the fact that willful infringement nets harsher punishment. However, if I actually do the research to make sure I don't violate certain patents it becomes reasonable to assume that I know about all relevant patents in the field. If I overlooked some and end up infringing them it becomes difficult to prove that I didn't know about them, costing me more money. Thus, the safest course of action is to never read any patents at all so I can at least claim ignorance. This keeps me open to surprise litigation, of course, and it also perverts the entire point of the patent system: Patents are not there so that someone can control an idea, they are there so that someone provides his idea and technical work to everyone else in exchange for some royalties.
Fixing this mess won't be easy. We need far more experts, more time per patent and fewer patent applications. The former two aren't going to happen because nobody's willing to pay that much money and the latter isn't going to happen as long as obtaining patents is as lucrative as it is today. While I don't think that killing off the entire patent system is the way to go it's easy to see how people come up with the idea.
USE HOT GRITS WITH STATUE OF NATALIE PORTMAN (NAKED AND PETRIFIED)
A good litmus test for patents would then be: If someone is infringing a patent, but has not read the patent, then the patent is probably much too broad or the invention is too simple and obvious. "First to file" vs "first to invent" becomes irrelevant if patents are required to be highly specific.
Nope. Monopoly of ideas is keeping them to yourself. Patents were meant to protect the innovation for a time, before it was made free for all.
Trolls do not produce, they just abuse the system.
What is more important is why the economy tanked. The initial tanking was because Greenspan and the Bush Administration saw no need to pop the housing bubble. The Democrats were surely not going to rock the boat either. The Fed and the Bush Administration went that extra mile by relaxing regulation so everyone and their uncle's dog were able to flip houses. The Fed and the Bush A. were continuing the proud tradition of Clinton and his Republican Congress to allow the investment and the commercial banks to cross each others business lines. And that allowed them to tap into the increasingly open international financial system to unload their hot potatoes.
Obama's main claim to fame is that he saved the banking system from collapsing. And he did, but he was continuing the Bush A. policies of saving the banking system since TARP was started during the waning days of the Bush A. And the banks paid most of that back, so they were only bailed out with what amounted to loans. None of the bankers went to prison because they broke no laws, the politicians had stripped the laws down so that they could do what they wanted.
What Obama then did made matters worse. He refused to cut government spending and he allowed the Bush tax cuts to become more or less permanent...well, Congress did the latter and helped with the former, but Obama never vetoed the extension. This guaranteed government would be underfunded thus increasing the deficit, and that encouraged business to keep their powder dry and not spend into a recovery. Those tax cuts had a sunset provision of 10 years and were passed in an era when there would be "surpluses as far as the eye could see"...which wasn't very far given Bush's policies and fighting two wars.
Overlaying all of that was the economy of things fundamentally shifting to higher automation. So the workforce was blindsided because then they didn't have the skills to put into a new economy that emerged after the meltdown. And business's exports had tanked because when Wall Street exported the hot potatoes, it had the knock on effect of tanking the world's economy so U.S. businesses had less of an export market.
And just to drive the butt plug home, the Republicans in Congress have been tilting at every windmill they could find instead of working with Democrats to fix the structural problems in the economy. This was the product of being enthralled with libertards who claim that if the government got out of people's lives, everything would be rosy....neglecting health care (libertards are always employed and never get sick), the environment (companies are naturally clean (see coal companies for counter examples)), financial regulation (those Wall Street hyena are still there), research and development (apparently, research grows on trees and just happens), etc.
Let's see: companies who copy rather than innovate spend less on R&D. Therefore patent (troll)s are bad.
That's not arguable. You can state it, and preface the statement with "arguably", but that's as far as you can go with that train of thought. It won't stand up to debate. All you can do is give examples of some laws where it's obviously true, but extending that to all laws reaches reductio ad absurdum rather quickly.
R&D is cheaper to steal than create due to high labor costs in America. Why do we still think we have any significant R&D funding? The older companies that have done R&D in the past switched to doing support tasks only, more money, simpler, more dependable cash-flow, as part of a push for globalization which helps to keep the labor costs lower (the added benefit is you need less skilled workers to go that route). Patent trolls are just another nail in the coffin.
Yup, that old /. chestnut; correlation != causation.
Maybe they just "proved" that some firms invest less when they realise they don't know how to do innovation / R&D.
In any serious organisation these days, spending serious money on R&D, there's a multi-layered approach to all this, ranging from building portfolio of defense/attack/trade patents (Google buying Motorola phone division), (or joining a group who does), through researching prior art to finally building a attacking others (think Apple vs. Samsung).
You could say that that's the real "tax on innovation", since it's far more costly than the impact of a few "trolls" (defined as someone who holds a patent for the sole purpose of using it to attack others)
If I get the idea for a new valve design that uses some obscure property of gasoline to make direct injection engines five percent more efficient then I deserve to be rewarded for that
No you don't, and that's not what the patent system is for.
If you get the idea for a new valve design, and then go on to develop the valve in a way suitable for mass production, and then start a business selling those valves, then you deserve not to be undercut by rivals who just copy your design and go straight to market without having first paid the R&D costs. That's all you deserve. You don't automatically deserve for your business to succeed regardless of other commercial factors, and you certainly don't deserve money just for having an idea. Ideas are cheap, it's R&D that costs money.
And that is how the patent system is broken, because it directly rewards ideas and not development effort. The positive outcome of the system is just a side-effect of how the system works. The whole system needs refactoring so that it directly achieves the goals above within an ethical framework that acknowledges the value of straightforward hard work over simple ideas. This would mean that a patent troll with nothing more than an idea can't walk all over a company that had the same idea and then spend $10m developing it into a commercial product.
If I get the idea for a new valve design that uses some obscure property of gasoline to make direct injection engines five percent more efficient then I should pay you for the privilege? No. No, I should not.
Just say no.
Patents are evil. There's no reason that inventors who pay for a little piece of paper 5 minutes before everyone else should receive money from other inventors for the same idea. That's what patent licensing is.
Some overly-broad software patents are like that, but software patents per se are not equivalent to that at all. There are plenty of examples of patented software methods to perform a specific computational task in a specific way, the AV literature is full of them, and you can do things a different way and evade all the patents (e.g. Theora vs MPEG-2).
That is the natural working of our world. People gang up because it works. Then they invent bureaucracy to have gangs bigger than "everybody knows everybody". And "Laws" is one way of streamlining this - instead of "because the chieftain/boss says so."
Why should I start a business when at any time a troll could come by with some vague patent, and sue me? Fuck this country, and fuck the government.
I would assume the parallel research showing that those who end up paying our against non-trolls also reduce spend later having lost a lot of money.
The link is the losing of a patent suit (or having to settle) etc. rather than patent trolls.
The real problem is that the patent system is open to abuse by everyone not merely trolls. It's expensive to be on the receiving end of a patent lawsuit regardless of if you are in the right or wrong. The well known issues with Patents been issued on broad ideas rather than actual inventions etc. Al this leads to the potential to be sued increasing, the costs huge and ends up as a deterrent to innovation.
The original purpose of Patents to create a period of exclusivity to regain the expense of research, tooling (and other capital risks), are good. These don't tend to work well in many areas, software being obvious where the costs are primarily research and in many cases it's pretty debatable as to the genuine cost of that, the capital risks are generally pretty small, not to mention the rapid pace of development making patent terms generally too long. NPE's similarly the primary cost is that of research, they don't take capital risks to bring it to market, why should they then be afforded the protection?
In short NPEs the problem per se, it's the whole patent system which needs a significant overhaul to refocus on it's actual purpose, to reward those willing to take risks on innovation.
> Fixing this mess won't be easy.
Fixing the mess is at least straightforward. Discard software patents. Their legality has always been questionable, for sound technical and legal reasons, and they're one of the greatest drains on the patent office. They also have profound, demonstrable adverse effects on industry and on innovation in practice.
Implementing that legal and policy change will not be easy, I agree.
Well you know all that "repackaging bad loans as if they are tripple-A rated investments instead of high-risk" that the banks did. There's nothing WRONG with high risk investments, many investors seek those out actively, but generally these are not big governments.
The repackaging meant that these investments were sold, under false pretences, to organisations (including governments like Iceland) as highly secure investments to store and grow their money.
How the hell that is not outright fraud and how EVERY bank CEO is NOT in jail is the question of the century. Sorry but when you LIE to people about what your product IS - that's the very DEFINITION of fraud ! Don't tell me "but the government forced them to make those loans" - firstly that's really not as true as you think but more critically NOBODY forced them to then use FRAUD to offset the risk - there are perfectly valid and legal ways they could have done instead.
Now let's imagine for a second that this part never happened. The bubble eventually burst, lots of loans defaulted. The banks end up with a bunch of houses (the security on any mortgage) which they sell and recover a large chunk of their losses - a lot of people who were formerly unable to buy a house gets one on the cheap, the banks perhaps sue the government for making them give loans to easy and maybe win a few bucks back.
What does NOT happen now is that suddenly half of Europe's welfare states who had all be highly profitable welfare states for DECADES are broke because the accounts where they stored all their surplus and emergency funds just fucking disappeared overnight ! They don't suddenly sit with pensions and unemployment and other benefits that their society has PAID for with taxes which they are UNABLE to pay out to the people who have the right to them under their laws.
They don't suddenly find themselves having to make cost-cutting laws that lead to protests in the streets and the rightwing idiots don't get to point to that as proof that "socialist countries always end up broke" - while conveniently forgetting that these countries were, ALL of them, so far in the green on their social spending that they could have covered their benefits for several decades even if they got no tax money in at all - and only had this problem because the place they put all that surplus money turned out to be a fraud committed by American banks.
You don't end up with a Eurozone crisis. You don't have China turning into a mennace 50 times bigger than they were ten years ago.
You probably have a recession but it's a fairly mild one, some job losses followed by rather MORE jobs being regained.
The teabaggers never becomes a significant political force. Michelle Bachman's is allowed to remain an OBSCURE moron. No government shutdown in 2013. No Ted Cruz in Washington. Rick Perry finally manages to get the job he was ACTUALLY destined to do but had twice failed to get due to being overqualified as the village idiot of some small town in South-east Texas. And Obamacare may just have been the single-payer system it SHOULD have been all along.
So why is it, that the thing which made your average run of the mill EVERY congress has one silly economic policy turn into a global motherfucking disaster and which is a very obvious crime under even the bloody mosaic code ... has seen not a single jail sentence, in fact the sole fall-out anybody got was JP Morgan's fine - which we know for a fact was less than HALF what they BUDGETED for fines when they bought Bear Sterns.
Unicode killed the ASCII-art *
Dear Sir:
I apologize for replying 20 minutes late, but I have discovered prior art from ancient Egypt. You can expect Mr. Boundary's counsel to bring this up at trial.
Sincerely,
Damian Yerrick
Owner and Lead Developer, Pin Eight
Unfortunately that wouldn't hold up, everyone would claim they never read it even if they had. We'll need something more solid than that.
3. Lack of a good Non-Patent Protection legal mechanism.
Of course there is. It's called publishing a white paper.
you need to fix your history line so it should correctly read, under Bush Jr the economy tanked then Obama got into power. I don't support Obama but I do hate it when people try to re-write history.
The conspiracies kind of lose their oomph when they have to stick to the truth.
Binders full of kooks.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
I find the idea of someone trying to implement a product based on a vague legalese filled document laughable.
This example gets trumpeted out in every discussion on patents. First of all, I think most of us here are interested in software patents and maybe to a lesser extent patents on electronic or mechanical devices.
Second... WHY does it take so much money to develop a drug. Is it really necessary? Or is this just the result of the system which people in industry and government have created? This is an industry where the customer MUST buy the product. To not do so is to be sick or maybe dead. That hardly gives the companies involved a lot of incentive to save money. Likewise having seen drugs taken off the market which had been helping me with my own issues better than any other just becasue 1 in 300k people had a bad reaction I suspect regulators are doing little to help matters.
I have a friend who is a nurse, he argues adamantly for the drug companies any time this subject comes up. He talks about multii-million dollar lab equipment he has seen during his schooling which are somehow used in drug research. I wonder why any piece of equipment is so expensive. Is it the materials? Our TVs and cellphones are full of rare earth minerals. Is it the labor? Look at all the labor that goes into all sorts of consumer products. I suspect it's the fact that it is only large drug corporations and universities ever buy such equipment. They expect it to be expensive. they only trust expensive equipment. They have deep pockets. Not many companies make such things and the manufacturers know all of this. I am not a part of the health industry and I don't claim to be an expert in these matters. I only have my suspicions and I freely admit I could be wrong. The more I read about DIY biologists and the lab equipment they make however the more I think I might be right.
Sadly, I lived next to a patent troll for a bit (Intellectual Ventures in Palo Alto) and did not pillage and raze their building. I don't have many regrets in my life, but this is one.
Liberty - Security - Laziness - Pick any two.
Some overly-broad software patents are like that, but software patents per se are not equivalent to that at all. There are plenty of examples of patented software methods to perform a specific computational task in a specific way...
There are plenty of examples of overly broad patents protecting their invention of "transmitting data using a series of 1's and 0's..." as well.
Trolls aren't using specific patents protecting ideas. That's what separates legitimate patent complaints from trolls in the first place. Most of them are using vastly broad bullshit encompassing entire concepts that never should have been protected in the first place.
Fixing the mess is at least straightforward. Discard software patents. Their legality has always been questionable, for sound technical and legal reasons, and they're one of the greatest drains on the patent office. They also have profound, demonstrable adverse effects on industry and on innovation in practice.
Is it really? Now suppose that instead of that clever new valve the OP was talking about I invent a whole new concept of fuel injection that also saves 5% of fuel. And I have an implementation, but as software in a standard electronic fuel controller. Do I deserve a patent? If not, why is it fair that the OP gets rewarded for his mechanical invention, and I am not for my software invention?
You guys are putting all the blame on people who are just taking advantage of laws created by elected officials. IMO the original patent winner is the problem or forced to sell because they" Patent Trolls" were the only ones willing to buy there patented whatever. IMO once that patent is sold to a non creator its value should be less how much less I would leave to the so called experts but the value should be at least half. IMO
Jack of all trades,master of none
Even if you ignore prior art from 1982, the Supreme Court of the United States recently decided Alice Corp. v. CLS Bank to strike down treatment of "with a computer" as an inventive step. I'm not a lawyer, but I'd recommend that nonpracticing entities reconsider their business plans in light of the opinion of the Court.
There is a right way and a wrong way to own patents. When a patent troll buys a patent not to collect legitimate licensing fees on the intellectual property or to pursue a legitimate business endeavor, but rather just to sue anyone and everyone they can for damages then that is the wrong way. Just because I can buy some obscure overly broad patent that never should have been granted and use that as leverage to suck money out of legitimate businesses doesn't make it an acceptable business practice. Laziness, resource issues and an overly accommodative relationship with big business on the part of the USPTO have created this mess. It's no surprise that lawyers are happy to help game the system. Now, having masses of bad patents in effect we are stuck because if someone has a patent that is legit on paper and they sue they isn't any way to quickly and cheaply nullify the suit. I hope we find ways to resolve this while still allowing the little guy a fair shot at obtaining patents and defending those held.
You don't automatically deserve for your business to succeed regardless of other commercial factors, and you certainly don't deserve money just for having an idea. Ideas are cheap, it's R&D that costs money.
I never said that I deserve automatic business success. "Reward" and "getting paid" are two different things. I do agree, however, that I expressed myself poorly. Of course the mere idea is not enough to get a patent: At the very least I should supply enough information to make my valve. Still, I shouldn't need to actually produce valves in order to deserve patent protection; after all there are dedicated research entities like CSIRO who do expend significant effort to develop technologies even though they don't develop physical products based on those technologies.
And that is how the patent system is broken, because it directly rewards ideas and not development effort. The positive outcome of the system is just a side-effect of how the system works. The whole system needs refactoring so that it directly achieves the goals above within an ethical framework that acknowledges the value of straightforward hard work over simple ideas. This would mean that a patent troll with nothing more than an idea can't walk all over a company that had the same idea and then spend $10m developing it into a commercial product.
If the non-company actually came up with a working prototype and wrote a patent that explains in detail how to copy it and demonstrably came up with the whole thing first then yes, the non-company deserves the patent. Of course this scenario is utterly unlikely. Still, patents shouldn't be about how much it cost to come up with something; they should be about whether this something advances the state of the art and is described in a precise manner that allows an average worker in the field to reproduce it. If your company spends $10m and mine spends $100k and we independently arrive at the same method of solving a particular problem then your company's claim isn't automatically more valid than mine.
If we could ensure that all granted patents are for things that advance the state of the art in a reproducible manner we'd be much closer to a reasonable system (although there'd still be work left to be done).
USE HOT GRITS WITH STATUE OF NATALIE PORTMAN (NAKED AND PETRIFIED)
There are also the large copyists who rip off innovative startups. See http://qz.com/250346/a-google-... Innovative startups, particularly in the life sciences but also in other industries that require large and long-term investments, need patents. Google doesn't need them, and it's working hard to crush the system. So what happens if Google succeeds? We'd still have government and non-profit (e.g. open source) innovation. Private innovation would still happen in fast-moving fields with first-mover advantages, in fields where trade secrets are effective, and in large enterprises that recoup innovation costs in other areas (Google now, or Bell Labs in the past). That leaves large swathes of technology where innovation by startups goes away because no investor would have any hope of making money. See China's hyper-competitive ripoff culture for a hint of what that would look like.
It seems that we need to stop hating patent trolls, but love them. Eagerly wait, then catch them and love as much as we can, at every corner. There's some inspiring experience, e.g.
http://eugene.kaspersky.com/2013/10/02/the-patent-trolls-can-be-defeated-just-never-give-up/
http://eugene.kaspersky.com/2013/12/12/top-10-tips-for-fighting-patent-trolls/