I know healthcare is really important, but I think this bill is also up there when it comes to the long term financial viability of our nation. Intellectual Ventures and all these other no-talent, pirate scum need to go down. If not, my children and your children will be working for bean soup while some cocksucker in a suit extracts rents for "intellectual" property rights based on some goddamn scrap of paper with no connection to reality.
Gonna call my senator and congress woman tomorrow. And then I'm going to tell everyone I know to do the same.
Intellectual Ventures and these other pantywaste dirtbags are going to be lobbying hard against this bill, so the only thing we can do (unless you have some millions of dollars to spare on lobbying) is to call people and spread the word. That worked for SOPA, so maybe it can work now too.
Intellectual Ventures is now the bitter pill tech giants have to swallow to maintain their intellectual monopolies. With legislation that makes trolling impossible, but still maintains the legal privileges, large companies will have their cake and eat it too. It would mean there's nothing stopping the likes of Oracle or Microsoft from lobbying for harsher penalties, looser rules and longer terms for patent law in general.
The cure for this problem would be a refutation of patents wholesale, or at the very least a repeal of software and algorithmic patents. Patent trolling isn't a problem that's distinct from legal patent enforcement, it just means some "little guys" can steal some of the intellectual free lunch the large companies have been having.
Agreed. Patent trolling isn't the problem - it's a symptom of the wider issue that far too many obvious patents are granted.
The reason NPEs are perceived as a problem is because they break mutually assured destruction. If the patent system were working as intended, we wouldn't need MAD, because it would be possible to write a nontrivial computer program that didn't infringe on someone's patent.
I have no real problem with the concept of an NPE, if their patents are genuinely worthwhile.
I agree with your general point, but the ability to decide what patents are valid is still a lot of economic power. Even a vastly better-staffed USPTO would still have the capability for incompetence or corruption, at a huge cost to innovation and society.
Ultimately, any invention covered by a legitimate patent should probably be protected by a legitimate copyright instead. The flaw in the concept of patents is the one pointed out by Carmack: if someone is capable of reproducing your work independently, then can it really be said to be "owned" by its "creator"? Obviously, no one is going to create an exact copy of Harry Potter or Microsoft Flight Simulator without having seen the original, but they might very well write a wizard school story or plane-based video game; clearly, those concepts do not deserve to be owned.
Anything not specific enough to be covered by copyright is capable of being duplicated by another human independently, and therefore absurd and counterproductive to assign ownership and monopoly rights.
I think you're right on, but lets take our victories where we can get them. Shutting down patent trolls is worth doing. Lets make the next fight patent reform in general.
This is certainly kind of legislation that could come down to a close vote, especially if IV throws around some lobbying dollars against it.
A little advocacy will go a long way, and it will be very interesting to see if the tech industry gets their act together enough to support it in any meaningful way.
The pleading requirement is very important. On of the basic tools courts use to filter out frivolous litigation is to quickly dispose of suits that are implausible on their face. See: http://en.wikipedia.org/wiki/Bell_Atlantic_Corp._v._Twombly. Until this bill, the pleadings in patent cases were often ridiculously vague. Like filing a lawsuit against Best Buy saying: "Best Buy was negligent" without making any more specific allegations that could be used to evaluate the complaint on its face.
As an aside, there are a lot of parallels between the litigation system under the federal rules and computer systems. In patent litigation, you have a phase that is extremely slow and expensive (claim construction). How can you minimize the average cost? One way is to try and filter out as many easy cases early in the pipeline so you hit the slow path as little as possible.
Interesting legal fact: although the Constitution bars ex post facto laws, that only applies to criminal law. A retroactive tax is legal.
One of the reasons trolls have been successful is that the patent office is understaffed, and of the staff it does have, not enough are experts in software related matters. This means things get through that might not have if the PTO had more and better trained examiners.
If reforming to eliminate patent trolls, how about tossing in a nice big retroactive tax on patent trolls to help fund improvements in patent examining?
That's fascinating if true, since the power to tax is the power to destroy. I don't see a clean division around a domain on which a retroactive tax is justified.
I had a hard time coming up with a good citation for this. Retroactive taxes seem to be legally controversial whenever introduced, and they're usually retroactive only to the beginning of the year introduced. Could you point me towards a better link?
Yeah I've never heard of that, even retroactive tax in a given year is new and controversial. I'd have to think that a massive retroactive tax would be considered an unconstitutional takings.
I don't think it's possible to have a retroactive tax on instances of patent trolling, as opposed to patents in general. In order for this to be a tax and not a fine, it seems like it would need to be a tax on the patent application, not on bringing and losing a patent lawsuit. And in order to determine at the point of application whether or not a patent will be used for trolling (which we might define as whether the patent will be used in a lawsuit by an entity that holds the patent but does not itself employ the patent's "invention"), the USPTO would need to be able to read the future.
wrong approach. copyright laws are already sufficient to protect copying of source code. thats not what patents are used for. patents are used for protecting product features and functionality. by their nature, product features and functionality cannot be trade secrets since the public uses them.
however, I agree with you that we should just get rid of software patents. I think there is no downside to companies copying (and potentially improving on) the features of a competing product.
This basically shoots the messenger. NPEs just expose a greater problem with the patent system, which people like rms and others have warning about for years.
What we need is actual reform of the patent system, not just sweeping the problem under the rug by singling out "trolls".
> It isn't just HappyTroll LLC or whatever shell company was set up that week that's going to be on the hook for fees. The fees can be applied to any "interested party" in the case.
That's good, but the pessimist in me thinks IV could probably find a way around this too, but maybe not. Modifying the law to somehow identify patent troll originators (IV) and barring them from disbursing patents to NPEs would seem like some added protection.
Unless a company is in the business of producing things its patents cover, it isn't utilizing the patent system as intended. I fail to see how barring a Non Practicing Entity from litigating patents it isn't actually using in a real, product making capacity is unjust. It seems perfectly reasonable to me, in fact.
Part of the purpose of the patent system is to allow individual inventors and small companies to develop technology even if they won't have the resources to produce and sell it. The ideal situation is that these NPEs go out to the large companies in an industry and say "hey, we've got this invention you might be interested in...".
If NPEs are barred from litigating patents, there's nothing to stop those large companies from saying "great, we're going to use this... but not pay you anything, because there's nothing you can do about it".
No, large companies are generally scrupulous about licensing patents. Infringing a patent makes it valuable, and thus worth selling to a competitor or underwriting by a venture capitalist. Nobody wants to have the billion dollar product that is enjoined from sale.
Depends. Usually big companies have cross-licensing agreements between competitors (since they usually can't do a product without each other's technologies - example: hard drive companies)
Also, it's easier for them to come up with a way of not infringing the patent in the first place.
That would solve some problems but create others. If it's "original inventor" rather than "original inventor and heirs" you've just created an incentive to assassinate inventors (and a disincentive to invent if you're getting old).
Even if it's "original inventor and heirs", you've created a liquidity process -- if you're a chemist with lung cancer, it would be great if you could sell your novel synthesis in order to pay for your cancer treatments rather than needing to start selling drugs yourself.
And then there's the problem of defining what a "practicing" entity is, of course. Someone who has at least one customer? Someone who has used the invention themselves? Someone who was planning on building a product, but didn't get into YC and ended up working at Microsoft instead while he tries to license his invention to raise money to pay for his next startup idea?
I don't follow the chemist example. The patent is still valuable to companies who do want to productize it, or even companies that don't. Companies can still buy and hold patents without doing anything with them, it's just that they are barred from litigating them. They can still resell the patent to someone else, potentially for a profit.
A "practicing" entity has either brought a product to market, or uses the invention themselves in the process of building a product on the market. Someone who is planning on building a product but has no funds doesn't get to litigate unless they are the original inventor. Your last example seems to imply that they are the original inventor.
I think trying to come up with too many special cases is just the wrong approach. Patents are intended to be somewhat property-like, and transferability seems like a completely reasonable thing to me. In fact, it would be quite challenging to prevent transferability without impacting a lot of contracts -- they'd just set up some power of attorney scheme to make it seem like the inventor is a party to the lawsuit.
The root of the problem is more closely related to the imbalance of power in a lawsuit: one party has the ability to subject another to great cost; with little or no cost to themselves, even if they are completely wrong. That imbalance is what makes extortion possible, and this bill seems to be more directly aimed at that problem.
To force the plaintiff to take on more responsibility, perhaps they could go further and require posting a bond for the cost of the trial in case they are wrong. That would prevent them from just setting up shell companies and then saying they can't pay when they lose. The judge can be involved in setting the bond amount, which should help sort out the rest of the problems and keep the incentives reasonable.
The chemist doesn't want to spend time going around to companies trying to license his technology, and he certainly doesn't want to spend years in litigation. He's busy dying (and/or cooking meth) -- he wants to sell his technology to a company which will do the licensing and/or litigating for him.
The problem in this case there are many instances where the original inventor is not interested in taking on the risk of sales based licensing and so sells the patent for a lump sum to a third party.
Unequal treatment of NPEs acts against specialization of skills/division of labor. Invention, Manufacturing, and Litigation are three entirely different skills. If an inventor has to start some token manufacturing operations to monetize his patent, that manufacturing will be subscale and inefficient. If the manufacturer has to litigate and cannot sell the patent to litigation specialist firms, they will be distracting themselves from their core business.
The ability to sell an asset is an important one for an efficient economy.
Your first paragraph consists effectively of assertions without any sort of empirical support, and the second is at best an inappropriate generalization. The ability to sell assets, in general, may be important for an efficient economy, but not necessarily in the case of specific assets, in this case patents, if you care to call them 'assets'.
Why should patents be assignable or transferable anyway? The assignment or transfer of a patent necessarily implies the original holder isn't interested in the state-conferred monopoly that a patent is, and therefore he's not interested in having a monopoly on the invention the patent covers. To my mind, the assignment of a patent should immediately expire and/or invalidate it.
> The assignment or transfer of a patent necessarily implies the original holder isn't interested in the state-conferred monopoly that a patent is, and therefore he's not interested in having a monopoly on the invention the patent covers.
It means no such thing. The monopoly has value whether they go through with production themselves or sell it. Selling it just realizes the value in the short term rather than the long.
The monopoly no longer has value to the original holder once he sells it. He has realized the entire value of the monopoly for a short term profit. This isn't incompatible with the notion that, effective immediately upon such realization of value, the patent should expire. You may disagree that it should expire at that point; in which case we'll have to agree to disagree.
And should the purchasing party know that the patent will expire on the moment of purchase, the patent will hold no value and will never be purchased.
There is a middle ground, where a patent once transferred by the original patent holder cannot be extended, or is perhaps reduced, or the patent cannot be resold. Something of the sort. This would maintain the patent's value for the inventor in a market, as well as provide reasonable measure against patents being scooped up and plaguing IT for decades.
Better yet, though, no more software / algorithm patents.
As has been pointed out, if the patent expired on selling it would obviously have no selling value.
But beyond that I'm really confused by your argument. You seem to think that someone files a patent because they hope to exclude people from its use, which is not what patents are intended to do at all. They are intended to allow an inventor to realize an incentivized value for the public disclosure of their invention.
To that end it doesn't matter when the value is realized, the inventor has done their part by disclosing the invention to the public.
> Why should patents be assignable or transferable anyway?
Because the purpose of the patent system is to turn trade secrets into public assets. Bob the blacksmith's new alloy is not much of a public asset if for the first twenty years all we get are the few thousand horseshoes that Bob can hammer out. You are advocating a Chairman Mao patent system, with patents only benefiting garage semiconductor fabs and artisinal jet engine factories.
The transferability of patents allows them to immediately be deployed throughout society.
Can you explain? On the face of it, an entity without any skin in the game (i.e., can't be sued, it'll just fold and re-emerge as another company) sounds like a complete abuse of the system.
It's because you can have "good" NPE's. Take ARM Holdings for example, they do not manufacture their own chips but rather licenses their designs to other semiconductor manufacturers.
How exactly are ARM Holdings "an NPE"? They're definitely practicing - they're using their patents in their designs. They also attempt to shoot down any independent implementation of the ISA, for that matter.
ARM does not reduce its inventions to practice. It is not the hardware description language files that are subject to patents but the chips that embody those files.
Another valuable example of this is a patent pool consortium, a corporation that exists to bring all patents in a field together for easy licensing.
"Reduce inventions to practice?" First, I don't think that my country has any such legalese in our patent law. Second, what does that make NVIDIA? Or ATI? They don't make their own chips either. Third, I believe that what is protected by most of these patents are neither HDL files nor the chips but rather specific implementation techniques for parts of the HDL implementation of the ISA. If the chips were patented, it would be worthless because you could do an independent design.
YES!! I don't think ideas need to be protected if you can back it with great execution. Ideas aren't unique, can never be. As René Girard said, all desires (and hence ideas) are mimetic! So, I don't buy into the philosophy that ideas need to be guarded. It curtails innovation.
A couple of years ago when I was building a product, our board convinced us to apply for a patent. After a provisional application and following it up with a proper submission, we finally had an offer that granted us the patent. Never pursued it. I know, it makes sense to protect your ideas; but we had Whatsapp, Pinger and other apps kicking ass in the space.
still about a million miles away from good enough. but a nice attempt a political manouveur
when $100k dollars is considered a low cost, someone is living in cuckoo land...
how about charging people this for failed patent applications? or just no patents at all?
nearly all of the arguments for patents are trivially in the worst interest of the wider public... frankly its an embarassment that the system exists at all, much less in the way that it does
Anyone interested in getting a better understanding of the economic reality of trolls is encouraged to go to ssrn.com and do a quick search for "patent trolls". These are not all peer reviewed papers, but many of them have data and methodologies and, most importantly, numbers. Read only the abstracts, if you're short on time.
As always, the topic is so much more nuanced than "good" or "bad". The first result, "Patent Troll Myths" by Michael Risch is a good start.
Sure, you will find the papers by Bessen et al where the "trolls cost the economy 29 Billion" meme comes from. But you'll also find a paper (by Schwartz and Kesan) that debunks Bessen's paper, which got nearly 0 coverage in the press. You'll even find a paper showing trolls have better patents than average! But these tend to get settled quickly, so typically the poorer ones go to trial, and so you get papers (like from Lemley) showing that trolls lose more cases than average.
You'll also find papers arguing the benefits of trolls, debunking some of the common arguments against trolls, and introducing new previously unconsidered harms of patent trolls.
And of course, just like there's no clear definition of "software patents", there is no clear definition of "patent trolls" either, and you'll find papers discussing this.
And because they use different data sets, different papers look at the same problem at the same time and reach completely opposite conclusions.
And further, because the authors are almost never practitioners in the field, you get some really obvious findings being reported... and then misconstrued! For instance there's a paper showing litigation has shot up since 2007, and presenting various theories, completely missing the
Medimmune v Genntech decision that effectively upended the rules of patent licensing. And there's the paper that argues patent quality is dropping because more patents were being issued, without being aware of the ending of the misguided "reject, reject, reject" unofficial policy instituted by former USPTO head Jon Dudas (http://www.ipwatchdog.com/2009/03/16/prespective-of-an-anony...)
And as always, it's helpful to keep in mind where the authors' funding comes from. Bessen of the "29 billion" fame, for instance, is funded by the "Coalition for Patent Fairness". Check out the list of supporters. It's almost ad hom, but hey, if we can point out that studies showing the harms of piracy are often funded by the MPAA, we can point this out too.
Yes, there are clear bad actors like Lodsys, but there are so many more variables out there, and many are arguably helping more than harming.
Yet, somehow, it's only one small side of the story that gets told.
As this is a hot-button topic, we should take an objective look at the data. Because, quoting from one of the papers above, "Without a better understanding of the many complicated effects of patents in high technology markets, we run the very real risk of misguided policy decisions."
While it's definitely healthy to step back and attempt a broader view of any issue, it seems to me that "patent troll," by admittedly informal definition, means a non-practicing entity litigating solely for profit.
Maybe I'm missing something, and maybe it is a lot more complex than that, but I think this is one case where ill-defined or over-applied terms may be muddying the water with regard to what is or isn't taken into consideration on an issue that, by its nature, seems to have no redeeming value.
Read the papers to get an idea of how they are beneficial. One obvious way is straight-up helping individual inventors or small companies take on big ones. But another less obvious way they help is by creating a secondary market for patents. This has many follow on effects. For one, VCs are more likely to fund startups with the idea that they can partially offset the risk of failure by monetizing the patents (papers by Merges, Mann, etc. to this effect, IIRC). This enables entrepreneurs to pursue riskier technology ventures.
Saying they exist only to litigate is missing the whole picture. That is simply what they specialize in, primarily because patents are essentially a right to sue, and there's a gap in the market when it comes to enforcing patents.
Now you may say that patents themselves are crap and represent no value, but 1) that's a different problem than trolls, as others have mentioned, and 2) you'd be making a generalized assertion with little data to back it up. Even if you are an experienced patent litigator who's seen a lot of cases, there are biases at play. Which is why, again, we should turn to studies, which, again, do exist and, again, present a much more nuanced reality.
Most agree that patents are a good thing. But a "patent troll" as commonly understood is an entity that only litigates. There is no value creation on their end, and they are not using the patents to create value. Simply to re-distribute value from other parties to themselves.
1. There's no such thing as "software patents", legally speaking.
2. I'd love to know how many people voting on that poll meet the following criteria:
a) know what claims are;
b) did their own research rather than parroting what others say.
My point is always this: if we really are nerds, we should know what we're talking about, and woefully few of us meet that criteria when it comes to patents.
Good start but it would be great to see something targeting trolls which threaten small companies and individuals, maybe something forcing them to do a class action against all companies that use Apple IAP frameworks rather than allowing them to target everyone one on one.
I like the idea that NPE can only make a certain percentage of revenue on "trolling". What if, for example, only 25% of a company's revenue can be made off these "trolling" escapades? I think it would clean things up quite a bit.
The rule should be for NPE only. In otherwords, as soon as you can prove that the idea is making you money (even if it's a small amount) the ceiling comes off. This doesn't mean "NPE" no longer exists. For example, a business who has a revenue stream but haven't incorporated their invention into their products yet, but want to claim the invention is worth alot. Why aren't you making money on it yourself if it's worth so much?
So I got to speak with Bob Goodlatte a few times before. I generally considered him a generic shmuck, but this legislation is pretty impressive. Kudos, Bobby.
Gonna call my senator and congress woman tomorrow. And then I'm going to tell everyone I know to do the same.
Intellectual Ventures and these other pantywaste dirtbags are going to be lobbying hard against this bill, so the only thing we can do (unless you have some millions of dollars to spare on lobbying) is to call people and spread the word. That worked for SOPA, so maybe it can work now too.
Go, go, go!