Congress Happy To Knock Out Patents That Impact Financial Institutions... But Everyone Else?
from the funny-how-that-works dept
For about five years now, we've been discussing the ridiculous rise of "tax strategy" patents. There have been a bunch of them. Three years ago, an attempt was made by Congress to effectively dump such patents. It didn't go anywhere. What I hadn't realized is that this particular provision has made its way back into Congress in the current patent bill, and it seems likely that such tax strategy patents will effectively be killed off as well as one famous patent on digitally scanning checks that the big banks have been trying to get Congress to dump for years.Make no mistake about it: these are ridiculous patents that have no business existing. So I'm happy that they'd be ditched, but I'm troubled by the fact that Congress seems to see no problem carving out such patents when they hurt financial institutions, but doesn't do it in other cases. Senator Schumer, who is a major backer of this, highlighted the check scanning situation specifically in supporting the bill: "This is a case where one company has made a cottage industry out of extracting legal settlements by exploiting a fuzzy part of the law on patents." But couldn't this be said about pretty much all patent trolling? So why isn't Congress dealing with that?
Again, it's a good thing that Congress recognizes that there are bad patents, but it seems to only cherry pick the bad patents that harm the financial sector. In fact, when people bring up all the bad software and business method patents, all you hear is how it would be "impossible" to reasonably carve those out of the patent system. Yet, for some reason, they seem to have no problem doing that when it comes to Wall Street and other financial institutions?
Separately, highlighting just how ridiculous this is, it appears that this carve out of tax prep patents has a separate negative carve out that says it won't apply to tax prep software patents. Think of it as the Intuit exception. Basically, you can't patent tax preparation strategies anymore, because that hurts big financial institutions... but you can patent tax prep software, because that helps Intuit.
Instead of creating special carve outs in the patent system for big special interests with massive lobbying budgets, how about if Congress actually did its job and fixed a broken patent system to get rid of all bad patents?
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
Filed Under: check scanning, chuck schumer, financial institutions, patent reform, patents, tax preparation strategies
Companies: datatreasury
Reader Comments
Subscribe: RSS
View by: Time | Thread
Some industries are more equal than others
[ link to this | view in chronology ]
Because that's the way capitalism works, that's why. If other industries want their own "carve outs", then let them go buy their own, like the banks did. Nothing for nothing.
[ link to this | view in chronology ]
Re:
What a deal, where do we sign up for the same treatment...
1. Screw up so badly the government has to 'bail' you out
2. Buy 'carve out' with bailout funds
3. Profit...
What could be easier?
[ link to this | view in chronology ]
Re: Re:
2. Buy 'carve out' with bailout funds
3. Profit...
What could be easier?
It's a collusion between the government and its corporate partners to bilk the common people.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
Fault? Who said it was a fault? What are you, a socialist?
Can't we just call it what it is Bribery... which last time i checked is a Capitalism or Socialism or any other -ism, maybe Croony-ism or the simple and easy Corrupt Public Officials...
Using money to make money is a feature of capitalism, not socialism.
[ link to this | view in chronology ]
Well
[ link to this | view in chronology ]
thats due to..
[ link to this | view in chronology ]
Rhetorical?
Because that would be representing the citizens, and not the companies that bankroll their lavish lifestyles and employ them when they quit politics.
I certainly hope you meant that as a rhetorical question ;)
[ link to this | view in chronology ]
Even better
Even better, abolish IP laws.
[ link to this | view in chronology ]
Re: Even better
[ link to this | view in chronology ]
Re: Re: Even better
[ link to this | view in chronology ]
Re: Re: Re: Even better
[ link to this | view in chronology ]
Re: Re: Re: Even better
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Imagine what would happen if someone were to invent the standard double entry accounting system under today's patent rules. It would almost certainly be locked up by a business process patent. Instead of everyone using the same accounting system, which we take for granted as essential for our economy to function, there would be 50 different bookkeeping systems. Imagine the chaos that would cause. You would have people getting PhDs in Bookkeeping Analysis just so they could fill out the tax return for a small business. It would take an army of accountants and a room full of supercomputers to figure out the value of a company and whether they're profitable.
The problem is these same issues apply to other business processes. It doesn't make any more sense to have 50 ways to turn a document into XML or place an online order using stored information than it does to have 50 bookkeeping systems. But as soon as you say the word computer, the typical judge or Congress critter's eyes glaze over and they stop hearing anything you say. You might as well be talking about turning lead into gold. As far as they're concerned, computers are powered by magic.
At the end of the day, financial and technological processes are more similar than different. The reason someone invents a method to scan checks, record financial transactions, convert documents to XML, or streamline the online checkout process is the same. Doing so makes your business more profitable. Anyone who needs an extra incentive to do that deserves to go out of business, and probably will whether they can patent processes or not.
[ link to this | view in chronology ]
Re:
What they fail to take into account is by the time all their competitors have jumped onto the patent bandwagon all that extra profit (and probably more besides) is frittered away on license fees.
This is a lot like someone suing local government after tripping over a broken paving stone and thinking they're in the money - but failing to appreciate that over the long term the necessarily higher taxes mean they end up effectively paying for their own payout.
[ link to this | view in chronology ]
Already said, but...
Because then who would pay for their re-elections?? Certainly not the citizens they don't help.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Slippery Slope
No, better to avoid these “principle” things and stick to the tried-and-true, traditional way.
[ link to this | view in chronology ]
Perfectly Simple Fix
It is time to stop the racket. An essential part of making the racket work is the offense of patent infringement. The whole idea of infringement is silly. How can anybody use a patent with the threat of infringement hanging over them? "Why, just get a license!" say the patent lawyers. No, that does not work, because that constitutes making an extortion payment. The extortionist will then demand such a huge payment that the innovative company is doomed. Look at what has happened to RIM (Blackberry) since their huge patent loss.
The answer is simple. Repeal all parts of the law which make patent infringement illegal. Get rid of the concept. Patents should be there to be used. With infringement gone, the racket is gone and the threat to innovation is gone.
[ link to this | view in chronology ]
Maybe this is good news in disguise?
[ link to this | view in chronology ]
But how???
So how should it be fixed? You can complain all day long and talk in generalities all you want, but at the end of the day if you don't have a solution yourself then maybe the problem is extremely difficult to solve. Far more so than you are making it out to be.
I am just playing devil's advocate here. But seriously, we can say stop bad patents or make copyright more fair and never actually have a real solution to the problem. Those types of comments are far too general.
Lets stop bad patents, ok how? Who or what determines that a patent is bad? With those factors are we missing anything? Maybe forgetting about a problem these factors create?
I am all for patent and copyright reform, but how about some constructive feedback here. It would be like me saying "Health care is too expensive. Someone should fix it." Ok, that sounds great but what makes it expensive is a complex list of variables and no magic bullet.
Ok, I am off my soap box. Keep fighting the good fight.
-Pjerky
[ link to this | view in chronology ]
This is how...
Well, this is kind of the point. Mike is, day after day, getting on his soapbox and, as you say, fighting the good fight.
You see, the reason why we have such awful copyright and patent laws is because Hollywood, the RIAA and in this case Wall St. all have big lobbying budgets and get the ears of congress - while "We the people" on average tend to be more "meh - I'd rather have a tax break".
Because, unless you know a few billionaire philanthropists you can get on side, the only thing that's going to get a bigger voice in congress and the senate than these lobbyists is to get the voting public to start raising a stink en-masse about how IP laws aren't looking after their interests.
So, every time Mike or someone like him gets someone like you or I worked up enough to write to our representatives or sign a petition, that's one tiny step closer to hopefully getting this mess sorted out.
[ link to this | view in chronology ]
[ link to this | view in chronology ]