I fear somebody else with a few hundred $million who might buy their rights
If patents are valuable to own, I don't see anything wrong with buying them and hoping they yield more than you paid for them. We allow this with corporate stock, for example. People can buy low and sell high, profitting even though they did *nothing* on their own to create value. The problem here, if there is one, is not who can enforce a patent but under what circumstances, and for how long. For example, I suspect that Microsoft, IBM, and Apple would be considered "major players" in IP with their many patents. Why is the threat they pose any less?
the government can let somebody sit on something like this for years while other people innovate, and then dive in and claim they own it
The claim to ownership happens when the patent application is filed, long before the patent is granted and often before the value of the invention is known. This is not a secret, nor is the invention itself a secret. All patents, and many applications are available for public inspection.
Finally, I can understand the motivation of waiting to assert your right until you have a chance at a big award. Patent litigation can be very expensive, and you can't afford to just sue everyone who might infringe right away. What alternative do you propose to the current system of announcing your patent publicly and then suing when you think you have a case worth pursuing?
For one thing, when you buy property, you buy it FROM somebody
I didn't intend to imply that the process of inventing was like buying a house. Rather, I meant that the purchase of rights to an existing patent was like buying a house. This may be part of our disconnect. My understanding is that patent owners frequently sell their interest in a patent to someone else. In fact, I have personal knowledge of one such case. In that case, the second party is buying it from someone else. That's what I think NTP has done -- maybe not buying outright, but recieving ownership from the inventors (who probably have better things to do) for the purposes of profiting from it. Again, this is analogous to someone buying a house.
Moving on, I understand your third paragraph to outline a scenario in which a patent holders fail to warn the public about the existence of their patent. I think the two of us can agree that patented inventions are, by definition, public knowledge. You can find almost everything that's ever been patented on-line, or in hard copy. Given that, it seems like you are arguing that patent holders have some additional responsibility to warn the public, outside of telling the U.S. Government, and thus the rest of the world, how to make and use their invention. Can you elaborate on that responsibility?
If we are going to have a patent system, inventors have to be held responsible for making sure their work hasn't already been patented. You may argue that this is a hard and error-prone process, and it is, but it is a responsibility that many inventors over the centuries have accepted.
Next, you argue that "Many patents do *not* 'DISCLOSE something valuable'". I grant that value is hard to judge, so the law has settled on something close: inventions must be novel, useful, and not obvious. Every patent has to meet at least that standard to be issued, on the premise that an idea meeting that standard has a good chance of being valuable to society. Again, this determination is hard to make, but I'm not sure whether you are arguing against that standard, or if you are arguing that the USPTO, etc. aren't doing a good job. Can you elaborate?
So far, discussing public notice and patentability, I don't see how these issues apply any differently to NTP that they would to IBM, which remains the core of my own contention: they should be treated the same.
Your final points do touch on this, when you discuss the NTP business model. I read you to argue that the relative obscurity of the patent is the main source of its value. I think you are right in some cases, but I'll make two points.
First, I'm convinced that patent holding companies prefer to make money from licensing patents, rather than litigating them. However, the only way they can convince the industry that they need a license is to sue for infringement. I am not sure how you could create a system that didn't have this property, or no one would ever license a patent, and IP would be much less valuable. Licensing is a very important scenario when the patent has value, even though no one else developed it independently. I'm convinced there are also cases when inventors knowingly intrude on patented ground, hoping never to be sued or hoping to defeat the suit. This would be another counter-example. And if I was an inventor who suspected competitors of such intrusion, I would feel justified spending some cash to assert my rights against them.
Second, I'll just extend my real estate analogy a little more to cover a case where I find value through obscurity is perfectly acceptable. Suppose I read an obscure article in a journal that implies a house is built on top of a valuable archeological site, and buy it on the cheap, even though I would have paid a much higher price, had the information been more widely known. Would you criticise me the same way you criticise NTP? The information was there, for those alert enough to see it.
Finally, I am still interested to know your answer to the question I posed at the end of my last post. To rephrase: Do you think that NTP should be singled out for sitting on patents, letting IBM, for example, off the hook?
Public property and land is essential for any society to function. It must be the same with intellectual property.
OK. I think I can accept that some IP should be commonly held, without granting that all IP should be commonly held. My brother owns his house. I'm glad he does. Dickens' work is in the public domain. I'm glad it is. The Grand Canyon is Federally owned. Great! The FSF owns the copyright to a lot of open source code. I'm glad it does. Where is the problem here? Individual property should be abolished, or only intellectual property?
From an economic standpoint, for any value to be derived from intellectual property, then there must be a maximum gain in value through the intellectual property system,
I don't understand economics that way. What is a "maximum gain in value"? How do you know the maximum? It seems to me that the IP system is worthwhile if the benefits are worth the costs. Figuring that out seems hard, but might not require a calculation of maximum gain. Maybe you agree?
if ideas build upon ideas then we should not protect ideas
So if the ideas behind the Rubik's Revenge built on ideas in the Rubik's Cube, does that mean that Erno Rubik should be undercut by people making cheap knock-offs? Seems like he deserved a little protection for making such fun toys. Why is building relevant?
You move on to software patents and the GPL; neither of which I thought at issue in this thread, so I'm going to let others take those up if they wish.
So your saying that real estate holding companies are a way to really get an economy going?
I think you are reading that in. I'm just saying that the NTP's of the world are no worse than other companies that invest.
Here is a mental experiment;
Thanks for that. Between those two imaginary countries, I would like to live in the one with the engineers. However, if I could choose instead to stay in this real country, I would, since I don't imagine it filled with Golgafrinchans. It seems to me that creators are often rewarded in this country, and the ability to gain reward from a wide variety of different activities is a good thing, not a bad thing.
Sorry I can't speculate on the tipping point, but I'm late for my grooming...
The issue for me is not whether NTP is adding value. Regardless of that, the patent has value in and of itself because it discloses something valuable. The Wikipedia article on patents talks about this: "... one theory of patent legislation is to induce the inventor to disclose knowledge for the advancement of society in exchange for a limited period of exclusivity." I think some people use the phrase "public notice function" to describe this aspect of a patent's value -- essentially that the commons is enriched by the disclosure of the inventor's knowledge.
Sometimes, the information isn't valuable to anyone, but sometimes it is, and it may retain that value even if the company doesn't do anything with it.
I think the analogy to real estate is still fair. Suppose I buy three houses because I expect them to appreciate in value. I do nothing with them, no improvements, just hold them until they have appreciated in value. I made money just by being right.
Nothing wrong with that.
And that is all this company is doing. Now, we might have a legitimate gripe about *why* patents appreciate in value, and allow these companies to make money, but we should remember that the *why* is the same for everyone, from NTP to IBM to RIM. Anybody can sit on a patent.
I'm sympathetic to your suggestion regarding land grants. I read Wikipedia to describe something similar when it discusses "compulsory licence." My point here is that the NTP's of the world shouldn't be singled out for sitting on patents, the policy should be the same across the board. Wouldn't you agree?
These companies are "real" because they own something of value, and use it to their advantage. Consider a real estate holding company, or an another kind of investment firm. They don't create products, but they are still real businesses, because they make money off the things of value that they own.
Nothing wrong with that.
Some might argue that the patent doesn't have any value if no one implements it, but historically patents are valued because they teach the public how to do things that might otherwise remain secret. From that perspective, building products is not the point.
I think the important question is whether that value is worth the costs of providing it. I don't think the answer to that question depends on what kind of company owns the patent.
I know it may be a stretch to call any Coen Brothers' movie 'underappreciated' but I think that Miller's Crossing doesn't get the appreciation it deserves both among Coen films and among films in general.
It is the most compelling, well-crafted movie I know.
Harry Knowles wrote an appropriately appreciative review.
Slashdot Mirror
which this comment is too small to contain.
A few things:
I fear somebody else with a few hundred $million who might buy their rights
If patents are valuable to own, I don't see anything wrong with buying them and hoping they yield more than you paid for them. We allow this with corporate stock, for example. People can buy low and sell high, profitting even though they did *nothing* on their own to create value. The problem here, if there is one, is not who can enforce a patent but under what circumstances, and for how long. For example, I suspect that Microsoft, IBM, and Apple would be considered "major players" in IP with their many patents. Why is the threat they pose any less?
the government can let somebody sit on something like this for years while other people innovate, and then dive in and claim they own it
The claim to ownership happens when the patent application is filed, long before the patent is granted and often before the value of the invention is known. This is not a secret, nor is the invention itself a secret. All patents, and many applications are available for public inspection. Finally, I can understand the motivation of waiting to assert your right until you have a chance at a big award. Patent litigation can be very expensive, and you can't afford to just sue everyone who might infringe right away. What alternative do you propose to the current system of announcing your patent publicly and then suing when you think you have a case worth pursuing?
Thanks, Walter.
For one thing, when you buy property, you buy it FROM somebody
I didn't intend to imply that the process of inventing was like buying a house. Rather, I meant that the purchase of rights to an existing patent was like buying a house. This may be part of our disconnect. My understanding is that patent owners frequently sell their interest in a patent to someone else. In fact, I have personal knowledge of one such case. In that case, the second party is buying it from someone else. That's what I think NTP has done -- maybe not buying outright, but recieving ownership from the inventors (who probably have better things to do) for the purposes of profiting from it. Again, this is analogous to someone buying a house.
Moving on, I understand your third paragraph to outline a scenario in which a patent holders fail to warn the public about the existence of their patent. I think the two of us can agree that patented inventions are, by definition, public knowledge. You can find almost everything that's ever been patented on-line, or in hard copy. Given that, it seems like you are arguing that patent holders have some additional responsibility to warn the public, outside of telling the U.S. Government, and thus the rest of the world, how to make and use their invention. Can you elaborate on that responsibility?
If we are going to have a patent system, inventors have to be held responsible for making sure their work hasn't already been patented. You may argue that this is a hard and error-prone process, and it is, but it is a responsibility that many inventors over the centuries have accepted.
Next, you argue that "Many patents do *not* 'DISCLOSE something valuable'". I grant that value is hard to judge, so the law has settled on something close: inventions must be novel, useful, and not obvious. Every patent has to meet at least that standard to be issued, on the premise that an idea meeting that standard has a good chance of being valuable to society. Again, this determination is hard to make, but I'm not sure whether you are arguing against that standard, or if you are arguing that the USPTO, etc. aren't doing a good job. Can you elaborate?
So far, discussing public notice and patentability, I don't see how these issues apply any differently to NTP that they would to IBM, which remains the core of my own contention: they should be treated the same.
Your final points do touch on this, when you discuss the NTP business model. I read you to argue that the relative obscurity of the patent is the main source of its value. I think you are right in some cases, but I'll make two points.
First, I'm convinced that patent holding companies prefer to make money from licensing patents, rather than litigating them. However, the only way they can convince the industry that they need a license is to sue for infringement. I am not sure how you could create a system that didn't have this property, or no one would ever license a patent, and IP would be much less valuable. Licensing is a very important scenario when the patent has value, even though no one else developed it independently. I'm convinced there are also cases when inventors knowingly intrude on patented ground, hoping never to be sued or hoping to defeat the suit. This would be another counter-example. And if I was an inventor who suspected competitors of such intrusion, I would feel justified spending some cash to assert my rights against them.
Second, I'll just extend my real estate analogy a little more to cover a case where I find value through obscurity is perfectly acceptable. Suppose I read an obscure article in a journal that implies a house is built on top of a valuable archeological site, and buy it on the cheap, even though I would have paid a much higher price, had the information been more widely known. Would you criticise me the same way you criticise NTP? The information was there, for those alert enough to see it.
Finally, I am still interested to know your answer to the question I posed at the end of my last post. To rephrase: Do you think that NTP should be singled out for sitting on patents, letting IBM, for example, off the hook?
Public property and land is essential for any society to function. It must be the same with intellectual property.
OK. I think I can accept that some IP should be commonly held, without granting that all IP should be commonly held. My brother owns his house. I'm glad he does. Dickens' work is in the public domain. I'm glad it is. The Grand Canyon is Federally owned. Great! The FSF owns the copyright to a lot of open source code. I'm glad it does. Where is the problem here? Individual property should be abolished, or only intellectual property?
From an economic standpoint, for any value to be derived from intellectual property, then there must be a maximum gain in value through the intellectual property system,
I don't understand economics that way. What is a "maximum gain in value"? How do you know the maximum? It seems to me that the IP system is worthwhile if the benefits are worth the costs. Figuring that out seems hard, but might not require a calculation of maximum gain. Maybe you agree?
if ideas build upon ideas then we should not protect ideas
So if the ideas behind the Rubik's Revenge built on ideas in the Rubik's Cube, does that mean that Erno Rubik should be undercut by people making cheap knock-offs? Seems like he deserved a little protection for making such fun toys. Why is building relevant?
You move on to software patents and the GPL; neither of which I thought at issue in this thread, so I'm going to let others take those up if they wish.
So your saying that real estate holding companies are a way to really get an economy going?
...
I think you are reading that in. I'm just saying that the NTP's of the world are no worse than other companies that invest.
Here is a mental experiment;
Thanks for that. Between those two imaginary countries, I would like to live in the one with the engineers. However, if I could choose instead to stay in this real country, I would, since I don't imagine it filled with Golgafrinchans. It seems to me that creators are often rewarded in this country, and the ability to gain reward from a wide variety of different activities is a good thing, not a bad thing.
Sorry I can't speculate on the tipping point, but I'm late for my grooming
The issue for me is not whether NTP is adding value. Regardless of that, the patent has value in and of itself because it discloses something valuable. The Wikipedia article on patents talks about this: "... one theory of patent legislation is to induce the inventor to disclose knowledge for the advancement of society in exchange for a limited period of exclusivity." I think some people use the phrase "public notice function" to describe this aspect of a patent's value -- essentially that the commons is enriched by the disclosure of the inventor's knowledge.
Sometimes, the information isn't valuable to anyone, but sometimes it is, and it may retain that value even if the company doesn't do anything with it.
I think the analogy to real estate is still fair. Suppose I buy three houses because I expect them to appreciate in value. I do nothing with them, no improvements, just hold them until they have appreciated in value. I made money just by being right.
Nothing wrong with that.
And that is all this company is doing. Now, we might have a legitimate gripe about *why* patents appreciate in value, and allow these companies to make money, but we should remember that the *why* is the same for everyone, from NTP to IBM to RIM. Anybody can sit on a patent.
I'm sympathetic to your suggestion regarding land grants. I read Wikipedia to describe something similar when it discusses "compulsory licence." My point here is that the NTP's of the world shouldn't be singled out for sitting on patents, the policy should be the same across the board. Wouldn't you agree?
"a company that did something real"
These companies are "real" because they own something of value, and use it to their advantage. Consider a real estate holding company, or an another kind of investment firm. They don't create products, but they are still real businesses, because they make money off the things of value that they own.
Nothing wrong with that.
Some might argue that the patent doesn't have any value if no one implements it, but historically patents are valued because they teach the public how to do things that might otherwise remain secret. From that perspective, building products is not the point.
I think the important question is whether that value is worth the costs of providing it. I don't think the answer to that question depends on what kind of company owns the patent.
Now, if only I knew what the answer is!
I know it may be a stretch to call any Coen Brothers' movie 'underappreciated' but I think that Miller's Crossing doesn't get the appreciation it deserves both among Coen films and among films in general.
It is the most compelling, well-crafted movie I know.
Harry Knowles wrote an appropriately appreciative review.