Andy Grove On Patents: You Should Use 'Em Or Lose 'Em

from the good-for-him dept

Tue, Sep 8th 2009 12:09pm — Mike Masnick

Earlier this year, we wrote about a rather thoughtful analysis of the problems of the patent system by Intel founder and former CEO Andy Grove. His view was that patents separate the important part (the actual innovation) from the "asset" (the patent), and that allows for bad behavior. He compared it to mortgage-backed securities, where the underlying mortgages were completely separated from the "asset," and bad behavior ensued. Apparently, he received a lot of criticism for this view -- but he's not backing down (if anything, he appears to be getting more aggressive). The Economist's tech quarterly issue includes a fascinating look at Grove and his views on innovation as a whole, and the wider economy. He mocks the idea that the gov't should ever prop up failing business models, noting that it stalls innovation. At the very end, he's asked if he believes what he said earlier this year about patents, and he not only defends his earlier statements, but makes an even stronger one:

"You can't just sit on your ass and give everyone the finger."

Unfortunately, with today's patent (and copyright) system, you can.

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Filed Under: andy grove, innovation, patents

41 Comments

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Killer_Tofu (profile), 8 Sep 2009 @ 12:30pm

Never compromise, even in the face of armageddon
Good to see a man with as much prominence as Grove isn't backing down.
Always good to see people stand up to a messed up system. Even better to see those who have a loud voice do so.
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Anonymous Coward, 8 Sep 2009 @ 12:45pm

Grove is not standing up for a messed up system. He is making a very valuable point, and that is the recent separation of "inventions" from "patents", with the latter in many instances being treated less as a means for facilitating a patent holder's market entry and more as a piece of commercial paper.

His point seems fairly clear. If you are going to get a patent it should be directed to products in your current and upcoming product portfolio. If it ceases to apply to either, dump it and move on to something else. Whatever may happen, it should not be separated from the invention/product and sold to the highest bidder merely because it holds some measure of exclusionary value.
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Steve R. (profile), 8 Sep 2009 @ 12:55pm

But What Consitutes "Use"?
Excellent point. This should also apply to all products, especially when a company "discontinues" a product.

But the devil is in the details. The problem that I see is that companies are now patenting concepts, such as "one-click". They are not patenting an actual device (asset). So what that means is that even if a patent troll owns a patent on some ambiguous "device" but someone else actually builds the device and puts it into the marketplace; the patent troll will still assert that the so-called patent is somehow in use, but that they were prevent by some nefarious obstruction from bringing it into the marketplace. For Grove's concept to work, we need to establish a clear definition of what a patent is and when a patent is actually put into use.
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angry dude, 8 Sep 2009 @ 12:59pm

Mikey is a corporate lackey
Well,I have to give my middle finger to that old dishonest piece of corporate shit András

WTF did he invent ? A transistor, a semiconductor chip ?

Nope, he just managed to extract maximum profits from someone else's inventions
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angry dude, 8 Sep 2009 @ 1:04pm

Re: But What Consitutes "Use"?
"For Grove's concept to work, we need to establish a clear definition of what a patent is and when a patent is actually put into use."

I'll make it easy for you, punky

According to Grove (and the rest of corporate shysters) the only good patent is a patent owned by a large multinational corporation like Intel or Msgit and used to maintain their monopoly on the market

All other patents are bad by his definition
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:Lobo Santo (profile), 8 Sep 2009 @ 1:05pm

Re: Mikey is a corporate lackey
Corporate Lackeys do it in the back-rooms!

**I trolled with angry dude**
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angry dude, 8 Sep 2009 @ 1:09pm

"You can't just sit on your ass and give everyone the finger."

Old Andy is delusional

Patents ARE property and like any other type of property they can be bought and sold
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angry dude, 8 Sep 2009 @ 1:11pm

Re: Re: Mikey is a corporate lackey
Do what ? Take big corporate @#$% in the ass ?

MIkey probly does it too
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Anonymous Coward, 8 Sep 2009 @ 1:13pm

Re: But What Consitutes "Use"?
I own the patent on the idea of patent trolling so if you patent troll you must pay me.
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angry dude, 8 Sep 2009 @ 2:07pm

shillin for livin
Yeah, so I don't have any patent that I can make money off of either, but that's because people like Mikee here won't let me patent obvious crap so I could extort companies for money. Fine, I don't have any patents at all, but rich people make me jealous and wish I could be one of them too.
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Esahc (profile), 8 Sep 2009 @ 3:24pm

Re:
If you want patents to be treated as property then they need to be taxed like all other property.
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Esahc (profile), 8 Sep 2009 @ 3:25pm

Re: Re: But What Consitutes "Use"?
Welcome back angry dude.
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Anonymous Coward, 8 Sep 2009 @ 5:01pm

Patents ARE property and like any other type of property they can be bought and sold

I just had an interesting thought (patent pending obviously) - if copyrights and patents themselves are property in the way that some people claim - could they be subject to eminent domain in the way that physical property is?

In a way, this already happens with pharmaceutical patents - governments decide to manufacture their own generic drugs before the patent expires
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Derek Kerton (profile), 8 Sep 2009 @ 6:14pm

Re: Re: But What Consitutes "Use"?
AD, why not stick with the usual claptrap like:

"If he had ever invented anything in his life, he would understand. He hasn't got a creative bone in his body."

I mean, someone like you always lobs that gem out when Mike speaks againt the patent system. Oh, but with Grove you go with the big bad company line.

Who, in your mind, would be qualified to make a case against the patent system?
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Anonymous Coward, 8 Sep 2009 @ 6:17pm

Breaking News
AD is off his meds again
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Anonymous Coward, 8 Sep 2009 @ 8:52pm

Sometimes I wonder if AD is just an elaborate satire to make patent trolls look even sillier.
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angry dude, 9 Sep 2009 @ 6:51am

Re: Re: Re: But What Consitutes "Use"?
"Who, in your mind, would be qualified to make a case against the patent system?"

Certainly not that corporate stooge Grove or his cheap puppet Mikey

Someone who made a genuine contribition to human progress

Think Dean Kamen, or Raymond Kurzweil, or Robert Metcalfe, or Leroy Hood, or Gordon Gould etc. etc etc.

These folks made important contributions and improved the quality of life, including your life, punky
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angry dude, 9 Sep 2009 @ 6:58am

Re:
"In a way, this already happens with pharmaceutical patents - governments decide to manufacture their own generic drugs before the patent expires"

yeah, right, in Venezuela

Go live there punky

God save you from becoming seriously ill there

They have a shortage of just about anything right now.
A litlle more effort on Chavez part and they'll have to smuggle all new drugs from other countries
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angry dude, 9 Sep 2009 @ 7:00am

Re: Re:
They ARE taxed, punky
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angry dude, 9 Sep 2009 @ 7:02am

impostors be damned
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Esahc (profile), 9 Sep 2009 @ 8:13am

Re: Re: Re:
You pay an annual property tax on patents? Really? Can you give a citation please?
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angry dude, 9 Sep 2009 @ 8:17am

Re: Re: Re: Re:
Ever heard of patent issue and maintenance fees, punky ?

If patent doesn't make any money those are the only fees you pay to the government

If patent starts making money then you'll have to pay tax on that income of course
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Esahc (profile), 9 Sep 2009 @ 8:33am

Re: Re: Re: Re: Re:
Why go angry? I was asking for a citation so I could read up on the subject.
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vic kley, 9 Sep 2009 @ 8:34am

Grove in his groove
Intel from the beginning and during Grove's tenure had people involved in new development. sometimes these people had ideas which were promising and deemed worthy of being patented and assigned to intel. Many of these ideas were never developed or turned into product. Did this not make Intel an NPE by Andy's definition?

Now the question Andy can answer for us is if his competitor or some entity outside of Intel infringed or wanted to buy this invention from Intel what would Intel and Andy do? This almost certainly happened what did Andy and Intel do in a real specific instance?
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vic kley, 9 Sep 2009 @ 8:35am

Grove in his groove
Intel from the beginning and during Grove's tenure had people involved in new development. sometimes these people had ideas which were promising and deemed worthy of being patented and assigned to intel. Many of these ideas were never developed or turned into product. Did this not make Intel an NPE by Andy's definition?

Now the question Andy can answer for us is if his competitor or some entity outside of Intel infringed or wanted to buy this invention from Intel what would Intel and Andy do? This almost certainly happened what did Andy and Intel do in a real specific instance?
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Anonymous Coward, 9 Sep 2009 @ 10:08am

Re: Re: Re: Re: Re:
Patents are treated like capital assets under our tax laws. Upon transfer of all or substantially all of the rights to a third party, the sale proceeds are subject to capital gains tax.

In the case of income earned from licensing, such income is treated as earned income and subject to ordinary income taxes vs. capital gains.

As you correctly note, maintenance fees are likewise a tax, payable at statutorily set times in order for a patent to remain in force.

Filing, prosecution and issue fees are the most pernicious of all. Historically they have exceeded the amounts actually spent by the USPTO. This has not gone unnoticed by Congress who promptly began diverting fees for purposes unrelated to the running of the USPTO.

These are just federal tax considerations. States do have concurrent power to levy taxes as well. To my knowledge, however, this is largely the exception and not the rule. For example, Florida at one time had (and may still have) its notorious intangibles tax. I say notorious because virtually everbody was unaware of the tax until a letter came in the mail saying "pay up".
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angry dude, 9 Sep 2009 @ 10:31am

Re: Grove in his groove
"...what would Intel and Andy do?"

Let me guess...

Screw the competitor using the patent Intel does not practice itself ?

Right, Andy ?
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dorp, 9 Sep 2009 @ 10:57am

Re: Re: Re: Re: Re: Re:
As you correctly note, maintenance fees are likewise a tax, payable at statutorily set times in order for a patent to remain in force.

Yes, do tell us about the horrible maintenance fees. Cry us a river.
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angry dude, 9 Sep 2009 @ 11:01am

What would angry dude do?
In case someone asks that question, obviously I would do screw other companies if I had a patent that let me do it. And that's regardless of whether I am doing anything about it or not. I just love double standards.

Speaking of double standards, yes, I know that I call Mikee a corporate shill. And yes, I just raged and bitched about the system as it is screwing me over. And Mikee is against that system. But I am angry, so I am against everyone. Current system favors corporations with lawyers and it makes it hard for small fry. But to change it would mean admitting that I am wrong and there is no way in hell that's happening. Going back to being angry.
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angry dude, 9 Sep 2009 @ 12:33pm

impostors be damned
Punky

you have no clue

yes, patent game favors large corps but sometimes even small fry can get a lucky break

But I'd love to see this country without patents

How do you think non-compete employment agreements would look like ?
Ever gave this any thought ?
Any good engineer working on new high-tech products will be able to enjoy much better job security in a corporate world without patents
Wonderful !!!

Not gonna happen, dude
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angry dude, 9 Sep 2009 @ 12:46pm

The point I want to make is this
Abolishing patent system altogether is OK with me (it will screw the country in a long run but who cares ?)

But that is not what Andy, Mikey & Co are advocating

They advocate making patents a sport of kings so only rich and powerful corporations can benefit

Screw you all, Andy, Mikey and Co.
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Anonymous Coward, 9 Sep 2009 @ 1:03pm

Re: Re: Re: Re: Re: Re: Re:
As of this month maintenance fees are as follows (the first being the charge for "large entities" and the second for "small entities"). It is useful to bear in mind that if a small entity has granted a license, even a non-exclusive license, to a large entity then it is no longer eligible to avail itself of small entity status.

Patent Maintenance Fees
1551/2551 1.20(e) Due at 3.5 years 980.00 490.00
1552/2552 1.20(f) Due at 7.5 years 2,480.00 1,240.00
1553/2553 1.20(g) Due at 11.5 years 4,110.00 2,055.00
1554/2554 1.20(h) Surcharge - 3.5 year - Late payment within 6 months 130.00 65.00
1555/2555 1.20(h) Surcharge - 7.5 year - Late payment within 6 months 130.00 65.00
1556/2556 1.20(h) Surcharge - 11.5 year - Late payment within 6 months 130.00 65.00
1557 1.20(i)(1) Surcharge after expiration - Late payment is unavoidable 700.00
1558 1.20(i)(2) Surcharge after expiration - Late payment is unintentional 1,640.00

These are not exactly miniscule amounts, unless you happen to be someone who dislikes patents and who believe that such fees should be large enough to cover the many stimulus packages floating around.

Next time you want to wax poetic on an issue it would behoove you to first get the relevant data.

As I noted, these maintenance fees are just one part of the taxes that are levied against those who participate in the patent system.
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Ed C., 9 Sep 2009 @ 4:10pm

Re: The point I want to make is this
How you can claim to read Mike's post and still have no clue about what he advocates is beyond me.

Oh and BTW, IP is NOT real property--never has and never will be.
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angry dude, 9 Sep 2009 @ 6:56pm

Re: Re: The point I want to make is this
it is intangible property as opposed to tangible property like real estate

Ah well, you don't have either so why do you care, punky ?
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Mike Masnick (profile), 9 Sep 2009 @ 10:39pm

Re: The point I want to make is this
But that is not what Andy, Mikey & Co are advocating

They advocate making patents a sport of kings so only rich and powerful corporations can benefit

Really? When have I ever suggested anything like that?

I have pointed out, repeatedly, that I think the current patent reform on the table makes things worse, not better. I don't quite understand why you keep insisting that I'm in agreement with it.
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angry dude, 10 Sep 2009 @ 1:00am

Re: impostors be damned
You are the impostor here, asswipe.

When have I ever advocated getting rid of patents altogether? If that's what I was in favor of, I wouldn't have to bust Mikee's balls here. You are one of the sheeple here that follows everything Mikee says and now you are trying to pretend you are me and turn everything upside down. Go do something useful, punky.
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staff1, 10 Sep 2009 @ 7:48am

stop the shilling!!!
I just checked on the PTO web site. From 1976 on there are no issued patents with Grove as an inventor assigned to Intel. I gather Mr. Grove is then no inventor. Sure, he and all the large tech firms would love to eliminate competition from upstart inventors and small firms. They prefer to secure their markets by their size alone. They hate patents because they are forever being beaten to the punch. Ever hear of AMD? Ever hear of anti-trust? Intel has.
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dorp, 10 Sep 2009 @ 8:34am

Re: stop the shilling!!!
I just checked on the PTO web site. From 1976 on there are no issued patents with Grove as an inventor assigned to Intel. I gather Mr. Grove is then no inventor. Sure, he and all the large tech firms would love to eliminate competition from upstart inventors and small firms. They prefer to secure their markets by their size alone. They hate patents because they are forever being beaten to the punch. Ever hear of AMD? Ever hear of anti-trust? Intel has.

Err... what on god's green earth does anti-trust have to do with patents? And in case you have not heard of Intel (you seem to be confused about them), they have quite a broad patent portfolio that they use to beat up competition and others quite well. And that's under current system. Of course, why use facts when you can make shit up.
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angry dude, 10 Sep 2009 @ 9:03am

Re: Re: stop the shilling!!!
True, those multinationals like Intel do not want to abolish patents completely
They just want to weaken patents in the hands of smaller upstarts and private individuals so they can keep their monopolies going on forever

This was precisely the purpose behind attempted patent "reform" - to make patents unaffordable and unusable to smaller underfunded patent holders

But I'd love to see those employment non-compete agreements for engineers in a world without patents :-)
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Al Davis, 10 Sep 2009 @ 8:35pm

Patents
Use them or lose them is OK for big companies. The small inventor needs licensees or investors. Both are hard to find. Wall Street sucks up all the money for speculation (casino gambling).
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terry_allen (profile), 15 Sep 2014 @ 6:04am

"You can't just sit on your ass and give everyone the finger."
As the writer quite accurately concludes, in today's patent climate, unfortunately, you can.

Also, you still have one hand free to 'use' the patent however you like, so Andy's otherwise excellent suggestion will quickly be undone by the myriad 'uses' a clever one-handed lawyer can still discover for the patent.
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