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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."
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Ask Slashdot: When Is Patent License Trading Not Trolling?

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  • Thomas Edison (Score:2, Insightful)

    by Anonymous Coward

    Great example - just not for their cause.

    • Yeah, Edison profited off the research of his students, and everyone around him......a bad example to be used if they want to prove patents are useful.

      • Re:Thomas Edison (Score:4, Insightful)

        by Sarten-X ( 1102295 ) on Wednesday September 18, 2013 @01:40PM (#44885577) Homepage

        He made his students' research into actual working inventions. That's what patents are supposed to cover - the working form, with all of the show-stopping problems worked out enough to have a functional device. Pure research isn't patentable, because without an application it just adds to the pile of useless facts about the world.

      • Re: (Score:3, Insightful)

        by BenfromMO ( 3109565 )

        How exactly is Edison a bad example of how the patent process works? Whether we agree with his methods on farming work out and paying employees to invent things for him, we must recognize the fact that through this system he used that he both made money, and benefited mankind through his shops and his laboratories where his employees advanced human knowledge.

        And isn't that the point to the patent system?

        To advance our technology and to advance those who invent? The people all along had an option to n

        • Edison was a convicted monopolist who tortured puppies to slander competitors and proudly used inefficient methods of research. Yes, technology advanced through his companies, but it would have probably advanced faster had he never been born.
        • Re:Thomas Edison (Score:5, Informative)

          by suutar ( 1860506 ) on Wednesday September 18, 2013 @04:12PM (#44887323)
          Edison is known to have attempted to use the power of his patents to suppress behavior he didn't like making him possibly the earliest known troll. That's why the movie industry cranked up in Hollywood CA; it was far enough from Edison to avoid enforcement of his patents on motion picture cameras/projectors.
        • Re: (Score:3, Insightful)

          we must recognize the fact that through this system he used that he both made money, and benefited mankind through his shops and his laboratories where his employees advanced human knowledge.

          Why must we recognize that? Do you have evidence to suggest that he wouldn't have made a similar or greater amount of money in a system with no patents? As far as I know, no such evidence exists; if we required proof that a policy is effective before we could implement it, patent/copyright laws would be long gone by now.

      • by tgd ( 2822 )

        Yeah, Edison profited off the research of his students, and everyone around him......a bad example to be used if they want to prove patents are useful.

        There's no crime in profiting off the work of employees and students.

        You may disagree with it, but its completely orthogonal to the question of the usefulness of patents.

      • Re:Thomas Edison (Score:5, Insightful)

        by ShanghaiBill ( 739463 ) on Wednesday September 18, 2013 @02:41PM (#44886259)

        Yeah, Edison profited off the research of his students, and everyone around him......a bad example to be used if they want to prove patents are useful.

        And an even worse example if you want to show that NPEs are useful today. That fact that independent inventors were useful a century ago is irrelevant. They play very little role in modern innovation. Many companies refuse to even talk to independent inventors, because knowledge of their patents can expose the company to liability. 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.

        • Re:Thomas Edison (Score:5, Interesting)

          by MightyYar ( 622222 ) on Wednesday September 18, 2013 @03:45PM (#44886991)

          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:Thomas Edison (Score:5, Insightful)

          by pnutjam ( 523990 ) <> on Wednesday September 18, 2013 @04:00PM (#44887171) Homepage Journal
          Patents were useful in a time where the written word was expensive to produce in quantity and ideas could easily be lost. This is just not the case anymore. Our population alone has put us into the million monkeys on typewriter range.
      • Isn't this the entire point of capitalism, though? If you want capitalism to work for inventions, I don't see how you could do it without something like patents.

        The answer might be to move from this archaic system of absolute state-enforced monopoly to something a bit more flexible. Of course this would require economists and policy-makers to be imaginative and innovative themselves, rather than modeling `innovation' as white noise (wtf?), which seems unlikely.

      • by Ksevio ( 865461 )
        Edison was also an inventor himself that made many innovative machines. Later in life he advanced to running a lab that people don't like the ethics of, but he was certainly no manager type exploiting an industry like some people believe.
  • by gstoddart ( 321705 ) on Wednesday September 18, 2013 @01:37PM (#44885533) Homepage

    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.

    • I would go without the "if you didn't create it." I've yet to find a single patent case that wasn't trolling.

      • Re: (Score:3, Informative)

        by tgd ( 2822 )

        I would go without the "if you didn't create it." I've yet to find a single patent case that wasn't trolling.

        If you get your "news" from stories on Slashdot, that would make sense. All you see on here is the fringe ridiculous cases, and the high profile games played between multinational corporations using patent portfolios as pawns. The vast majority of patents do exactly what they're supposed to do, and the vast majority of patents are licensed fairly and appropriately.

    • What if a bank, B, loans money to a startup, S, that is a small company where inventors have a few of their own patents, P. As part of the collateral for the loan, S assigns rights to B for the patents until the loan is repaid.
      Startup S goes belly-up. The inventors blow through the cash and have nothing but the patents assigned to B.
      B places S into receivership and sells rights to P.

      By your definition of "patent troll", B and anyone buying rights to P are "patent trolls", but I don't' see it that way. If

      • Make patents non-transferrable. Then they can't be used for collateral and there is no conflict at all.

        " If you wanted to remove all patent trolls, you will also make it almost impossible for a start-up company that only has intellectual property to get start-up capital."

          I don't see that as necessarily a bad thing.

        • by Rinikusu ( 28164 ) on Wednesday September 18, 2013 @02:20PM (#44886023)

          "How much would we have to pay 'the Patent Holder' for licensing of their shitty little patent?"
          "$50 million a year, sir."
          "What's contract killers going for on Silk Road?"
          "How many patent holders?"
          "Six are listed." ...
          "let's save ourselves over $49 million bucks. Fire up Tor."

          • Upon the death of the patent holders, the IP will still be transferred to either personal estates or will be retained by their companies. Mafia-style hits will not gain the IP in this way.

      • by mellon ( 7048 )

        The patent still has value to practicing entities, just not to NPEs. But your basic point is correct—getting rid of NPEs won't solve the patent problem. Granting patents to all comers is like selling arms to all sides in a civil war. Sure, it's fair, but wouldn't it be better to get them to disarm and resolve their differences some other way?

        • Restricting the sale of patents to PEs reduces the value of the intellectual property. Besides, in my example, most banks would be an NPE.

          The problem is not that "granting patents to all comers is like selling arms to all sides in a civil war". Who is to decide who the PEs are? Who has the right to restrict how these are traded?

          Rather, the real problem is that the patent system is broken---issuing patents for inventions that, as a whole, lack inventive steps or are very obvious to those PEs at the time p

    • by tgd ( 2822 ) on Wednesday September 18, 2013 @02:26PM (#44886101)

      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.

      At the risk of burning karma, I disagree... licensing organizations are not the problem. Bad patents are the problem.

      Licensing organizations are very useful, to big companies, small companies and individuals.

      There are a fairly large number of companies that exist to profit off bad patents, but that doesn't invalidate the work the "good" companies are doing.

      • by Beryllium Sphere(tm) ( 193358 ) on Wednesday September 18, 2013 @04:00PM (#44887169) Homepage Journal

        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."

      • A police state is created by making laws in opposition to human nature. Primarily laws concerned with censorship or restrictions of ideas or information.

        You are trillions of copies of a single cell. Life itself is duplication and preservation of information. Evolution encodes better information about survival into DNA and passes it onto the future. This is the nature of and meaning of life (meaning: what life is and what life does).

        The prime thing you have over all other species on this planet is a

    • your entity exists to do nothing than extort people for royalties on your patent

      Let's say we make a new rule that says any corporation that derives more than 90% of its revenue from patent royalties is a patent troll.

      The problem is that this rule is trivial to dodge. Large multi-nationals can just buy patent trolls and thus wash the patent royalties into the legitimate revenue stream. It doesn't matter if the percentage is set at 90% or even 1%, there are plenty of Fortune 500s out there with big enough revenue streams to do this.

      This is a complicated problem which requires delicate s

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      I agree.

      There is nothing in the Constitution that implies that a patent should be transferable to another party. The Constitution says,

      Congress has the power to...promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

      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

    • by Solandri ( 704621 ) on Wednesday September 18, 2013 @03:51PM (#44887063)
      That doesn't work. If the people profiting from an invention wouldn't have had the idea for the invention on their own, then you are not extorting them by making them pay to license the patent.

      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.
  • by RobertLTux ( 260313 ) <robert@lauBLUEre ... .org minus berry> on Wednesday September 18, 2013 @01:38PM (#44885555)

    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

    • Type 3 buys patents from type 1, allowing type 1 to invent more (or recoup the initial investment).

      That means that types 2 and 3 are effectively competitors, both trying to get the license from type 1. However, type 3 will buy from type 1 any time on speculation of future profit, whereas type 2 will only buy from type 1 when the patent is immediately useful. That's why type 3 is so often found associating with "pure research" type 1s, where profitable applications aren't clearly visible.

      Those "leeches" prov

      • Type 3a firms are good--they buy patents from inventors and seek out companies who want to bring in new ideas by buying or licensing a patent.

        Type 3b firms are patent trolls--they buy patents and seek out companies already using the patent in order to extort money from them.

        The problem is that in many fields (like software and computer design) there are simply so many engineers working on any given problem that it is almost impossible to avoid the simultaneous/independent invention of any given idea. In

    • Suppose you are an inventor. Perhaps you come up with something clever, but you cannot find a maker interested in making your widget. Or there are already a few making it but disputing their infringment of your patent (or simply using it without your knowledge), meaning massive legal fees before you can collect dollar one. In this case, the "IP venture" types can buy your patent. You get paid, and their market guys get to work finding makers interested in your invention, or they sick their legal depart
    • by tgd ( 2822 )

      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

      The problem is, there's really two kinds of companies in bucket #3 -- patent licensing companies that handle licensing (and sometimes legally holding) patents on behalf of the people in #1 and #2, and patent aggregators that seek out and buy up bad patents as companies are failing for the express purpose of monetizing them until they're found invalid. You can tell the latter by the random nature of their litigation and the tendency to keep licensing costs in the "extortion" range where its cheaper to pay th

  • NPE and Forbes (Score:5, Insightful)

    by jbolden ( 176878 ) on Wednesday September 18, 2013 @01:41PM (#44885585) Homepage

    More of less the article says that NPEs encourage innovation by allowing people to sell patents. Everyone agrees that patent trolls/ NPE by being willing to buy patents help to make having a portfolio of patents a valuable asset. That's not a point in question. The point in question is whether the damage NPEs cause exceeds the benefits of their funding since the money for those buys comes from lawsuits. And Forbes doesn't even attempt to answer that question. Lots of terrible things often have some side advantages that don't come close to covering the downside of the terrible thing.

  • Those patents covered actual working models, not taking something that already exists, slapping "Mobile" in the description, and suing small businesses that are using it.

    This article is out to lunch and written entirely to benefit the patent troll industry (which now finds itself drawing unwanted attention).

  • Since a patent is a government granted privilege, if you don't market your patented device, you must allow somebody to do so at a reasonable price, set by the government, if need be. If you want to consider patents as property, let's levy taxes on it and use eminent domain where necessary. (See the Wright Brothers patent on lateral control of the airplane)

  • by SecurityGuy ( 217807 ) on Wednesday September 18, 2013 @01:47PM (#44885667)

    The problem is junk patents.

    Imagine you invent a device that pulls water out of the air for free (unlike anything cold, which will do it for $$$). Anywhere. Even in a desert. This is a great innovation. I have zero problem with you selling your patent to someone else. The problem I have is that right after you invent this, a horde of lawyers will storm the patent office and patent things like drinking water that came from your device. Watering a lawn with water that came from your device. Making beer with water that came from your device.

    The problem is the ridiculous deluge of patents for trivial and obvious things. They litter the business landscape and make it impossible to solve any real problem without tripping over them as you solve 100 trivial problems in obvious ways along the way. Cuz you know, who ever would have thought that the optimal number of clicks to buy something in would be 1? That must have taken a talented team of web developer (singular) literally hours to do.

    • by Anonymous Coward on Wednesday September 18, 2013 @01:58PM (#44885799)

      This, this, a hundred times this.

      One example I can think of is in the salt water aquarium hobby, particularly the reefkeeping segment. Some stupid patent examiner let a patent get through that covers lighting for saltwater aquaria that incorporates a timer and LEDs. 'Cause, you know, replacing frakking fluoros or HID lights with LEDs and sticking a timer in it's 'non-obvious' or some crap. Sued several emergent companies out of business, while not actually producing a product.

    • Pretty much. Put another way, the Patent system is being gamed now. It is like a really old server running old software, all the hacks are known and it will be serving porn within the hour. Patent system really isn't much different. The law is really old. All the cracks and exploits are now well known by the legal community, and it is now not doing its intended job, instead of the legal hackers are exploiting it.
    • The problem is junk patents

      And the cause of junk patents is the distorted economy of issuing patents. USPTO gets paid for every patent they issue, good or bad, yet are immune [] from lawsuits from the businesses they negatively impact by their bad behavior.

      The term for this immunity is royal perogative [].

    • who ever would have thought that the optimal number of clicks to buy something in would be 1?

      I don't get this idea. Unless there's an easy undo functionality for the transaction, if there's real-world money involved, I always want confirmation. So 2 clicks for me, please.

  • by Skapare ( 16644 ) on Wednesday September 18, 2013 @01:52PM (#44885721) Homepage

    ... is not that patents are bought and sold (this should be perfectly valid for valid patents). The real problem is that there are so many bad patents ... things that are not innovative at all ... things that don't fulfill the need to have a patent system. Once people start to understand what patents really are supposed to be, then we can solve the problem. It's not about trolls or software patents or things like that. It's about what justifies the government taking property rights away, and how that concept has been corrupted by corporations since the middle 1800's.

    Read more ... []

  • by tlambert ( 566799 ) on Wednesday September 18, 2013 @01:59PM (#44885809)

    Until 1880 this was not a problem.

    Up until that point, there was a requirement of production of a working model, also known as a Reduction To Practice. After 1880, you could patent whatever, and get away with never having produced anything other than the speculation that your idea might be reduced to practice using some future engineering or technical ability which did not exist at the date of filing.

    One common alternative method of patent reform is to bring back this requirement, and to place the model in escrow. In the limit, this permits future study of the model, whether it be hardware, or a process patent for software. This would incidentally remove patent protection from soft processes, such as business model process patents, which people tend to find very objectionable as abuses of the patent system.

    • by geekoid ( 135745 )

      You can't bring back the requirement, it's overly burdensome.

      I have a patent for a omni-transducer polymer. I can't afford to get it made, so what? only people with money should be allowed to patent?
      Of course, the person who invented the LASER would never have been able to gat a patent with Reduction to Practice, and last I checked, the LASER was pretty damn useful.

      And yes, business models, or any 'model' should be removed, a should software; which should be protected by copyright.

      • by Skapare ( 16644 )

        I agree ... that requirement is burdensome. But there does need to be some kind of showing of innovation. It seems that 99% if patents are for things lots of people could easily do.

      • Of course, the person who invented the LASER would never have been able to gat a patent with Reduction to Practice, and last I checked, the LASER was pretty damn useful.

        You are wrong about the laser. You need to read:

        The Laser Odyssey
        Theodore Maiman
        ISBN: 0970292704

        The original inventor of the laser almost lost out on his patent because he believed that there was still a "reduction to practice" requirement. The difference in the time to invention to reduction as a period of a bout 3 years.

      • by rollingcalf ( 605357 ) on Wednesday September 18, 2013 @03:55PM (#44887097)

        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.

    • It's my understanding that it wasn't particularly burdensome to inventors at the time. It was a burden on the patent office because they were running out of space to store the models. Can you imagine what would happen if they had to do that now? There'd be entire warehouses filled with nothing but abdominal muscle workout machines.

  • by Schnapple ( 262314 ) <tomkidd@viate x a s . com> on Wednesday September 18, 2013 @02:00PM (#44885813) Homepage

    In theory what a NPE does is actually quite admirable. You're an inventor and you invented something and you have a patent and big companies rip you off. They know you can't afford to fight them so they just do what they want. So you sell your patent to someone like Intellectual Ventures who goes after the big companies for you. Now no one can make your widget bolt without paying you, as it should be.

    And look what's happened - even giant companies are scared shitless to defend against patent lawsuits. In that respect, the idea worked.

    In practice though what happens is minute, even trivial things get patented and NPE's go looking for people to sue, using a byzantine series of shell companies and borderline gaming of the legal system. Whereas the inventor of the widget bolt has to make the exact specifications of how his bolt works open to the public (who could also just figure it out by looking at it) software companies don't have to make the source code of their patented inventions available to anyone.

    NPE's to me are like the NRA or PETA - organizations/concepts which started out with noble intentions (responsible gun ownership, don't torture animals) and just strayed way off the mark.

    • by Skapare ( 16644 )

      The problem is that too many of the patents are not innovative. Anyone can make a widget bolt. That patent should have never been issued.

      NRA did not stray off ... it was pulled off track by the "ban all guns" lobby. The problem today is even well intentioned changes like "background checks for mental illness everywhere" risks the slippery slope, and the "pro guns" lobby has to fight even that to be sure "ban all guns" isn't where we end up. To fix this, liberals need to show, by their actions, they are

    • Better yet is to make it so NPE's or PAE's aren't needed int he first place.

      Big corporations ripping off small fry inventors is the root of hte problem? Attack the problem directly and hold the corporations accountable for being rip-off artists.

  • "Is there a right way to trade in patents for profit without abusing the process" - as long as it's not illegal, in a capitalist society somebody will find a more 'efficient' way to do things.
    • Sure - compulsory licensing for IP, just like is done for mechanical rights of recordings; though I would favor a sliding scale of payment based on the quantity. You're ALWAYS allowed to negotiate a lower rate, but any patent may be licensed for production for a fixed rate simply by filing a form.

      It puts a cap on what you can and cannot do, and it makes compliance very easy. Without it, the entire semi-pro music field would grind to a halt.

  • by geekoid ( 135745 )

    Don't let the ignorant convince you otherwise.

    Trolling is when you great a broader patent in order to try to claim royalties on existing patents.

    This nonsense about people trying to protect their rights, or license their patent, is trolling is a pile of crap.
    Generally supported by anti tort groups(i,e, insurance companies) that want to strip inventors of their rights.

  • 1) A Patent Troll is a person or entity who tries to extort payments from any entity for utilizing a patented process or design that should never have been patented.

    2) A patent holder seeking to receive compensation for the utilization of a patent shall not be deemed a 'Troll' if said patent holder is me.

  • Was NOT a great inventor. He was a businessman that took credit for his employees work. He also worked them like dogs, and lied to them. He may have been needed at the time to coordinate/etc, but that doesn't mean he should get credit for what he couldn't do.

    Just read some of Tesla's notes about what happened, the guy was a total 'bag.

    • by Ksevio ( 865461 )
      He also was a great inventor before he opened his lab. Just because the Internet has an obsession over Tesla, doesn't make everything you read about Edison true (or make up for the stuff you don't read).
      • He wasn't a great inventor. He was a marginally talented inventor with a knack for business. His contributions were not great technological advances, but they often did have great commercial value in the environment he operated within. The carbon filament, for example was a very minor element in the advancement of lightbulbs. However, it made a big impact in the commercial viability. Better vacuums were the really heavy lifting, and Edison's filament was replaced soon anyway. He had a gift for being a
  • I'm not saying that Edison wasn't smart and didn't accomplish anything, but do keep in mind that in a lot of cases he just simply improved what others did before him, profiting off the heavy lifting that others did. He promoted things that weren't really all that good to begin with such as the current wars. It's known that he took credit for things that were actually done by people who worked for him. And finally, it's not well known today, but you can research how his motion picture patents put the earl
  • by BBF_BBF ( 812493 ) on Wednesday September 18, 2013 @02:14PM (#44885961)
    After I RTFA, I realized that the authors' definition of NPE is a company that doesn't PHYSICALLY MANUFACTURE the product. And it's doubly disappointing that one author WAS the DIRECTOR of the patent office from 2004-2009. I wonder why the patent office is so screwed up?

    It lists Qualcomm as an NPE!?!?! WTF!?! I guess it's because they don't FAB the chips themselves.

    Qualcomm sells chips THEY DESIGN using their IP, they just CONTRACT OUT the device to others to build. How is that NOT an Practicing Entity?!? They also license out their patents for worldwide standards (WCDMA) that they may not have any part in the manufacture of the devices that use that standard.

    So by the Authors' definition of NPE, Apple is also an NPE because they contract the assembly of their I-devices to other companies and don't actually FAB their A7 processors?


    • by Rinikusu ( 28164 ) on Wednesday September 18, 2013 @03:06PM (#44886515)

      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. :/

  • by psydeshow ( 154300 ) on Wednesday September 18, 2013 @02:15PM (#44885969) Homepage

    Layman's answer:
    It's trolling when the party seeking to enforce their patent rights has no intention of selling an actual working implementation on the open market.

    If the purpose of your company is to make money by licensing an idea, rather than selling a product or service that incorporates that idea, then you're a troll. The system shouldn't allow you to feed on other companies and individuals that are using that idea in their own products or services.

    Nobody cares if an inventor sells a patent to a manufacturer or a service provider who will actually use it, that's how the system is supposed to work. But holding companies and the builders of defensive portfolios should have no place at the table.

    Also, just because business has been conducted a certain way up till now, doesn't mean that's the best way to conduct business. Thomas Edison wasn't a saint, he ruthlessly exploited the inspiration and perspiration of everyone who worked for him and went to great lengths to crush his competitors. WE CAN DO BETTER, is the point.

    • I'd have a different answer:
      - It's legitimate licensing when you either are the firm using the patent, or approach them with reasonable terms before they produce the product.
      - It's trolling when you look for a successful product using an idea patented by somebody else, buy the patent, and then threaten to sue.

      So let's say I have a patented process to harvest hemp that's more efficient than everyone else's. I find out that John Deere is working on a new line of harvester, so I go to Deere and say "I have a p

    • by Rinikusu ( 28164 )

      Whoops, I replied to the wrong post. However, I think you'd be throwing the baby out with the bathwater with this approach because someone like ARM Holdings, who design and control the ARM line of processors many of us use and adore, are exactly that: They exist solely to design, license, and modify their designs. They don't have a fab and from what I can tell, you just can't go down to Fry's and buy an ARM branded CPU (although you can buy Qualcomm and others who license their technology). So, it's not

  • by nurb432 ( 527695 ) on Wednesday September 18, 2013 @02:15PM (#44885977) Homepage Journal

    When you have entities taking advantage of what you invented, and you have no choice but to involve the courts to force them to do the right thing.

    Anything else is a troll.

  • A Patent Troll is a term used by a practicing entity to describe a patent holder that tries to collect license fees, usually in a hostile fashion, for use of their perceived intellectual property. Instead of calling them a "Weenie" they're a Patent Troll. What we all have to realize is that history has numerous examples of NPEs and Inventors who created novel inventions but weren't necessarily the prime manufacturer involving the technology. Thomas Edison and Rudolph Diesel are two inventors that come

  • Patent is based on the same constitutional clause as copyright. It is meant to promote the progress of science and the useful arts by granting temporary exclusive rights to authors and inventors. A patent held by someone other than the inventor goes against that. Grabbing a buck by stifling progress is what corporations that buy patents do. I am not aware of a single case where a corporation that bought out a patent promoted progress.
  • by amaurea ( 2900163 ) on Wednesday September 18, 2013 @03:57PM (#44887117) Homepage

    Patents slowing down progress by discouraging use and hindering competitors is not new, but has been going on since the beginning of the patent system. The beginning chapter of Against Intellectual Monopoly [] details the case of the steam engine, where progress in efficiency and adoption of the steam engine was effectively halted for the duration of Watt's patents, only to take off right after they expired.

    Once Watt’s patents were secured and production started, a substantial portion of his energy was devoted to fending off rival inventors. In 1782, Watt secured an additional patent, made “necessary in consequence of ... having been so unfairly anticipated, by [Matthew] Wasborough in the crank motion.” More dramatically, in the 1790s, when the superior Hornblower engine was put into production, Boulton and Watt went after him with the full force of the legal system. During the period of Watt’s patents the U.K. added about 750 horsepower of steam engines per year. In the thirty years following Watt’s patents, additional horsepower was added at a rate of more than 4,000 per year. Moreover, the fuel efficiency of steam engines changed little during the period of Watt’s patent; while between 1810 and 1835 it is estimated to have increased by a factor of five. After the expiration of Watt’s patents, not only was there an explosion in the production and efficiency of engines, but steam power came into its own as the driving force of the industrial revolution. Over a thirty year period steam engines were modified and improved as crucial innovations such as the steam train, the steamboat and the steam jenny came into wide usage. The key innovation was the high-pressure steam engine – development of which had been blocked by Watt’s strategic use of his patent.

    The above is just a short section, they go through the case very thoroughly (with references), and it is worth a read. Interestingly, the steam engine is often quoted by patent proponents as an example of patents working like they are supposed to.

  • I have no problem with licensing of patents. What I find absurd is the notion of transfer of patents. If someone invents something they ought to be able to profit from it even if they don't produce. But what sense is there in allowing trolls to buy innovation rights from others?

    "Patents: license them or lose them. No sales or transferes allowed." Soon as they make me king.

  • A company can be a non-practicing entity in the sense of not producing an actual product and still be a valid and useful part of the economy if they are genuinely providing the know how that goes along with the patent. The quoted article makes reference to Thomas Eddison, and it is true that he primarily focused on actually inventing rather than building and selling his inventions. But (at least most of the time) when he licensed the patent he also provided the knowledge and advice needed to actually prod

All science is either physics or stamp collecting. -- Ernest Rutherford