Obama moves to curb software patent lawsuits

http://www.nytimes.com/2013/06/05/business/president-moves-to-curb-patent-suits.html

by cperry • 13 years ago

171 63 13 years ago

ryandvm• 13 years ago

I really enjoyed the most recent This American Life podcast as they revisited the topic of patent trolls (specifically Nathan Myhrvold's Intellectual Ventures). Fascinating and terrifying.

http://www.thisamericanlife.org/radio-archives/episode/496/w...

rexreed2• 13 years ago

Yeah - my first thought was: Is it possible that the 2-part series by This American Life ("When Patents Attack") had a tangible effect here?

skwirl2• 13 years ago

I doubt it. It seems to me that this American Life was responding to the fact that patent trolling was already very much on the radar, not putting it there themselves.

pionar• 13 years ago

I'd say it's just coincidence. The White House doesn't decide to take a policy position like this "over the weekend". I'd bet it's been in the works for a couple months, they've just been nailing down the plan and the wording.

rscale• 13 years ago

The most recent Planet Money podcast is also about patent trolls, and goes into a bit more depth about the guy who declared himself a co-inventor of podcasting.

http://www.npr.org/blogs/money/2013/05/31/187374157/episode-...

EFF's effort to find prior art and raise money to fight this particular troll can be found here:

https://www.eff.org/deeplinks/2013/05/help-save-podcasting

snorkel• 13 years ago

So many mind-blowing revelations in that TAL episode:

* The original filer of the patent featured in the story was not the inventor of the idea but rather a partner in a failed startup around the idea, which was never realized, he then later patented his former partner's ideas, and made a lot of money from that patent since

* Two defendants fought the patent infringement suit and won on a technicality: the patent was filed improperly due to random mention of another contributor to the idea who was not listed as a co-inventor

* ... BUT any of the other 16 infringements defendants who had already agreed to settle their infringement claims out of court are still bound to the terms of their license agreements forever because the language of the license agreement basically asserts that they have to pay the license fees no matter if the patent in question is still valid or not. So anyone that settled out of court are trapped anyway.

* There is an entire economy and market around reselling patents to the point of the current self-proclaimed owners of a given patent can not describe its origins.

After listening to this episode I couldn't help but think that patents can be fixed if:

1. You should not be allowed to sell a patent. The intent of a patent is to give the inventor(s) enough lead time to develop the idea, not to create a market for ideas.

2. A patent should not be valid unless you can demonstrate it. You shouldn't be allowed to own ideas that are beyond your means to execute.

3. There should be very low limits on patent infringement damage claims thereby removing the financial incentive of using patents and anti-competitive and extortion weapons.

anigbrowl• 13 years ago

The patent system badly needs fixing, but hasty solutions lead to new problems.

1. If you can't sell a patent, but lack capital or the desire to exploit it (perhaps you have invented something more interesting in the meantime, or alternatively you've developed a serious health condition that prevents you from working), the there's a net economic loss to society because the invention languishes undeveloped for 20 years.

2. You are already required to be able to demonstrate as far as I know. Enforcing this more strictly would allow a different kind of patent trolling by large firms that wanted to grab the inventions of smaller firms/individuals for cheap or nothing by arguing that they weren't sufficiently well resourced to develop the product.

3. If you make patent infringement into an affordable cost of doing business then you're just encouraging people to infringe and pass the minimal costs along to the consumer.

ISL3• 13 years ago

If you're good at inventing, but not at manufacturing/bringing a product to market, you're out of luck if patents cannot be sold/delegated.

legutierr• 13 years ago

I have a problem with your first solution: patents can be owned by companies, correct? And companies can be bought and sold, no? Given how many patent trolls are using the patents of now-defunct entities, I don't think that limiting patent sales would help much, unless you go further and say that any company that is merged or acquired by another must give up its patents (which doesn't seem like a good idea).

Another issue with your suggestions: setting arbitrary limits on damages would make patents worthless in protecting truly ground-breaking inventions, like the telephone, for instance.

Symmetry2• 13 years ago

A simpler way would be to just give the USPTO the resources it needs to properly evaluate patents before it. And maybe allow it to go back to developing a backlog if it doesn't have resources to properly examine the patents before it.

IanCal• 13 years ago

What's astonishing is the technicality really doesn't change the problem much.

I've been thinking along the same lines as you, but (to play devils advocate and help discussion):

> 1. You should not be allowed to sell a patent. The intent of a patent is to give the inventor(s) enough lead time to develop the idea, not to create a market for ideas.

Why are ideas worth nothing? If I have a breakthrough while researching, I'm screwed unless I also manage to form a company with a production line?

> 2. A patent should not be valid unless you can demonstrate it. You shouldn't be allowed to own ideas that are beyond your means to execute.

Would a prototype be acceptable, or does it have to be viable for production? Also, between coming up with an idea and being able to show it as viable might be a reasonable amount of time

> 3. There should be very low limits on patent infringement damage claims thereby removing the financial incentive of using patents and anti-competitive and extortion weapons.

This one feels the most concerning. If the limits are low, then why would anyone bother following them? You could easily make it cheaper for big companies to copy ideas and run with them, then pay people off when they get caught.

Anything that encourages people who have a new, innovative idea to hide it to try and make money is against the original aim.

I do, in general, like the approach though. Maybe there are points along the way:

1. You have a new, awesome, innovative idea. You can get a patent for it.

2. You have to show some working, or viable prototype within a certain time period (short, a few years maybe)

3. With a real example, you can then get a longer patent.

4. You can sell it, but the original time limit still applies.

This way you're compensated for coming up with great ideas (but you or someone you sell it to has to be able to make it a reality soon) and have to release how things work into the public domain (the original intent of patents).

spodek• 13 years ago

Also covered in the New Yorker yesterday: "How to Make War on Patent Trolls" -- an informative, thoughtful article, listing resources the government already has to defeat trolls but isn't much using, though it describes how Vermont is acting in at least one case.

http://www.newyorker.com/online/blogs/elements/2013/06/how-t...

From the article: "It is time to declare total war on patent trolls. The federal government, and the states, should do everything they can to exterminate them and to make anyone regret getting into such crooked work. The existence of trolls is entirely a product of government: they abuse a government program (the patent law), and continue to exist only thanks to government inaction."

It later continues...

"The one exception to the pattern of government inaction is Bill Sorrell, the Attorney General of Vermont, who, two weeks ago, filed lawsuits against MPHJ for exploiting Vermont businesses and nonprofits. He explained to me that Vermont is trying to attract new businesses to the state, and that scaring off trolls might help. “This is not anti-patent,” Sorrell said. “This is anti-abuse of patent rights. We don’t want people preying on Vermont’s small business.”

The Vermont story may help create a race to the top. If Vermont succeeds in scaring trolls away, it will give companies there an advantage. And as more states act, it will be relatively worse to do business in those that don’t."

It covers more than just Vermont and links to other informative resources.

On another note...

A major problem infrequently mentioned is that a lot of people, especially in parts of business far from R&D, see patents solely as a way to recoup private investment, not supposed to be balanced with public interest after limited times, and they use number of patents as a proxy for amount of innovation.

They honestly see the system as it is now as functioning great. Many see objections to patents as objections to capitalism and business. Many of these people aren't stupid, malevolent, or self-serving. They believe in a model that no longer functions, but haven't realized that model no longer applies.

rayiner2• 13 years ago

> A major problem infrequently mentioned is that a lot of people, especially in parts of business far from R&D, see patents solely as a way to recoup private investment, not supposed to be balanced with public interest after limited times, and they use number of patents as a proxy for amount of innovation.

Lots of people in R&D see things this way. My friends in "Big Engineering" are proud of the number of patents they have to their name.

georgebonnr• 13 years ago

this.

javajosh• 13 years ago

Too bad they ended this article with such a weak quote from Sen. Leahy "Unfortunately, misuse of low-quality patents through patent trolling has tarnished the system's image."

This implies that "the system's image" is the thing he's trying to protect, rather than the livelihoods of people just trying to make a living in a free-market economy. When small businesses are sued for scanning a document and emailing it[1], there's more at stake than "the system's image".

[1]http://arstechnica.com/tech-policy/2013/01/patent-trolls-wan...

Pxtl• 13 years ago

That demonstrates a problem not just with the patent system, but the legal system itself. There will always be a number of people who will cave to a legal threat if they have enough money to pay off the threat and not enough money to fight it... unless the legal threat has some sort of risk associated with the one making the threat, there will be people who take advantage of it.

As horrifying as it is, I'm actually kinda happy this nasty crap is going on. The best way to get a problem fixed is to exploit it relentlessly.

rayiner2• 13 years ago

Fundamentally, the legal system is a way for individuals to invoke the state's monopoly on force to resolve disputes. That's the point. As long as there is law, there is the possibility for abuse, and that possibility is a cross-cutting concern.

Now, you say that the issue is associating some sort of risk with people invoking the legal system, but that's a very tricky path to walk down. What if you think someone breached a contract with you, but a court disagrees? Does losing a case inexorably mean you were in the wrong for having brought it?

I personally don't think that penalizing people for invoking the legal system is the way to go. The best solution is to make it cheap to reject meritless cases. After all, anybody could file suit claiming you trespassed on their land, and they could do so maliciously or mistakenly. We don't worry about frivolous suits for trespass because the underlying property right is clear and well-defined, so that if you do get sued it's really easy to show that you did not violate that right. The ease with which a case like that can be dismissed automatically disincentives people from bringing nuisance cases.

snowwrestler5• 13 years ago

The "system's image" is important because the end to all patents or IP would be absolutely devastating to the U.S. economy, killing way more jobs than patent trolls do. The public needs to trust the patent system.

JoshTriplett2• 13 years ago

Citation needed; eliminating patents in general or software patents in particular would hurt some companies (notably patent trolls and other companies who make most of their money on patent licensing) and help others (notably those who regularly get sued by those companies, and those who spend time and money writing and filing patents and creating cross-licensing arrangements for defensive purposes).

The question of which of those will have a larger impact on the economy, and for that matter which behavior we would prefer to see encouraged, remains open and does not have a well-known or accepted answer as you've implied.

sporkologist• 13 years ago

Just want to make a distinction within "patents or IP". Patents are at issue here, not copyrights or trademarks. Having said that, there are certain things I do trust the patent system for (mechanical things) and things I don't (software). This speaks to the patent examiners' lack of familiarity with the state of the art in logic and programming.

jccooper• 13 years ago

Yeah, just think of all the lawyers out of work. It's hard enough out there for the poor JDs already!

kkowalczyk3• 13 years ago

That is a plausible statement except it contradicts pretty much any economic study done on the subject i.e. when economist look at this issue using historic data, they find that industries thrive at times of weak patent protection.

This is not actually surprising. A patent is a monopoly. A monopoly creates an environment where you can jack up the prices without improving the product you're selling and that's why americans pay much more money for pathetic broadband speeds than majority of other countries, while cable companies are comfortably profitable. It's also why a day after Google introduces 1GB broadband in one area, Comcast or TWN suddenly announce that they also will provide such speeds in this area (but not anywhere else).

Monopoly is what devastating to economy. Patents are monopoly and they are devastating to economy.

YokoZar• 13 years ago

The most obvious reform to me would be triggering an automatic review of any patent asserted in a legal case. That way we wouldn't have to worry too much about all the existing bad patents, since whenever they became an issue the patent office (under whatever the new standards are) would take a closer look and maybe stop the case before it started.

Yet I haven't seen it in any of the proposals/orders coming about over the years mention this sort of feature. Is there something I'm missing?

nissimk2• 13 years ago

Doesn't this already happen automatically by default because the first defense is to demand re-examination?

belorn3• 13 years ago

Only if the defense will pay for it. However, given that only 1 out of 10 patents will go through a re-examination with all claims intact, paying for re-examination is a working tactic. That is, if one can wait the many years it take for a re-examination to finish.

A better approach would of course be that the PTO did not 9 out of 10 times create a patent that they later will find to be incorrectly issued. That the state has an 88% error rate when issuing 20 years patents should really not be allowed in 2013.

Symmetry2• 13 years ago

Hmm, my understanding of how this worked was that re-examination was entirely independent of any lawsuit and since patents have a "presumption of validity" the fact that it was being re-examined wouldn't have any bearing on a lawsuit. That is, if you're sued you might get lucky and have the re-examination finish before the lawsuit did but it probably wouldn't?

ajross• 13 years ago

I suspect you'd need to adjust that a little to handle "threatened" legal action too. The overwhelming majority of patent troll suits are settled without suit.

ColinWright• 13 years ago

Also being discussed here: https://news.ycombinator.com/item?id=5819222

Split discussion, both on the front page.

mullingitover• 13 years ago

From what I understand of the patent office, the problem with their methodology is the test for obviousness: has this already been patented? No? Then it's non-obvious.

Which of course ignores the possibility that a typical engineer working in this area would assume that the idea is obvious and therefore ineligible for patent. So the ethical engineer doesn't apply, but giganticorp's legal staff pesters their engineering team to patent every possible idea, obvious or not. Which they dutifully do.

Of course, how would the patent office know that the idea is non-obvious to an engineer trained in the state of the art, unless they employ engineers who are trained in the state of the art in every engineering discipline?

greenyoda• 13 years ago

There aren't all that many engineering disciplines, and hiring a hundred well-qualified people to review patents might actually save the government a lot of money that currently goes toward running the legal system (they could hire fewer federal judges).

Being a part-time patent examiner might be a great job for a retired engineer who remembers all the "new ideas" from the last several decades.

bobwaycott• 13 years ago

> Being a part-time patent examiner might be a great job for a retired engineer who remembers all the "new ideas" from the last several decades.

Shit, that is a damn fine idea, friend.

vilya• 13 years ago

> Of course, how would the patent office know that the idea is non-obvious to an engineer trained in the state of the art, unless they employ engineers who are trained in the state of the art in every engineering discipline?

By using a roster of consultants, presumably.

(I agree with the rest of your points, by the way.)

elclingman• 13 years ago

crazy.

stormbrew• 13 years ago

Killing patent trolls is just a bandaid. Companies that aren't technically trolls can (and do) still engage in troll-like behaviour. There need to be ground-up changes in how patents, especially in technology, work.

mortdeus• 13 years ago

"But some big software companies, including Microsoft, expressed dismay at some of the proposals, saying they could themselves stifle innovation."

And what exactly has Microsoft been innovating lately?

nanidin• 13 years ago

It's hard to say since they don't expose the internals of their OS or other products, but one must assume that something interesting happened below in the surface in Windows 8 and in Windows Phone. They also manufacture the xbox360 and are probably working on a next-gen console in addition to that. They run a cloud platform (Azure) that again, probably has interesting things going on under the surface. Etc etc.

kelnos• 13 years ago

Found this interesting:

"Vermont has one of the highest per-capita rates of issued patents in the country."

What could explain that?

mc-lovin• 13 years ago

Why is this a matter for the executive branch?

Can someone with more knowledge of US politics explain?

Obama moves to curb software patent lawsuits

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