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Have Patents Run Their Course?

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Caleb Kraft
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tech
Caleb Kraft   8/28/2013 4:50:05 PM
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It is clear that the patent system desperately needs to be updated at the very least. The time constraints were created long before the fast product evolution we have now. 20 years is an insanely long patent on most things. I'm not sure we need to dump the process, but it really needs to be re-imagined.

resistion
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Too much baggage
resistion   8/28/2013 8:02:22 PM
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A big barrier to revamping the system is there are already too many patents with the overreach problem. They have to be invalidated en masse before rebooting the patent system. But already too much has been spent on them, which brings up the second barrier, that patent-related costs are rising because it is a good business for those involved. Even USPTO fees went up.

VictorRBlake
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Re: Too much baggage
VictorRBlake   8/29/2013 10:54:43 AM
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Putting aside the need for reform, the author ignores the many values of patents. First, in disclosure of the application (if disclosed) and ultimately the patent, even during the exlusive use of the patent, the patent itself is a valuable tool in research for researchers, competitiors, suppliers, etc.

 

Second, the author says that many patents are "just engineering." Yes, engineers and scientists (among others) can patent their inventions. Many engineering improvements are patents and certainly should be protected by their owners.

Third, author argues there is no public good to disclosure 15 years (after 14 years) later. NOT TRUE. Tell this to people buying the "generic" versions of drugs after patents expire. The generics save untold millions (billions) for consumers EVERY YEAR. These would not be possible if the science of the drugs and manufacturing were kept secret instead of patented.

Any system (run by the govnerment) is going to be fraught with problems. It doesn't matter if its copyright, patent, or other rights of ownership. But that doesn't make the system useless. It may be imperfect and it may be inefficient, but improving it is the only option, not eliminating it.

Think of the recent cases of the wrong houses being demolitioned by demolition crews. Does this mean we should do away with real property ownership ?

rick merritt
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Reform don't eliminate
rick merritt   8/29/2013 11:33:28 AM
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I too have argued, tongue in cheek, many times that we should eliminate patents, just to mstimulate a good discussion.

That's too radical, but there are still significant reforms needed to counter a system that is out of whack.

Your suggestion the term of a patent should be reduced from 14-20 year to maybe 2-3 is a good one. But as much as that makes sense for electroncis I suspect it is exactly wrong for pharma.

This is a complex system with diverse stakeholders and actors. It've very hard to find changes that don't have unintended consequences. That can drive one to frustration of saying scrap the whole thing, which is also wrong.

I wish I had some solid suggestions that would roll the ball forward.

KenKrechmer
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Academic view
KenKrechmer   8/29/2013 12:27:54 PM
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Invention will not be reduced without patents.  But, innovation (the process of bringing inventions to market) would be significantly curtailed.  Without the possibility of market control via patents, the possibility of significant profits would be reduced.  This would directly reduce any investment in the invention.  Such investments include other people willing to work to assist the inventor as well as capital investments. 

For a very different approach to patent problems please see:

Open Standards: A Call for Action

http://www.csrstds.com/OpnStdsCallforAction.pdf

 

fundamentals
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Have Patents Run Their Course
fundamentals   8/29/2013 12:34:22 PM
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Not all patents are useless for technological innovation.  The problem is that there are far too many patents (easily 90% of all) that should be invalidated based on obviousness.  A less direct cure for the problem without invalidating any patents may be by introducing classes of patents.  For example:

Class-1: Revolutionary patents.  Example: invention of transistor.

Class-2: Innovation patents. Example: invention of microprocessor.

Class-3: Improvement patents. Example: cache in microprocessors.

Class-4: Patents on Design.  Example: A certain type of bus protocol.

Class-5: Utility or look-and-feel patents: Example: I-Phone user interface.

Once a patent is classified by the patent office, the patent holder may later ask it to be reclassified (upgraded) based on the change of technology.  Who would have thought that the transistor will be revolutionary 60 years ago?  Also the class of a patent limits the royalties.  For example for a class-5 patent the royalties should be limited to a maximum of 0.02% of sales, for a class-4 patent they may be worth five times as much at 0.1%, and for a class-3 patent at 0.5%, and so on.

 

Frank Eory
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Re: Have Patents Run Their Course
Frank Eory   8/29/2013 2:15:21 PM
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You highlighted the root of the problem -- 90% (maybe more) of all patents issued should be invalidated based on obviousness "to one skilled in the art", or if not invalidated, then their overly broad claims should be severely curtailed to reflect the actual innovation that the deserves protection.

I remember a patent attorney who had a framed plaque on his wall, a gift from another patent attorney friend & colleague -- a gift intended to convey both humor and praise. It was made to look like the claims section of an actual U.S. patent, and it read:

Claims

1. A device consisting of p and n-type semiconductor materials.

 

jeremy_birch
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Re: Have Patents Run Their Course
jeremy_birch   9/4/2013 5:44:18 AM
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Just as you often see one innovative movie then a long sequence of imitators (think of vampire movies, for instance) so you have some truly innovative technical work then a lot of subsequent work in the field by competitors essentially doing 'patent engineering' ie doing fairly obvious things to get around the original patent whilst enabling a directly competitive product to exist without paying a license fee - think of the smart phone market - there are only so many ways to produce almost identical touch screen devices!

I am not sure that this use of patents is positive for anyone, other than lawyers.

A patent should really be used for two purposes:

1) to enable the originator to recoup their R&D costs for innovation by giving them a legally protected headstart - because there are very few innovations that are hard enough to reverse engineer that a bigger or cheaper competitor could not catch up quickly

2) to educate the world (and primarily competitors) on how things are actually done - therefore spurring innovation AND ensuring that the knowledge is a matter of record

The combination of these is of course what drives 'patent engineering' - if you can see how the originator did it and see the holes in his patent then you can still eat his lunch. 

There does need to be a more thorough block on being able to patent the obvious, particularly obvious variations on someone else's patent. But then there needs to be an expectation that the originator will license the patent to competitors for a reasonable fee.

Loking at recent stories here, for instance, there seem to be at least two almot identical MEMS solutions for mobile phone clock generation, driven by a common demand and using (at least in part) common innovations to achieve features. Do these all have patents, and if so do they overlap? Where does the fault lie?

 

 

Larry Desjardin
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Re: Have Patents Run Their Course
Larry Desjardin   9/4/2013 1:47:20 PM
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I'm enjoying seeing the ideas generated by my provocative post.  Most, not all, of the comments lean in the direction of reforming the patent system through reducing the number and reach of patents, and/or the lifetime of the patents.  I'm also in this camp. Patent claims are so broad, that it is easy to see why there are accidental infringements. 

Another way to look at this could be this: Instead of taking the current system and justifying each change from that system, go to a "zero-based budgeting" approach. Imagine that there were no patent laws, just copyright, trademark, and trade secret law.  Then add patent law where there are clear cases that doesn't work, and the new laws don't come with considerable cost themselves.  I still think drug patents may fall into this category.  In any case, we would probably end up with a much different and more streamlined system than we have today.

labnet
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Re: Have Patents Run Their Course
labnet   9/3/2013 8:33:21 PM
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I like that idea. Here some others.

- patent owners must be commercially utilizing their patent to keep it. (within 4 years of patent application)
- software and business process should not be patentable (ie 1 click)
- accidental infringement be not initially punishable (ie stop it, then you have the choice to stop using/licence or litigate, but no backdated punitive action)
- the bar for novelty to receive a patent be way higher than it is now.
- patent application / renewal fees be based on number of patents held
eg x = v * n(n+1)/2 where v = the base patent cost.
Lets say v = $100
1 Patent = $100/annum to maintain
2 Patents = $300/annum to maintain
10 Patents = $5.5k/annum to maintain
100 Patents = $500k/annum to maintain
1000 Patents = $50M/annum to maintain
10k Patents = $5Billion/annum to maintain

This would force very large companies / trolls to only keep their best patents and toss out the dross polluting the patent system.
You would need rules to stop companies spawning sub related companies to get around the intent.

DrQuine
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CEO
Re: Have Patents Run Their Course
DrQuine   9/3/2013 11:07:36 PM
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You raise a number of interesting points. The "accidental infringement" concept is an interesting idea but how would the "accidental" part be proven)? Would everyone infringe until they were caught and then negotiate a license or develop a work-around? What about monopoly laws? Should it be legal to refuse to license a technology at a rational price with the intention of driving a competitor out of business? Meanwhile, the patent office maintenance fees do have a tendency to cause companies to drop patents that are not paying their way. Finally, there is the issue of patents before their time. If you invent something 12 years before the world is ready, is it fair to require it be commercially launched within 4 years?

Don.Shoemaker_#1
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One point we may have missed......
Don.Shoemaker_#1   8/29/2013 1:44:32 PM
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I understand, when looking at Samsung vs Apple (or most of the other patent battles that make the news today), why someone would question the value of the patent system. I totally get that it needs reform, but let's not loose site an important point. One of the intents here is to level the playing field. A number of these industry giants started with 2 or 3 guys in a garage or some obscure rented lab space. For us old guys, that's was part of the attraction that pulled us into this industry. What if the next "big thing" comes from some unknown inventor from a tiny company? Patents are supposed to protect this guy's IP from the industry "giants". Without some sort of protection, these little guys are simple crushed by the bigger players. Reform may be indicated, but let's not throw out the baby with the bath water.

wilber_xbox
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Re: One point we may have missed......
wilber_xbox   8/29/2013 2:14:02 PM
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The patents are especially useful for startups who might be still far away from their product but might need to protect what they already know. It is a tool to get more fundings as IP have their monetory values. All-in-all unless the inventor is sure that the idea needs to be a trade secret and noone can reverse-engineer to find the idea, one needs some kind of protection on ideas.

lakehermit
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Re: The Real Problem of Patents
lakehermit   8/29/2013 2:07:51 PM
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You are absolutely correct that the problem is a lack of respect for the system, but it goes even further, there is a lack of respect for the patent itself. Many of the great innovations we use and appreciate in products today were originated, that is invented, by an individual inventor or small company, known as a small entity in patent parlance. In many instances it is impossible for the small entity to keep its invention as a trade secret, particularly when attempting to obtain the backing necessary to commercialize the invention. Without patent protection the rightful owner of the invention has no recourse when some unethical large corporation (is that an oxymoron?) steals the invention. And, why do you think we have all of this negative publicity about patents? Could it be that the large corporations are using secret, and sometimes not so secret, public relations firms to create so called grass roots opposition to patents. Do they do that because they have been found guilty of stealing the intellectual property of others and punished accordingly? If you really want to know how this all works you only need to follow the trail of the innovation from small entity to large corporation. Rarely will you discover that the innovation is legally acquired but you will find that the infringer crys foul when they are brought to justice and blames the patent system.

Don from Oz
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Tax office, Govt departments, and secrecy
Don from Oz   8/29/2013 7:30:55 PM
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Having been criticised by various government instrumentalities like the tax office and government R&D support departments because I don't hold patents for certain defence projects ... which I regard as 'secret' ... does create something of a challenge, and highlights the blind following of the patent system by certain officials.

On one side, I have the Australian Defence Export Control Office advices that restrict the export of 4 of my technologies, and then the tax department that infers that the technology does not exist because I will not detail who did what in the defence system sub assemblies. By lining up the required detailed invoices for any month, it will clearly explain how it is done .... secrecy, patents and the tax department is an interesting mix. And the tax department claims their compliance to 'commercial confidentiality' has a higher status than national defence secrecy.

Ah yes ... have patents run their course .... nah, they are a good starting point for the book!

nidan
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is a patent useful?
nidan   8/29/2013 8:25:03 PM
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i have a patent pending. it's a very simple idea... once it's on the market anyone will be able to copy it, fabricate it, and even improve on it. BUT nobody thought of it before, at least nobody has manufactured it commercially before. shouldn't i be able to profit from my invention?

pseudoid
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Manager
SW Patents Banned in NZ
pseudoid   8/30/2013 2:12:29 AM
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Patent claims can't cover computer programs "as such."

by Joe Mullin - Aug 28 2013, 12:50pm PST

Pasted from <http://arstechnica.com/tech-policy/2013/08/in-historic-vote-new-zealand-bans-software-patents/>

A major new patent bill, passed in a 117-4 vote by New Zealand's Parliament after five years of debate, has banned software patents.

The relevant clause of the patent bill actually states that a computer program is "not an invention." Some have suggested that was a way to get around the wording of the TRIPS intellectual property treaty, which requires patents to be "available for any inventions, whether products or processes, in all fields of technology."

Processes will still be patentable if the computer program is merely a way of implementing a patentable process. But patent claims that cover computer programs "as such" will not be allowed.

It seems there will be some leeway for computer programs directly tied to improved hardware. The bill includes the example of a better washing machine. Even if the improvements are implemented with a computer program, "the actual contribution is a new and improved way of operating a washing machine that gets clothes cleaner and uses less electricity," so a patent could be awarded.

One Member of Parliament who was deeply involved in the debate, Clare Curran, quoted several heads of software firms complaining about how the patenting process allowed "obvious things" to get patented and that "in general software patents are counter-productive." Curran quoted one developer as saying, "It's near impossible for software to be developed without breaching some of the hundreds of thousands of patents granted around the world for obvious work."

"These are the heavyweights of the new economy in software development," said Curran. "These are the people that needed to be listened to, and thankfully, they were."

The head of New Zealand's Institute of IT Professionals, Paul Matthews, celebrated the passage of the bill, tweeting: "Software patents are now disallowed in New Zealand. #Historic #Awesome #Yay." Matthews also noted that the new law will only apply to new patent applications, so existing software patents will continue to stand in New Zealand.

It's an open question whether other countries will take up New Zealand's example. An outright ban on software patents in the US seems unlikely given the large corporations—in tech and other sectors—that would oppose such a move. However, this year has been one of unprecedented concern about "patent trolls," with six bills introduced in Congress addressing that issue in the last several months.

Chas56
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Patent infringement
Chas56   9/2/2013 5:19:28 AM
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I know of one small company who were on the wrong end of a patent infringement case, where a large corporation had bought a very poor patent, but had the money to defend it. They spent about $2m defending themselves and eventually settled, as they couldn't rely on a jury of ordinary people to understand the issues. In this case, the corporation made it clear that they wanted them out of the market as they wouldn't allow them to licence 'the technology' at anything other than the crippling fee of 30% of sales revenue. In the end the corporation agreed to a settlement as all of their development budget for this type of product was being spent on lawyers.

In this case, the patent should have been rejected by the patent office, as the first thing that the patent stated was that it was a combination of two well-known products so should have failed the KSR v Teleflex test.

In the USA, it seems that the patent office doesn't have the time to properly examine patents, so they are awarded and and then everyone sorts things out in the courts. The only beneficiaries are hugly expensive patent lawyers.

In Europe, they are much more strict about requiring a novel step, and they would not grant the same patent.

Charles 

marknowotarski
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No patent, no investment
marknowotarski   9/5/2013 10:00:06 AM
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Larry,

Great article.  "Innovation" may not cease with the loss of patents, but investment certainly will.  Most of my clients are startup companies raising Angel and Venture capital.  The first thing they are asked by investors is "Do you have a patent?"  If there is no patent, then there is no investment.  The same is true for inventors licensing their innovations to larger companies.  If there is no patent, there is no licensing.

Larry Desjardin
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Blogger
Re: No patent, no investment
Larry Desjardin   9/5/2013 10:18:00 AM
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That's a very interesting point. Thanks.

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