Posted by: Anonymous Coward
on September 12, 2004 08:11 AM
You don't understand how patent portfolios are being used and why this is such an issue. The problem is that the idea of the lone, poor inventor coming up with a new idea, or a bunch of white-coated scientists running around at a research firm, both being funded by patents, this popular view, is completely inaccurate.
Companies amass a large number of patents. There are so many existing patents, that large players in a particular field (say, operating systems, hard drives, or GPU chips) have discovered that it's simply impossible to product any new products without infringing on patents. They took the only logical approach -- mass cross-licensing. So Microsoft and Apple bring out their legal folks and ink an agreement -- now Microsoft can use ideas patented by Apple, and Apple ideas patented by Microsoft. To do otherwise would cripple each company, as neither could produce any products.
It is very common in large industries for all the players involved to cross-license patents. All the GPU manufacturers (Nvidia, ATI, etc) cross-license patents. Otherwise, nobody could produce new products.
Patent portfolios are only very rarely used to protect new ideas, to cause research to be funded, as was their original intent. I worked at a corporate research wing belonging to a Fortune 500 company -- a typical company involved in this sort of thing. When someone produced a new idea that was actually valuable against competitors, that idea would absolutely not be patented. Why? Because then the improvement would have to be made public, and all competitors would have it available. No, these improvements remained secret. However, trivial improvements were frequently patented. As a matter of fact, researchers were generally evaluated based on the number (not quality) of papers they had written -- and especially the number of patents they churned out each year. This kind of reward system led to many reformulated papers describing identical systems slightly differently and uninteresting patents. However, researchers did it -- because that was what paid the bills and kept them from being let go.
But why, you ask, do they do this? It seems like there would be no point to patenting anything! Here's where things take a bit of a twist that the average Joe isn't aware of. There is a very valuable tactic that patent portfolios *can* be used for. Establishing a barrier to entry in an industry. If S3, Nvidia, and ATI all hold patents that are absolutely crucial for producing modern GPUs, it becomes impossible for a new competitor or an existing company like Motorola to enter the market and begin offering product. Instead, the group of existing companies in the field establishes a stranglehold. Every now and then, two companies in the field merge, or one goes out of business, and the pool of providers in the industry just gets a little bit smaller. The market gets bigger and more profitable for the existing players. Of course, this is highly anticompetive, and no company will publically admit to using tactics like this, even if everyone does it. However, it is an effective way to give shareholders value and increase profit, and it is unlikely to go away.
The main "legitimate reason" companies claim for needing patent portfolios is simple -- defensive purposes. Many companies say that they will not use their portfolios offensively, just in defense. Microsoft, for example, has made this statement towards Linux. However, even if this statement is made in the best of faith, every company will eventually come to dire straits one day -- as SCO did -- and start using any of its available IP assets to try to slow its crumble. Furthermore, when a company goes under, it sells its IP assets off to other companies. Who is to say that these companies will be as scrupulous and honor-bound as the first company?
No, there are a number of things wrong with the patent system.
Here are my proposed changes to the US patent system:
1) Eliminate the software patent. It does not serve a good purpose. The overwhelming majority of technical improvements I am aware of have not come from patents. They have come from academic researchers with government funding, or from engineers building a product that require a solution to a problem. It simply is not required, and hurts a rapidly-moving industry. Software does not live long, and generally the implementation of an idea (which it can be expected of the inventor to provide) has enough time before reverse-engineering and marketing to provide funding to produce new ideas.
2) Institute a rule banning further "trivial" patents. If a patented idea is a solution that any educated person in the field would suggest when presented with the problem in five minutes or so, the idea is trivial and should not be patented. Yes, legally this can be difficult to prove, but there are clearly trivial patents being allowed through today.
3) Place patent challenge fees on the *loser* of a patent challenge, not the *challenger*. Currently, it costs perhaps $2000 plus legal fees to obtain a patent. Depending on whether inter partes or ex parte challenges are being used, it may cost $12,000 or more simply to challenge a patent. It is vastly cheaper to produce more patents than it is to challenge such a patent, so we continue to see ridiculous patents -- why not? It's worthwhile to produce them.
4) Allow a patent holder to freely and at any time in the lifetime of a patent, choose to release a patent into the public domain. Give them the opportunity to do before any challenge goes through.
5) Increase the cost of additional claims in a patent to one-half the cost of an additional patent, and limit the number of additional claims to a smaller number, perhaps ten. Currently, it is almost entirely to the benefit of a patent filer to do no prior art research, to file many claims (even ones that are known to be bogus, but will take a victim of an infringement lawsuit time and money to research, especially if the infringement lawsuit involves many patents) in each patent. Thus, most patents have additional claims of the following sort: "1. Foo", "2. Foo with multiple antennas", "3. Foo with multiple antennas shaped like a Yagi structure". This means that every victim of a patent infringement lawsuit must dig through a large number of bogus claims. The filer has little reason not to try filing over-general claims, since even if one claim is invalidated, it does not invalidate other claims.
6) Include a "clarity" criteria. Currently, it is to a filer's benefit to make patent applications as difficult to read as possible, so that they will slip past the examiner (or make it prohibitively difficult to fully examine the patent) but can still be pulled out to attack a victim with. If the patent examiner feels that a patent application is "unclear" or more difficult to understand than is necessary, I would like to see them be able to simply reject it based on these grounds. This would tend to improve the clarity of the US Patent Office database, and make it a more valuable resource for people who use it. Since this database is write once, read many, it seems very reasonable to put the burden of ensuring that the ideas are comprehensible on the patent appliers.
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Patents will not kill patents
Posted by: Anonymous Coward on September 12, 2004 08:11 AMCompanies amass a large number of patents. There are so many existing patents, that large players in a particular field (say, operating systems, hard drives, or GPU chips) have discovered that it's simply impossible to product any new products without infringing on patents. They took the only logical approach -- mass cross-licensing. So Microsoft and Apple bring out their legal folks and ink an agreement -- now Microsoft can use ideas patented by Apple, and Apple ideas patented by Microsoft. To do otherwise would cripple each company, as neither could produce any products.
It is very common in large industries for all the players involved to cross-license patents. All the GPU manufacturers (Nvidia, ATI, etc) cross-license patents. Otherwise, nobody could produce new products.
Patent portfolios are only very rarely used to protect new ideas, to cause research to be funded, as was their original intent. I worked at a corporate research wing belonging to a Fortune 500 company -- a typical company involved in this sort of thing. When someone produced a new idea that was actually valuable against competitors, that idea would absolutely not be patented. Why? Because then the improvement would have to be made public, and all competitors would have it available. No, these improvements remained secret. However, trivial improvements were frequently patented. As a matter of fact, researchers were generally evaluated based on the number (not quality) of papers they had written -- and especially the number of patents they churned out each year. This kind of reward system led to many reformulated papers describing identical systems slightly differently and uninteresting patents. However, researchers did it -- because that was what paid the bills and kept them from being let go.
But why, you ask, do they do this? It seems like there would be no point to patenting anything! Here's where things take a bit of a twist that the average Joe isn't aware of. There is a very valuable tactic that patent portfolios *can* be used for. Establishing a barrier to entry in an industry. If S3, Nvidia, and ATI all hold patents that are absolutely crucial for producing modern GPUs, it becomes impossible for a new competitor or an existing company like Motorola to enter the market and begin offering product. Instead, the group of existing companies in the field establishes a stranglehold. Every now and then, two companies in the field merge, or one goes out of business, and the pool of providers in the industry just gets a little bit smaller. The market gets bigger and more profitable for the existing players. Of course, this is highly anticompetive, and no company will publically admit to using tactics like this, even if everyone does it. However, it is an effective way to give shareholders value and increase profit, and it is unlikely to go away.
The main "legitimate reason" companies claim for needing patent portfolios is simple -- defensive purposes. Many companies say that they will not use their portfolios offensively, just in defense. Microsoft, for example, has made this statement towards Linux. However, even if this statement is made in the best of faith, every company will eventually come to dire straits one day -- as SCO did -- and start using any of its available IP assets to try to slow its crumble. Furthermore, when a company goes under, it sells its IP assets off to other companies. Who is to say that these companies will be as scrupulous and honor-bound as the first company?
No, there are a number of things wrong with the patent system.
Here are my proposed changes to the US patent system:
1) Eliminate the software patent. It does not serve a good purpose. The overwhelming majority of technical improvements I am aware of have not come from patents. They have come from academic researchers with government funding, or from engineers building a product that require a solution to a problem. It simply is not required, and hurts a rapidly-moving industry. Software does not live long, and generally the implementation of an idea (which it can be expected of the inventor to provide) has enough time before reverse-engineering and marketing to provide funding to produce new ideas.
2) Institute a rule banning further "trivial" patents. If a patented idea is a solution that any educated person in the field would suggest when presented with the problem in five minutes or so, the idea is trivial and should not be patented. Yes, legally this can be difficult to prove, but there are clearly trivial patents being allowed through today.
3) Place patent challenge fees on the *loser* of a patent challenge, not the *challenger*. Currently, it costs perhaps $2000 plus legal fees to obtain a patent. Depending on whether inter partes or ex parte challenges are being used, it may cost $12,000 or more simply to challenge a patent. It is vastly cheaper to produce more patents than it is to challenge such a patent, so we continue to see ridiculous patents -- why not? It's worthwhile to produce them.
4) Allow a patent holder to freely and at any time in the lifetime of a patent, choose to release a patent into the public domain. Give them the opportunity to do before any challenge goes through.
5) Increase the cost of additional claims in a patent to one-half the cost of an additional patent, and limit the number of additional claims to a smaller number, perhaps ten. Currently, it is almost entirely to the benefit of a patent filer to do no prior art research, to file many claims (even ones that are known to be bogus, but will take a victim of an infringement lawsuit time and money to research, especially if the infringement lawsuit involves many patents) in each patent. Thus, most patents have additional claims of the following sort: "1. Foo", "2. Foo with multiple antennas", "3. Foo with multiple antennas shaped like a Yagi structure". This means that every victim of a patent infringement lawsuit must dig through a large number of bogus claims. The filer has little reason not to try filing over-general claims, since even if one claim is invalidated, it does not invalidate other claims.
6) Include a "clarity" criteria. Currently, it is to a filer's benefit to make patent applications as difficult to read as possible, so that they will slip past the examiner (or make it prohibitively difficult to fully examine the patent) but can still be pulled out to attack a victim with. If the patent examiner feels that a patent application is "unclear" or more difficult to understand than is necessary, I would like to see them be able to simply reject it based on these grounds. This would tend to improve the clarity of the US Patent Office database, and make it a more valuable resource for people who use it. Since this database is write once, read many, it seems very reasonable to put the burden of ensuring that the ideas are comprehensible on the patent appliers.
Just my two cents.
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