Ask Slashdot: When Is Patent License Trading Not Trolling? 191
LeadSongDog writes "A piece in yesterday's Forbes offers arguments on why not all 'Non-Practicing Entities' are 'Patent Trolls.' Comments here on such businesses are often critical. Is there a right way to trade in patents for profit without abusing the process?"
From the article: "The Founders’ decision to foster non-practicing entities and patent licensing proved crucial to America’s rapid technological progress and economic growth. Patent records from the nineteenth century reveal that more than two-thirds of all the great inventors of the Industrial Revolution, including Thomas Edison and Elias Howe, were non-practicing entities who focused on invention and licensed some or all of their patents to others to develop into new products."
Pretty much never ... (Score:5, Interesting)
I'm of the opinion that if you didn't create it, and your entity exists to do nothing than extort people for royalties on your patent ... you are a patent troll.
err some confusion there folks (Score:5, Interesting)
okay we have 3 different groups to deal with
1 inventor type that don't market anything (they invent and then sell to a Maker)
2 Makers that have on staff inventor types (they make stuff "with our patented..."
3 Leech types that just beg, borrow , steal and Buy patents (Holding Corps that only send bills around)
Trolls are type 3 not type 1
Re:Pretty much never ... (Score:2, Interesting)
I agree.
There is nothing in the Constitution that implies that a patent should be transferable to another party. The Constitution says,
The point was to provide an incentive, in the form of preventing their designs from being stolen, to inventors so that they would pursue their ideas and bring new devices to market. The point was not to enable individuals or companies to accumulate patent portfolios.
Also, note that is says "Authors and Inventors" - not "Authors, Inventors, or Companies".
Re:Article's Definition of NPE is Incorrect (Score:4, Interesting)
What would you consider ARM Holdings? They don't make anything, either, they just employ a bunch of engineers to design and come up with CPU solutions for various problems (using the ARM architecture, obviously). And, of course, they patent their designs and then let approved licensors fab their designs (with and without approved modifications). Honestly, I'd say that ARM is the type of NPE that's "doing it right". Not only are they protecting their patents, but they are steadily trying to improve the state of the art and continuing to push forward. I think the key difference is, you can *buy* a Qualcomm branded chip (I've got a snapdragon in one of my phones, for instance). However, you're most likely never going to be able to buy an ARM Holdings chip, even though it's their designs (many of which Qualcomm uses and modifies). It's a subtle difference, but it does change the frame of the question.
Now, trying to compare guys who think they patented, I dunno, hypertext 7 years after the fact, that's absurd. :/
Re:Thomas Edison (Score:5, Interesting)
What most NPEs do is sit on the patent and wait for someone to independently come up with the same innovation, and then demand payment. They are just parasites.
Exactly the problem. We need to consider whether patents really encourage innovation, or whether the state of the art is more of an inevitable progression. As a thought experiment, it's easy to look at Einstein and think that maybe the world would be very different without him. But the alternate view - and the one that seems more likely - is that someone else would have discovered special relativity... that he simply came to the natural conclusion that many others working on the same problem would when presented with the same facts.
Some patents probably do deserve to exist. There are probably drugs that would never have been developed without a patent. Not because the science is novel, but because so much money was required to develop it. But a thought experiment costs nothing - an idea by itself is usually worthless. A guy could come up with an idea for a clever gear arrangement that will save 1% of the energy that goes into a drive-train. But until he actually builds and demonstrates the idea, it is not worth anything. We need to refocus patents on the doers and less on the thinkers. When people actually making something can't progress the state of the art because someone else had an idea, we have a problem.
Re:Pretty much never ... (Score:5, Interesting)
For stopping (or for that matter, distinguishing) patent trolls, I think we can take a page out of copyright law. With copyrights, you're automatically granted a copyright on anything you make. But if someone violates your copyright, you're limited to compensatory damages. i.e. the offender can only be forced to pay you for actual damages you suffered. To collect statutory damages (the fines that go up to $150k per work regardless of damages suffered), you have to have first registered your copyright. I think if we switch this around a bit, it could solve the problem of patent trolls.
Make it so the original patent filer can collect both compensatory and statutory damages (to protect the little guy who comes up with a great idea, but has trouble bringing it to market while a big company shamelessly steals the idea and takes over the market). But if the patent is transferred, the new patent holder can only collect compensatory damages. That would make it worthless for a person or company to buy a patent solely to sue others for infringement. If they aren't actually building something which uses that patent, then they suffered no damages from the patent infringement and thus aren't able to collect anything from others using that patent. In order to be able to collect damages, you need to be able to show your income was negatively impacted by the infringement, which means you need to be making something which uses the patent.
That would eliminate all the speculating going on with patents. You wouldn't buy a patent in the hopes that you'd be able to collect millions from others for infringement. You'd only buy a patent because you plan to start building something which uses it or it'll improve a product you're already building, and you decide it'll be cheaper to own the patent rather than license it from whoever owns the patent. The main problem I can think of with this idea is you'd end up with a bunch of shell corporations set up to file for patent(s), and people would buy/sell the shell corporation (which is the original patent filer) instead of the patents themselves.
Re:Until 1880 this was not a problem. (Score:5, Interesting)
They need to bring back the working model requirement. If you can't produce a working model, maybe your idea won't work exactly as written, but if your patent would block others from making a variation which works.
For cases where the working model is too expensive or time-consuming for the inventor to build, grant the patent provisionally with the requirement that a working model must be produced within 7 years. If no working model is produced by then, the patent automatically goes up for auction (alternatively the inventor can sell it or put it up for auction before that), with auction proceeds going to the inventor. Whoever buys that patent has to produce a working model before they can sue anybody for infringement.
With that system, the inventor can still get paid for what they invent even if building a working model is beyond their capabilities.
After fixing bad patents (Score:5, Interesting)
The next step to turning a "licensing organization" into a legitimate business is to have it advertise its portfolio, in a market analogous to Programmer's Paradise, rather than remain silent until ambushing real businesses with threatened litigation.
Imagine if you got ads instead of C&D letters! "We hear you're working on nails for building houses in hurricane-prone areas. We can save you tons of expensive R&D and get you to market quicker if you license our patent that documents the measurements and manufacturing process for Hurriquake® nails."