There needs to be a "use it or lose it" doctrine/law around technological IP. I get all the arguments around creating a market for the patent rights, but it just leads to these bottom feeders creating no value and increasing costs for the industry and consumers.
Patents are property and we need taxes/fee on it. $500/year per patent, will ensure use it (if you think it is valuable) or lose it. This is no different from domain names, most people pay $10 - $100/year just to keep a domain name. Some domain names are used, most aren't. These taxes can fund free education or healthcare or defense.
> $500/year per patent, will ensure use it (if you think it is valuable) or lose it.
Not really.
Some patents are fantastically valuable to patent trolls. Some are not. A $500/year fee isn't going to deter a "company" of lawyers who are making millions soaking businesses with patents that should never have been granted.
If you want a scheme that actually does what you want, you'd need something like:
The owner of the patent chooses the fee that they pay per year. And anyone can pay that fee * the remaining years on the patent * some multiplier (probably in the 2-10 range) to prematurely end the patent.
So, if someone's got a patent on a hamster powered submarine, they can keep it for $1 per year (or whatever the minimum should be). And that's fine... because it isn't harming any one since no one wants to build such a thing.
But a patent that a troll is using to milk the industry with will need to have a pretty stiff fee or people won't play ball, they'll just buy out the troll.
> The owner of the patent chooses the fee that they pay per year. And anyone can pay that fee * the remaining years on the patent * some multiplier (probably in the 2-10 range) to prematurely end the patent.
So basically ending patents? If you invent something fantastic, say a way for a self driving car to perfectly sense its surroundings, Ford could just come in and pay whatever amount to invalidate your patent and prevent you from bringing your invention to market?
> If you invent something fantastic, say a way for a self driving car to perfectly sense its surroundings
That sounds like a highly constructed example, and even if we take it for bare value, makes a lot of assumptions, for example that whatever you invent is patentable.
The way you phrase it also makes it sound like patents are all about individual contributions, when in reality the era of lone genius inventors is long over (if they ever existed). In the US, it's practice for your funding institution to keep all the rights to your inventions, so if you invented the perfect sense for self driving, it's highly likely that a company like Ford already has the patent, because they quite literally own your intellectual output.
Imo, I feel the same way like OP, there needs to be a use it or loose it doctrine, just like there is with trademarks. Overall the legislation around intellectual property and copyright feels to be in favor of big corps at the moment and should be heavily castrated.
The number of patents owned by startups is greatly dwarfed by the number owned by large companies. Furthermore, the competition opportunity for small businesses to offer similar products at lower prices greatly outweighs the value of patent invention.
Some people would say large businesses can make things cheap in a way that small businesses can't compete with. However, that turned out to not happen in practice as big companies chase huge profit margins, supported only by the government.
China doesn't have this problem the US does because they have weaker patent laws. Patents need to be eradicated ASAP or we will not be globally competitive. We are also harming humanity as a whole as the inventive utility of patents simply doesn't scale in proportion to the harms, with the large populations we have now, they are clearly harmful on balance.
The fundamental problem with patents is that the benefit has lower asymptotic complexity with respect to population size than than the harm does. When you exceed some population size, patents become harmful.
The utility of copying is N^2 since you have O(N) copiers and O(N) inventions to copy from.
The harm of patents is therefore O(N^2) since this is the copying that patents prevent.
What we find is that the benefits of patents seem to scale at most around some O(N /log N) ish metric. Doubling the population size increases the number of inventors, but the chance an invention was already invented by someone else increases as population size increases. Hence the benefits of patents scale worse than O(N). Applying that to the harm and we still get O(N(N/logN)) for harm and O(N/logN) for benefits. Clearly patents do not scale.
* Here I am using Log N as a substituite for the difficulty increase of finding an invention not already invented. This exact measure is difficult to estimate.
Not having a patent doesn’t _prevent_ you from bringing your invention to market, it just accelerates _someone_ bringing it to market, and that’s a net good for society if the invention is useful, no?
Patents are vital to bringing things to market. It lessens the risk associated with investors getting returns, which allows funding for development.
I get that people don't like patents because they sometimes get abused, but on the whole I think we wouldn't have a lot of the things we take for granted if they didn't exist.
Let me add a personal anecdote: my uncle has developed a better sprinkler head. Think of bearded inventor tinkering in his garage for a decade. This was late 80s /early 90s so not much CAD was involved.
This is where the patent system shines. Because he got a patent he could shop around, sell it to a company which made a tidy profit on it. He didn't need to raise capital to establish a factory and all that to bring it to market and the company buying it seriously got ahead without spending an inordinate amount of money and time inventing the thing.
I agree that patents serve a purpose, but taxing intellectual property similarly to other property doesn't seem like it would end patents.
A slightly different approach would be for patent owners to declare an estimated value and pay property taxes on that value to enforce their monopoly. (They may also wish to update the estimated value periodically as circumstances change, perhaps every few months or years.)
To keep owners honest, anyone is allowed to pay the owner a multiple (1.5x? 2x? 10x?) of the patent's current estimated value to invalidate it.
If the patent owner wishes to hang onto the patent but cannot afford the taxes then perhaps banks would be willing to offer a patent equity line of credit, like using any other income-generating property as collateral.
To use your example, if you estimate that your self-driving patent is a ten million dollar asset and Ford pays you twenty million dollars to invalidate it that seems like you come out ahead because you have more than the patent was worth and can still build your product.
> Some patents are fantastically valuable to patent trolls. Some are not. A $500/year fee
Part of the problem is having a huge number of BS patents driving up the cost of going through all of them to figure out what's what.
Its not the only problem with patents, but i think a "property tax" solution would solve some of the issues. I'd like it to be incrementing each year - like first year $0/year, and increasing each year so the longer you keep things out of the public domain the more you need to be able to self-jystify its value.
Maybe when you file the patent, you have to submit an anticipated value statement and you are taxed some % / year on that anticipated value. If somebody violates the patent, you can sue them for up to the amount you anticipated, but not more.
In the future you can amend the value claim, but you can only adjust it down.
So someone inventing something for say mobile phones in the 80s that is still used would have estimated their patentent to not be so useful because the number of mobile phones wasnt that high. And if Apple violated their patent they would just pay pennies because of that? It is extremly hard to estimate the worth of a tech 30 years into the future invented today. Take a tech invented today and tell me what the market value will be in 30 years and how sure you are about that predicition.
If you invented and patented something in the US in 1989, you'd have protections until 2009 at the latest. If it wasn't usable until 2013, then that sucks for you, but it is what it is. Your invention doesn't get 20 guaranteed years of profitability. You get 20 years to figure out how to make it profitable.
The two are very different concepts.
edit: this is why you don't patent every damned thing, just the things that you believe will be profitable over the next 20 years. Otherwise, the cost of researching and filing the patent, as well as maintaining it, may well exceed whatever profit you actually get from the thing.
> this is why you don't patent every damned thing, just the things that you believe will be profitable over the next 20 years
Unless you work for a corporation, that owns your intellectual output anyway, and encourages you to submit forms for anything that looks even remotely patentable.
I want to be clear here: you submit a form for everything, then people in the legal and business development teams decide if its actually worth patenting.
But even then, if you devise some thing that will be very useful if we ever get teleportation working, your employer may still not patent it, if they believe that teleportation is more than 20 years away.
Yeah, that’s roughly how it would work, except 30 years feels way too long.
If other people are better than you at seeing what some technology could be used for it, then maybe we should lower the barriers for those people. The whole point of the patent system should be to provide the greatest benefit to the greatest number of people.
That's awful for protecting innovation. You don't know the market value of each individual invention with that level of granularity.
Companies and researchers should be free to patent to protect themselves, but patent trolls with no clear technological development (no lab, no product, no licensing+developing) should be stopped.
It seems easy to me to draw a bounding box around these behaviors with a simple test. Perhaps like a Howey test [1], but for patent trolling.
The troll can price their licenses slightly less than the presumed legal costs. Then most victims won't fight.
Presumption of validity is what makes patent trolling more lucrative than other forms of predatory litigation. You're guilty until proven innocent, because the law assumes that the patent office is generally doing the right thing.
The vast majority of these decisions are against the patent owners, which I'm sure you are aware of. Also, I wasn't the one who characterized something as a patent that "should never have been granted."
IP is property, and it's taxed at the value you declare that it's worth.
However, if you swear to the IRS that it's worth $500/yr, then you can't claim in court that a violation of it is costing you $10,000,000/yr in losses. That would be perjury.
Your patent is worth $10,000,000? Awesome! I bet your local school district will love to hear how much you'll be paying in taxes on it.
I offer one more alternative. Double the tax every year, and once the ip holder decides not to pay the tax, IP is released to public domain. No compnay has money to keep IP indefinitely in such a scheme.
I've proposed this alternative on message forums like this for probably 20 years now, but specifically for copyright. I think it'd be a great way to let Disney and co. have the long copyright terms they want for extremely valuable properties, but get other stuff into the public domain much, much faster.
Instead of doubling every year, my proposal is 5-year terms: the first is free, then $1000 for the next 5, $10k for the next 5, $100k for the next 5, etc. Feel free to adjust the actual dollar amounts, but you get the idea. Most stuff would be in the public domain after 10 years, if not 5.
I would suggest only for corporations above a certain size. I would appreciate if some old music composer somewhere gets to continue being old and stuff without worrying about this sort of thing.
It would have to be managed by tracking the number of active patents. You get 100 active patents tax free. Over that, and you have to pay an annual fee. This allows for independent inventors to operate as the system intended while clamping down on NPEs.
What do you think will happen if IP becomes impossible to afford, as it surely will under such a policy? Do you think companies that value IP will bother investing further in R&D, let alone even stay in your country?
Congratulations on the massive net loss in taxable income in your country.
It'll only be impossible to hold for long periods of time. We can start the tax at $1, it hits $1mil after 20 years - and for 99.9999% of IP by year 20 it's either clearly worth zero or clearly worth >$1mil so it'll be an easy choice. It'll force things into the public domain faster and make it expensive to hold a big bullshit patent catalog, but for actively used properties it'll be fine.
Companies are going to want to sell in one of the richest markets in the world; they can either pay for IP protection or not be granted it.
edit: I'm not suggesting these exact $ values as clearly being the correct ones, it's just an example.
You do not seem to understand how patents work because of other comments thinking that you can patent something without publicly disclosing the invention. In and of itself, this comment is silly because the answer to your question "What do you think will happen if IP becomes impossible to afford, as it surely will under such a policy?" is "exactly what happens when patents expire currently." It appears you are unaware that companies still invest in R&D knowing they at most get a few decades of exclusive rights.
So, for example, the secret sauce that makes the CPLEX and Gurobi solvers tens or hundreds of times faster than open source equivalents should simply be released to the public, leading to the immediate loss of 90% of those products' competitive advantage?
You don't see how such a policy would spur terror among large, profitable companies with trade secrets, leading to them moving overseas?
In these threads it always end up being: "Sure Foo would be nice, but, I don't know if you are aware, we are actually held at gunpoint by the status quo; its all really a non starter when you consider this fact."
If this is the only real problem, than why not just let them go overseas? Let the market play it out? The boon of progress and freedom X country would get from becoming even little more rational about IP would pay for itself and be better for actual people.
> The boon of progress and freedom X country would get from becoming even little more rational about IP would pay for itself and be better for actual people.
That's what China has been doing for decades, and "gongkai" [1] is just one tiny part of it. While life for the average Chinese citizen has gone up - the CCP managed to lift hundreds of millions of people out of poverty - the life of most Western populations has gone down the drain as entire industries, entire towns were unable to cope with unfair competition.
The societal consequences of that will haunt us all for many years to come.
Something like this genuinely does hurt very small businesses or inventors who invent something actually valuable but don't have time to quickly scale up.
What I like for IP laws is as follows:
When you create a protected work, you pay a very small fee. Say, $1 for copyright, maybe $500 for a patent.
Each year thereafter, if you wish to maintain your IP protection, you must pay double what was paid the previous year. Otherwise the property reverts to the public domain.
This ensures a period of protection if it's genuinely needed, but ensures that everything will eventually enter the public domain, especially in the case where no one is making any economic use of the material.
Even if we halve the patent protection period, that is still ten years during which a patent troll can scoop up a BS patent and then simply send threat letters and rake in money, while chilling any actual advancement.
Currently, there's an incentive to disallow progress. If someone does not want to make use of their own patent, they are currently incentivized to sit on it and keep the ability to create that thing out of the hands of anyone else, "just in case". If we shorten the period as you suggest, to half (for example), then that freezes that progress for a decade.
If an incentive is created to put inventions into the public domain if one is not using them, then that is better for everyone.
And by doubling the fee each year, it becomes financially infeasible for even large companies to keep things out of the public domain forever. A fee of $500 that doubles annually would, at the 20 year mark that is the current patent lifespan, cost a half a billion dollars to renew for that year.
Something I've wondered about - you specify a value and pay a tax accordingly. Anyone is then able to buy it from you for that price. Have some short term part for free, then fees scale over time.
It sounds nice in principal but I think it’s not so easy in practice, if I asked you what’s your car worth you probably say something along the lines of well it would cost x to replace it, or I paid y for it, or I could sell it for z on eBay (all three different prices) but if you then said that well whatever price you say someone can buy your car for and you’re stuck with without a car while you go figure out replacing is actually a price is not any of those prices, and is probably higher than the actual value, and may even be higher than the cost to replace it - you might say that’s the idea but ultimately it feels creepy to make people pay a tax to avoid the risk of an asset they rely on not to be taken away at an inconvenient time…
The value to me would be the replacement plus hassle value.
There's clearly values I'd easily accept, you offer me a hundred grand for my car and you can take it whenever you want.
Now for regular items like a car this would be hard. How do I value it and how do I not get caught out when second hand sales spike and I don't follow the markets?
But we're not talking about everyone's car. We're talking about asking the state to forbid others to make or build certain things (yes I know it's more detailed but you get the meaning).
Yep but that’s kind of my point - let’s say your a poverty level worker with a POS car “worth” $2k but it’s reliable and you need it to go to work, and finding another one for a solar price carries the risk of finding a lemon or having unexpected bills your going to end up saying it’s worth $[4]k because it would be a really bad day for you not to have your car and taking the risk on a replacement is just not worth it. You end up paying a higher tax rate than the guy that’s got three cars in his garage and his happy wearing the risk over time of being slightly under replacement value since it lowers his effective tax rate and if he’s out a car for a bit at slight loss that’s no big deal..
That extra “value” (or tax on people) you ascribe to your car may or may not be distributed in manner that societally makes sense
Ok? It results in them paying taxes while they hold it, to the value they ascribe to it. If they say it's higher than the original buyer, we get more in tax revenue
You’ve misunderstood my point. This is formulaic finance math. In normal finance markets, there is a natural equilibrium where markets fully value the risk of mis-pricing the asset as part of the asset value. In the scenario outlined, only one party in the market is taking that risk, which means any financially savvy third-party can basically make free money off assets owned by others almost risk-free under a wide range of scenarios. Instant profit while producing no value. It would create an entire parasitic finance industry dedicated to exploiting it. You won’t generate much tax revenue if you destroy elementary mechanics of the economy along the way.
It may not be intuitive how the math works but this would be exploited so hard it would cause serious social and political issues. I don’t have a dog in this fight, I am just savvy enough to the math to see how bad an idea this is. Which is probably why no government has seriously attempted it even though it is an old idea.
Could you outline a single example or at least provide a reference to understand this more? I'm not at all getting what exactly these third parties would do. How is it different from just putting up items for sale with a price?
Lots of people don’t know what their IP is worth, and it can change with market and tech trends.
And the damages aren’t based on the harm to the IP owner, but on the benefit to the infringer.
I could have a patent that I think is worthless, but in 10 years I discover that a multinational flat out stole the IP after an NDA meeting. What is the value that I should have declared?
But property usually isn't taxed. Trading is. If you license a patent to someone else for $500/year, you'd pay tax on that $500. But if it's actually worth more, of course you wouldn't charge such a low fee.
Property is almost always taxed. In Texas, property taxes on homes are 2.5 - 3% of value, most people pay between 8K - 30K every year. And this keeps going up! Over a 30 year mortgage, I'm sure most people pay more on property taxes than on their home. Approximately 50% of property taxes go to school districts, the rest for other municipal services.
Some states also tax car as property.
What is not taxed is Intellectual Property. Because it is almost completely owned by the super rich. And, of course, these billionaires need all the help they can get. How about we change this? We can think of wiping out property taxes for homeowners (making homes affordable) and fund education from patent taxes. After all, the super rich are deriving these patents from the education system, its only fair they pay their fair share.
Failing to pay the fee causes the patent to expire, and be unable to be used to sue someone. So these troll firms must also be paying these fees to be able to sue based on the patent.
Yes, having patents is expensive. Large corporations often file patents for defensive reasons, and for this they employ multiple patent lawyers full time.
I would be in favor of a fee that is 1024 * 2^n USD where n is the nth year you want to keep the patent.
1st year = 2000 USD
10th year = 1m USD per year
20th year = 1bn USD per year
It becomes prohibitively expensive if you don't use it. After 23 years it would make only sense for the most insane blockbuster drugs to keep going for another year.
Never used a fixed number for anything. Just tie it to a percentage of yearly revenue of the entity. This way you can ensure:
- small companies and private people can afford patents
- big corps do not get an advantage, in fact the bigger they get, the more expensive holding a patent becomes, ensuring they have to use those patents and not patent everything just because
- number of patents any single entity can hold is limited, unless they want to go in debt for holding patents
- there could still be a minimum yearly amount as proposed by you
That just means patent trolls would split their patent portfolios into hundreds of holding companies. Also people would start filing bigger and bigger patents, stuffing more and more claims into a single patent.
Well this is a problem we need to tackle anyways. Splitting things into a thousand holding companies should be with considerable cost as well for those involved with a thousand holding companies.
There is literally no case in which society profits from a corp being split up into a thousand holdings.
How often are you allowed to change this? Could just undervalue it until you suddenly don't. If you are not allowed to change it that is not an uninteresting idea.
Domain names pay per year because there's an ongoing service attached. There's no such thing for patent (besides fee to file)
Why punish patent holders because of patent trolls or garbage patents ?
Make it unprofitable to be a troll, and they will go away. Trolls need to be tagged , like pirates. There should be rules to make hunting for trolls profitable. For that, you need a "bounty". Here's my take:
In any patent dispute[1], the loser will pay as punitive damages (this is the "bounty") to the winner, the lower of (i) the winner's legal costs, OR the loser's legal costs x 2, plus (ii) loser must disclose the ultimate name of the beneficial owners (or material, if public) of the loser. EINs not allowed. The "trolls" are thus, branded.
The next lawsuit ensues. During research, it is found that one of the parties is a known troll that has lost 1 prior case. Now the damages, should troll lose, are 2X of any settlement OR punitive amount.
Should troll lose again, an extra 2x (total, 4x) gets applied on the punitive damage[1] to the troll and so on. If troll wins, his x is halved.
This does 3 things:
1- Incentivize public to seek out weak patents, or trolls, for a payout.
2- Makes Trolling much harder at scale.
3- Ensures huge companies face risks if they throw their weight around. Bigco can afford $$ penalties vs small fish, but cannot afford to be tagged a 2-4x troll. It makes them an attractive target for bigger fish looking for the 2X or 4X reward challenge of Bigco patent portfolio.
> Domain names pay per year because there's an ongoing service attached. There's no such thing for patent
Erm, what service? A record in a database? How's that different from a patent office? I guess there's fancy registrar website...to do what...help me pay my recurring bill?
OK fine want an ongoing patient fee ? Make it $9.99 per year just like a registrar, who gives you convenient ways to renew and pay fees from a working, modern site, and allow migration , with a few clicks.
Is that going to prevent trolls ? Unequivocally, no.
Parent was arguing for some ridiculous, unnecessary , tax. Then cited registrars as an example.
My point, 1 gives a service, one does not. If you want to charge for a service, then make it transparent and make the fee reflect the service, not argue "hey we already charge for registrars" to make his/her point about a new, unecessary tax.
I do not think you know the domain business, which I happen to work in (I own a small registrar and know people at registries). The reason domain costs money is to make it more expensive to hoard, not to pay for any service. There is a service but it just costs a tiny fraction of the registry fee the rest they often use for funding various non-profit initiatives to improve the internet not related at all the providing any service. The fee is set where it is to discourage hoarding.
Edit: It is also there to make it slightly more expensive to create scam sites, but mostly for the anti-hoarding.
Makes complete sense. Domain hoarding is not cool and makes sense to mitigate using fees as you describe.
Now, Patents already require fees and also substantial paperwork. In effect that is the "hoarding" control.
I stand corrected that the point of ICANN and registrars to charge something is to introduce a barrier to entry. Yet, I'd argue you are still providing a service if the fees go towards nonprofit activity to improve interoperability.
Yet, introducing a huge fee to patents wouldn't really be conductive to anything on the patent side, which is at the core my issue: I'm not making a judgement about the margin on fees, i'm questioning whether there's a semblance of service. From my vantage point, registrars have made massive improvements in accessibility and ease of use, and as you said, they have lowered the barriers to entry.
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I can't say the same at all for patents.
> Domain names pay per year because there's an ongoing service attached. There's no such thing for patent (besides fee to file)
I work for a registrar and know people working at registries so I know that is not the case. The reason they charge more than like 1-2 dollars per year is to make it expensive to hoard domains.
Sadly though, not expensive enough to actually prevent anyone other than the very low end of consumers from hoarding domains.
I worked for a registrar for a decade+ and worked with a lot of hoarders. Very early on in my career I actually dobbed one in to our local registry authority (because I was naive, and he was CLEARLY breaching the requirements for our ccTLD and so I thought 'Well this is wrong and I should report it') and is how I discovered nobody actually cares about hoarding and just wants to maximise revenue. (Well duh I suppose.)
> loser must disclose the ultimate name of the beneficial owners (or material, if public) of the loser. EINs not allowed. The "trolls" are thus, branded.
So TrollCo will just pay a different homeless person $100 to be the owner on paper for each of their patents?
Sure. Let them deal with getting the homeless persons to sign up. Open a bank account, pay taxes, get credit cards, run payroll, process permits, etc.
I don't think you fully appreciate how tough is to run a business with someone's name on top of every document. Not to say its not possible for a determined actor, but its going to eliminate a lot of options from the get go.
Another valuation/taxation scheme I've read about is: you can value your patent however you want, and it's taxed based on that value.
The kicker is: the values are public, and if anybody wants to buy it for something higher than the assigned value (or maybe some fixed percentage above the assigned value), you HAVE to sell. Of course, the buyer is then taxed at the higher value.
That seems like a terrible idea! If you underestimate the value of your invention, some big company can own it for $n+$.01. Or if you have invented something valuable but it takes years to get to market with it, you can go bankrupt in the mean time, or have your ownership eaten away by investors who suddenly have a ton of extra leverage over you.
>>These taxes can fund free education or healthcare or defense.
is it is always a bad idea to ear mark a tax for a specific purpose. Especially if you desire to use the tax as a punitive measure to reduce that which you deem bad for society, if it works now you need to come up with the money for the thing you funded elsewhere because all government programs are permanent
Look at smoking, all kind of things were funded on the back of smoking taxes, and when those punitive taxes worked to reduce smoking the revenue dried up but the budgets for for those programs did not so now the money had to come from somewhere else....
Using the tax code to punish or reward behavior is always bad
Using tax to punish or reward is called correcting externalities. More formally these taxes are called Pigovian taxes and they are supported by economists from all the schools, in similar vein to a land-value tax, because Pigovian taxes do not hamper economic producitivity.
You seem to misunderstand the entire concept of taxation, in its entirety, also. Taxes can either be used to raise revenue, or to correct for externalities. A tax that corrects an externality is valid on its own, EVEN IF, the revenue from that tax is burned or otherwise destroyed. It corrects for market failure, which leads to greater surplus.
While you are correct given the government debt levels and printing of money, on principle taxation should only be used to raise money for public purposes. Not to incentivize or punish behavior.
Allowing the government to use taxation for purposes other than public finance has been and will continue to be an avenue for abuse, and authoritarian control ultimately leading to tyranny
I generally think the principal of taxing property is fundamentally flawed (especially as it relates to property that has a market value that can be quite volatile or hard to value and even more so if the property generates no current income).
My rationale is that it means that only people that are rich can own property as they can afford the taxes, and especially if the property has increased in value over time and has no or small associated cash flows. By all means tax gains on realization (though I’d argue there should be a CPI adjustment to the basis but that’s another conversation)
This is an interesting point of view. Reminds me in some sense of some of the ethical justifications behind land value tax or property taxes.
The intention of legally enforced ownership is primarily to encourage development - and not to incentivize speculation as we seem to be doing in many situations. It seems reasonable to tax such speculation.
We need a fair-valuation tax; patents taxed yearly on their declared value and mandatory sale of the patent to anyone willing to pay the declared value. Some kind of deferred tax schedule (maybe 5-10 years?) for R&D.
Why would we tax that property (at the federal level) and not others?
What would this do to people who file their own patents to protect their own inventions? Historically, that's been the vast bulk of all useful inventions in this country.
No, the fee should be exponential, to keep people from keeping technology out of the public domain longer than necessary.
For example, maybe the fee is $10000 for the first year. This doesn't come close to recouping the cost of a single enforcement action, but it makes sure that someone has some skin in the game. Then every year the cost gets 10x more expensive. Of course you are free to choose your own base and multiplier.
For someone to keep a patent for 5 years, the total cost would be $10k + $100k + $1M + $10M + $100M = $111110000. Maybe it's worth it for a patent like the light bulb. Probably not worth it for a drinking bird toy. But either way, the value decision is up to the patent holder, and the cost of the patent incentivizes rapid monetization rather than squatting.
I think a better model would just be something like adverse possession, where if the owner of the patent hasn't developed it, or done certain things it can be nullified.
Appeal to emotion. Taxes go towards all publicly funded projects, but it’s easier to convince people that a new tax is a good thing when it goes towards these things that benefit everyone.
There are research companies who only do research and get money by licencing their patents. I mean, I really would like to live in a world without patents, but currently those companies do provide value, but cannot exist, without guarding their IP. Yet they would cease to exist, with your proposal.
Issuing a license is a form of "using it" in a use it or lose it scenario.
Those are not patent troll companies.
Patent troll companies file patents and then sit on the patent until they can sue another party for infringement, and never make an attempt to commercialize their patent.
Another example of not using it in the use it or lose it scenario is Pfizer's acquisition of Esperion Therapeutics in 2004. Esperion was developing a competitor to Lipitor, so Pfizer purchased Esperion for $1.3BB and shelved the technology to prevent competition with their best selling drug. Had Pfizer "lost" their patent for failing to commercial Esperion's drug, that drug could have entered the market as a generic to compete with Lipitor and severely reduced the cost of statin drugs for consumers.
> Patent troll companies file patents and then sit on the patent until they can sue another party for infringement
Many of the patents asserted by trolls were not actually filed by the trolls. Most often the troll company simply purchased the patent from the original owner (or, often, a bankruptcy court) and then they proceed to go about suing others using their newly acquired weapon.
Worse yet, the troll company was often created for the purpose of owning that specific group of patents. That limits the damage from a lawsuit gone wrong to just that group of patents, and not the many other patents owned by the hundreds of other similar troll companies that the same lawyer runs.
We really need a patent troll version of anti-SLAPP laws. To go past the shell company, and hit the people who run them.
That is hard I think, as there are patents that are not licenced because no one wants to - but I think every holder of a patent must licence it to any party interested. So just "sitting on patents" is not really possible to my knowledge. (but I am really not an expert here)
This is Qualcomm's big business (and others), getting their patents into standards like 5G and then charging people a fair amount to use it - and they have to license it to everyone, even their arch nemesis. Or you just buy their chips.
For a patent of something you invented, but did not submit to become part of a standards-body, you absolutely can choose not to license it for any amount of money.
If I'm understanding what you're saying correctly, then I'm not sure where you got that idea.
Patent holders are not required to license their patents last time I checked. You are simply required to acquire a license prior to using patented technology.
If they don't want to license it, you're SOL.
(edit: if you were speculating on what should be, and not what is, then my bad... :)
If you invent something, there's a work product. There is documentation, notes, blueprints, CAD files, software, etc. You can sell this and license it however you want. You can sue people that use it without a license. More importantly, you as the original author can use the IP as you see fit.
All of that is what I would put under the category of "use it." If you stop licensing it, then you "lose it."
Personally I don't think you should be able to sell the invention as an idea to another company that only relicenses it, but I get that there needs to be a market for IP itself.
> If you invent something, there's a work product. There is documentation, notes, blueprints, CAD files, software, etc. You can sell this and license it however you want.
These would only be protected by copyright. So if you invent something but do not have the resources to create the implementation yourself (and therefore cannot patent the invention under the scheme proposed by GGP), but you licence the work products (documentation, software) to one or more companies who can then implement it, a larger, well-resourced competitor can just reimplement it without paying you as long as they did not need to use any of your documentation or software. So that reduces the value of your work products.
But if the converse happened, e.g., your customer reimplements something invented by the large competitor, they can get sued, because the large company, being able to implement their invention, can therefore file a patent. So it amplifies the effect of having more resources.
It would be fairer to treat the large company the same way, and only let them copyright the work products rather than patent the invention, putting them on the same level as a smaller inventor.
I am aware of a few orgs that license interesting software R&D often with engineering support, sometimes with an equity component. Another variant is the R&D holding company that creates separate companies to commercially exploit the R&D in different parts of the public or private sector. Most such R&D orgs are very low-profile, they usually don't have an internet presence. Many use few or no patents these days, those economics don't make sense unless the business is largely owned by lawyers, which creates a different kind of company (much closer to patent trolls).
It is a bespoke kind of business, tailored to the specific technology and investment network of the people involved.
Great point. And then if one of those companies sold a patent that wasn't immediately licensable to an IP firm for an immediate infusion of funds should the IP firm be considered a patent troll?
Maybe the patent system could work, without the possibility of selling patents at all? Have not thought it out, but I know musicians also seldom profit of selling their IP to the major labels. But they are pushed into it.
Based on the text of the IP clause of the US Constitution I have wondered whether selling or licensing of IP (or even assigning it to a corporation) is technically allowable.
: To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
"Exclusive Right" means exclusive right. And I don't think the definition has changed much since the US Constitution was written.
It means the right is exclusively granted with them. I.e. no one besides the author gets to control the exclusive rights of a patent. By your logic, they can't even license it because "it's an exclusive right".
They control the license according to the terms of a license. But once a patent is sold the author of it no longer has any right to it.
Authors and inventors are mentioned with the same language in the clause. Since it has always been true that authors can basically only profit from their writings by selling copies or originals of their works (without selling the right to the copyrighted material itself) then some form of licensing is necessarily included in the clause for both copyright and patents.
There may have been journalists at the time who wrote works for newspapers owned by others. If so, this would be a reason to include the right of selling all of the rights to one's writings or inventions in the clause. I genuinely don't know if this was the case though.
I'm asking whether the laws which allow this are within scope of the US Constitution's clause on intellectual property rights.
There are plenty of laws which have been ruled unconstitutional. But it takes someone making the complaint to a court for this to happen. Otherwise the legislature does whatever it wants.
Currently a majority of the US Supreme court thinks that the status quo at the time of the writing of the US Constitution or its amendments has bearing as to the meaning of those texts. Thus I mentioned back then authors sold copies of their works while retaining all other rights as indicating that "licensing" is within this clause. Whether or not total sales of the rights to the work is within the purview of the clause is another question that I'm curious about.
>
I'm asking whether the laws which allow this are within scope of the US Constitution's clause on intellectual property rights.
Which laws are those? I'm not sure why it wouldn't be in the scope of the constitutional grant of authority to congress. "by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries" The use of exclusive here makes perfect sense with how things worked then, and today. I think you are getting caught up in non-existent semantics. What would be the purpose of the clause if authors/inventors couldn't sell their work? what would be secured in the exclusive rights that benefits the furthering of arts and science if inventors and authors couldn't exploit their exclusive rights? I'm a copyright and patent litigator and I've never heard anyone make the argument you are making.
> What would be the purpose of the clause if authors/inventors couldn't sell their work?
Not that they can't sell their work, but that they can transfer their exclusive rights in such a manner that they themselves can no longer exercise those rights.
And laws which allow this are obviously, by definition of the words at the time, not "securing" those rights to the authors and inventors. You can't secure something to someone by allowing them to (both post-hoc and especially pre-hoc) permanently transfer those rights.
Especially the pre-hoc transmission of rights as seen in various contracts (work for hire, etcetera) completely flouts the "securing" basis of the constitutional IP clause in that under no circumstances whatsoever did the rights ever belong to the author/inventor. The Constitution did not grant congress the authority to make laws allowing intellectual property protections to a pre-hoc transfer, but only possibly to transfer in which the author/inventor first had exclusive rights. Therefore any contracts which automatically assign any rights to any creations to another party the moment those creations are created cannot be covered by intellectual property protection laws created pursuant to Article 1, section 8, clause 8 powers, but must have some other constitutional basis (possibly under the commerce clause?).
I guess you could get around this argument fairly easily by saying that the "limited time" is X number of years or until sold. But then I still don't understand under what authority the purchasing party gets these IP rights, as they are not the author or inventor, and thus not entitled to any securing of rights under this clause. If they do have rights it must be under either common law which pre-existed 1789, or under another section and clause of the Constitution, since this is not a 9th or 10th amendment issue. Congress can't just make law willy-nilly however it wants to, but must do so under one of its enumerated powers.
I guess another way around this, and possibly the way it is done in IP law (you would know better than I), is that these rights aren't literally sold to another, but instead a permanent licensing contract is signed in which the author/inventor grants use of their exclusive rights to the licensee to do with however they wish. In this way the "exclusive rights" would still be secured to the author/inventor, though exercised by the other party. This seems like sophistry, but much of the law is.
>And laws which allow this are obviously, by definition of the words at the time, not "securing" those rights to the authors and inventors. You can't secure something to someone by allowing them to (both post-hoc and especially pre-hoc) permanently transfer those rights.
I don't follow that those words are the "laws" you are talking about. The security of the right is the intellectual property. The patent secures the space the invention covers. The copyright secures the space the novel expression covers. Your interpretation of "secure" is completely specious and has no basis in law.
Can you point to anything to support that understanding of "secure"? It seems like you are doing the opposite than what you claim to be. Rather than reading "secure" as they meant it at the time, you are reading a new definition of "secure" based upon how you feel IP should be resolved today.
This is all besides that if an owner can license, then transferring the IP itself is trivial, as one can grant a license that covers all aspects of the exclusive rights.
I find it a bit ridiculous that you write "ways around this" as if your argument has any actual basis in law. It doesn't, and it seems like you have no experience in licensing IP rights. While that's not necessary to have an opinion, it certainly has not left you with an understanding of how things work such that you could base a reasonable opinion off of that.
You're missing that I'm trying to figure out how this actually works. Not saying how it should work. I'm not a sovereign citizen here, merely a confused citizen.
> Can you point to anything to support that understanding of "secure"?
I'm a regular person who is trying to interpret the law. I'm failing. This is probably because I'm getting too lost in thought. But the law should be clear enough that regular people can understand it without citation or legal knowledge. It should not be a specialized field except that specialists have broad facility in application. It's a definite improvement that modern laws abandoned parsimony for as precise as possible definition of terms.
That's all.
And the plain meaning of "secure" at the time was: "The sense of "get possession of, make oneself master of" is from 1743." https://www.etymonline.com/word/secure With "no one can serve two masters" a biblical phrase that Jefferson would have been well familiar with.
> This is all besides that if an owner can license, then transferring the IP itself is trivial, as one can grant a license that covers all aspects of the exclusive rights.
Exactly. I did eventually figure this out. I still think that it's a sophistic end-run around the plain text of the clause, unless said license includes a clawback provision that the author/inventor can unilaterally initiate.
But I also believe that the founders knew about the Sophists, Shakespear's Merchant of Venice, and the like, as well as some of the arguments at the time over what to include in the Constitution. And that if they wrote ambiguity into Constitutional provisions, they likely did so on purpose. Definitional changes accounted for. Which puts me at odds with most jurisprudence.
This conversation is becoming absurd. I do not understand how you read that definition of secure to mean that the master cannot sell their own shop. I’ve repeatedly asked you for your support on what is a very esoteric reading of the word secure, as opposed to the plain reading I keep providing to you. It’s one thing for you to speculate, but to insist that your forced reading is the plain one is a bit ridiculous IMO. I’m well aware that the law needs to be written clearly for plain understanding, it is. You are the one advancing a meaning that says by giving something to someone, they can’t also then sell it? That doesn’t mesh with the founder’s understandings of property rights at all or the definitions themselves.
It’s a bit of a joke, and I guess you don’t realize it. But the point about academic references is that you are making an academic argument. You’d think that if your point was true, that it is SO OBVIOUSLY beyond the plain meaning of the word, SOMEONE else would have said something in the ensuing 200 years. Yet here we are, you telling me you know what the founders meant, despite all the evidence and common sense running against you. Okay buddy - good luck with that.
It's not just "secure". It is "exclusive". "Exclusive" has always meant "exclusive".
The Constitution only allows congress to "exclusively secure" IP rights to the originators of the material. It does not allow congress to "exclusively secure" rights to anyone else. The only way I can make this work is through an originator licensing a work to a single other entity, and in said license guaranteeing that other entity that the originator will not otherwise use any rights they own except to the extent of the exclusive license to the other entity.
This works. I still think it only really works if the originator has the unilateral power to break the agreement. But I can understand someone legitimately making a counter-argument.
In an originalist sense, the founders were very much against royal grants of monopoly, so limited the power of the government to grant monopolies solely to the originators of ideas.
I'm no longer confused, so yes we can drop this line of discussion. I hope you understand that I wasn't talking about just one word, but the word in the context of the rest of the clause.
It doesn't work and the only historical evidence you can point to is the merchant of venice, not the actual theories of property rights the drafters had in mind. This is an asinine argument. Exclusive here doesn't mean the owner can't sell, it means he's the only person who can decide to sell. That's why it's their exclusive right.
> You’d think that if your point was true, that it is SO OBVIOUSLY beyond the plain meaning of the word, SOMEONE else would have said something in the ensuing 200 years
The only people who would advance an argument against transfer of IP rights are those who don't have standing to make such an argument.
I ask you about any actual writing on this topic to demonstrate that you are making this up wholesale on your own. You haven't rebutted that. You just made my point for me with this ridiculous argument that in the entire history of the constitution of the united states, and all the years of interpreting it since then, everyone has been so invested in being pro-patent, that nobody besides you ever realized that the founders OBVIOUSLY meant that IP owners can't transfer their rights
(what could they do with it then? you realize not all inventors are interested in running businesses? licensing was not a new concept to the founders. obviously you have no rebuttal to this, but I just want to hit the point home because I find your argument so obnoxious in the profundity you think it belies)
including the founders themselves, who you cannot cite to say meant that their entire concept of property rights was somehow distinct when it comes to patents.
YOU ARE TOO USED TO ARGUING WITH OTHER LAWYERS THAT YOU HAVE FORGOTTEN HOW TO CONVERSE AND LEAD PEOPLE TO THE TRUTH.
In my "arguments" as you call them I am not citing jack shit other than the constitution, time-specific definitions, and some recollections.
AGAIN I AM A CITIZEN TRYING TO UNDERSTAND THE LAW BY READING THE PLAIN TEXT OF THE LAW.
> including the founders themselves, who you cannot cite to say meant that their entire concept of property rights was somehow distinct when it comes to patents.
There were a lot of distinctions written into the constitution that separated it from preexisting common law and royal prerogative. Titles of nobility, etcetera. So when trying to understand the basis of the law I necessarily revert to the knowledge that the constitution is the supreme law of the land, and thus it's text is definitive as to jurisdiction and powers.
AGAIN, I SAID THAT I FINALLY UNDERSTOOD THAT THEY CAN EXCLUSIVELY LICENSE THEIR RIGHTS. BUT THE CONSTITUTION DOES NOT GRANT CONGRESS THE AUTHORITY TO GRANT RIGHTS TO SOMEONE WHO IS NOT THE ORIGINATOR. SO I WAS TRYING TO FIGURE OUT HOW THIS WORKS. *I NOW UNDERSTAND HOW THIS WORKS!!!!* I still think there are holes in it, or of my understanding of it, but these aren't killer holes.
FOR GOD DAMN SAKE. HOW IS IT OBNOXIOUS TO WANT A COMMON CITIZEN TO UNDERSTAND THE VERY LAWS HE LIVES UNDER? AND THEN CALL HIM ASININE AND OBNOXIOUS FOR TRYING TO FIGURE IT OUT VIA DIALOGUE?
>YOU ARE TOO USED TO ARGUING WITH OTHER LAWYERS THAT YOU HAVE FORGOTTEN HOW TO CONVERSE AND LEAD PEOPLE TO THE TRUTH.
No, you're talking out of your ass, and you wont listen to reason.
>AGAIN, I SAID THAT I FINALLY UNDERSTOOD THAT THEY CAN EXCLUSIVELY LICENSE THEIR RIGHTS. BUT THE CONSTITUTION DOES NOT GRANT CONGRESS THE AUTHORITY TO GRANT RIGHTS TO SOMEONE WHO IS NOT THE ORIGINATOR. SO I WAS TRYING TO FIGURE OUT HOW THIS WORKS. I NOW UNDERSTAND HOW THIS WORKS!!!! I still think there are holes in it, or of my understanding of it, but these aren't killer holes.
Not sure why you think repeating yourself in caps-lock makes a difference. Congress can't grant a patent or a copyright to anyone else but the inventor or the author. The author and the inventor are free to do what they want with that property right. Nothing you said about the word exclusive or anything else changes. This is entirely common sense as I've pointed out to you several times. I also pointed out that your reading of the text is baseless, defies common sense, and the plain definition of any of the words. You, of course, insisted otherwise and that you were obviously correct despite a complete dearth of any kind of support. There's no reason for you to be electronically yelling at me, you got yourself here on your own. You were pompous and rude, why should I be courteous to you at all?
Patents can't sell themselves, just the same as a house or slave. I think that's consistent with their conception of property rights, which save for slavery, remains unchanged in today's society. I do wonder if you think before you post.
Whilst good intentioned, it might well work the other way:
Dedicated patent trolls will trivially overcome any hurdles by cheaply doing just enough to legally demonstrate they are working on future commercial applications blah blah honest.
Meanwhile, it likely puts up a prohibitive cost that will prevent the smallest genuine inventors from inventing?
That's the big problem with societies based on the letter of the law vs. the spirit of the law. Human nature has repeatedly demonstrated that if the letter of the law is what matters, people will work night and day to technically comply with the letter of the law, so they can continue to do the bad thing legally. Whole cottage industries will spring up to guide businesses right up to that legal line and sell them the tools and techniques to ensure they barely don't cross it.
In such a society, the rules need to be enormous and complex, much more than a 2 sentence HN post, to eliminate all the edge cases and loopholes everyone will naturally want to take advantage of.
Pretty sure the original idea of patents was to protect the inventor while they brought a product to market or licensed the patent to others to improve their products.
Holding a patent without even attempting to bring the idea to market should invalidate the patent after some reasonable amount of time.
The whole system as it is today needs a hard sanity check.
>Pretty sure the original idea of patents was to protect the inventor while they brought a product to market or licensed the patent to others to improve their products.
It was to protect the inventor so that when they did take it to market, or license it, someone else couldn't just make a copy of the same thing and sell it for cheaper not having to recoup r&d costs.
>Holding a patent without even attempting to bring the idea to market should invalidate the patent after some reasonable amount of time.
Patents are already invalid after a certain amount of time. I'm not sure what you think a reasonable time to bring a new invention to market is, but it's not far off from what the limits on patents are already today anyway.
By the way, where do you think these patents come from? They belong to companies that couldn't succeed in the market for various reasons. They go under and they sell their assets, which in these cases include any claims that could accrue to them by the short period of exclusivity granted to them for their invention.
While appealing to me as an entrepreneur, if I step back, I don't see how this law could work. Patent Law is the regulation of intellectual property, as such, the way property is regulated, informs the way intellectual property should be regulated.
Would it be possible to pass a law that says you can't own a patch of land unless you develop it sufficiently for some public utility? You can't own it unless you build a house on it, or an office? What about all the rough land, that isn't close to a development yet, but is anticipated to be? If someone can tell me how a law like this has been shown to work, perhaps even in a limited case like densely populated zones, then I might be persuaded.
> Would it be possible to pass a law that says you can't own a patch of land unless you develop it sufficiently for some public utility?
This is exactly how mineral rights work. The federal law says you need to do $100 worth of development on every claim every year to maintain it [1]. This is not something new.
Intellectual property is not property. It's a misnomer. Property is inherently scarce and exclusive. IP is not exclusive. If I have an idea, and you have an idea, and we share those ideas -- we both have two ideas. What IP is, is an economic rent, a protectionist measure to a class of individuals. It's a tax on the productive economy and it reduces competition and thus inflates prices. It is enforced by the monopoly of violence that the state holds. The burden of proof for justifying this violence for this end is on the proponents, not the opponents.
>You can't own it unless you build a house on it, or an office? What about all the rough land, that isn't close to a development yet, but is anticipated to be? If someone can tell me how a law like this has been shown to work, perhaps even in a limited case like densely populated zones, then I might be persuaded.
And as for this, we already have this. It's called a land value tax. A tax that discourages unproductive land use.
Then you assign the patent to them collectively by listing them all as inventors. It's not redefining companies because it's still assigned to people, not an abstract entity that can arbitrarily change hands in the future.
the moment you put an expiration date on patents due to lack of use, watch moneyed competitors sitting around waiting for your patent to expire instead of using yours to bring it to market
I'm not sure how small inventors could benefit from their creativity.
What is at the core of this need to steal other people's ideas? HN is supposed to respect the rule of law and western respect for innovation and collecting the fruits of your labor.
If someone won't give you a decent price, reverse engineer their work and come up with a creative alternative.
I'm not arguing that its OK to patent code or abstract ideas that are the basis for BS "catch all" patent infringement lawsuits or amazon 1-click buy nonsense. I'm talking is about real inventions. Television, radio, wheeled luggage, etc.
I also think that code should be copyrighted, but cannot be patented.
I'm not arguing that its OK to patent code or abstract ideas that are the basis for BS "catch all" patent infringement lawsuits or amazon 1-click buy nonsense.
I'm talking is about real inventions. Television, radio, wheeled luggage, etc.
I also think that code should be copyrighted, not patented.
Patents use to mean something else, and I can see we are talking about different things.
> but don’t have the capital to manufacture it myself
You're looking at 10k to file it, and then all it gives you is the ability to sue. If [insert company] violates it, you could easily be looking at 100k+ for litigation that you may or may not win.
> So if I invent something
My problem is you don't need to "invent" anything. You just need to be the first to file the paperwork (and have the cash to do so).
"[sensor] on [smartwatch, glasses, goggles, belts, chairs, whatever]" and now nobody else can do it for 20 years. Even if it's blatantly obvious that an chair can sense if you're sitting in it to turn on the tv automatically.
