Big companies are stopping Congress from fixing the patent system

http://www.vox.com/2015/4/30/8521263/patent-reform-trolls-quality

by __Joker • 11 years ago

201 80 11 years ago

vox.com

mhuffman• 11 years ago

Investors, as well, have been forcing startups to feed the patent beast. Gotta keep your tech "defensible" after all!

janvdberg• 11 years ago

This is also subject in this piece with John Oliver: https://www.youtube.com/watch?v=3bxcc3SM_KA

throwawaykf055• 11 years ago

I think that was more about trolls rather than big company shenanigans. In any case there are some errors in that video that I pointed out in a previous comment: https://news.ycombinator.com/item?id=9442161

fu9ar2• 11 years ago

Honestly, if I was running a company that relied on IP, I'd be worried that Congress will probably fuck it up even worse.

talmand2• 11 years ago

Well, one might say one of the goals of such a company is to get big enough to be able to pay, er influence, Congress to fuck it up for everybody else and leave you free to move forward.

fu9ar2• 11 years ago

If they are a publicly traded company it could be argued that lobbying Congress for beneficial legislation would be a part of their due diligence toward increasing stockholder value.

fixxer• 11 years ago

Seems like the America Invents Act has created a great opportunity for a non-profit to organize lawyers/law students with engineers for purpose of filing briefs to dismantle the massive pile of software patents out there. I could see it as a grass roots/crowdsourcing effort.

Does anyone know of any such org?

TheDong• 11 years ago

The 'patents' section of stack exchange was made to do something sorta like this. See the original blog post announcing it: http://blog.stackoverflow.com/2012/09/askpatents-com-a-stack...

nfc5• 11 years ago

Wouldn't it make sense for small companies to commit their patents to a mutual "patent fund" that would protect them in case they are sued?, are there legal reasons why this has not been done?

An ideal version of this mechanism would work like this: once you commit a patent to the fund you can not use it offensively in the future (to avoid worsening the problem), but you'll be protected by the "patent fund" when someone sues you. The sum of the patents of lots of small companies could quickly be enough to deter most suers that are not patent trolls.

Disclaimer: I'm not american so my knowledge of the patent system is quite superficial, perhaps a similar mechanism already exists?

thfuran• 11 years ago

But there's really no point in a patent if it can't be used offensively - by which I assume you mean filing a suit on the grounds of infringement of the patent. If you waive that right, then everyone is free to infringe your patent with impunity.

icebraining• 11 years ago

The point of the patent would be to counter-sue in case of a lawsuit being initiated against them.

That said, I'm not sure it'd help much, since AFAIK patent trolls don't have much to get sued for.

glesica• 11 years ago

One problem with this is that most companies that are small today hope to be large tomorrow. "Small" is not an intrinsic characteristic of most companies (at least most companies that would have patents), so there is little incentive for them to band together based on that characteristic.

nfc5• 11 years ago

You are right that there's a tradeoff. I'd say the tradeoff is not so bad if at least they get to be large before being sued out of existence.

A way to address some of the problems that would arise for the protection of IP (what happens if google starts tomorrow the service disregarding the non enforceable patents?) would be to not commit to the patent fund patents that are both highly innovative and/or key to the business model, while committing the rest.

Anyway what I wanted was to start a discussion on it not detail all the possibilities of a rather complex topic in a small HN comment ;)

SteveGerencser• 11 years ago

I know of several small companies that manufacture small devices/goods that no longer patent anything at all because the patent itself becomes a high speed copy process for competitors to steal the idea and make their own copy. Not having the large bank accounts or the lawyers needed to fight these types of thefts they have decided to spend the money to continue to evolve the product(s) faster than the competition reverse engineer them and put them in to production themselves.

derf_• 11 years ago

We could call it the "Defensive Patent License", if it's not already taken [0].

[0] http://www.defensivepatentlicense.org/

jhdevos• 11 years ago

I think when smaller companies have patents, they tend to be closely related to their core business, and they have them precisely in order to use them 'offensively' - or, in other words, to protect their core business from companies that want to 'copy' them.

In principle, that is sort of what the patent system was intended for. (I still don't agree with it, but that's another story).

nfc5• 11 years ago

Yes, I suppose for this system to work companies'd have to commit some non core patents, that would be the "price to pay" for the insurance the system provides.

I've never applied for a patent, mostly for ethical reasons since I don't believe in the system the way it's structured right now but it has always seemed to me that getting a few patents was not so difficult for someone with a bit of "innovation capacity".

e40• 11 years ago

I don't think smaller companies can be offensive with patents, because they don't have the money to litigate. Maybe your definition of small and mine are different, though. I'm thinking of < $10M/yr. In that case, I don't believe a company of that size would have the resources to go after alleged infringers.

adrianparsons2• 11 years ago

That could work. You could also establish a committee to resolve disputes between two or more members. Of course, members would have to agree by the operating rules of the organization, and would have to agree to abide by the decisions of that organization.

Hell, you could get the larger organizations involved -- they couldn't sue the hell out of each other, but they could protect their intellectual property.

We could call it "The United States Patent Office" or something like that. Is the domain name available?

nfc5• 11 years ago

The idea is to have alternatives to work around the flaws of the system.

The difference between using what the state provides and creating such a "patent fund" is that with the former you just accept the status quo. It's obviously an option to accept it and go for it alone, I'll not take that from you but perhaps for many small companies it would be better to not go at it on their own.

streptomycin• 11 years ago

That is kind of like http://www.openinventionnetwork.com/community-of-licensees/

rhino369• 11 years ago

Patents are offensive only. Even if you have a patent over your product, you can still infringe another patent.

The reason big companies want patents "as defense" is because they can use those patents against a competitor if the competitor sues.

A good example is Apple v. Samsung. They both asserted many patents against each other.

Patent trolls, however, don't infringe any patents. You can't hit them back.

twoodfin• 11 years ago

Companies large and small do this all the time. They're called cross-licensing agreements.

bnolsen• 11 years ago

The US congress was supposed to be made up of ordinary citizens who part of the time lived at home in their districts. ran their businesses and affairs and occasionally went to vote on federal government issues.

What we have is a political class that only does law and politics. Most of them look down on those of us who have to actually work and produce to make a living. Small business individually have almost no revenue or clout compared to these larger entities even though collectively we are the ones who represent most of the economy (or should be representing almost all of the economy if it's healthy).

bpodgursky2• 11 years ago

There's actually a strong argument that the current congressional gridlock is due to representatives / senators flying into Washington Monday morning and flying back home thursday night, leaving very little time for casual conversations or backroom negotiations (which are vital to actually getting anything passed, as dirty as it sounds)

The original pattern setup might have been better, where congressmen moved to Washington for 4-6 months a year along with their families, because there was no other option. But it's harder now to do that with working spouses, and also because they would be eviscerated by challengers locally as being permanent Washington elitists.

shit_parade27• 11 years ago

Every member of congress fund raise every day, sometimes going to multiple fundraising events in a single day.

Congress is bought and paid, believing otherwise is to ignore the obvious.

frozenport• 11 years ago

>The US congress was supposed to be made up of ordinary citizens who part of the time lived at home in their districts.

Consider the 1790s when it would take a few weeks to travel from DC to the Ohio valley.

zouhair• 11 years ago

In other time we called that class: Aristocracy.

CWuestefeld2• 11 years ago

The US congress was supposed to be made up of ordinary citizens

And indeed they are, and this is the heart of the problem. They're just regular people like us, subject to the same prejudices, temptations, motivations, etc. We shouldn't be surprised when the motivations that are built into the system actually do something.

More concretely, we've vested incredible power with our politicians. That makes them huge targets for those with vested interests (whether those be corporation, special interests, foreign governments, what-have-you). The potential reward to them for getting influence is so great that they'll invest tremendously in trying to do so.

The idea that "public servants" don't magically become saints, but respond to the same incentives as do the rest of us, is the core of public choice economics [1]. There is, in fact, a fair amount of research and literature on the topic from an academic perspective.

From where I sit, if you recognize the problem as one where we're giving the corporations and special interests, etc., a huge potential payoff by finding ways to co-opt governmental power, then increasing that power to try to combat it doesn't make sense: it's just increasing the size of their potential payoff. It sounds like silly pop-Zen, but the way to get such corruption out of government is to limit the power of government.

[1] https://en.wikipedia.org/wiki/Public_choice

raincom• 11 years ago

Is there a way to come up with a better system than the exsting one. I am not asking for the ideal system.

Lawtonfogle• 11 years ago

And indeed they are,

Their demographics compared to the population at large does not seem to agree with this view.

anigbrowl2• 11 years ago

the way to get such corruption out of government is to limit the power of government

Where's the power going to go? If you have a weak legislature that's clean-handed because it does little of consequence, that doesn't mean society is magically going to operate better. I'm also a fan of public-choice theory, but I think there are two aspects of the situation it fails to address:

1. Public administration is relatively transparent. Not as much as we'd like, of course regular people simply don't have the time, energy, or expertise to fully exploit this transparency (and so rely on lobbying organizations that do represent their interests, eg the ACLU or EFF), but the public sector is more transparent than the private sector. I don't have much faith in market mechanisms to correct excessive behavior in the private sector because bad actors can buy a lot of good PR.

2. A non-negligible degree of the power invested in government is the results of demands from the public, eg things like the clean water and the EPA exist because private entities exploited the commons sufficiently that there was eventually an outcry eg repeated fires on the Cuyahoga river. There are many similar demands for governmental action on climate change today, it's not hard to imagine a tipping point in the near future with carbon becoming much more heavily regulated than today. The fact that granting more power to government may well result in future abuses doesn't negate the existence of problems absent regulation.

higherpurpose• 11 years ago

Term limits should be set. I think 12 years in Congress is about the optimum number: not too long to become your life, but also long enough to get "enough experience" and pass it along to the newcomers as they come in. That would be 6 terms for House Representatives and 2 for Senators.

Of course it's not a magic bullet. Many other things need to be changed:

1) banning corporations, PACs or any organization from giving money to politicians - only individuals should be able to donate and the sum should be limited to maybe $1,000 (allowing "NGO's" and such to give money is just a loophole looking to be abused)

2) making votes in Congress anonymous [1]. Votes shouldn't have "transparency". There's a reason why anywhere else voting is anonymous: it's much harder to get influenced this way, whether it's by money or peer/leader pressure (see invasion of Iraq, passing the "Patriot" Act, etc). The lobbyists can give you money, and then you can still vote as you wish, which over the long term it will seem like a less and less viable strategy for lobbyists.

3) switching to a much more democratic voting system ("approval voting" [2] would be ideal, but even the 2-voting rounds system that's used in some European countries would be a HUGE improvement, as it would fix the "spoiler effect" somewhat - but still nowhere near enough as approval voting does)

4) proportional party representation in Congress (seems like a no-brainer to me). The idea that 2 parties can dominate Congress/Parliament for a century seems ridiculous to me. Parties should rise and fall every 10 years or so, like it happens in Europe. That would put the focus much more on the issues and much less on "being on the Red or Blue team".

5) abolishing or fixing gerrymandering

6) maybe even regulating the revolving door issue (this one is a bit tricky to do, but I think other countries have some regulation for this)

I'm sure there are many other things that can improve how Congress works. The idea is to make them listen much more to the People [3] and much less to single rich individuals and corporations.

[1] https://www.youtube.com/watch?v=1gEz__sMVaY

[2] http://www.electology.org/#!approval-voting/cc04

[3] https://www.youtube.com/watch?v=mw2z9lV3W1g

ClayShentrup• 11 years ago

I would put voting method reform (Score Voting or Approval Voting) at the top, by a km.

limeyx2• 11 years ago

To add a few more things - No more "language was inserted into the bill at the last moment by an anonymous 'staffer' " - All bills have to have an evaluation clause where they describe the criteria for deciding if they are working or not and if they fail them then revoking / fixing - Bills cover a single subject and dont attach a bunch of irrelevant stuff - I would say 6 years max should be plenty then they have to skip at least one cycle - term limits for supreme court

Then there's the really radical - All congress people and staffers + Kids go to public school ... if its good enough for my kids, its good enough for yours + use the VA for healthcare ... same reason + Get a nice 401(k) just like we have to live with (the people should get to pick the funds they get to invest in for extra credit) + Get fired if they are late 3 times like a large number of low-wage employees are ....

etc. etc. Bring them into the real world instead of living above it

mjevans• 11 years ago

Fixing 5 requires the elimination of districts and restructuring across a popular vote.

At the scale of the US Federal government, this would require some form of automation to help inform voters of which candidates are on their short list (given preferences they've expressed). Ideally this calculation could be performed on computing hardware that the end user owns and trusts (be that a cell phone, or a RISC-V system with a fully open stack from layout through firmware to OS; this BTW is the only type of hardware that I would consider to be audit-able for inclusion in an assisted /paper trail/ (for recounts and etc) instant tally at close voting system.)

shit_parade27• 11 years ago

To underline your point people should go look up median wealth by zip code and look at the top ten, they'll see pigs massed around the trough of DC.

We've somehow been suckered into supporting a massive class of very expensive bureaucrats whose main interest are themselves, power, and the rich. Who believes laws and regulations create wealth and prosperity, they are burdens and restrictions on the productive.

limeyx2• 11 years ago

Then they dare to tell us we are part of the problem, as opposed to them getting their taxpayer-funded salaries, benefits and pensions !

amelius• 11 years ago

The problem with members of congress returning to society is that they could make deals with companies while they are in congress, in order to get great benefits at those companies when their term is over.

So better keep them from going back into society. Or... forbid them to work (later) for companies that they have dealt with while in congress (but this is difficult to check).

lotsofmangos• 11 years ago

Reminds me of a line from "Inherent Vice".

"People like you lose all claim to respect the first time they pay anybody rent"

rayiner• 11 years ago

At the state level, legislatures are often part time. But state legislatures are worse and more corrupt.

throwawaykf055• 11 years ago

Oh, I see binarybits is at it again! Just a few corrections:

1. Android makers don't necessarily pay Microsoft for patents on things that were invented in Windows Phone. They pay licenses for patents that relate to either a) computers in general, or b) that you could do on mobile devices in general. Examples include the infamous FAT patent, patents on low-level concurrency primitives, and patents on synchronizing calendar clients. "Good" patents? I don't know. But it's disingenuous to compare Android to Windows Phone because a) it implies Android is licensing stuff that came later, and b) from a product that is inferior, insinuating these patents are low quality. If I were uncharitable, I'd say Google ordered a hit piece after all the love Microsoft has been getting the past couple of days!

2. The "billions of dollars spent on patents instead of hiring engineers" argument is a red herring. Firstly, these companies cannot find enough "good" engineers to hire, which is why they're lobbying for more H1s. Is their bar too high? Maybe. Or they may justly be concerned about allowing a "bozo explosion". And even if they did hire more engineers, they still have billions of dollars left over. Patents are designed to be a risk to those that would not reward inventions they practice, and reducing risk to the company is a fine way of spending that money,

3. Using these patents to crush future competition? These companies can more easily crush competition by buying them up rather than suing them. A 2009 study found only a small fraction of lawsuits involve large companies suing smaller ones: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1396319 - and I would bet none of the large tech companies would risk the PR fallout.

4. There is no "patent litigation crisis", just increased media coverage of litigation that is more or less in line with historical rates. Less than 2% of active patents are ever asserted and only a fraction of a percent ever make it to trial. See studies by Mark Lemley, for instance. The "smartphone wars" were just a drop in the bucket of all other patent litigation that happens. In fact there were higher rates of litigation in history when major technical developments happened: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=

chrisbennet• 11 years ago

Good info. I have a different take on #2.

"2. The "billions of dollars spent on patents instead of hiring engineers" argument is a red herring. Firstly, these companies cannot find enough "good" engineers to hire, which is why they're lobbying for more H1s. "

They can't find enough good engineers at below market price. If you could find a good engineer if you paid 1 million dollars, than the "market price" lies somewhere between what you are offering and 1 millions dollars i.e. the price at which you can purchase a commodity on the market.

If I can't find enough gold at $1000 an ounce I wouldn't be correct in saying that "I can't find gold". (The market now is ~$1200 oz.)

the_why_of_y• 11 years ago

It is particularly interesting if you compare the average salaries between software engineers and patent attorneys in the US.

http://www.glassdoor.com/Salaries/us-software-engineer-salar...

http://www.glassdoor.com/Salaries/us-patent-attorney-salary-...

How many more "good engineers" would suddenly be found if they were offered 58 % higher compensation?

msl09• 11 years ago

...I'd say Google ordered a hit piece after all the love Microsoft has been getting the past couple of days!

Considering that EEF have been hitting that same note for quite a while, I would find that unlikely

These companies can more easily crush competition by buying them up rather than suing them.

The fear that is being currently generated is that small companies will start choosing to not deal with the problems of running a tech business by themselves since the risk and cost of dealing with litigations is so high. That scenario would ensure that the small companies can never grow to be become the future large corporations.

I would bet none of the large tech companies would risk the PR fallout.

There is not a single week that Microsoft does no do that. The reason that they are able to get away with it without a massive media backslash is that no data about what actual patents that are being infringed is released to the public.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=

Your last paper links to nothing.

Also please avoid overusing slangs as it makes your posts hard to read.

throwawaykf055• 11 years ago

The EFF is not an unbiased source of information. They have an agenda and they are not afraid to embellish their stories to support it. They're have been quite a few posts on HN calling out this behavior over the past few months on EFF threads.

2. Sorry about the link... Must have copied it wrong. This should be the right link: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2503140

3. I'm not sure what you mean by "slang" - could you give an example in my post.

schnable• 11 years ago

Vox getting it wrong, shocking.

sbov• 11 years ago

4.There is no "patent litigation crisis", just increased media coverage of litigation that is more or less in line with historical rates.

From reading that paper, the raw numbers look bleak to me - pretty much all of them doubling over the last 10 years. My only hope is that the AIA is actually causing the inflation in patent lawsuits the paper claims. There does seem to be some evidence in it that it is.

I also don't find looking at percent of patents in force very useful. Even if that number remains flat, the number of patents in force increases. What I'm interested in is how many businesses are getting screwed over. If that percent remains flat but we had a huge upswing in patents granted it would be tragic, and it would be hidden behind the 2% number that doesn't really matter.

Also, "historic rates" goes back to 1923. The software sector has not existed for nearly that long, and making comparisons to a very different economy doesn't seem that useful.

throwawaykf055• 11 years ago

The numbers may be bleak when viewed in isolation, but taken as a percentage of all active patents, the number of patents asserted in lawsuits have been remarkably constant. The more recent spike, as you surmised, can be attributed to the AIA joinder rules.

You may worry that the spike in number of active patents is unhealthy, but again, there are studies that indicate that this is due to increased innovation than just over-patenting: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=556630

As for number of patents getting "screwed over", that is a very difficult metric to measure, simply because "screwed over" is ill-defined. If you can define "screwed over" I might be able to find a paper that tries to measure that. (Seriously, SSRN appears to a number of papers on all kinds of crazy topics.)

The Katznelson paper is not about just software and patents. By "historic" rates, the paper means revolutions in technology similar to those wrought by the computer revolution. Similar litigation rates have been observed in the past when major new technologies were introduced, such as radio and microelectronics. They are not the same thing technically, but the potential for new applications that these new technologies introduced is similar.

Animats• 11 years ago

"Examples include the infamous FAT patent, patents on low-level concurrency primitives, and patents on synchronizing calendar clients."

What "patents on low-level concurrency primitives"? Those go back to the 1970s. The Microsoft FAT file system patents have expired. The Microsoft calendar synchronization patent is getting close to expiration.

throwawaykf055• 11 years ago

I was surprised to find this one too, but it was used in a recent lawsuit against Kyocera [1]: http://www.google.com/patents/USRE40989

That, to me, looks like a solution to one of Bloomberg's interview questions, so it's surprising to me that with a 1999 priority date, Microsoft's lawyers did not find enough prior art to keep it from being asserted. (Generally when you assert a patent, if you're smart, you'll conduct another prior art search to make sure it sticks.)

But in general, independent of the quality of the patents themselves, the article [1] indicates that none of those are specific to Windows Phone specifically.

1. http://arstechnica.com/tech-policy/2015/03/09/microsoft-drop...

pinaceae• 11 years ago

where is the problem? which startup has been killed by patents? given that the US has the most successful entrepreneurial system - what exactly makes this a huge problem?

dadkins• 11 years ago

http://www.businessinsider.com/the-story-of-the-greatest-sho...

MCRed• 11 years ago

You ask a good question. I've seen a lot of people express fear. I've seen a lot of claims about startup being killed by patents.... but I've never seen it happen. I've been involved in a bunch of startups over the past 30 years. I have a patent myself and was involved in several others. I'm not aware of any of these patents (Which are now owned by a large company) ever being asserted (I presume that if it were at some point I'd be contacted as the inventor? It's pretty fundamental.)

I have, however, gotten cease and desists based on trade mark. I had a name that was of the type Adjective-Adverb. A company claimed it owned all use of the Adverb word because they'd registered some other two word name that included the same word. I Thought it was hilarious. They weren't even registered in the same business area as I was operating-- yet they sent me several 30-40 page threatening letters and "license agreement/settlement" contracts for me to sign via FedEx. I just tossed them and laughed.

jacquesm• 11 years ago

Your assumption that people that start start-ups are stupid is wrong. People that start start-ups are in general smart enough to research the patent situation around their start-up idea and will look for greener pastures if they consider the patent situation too borked to try establishing a foot-hold or to navigate the patent minefield.

It's not just the start-ups that you see that might be killed it's all those that you never get to see or hear about in the first place, killed before they ever left the drawing board.

Start-up founders are savvy enough to take patents into consideration when they embark on a new venture, to do otherwise would be extremely foolish.

As for whether or not patents can kill companies, I've been on the receiving side of these suits and were it not for the fact that I had a main office in a country that is a bit more down-to-earth when it comes to legislation it would have certainly killed the start-up I was CEO of.

bduerst• 11 years ago

What exactly qualifies as "being killed by patents"?

A lot of patent trolls will canvas small businesses and extort settlements. The bigger cases that you would hear about are usually when litigation happens - but by that point its when the company is no longer a start up and large enough to be a profitable litigation target.

Retra• 11 years ago

Are you accounting for survivorship bias? Just because you look across the ocean and see all the boats afloat doesn't mean everything is ok.

CodeSheikh• 11 years ago

Either get rid of the patent system altogether. All innovations eventually do good to the mankind. Or we need to form a patent review committee primarily composed of people with great track records. Pick professors, company leaders (like Elon Musk, political leaders, graduate students and average consumers. This committee should be tasked to review all of the patents and purge the ones that are too generic in nature. Reduce the patent age from 100 years to a decade. Change this committee every year and their doings should be VERY transparent. A public facing website where they publish their reviews.

joshuapants• 11 years ago

Reduce the patent age from 100 years to a decade.

I think you have patents and copyright mixed up there. Might be a good idea to learn more about this topic before developing an opinion.

ahomescu1• 11 years ago

Reduce the patent age from 100 years to a decade.

The duration of a patent in the US is 17 years, AFAIK.

logfromblammo2• 11 years ago

That duration was measured by a legal clock rather than a natural clock.

Because of that, since 1995, it has been 20 years from filing; prior to that it was 20 years from filing OR 17 years from issue. That enabled "submarine patents", wherein the applicant could intentionally delay consideration of the application to extent the period of market exclusivity.

Design patents have a shorter term, but no one cares how long they last because they are largely worthless, and more like trademarks than actual patents.

josefresco• 11 years ago

I was under the impression (maybe it's wrong), that good deal of US company value is tied to patents, and IP in general. Reforming the patent system would effectively destroy, or reduce the value of these (in some cases very large and important) patents and therefore harm businesses in the short term. This doesn't seem like something Congress, or US lawmakers would be addressing with gusto.

Big companies are stopping Congress from fixing the patent system

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