Patent trolls are a symptom of the problem that the patent system misidentifies the risk involved in invention.
The concept is to mitigate the risk of innovating by adding reward. But the reward in the patent system is associated to the conceptualization of the idea which (mostly) carries no risk. The risk comes when you try to invest in that idea to bring it to market. So patent trolls can capture all the reward but not have any of the risk. The only way to solve this is to limit the reward to match the risk: a patent owner should only be entitled to damages that are directly comparable to the revenue they themselves are making from the same invention in the same market. If a patent troll is doing nothing with an invention then it should fall into the public domain.
Even that has issues. Say you invent X and start selling it locally. You're making a few $100k p/m and growing fast. The global market could be in the billions but your planning on growing one town at a time.
Meanwhile, another company with resources uses your invention and decides to grow 10 cities at a time. They can be 10X bigger than you very fast. They're eating your lunch, even if you'd only have made a fraction of what they made in that period.
That said, patents aren't supposed to be for inventors, they're supposed to be for society, to help stuff get invented and produced. Society benefits more from the larger company.
"patents aren't supposed to be for inventors, they're supposed to be for society, to help stuff get invented and produced. Society benefits more from the larger company."
It's both.
The original vision for the patent system, as laid out in the Constitution, was "...to promote the progress of science and useful arts [thereby benefitting society as a whole], by securing for limited times to authors and inventors the exclusive right to their writings and discoveries."
The end-goal is, as you've stated, the benefit of society as effeced by innovation and discovery. An important implication in that goal is that society does not benefit, and maybe even hurts, from stagnation in the arts and sciences. The founders theorized that a society free from any patents or protections would lead to stagnation, because there would be no financial benefit to the inventors, and hence, fewer would get into the innovations game in the first place. In order for society to benefit from innovation, being an inventor needs to have some serious upside, so that more inventors keep inventing.
There's nothing in the letter or spirit of the US patent system that claims the "larger company" or the "smaller company" in your example is better for society. Indeed, the patent system is mainly concerned with the startup/inventor at its seed stage. Where the startup or inventor goes from there is left open to the dynamics of the marketplace.
The section you quoted only supports the claim that patents are for society - all benefits to the creators are merely to promote the progress of science, etc...
They merely gave congress the power to do this, like declaring war, but they didn't mandate it.
Patents are broken. Fundamentally and in this implementation. We could reward those who helps society, such as inventors (regardless of who builds the invention) and the engineer who creatively gets the price down to where everyone can have one, and the manager who wrangled thousands of people to make something great, all without granting a single monopoly.
Simply divide the cost of the patent office (ignore the money it collects because it's a tax on industry), and give it to the people who've made things we like/need. For more money, tax industry equivalently to the average current patent litigation burden and give that to the innovators as well. It's no less fair than what we do now, at its worst, and its upsides are tremendous.
That's an insightful post. There is great risk in actually getting an idea to market. However, there is risk at the conceptualization phase too. I'd guess 1 in 100 patents are actually worth anything. There is a sort of yield management that goes on.
I don't see any solution to the mess other than abolishing software patents. That way you have a level playing field. I really don't think that will stop researchers from innovating, nor will it stop those with a purse from funding them. But yeah ... not gonna happen in my lifetime :(
Addressing the system, not single elements within it, is right on. If a company can legally profit doing something, how can you blame them for following the rules?
Saying trolls are killing innovation is like saying tall people are killing basketball. Once you write the rules, people will win the game by following those rules.
If you want shorter basketball players, change the rules that give them advantages. If you want more innovation, change the rules that stifle it. Blaming people for following the rules does little but polarize the debate.
My problem with patent-overload is that it's turned into a protection scheme. Big company approaches me and my little company and says,
"We think we have some patent issues".
And I say, "Really? Unlikely, we wrote everything from scratch."
And they reply, "How much money did you make last year?"
And I ask, "What's the got to do with anything?"
And they say, "do you know how much it will cost you to defend against our claims? So you can license for this sum now or pay 100 times that to your lawyers."
Guess what I do?
It's the same with patent trolls. Although they usually wait until you have a product to go after.
Really, it's as if paying off your friendly neighbourhood patent troll will become just another ugly cost of doing business.
Maybe they should set up an online patent-protection store where developers can setup an account to ease the friction (probably wouldn't have a one-click checkout though).
Right, it's a protection racket. Except that software isn't anyone's turf in particular, there are no gang wars to keep the troll count low, so you'll end up paying, paying, and paying again until you are big enough to spend a lot on IP lawyers. Then the lawyers start to twiddle their thumbs, and you begin to acquire your own patent portfolio. Then you become part of the problem.
That is just as easy to use for extortion. Suppose we have a dispute over who owes who $1000. You hire a $10000 lawyer. I hire a $100000 lawyer. Now although we both get the same ($1000) if we win, you stand to lose more than I do. So if we both have even chances of winning I can use that to pressure you to drop your case.
>Tim has been active in this space and in 2001, O’Reilly was involved in a dispute with Amazon.com, leading a protest against Amazon’s one-click patent and, specifically, Amazon’s assertion of that patent against rival barnesandnoble.com. The protest ended with O’Reilly and Amazon.com founder Jeff Bezos visiting Washington D.C. to lobby for patent reform.
And it's not like copyright trolls are limited to Silicon Valley. It's coming from content "creators" like the blog linked. If the quote that was stolen was originally from the AP the blog would have to pay $40. (See: http://mashable.com/2009/08/02/associated-press/)
My biggest problem with patent-overload isn't Apple v. Google v. Amazon, and lost innovation, it's Big Company v. Samll Company (particularly the physical engineering kind), with large legal departments versus smaller ones. E.g. "please top infringing on our bs ethernet connector patent"
One solution could be to give patent amnesty to small independent organizations - less than X million in revenue. That would at least have prevented LodSyS from going after small developers. The basis for this is recognition that a small entity would simply implode if they had to defend themselves in a court of law.
The problem is that the big companies would then infringe on the patent deliberately through a bunch of completely owned sub companies created solely for that purpose.
The system has always been defective to a significant degree. The difference today is that the information age makes it that much easier to abuse and run afoul of the system. It's certain that there have been many independent invention "patent violations" throughout recent history that flew under the radar of the legal system merely due to the difficulty of researching such things in an era of less pervasive communications.
We've sped up the rpms on the centrifuge and the system is shaking itself apart.
The only thing keeping the trolls slightly at bay (such as it is) is that they are forced to do their own prosecution. I think its only a matter of time until the IP lobby wises up and start agitating to pass laws that make patent violations a criminal matter such as they have done with other forms of intellectual property, i.e. trademarks, etc.
Over the years, many of the checks and balances have been eroded and much of modern IP law is a one-sided scam that doesn't work in favour of the market, competition or society as a whole.
The concept is to mitigate the risk of innovating by adding reward. But the reward in the patent system is associated to the conceptualization of the idea which (mostly) carries no risk. The risk comes when you try to invest in that idea to bring it to market. So patent trolls can capture all the reward but not have any of the risk. The only way to solve this is to limit the reward to match the risk: a patent owner should only be entitled to damages that are directly comparable to the revenue they themselves are making from the same invention in the same market. If a patent troll is doing nothing with an invention then it should fall into the public domain.