Is Building An Active Marketplace For Buying And Selling Patents A Good Thing?

from the something-to-think-about dept

Fri, Apr 7th 2006 1:40am — Mike Masnick

One of the criticisms we often have about the patent system is that in recent years it's been setup in a way that encourages people to sit on patents and sue, rather than actually bringing products to market. We'd much rather see products compete in the marketplace, where their true value can be judged. With the growth of patent hoarding and nuclear stockpiling, however, it doesn't seem like we're going to get there any time soon. Instead, patents are now being used either for defensive purposes or to attack others -- rather than to help bring real innovations to market. That's unfortunate. Of course, with all this attention on patents, it's not just patent lawyers looking to cash in. There was a ton of buzz for a big new patent auction, even if very few buyers actually showed up. Part of that could just be the "first time" nature of the event. However, the folks behind it plan to have them regularly... and eventually try to turn the whole system into a regular "marketplace for patents." This is definitely an interesting idea, and one worth watching. One of the reasons for setting this up in the first place, they claim, is to get a more positive image out there of patents and the market for intellectual property -- but it seems just as likely to open things up to further abuse of the system. Those in the best position to hold back the innovation of others could very likely use such a marketplace to hoard patents to prevent others from innovating. Since true innovation often occurs by actually getting stuff done and products to market, the fear is that those who are actually innovating won't even be paying attention when some random patent goes up for sale that could eventually stop them from actually bringing their product to market. When we say we want to see innovations compete in the market, we didn't mean this kind of market -- but one where actual products get developed.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

18 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Bob, 7 Apr 2006 @ 5:38am

Marketplace
I think a marketplace where you could choose a couple of lisence options and go would be cool and allow people to lisence things more easily. I'll take the .01 cents per click for Amazon's one click patent.
[ link to this | view in thread ]
Thomason, 7 Apr 2006 @ 5:53am

pricing patents
In "bringing products to market" it's all sunk costs. Recently-patented, but as of yet untested-by-the-market, product ideas are tough to get fully ramped up. Believing that inventors just invent to sit on the thing overlooks all of those who put their heart, soul, home equity credit line, etc., into trying to get a product to launch, as well as those, who travel to all sorts of inventor fairs, and trade expos, etc..
The Ocean Tomo affair is a clear example of the difficulty of valuing inventions that have not been marketed. Valuation is typically based on revenue stream, but if it's never been marketing, then it's all guesswork. Inventors may expect too much, or more $$ than the marketers are willing to commit to launch the product. I presume a fair number of those bidding at Ocean Tomo just hoped to flip what they bought, thinking that they could promote the invention more effectively than the inventor did/could.
[ link to this | view in thread ]
Ryan, 7 Apr 2006 @ 7:25am

re: pricing patents
"Software patents are the roadside bombs of the information superhighway" -me
[ link to this | view in thread ]
Director Mitch, 7 Apr 2006 @ 7:47am

It's really apparent that you never have worked with patents.

Thomason is right. Patents in and of themselves have no value - more money has to be invested in them. If used to develop, then marketing, prototyping, etc. have to be done. If used for licensing, defense, or "trolling", money has to be invested on the legal side. And just because something is patented, doesn't mean that it will hold up in a reexamination, a prior art search, etc.

A patent has never stopped a start-up or small company from putting a product on the market. I have been in both places where "patents be damn let's move forward" was yelled when told by counsel that we infringe. After all, no one goes after you unless your product is successful, and we'll worry about the patent issue when we get there.

So this whole "patents stop innovation" meme you're pushing is getting really, really old since it doesn't hold up to close inpsection.
[ link to this | view in thread ]
Mousky, 7 Apr 2006 @ 8:02am

Re: pricing patents
"Believing that inventors just invent to sit on the thing overlooks all of those who put their heart, soul, home equity credit line, etc., into trying to get a product to launch, as well as those, who travel to all sorts of inventor fairs, and trade expos, etc.."
It's not a case of believing, it's a fact. The overwhelming majority of patents never get used. The trend towards hoarding and stockpiling will make this worse and will only cause more people to overlook real inventors with real patents.
[ link to this | view in thread ]
Mike (profile), 7 Apr 2006 @ 9:42am

Re:
It's really apparent that you never have worked with patents.

Hmm. That's not true. Not sure why you'd say so.

Thomason is right. Patents in and of themselves have no value - more money has to be invested in them. If used to develop, then marketing, prototyping, etc. have to be done. If used for licensing, defense, or "trolling", money has to be invested on the legal side. And just because something is patented, doesn't mean that it will hold up in a reexamination, a prior art search, etc.

Not disagreeing with any of this. Not sure why you think I am. In fact, this has been my whole point all along. The system puts way too much emphasis on the *invention* stage and giving all the rights and power to the "inventor" and much less to anyone who actually *does* all the work to bring a product to market.

So, I don't see how this goes against what I've been saying. It actually *supports* my position.

A patent has never stopped a start-up or small company from putting a product on the market. I have been in both places where "patents be damn let's move forward" was yelled when told by counsel that we infringe. After all, no one goes after you unless your product is successful, and we'll worry about the patent issue when we get there.

Yeah, I've discussed that before as well. In fact, just recently I discussed exactly that concept, and why it's problematic.

So this whole "patents stop innovation" meme you're pushing is getting really, really old since it doesn't hold up to close inpsection.

Er, sure it does. You don't think the $600+ million RIM just handed over to NTP (not to mention the millions they spent on lawyers) couldn't have been better spent on research and bringing products to market?

There's no doubt it's holding back innovation. Hell, it's already stopped us from working on something, and we get stories all the time about innovation patents have held back. We posted a story not so long ago about scientific researchers talking about all the work they won't do because of patent infringement.

So help me here. What's not holding up to scrutiny -- because we're seeing evidence everywhere?
[ link to this | view in thread ]
Ron Johnson, 7 Apr 2006 @ 11:23am

Selling Patents
Good article..........but you must consider the fact that many perfectly valid patent applications are currently being blocked by the patent office because of pressure from the Fortune 500 companies (through Government lobbying, of course). This is because these valid patent applications will, if granted, conflict with current corporate business models in which millions of dollars have been invested - often without the need to protect the corporation by patent filing. Why punish innovation?
I often thing what would Edison be able to to today?
Probably work for some 3rd tier electrical service provider :)
[ link to this | view in thread ]
Mike (profile), 7 Apr 2006 @ 11:25am

Re: Selling Patents
but you must consider the fact that many perfectly valid patent applications are currently being blocked by the patent office because of pressure from the Fortune 500 companies (through Government lobbying, of course). This is because these valid patent applications will, if granted, conflict with current corporate business models in which millions of dollars have been invested

Huh? How could they possibly be "perfectly valid" if they would conflict with an existing offering? Isn't that clearly prior art?
[ link to this | view in thread ]
Ronald Johnson, 7 Apr 2006 @ 11:30am

Re: Re: Selling Patents
This is the problem - there is no prior art. Personally having been in a battle with the Patent Office for 7 years over an application that has no existing prior art - and there are many others like me. And on the other hand - how can Amazon be granted a patent last December for product reviews where they can enforce such a public domain feature over the entire internet community.
Patents are granted today provided there are no large corporations that would be affected by granting them - that is a fact!
[ link to this | view in thread ]
Ronald Johnson, 7 Apr 2006 @ 11:31am

Re: Re: Selling Patents
This is the problem - there is no prior art. Personally having been in a battle with the Patent Office for 7 years over an application that has no existing prior art - and there are many others like me. And on the other hand - how can Amazon be granted a patent last December for product reviews where they can enforce such a public domain feature over the entire internet community.
Patents are granted today provided there are no large corporations that would be affected by granting them - that is a fact!
[ link to this | view in thread ]
angry dude, 7 Apr 2006 @ 11:48am

Re: Re: Re: Selling Patents
Hear, Hear,

PTO's upper management doesn't like american small inventors... (Isn't it a PTO job to protect small guys from the big evil corporations ? apparently not these days...)

The whole thing looks more and more like a scam to me...
[ link to this | view in thread ]
Mike (profile), 7 Apr 2006 @ 12:36pm

Re: Re: Re: Selling Patents
This is the problem - there is no prior art.

But you said there was prior art because they were already using the process.
[ link to this | view in thread ]
jamie, 11 May 2006 @ 10:59am

Apple 2 GB iPod Nano......50 USD
Apple 20 GB iPod ....................30 USD
Apple 4 GB iPod Mini Pink M9435LL/A .45 USD
Apple 40 GB iPod photo................40 USD
Apple 4 GB iPod Mini Silver M9160LL/A 40 USD
Apple 60 GB iPod Photo M9830LL/A......60 USD
Apple 60 GB iPod photo ...............55 USD
Apple 30 GB iPod Photo M9829LL/A......40 USD
Apple 512 MB iPod Shuffle MP3 Player..40 USD
Apple 4 GB iPod Mini Blue M9436LL/A...45 USD
Apple 2 GB iPod Nano......50 USD
Apple 4 GB iPod Nano......60 USD
Apple 30 GB iPod Vidoe....110 USD
Apple 60 GB iPod Vidoe....140 USD
Xbox 360..................160 usd

for more information contact us:
Email:uzzi_001@hotmail.com
Tel:2348054639372
JAMIE ALEXANDER
Thank you.
[ link to this | view in thread ]
oswald, 21 May 2006 @ 4:43am

underwater timed release
Dear Sir my name is Oswald and over the last 9 years have been working on my release tool, now that this is complete and functional I require your assistance as to the sales of my product.
its designed to economically retrieve goods from the ocean floor with a countdown timer programmable up to 8 years pending the type of battery's used , the release loads are up to 300KG instantly with precise timing. even over longer periods of time delays.
as a stand alone unit, it can be used for the following. acoustic back up releases, subsea blue and white water monitoring sensing. acoustic modems for one. travick monitoring at subsea level, decoy preposes for military purposes, simultaneously monitoring of currents at sea air enz, salinity, Tsunami, warning, at greater depths, auto deployment for escape vessels as missions for frogman. remote recovery for hasitors materials, political information that can be released , like documents.and corordenence with individual security, smuggling of food and medicine of people that are deprived of such, combating commercial monopolisation. fishing traps, retrieval.
its too many to educate you, A fantastic tool, if this can be applied to your customers, you may contact me for a demonstration soon to be held hopefully with the assistance of the defence force,in South Australia this tool is so well designed, in some cases it is more economical to recover the goods 100s of Kilometres of shore by helicopter, as a helicopter cost $1000. per hour, and a ship and its manpower can due to the timefactor cost and investment of equipment be more expensive. depth rating 1000meters or more release loads from 5KG to 300KG more with heavy duty plate, deeper with disposable timers, cost evective both in its use and purchase , compact and easily handled , light weight storage, and small, strobe light for night recovery is additional and only rated to 8 bar or atm. we are still working on this, so please contact me . if you find use for this tool thank you for your attention Oswald.

--------------------------------------------------------------------------------
[ link to this | view in thread ]
Anonymous Coward, 18 Aug 2006 @ 9:33am

Re: Selling Patents
Hey Ron

Liked your comment. Actually had a first hand go around with the patent office, 9 years to be exact fighting examiners and corporate lobbyist for a patent that would actually upset Apple, Microsoft, and the big guns. Spent close to 2 Million in fees. The patent system in this country is a joke........ and thats being kind
[ link to this | view in thread ]
Timothy B Newland, 15 Mar 2007 @ 2:41am

Selling my patent
every company that is out there wants alot of money to promote my patent. I have already put alot of money in my idea to get a patent. My patent is called, the Aqua-loc system #D/510,772 No one said this would be that exspencieve to do. All I want to do is sell it to a manufactor that can save the govt. and insurance millions a year. and the people that looses so much in floods. Can you help. Thanks for listening.
[ link to this | view in thread ]
myrna brayford, 2 May 2007 @ 4:44pm

I have two patents I wish to sell
How would I go about that??
[ link to this | view in thread ]
Robert L. Sharp, 29 May 2007 @ 6:12pm

Selling Utility Patent
I also have a Utility Patent that was issued on February 14, 2006. I am interested in selling the Patent for a
reasonable amount of money. The key word is reasonable.
You can read more about my new and innovative ladder by
looking at Patent # 6997282.

I am not a greedy person looking for Billions of dollars.
I am looking at an amount to help me with my retirement
in a couple of months.

Does anyone have an idea as to where I could pursue the
selling of my invention? I have had a ton of Marketing
Companies approach me in the last year, and they are all
money greedy leaches, and a number of them are totally
unscrupulous, according to the Better Business Bureau and
other reporting agencies.

I would gladly work as an advisor or technical assistant
with the Marketing of my ladder. Obviously, royalties are
a big factor in something like this, and I would work with
someone on a sensible basis.

Thanks,

Robert L. Sharp
[ link to this | view in thread ]