Since I’ve discussed this topic before, I have to link to this article in the Atlantic by the Judge who recently dismissed an Apple-Motorola case:
He gives a very clear description of the problems in the patent system, and then suggests a few ways to fix it, such as eliminating patents in certain industries, eliminating court trial or requiring the patentee to produce the item within a specified time. See also my suggestion here for fixing the system with crowd-sourcing:
The U.S. Senate on Thursday afternoon voted overwhelmingly in favor (73-26) of a “crowdfunding” bill, one that would enable private startup companies to turn to social media and websites like Kickstarter to solicit early investments from the general public, a practice currently prohibited by the government…
The amended version also puts tighter restrictions on how much money investors can gamble on the startups: 5 percent of their annual income or $2,000 in the case of those with annual incomes of $100,000 or less, whichever is greater, or 10 percent of income or $100,000 for those making $100,000 or more a year, whichever is less.
So it looks like regular people will soon be able to invest in startups. It seems kind of ridiculous that until now a person would violate the law when investing when there are so many other ways one can lose money without any potential benefits for society. This will help lower the barrier for entry for entrepreneurs, though that may increase the number of lower-quality startups. However, sometimes the crtowds may have more wisdom than professional funds. (They can also help with marketing!) Not sure why people making more than a million dollars cannot invest more than 100(k), its not like they’ll suddenly become poor if they lose it all.
Apple faces setback in Europe over their fight with Motorola: apple-on-motorola-ip-claims-in-germany-this-old-pager-patent-is-invalid
Basically, Apple is waging a worldwide patent war against many other phone-makers, which seems strange. Patents are supposed to be used like nukes – Don’t sue me, or I’ll sue you, and we’ll both lose tons of money. What is Apple’s strategy? Probably they figure they have enough money that lawsuits cannot threaten them too much, but other companies might run out and be forced to give in to Apple.
Also, in case you were wondering where Apple, Google, and Microsoft get all their revenue, here’s some simple charts: http://www.zdnet.com/blog/bott/microsoft-apple-and-google-where-does-the-money-come-from/4469.
Google makes all of their money from advertising, one wonders if maybe they should diversify. It’s also interesting how much Apple makes from the iPhone and how Microsoft makes a significant chunk from server software, which most people haven’t heard of.
Why do patents exist? A person does not inherently own the rights to his ideas. The patent is an artificial construct to encourage innovation in areas that otherwise would be under-developed. For example, certain companies invest millions of dollars in R&D and only get a return on their investment if they own exclusive rights to their inventions for a certain period. In this way, the patent system can encourage innovation.
However, in many areas, the current patent laws end up causing the exact opposite. Software patents are often
given as the prime example where patents end up stifling innovation. Frequently, patents are granted for ideas that are not really that innovative. Often the patents are granted when similar ideas had been floating around before. In other cases, many people can come up with the idea independently, but once company manages to patent it first and exclude others from using it. In fact, even if a person is only later able to come up with he idea on his own, why should the initial patent prevent him from using the idea? He was able to discover it without their help, what economic good is served by preventing him from using it? It would be difficult to prove he didn’t see the original patent, but the system should be adjusted so only extremely innovative patents are granted.
Another issue with the patent system is the inefficiencies and costs involved. It costs many thousands of dollars to apply for a patent, and then it can take the government years to process the patent. The whole system is slow and inefficient. Patents should have a much higher bar to be granted, but they should also be a quicker, cheaper process.
Recently, some have begun trying out to crowd-sourcing some of the patent review process. Instead of just having inefficient government clerks reviewing the patents, some have begun opening the process to the wider public. This way many people can review the patents to see if they involve any “prior art”. This is a good step, but the very definition of the patent needs to change. Even if a patent does not involve prior art, who says the idea is so innovative that others couldn’t have thought of it on their own?
Instead of just checking the patents for prior art, I suggest a more radical move. If an idea truly deserves to be patented, then no one else should be able to think of the same idea on their own. To apply for a patent, a person or company would have to submit the problem they are trying to solve, and the general area of the solution they have in mind, which would all be posted to a public site. Their actual solution would be posted privately to the patent site. If no one can suggest the same solution, than the patent is truly innovative and will be granted. But if people can come up with the same solution on their own, then no patent would be granted. Why should there be a patent, when others were able to figure out the same idea?
This would greatly reduce the number of patents that are actually granted, but it would fit with the way ideas are actually discovered. In a recent paper, “The Myth of the Sole Inventor“, Mark Lemley demonstrates that most inventions are invented simultaneously by different groups of people working independently of each other. There is little reason why one group should be granted exclusive rights to something that would have been invented anyways. In my proposed solution, they would both be able to submit to one site, and instead of a patent being granted, the idea would become open to the public. The companies would still be encouraged to submit their ideas, whether to get their patent, or to prevent their competitors from patenting the idea.
By having the general public review the patents, people will suggest different ideas, and this will lead to even more innovation. Of course, this will lead to large numbers of submissions, and new methods will be needed to categorize and process all the patent data. In the current system, the patent-reviewers do not even have access to the internet when reviewing patents. In the new system, all patent applications will be well categorized and tagged and have clear semantic data that could be processed by computers. This way, it will be much easier to find related patents, and perhaps even to discover what areas are ripe for new ideas.
The entire patent process would be much quicker and cheaper. Instead of paying
government clerks to review the patents, the process would be open to the public. People will compete with each other to suggest solutions to the problems or to find related patents. They’re could be some financial incentives, or there could be certain opportunities for suggested ideas to be patented themselves. But people would likely partake in the process without even getting any money, as they do on sites like Wikipedia and StackOverflow.com. However it is done, the whole process will be much faster and cheaper than the current system.Many details of such a system would still need to be worked out. Perhaps it could then be tried out in a small area of software patents. If such an idea succeeds, it could lead to greater innovation, a greater spread of ideas, reduced legal costs, and a true stimulus for the economy.
NPR recently ran a full story on Intellectual Ventures and patent trolling. Most software patents are pretty ridiculous, and clearly the system needs some fixing. More on that in the future…
At the same time Crawford's patent was being prosecuted, more than 5,000 other patents were issued for "the same thing," Martin says.
Crawford's patent was for "an online backup system." Another patent from the same time was for "efficiently backing up files using multiple computer systems." Yet another was for "mirroring data in a remote data storage system."
And then there were three different patents with three different patent numbers but that all had the same title: "System and method for backing up computer files over a wide area computer network."
Martin says about 30 percent of U.S. patents are essentially on things that have already been invented. In 2000, for example, the patent office granted a patent on making toast — patent number 6080436, "Bread Refreshing Method."