Can We Get Rid Of The Myth That More Patents Means More Innovation?
from the pretty-please dept
I've talked repeatedly about some of the problems with the current patent reform efforts underway in Congress, but it amazes me when I read some of the arguments made against the bill. The latest comes from Steve Tobak at News.com, who argues that patent reform will harm US innovation. It's a position that others have taken, but you need to be able to back it up. Tobak's entire argument seems to be that since this new law would make it more difficult to get a patent, it would be harder to innovate. The problem with this argument is that it simply equates patents to innovation, which has never been true. In fact, if you look at the research you quickly realize that actual innovation is totally disconnected from patents. That's because the important part of innovation (unlike Tobak's claims) have little to do with invention and much to do with the process of making any technology more useful for the market. Patents don't help with that. In fact, patents quite often can often do a lot more damage by slowing the pace of innovation -- limiting the ability for companies to improve upon a technology or even a business model concept. Tobak's article is based on a faulty premise. I agree that the patent reform act has many problems, but the reasoning that fewer patents would mean less innovation is not supported by the research about the impact on patents.
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Filed Under: innovation, patent reform, patents
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We will see this in China
Why? Because they won't be hindering their innovation with patents.
While we litigate, they will destroy us.
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Maybe "innovation" now means "the status quo"?
If we ever got rid of our liberal patent system all of those slow moving giants would quickly die if they had to compete with fast moving upstarts without resorting to lawsuits.
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It's a Perception Problem
Getting rid of the myth that patents lead to innovation will be akin to teaching a color blind person to "see" color. A highly unlikely scenario. (Now my obligatory politically correct apology if I accidentally offended a person who is color blind. And yes there are varying degrees of color blindness.)
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liberal?
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Re: liberal?
NB
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Patent Reform Boondoggle
The "REAL" meaning of special interests:
After an exhausting 6 months, all eyes cautiously look towards March, where
the next installment of "Who Wants to Reform the Patent System?" is being
prepared in the Congress. As a small inventor I might concur that our
patent system is in need of some reform, but I am very concerned that the
bill in its present form picks winners and losers among industries with
different business models in a way that has never before been attempted in
patent law or practice.
A gross example of this objective: Sen. Jeff Sessions (R-Ala.) has
sponsored an unusual provision at the urging of the nation's banks granting
them immunity against an active patent lawsuit, potentially saving them
billions of dollars. Adopted with little fanfare, the amendment would
prevent a small Texas company called DataTreasury from collecting damages
from banks for infringing on its patented method for digitally scanning,
sending and archiving checks.The provision introduced by Sessions did not
name DataTreasury but was carefully tailored to apply to that company and
its "check collection" system. The patents were upheld last summer by the
U.S. Patent and Trademark Office after they were thoroughly challenged.
Justification of the Sessions Amendment seems to be that the Check 21 Act
forced the banks to adopt new check processing procedures with the innocent
banks (who were merely complying with government regulation) thereby finding
themselves opportunistically and indiscriminately sued for infringement by a"patent
troll." This view, however, fails to recognize that the (Data Treasury)
patents in question were filed years before the Check 21 Act, that thus far
the key Data Treasury patents have withstood the best legal challenges the
banks could buy, and that some of the more responsible banks have admitted
the validity of the patents by licensing them. And every entity that has
been sued almost surely had opportunity to negotiate a license before being
sued.
But two added facts make the bank's legislative duplicity even more
reprehensible.
The first is simply that nothing in the Check 21 Act requires banks infringe
the Data Treasury patents.
The second is that Check 21 made it possible for the banks to dramatically
reduce check clearance costs, relative to then current processes. ( $2.75
per cleared paper check as opposed to two to three cents per check using
Data Treasury's Technology). Check 21 was opportunity, not burden!!
The Data Treasury Technology is a roadmap to pocketing these savings. Banks
remain free to process checks the old way or themselves invent a
non-infringing new way or license use of the Data Treasury roadmap for a
modest portion of the savings it offers. But some banks are just plain
greedy. They expect to use the Data Treasury road map, realize huge savings,
and pay Data Treasury nothing. A number of financial institutions considered
themselves above the patent law that applies to the rest of us and now,
after 5 years of infringing and ongoing litigation, are on the cusp of
facing huge damage awards for willful infringement. Any idea that the
Sessions Amendment is justified as "relief" is simply preposterous. It is no
more or less than the financial lobby buying a "Get out of Jail Free" card
from congress.
Although the amendment would not invalidate DataTreasury's patents, it would
spare the banks from paying for infringing them should courts decide that's
warranted. If DataTreasury collected a royalty of just a couple pennies per
check, the cost would run into billions of dollars. It seems that Sessions
and his Ilk are ready to, once again, throw the American taxpayer under the
bus. This time to the tune of a billion dollar and more back door bail out
for the banking industry. The federal government would have to pay $1
billion + (albeit grossly undervalued) to DataTreasury over 10 years as
compensation for taking its property under the amendment, according to
estimates by the Congressional Budget Office. Hence, let us not forget the
poor victims, (banking industry) who have realized almost $300 Billion in
profit during the period they have utilized this valuable technology. And
all of this on the heels of the sub prime loan mess!! Apparently the
financial industry feels that there is no downside to their risky business
practices. As long as they continue to contribute generously to the right
politicians the taxpayers will continue to bear the burden of their mistakes
while they reap the fruit of their exuberant gains. Who would invest in
developing a new technology if the big corps can steal it and then buy off
Congress to pass a law giving them immunity from liability? Those that wish
to see a clear and crass example of who gets bought in Congress and how,
might read the amendment in contrast to the act and then examine who gives
how much to Sessions and Schumer. Political action committees of financial
institutions were the largest single category of industry donors to
Sessions, with $104,000 in the current election cycle.
Overall, this bill is a great disservice to the small technology companies
and independent inventors that drive American innovation. Reforms are
needed. But this Bill, with or without Sessions, should go back to committee
in a Congress with a "Purer Heart."
As a side note: Bank of America is the only bank among the big four to list
Datatreasury as a potential, pending litigation liability on their SEC 10-K
filings. It has done this systematically since the suit was initiated in
2005. In the filings Datatreasury is said to be suing for an undisclosed
sum of money. It does not however make mention of any reserve funds set
aside for the possible outcome. Apparently Citigroup, Wells Fargo and
Wachovia do not feel their shareholders should be privy to same information.
P.Principato
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Your wrong Patents do force innovation.
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Re: Your wrong Patents do force innovation.
You'll need empirical evidences to prove your point.
Otherwise, as it stand, there are no to very little evidence that patents' incentive work.
Rather the opposite is true. The free market works better.
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Creating a Myth
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You want to pay $15 billion? I don't....
"CBO anticipates that enactment of section 14 {Session's amendment} would result in litigation against the federal government seeking compensation for a taking of private property {from DataTreasury}. Further, certain patent holders who believe their patents would be infringed have indicated that, if section 14 is enacted, they would immediately file suit against the federal government. CBO generally has insufficient information to assess the likelihood or outcome of litigation against the federal government. In this case, the likelihood of litigation alleging a taking of private property is very high; based on Supreme Court precedents, there is a high likelihood that the federal government will have to pay damages; and there is a strong basis for estimating those damages. Hence, we estimate that the expected value of the federal government’s liability under section 14 would total about $1 billion, representing a royalty of 0.5 cents per check on more than 200 billion checks cleared by financial institutions that would be authorized to infringe on the rights of patent holders under the bill. Depending on the outcome of the likely litigation against the government, the cost could be substantially more.
From my research, DataTreasury has valid patents and have licensed them (http://www.datatreasury.com/news.asp) to JP Morgan, Merrill Lynch, etc., so why not allow the banks to fight it out with DataTreasury and let THEM pay if they lose...not us SENATOR SESSIONS!
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Re: Creating a Myth
It's the equivalent. The idea is that the patent itself represents the innovation. If Tobak knew anything about history, he'd find the opposite to be true. Even the US was able to innovate faster when it ignored patents. The root of the problem is associating patents and innovation as if they're one and the same.
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Re: Re: Creating a Myth
"It's the equivalent. The idea is that the patent itself represents the innovation. If Tobak knew anything about history, he'd find the opposite to be true. Even the US was able to innovate faster when it ignored patents. The root of the problem is associating patents and innovation as if they're one and the same."
There are some who quite erroneously opine that the number of patents that exist are a yardstick by which innovation can in part be measured. I am certainly not one of them, and apparently neither is Mr. Tobak judging from what he states in his article. In this regard he and I agree with you that to use patents as a metric for "measuring" innovation is sheer folly.
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Re: It's a Perception Problem
Destroy your computer, stop taking your medicine for slowing down mental retardation process, take off your pants and go live in woods
Otherwise just shut the fuck up
You just don't know what you are talking about
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Your wrong again Mike
Yes they do....Perfect Example: if a company is trying to get funding to help execute a plan in bringing an innovation to the market, and if they don't have a patent for their innovation, it's a lot hard to get the funding from VC's (not impossible, just harder). Thus, not having a patent can hinder innovations from reaching the market in these cases.
So, to answer your question - "No" we can't get rid of it because it's not a myth as proved above.
Also, Mike, you previously complimented on how good a job Garmin did to TomTom - causing Tom Tom to pay over twice of what they wanted to pay for the maps. Thus, Tom Tom ends up wasting a bunch of money that could have otherwise been used to innovate.
This waste of money is usually your top argument for why all the patent litigation is hindering innovation, because that money could have been spent innovating.
But, because the garmin/tomtom deal didn't involve patent litigation, the same harm it will cause to tomtom's ability to innovate somehow gets your full approval - how's that?
Mike, Double standards...double standards ;)
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Re: Your wrong again Mike
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Re: Your wrong again Mike
I could just as easily say that, you know, if I was granted a gov't monopoly on producing cars, it would be a lot easier to get me funded. That's true, but it doesn't mean innovation would increase. In fact, most everyone would agree that it decreases.
Competition drives innovation, not monopolies.
Also, Mike, you previously complimented on how good a job Garmin did to TomTom - causing Tom Tom to pay over twice of what they wanted to pay for the maps. Thus, Tom Tom ends up wasting a bunch of money that could have otherwise been used to innovate.
Well, first of all, my comments on Garmin/TomTom were a joke. I said it because it was amusing... But second of all, the money being spent is actually going towards efforts that build and innovate, not towards an empty blackhole or lawsuits... quite different.
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Re: Re: Your wrong again Mike
You think gov't granted monopolies are a good thing? I'm not against patents, per se, if someone could just show me the market failure that requires one.
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Re: Re: Your wrong again Mike
You insist on using the word "monopoly" as if it has some talismanic quality that makes your positions unassailable. As noted before, I have never seen (and am certain I will never see) a patent so generic and broad in scope that it will stifle innovation in any specific area of technology.
For example, back around 1948 Bell Labs secured patents on transistors. I most certainly did not see innovation in new transistor structures and methods for making such structures, as well as in electronic systems employing transistors, grind to a halt.
I note your bio indicates that in a former life you worked in marketing at Intel, a company well known for using patents to protect its inventions. If Intel indeed had a "monopoly" as you seem to believe patents confer, they why in the world did Intel even need a marketing group? Might the answer in part be because those patents did not preclude innovation by companies such as AMD?
I will of course grant that there are many companies employing business models that do not depend upon patents to achieve their financial goals. However, there are many businesses that depend upon them because that is the nature of the business environment within which they operate. They are in business to make money, and that is a bit difficult to do if their latest and greatest "widget" is susceptible to immediate copying.
Broad generalizations do little to encourage intelligent and accururate discourse. Provide a specific factual situation that you believe supports your position and perhaps a meaningful discussion can take place. Until that happens articles such as this seem more in the nature of rants than an informed presentation.
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Says who?
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Re: Re: It's a Perception Problem
How about this, we take the 2 kids he and his wife 'invented', into prevent any enjoyment and reward he gets from his 'inventions' (because they are his until they are 18, we keep the originals.
We then make boy clones for a personal army and use them to rob all of the money from anyone we want. All the girl inventions get turned into love slaves and become thier Pimp so we can collect a portion from the labor they put out. After they turn 18 we turn them over to the public to use as they may.
Why not? He thinks it is ok to do it to my inventions....the freakn' dope...why can't we do this?
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Re: Re: Re: Your wrong again Mike
I do when they encourage inventors to invest the proper amount of resources into the development of an invention. I also think patents are a good thing when they encourage inventors to disclose their inventions to the public at the earliest possible moment.
I'm not against patents, per se, if someone could just show me the market failure that requires one.
The pharmaceutical industry is a big one, as well as the world of prosthetics, surgical tools, electric power generation and storage (batteries), and any other industry that requires a tremendous amount of resources to fund the research and conception of the invention, as well as its eventual reduction to practice.
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Sorry, forgot to tag my own writing.
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Two identical worlds - one with 5 innovations with patents for them and the other world with the same 5 innovations, but no patents for them.
Ah...if you agree that not having a patent *can* (but not always) hinder getting funding, then simple math proves it can only *increase* innovation because the world with the patents and funding would have a better chance of making it to the market then the world without funding.
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(re: your post at http://www.techdirt.com/articles/20071116/105507.shtml)
A joke? Your comments of "Sometimes you just need to stand back and applaud a strategy that works so well.", and "Well played, Garmin. Well played, indeed." don't really sound like fake/joking comments.
So, if those comments were meant to be a joke, then how many of all your other posts are also jokes - because the difference appears to be indistiguishable?
Oh, nice try to back-step out of your conflicting opinion ;)
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No Because its not a myth..
I hope this is clear enough for you..
Thanks and I hope you use your newly found time to write better stories...
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Dear Santa,
I have been a good boy this year and I like books. But please NO books about patents or industrial history - especially not about steam engines or radio or powered flight.
Ta,
MLS
;-)
"I most certainly did not see innovation in new transistor structures and methods for making such structures, as well as in electronic systems employing transistors, grind to a halt."
That's a variation on the Campbell-Kelly/Merges/Mann straw man argument (about patent thickets rather than individual patents not having *completely* stifled software innovation).
Doc: How are you feeling plh?
plh: Never better thanks, Doc.
Doc: Hmm... Okay - I'm going to prescribe you this powerful experimental drug. It's thought that it may be beneficial for people with serious heart conditions.
plh: But Doc - there's nothing wrong with my heart!
Doc: Well maybe there is and maybe there isn't - but you could develop a problem at any time. It's best to be on the safe side.
plh: Errr right... You said it's a powerful drug. What about side effects?
Doc: Well apparently it has caused liver damage, aneurisms, respiratory paralysis and a few other problems in some older patients, but you're still young and fit - you should be okay for now.
plh: Okay, thanks Doc.
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Re: No Because its not a myth..
If there is such a beast, it is undoubtedly limited to specific construction features that are easily designed around by anyone with even a modicum of technical knowledge in the mechanical arts.
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