Do Patent Laws Really Protect Small Inventors? 267
whoever57 writes "Patent trolls like to claim that patent laws provide a way that small inventors can create products and benefit financially from their invention. One such inventor faces selling his house, despite inventing a product that has sold tens of millions worldwide. From the article: 'Inventor Trevor Baylis says he faces having to sell his house after failing to make money from his wind up radio and is now calling for the government to step into to protect inventors. “I’ve got someone coming around in the next couple of weeks to do a valuation on my house,” says Trevor Baylis, as he walks into the sitting room of his home on Eel Pie Island, in Twickenham, south-west London. “I’m going to have to sell it or remortgage it – I’m totally broke. I’m living in poverty here.”'"
Re:Of course it protects the small investor (Score:5, Informative)
The question here is incorrect.
The question is also misapplied. Trevor Baylis is not a good poster child for "ripped-off" inventors. First of all, he did not invent the wind up radio. [wikipedia.org] He just invented a more practical way of storing the energy (using a constant force spring). But his business partners decided his spring was too expensive, and replaced it with a conventional crank and used batteries to even out the power (the article calls this a "tweak"). In other words they did not use his invention. To suggest he is being "ripped off" because he is not receiving royalties from someone not using his patent is pretty silly.
Re:Tax net liquid value of assets not activity (Score:4, Informative)
You do know that patent fees are on a sliding scale depending on the size of the patenting entity?
http://www.uspto.gov/web/offices/ac/qs/ope/fee100512.htm#maintain [uspto.gov]
What kills the independents are the legal costs. They are generally 3 orders of magnitude larger.
Re:Wrong Premise, Approach from a Different Angle (Score:5, Informative)
I'll be the first to admit that the entire patent system is a horrible mess that is now doing more harm than good. But this story is about something entirely different.
Out of 250 claimed "inventions", which include such nonsense as a "self-weighing briefcase", he invented one item, 20 years ago, which took off and sold fairly well, but has now been replaced by newer technology. Apparently he seems to think that he should be able to live forever on the royalties from that single 20 year old patent.
Hard to enforce a patent under $100 million (Score:4, Informative)
Speaking as an inventor with six patents, it's hard to enforce a patent until you have $100 million in infringing activity. In practice, almost everybody who gets a royalty deal gets about 5%, +- 2%. (There's a whole theory of IP valuation, but it's not taken very seriously.) So 5% of $100 million is $5 million. Expect legal fees of about $2 million. So you make about $3 million, best case. It's fully taxable, so you get to keep about $2 million. The odds of winning a patent case are about 30%-40%, So the expectation is about $700K on $100,000,000 in infringement.
I've licensed two patents. One I swapped for stock in a startup, and that came out very well. There I wrote one of the startup's products. A straight licensing deal on another made me about $400K after taxes; that was partly about getting my product off the market so it didn't compete with theirs. I'm working on licensing the other patents.
Re:I can't be the only one who googled (Score:4, Informative)
FYI, akin to bathtub girl. Click only if you wish to be grossed out.
Re:Of course it protects the small investor (Score:4, Informative)
I don't suppose it would help to mention that this story is in the UK? That the inventor went into business with a partner who tweaked the invention to "charge a battery" instead of directly powering the device(s) and so they created a new patent and he lost control of his invention.
There's more than patent law at play here though I would say he would have a strong case to sue the partner as they merely made an adaptation on his patent and so he is still entitled to some of his patent claims.
But this is how the system(s) work now.. the people with the most knowledge of the system(s) and the least amount of moral integrity will win out.