Obama Plans to Take Action Against Patent-Holding Firms

Yeah the early internet really spoiled us. We're so used to "Free" being the default that anything else is instantly a disappointment. I'm kind of glad we're moving away from that though, from content to music to services, everything's being turned into a paid/stick-around model rather than a free-for-3-years/go-bankrupt one. Look at how much money it's made for app creators alone.

CoachRufus872• 13 years ago

I'll believe it when I see it.

eoswald• 13 years ago

http://www.techpolitik.com/2013/06/04/patent-trolls-get-thei...

hkmurakami• 13 years ago

If the administration is able to concoct and pass a set of laws that can actually systematically identify and lock down patent trolls but not companies like ARM, it would be an amazing development. Yet this litigation dance is clearly the trolls' domain of expertise. I'm afraid that any rules passed would be adroitly evaded by the trolls and "evolved" shell companies that say, take to putting on a camoflage guise like that of Intellectual Ventures (IV).

In addition, the president plans to ask Congress to pass legislation that would allow sanctions on litigants who file lawsuits deemed abusive by courts, officials said.

I wonder if "litigants" actually points to "people" rather than entities.

The president has taken a dim view of certain patent-holding firms. In February, he said some firms "don't actually produce anything themselves. They're just trying to essentially leverage and hijack somebody else's idea to see if they can extort some money out of them."

As we all know, companies like ARM don't "make" anything. But they are a legitimate operation by all means. But on the surface, IV might look like a legitimate operation too, with their research staff and everything. And once legislation passes, the now simple shell companies will surely take on a new form that will be more difficult to discern from their legitimate counterparts.

The fact that the administration wants to make this change is amazing. I love it. Yet I have to be skeptical, not only for the aforementioned reasons but also due to our political gridlock. I'm afraid that any legislation that does pass will be laden with intentional loopholes for the trolls to exploit.

I am hopeful yet fearful.

spullara• 13 years ago

Even if the only outcome was to identify the root company and individuals profiting from the suit it would help. It would then be easier to craft ToS of that would exclude them from the internet entirely.

In the interim, get your company to adopt the Innovators Patent Agreement: https://github.com/twitter/innovators-patent-agreement

tptacek• 13 years ago

How much of ARMH's IP licensing is based on patents, versus other forms of IP?

jjuliano• 13 years ago

I would like to know, why ARM is perceived as a patent troll?

And what about companies that sell IP's?

coob• 13 years ago

ARM is not a patent troll and the GP post is not inferring that, in fact precisely the opposite. ARM could not exist without IP protection.

bryanlarsen2• 13 years ago

Most companies with a business model similar to ARM can rely on copyright law. There are a large number of software firms with a business model similar to ARM.

As far as I'm concerned, patent trolls are such a cost to society that if ARM was collateral damage, I'd be willing to sacrifice them.

If ARM lost their patent protections, it would neither destroy ARM as a company, nor would it destroy ARM as an architecture. In fact, ARM as an architecture would become strengthened. ARM as a company would still survive, although a huge hole would be blown in their earnings. You would still need a copyright license from ARM to produce chips containing A15 or any of the other cores designed by ARM; it's only cores that weren't designed by ARM (Krait for example), that would no longer have to pay ARM.

gyardley• 13 years ago

Gridlock generally occurs when one of the two parties is opposed to a bill, but here the President is following Republican initiatives - in the Senate, John Cornyn's 'Patent Abuse Reduction Act', and in the House, Jason Chaffetz's 'Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act'.

Since this issue seems to have some bipartisan support behind it, perhaps something will actually get done.

metageek• 13 years ago

ARM doesn't make anything physical--but neither do most software companies. ARM makes products that their customers actually want. Patent trolls don't.

mapt• 13 years ago

Notably though ARM could survive under a regime with dramatically shortened patent protection (5 years), which would be an unsatisfactory but necessary compromise until we can work out a system for prior art, examination, and code that doesn't destroy innovation.

protolif2• 13 years ago

16 minutes into Obama's "Fireside Hangout", the topic of patent reform is introduced. Watch for yourself.

http://bit.ly/obama-on-patents

rantee• 13 years ago

Paywall politics aside however one feels about them, would be great if HN mods would just never put through a link to one... Waste of time for most of us.

eksith• 13 years ago

Previously :

http://gigaom.com/2013/02/16/obama-says-patent-trolls-hijack...

http://www.businessinsider.com/obamas-patent-comments-at-goo...

https://www.eff.org/deeplinks/2013/02/obama-calls-patent-ref...

http://www.pcmag.com/article2/0,2817,2415469,00.asp

And for folks who are getting upset at the those who don't like paywalls, I'm quite happy to enable ads if your site has quality content.

If a paywall is how you get money, then keep your stories off Google. You can't be Quora and The Well at the same time.

aashaykumar92• 13 years ago

"Those are among five executive actions and seven proposed legislative changes that Mr. Obama is expected to recommend"

Until these actions and changes are stated, it is really tough to have a good debate about the topic. The article is pretty general and can really be condensed into a tweet, maybe even less. There has to be more substance behind how they plan to determine the so-called trolls versus companies such as Arm.

fleitz• 13 years ago

"don't actually produce anything themselves. They're just trying to essentially leverage and hijack somebody else's idea to see if they can extort some money out of them."

Silly patent trolls, don't they know that is the job of the politician?

bane• 13 years ago

One of the difficulties of fixing the problem is going to be that you can't just pass a law that says poof "you must be the company that makes a thing in order to have a patent on a thing". There are many legitimate reasons for patents to be tradeable assets. Take for example the basement tinkerer who comes up with and patents a completely novel widget. They may not have the resources to build, market and sell that widget. But a Samsung might want to buy that patent for a couple million and make those widgets themselves.

Sure the basement tinkerer could license the patent to Samsung, even an exclusive perpetual license, which is almost as good as owning it, and might be the preferred path forward (though there can be some problems with that too as companies start to defensively buy exclusive perpetual licenses with no intention of making those widgets just to keep others out of that market).

But at this point, any law requiring such licenses would have to be for those going forward. Any retroactive law would require either handing back legally purchased patents (which destroys wealth) or require the originator to buy them back (which may be impossible in many cases if they've already spent the money on retirement homes).

The core reason patents become so valuable is because they last so damn long. If they didn't last until the next ice age it would take much of the value out of ownership and make licensing naturally make more sense anyway. The way to attack this is at the root and revert back the patent expiration to something far more reasonable.

WalterBright• 13 years ago

Just render software unpatentable from now on.

oleganza2• 13 years ago

And everything else for that matter.

dnautics• 13 years ago

"except for pharmaceuticals" (according to Posner, and notch)

(I happen to disagree)

AlisdairO• 13 years ago

Patent trolls aren't the problem. We don't need patent-holding firms to be restricted: there's nothing strictly wrong with them, if the patents they're holding are worthwhile. All they do is create a wider market for intellectual property. All restricting them does is stop one angle of oppression - large companies will still be free to bully small ones as they wish.

The real problem is that currently it's profitable to have an idea, patent it, and then sit on it until someone accidentally re-invents your idea. If an idea is sufficiently obvious that there's a reasonably high likelihood of reinvention (as opposed to copying), it should never have been patentable in the first place.

If it makes sense for companies to tell employees not to look at the knowledge distributed by patents, you have too many obvious patents. Looking at the information disseminated by patents should be a universal good: you should be seeing ideas that you'd be unlikely to come up with yourself - that will mostly only add to your options for creating your product, not subtract.

You don't need complicated, nuanced legislation to make this happen - you need instead to do a hell of a lot of patent reevaluation.

tomelders• 13 years ago

Perhaps every patent suit should trigger an automatic re-assesment of the patent in question. Right now, it seems the biggest weapon in a patent trolls arsenal is the über-general patent; patents so vague that they can literally apply to anything in the past, present and future. Triggering a re-evaluation of a patent every time it is used in litigation would, I think, serve as a huge deterrent.

With regard to companies like ARM, who's patents are of a very high quality and technically innovative and detailed, it would be hard for people to argue that they don't deserve the patent. But people who have essentially patented the internet without providing any worthwhile details would find it a lot more difficult to retain their patent once other interested parties are given the opportunity to call it out as bullshit.

I do think it is a little unfair to ask the patent offices to make the right call every time with regard to patent filings, simply because of the sheer volume they have to process. Giving them a second chance to evaluate a patent with the input of experts in the field that a particular patent relates to would be beneficial to everyone.

Going to an extreme: Maybe you could grant any and all patent filings automatically, and only the patents used in patent suits are evaluated. So all patents are worthless until tested. Or that might be a bad idea, I've not given it much thought beyond this.

netcan• 13 years ago

Obviousness is actually an interesting issue because it's dependent on context and context is moving pretty fast now. A lot of web inventing/entrepreneurship is as much predicting as it is inventing.

Some of the great ideas will become obvious later. That doesn't mean they're not valid & creative ideas.

Generally describing patents as creative works is problematic. In some cases they are like literature or music. In lots of other cases they are more like scientific discoveries. Out there waiting to be uncovered.

Fuxy• 13 years ago

Lol... Locked by paywall. The news may be interesting but I'm not interested in paying for a website i may not see ever again.

belorn2• 13 years ago

If the president has taken such a dim view of patent-holding firms, maybe he should focus on the PTO first who is giving out incorrect patents left and right. Only one in ten patents, or 12% to be exact[1], are given out in compliance with patent law.

Imagine if a bank teller had a 88% error rate when giving out loans, thus handing out large sums of money to people who can't repay it. No bank in history would allow such personal to still be employed, or they would go out of businesses thanks to competition in the market. The PTO do not have any competition, so instead we are left dealing with the after effect with 9/10 patents being incorrectly issued for fully 20 years periods. Patent trolls and patent-holding firms would likely not exist, or would at least have extremely smaller effect on the market if PTO actually did their job correctly.

[1]In an effort to assert the quality of patent, one can look at the result from reexaminations. Like with code, if it is not tested, its quality is indeterminable. The PTO publish yearly a report for ex parte reexaminations, and during the latest period of 2011/09/30 -> 2012/09/30, the reexamination certificates only gave 12% of all examined patents a pass with all claims intact. This is averaged across all technical fields, as PTO do not have numbers for specific markets. I would guess that software patents will have slightly higher number of faulty patents (~95% of incorrect patents?), but statistics over the IT industry patents doesn't seem to exist.

protomyth• 13 years ago

This is fairly typical of government. Looking at how the government actually does its work is "bad". Passing a law to punish people in the courts or do some tax foolishness is considered ok. In this case, you are exactly right, looking at the input to the system and how it is dealt with there would be a better approach, but it goes against form.

Both sides do this a lot. Look at the whole focus of health care costs. No debate on why they are high and how to fix the inputs.

The patent troll debate is further hampered by reporters using the term willy-nilly instead of focusing on companies that actually have that business model.

DerekL• 13 years ago

So 88% of reexamined patents are modified or invalidated. But how does this lead to the conclusion that 88% of all patents would be modified or invalidated if they were reexamined?

An ex parte reexamination requires a fee. People don't randomly choose patents for reexamination, they only challenge the weakest ones.

belorn2• 13 years ago

> So 88% of reexamined patents are modified or invalidated. But how does this lead to the conclusion that 88% of all patents would be modified or invalidated if they were reexamined?

Untested patents is of undetermined quality similar to untested code. How do we know that untested code has bugs if most people don't write tests randomly? Well, because developer experience would argue that untested code is not a haven of bugfree or high quality software. Rather, code is seen as non-working until testing has proven otherwise. Why should we treat untested patents differently?

> People don't randomly choose patents for reexamination, they only challenge the weakest ones.

Got a source for that? Normally, people spend money on reexamination when other people try to extract money from licensing agreements. When companies tries to extract money from licensing agreements, don't they tend to use their strongest patents as the stick? In that sense, people don't randomly choose patents for reexamination, they only challenge the strongest ones which is the ones used in patent litigation and patent licensing agreements. But I don't have a source for that, so I guess the argument goes to the person with a source.

tehwalrus• 13 years ago

Go Obama! I'm glad someone with the reins of power has noticed that this blackmail is going on and wants to fix it.

HydrogenFakes• 13 years ago

Put "say hello to cheaper hydrogen" and ask yourself why the media never reported about the Los Alamos National National laboratory press release.

pasbesoin• 13 years ago

For a start, there are some fairly "simple" things that can/could happen in IP regulation. A reassessment of effective (versus stifling) term limits in copyright. The elimination of most "evergreening" of patents under the rubrik of "obviousness" (e.g. extended release where the extended release method/mechanism is not truly novel). The investigation and prosecution of business practices that seek to remove legitimate generics from the marketplace -- monopoly regulation might be a ready avenue.

I put "simple" in quotes, because I've left the political factor out.

If we can't do the above, I have to wonder what any process involving "political compromise" can or will achieve. My hopes are not too high.

Obama Plans to Take Action Against Patent-Holding Firms

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