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Patents Businesses Cellphones

Study: Royalty Charges Almost On Par With Component Costs For Smartphones 131

Posted by samzenpus
from the cost-of-things dept.
Bismillah (993337) writes "An interesting study by WilmerHale lawyers and Intel's assistant general counsel Ann Armstrong looked into how much royalty payments and demands actually amount to per device, and found the cost so high it threatens industry profitability and competitiveness. 'As the bank robber Willie Sutton is reported to have said, he robbed banks 'because that's where the money is' - so too of smartphones for patent holders,' the authors wrote."
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Study: Royalty Charges Almost On Par With Component Costs For Smartphones

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  • by mythosaz (572040)

    The authors of the paper estimate that for such a phone, the potential patent royalties could exceed US$120 per device.

    They could, but since there are phones for less than $120 with being subsidized, I'm going to guess they potentially aren't.

    • by Ecuador (740021) on Thursday May 29, 2014 @06:31PM (#47124693) Homepage
      Since most smartphone royalties are charged as a % of the price of the device, they have to do the calculation given a hypothetical device with a specific price. They chose $400, seems that seems to be near the average price of a high-end smartphone.
      I know it is /., but if you have such a basic question about the article perhaps you could take a quick look...

      In general I can understand basic technology royalties like LTE etc. I mean, somebody spent a lot of money developing a technology essential for a device type, so you'd have to pay to enter the market of that device which would not exist otherwise. Ok, with so many companies involved the royalties may get a bit high. But in addition to that, there are companies allowed to patent obvious things (that most of the time they did not even "invent" first) like swiping the screen, or even generic designs like rounded corners that essentially had near ZERO cost in R&D and yet either demand high royalties or try to block competitors...
    • The authors of the paper estimate that for such a phone, the potential patent royalties could exceed US$120 per device.

      They could, but since there are phones for less than $120 with being subsidized, I'm going to guess they potentially aren't.

      You know, that subsidy doesn't mean you got a $600 phone for $100... it means you got a $600 phone for $1000, but get to pay in installments.

      • Your carrier is Verizon I take it?
      • by pla (258480)
        You know, that subsidy doesn't mean you got a $600 phone for $100... it means you got a $600 phone for $1000, but get to pay in installments.

        You know, the GP obviously meant to say "without"? Just this week, Amazon had a basic quad-core prepaid (ie, no contract or subsidy) Android 4.4 smartphone on sale for $69.

        That said, royalties often use a percentage basis rather than a flat fee, so you can't necessarily take the existence of a sub-$120 smartphone as disproof of TFA.
  • and then they won't pay any royalties
    just do all the R&D for the thousands of patents that cover antennas, modulation, encryption, LTE, beam forming the signal and everything else it takes for a modern phone to work

    • by Mordok-DestroyerOfWo (1000167) on Thursday May 29, 2014 @06:22PM (#47124629)

      and then they won't pay any royalties just do all the R&D for the thousands of patents that cover antennas, modulation, encryption, LTE, beam forming the signal and everything else it takes for a modern phone to work

      And yet if they did reinvent the wheel, they'd get sued into oblivion by these companies nontheless. With the speed at wihch technology progresses increasing as drastically as it has been, we need to rethink the we we grant patents. Software patents need to pass the CS201 stink test (if a CS201 student can figure it out, it ain't novel), and important hardware patents should have a shorter lifespan.

      • Why should there be software patents to begin with?
        and of the rest of these fucking patents, how many are non-obvious and/or without prior art?

        Patents were intended to promote competition and a viable public domain, they were not intended to be a cudgel to keep the little guys from playing.

        With commodity hardware what it is, there should be thousands of cell phone manufacturers. (or hundreds? either way, vastly more than what we have today)

        When rent seeking companies succeed, they are taking away from the p

        • by Sarten-X (1102295)

          Patents were intended to promote competition and a viable public domain

          [citation needed]. Per the Constitution:

          The Congress shall have Power...To promote the Progress of Science and useful Arts

          and from the USPTO [uspto.gov], "To foster innovation and competitiveness...", saying nothing about the public domain. In fact, I'd argue that a state-of-the-art public domain is actually bad for innovation, because there is little incentive to advance beyond the good-enough level of what's public.

          From the perspective of competition, what exactly is the prize for competing? With weak patents, a company that does its own research and actually innovates has nothing to gain except

          • 'State of the art' public domain is not the same as 'viable' public domain.

            One of the points of patents is to keep the public domain relatively current - New/current ideas are patented, but ideas a generation or so old are public domain. This is verses the previous system, where either it was open (anyone who could figure out how you did something did) or it was closed forever (anything you couldn't figure out from looking at it) - and occasionally lost.

            In a good, healthy patent system the patent is a rewa

          • by xelah (176252)

            Along with the actual definition of "rent-seeking [wikipedia.org]". Rent-seeking is when one spends wealth on lobbying to increase their share of some limited resource, without creating anything of value in return.

            That's a terrible definition.....even later in the same Wikipedia article it's redefined as 'an attempt to obtain economic rent', linking to the entry on economic rent itself, which has a section on monopoly rent [wikipedia.org] which specifically mentions patents.

            Economic rent is pretty much everywhere in some degree, because monopoly power is everywhere to some degree (nothing is perfectly competitive). And I think it would be wrong to just assume that it always causes a welfare loss just because it's become a (justifiab

          • ...

            Along with the actual definition of "rent-seeking [wikipedia.org]". Rent-seeking is when one spends wealth on lobbying to increase their share of some limited resource, without creating anything of value in return. The closest the term comes to patents is when a patent troll buys patents to increase its chances of winning a lawsuit, but even that's a stretch, because the purchase isn't lobbying. ....

            Despite the poorly written lead-in sentence to that Wikipedia article, "rent seeking" is not limited to political lobbying, that is merely a common example of rent-seeking. Regulatory capture, in which regulators expect to be rewarded by industry after they leave their regulatory role is rent-seeking via quid-pro-quo, not lobbying, for example. It is the act of obtaining wealth by gaining control of a limited resource, not through productive activity, is rent-seeking, no matter how it is carried out, so ye

      • by evilviper (135110)

        we need to rethink the we we grant patents.

        Very eloquently said...

      • by Yakasha (42321) on Thursday May 29, 2014 @07:15PM (#47125093) Homepage

        With the speed at wihch technology progresses increasing as drastically as it has been, we need to rethink the we we grant patents. Software patents need to pass the CS201 stink test (if a CS201 student can figure it out, it ain't novel), and important hardware patents should have a shorter lifespan.

        Part of the problem is the complexity of the product being built, which naturally increases the number of technologies, and therefore the number of patents being included in the product.

        Invent a plow today and you need... 1 patent. Its a sheet of metal for cutting the earth. Throw on a yoke and use a new alloy and may be a couple more for hooks and leather straps and you're still around 5 patents. Granted I'm not a plow engineer so I really don't know everything that goes into one, but how complicated can one plow really be... when compared to a modern smart phone?

        We're no longer standing on the shoulders of giants, we're standing on the shoulders of giants who are standing on the shoulders of giants who are standing on the shoulders of giants... and every single one of them wants to get paid for holding us up. (Atlas shrugged cause he wasn't getting paid).

        I'm having trouble linking royalty costs to "stifling innovation" though. Getting paid via royalty payments is a pretty good reason to innovate: invent something, get paid. Increases in the amount people are paying in royalties just increases the incentive to invent something and get paid. In fact, it is doing exactly that. Companies invent stuff, or buy inventions, just to use those inventions as collateral to get access to other inventions. That $120-$150 estimate they put on there is not cash payments, it is $120-$150 of something... such as their own inventions.

        I don't particularly recall that many "Cant afford royalty payments so our product is cancelled" stories. I do see Apple's $160 billion bank balance though, which to me says there is no problem with royalties or lawsuits over royalties or profit margins. In fact that tells me the royalties have saved Apple quite a bit of money in R&D costs.

        • Granted I'm not a plow engineer so I really don't know everything that goes into one, but how complicated can one plow really be...

          Complicated enough...

          Following an initial trial, Richard, then in business with Clarence at Kalkabury (Arthurton) on Yorke Peninsula, exhibited two prize-winning versions of a stone- and stump-jumping plough at the agricultural show at Moonta in November 1876. The Farmers' Weekly Messenger accurately forecast that Smith's invention had the potential to 'cause a complete revolution in tilling uncleared land'. The mechanism allowed the shares to glide over stumps which otherwise required grubbing, a laborious and costly process. He failed, however, adequately to secure his rights under the Patents Act of 1877 and prosperity eluded him.

          http://adb.anu.edu.au/biograph... [anu.edu.au]

          Of course, if he invented it today, he and his descendants would have prosperity guaranteed for as long as they could buy lawmakers...

        • by houghi (78078)

          but how complicated can one plow really be... when compared to a modern smart phone?

          When we talk about phones and licenses, we also need to include trademarks. What is the shape of the plow. What color did you make the plow. What type of handles. What is the shape of the handles.
          And obviously there is a difference between a human driven and an animal driven plow.

          Oh and obviously if the plow is made after 1492, you can add 'for the potato' to each patent and copyright.

          If the plow was invented today by a com

          • by Yakasha (42321)

            but how complicated can one plow really be... when compared to a modern smart phone?

            When we talk about phones and licenses, we also need to include trademarks. What is the shape of the plow. What color did you make the plow. What type of handles. What is the shape of the handles. And obviously there is a difference between a human driven and an animal driven plow.

            Oh and obviously if the plow is made after 1492, you can add 'for the potato' to each patent and copyright.

            If the plow was invented today by a company, the patent, copyright and trademark lawers would have a field day and come up with way more then just the 5 you think are logical.

            Oh and obviously you can not just go to the townsmith and ask for a plow or make parts yourself. That would be equal pirating.

            That's it? So you agree.

        • by xelah (176252)

          I'm having trouble linking royalty costs to "stifling innovation" though. Getting paid via royalty payments is a pretty good reason to innovate: invent something, get paid. Increases in the amount people are paying in royalties just increases the incentive to invent something and get paid. In fact, it is doing exactly that. Companies invent stuff, or buy inventions, just to use those inventions as collateral to get access to other inventions. That $120-$150 estimate they put on there is not cash payments, it is $120-$150 of something... such as their own inventions.

          Innovation and improved technology isn't just about invention. An improvement in technology is an improvement in the techniques people use to do stuff. A marvellous new thing used by hardly anyone is only a very small innovation. So, if a law limits access to new inventions then the improvement in technology is also limited.

          I don't particularly recall that many "Cant afford royalty payments so our product is cancelled" stories.

          I suspect that 'new product not developed because its expensive' doesn't attract readers well enough. Besides, just think of how many more people would be using better technology if they

      • by Sarten-X (1102295)

        And yet if they did reinvent the wheel, they'd get sued into oblivion by these companies non[e]theless.

        Maybe they shouldn't be using wheels, then. Perhaps a bearing caster would be better, or a nylon pad, or a small armature. If this "wheel" thing is patented, then it's because it's a particular solution for a particular problem. Avoid that solution and solve your problem differently.

        Software patents need to pass the CS201 stink test (if a CS201 student can figure it out, it ain't novel)

        Here's the catch: They aren't allowed to know the patented solution before they figure it out. If they're the standard for "reasonably skilled in the art", then a bad patent must be "obvious" to them before the state of the art

      • by NoKaOi (1415755)

        Software patents need to pass the CS201 stink test (if a CS201 student can figure it out, it ain't novel)

        The law already says that (and I think you mean obvious btw, not novel). The problem is how the law is applied/enforced. And frankly, somebody "skilled in the art" ought to mean somebody with a CS degree and several years of experience, not just a CS201 student, so you're setting the bar too low.
        Novel = Has the problem been solved this way before?
        Obvious = Is the same solution obvious to somebody skilled in the arts when presented with the problem it's trying to solve?

        So then the issue is: who decides whe

        • Judging obviousness is difficult, because most solutions are obvious if someone explains the problem well enough. One of my favourite papers describes a series of spinlock implementations, and by the time you get about half way through you've worked out what their good solution will be, but most people will not come up with that design if you tell them to design a spinlock. Even if you tell them to design a spinlock to minimise cache-coherency bus traffic, their final design isn't quite obvious, but by th
    • by dshk (838175)
      It does not work that way. Even if Apple or Samsung or anybody else invents all the components themself, they still have to pay the same royalty to the original "inventors", because they received monopoly for 20 years.
      • by alen (225700)

        then apple and samsung need to open up a modern day bell labs and invent new stuff
        like that australian university that invented most of wifi. or the german one that invented mp3

        • CSIRO didn't invent most of wifi, and the Fraunhofer Society didn't invent mp3 alone.
          • by daknapp (156051)

            ... the Fraunhofer Society didn't invent mp3 alone.

            No, but they led the way to making it needlessly complex! Seriously, the MP3 bitstream format is seriously screwed up.

    • Actually Samsung has done a lot of that research, however it is handwaved away by the US courts and valueless.
      Samsung and other companies participating in the active development of standards for such important techniques also
      cooperate, cross license, and charge very little.

      Apple however slapped 'on a capacitive touch screen' on a mountain of prior art it is held up and important and innovative.
      Apple then uses this 'high value patents' as a weapon to try and exclude competition from who markets so they can p

      • by alen (225700)

        most of those were design patents
        and the holder of the most design patents in the usa is, Samsung. patenting their designs for fridges and microwaves

    • by sjames (1099)

      Unless the phone is a randomly shaped blob with razor sharp spikes and a morse code only interface that doesn't actually connect to anything, someone will have their hand out for royalties anyway.

  • Because he basically invented all of it, didn't he give up all patents? So prior work nullifies all of the new stuff? :D
  • If you void patients then companies will stop sharing their innovations with people and instead rely on trade secrets to protect their intellectual property.

    You think progress is slow now? See what happens when companies actively hide how they do things rather then relying on patients to protect their IP.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      You seriously think that a company could keep secrets for more than a product cycle? The spying-security arms race would be won by the spies in a matter of minutes.

      • You lack imagination and a grasp of history.

        You forget that prior to patents that is precisely how companies operated.

        Would they have to change the way they make products and release them? Obviously.

        or did you not realize that was an unavoidable component of that point?

        Take the push for cloud computing which is itself partially seen a solution to piracy. Consider that invalidating patents and piracy are similar qualities and the means by which you fight one works well against the other. In effect you might

        • Secrets weren't kept all that well even by guilds, and getting rid of patents would only serve to accelerate the growth, because innovation happens when ideas have sex and reproduce, and patents are a form of birth control.
          • ...patents are a form of birth control.

            Yeah, by abortion.

          • In practice that doesn't happen because people don't invest the time to invent new things if they know their ideas will be stolen from them and used by their competitors against them.

    • by bug1 (96678)

      If you void patients then companies will stop sharing their innovations with people ...

      What do people have to do with it ?

    • by Anonymous Coward

      That seems like it would be interesting. Each company would pay more for research independently, so STEM gets a boost in pay and numbers. The small guy would likely be able to buy common-tech parts from some Chinese without worry about how they are made, just what they can do.

      The problem at this point in time is that technology gets out paced before the patent's ink is even dry. The patent clerk's office gave up trying to find prior art and is letting the burden fall on the courts. No one wants to claim tha

      • by alen (225700)

        that's not true
        each new gen has new stuff and patents but it still uses inventions from prior generations of that product

      • No, the profit margin for innovating would be lower and the risks for innovating would increase... thus there would be less innovation.

        if anything, the majority of effort would be put into protecting what IP could be kept secret.

        Why are people so ignorant of the history on this? You do realize there was a time before patents, right? Do you know what innovation looked like at that time? Patients reward innovation. If you hate people that innovate, then by all means... cut off their livelihood. If you like in

        • You need to limit patents, narrow the scope so someone can't patent the wheel for their cart and stop anyone from making inline skates (because it uses wheels!). You need to check for prior art before you issue a patent. There are far too many examples of patents on things that were in common usage before the patent was filed. I suggest mandatory licensing of all patents on a fair and reasonable rate. That would still allow the inventor to make money but not stop all progress in that field while everyon
          • Most of what you're talking about relates to the US patent office being run badly... not to the idea of patents themselves.

            Will I agree that a US federal bureau is being run by halfwits?

            Yes. That would hardly be the only portion of the US government run by incompetents.

            However, incompetent government officials does not mean that we should make murder legal or negate property rights or negate the first amendment or otherwise radically alter US law simply because the current people put in charge of given serv

    • If you could keep it a secret, you'd be a moron to get a patent. Also, outside of a few industries, you get LESS useful information from most patents than having someone with at least moderately related knowledge on the subject looking at it for five minutes.
      • Not at all. Keeping it secret often means literally keeping it secret... as in telling no one and doing nothing with it that would reveal the secret.

        That keeps it secret but you don't make much money on it.

        Savvy? This is how companies kept secrets. They would use the technology in house or with trusted customers... but the general public would get no access to it.

        Again, this was at one point standard. I'm not debating this with you... you're arguing against historical fact.

        Don't waste my time arguing agains

        • Even if you have perfect secrecy, it does nothing if someone else independently invents the same thing in a similar timeframe. That is actually the norm, even for something as complicated as calculus, and that was in a world far less than flat than ours today. Most patents are for things where it took more effort to write up the patent than to actually invent the subject matter. So, not only is there no chance of keeping it secret in most cases, it's not even worth the effort of attempting to do so.
          • You are assuming that the only patients are fraudulent ones.

            Consider if someone came up with something that wasn't just a bullshit patent.

            That is what I'm talking about... not the stupid patients that shouldn't have been accepted in the first place but the real ones.

            • No, I'm assuming that independent invention is the norm, most patented inventions are incremental changes from the prior art, and the only exceptions are almost universally accidents that there is no way to incentivize.

              Mark Lemly covered this quite well: http://papers.ssrn.com/sol3/pa... [ssrn.com]
              • People need to be compensated for work.

                This notion of everyone works for free and there are no negative consequences is unforgivably naive.

                • I'm not saying that everyone works for free. Not having patents doesn't mean that everyone works for free, just that everyone is free to work.
                  • if I invent things and you don't pay me but instead take my work and use it without compensating me at all then you expect me to work for free.

                    • If you do work without negotiating a contract for compensation, that's your fault. Nobody is forcing you to work, and if you don't want to invent in a society without patents, you are welcome to sit on your useless ass while the rest of us actually get things done.
                    • The patients are a contract between the inventor and society. A contract that is agreed to individually when you use the invention in return for that access.

                      If as an inventor you choose not to patient something you can do that. We have many forms of licensing that give people free use of inventions without compensation so long as they cite the inventor's name if the invention is used in a larger work. We also have patients that give people free use of the invention so long as it is not used in any commercia

                    • If you support contractual law, then you support patients.

                      Not at all. Patents are coercive, not consensual. If you had contracted with me, I would owe you something, but you contracted with my government.

                      However, inventors have a right to be compensated for their work.

                      No they don't, not even in the patent system. If you invent something that's useless, you will receive no money. Furthermore, it is not compensation, as it the money you make has no connection to the amount of work you did, and there is

                    • Wrong.

                      Its the same as a copyright in most cases. If I write a book or a song or paint a picture... and you wish to read it, listen to it, view it... then you must abide by my terms.

                      The patient is supposed to work in much the same way.

                      Here you'll tell me what about someone that came up with the same invention independently and now their work is rendered meaningless simply because some guy got to the patient office 2 seconds earlier.

                      That is an issue... and I'd be open to discussing resolutions to that. Howeve

                    • Its the same as a copyright in most cases.

                      I am also opposed to copyright for similar reasons.

                      That is an issue... and I'd be open to discussing resolutions to that. However, if you came up with the same invention a year later or two years later then its much more likely for me to conclude that you just copied his work and are now fraudulently claiming to have come up with it yourself.

                      No, as the article I cited mentions, in most cases, the invention is re-invented independently.

                      You seem to think you have a

                    • You're saying you have a right to steal what other people produce and you think that people will keep producing things even if everything they produce is stolen.

                      This is pretty much why third world countries stay third world countries.

                      One of the bigger problems in desperately poor countries is that they're almost all hopelessly corrupt. You apparently would be surprised to know that the poverty is actually a consequence of the corruption... not the other way around.

                      You see, when there is really no rule of la

                    • Property IS important because of the tragedy of the commons. The tragedy of the commons does not apply to the abstract, therefore the rationales for property do not apply to patents or copyright. I am strong advocate of property, which is why I oppose copyright and patents, as they undermine actual property rights. Patents are especially troublesome because provably independent work is not a defense against infringement.
                    • So in your opinion, inventors do not deserve to be compensated for their contributions to society.

                      This means you're either immoral... believing in theft... or stupid thinking you're not advocating stealing.

                      Its one of the two.

                      Flip a coin.

                      We're done here.

                    • So in your opinion, inventors do not deserve to be compensated for their contributions to society.

                      No, Mr. Strawman. I believe that inventors should look to means other than legal monopolies if they wish to get paid for work they've done.

                      This means you're either immoral... believing in theft... or stupid thinking you're not advocating stealing.

                      I'm not advocating stealing. Patent infringement is not theft, never has been, and never will be. The mens rea of theft is intent for deprivation, but information

                    • So you think that if an inventor invents something you have a right to steal their invention and use it at will because they have no right to own things they create?

                      I'm sorry but this isn't a strawman. You are asserting ownership over things other people created.

                    • You are apparently adopting a natural rights philosophy towards patents, that merely because someone invents something, they naturally have a right to control it like it was their physical property. Such a philosophy is incompatible with the US Constitution, under which patents are only justified as a means to an end for technological progress. I hold that this means does not actually further that end, and thus patents are not justified.
                    • That's fine. I understand your position. You believe you have a right to steal.

                      Understood.

                      I disagree. I don't think stealing is permissible and that property rights are important for a healthy society and economy.

                      You again will disagree with that... and think various things like people that don't get paid somehow keep making things for people that don't pay them.

                      And that's fine. Its unforgivably stupid... but you have a right to believe unforgivably stupid things.

                      You do not however have a right to not be ju

    • The problem is not with the companies doing real research that don't have the money or intent to produce the products themselfes. Its more with the patent system being used to enforce DRM, shooting small competition into the knee with patent claims, patent trolls, or too long terms in certain industries.
      I think that the current price for smartphone patents seems fair, even if there are some unfair patents like "swipe to unlock".
      Patents shouldn't be issued for obvious stuff, and be required to be written in

      • As to patent trolls, those people are fraudsters.

        Just because there are criminal elements in the patient system does not mean you should get rid of the patient system entirely.

        That would be like saying that because some people defraud people out of down payments they put on houses that we should not buy homes anymore.

        Just as we have an escrow system that protects home buyers and sellers the patient system probably needs some sort of infrastructure to stop fraudulent patient claims from interfering with peop

        • If the patient however is valid... that is someone actually did invent something, and patient it... then they're owed compensation for that. Pay the man.

          Agree.

    • by wbr1 (2538558) on Thursday May 29, 2014 @07:30PM (#47125207)
      Interesting fact. In america , recipes are not subject to copyright or patent. General mills, and other cereal makers, as well as other food companies rely on jealously guarded trade secrets. This does not stop generic copy cat foods (is store brand sodas and generic cereals) from being made. In fact they proliferate. Some are indistinguishable or better than the original. Some are junk.

      This is the market in operation. Stopping patents will not slow or stop innovation, it will spur some as companies need to invent to differentiate from the rest. Then when they are copied, it continues. In this sense, necessity is the mother of new invention. The necessity of being unique and valuable Ina sea of clones.

      • Tell you what, why don't you ask inventors and companies that spend real R&D money what they think of your little theory?

        They'll tell you what I just told you. If you won't listen to the inventors then that's like ignoring the farmers when they try to tell you what will happen to the harvest.

        That's just willful ignorance... it is worthy of neither respect nor tolerance. Its just stupid.

        I say this assuming that you won't listen to them... am I wrong?

        • by wbr1 (2538558)
          Who is speaking? The smaller guys... artists, indie game crews, new egg.. they are fighting. The only ones espousing a point similar to yours are those who are gigantic, worth billions, and only wish to hold onto and amass more billions. Oh and those that troll using the laws to skim off the top.
    • by jmv (93421)

      You think progress is slow now? See what happens when companies actively hide how they do things rather then relying on patients to protect their IP.

      Yeah, imagine all these iPhone owners with rounded corners they can't even see because Apple had to hide them.

    • If you void patients then companies will stop sharing their innovations with people and instead rely on trade secrets to protect their intellectual property.

      You think progress is slow now? See what happens when companies actively hide how they do things rather then relying on patients to protect their IP.

      So you do realize that the Computer Software Industry was flourishing quite well when it was under Trade Secret Law - one of the biggest reasons why Software has such as hard time with Patent Law, the majority of its origins are still hidden by the time it was under Trade Secret Law and many of those companies have since been bought or gone out of business due to market demands, not "intellectual" property protection issues. This is also one of the reasons why the original UNIX code base developed by AT

  • If you made a general-purpose pocket computer that has a LTE addon module (which you license as a single unit), how much of that royalty pool just melts away?
    • by Sarten-X (1102295)

      If your computer system is designed to avoid any other patents, a good chunk of those royalties probably do disappear. Of course, then you're missing most of the UI features that users have come to expect, and your naive implementations of subsystems are probably not as efficient as the patented implementations, so your cheap phone will seem awkward and slow to use.

      But hey, it was cheap.

  • by ReekRend (843787) on Thursday May 29, 2014 @06:34PM (#47124719)
    They have no place in the modern world, if they ever had a place at all. Creating art is a privilege and invention is the nature of intelligence, they will happen just fine without greed as the motivation. Down with unfettered capitalism, live like rational humans instead of psychopaths.
    • by alen (225700)

      yes
      now go to stanford and then find a place to live under a bridge while you work 18 hour days making stuff for me

  • by Required Snark (1702878) on Thursday May 29, 2014 @07:44PM (#47125311)
    I worked for a company that was trying to develop technology for MPEG. It was a pure intellectual property play.

    MPEG is (theoretically) a non-profit, open to all international standards body. The separate entity MPEG-LA is the MPEG License Authority. It's the business end. The technical committees are front organizations for the license authority, which generates a lot of cash.

    The entire setup is a sham. The big players send so many representatives to the technical committees that they dominate by sheer numbers. Sometimes meetings extend for hours late into the night. The faction that wants to get their proposal excepted keeps their people in the meeting, and then when they count a majority they hold a vote and get what they want.

    It's not about technology or quality or making things faster/better/cheaper. It's about decades long revenue streams protected by international standards and laws like the DCMA. Even though it looks like technology is driving to lower costs, the reality is that patent royalties are effective a huge tax on users.

    The return is completely disproportionate to the initial investment. How much do you think it cost to come up with the standard for the HDMI cable? How much do you think is being made worldwide if even $1.00 US is going for license fees?

    No capitalism here. Nothing to see. Move along.

    • The return is completely disproportionate to the initial investment. How much do you think it cost to come up with the standard for the HDMI cable? How much do you think is being made worldwide if even $1.00 US is going for license fees?

      But what if $0.05 is the fee per cable/unit?
      Because that is the actual license fee for HCMI.
      Why make up numbers when the actual numbers are available through a simple search? http://www.hdmi.org/manufactur... [hdmi.org]

      • by Gibgezr (2025238)

        So he was off by a factor of 20. Are you implying that a royalty of 5 cents per cable is still not HUGE money if you add it up over a year?

        • When looking at a cost, you have to consider what the licensees get,
          By paying a nominal sum per unit sold, the manufacturers gets access to an established market with more or less certain sales due to the widespread use of the technology. Is it not reasonable that hose who have in effect created a huge market for the product also get part of the profit?

          I could understand the negativity if the license contributed significantly to the cost of the end product (which is the case for mobile phones), but when
          • by Gibgezr (2025238)

            It's hardly significant as long as we only have to pay for one patent. All those patents add up, though, which is the point of the article.

            • That is true, but what I answered to was that the post used a specific example witout bothering to check the facts.
              Using $1 per unit as an example when the actual fee is $0.05 misrepresents the facts, which needs to be pointed out.
  • All manufacturers have to pay these costs, so they don't lose competitiveness. It just makes the handsets a bit more expensive than they would otherwise be - and as a result it's the consumer that suffers. They have to pay more for their phone.

    There won't be a single manufacturer that can't compete due to these costs. They're the same for everyone. Just like the physical components, this is just a part of the bill of parts of a phone. And if a phone manufacturer doesn't pay for those patents, they can't sel

  • We should cut their heads and use royalty free phones

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