It's Back: Patent Reform Deal Expected Shortly
from the it's-that-time-of-year dept
It seems to happen every year around this time. Senators on the Judiciary Committee announce that they've got a plan for patent reform. We've been hearing the same thing for about half a decade now, and while legislation gets introduced, it never actually goes anywhere. I'll be curious to see what they've got this year, but since they claim they've come "close to a compromise," my guess is that, like previous patent reform bills, there will be a lot of hype, and it probably won't do all that much to get at the real problems with the patent system. It may fix some things around the edges, but like last year's bill there will be a lot of bad things in the bill as well.
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Filed Under: patent reform, patents, senate
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Quote sums it up
"No one will think this a perfect bill"
That says it all right there. Compromise usually involves some concessions.
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Re: Quote sums it up
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Re: Re: Re: Quote sums it up
But what's worse is you are advocating removing the majority of people's fundamental rights simply to protect the rights of very few... yet you claim this is better for them? So you must also believe in government censorship, because it better for the people by preventing anarchy and dissent. I would guess you don't really, because you know there are just as many problems this creates as it solves.
Yet when it comes to IP laws, you decide those new problems it creates are not important? Because "it would benefit all", ignoring the fact it also hurts just as many people. Seems to me you support laws that favor you personally, but are against those that favor anyone except you. Fairly typical of most people unfortunately...
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The Innovation Alliance - Another Pro-Patent Special Interest
By implication, the good news will be that this was simply a PR stunt for face time and that the legislation will quietly die.
PS: In another decades long pending solution, every once in a while the Congress people proclaim that the AMAT tax will fixed. Still waiting, my grass is getting a bit long.
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Re: The Innovation Alliance - Another Pro-Patent Special Interest
yeah, this is fairly obvious static so that the supreme court doesn't have to regulate idea patents.
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Patent Reform and Independent Inventors
I disagree that patent reform is good for independent inventors or the US economy.
1) Damages – I believe that the patent reform bill still has the provision that reduces damages for infringing. As long as this provision is in the patent reform bill it will damage small inventors and the US economy.
2) First-to-File: I understand and have made the point that very few cases are won by the second to file. However, a first-to-file system is a first step in eliminating the inventor from the patent process. The next step will be to issue patents to entities, why name the inventors since we are not serious about the true inventors anyway. A first to file system is a fraud. It rewards not inventors but people who are skilled at gaming the system.
This is similar to the publication rule. Most patent applications were being published at 18 months anyway and if you did not want to foreign file you could avoid publication. But, publication is a breach of the social contract between the inventor and society. Society gets the benefit of disclosure but the inventor may never receive his part of the bargain. Note that immediately after this breach pendancy times expanded and the allowance rate fell off a cliff. Ron Katznelson has done a study showing that pendancy times always expand, usually by a factor of two, when a country adopts publication.
3) Publication: I believe that the present bill requires the publication of all patent applications. As stated above this is a clear breach of the social contract between the inventor and society. Publication discourages people from inventing and filing for patents. If an invention can be kept a trade secret, more people will chose this right to the detriment of everyone. We tried the trade secret route in the middle ages and the level of innovation was pitiful. If an invention cannot be kept a trade secret, investors will be less willing to back a company whose inventions are known to the whole world before the company even gets protection in their own country.
Real Patent Reform
Here are my suggestions for real patent reform that would not only help small inventors but the US economy.
1) Repeal Publication: This would restore the social contract
2) Repeal KSR: A subject standard of patentability just increases costs and uncertainty associated with the patent process
3) Repay PTO: Congress should repay the over $1B it stole from inventors with interest.
4) Regional Offices for PTO: This would ensure steady funding of the PTO and increase examiner retention
5) Repeal eBay: This decision is logical absurdity. If a patent give you the right to exclude, then if you win a patent infringement case you must be able to enforce your only right – the right to exclude
6) Eliminate “Combination of Known Elements”: The fact that the Supreme Court does not understand that every invention in the history of the world is a combination of known elements is high of ignorance. Have they ever heard of “conservation of matter and energy”?
Dale B. Halling, Author of the “Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation.” http://www.amazon.com/Decline-Fall-American-Entrepreneur-Regulations/dp/1439261369/ref=sr_1_1?ie=UTF 8&s=books&qid=1262124667&sr=8-1
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Re: Patent Reform and Independent Inventors
#3 Repay PTO/ stop stealing its revenue ... absolutly mandatory, Much of this mess has been caused by this. It needs to stand on its own, like the post office. Though it also needs to be less regulated than it is today. I would like to suggest an independent private sector license for research facilities that perform quality/obviousness analyses. This should be done ONLY by companies that specialize in the technical art in question. As in, I don't want a lawyer granting a patent on downloading a database for the 5000th time.
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Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.
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Re:
Wait. *ANY* patent reform is un-American? So the 1956 Act? Un-American?
I guess, based on Stevie's opinion here, we should go back to the original form of the patent system as designed by Thomas Jefferson. I might be okay with that.
And, while you seem to think that you're going against us, you clearly didn't read the post, as I agree that this bill is probably a bad idea. Why is it that RJR and his lapdogs still thing I support this patent reform bill?
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Patents
The Importance of Federal Patent Law to
Freedom, Prosperity, & Justice
Those who oppose US patent law or want to weaken it, may argue that patents are anti-competitive ... that they create a monopoly that only increases prices at the expense of the consumer.
NOT TRUE. Patents do enable an inventor and his investors to exclude others from producing THAT PARTICULAR product or process. But, there is nothing in patent law that prevents competitors from devising a new and different product or process that accomplishes the same thing.
By giving an inventor and his investors exclusivity on their product or process, US patent law challenges competitors to come up with another way of meeting that need or creating that value for customers. Instead of allowing them to just use someone else’s technologies, it encourages them to compete by coming up with something better. This has the effect of channeling the competitors investment resources towards coming up with new & better solutions, while protecting the investment returns of the inventor & his investors. Both impacts are just, righteous, and in the best interest of the consumer.
US patent law raises the standards of the competitive landscape, requiring competitors to develop a better mousetrap, rather than copying the existing mousetrap. It also encourages the civility of competition and protects certain property rights from violation. Theft & piracy are not valid means of competition. They are criminal acts. To exclude those who haven’t invested in the invention and development of a technology from marketing it as their own is not anti-competitive. Rather, it is merely protecting of the property rights of inventors and their investors and requiring competition on other grounds.
It is clear to civilized business people that cargo ships crossing the open seas are not just ‘fair game’ for anyone who comes along. They are owned. A great deal of labor and capital went into the production of their cargo, not to mention the construction of the vessel, and its safe operation. Pirates and would-be pirates have contributed nothing at all to the vessel or its cargo, and therefore have no right to acquire it from its rightful owners without their permission. For inventors & their investors, patented ideas are like the vessel full of cargo on pirate infested waters.
Solving an issue, for example, like "How can we economically extract the corn oil out of the DDG by product of corn ethanol plants?", as GreenShift Corporation and its affiliates spent nearly a decade and $10’s of millions of dollars doing, is now worth nearly $1B per year in extra profits, plus another $1B or so in one-time installation revenue to the US ethanol industry. That is the service that GreenShift, its inventors, management, and investors have provided to the economy of the US and the ethanol industry, but it wasn’t done as a public service. It was done as a private investment, with a great deal of risk of capital. That is the ‘cargo on the open seas’ for a patent holding innovator like GreenShift. For pirates to use that solution without giving at least a reasonable royalty to the inventors & their investors is "theft of services" on a grand scale. And, US patent laws are the means of justice, just as US Maritime Law and the US Navy enforce the rights of vessels on the open sea.
Like laws against maritime piracy, which protect the value chain of products like subsurface crude oil on its way from well to market, US patent laws protect the value chain of new ideas and innovation on their way to market. As a tanker full of oil might get hijacked by pirates on the open seas, innovations like GreenShift’s Corn Oil Extraction technology are vulnerable to domestic piracy right here in the US.
US patent laws are the "rules of the road" for the innovation economy. They ensure that competition is civil, moral, fair, just, and equitable and that it is gentlemanly. They attract investment capital to an activity, namely
new technology development, that is extremely risky. Without the chance for high rewards, many investors simply wouldn't invest in new technology development at all.
And, in the process of attracting investment capital, standardizing the rules of innovation, & ensuring gentlemanly competition, the US patent system produces greater and greater value for society in the form of new inventions. The consumer benefits as well.
Contrary to some assertions, the consolidation of market share into a single, patent-holding vendor of a product or service actually has a price-reducing impact on the cost of the product or service.
If, for example, there are 10 different customers, and they each buy the same product from 10 different off-patent vendors, then each of those vendors will manufacture only 1 unit of product. Since each vendor is manufacturing only a single unit, none of the vendors are able to take advantage of economies of scale in manufacturing.
If, on the other hand, all 10 customers purchase from the same patent-holding vendor, then that vendor can achieve a lower unit cost of production, because that vendor can achieve economies of scale in its manufacturing process. Instead of ten different vendors producing 1 unit each, the single, patent-holding vendor produces 10 units and achieves a lower per unit cost of production, as a result.
When one extrapolates to a 100 million unit marketplace, then those economies of scale will make a big difference. That will then enable the patent-holding, single vendor to reduce costs and pass on cost savings to the customers, creating more value for the customers, relative to what the 10 different, off-patent vendors can do with their single unit cost structure.
The impact of such economies of scale on manufacturing can be enormous. Henry Ford, and many others, have shown that impact in practice. The automobile is now widely available at very competitive prices, not inspite of Ford's patents, but rather because of them. They gave him the ability to consolidate orders from large numbers of customers and also to consolidate his supply chain, which in turn enabled him to reduce pricing, thereby making cars more affordable to customers. This was the beginning of a virtuous cycle of cost reductions, volume increases, and quality improvements that resulted, many years later, in automobiles being available to most of society, including the lower rungs.
As an inventor and entrepreneur, his patents, not his personality or charisma, enabled Henry Ford to achieve those economies of scale in the early years and to begin that virtuous cycle, which produced decades of declining auto prices and increasing auto quality. Without that patent-powered ability to consolidate his suppliers and customers, he would’ve been just one of many, fragmented competitors, none of whom would’ve had the ability to achieve economies of scale necessary to reduce prices for consumers. Not only would he have failed, but his competitors would’ve as well. In fact, the whole industry would’ve grown more slowly, if at all, making cars less available all around. That consolidating power of patents actually helped to make cars more affordable, not less as some contend.
Rather than weakening patents, we should be strengthening their enforcement with tough criminal penalties on top of the existing civil penalties. Those who violate patents are not only uncivilized scoff-laws, like the Somali marine pirates, but they also destroy wealth, investment dollars, and the consolidating power of rightful patentees, which could’ve created benefits for consumers, not to mention returns for investors. They deserve nothing but the strictest and toughest criminal and civil penalties.
Patent pirates violate inventor’s property rights, on a grand scale, and they destroy investment dollars as well as consumer benefits, all of which would’ve otherwise accrued to the economy, if the piracy had not occurred. Patent infringement often runs well into the millions of dollars. By all US criminal standards, patent infringement would be a felony on a scale far larger than average and punishment should meted out commensurately. Indeed, even the terms, ‘grand larceny’ and ‘grand theft’ don’t seem to quite capture the enormity of this heinous crime that too often goes unpunished in America.
[ link to this | view in chronology ]
Patents
The Importance of Federal Patent Law to
Freedom, Prosperity, & Justice
Those who oppose US patent law or want to weaken it, may argue that patents are anti-competitive ... that they create a monopoly that only increases prices at the expense of the consumer.
NOT TRUE. Patents do enable an inventor and his investors to exclude others from producing THAT PARTICULAR product or process. But, there is nothing in patent law that prevents competitors from devising a new and different product or process that accomplishes the same thing.
By giving an inventor and his investors exclusivity on their product or process, US patent law challenges competitors to come up with another way of meeting that need or creating that value for customers. Instead of allowing them to just use someone else’s technologies, it encourages them to compete by coming up with something better. This has the effect of channeling the competitors investment resources towards coming up with new & better solutions, while protecting the investment returns of the inventor & his investors. Both impacts are just, righteous, and in the best interest of the consumer.
US patent law raises the standards of the competitive landscape, requiring competitors to develop a better mousetrap, rather than copying the existing mousetrap. It also encourages the civility of competition and protects certain property rights from violation. Theft & piracy are not valid means of competition. They are criminal acts. To exclude those who haven’t invested in the invention and development of a technology from marketing it as their own is not anti-competitive. Rather, it is merely protecting of the property rights of inventors and their investors and requiring competition on other grounds.
It is clear to civilized business people that cargo ships crossing the open seas are not just ‘fair game’ for anyone who comes along. They are owned. A great deal of labor and capital went into the production of their cargo, not to mention the construction of the vessel, and its safe operation. Pirates and would-be pirates have contributed nothing at all to the vessel or its cargo, and therefore have no right to acquire it from its rightful owners without their permission. For inventors & their investors, patented ideas are like the vessel full of cargo on pirate infested waters.
Solving an issue, for example, like "How can we economically extract the corn oil out of the DDG by product of corn ethanol plants?", as GreenShift Corporation and its affiliates spent nearly a decade and $10’s of millions of dollars doing, is now worth nearly $1B per year in extra profits, plus another $1B or so in one-time installation revenue to the US ethanol industry. That is the service that GreenShift, its inventors, management, and investors have provided to the economy of the US and the ethanol industry, but it wasn’t done as a public service. It was done as a private investment, with a great deal of risk of capital. That is the ‘cargo on the open seas’ for a patent holding innovator like GreenShift. For pirates to use that solution without giving at least a reasonable royalty to the inventors & their investors is "theft of services" on a grand scale. And, US patent laws are the means of justice, just as US Maritime Law and the US Navy enforce the rights of vessels on the open sea.
Like laws against maritime piracy, which protect the value chain of products like subsurface crude oil on its way from well to market, US patent laws protect the value chain of new ideas and innovation on their way to market. As a tanker full of oil might get hijacked by pirates on the open seas, innovations like GreenShift’s Corn Oil Extraction technology are vulnerable to domestic piracy right here in the US.
US patent laws are the "rules of the road" for the innovation economy. They ensure that competition is civil, moral, fair, just, and equitable and that it is gentlemanly. They attract investment capital to an activity, namely
new technology development, that is extremely risky. Without the chance for high rewards, many investors simply wouldn't invest in new technology development at all.
And, in the process of attracting investment capital, standardizing the rules of innovation, & ensuring gentlemanly competition, the US patent system produces greater and greater value for society in the form of new inventions. The consumer benefits as well.
Contrary to some assertions, the consolidation of market share into a single, patent-holding vendor of a product or service actually has a price-reducing impact on the cost of the product or service.
If, for example, there are 10 different customers, and they each buy the same product from 10 different off-patent vendors, then each of those vendors will manufacture only 1 unit of product. Since each vendor is manufacturing only a single unit, none of the vendors are able to take advantage of economies of scale in manufacturing.
If, on the other hand, all 10 customers purchase from the same patent-holding vendor, then that vendor can achieve a lower unit cost of production, because that vendor can achieve economies of scale in its manufacturing process. Instead of ten different vendors producing 1 unit each, the single, patent-holding vendor produces 10 units and achieves a lower per unit cost of production, as a result.
When one extrapolates to a 100 million unit marketplace, then those economies of scale will make a big difference. That will then enable the patent-holding, single vendor to reduce costs and pass on cost savings to the customers, creating more value for the customers, relative to what the 10 different, off-patent vendors can do with their single unit cost structure.
The impact of such economies of scale on manufacturing can be enormous. Henry Ford, and many others, have shown that impact in practice. The automobile is now widely available at very competitive prices, not inspite of Ford's patents, but rather because of them. They gave him the ability to consolidate orders from large numbers of customers and also to consolidate his supply chain, which in turn enabled him to reduce pricing, thereby making cars more affordable to customers. This was the beginning of a virtuous cycle of cost reductions, volume increases, and quality improvements that resulted, many years later, in automobiles being available to most of society, including the lower rungs.
As an inventor and entrepreneur, his patents, not his personality or charisma, enabled Henry Ford to achieve those economies of scale in the early years and to begin that virtuous cycle, which produced decades of declining auto prices and increasing auto quality. Without that patent-powered ability to consolidate his suppliers and customers, he would’ve been just one of many, fragmented competitors, none of whom would’ve had the ability to achieve economies of scale necessary to reduce prices for consumers. Not only would he have failed, but his competitors would’ve as well. In fact, the whole industry would’ve grown more slowly, if at all, making cars less available all around. That consolidating power of patents actually helped to make cars more affordable, not less as some contend.
Rather than weakening patents, we should be strengthening their enforcement with tough criminal penalties on top of the existing civil penalties. Those who violate patents are not only uncivilized scoff-laws, like the Somali marine pirates, but they also destroy wealth, investment dollars, and the consolidating power of rightful patentees, which could’ve created benefits for consumers, not to mention returns for investors. They deserve nothing but the strictest and toughest criminal and civil penalties.
Patent pirates violate inventor’s property rights, on a grand scale, and they destroy investment dollars as well as consumer benefits, all of which would’ve otherwise accrued to the economy, if the piracy had not occurred. Patent infringement often runs well into the millions of dollars. By all US criminal standards, patent infringement would be a felony on a scale far larger than average and punishment should meted out commensurately. Indeed, even the terms, ‘grand larceny’ and ‘grand theft’ don’t seem to quite capture the enormity of this heinous crime that too often goes unpunished in America.
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Risks, Rewards, Patents, & Pirates
To ask for 20% of the profits created by new technology is not only fair, in terms of basing the reward on the value created, but it is also reasonable considering the great risks taken on.
Unfortunately, piracy is all-too-common and only increases the risks that new technology developers take. When a technology is pirated, the new technology development team takes on the additional "collection risk", which can requires many years of very costly litigation.
Those who understand finance know that financial returns are measured not only by dollar amount but also by the time to payback. The "time value of money" is a common phrase in measuring returns.
Piracy not only increases the dollar amount of the risk of new technology development, but it also increases the time to payback, sometimes as much as a decade.
If pirates and would-be pirates of new technologies want to reduce the costs of innovation and new technology, the best way to do it is to simply stop pirating, show some respect for the law and for the risks taken by the technology developers, and pay a fair price to begin with. To the extent that the costs and risks of new technology development are reduced, both in dollar amount and in time, by avoiding lengthy & costly collection measures, then technology developers are happy with a smaller reward.
But, to the extent that pirates force us to incur much greater financial risk and time-to-payback, then we deserve, & rightfully so, to collect higher returns for our work in the form of treble damages.
In my personal opinion, the penalties should also include tough criminal penalties. Like securities and investment advisor regulations, it sometimes becomes necessary to use the threat of criminal punishment as a deterent to misbehavior.
[ link to this | view in chronology ]
Risks, Rewards, Patents, & Pirates
To ask for 20% of the profits created by new technology is not only fair, in terms of basing the reward on the value created, but it is also reasonable considering the great risks taken on.
Unfortunately, piracy is all-too-common and only increases the risks that new technology developers take. When a technology is pirated, the new technology development team takes on the additional "collection risk", which can requires many years of very costly litigation.
Those who understand finance know that financial returns are measured not only by dollar amount but also by the time to payback. The "time value of money" is a common phrase in measuring returns.
Piracy not only increases the dollar amount of the risk of new technology development, but it also increases the time to payback, sometimes as much as a decade.
If pirates and would-be pirates of new technologies want to reduce the costs of innovation and new technology, the best way to do it is to simply stop pirating, show some respect for the law and for the risks taken by the technology developers, and pay a fair price to begin with. To the extent that the costs and risks of new technology development are reduced, both in dollar amount and in time, by avoiding lengthy & costly collection measures, then technology developers are happy with a smaller reward.
But, to the extent that pirates force us to incur much greater financial risk and time-to-payback, then we deserve, & rightfully so, to collect higher returns for our work in the form of treble damages.
In my personal opinion, the penalties should also include tough criminal penalties. Like securities and investment advisor regulations, it sometimes becomes necessary to use the threat of criminal punishment as a deterent to misbehavior.
[ link to this | view in chronology ]
Risks, Rewards, Patents, & Pirates
To ask for 20% of the profits created by new technology is not only fair, in terms of basing the reward on the value created, but it is also reasonable considering the great risks taken on.
Unfortunately, piracy is all-too-common and only increases the risks that new technology developers take. When a technology is pirated, the new technology development team takes on the additional "collection risk", which can requires many years of very costly litigation.
Those who understand finance know that financial returns are measured not only by dollar amount but also by the time to payback. The "time value of money" is a common phrase in measuring returns.
Piracy not only increases the dollar amount of the risk of new technology development, but it also increases the time to payback, sometimes as much as a decade.
If pirates and would-be pirates of new technologies want to reduce the costs of innovation and new technology, the best way to do it is to simply stop pirating, show some respect for the law and for the risks taken by the technology developers, and pay a fair price to begin with. To the extent that the costs and risks of new technology development are reduced, both in dollar amount and in time, by avoiding lengthy & costly collection measures, then technology developers are happy with a smaller reward.
But, to the extent that pirates force us to incur much greater financial risk and time-to-payback, then we deserve, & rightfully so, to collect higher returns for our work in the form of treble damages.
In my personal opinion, the penalties should also include tough criminal penalties. Like securities and investment advisor regulations, it sometimes becomes necessary to use the threat of criminal punishment as a deterent to misbehavior.
[ link to this | view in chronology ]
Risks, Rewards, Patents, & Pirates
To ask for 20% of the profits created by new technology is not only fair, in terms of basing the reward on the value created, but it is also reasonable considering the great risks taken on.
Unfortunately, piracy is all-too-common and only increases the risks that new technology developers take. When a technology is pirated, the new technology development team takes on the additional "collection risk", which can requires many years of very costly litigation.
Those who understand finance know that financial returns are measured not only by dollar amount but also by the time to payback. The "time value of money" is a common phrase in measuring returns.
Piracy not only increases the dollar amount of the risk of new technology development, but it also increases the time to payback, sometimes as much as a decade.
If pirates and would-be pirates of new technologies want to reduce the costs of innovation and new technology, the best way to do it is to simply stop pirating, show some respect for the law and for the risks taken by the technology developers, and pay a fair price to begin with. To the extent that the costs and risks of new technology development are reduced, both in dollar amount and in time, by avoiding lengthy & costly collection measures, then technology developers are happy with a smaller reward.
But, to the extent that pirates force us to incur much greater financial risk and time-to-payback, then we deserve, & rightfully so, to collect higher returns for our work in the form of treble damages.
In my personal opinion, the penalties should also include tough criminal penalties. Like securities and investment advisor regulations, it sometimes becomes necessary to use the threat of criminal punishment as a deterent to misbehavior.
[ link to this | view in chronology ]
Just Compensation for Inventors
When companies decide, instead, to try to cut corners, pirate the technology, build a business around it, and then go through all kinds of deceiptful and contemptuous lawyering to avoid paying anything at all to the patentee, then they end up paying the large centimillion damage awards that can approach or even exceed $1 Billion.
That is, as it should be. The law should be structured to encourage compliance and discourage cheating. No reduction in penalties or costly political lobbying needed.
If companies want to reduce their cost of acquiring new technology, all they need to do is show some respect for the risks taken by inventors and also for the law. This would also reduce their political lobbying expense as well, which has obviously become a big part of their new technology acquisition strategy.
It is their cheating and trying to avoid paying anything at all that leads to the high cost legal battles and high damage awards.
[ link to this | view in chronology ]