Companies Asked to Donate Unused Patents

Radon360 writes "There are countless patents that are promising but sitting idle, stowed in the corporate file room. In fact, about 90 percent to 95 percent of all patents are idle. Countless patents sit unused when companies decide not to develop them into products. Now, not-for-profit groups and state governments are asking companies to donate dormant patents so they can be passed to local entrepreneurs who try to build businesses out of them. "

Defensive Patents

[diablovision]

Many companies use patents defensively (or counter offensively). The company will patent technology or process X, though they may decide that it is better done internally with process Y. Or they may simply make the strategic decision that the effort and resources expended in pursuing profit in the patent are better spent pursuing something else. Nevertheless, the patent still has value to them because it gives them more options.

1. It helps deter competitors from launching patent infringement lawsuits against them, because they have patents that can be used in a counter suit.
2. It prevents competitors from utilizing the technology that they developed.
3. It gives them business options that they would not otherwise have if they didn't have the rights to the patent.

I doubt that most patents that are classified as being "unused" or "sitting around" still aren't providing some kind of value to the company that pursued them in the first place. It tends to be the nature of business that companies will look for ways to leverage their assets maximally. Besides, if the patents were valuable, the company would already have pursued licensing the technology to another person/company who can develop it into something viable.

Re:Why donate?

[Dan Ost]

According to the article's example, the company that owned the patent was paid a 5% stake in the start-up in exchange for letting the start-up use the patent.

Not a donation in the strictest sense of the word, but still, they're letting someone use a patent that they weren't going to pursue.

Re:Tax break for donating patents

[mpe]

Perhaps giving companies a tax writeoff equal to the amount in revenues that a donated patent generates would work out.

The original article mentions that tax breaks were actually stopped because they were abused.

Re:Is this really a good idea?

[AutopsyReport]

The only reason it's possible to do business in the United States at all is because 90% of patents are left lying in a drawer rather than being rigorously enforced.

Oh come on, could you have possibly made a more generalized statement? Since when do all American businesses rely on patents, or rely on a patent remaining in hibernation? This nonsense sounds like its coming straight from the mouth of someone who has their head buried in an industry held above (or beneath) the water by patents.

Did you wake up this morning and forget about the doctors, plumbers, programmers, McDonald's employees, sales reps, and many other factions whose doing business is not forcibly restricted by patents?

It is no doubt that many industries are affected by patents, but to say that this applies to all areas of business is just ridiculous.

Re:Invalidate them

[Strangely Familiar]

"patents (and other forms of protected IP, i.e. trademarks and copyrights) are government interference in the market. They are a form of government-granted monopoly which interfere with the normal operations of a free-market economy."

You would be correct if you were only talking about bad, invalid patents. Otherwise, you miss the point of patents. Patents are supposed to deal with inventions that, were it not for patents, would not exist. For example, without patents, Viagra would likely not exist. If pharmaceutical companies knew they would be immediately copied, research would be entirely dependent on government grants. Many, many devices and innovations would have gone uninvented, if all research was dependent on the Government. Civil Libertarians should shudder at the idea of much or all of innovation being sponsored by the Government. Do you really think Intel could survive, if AMD, Cyrix, VIA, Transmeta, HP, IBM, Alpha, Cray, and all the others were allowed to copy their chips exactly? No, money would not be pouring into Intel, to keep doing what they've been doing, buying new fabs, and pushing the envelope. There would be no Core Duo. You can argue exceptions until the heat death of the universe, but you will be arguing against the wisdom of the Founding Fathers, who were no slouches when it came to civil liberties.

If the "normal operations of a free market" wouldn't create inventions such as the Core Duo or Viagra, then your point that patents "interfere" is weak. If by "interference" you mean "add to", then you have a point. Yes, yes, there are bad, awful, despicable, embarrassing patents out there. Far too many, and THOSE are hurting the free market. So, to sum up: Bad, invalid patents = soapy dirty bathwater. Good patents = freshly washed, newly created baby.

Abandoned and Expired Patents Search Site

[RembrandtX]

If companies don't pay maintenance fees on a patent it will become abandoned, and thus (after a grace period) public domain.
Patents that are expired, (17-20 years) are of course already thus.

Try searching on http://www.patentmonkey.com/ [patentmonkey.com] and the results will show you status. Roumour has it that just 10 minutes ago they fixed it so you can even be able to SEARCH on status .. like .. show me all the patents with 'cel phone' in the title that are abandoned.

While you are there, you can browse patents by front page - as if you were in the patent office in VA too.

All food for the entrepreneur.

Re:Why donate?

[drinkypoo]

Uh, a submarine patent is one that is submitted knowing that it will not be accepted, then revised every year (or was it two?) and resubmitted, knowing that it still will not be accepted. When someone finally develops technology that a good version of the patent would address, the patent is revised into a form that will pass muster, then resubmitted. The patent's grant date corresponds not to the date of first filing, but to the date when the submission is approved. This is a huge problem with the system. Besides shortening the duration of all patents, we should be dating the patents to the date of first submission.

Re:Tax break for donating patents

[Ambidisastrous]

Yeah, but come on. They threw the baby out with the bathwater.

It's curious how recently the writeoff was dumped. And dumped completely, rather than putting caps on the value of a writeoff or tinkering with the way a patent's value is calculated -- or working with the patent office to stop granting so many worthless patents. Clearly there's a public benefit in having companies release their unused patents; the knowledge is distributed and the free market can get to work immediately, rather than hanging around for the temporarily granted monopoly to expire.

Summoning the power of my tinfoil hat, I see the following:

• After granting huge, high-profile tax cuts in the few years leading up to 2004, the Bush administration scrambled to make up some of the revenue shortage by eliminating more obscure deductions. The alternative minimum tax soaked up some of the change; donated-patent deductions were also sacrificed for the cause, along with many other things.
• Until recently, Big Business liked having lots of patents lying around. The big players had (and have) huge war chests of patents -- so that licensing squabbles with other big players have an overtone of mutually assured destruction, keeping negotiations under control; to keep dangerous upstarts in line; to list as company assets for interested parties; because silver-haired WASPs grew up thinking of patents as The American Way. If Big Business decides to take on patent law, the patent law will change.
• IBM would probably be fine with donating some of its patents to the FSF or a similar patent-lefting (hmm, doesn't sound as good as copylefting) nonprofit organization. Except that, as a big company involved in something as radically un-American as free sofware, they need a sufficiently deadly patent portfolio to ward off an IT monopolist that the US government refuses to bust because they feel that having an operating-system monopolist on US soil gives them technological dominion over the rest of the world.
• Idle patents are not the problem that needs fixing; they're a symptom of having oo many low-value patents granted in the first place. But giving back the incentive to relinquish patents would be nice.