Nathan Myhrvold’s Patent Extortion Fund Is Reaping Hundreds Of Millions of Dollars(techcrunch.com)
techcrunch.com
Nathan Myhrvold’s Patent Extortion Fund Is Reaping Hundreds Of Millions of Dollars
http://www.techcrunch.com/2008/09/17/nathan-myhrvolds-patent-extortion-fund-is-reaping-hundreds-of-millions-of-dollars/
47 comments
The problem with "fixing" the problem is that his company now has a huge stake in the system not changing, or at least in not loosening restrictions. Now that the company has extracted so much money from other companies, it can very effectively lobby Congress to ensure that the patent system doesn't undermine his business model.
It's now self-perpetuating. Look at some of Lessig's videos on Change Congress; he's talked about how Congress, while restructuring and changing regulation on the telecom industry in the 90s, was careful to ensure that what was left over would be able to contribute to re-election campaigns.
It's now self-perpetuating. Look at some of Lessig's videos on Change Congress; he's talked about how Congress, while restructuring and changing regulation on the telecom industry in the 90s, was careful to ensure that what was left over would be able to contribute to re-election campaigns.
See also: Fannie Mae/Freddie Mac.
I hope your logic does not also apply to representative government :-/
Sadly it kind of does. It's surprising just how many governments have followed the same pattern.
First they grow and grow and grow. Reform is occasional and minor (at best), eventually they get so big and bad that a crisis forces real change.
The state is then transformed into a lean mean productive machine. Which starts to grow slowly and the process repeats.
Of the top of my head I can think of Sweden, where a crisis forced massive reform and now it's almost ready for a crisis again.
And Great Britain in the 1970, crisis -> Thatcher -> prosperity -> growing government -> less prosperity -> coming crisis.
Guess where the US is in that cycle.
First they grow and grow and grow. Reform is occasional and minor (at best), eventually they get so big and bad that a crisis forces real change.
The state is then transformed into a lean mean productive machine. Which starts to grow slowly and the process repeats.
Of the top of my head I can think of Sweden, where a crisis forced massive reform and now it's almost ready for a crisis again.
And Great Britain in the 1970, crisis -> Thatcher -> prosperity -> growing government -> less prosperity -> coming crisis.
Guess where the US is in that cycle.
Interesting to see how that follows the cost of a barrel of crude oil.. roughly
Reminds me of a quote by Thomas Jefferson...something about the tree of liberty :-)
I met Nathan Myhrvold while giving his son a tour of my school. He struck me as a much nicer guy than what all of these articles play him up as. Extortion is almost certainly too bold of a term for what his company does.
The patent system was set up to be taken advantage of in this exact way. If someone comes up with/legally documents an idea before you do, you have to get them to let you use it (via licensing fees). I don't see how that's tantamount to protection money. If you're one of the companies involved, there's pretty clear net gain for you since you're essentially outsourcing R&D to some smart people and virtually extending your patent portfolio at the same time, which is an asset on its own.
The patent system was set up to be taken advantage of in this exact way. If someone comes up with/legally documents an idea before you do, you have to get them to let you use it (via licensing fees). I don't see how that's tantamount to protection money. If you're one of the companies involved, there's pretty clear net gain for you since you're essentially outsourcing R&D to some smart people and virtually extending your patent portfolio at the same time, which is an asset on its own.
The patent system was set up to be taken advantage of in this exact way.
Well, maybe not this exact way. It was certainly never intended to have the consequences Bill Gates foresaw in his leaked 1991 memo:
"If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today. [...] The solution to this is patent exchanges with large companies and patenting as much as we can."
http://arstechnica.com/news.ars/post/20070313-analysis-micro...
Well, maybe not this exact way. It was certainly never intended to have the consequences Bill Gates foresaw in his leaked 1991 memo:
"If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today. [...] The solution to this is patent exchanges with large companies and patenting as much as we can."
http://arstechnica.com/news.ars/post/20070313-analysis-micro...
>> The patent system was set up to be taken advantage of in this exact way
Pheraps, but the question is should it be set up this way? Two justifications of the patent system are
- inventors have more incentives, hence new ideas will emerge faster
- when these new ideas/inventions emerge, the patent ensures that it is openly documented and hence, can be used by everyone after the patent expires.
And the price that one pays for this is that noone can use the idea without a deal with the patent owner. Is the price worth the benefit? This depends on things like a) how easy it is to discover the idea
Two extreme cases would be say , a cure for AIDS vs. one-click patent
b) the existence and the power of non-patent incentives for the discovery of the idea
Would the idea be discovered without patents? Ideas/inventions are discovered all the time simply because one is working on some problem and one needs new tools to solve it. The university system is also a strong alternative system of incentives. But, there will be holes in what these systems incentivize.
c) how many things depend on the thing being patented?
This is a kind of an amplifying factor. Say, there a huge number of systems which depend on an idea. If the idea could be discovered without the patent system, the economy loses a lot of value and on the other side if patents were what made the discovery possible, then the patent system has caused great gain. Software, where ideas are built upon each other at great speed is full of these amplifying factors. A patent on say, garbage collection or oop, if granted, would affect a huge number of systems.(though, probably this would have expired before the 90's, but consider more recent ideas like say, stm.) the the rapid growth of the computer industry in the current phase increases this amplifying factor.
d) The negative effect of patents on the culture of open sharing of ideas. Precisely, because people are doing this without making money, there is little scope for licensing from the patent holder. And this culture has a lot of value, intrinsic, educational and economic.
Abolishing patents would probably be bad,(unless we can make alternative systems of incentives work. prizes?) But the important point here, is that there are a lot of free parameters - the length of patent, limitations on licensing fees, the nature of things which could be patented(i have used ideas/inventions interchangeably, but this is a controversial issue)
Deciding optimal values for these parameters is a complex task and it isn't clear how one should be doing this. For instance, the length of the patent, if decided in a market would probably vary with the field in which the idea applies. For some fields, the optimal parameter might well be 0.
Pheraps, but the question is should it be set up this way? Two justifications of the patent system are
- inventors have more incentives, hence new ideas will emerge faster
- when these new ideas/inventions emerge, the patent ensures that it is openly documented and hence, can be used by everyone after the patent expires.
And the price that one pays for this is that noone can use the idea without a deal with the patent owner. Is the price worth the benefit? This depends on things like a) how easy it is to discover the idea
Two extreme cases would be say , a cure for AIDS vs. one-click patent
b) the existence and the power of non-patent incentives for the discovery of the idea
Would the idea be discovered without patents? Ideas/inventions are discovered all the time simply because one is working on some problem and one needs new tools to solve it. The university system is also a strong alternative system of incentives. But, there will be holes in what these systems incentivize.
c) how many things depend on the thing being patented?
This is a kind of an amplifying factor. Say, there a huge number of systems which depend on an idea. If the idea could be discovered without the patent system, the economy loses a lot of value and on the other side if patents were what made the discovery possible, then the patent system has caused great gain. Software, where ideas are built upon each other at great speed is full of these amplifying factors. A patent on say, garbage collection or oop, if granted, would affect a huge number of systems.(though, probably this would have expired before the 90's, but consider more recent ideas like say, stm.) the the rapid growth of the computer industry in the current phase increases this amplifying factor.
d) The negative effect of patents on the culture of open sharing of ideas. Precisely, because people are doing this without making money, there is little scope for licensing from the patent holder. And this culture has a lot of value, intrinsic, educational and economic.
Abolishing patents would probably be bad,(unless we can make alternative systems of incentives work. prizes?) But the important point here, is that there are a lot of free parameters - the length of patent, limitations on licensing fees, the nature of things which could be patented(i have used ideas/inventions interchangeably, but this is a controversial issue)
Deciding optimal values for these parameters is a complex task and it isn't clear how one should be doing this. For instance, the length of the patent, if decided in a market would probably vary with the field in which the idea applies. For some fields, the optimal parameter might well be 0.
Well thought-out. I agree almost entirely.
Our current patent system clearly needs much improvement, but almost certainly encourages progress far beyond none at all.
I don't see prizes as being too effective. The nice thing about the market is it decides what problems are worth solving. Prizes put that decision in the hands of whoever organizes them.
There would clearly be prizes for fighting cancer, aids, lack of potable water, etc. I'm not sure there ever would have been a prize for a pot with a tight fitting lid and holes in it, but the Pasta Pot, simple as it is, is a miracle. Same with wheels on luggage, the SpinBrush, etc.
But our current patent system has a solid prize that encourages innovation from products as small as those all the way up to nanotech.
Our current patent system clearly needs much improvement, but almost certainly encourages progress far beyond none at all.
I don't see prizes as being too effective. The nice thing about the market is it decides what problems are worth solving. Prizes put that decision in the hands of whoever organizes them.
There would clearly be prizes for fighting cancer, aids, lack of potable water, etc. I'm not sure there ever would have been a prize for a pot with a tight fitting lid and holes in it, but the Pasta Pot, simple as it is, is a miracle. Same with wheels on luggage, the SpinBrush, etc.
But our current patent system has a solid prize that encourages innovation from products as small as those all the way up to nanotech.
I read this article about Intellectual Ventures earlier this year and was struck by how he was trying to engineer ingenuity:
"They had different backgrounds and temperaments and perspectives, and if you gave them something to think about that they did not ordinarily think about—like hurricanes, or jet engines, or metastatic cancer—you were guaranteed a fresh set of eyes."
"At one point, Myhrvold asked the surgeons what, in a perfect world, would make their lives easier, and they said that they wanted an X-ray that went only skin deep. They wanted to know, before they made their first incision, what was just below the surface. When the Intellectual Ventures crew heard that, their response was amazement. “That’s your dream? A subcutaneous X-ray? We can do that.”"
http://www.newyorker.com/reporting/2008/05/12/080512fa_fact_...
"They had different backgrounds and temperaments and perspectives, and if you gave them something to think about that they did not ordinarily think about—like hurricanes, or jet engines, or metastatic cancer—you were guaranteed a fresh set of eyes."
"At one point, Myhrvold asked the surgeons what, in a perfect world, would make their lives easier, and they said that they wanted an X-ray that went only skin deep. They wanted to know, before they made their first incision, what was just below the surface. When the Intellectual Ventures crew heard that, their response was amazement. “That’s your dream? A subcutaneous X-ray? We can do that.”"
http://www.newyorker.com/reporting/2008/05/12/080512fa_fact_...
He struck me as a much nicer guy than what all of these articles play him up as.
"Smiling faces sometime pretend to be your friend..."
"Smiling faces sometime pretend to be your friend..."
I don't ever have a problem with people exploiting a broken system. Even in a society with strong patents, companies like this would exist, and it isn't extortion, rather than a form of investment.
Without knowing what sort of patents he's purchased and is enforcing, it's impossible to make a moral judgment.
Without knowing what sort of patents he's purchased and is enforcing, it's impossible to make a moral judgment.
Matt, whereas arbitrage is a lucrative activity that's worthless to everybody else, this is a lucrative activity that's worthless and damaging. It hurts productive companies who are helping other people, at a 1:1 ratio. Each dollar Intellectual Ventures earns comes out of someone else's pocket, against their will, and in exchange for nothing.
Even if you look at it from your own self-interested perspective: wouldn't you rather they were making a useful internet service, something that might provide benefit to you? These are smart guys from Microsoft, why don't they make a company that produces a product?
This isn't a typical case of intellectual property providing a return. They're worse than the RIAA. It's an investment vehicle that provides revenue for the owners, with the added barbs that it 1.) Drains productive companies 2.) In the case of court cases, is subsidized by taxpayers.
Do you think that with $4 billion under management they only stop and enforce the legitimate and fair patents?
There's only one moral judgement to make. What they are doing is legal and unethical (hence morally wrong), and it should be made illegal, or rather, impossible under patent law. Arbitrageurs make a lot of money. They don't go to heaven.
Even if you look at it from your own self-interested perspective: wouldn't you rather they were making a useful internet service, something that might provide benefit to you? These are smart guys from Microsoft, why don't they make a company that produces a product?
This isn't a typical case of intellectual property providing a return. They're worse than the RIAA. It's an investment vehicle that provides revenue for the owners, with the added barbs that it 1.) Drains productive companies 2.) In the case of court cases, is subsidized by taxpayers.
Do you think that with $4 billion under management they only stop and enforce the legitimate and fair patents?
There's only one moral judgement to make. What they are doing is legal and unethical (hence morally wrong), and it should be made illegal, or rather, impossible under patent law. Arbitrageurs make a lot of money. They don't go to heaven.
Yeah, I'm not buying it. They're a natural byproduct of a functioning patent system. Part of the incentive to invent and produce new things is the ability to sell the IP itself. A lot of people are brilliant at building new things, but not so great at producing them and getting them into stores. They're two very different skills.
It's a very useful middleman. They don't just get these patents from nowhere. They pay inventors and investors in bankrupt companies for them.
It's no different than real estate investors buying up strip malls in areas they think will be big in a few years and then raising the rent. It isn't extortion, and it doesn't slow progress down. It incentivizes it. It creates a larger market for intellectual property.
I won't say that our patent system is perfect, it clearly needs a lot of work, especially in the software era. But overall, it's pretty good, as evidenced by the resulting economy. It's easy to pass these people off as valueless middlemen, but they're not.
It's a very useful middleman. They don't just get these patents from nowhere. They pay inventors and investors in bankrupt companies for them.
It's no different than real estate investors buying up strip malls in areas they think will be big in a few years and then raising the rent. It isn't extortion, and it doesn't slow progress down. It incentivizes it. It creates a larger market for intellectual property.
I won't say that our patent system is perfect, it clearly needs a lot of work, especially in the software era. But overall, it's pretty good, as evidenced by the resulting economy. It's easy to pass these people off as valueless middlemen, but they're not.
They're certainly a middleman in the patent system. The question is whether they're a middleman for positive exchanges (good) or a middleman for extortionate exchanges (bad).
Most people seem to be assuming the latter; you seem to be assuming the former.
To clarify, the two business plans I'm thinking of are
A) Find overlooked innovations; buy the patents; sell or license the patents to firms interested in developing products based on the innovations.
B) Find overlooked overly broad patents; buy the patents; find companies who rely on systems which likely infringe these patents; threaten to sue these companies unless they pay large licensing fees.
I would say that the evidence is on the side of model B. First of all, middlemen for extortion abound - the so called "patent trolls" - it is a proven market. Have you heard of any middlemen for genuine innovation?
Secondly, we can look at the company's client list. Cisco, Verizon, Sony, Nokia, Microsoft, Intel, Google, eBay, SAP, and Nvidia are named in the linked article. Lots of software and electronics companies. The nature of software companies probably makes business plan (A) impossible (the conventional wisdom, at least, is that no one cares about a bright idea in software; they care about implementation). If they were following business plan (A), I'd expect to see industries where ideas are worth a great deal of money more represented - biotechnology maybe. I don't know if patents are worth anything, except for litigation purposes, in any industry really though.
Finally, the actual article spells things out, although we can't be sure how accurate it is.
"It works like this: Technology companies agree to pay patent-licensing fees to inoculate themselves against potential lawsuits by Intellectual Ventures."
This kind of business plan is strictly destructive to the economy. Under this business plan, the patent gives nothing of value to the company licensing it (they are already infringing the patent, having "discovered" it in the normal course of business). It is the prevalence of these sorts of deals, and the rarity of the sort typified by model (A), that have put many of us against the patent system.
By the way, a strong economy is no evidence that the patent system is pretty good. The economy could be strong even if we had an absolutely miserable, almost purely destructive patent system. The patent system may have simply too small an effect to make the difference singlehandedly between a strong economy and a weak one. Or maybe it has a large effect, and our economy would be far stronger with a non-broken patent system. It's impossible to know, when all we have is this tangled-up complex system called the economy which somehow works pretty well.
Most people seem to be assuming the latter; you seem to be assuming the former.
To clarify, the two business plans I'm thinking of are
A) Find overlooked innovations; buy the patents; sell or license the patents to firms interested in developing products based on the innovations.
B) Find overlooked overly broad patents; buy the patents; find companies who rely on systems which likely infringe these patents; threaten to sue these companies unless they pay large licensing fees.
I would say that the evidence is on the side of model B. First of all, middlemen for extortion abound - the so called "patent trolls" - it is a proven market. Have you heard of any middlemen for genuine innovation?
Secondly, we can look at the company's client list. Cisco, Verizon, Sony, Nokia, Microsoft, Intel, Google, eBay, SAP, and Nvidia are named in the linked article. Lots of software and electronics companies. The nature of software companies probably makes business plan (A) impossible (the conventional wisdom, at least, is that no one cares about a bright idea in software; they care about implementation). If they were following business plan (A), I'd expect to see industries where ideas are worth a great deal of money more represented - biotechnology maybe. I don't know if patents are worth anything, except for litigation purposes, in any industry really though.
Finally, the actual article spells things out, although we can't be sure how accurate it is.
"It works like this: Technology companies agree to pay patent-licensing fees to inoculate themselves against potential lawsuits by Intellectual Ventures."
This kind of business plan is strictly destructive to the economy. Under this business plan, the patent gives nothing of value to the company licensing it (they are already infringing the patent, having "discovered" it in the normal course of business). It is the prevalence of these sorts of deals, and the rarity of the sort typified by model (A), that have put many of us against the patent system.
By the way, a strong economy is no evidence that the patent system is pretty good. The economy could be strong even if we had an absolutely miserable, almost purely destructive patent system. The patent system may have simply too small an effect to make the difference singlehandedly between a strong economy and a weak one. Or maybe it has a large effect, and our economy would be far stronger with a non-broken patent system. It's impossible to know, when all we have is this tangled-up complex system called the economy which somehow works pretty well.
But it's not extortion. It's perfectly valid and legal. The client list is entirely comprised of huge corporations that could afford to fight frivolous patent suits. Do you think that as soon as they get a letter from a "troll" they just mail a check?
Also when you phrase it as "Technology companies agree to pay patent-licensing fees to inoculate themselves against potential lawsuits by Intellectual Ventures." it sounds like extortion. Another way to phrease it is "companies agree to pay patent-licensing fees because Intellectual Ventures owns the valid patents they are infringing on."
You can phrase almost any perfectly moral activity to sound like extortion by using the same trick. "I pay taxes to inoculate myself against potential lawsuits by the IRS." or "I pay rent to inoculate myself against being evicted by the landlord." or "I go to the grocery store to inoculate myself against starvation." Is the grocery store extorting me?
Also when you phrase it as "Technology companies agree to pay patent-licensing fees to inoculate themselves against potential lawsuits by Intellectual Ventures." it sounds like extortion. Another way to phrease it is "companies agree to pay patent-licensing fees because Intellectual Ventures owns the valid patents they are infringing on."
You can phrase almost any perfectly moral activity to sound like extortion by using the same trick. "I pay taxes to inoculate myself against potential lawsuits by the IRS." or "I pay rent to inoculate myself against being evicted by the landlord." or "I go to the grocery store to inoculate myself against starvation." Is the grocery store extorting me?
how is this outsourcing r&d?
Intellectual Ventures is basically all R. These guys are indeed buying up patents, but they're doing a lot of thought themselves about how to solve problems and then going out and doing the due diligence to acquire all of the assets (patents, theirs or others') they need to present a full solution to a company.
You sound like Myrhvold's mom.
How is this outsourcing R&D if you've already done the R&D, since you're clearly using the techniques, and then Nathan comes along and takes you to court for millions?
You're buying into the spin. Intellectual Ventures is not a think-tank for nuclear geniuses and never was. Do you really believe the marketing story Intellectual Ventures puts out? Do you think that Trident makes your teeth whiter, and that Snapple is made from the best stuff on earth?
How is this outsourcing R&D if you've already done the R&D, since you're clearly using the techniques, and then Nathan comes along and takes you to court for millions?
You're buying into the spin. Intellectual Ventures is not a think-tank for nuclear geniuses and never was. Do you really believe the marketing story Intellectual Ventures puts out? Do you think that Trident makes your teeth whiter, and that Snapple is made from the best stuff on earth?
I actually am his mom.
Just curious, though, do you actually have any evidence that Intellectual Ventures is charging people for stuff they were already doing? Have they taken anyone to court over these patents? I'm not buying their spin, I'm assuming their innocence until guilt is proven.
Just curious, though, do you actually have any evidence that Intellectual Ventures is charging people for stuff they were already doing? Have they taken anyone to court over these patents? I'm not buying their spin, I'm assuming their innocence until guilt is proven.
> I'm assuming their innocence until guilt is proven.
They are extortionists and vultures. Their business model is to buy cheap patents from people who just do pure research. Then they go and sue the pants off people who do real work and make a honest living by doing things that make real products.
So I don't know how you can say they need to be proven guilty when they plainly state what they are doing.
They are extortionists and vultures. Their business model is to buy cheap patents from people who just do pure research. Then they go and sue the pants off people who do real work and make a honest living by doing things that make real products.
So I don't know how you can say they need to be proven guilty when they plainly state what they are doing.
Again, have they sued anyone? Has any company/institution they've dealt with actually been wronged?
And, as far as the patent buying goes, I don't really see a moral hazard with arbitrage. Either the market for patents is really inefficient and they're reaping rewards for exploiting that, or they're actually (gasp) providing a service to the market by connecting companies to institutions, and they're being compensated for it. Either way, I'm thumbs up on the enterprise.
And, as far as the patent buying goes, I don't really see a moral hazard with arbitrage. Either the market for patents is really inefficient and they're reaping rewards for exploiting that, or they're actually (gasp) providing a service to the market by connecting companies to institutions, and they're being compensated for it. Either way, I'm thumbs up on the enterprise.
They don't make money hand-over-fist by being nice. Licensing the patent is the first step. If a company doesn't agree to license, then the IP firm sues. So far they have gone after those with the deep pockets or insufficient intestinal fortitude it takes to pay up when these bastards come knocking.
> Their business model is to buy cheap patents from people who just do pure research. Then they go and sue the pants off people who do real work and make a honest living by doing things that make real products.
Doing pure research isn't making an honest living?
Doing pure research isn't making an honest living?
People doing research make news. These guys make money. Let me know when you've heard of one of their groundbreaking discoveries that wasn't simply purchased from some professor somewhere.
Why is it bad to make money off of something purchased from a professor?
After all, if one can't make money off of a thing purchased from a professor, there's no reason to buy said thing from a professor. Is it wrong for professors to make money from what they invent? In many cases, the school also makes money. Is that wrong?
Or, is it just wrong for middlemen to buy and resell? In other words, professors should only license to end users.
After all, if one can't make money off of a thing purchased from a professor, there's no reason to buy said thing from a professor. Is it wrong for professors to make money from what they invent? In many cases, the school also makes money. Is that wrong?
Or, is it just wrong for middlemen to buy and resell? In other words, professors should only license to end users.
No, it's being an extortionist and a vulture that isn't.
What is an acceptable way for a pure researcher to make money?
Note that you've already excluded "publish your invention and charge other people to use it".
Note that you've already excluded "publish your invention and charge other people to use it".
... this is getting confusing. Isn't Intellectual Ventures your run-of-the-mill patent troll? Don't invent anything worthwhile, acquire patents, sue companies that get stuff done?...
No lawsuits yet, but this is apparently because strong-arm tactics are more cost-effective. Here's an article suggesting that IV is hitting up companies for stuff they were already doing:
Myhrvold told the WSJ that he acknowledges facing resistance from companies he targets for licenses. But his patent inventory gives him leverage to extract settlements without litigation. "I say, 'I can't afford to sue you on all of these, and you can’t afford to defend on all these,'" he said.
http://blogs.wsj.com/law/2008/09/17/invention-capitalism-the...
It sounds like IV's general strategy is a carpet-bombing approach -- coming up with so many tangentially related patents that it doesn't matter how many are invalid, because proving it would cost too much in legal fees, lost sales, or investor confidence.
If you assume IV is legitimately innovating, then all these companies must have been willfully violating multiple patents (directly implementing them from the patent documents)... because otherwise these companies have all come up with the same innovations independently, and the frequency with which this occurs implies that the innovations are actually "obvious to someone skilled in the field" and hence not patentable.
Myhrvold told the WSJ that he acknowledges facing resistance from companies he targets for licenses. But his patent inventory gives him leverage to extract settlements without litigation. "I say, 'I can't afford to sue you on all of these, and you can’t afford to defend on all these,'" he said.
http://blogs.wsj.com/law/2008/09/17/invention-capitalism-the...
It sounds like IV's general strategy is a carpet-bombing approach -- coming up with so many tangentially related patents that it doesn't matter how many are invalid, because proving it would cost too much in legal fees, lost sales, or investor confidence.
If you assume IV is legitimately innovating, then all these companies must have been willfully violating multiple patents (directly implementing them from the patent documents)... because otherwise these companies have all come up with the same innovations independently, and the frequency with which this occurs implies that the innovations are actually "obvious to someone skilled in the field" and hence not patentable.
Do you know what some of these patents are? It would be interesting to see how innovative they really are.
It's surprising how many people (in the comments) are outraged over what is basically a way for someone who is not a big company to outsource the inevitable legal wrangling of commercializing their invention.
What _is_ broken is that the patent office and courts have completely ignored that whole "obvious to a practitioner of the art" thing. Patents are supposed to protect novel inventions. Instead people get patents for deciding to enter a market first.
Invalidating Amazon's "1-click shopping" patent shouldn't require prior art, but just a simple poll of the tech community saying "duh, that's what cookies were designed for".
What _is_ broken is that the patent office and courts have completely ignored that whole "obvious to a practitioner of the art" thing. Patents are supposed to protect novel inventions. Instead people get patents for deciding to enter a market first.
Invalidating Amazon's "1-click shopping" patent shouldn't require prior art, but just a simple poll of the tech community saying "duh, that's what cookies were designed for".
It's surprising how many people (in the comments) are outraged over what is basically a way for someone who is not a big company to outsource the inevitable legal wrangling of commercializing their invention.
What most people miss about rackets like this is that even after you pay off vultures like these they almost never offer you indemnity. That means some one else can sue you for exactly the same technology with a similar vague patent claim. In fact, they probably will, since you seem willing to pay.
What most people miss about rackets like this is that even after you pay off vultures like these they almost never offer you indemnity. That means some one else can sue you for exactly the same technology with a similar vague patent claim. In fact, they probably will, since you seem willing to pay.
Their (new) client's implementation could very well independently violate another patent or an unknown extension of the licensed patent. What would they gain from taking on this risk?
The broken patent system has bumbled along precisely because large companies generally have cross licensing deals with each other, leaving only the little guy subject to vague infringement claims. Now that there's a well-funded company which doesn't require 'incoming' licenses (by not making anything), there's real money involved for the big guys.
On another day I might be arguing for abolishing patents, but I just don't see how this is an abuse of the current system.
The broken patent system has bumbled along precisely because large companies generally have cross licensing deals with each other, leaving only the little guy subject to vague infringement claims. Now that there's a well-funded company which doesn't require 'incoming' licenses (by not making anything), there's real money involved for the big guys.
On another day I might be arguing for abolishing patents, but I just don't see how this is an abuse of the current system.
I have to give him credit for being clever. Broken system? yes. Clever? yes.
It seems as if these big companies simply invest in his fund as a hedge to the licensing fees they are going to have to pay.
It seems as if these big companies simply invest in his fund as a hedge to the licensing fees they are going to have to pay.
I love how the spirit of MS lives on strong in their alumni...
It's broken in the same sense that the domain name registration system is broken. Spend a little money and you can roadblock a lot of ideas.
Very few good ideas are dependent on getting a certain domain name.
But you can roadblock a lot of good domain names with a little money.
Have any small or medium-sized businesses stood up to this bullshit in court? I would like to imagine that if I were in the situation of being sued by one of these patent-wielding cowards I would say no to licensing and the inevitable attempt at settlement.
...and he hasn't even had to sue anybody yet.
With Danny Hillis, Neal Stephenson, and Sanjay Prasad (former chief patent attorney at Oracle, and an ouspoken proponent of patent reform) on board, I doubt that it's your garden-variety patent troll.
With Danny Hillis, Neal Stephenson, and Sanjay Prasad (former chief patent attorney at Oracle, and an ouspoken proponent of patent reform) on board, I doubt that it's your garden-variety patent troll.
if person.has_idea? && person.can_afford?(patent_attorney) {
business.start!
}
makes an entrepreneur hope that his idea stays under the radar.
makes an entrepreneur hope that his idea stays under the radar.
How can we stop it?
Lets remember that it is big corporations that lobby for the kind of patent and IP law that makes this possible.
On top of that, you have the over loaded patent office assuming bad patents will get sorted out in court. While at the same time judges assume that if a patent was granted it was legit.
To fix the system, you have to break it first.
Perfect.