I would really like to see something along the lines of a TED talk in which the presenter stands up, spends a couple of minutes demonstrating some kind of really interesting new technology -- something that could really help people, either in their lives or in their jobs -- and then the presenter would pause for a moment and say, "...but none of you are going to get to use this", and continue the talk but on the subject of patents.
I don't think people really understand the extent of the problem. I think they need to see exactly the damage that's being done before there will be any energy put into fixing it.
I do think that patents hold a valuable place in certain areas of research and development, but there are also areas in which patents are crippling development.
I do think that patents hold a valuable place in certain
areas of research and development, but there are also
areas in which patents are crippling development.
I hear people say this but they never give an example.
Can you name an area of research and development where patents hold a valuable position? I myself have trouble coming up with any and I'm curious what others think.
Conventional wisdom says that pharma qualifies. Labs wouldn't spend the resources if anyone could come up with generic drugs once the hard work of finding out which drug works is done.
And yet even pharmaceutical companies are now facing problems caused by too many patents (though I'm sure none of them want to abolish patents completely the way many in software do). Michael Heller from Columbia Law School writes about new therapies that companies can't bring to market because they involve dozens or hundreds of different genes or compounds, each patented separately; he argues that this will become more common because of trends in medical science. He also cites some interesting examples like http://www.goldenrice.org/ which actually did get produced, but only because they formed a non-profit foundation and basically shamed companies into licensing their patents as charity for the developing world.
Many, many more details in Heller's book and in this Econtalk interview:
That is conventional wisdom. However, if we pulled the patents from pharmas, the demand for drugs would not go away. I suspect things would open up and researchers would share and open-source their work. The total research may actually increase, but just get distributed very differently, much like software changed from Enterprise to open source processes. Of course this won't happen any time soon as making such a change would destroy the market caps of pharma corps.
i don't know if this is true, but i heard somewhere that drug companies don't really innovate anything.
it's the NIH and universities (via government funding) that actually discover the drugs, then they sell the exclusive rights to manufacture it to big pharma (who then spends a lot to get it approved and market it and such...)
I don't know if that's correct, but if it is, it's patents that make it possible for the universities and NIH to sell the right exclusively.
Since manufacturing, testing and marketing a drug is hysterically expensive, the patent seems to serve a purpose there -- even if pharma companies are more akin to specialized investment bankers than scientists.
Mechanical inventions are what patents were most obviously designed to deal with. There are still plenty of these being made today; they just don't make the waves they used to, because the new ones are mostly used in industrial settings.
The thing about mechanical inventions that made patenting important was that there was often a lot of hidden knowledge in their design.
If we take the familiar example of the ICE, simple dimensions like the bore and stroke of the cylinder aren't arbitrarily chosen. Altering the ratio of the bore and stroke changes the revving characteristics of the engine (a somewhat larger bore than stroke will cause the engine to have a higher rev limit, for example), and increasing the size of the bore requires disproportionately heavier cylinder heads (because cylinder heads have to have some depth and lateral reinforcement).
The size and weight of the cylinder heads, combined with the stroke effect the strength and dimensions required of the connecting rods and the crankshaft, so on and so forth.
Basically, a lot of mechanical "inventions" are big physics and engineering puzzles where the mere dimensions of each part was worked out through a lot of equation crunching (and probably a lot of plain old tinkering and testing as well). So for someone to just go and copy someone else's design, well that's kind of a big deal.
people often cite patents as the reason for this (lack of multi-touch) but I don't think it's the real reason. For starters almost everyone else is using multi-touch, and from what I understand (I haven't any dev experience with Android) multi-touch support is built into the OS, just that the default apps don't use it
This is true. Dolphin Broswer on the Android opperating system supports multi-touch. Gives you the pinch zoom so covetted on the iPhone. It is just going to take time for the applications to catch up to where Android 2.0 is.
> They pick on startups because undercapitalized small companies cannot afford to be ideological. When faced with the prospect of extensive legal fees and a huge distraction, they do the pragmatic thing - they settle.
Patent trolling reminds me of a game of chicken. I wonder whether chicken strategies have been tried to combat it.
For example, if the start-up could position themselves so that it is profitable for them to defend themselves if they are sued by a patent troll, and the trolls were aware of this (and rational), the trolls may be scared to litigate. This could be in the form of "insurance" that pays out when the company successfully defends itself against a patent claim. Ideally, the fact that the company is insured would thwart off trolls, so the premiums could be lower than what companies currently pay out in settlements.
That's an interesting idea for a company! An company that insures against patent lawsuits. It would have be staffed by lawyers who know whether there are any possible patent violations but it might work.
As you said, the fact that you are even insured by this company may already signal to the troll to back off.
Nice idea but it doesn't work because when I sue you with a bogus patent troll, you can't make money out of it. All you can do is make the lawsuit go away and lose as little money as possible.
So it's a win-lose scenario. So there is no insurance possible. The best lawyers in your hypothetical insurance company, at best could convince the judge that you are not infringing. But it won't make you any money. So there is no business insuring against patent troll.
The good guys pay me money for insurance, I promise to release my team of ruthless lawyers on anyone that sue them, the patent trolls see my scary lawyers and don't sue. Doesn't that work?
It doesn't work with Patent Trolls (AKA Non Practicing Entities). What is the team of scary lawyers going to do? Since the trolls don't actually have a business or product, you can't sue them for patents they infringe. And their whole business is litigating patents, so tying them up in court is not exactly a deterrent. The trolls themselves are often lawyers, or just a company that employs lawyers on retainer.
> their whole business is litigating patents, so tying them up in court is not exactly a deterrent.
Lawyers can make a considerable amount of money, any disruption to the Patent Trolls' game will severely reduce their numbers. These Patent trolls, as you said, are often lawyers and by tying them up in court you are costing them profitability. Every non-settlement forces them to go to court and actually fight.
This is how the courts work: Out-of-court settlements are frequent and are preferred as it saves a Judge's time for real cases, however mass submission and withdrawal of suits are seen as a waste of the courts time and effort. A fair amount of cases end up in front of a judge before settlement, if these end up being withdrawn (and the judge will know it's withdrawn not settled) you're going to be in bad credence with a judge. Pissing off a judge is a big no-no. Patent Trolls will be pissing off multiple judges, which is like putting a shotgun in your career's mouth and pulling the trigger.
An insurance agency that fights patent trolls would be ideal. Offer $X amount of legal fee coverage for $Y a month, get a few talented lawyers and a fair amount of paralegals. Once word gets out, the majority of the work can be performed by paralegals (essentially everything up until you're standing in front of a jury-or-equivalent can be performed by paralegals) as no troll will want their time tied up. Eventually, only Trolls with a fair-case will fight, you then have 3 options to give your clients: offer them your lawyers' services/suggest settling/wish them good luck elsewhere. It would be a sort of no-case-no-extra-fee's deal.
Lawyer's typically bill by the 6-minute interval, and frequently charge 100's of dollars an hour. In fact 1-2 billed hours is typically a lawyers daily pay, and they may still have 6-8 hours on top of what they're billing clients. If you start consuming these lawyers time, their profitability drops, especially considering they require settlements for their pay. They're invested in the 'easy win', which isn't conducive to fighting a drawn out case. If companies actually start going through with the court battles, the payment is potentially delayed anywhere from 3-months to 3-years.
Part of my assumption is that if the patent should truly not have been granted, the start-up has a decent chance of winning if they have the resources to fight it. (I do know of some counter-examples, like RIM and D2L)
The trolls don't want to enter a losing battle because of the cost (even if they're in the business of litigation, time spent suing one company is time that could be spent suing another). Also, losing would damage the validity of the patent for future cases. (In my understanding, that is. IANAL)
For example, if USV is typical and 1/3 of venture-backed companies are being attacked by patent trolls, then the premiums for this insurance would have to be extremely high -- enough to cover a third of the cost of defending a typical case.
There are a couple of other angles you could work here. In some jurisdictions, it's possible to seek damages for the cost of defending a failed lawsuit. I don't know if any of these jurisdictions extend this to patent litigation, or what tax and other implications might be of incorporating there (so that one might legitimately change venue to such a location). The two typical problems with this approach are getting into the right jurisdiction and being able to front the money for the defense in the first place.
Also, if the patent troll is suing a bunch of companies you're insuring based on the same patent, you could attempt to combine the cases, thus consolidating the defense costs. This works because patent trolls work by firing off lots of very similar lawsuits, each for a small enough amount that it's economical to settle. That's what keeps their costs down; such an insurance policy would let the defense leverage the same economy of scale.
The assumption is if you have few assets and the insurance then there would be little reason to litigate. Which would drive down the cost of the insurance.
It could be further augmented by a cross-patenting association and a large common fund to put down enough collateral to allow appeals to continue indefinitely.
Essentially, if you could show that any patent-troll would face an SCO vs IBM situation, I think you could have some plausible deterrence.
That doesn't make any sense. You think an insurance company makes money when you wreck your car? No. Yet there are thousands of them in business. They make money by making the premiums of the insurance cost more than what they have to pay to fix people's cars. This patent insurance would work the same way.
I'm a little cautious about this post. He is exaggerating by stretching the definition of "patent troll", if I am reading correctly. A true patent troll is a company that produces nothing except lawsuits. With a company that produces something and also sues over patents, there is at least the possibility of a countersuit / crosslicense / armed truce.
I assume their portfolio companies pool their patents together for the common defense. If not, that might be a good idea.
Still, with 26 portfolio companies, he's claiming 8-ish concurrent lawsuit threats... that's alarming. On the other hand, their portfolio is pretty high-profile (Etsy, Twitter, Zynga, Foursquare, Indeed, etc).
Also he doesn't put this claim in historical context: is this normal for a maturing (and very nice) portfolio? Are they going after the tender young startups or the bigger ones?
"With a company that produces something and also sues over patents, there is at least the possibility of a countersuit / crosslicense / armed truce."
Unless you're a startup that just wants to make a good product and isn't interested in spending tens of thousands of dollars acquiring patents on software you think shouldn't even be patented in the first place. Then you have no defense. You also don't have the funds for a protracted legal battle, since you're living on investment capital, or are barely profitable.
I'm not arguing anything about the validity or wisdom of patents. I'm saying the poster (a VC) left out a lot of pertinent information and using the term "patent troll" incorrectly.
It's an interesting item but wrapped in self-serving omission and linkbaity style.
"But anyone who has spent a significant time in technology based businesses will understand that two groups working completely independently from each other will often solve a problem similarly. One group is not copying or ripping off the other group. They are simply coming to similar conclusions about how to get something done.
In these cases, it makes no sense to protect one group from the other. Nobody has taken anyone's "intellectual property." Both groups should own their inventions outright without having to license technology from the other."
I really feel for smaller companies here as I know people with great products who have been trolled out of existence.
I wonder if there is a non-legislative fix available because I've heard about programmers wanting patent reform for as long as I've been programming and I believe almost no substantial progress has been made.
Brad mentions that larger companies have more resources available for fighting patent trolls. What if VCs set aside a pool of capital for defending their investments from patent trolls as part of raising their funds?
The idea would be to create a pool money whose size would ward off patent trolls. I'm sure it would take a few victories in court, but it could establish a precedent and change the game.
It certainly seems easier than attempting to reform patents.
Check out this patent. It appears to be for storing web page state in the web page itself and transmitting that state using HTTP POST. I'm not even kidding.
It's especially interesting to read the "referenced by" list on that page. "Incorporating state information into a URL" ... "Method for transmitting images over a network" ... "System for tracking the purchase of a product over the internet."
The fundamental problem with patents is that it rewards the first person to file a patent, disregarding the possibility that two people can synchronously, or asynchronously come to the same idea independently of each other.
I guess the "American" (assuming you're in America) course of action is to speak to your senator to push for reform and help evolve our government. If that fails, ditch the government altogether and either start or move to another country.
I'm curious, has anyone ever seen a software patent novel enough that it could be considered a "non-obvious" solution to the problem that the inventor is trying to attack?
Various data compression patents seem reasonable to this untrained eye - MP3 & LZW compression come to mind. Of course the duration of software patents is ridiculous, but let's not throw the baby out with the bathwater.
Not true at all. Cryptography Research has patented most of the implementation techniques required to do hardware crypto without being susceptible to differential power analysis (btw: that? My favorite business model ever!). That was almost pure systems research.
Something as arcane as DES is not a "natural law". Crypto algorithms aren't pre-existing (show me a naturally occuring physical process that can be described by a crypto alogrithm), they're not obvious to even experts in the field, and people spend a lot of time trying to get them right. That's the very definition of patentable.
[I know DES isn't patented, and there's plenty of good reasons why you don't want a patented crypto algorithm, but I think they certainly qualify.]
I think they are a giant waste of money. You spend $20K on lawyers, to get nothing more than the right to spend more money on lawyers in the future.
That $20K could be better invested elsewhere (like on product improvement).
I think it would be worth considering eliminating software patents.
However, I don't think an "independent invention defense" is a good idea. It would essentially eliminate all patent protection. Basically, the absence of proof that you knew a patent existed, would get you off the hook for infringing on it. This means that as long as you had the right set of rigorous policies in place, you could operate with complete immunity from patent infringement claims.
If all employees were trained (by mandatory corporate training) that "under no circumstances should you ever read any patents, ever", and "if you ever have any doubts about anything being patentable, direct the question to our lawyer", and you were very strict about enforcing it, you could make a case that pretty much every invention was discovered independently.
That would defeat the whole purpose of patent protection. The idea is that by getting inventors to disclose details of their invention (which benefits society), that they get a monopoly on its use. Without the monopoly, there is no point in having a patent.
If software patents pose a fundamental problem, then I think the best course of action is to eliminate software parents, not to undermine the entire patent system.
If all employees were trained (by mandatory corporate training) that "under no circumstances should you ever read any patents, ever", and "if you ever have any doubts about anything being patentable, direct the question to our lawyer", and you were very strict about enforcing it, you could make a case that pretty much every invention was discovered independently.
Thanks to the "treble damages" part, this is exactly how it operates right now, right down to the corporate training. Unless you're a patent attorney, "never ever read a patent" is pretty good advice for any technical professional.
Any one of those mentioned in your question are bad. If it's all of them it's still bad. No matter what meaning of the word "is" that you choose it's bad. That's kind of the point of the article really.
God damn I hate nothing more than patent trolls. I'm positive that Lucifer is reserving a special place in hell for them, because there's no question they're going to burn.
I don't think people really understand the extent of the problem. I think they need to see exactly the damage that's being done before there will be any energy put into fixing it.
I do think that patents hold a valuable place in certain areas of research and development, but there are also areas in which patents are crippling development.