
Defend Innovation: How to Fix Our Broken Patent System (2015) - _nh_
https://www.eff.org/wp/defend-innovation-how-fix-our-broken-patent-system
======
jeswin
Software patents can only be fixed in the near future if the largest software
companies in the world work together. Sadly, some of them profit (immensely)
from putting up that huge barrier for smaller companies to compete with them.
Case in point, Microsoft has had to pay hundreds of millions in damages to
trolls like Eolas, yet stand solidly behind software patents. For the millions
they paid Eolas, Steve Ballmer could claim that Linux infringes over 200
patents. Oracle gets to claim $9B for 37 methods in the Android code. Apple
gets to sue Samsung over icons, among other things. Basically, this is a
cartel. They even have a website: [http://ww2.bsa.org](http://ww2.bsa.org)

These companies thrive on mind share. As is evident with MS shipping Linux
subsystems with Windows 10, they have to court developers or their influence
will wane. The loss of developer community happened over many years, and it
should continue until these companies change their approach. Get projects you
have influence over to try open alternatives. Spread the word in forums and
meetups. Make their platforms uncool.

Being Open Source friendly isn't about releasing code under liberal licenses.
It is about the commitment to software freedom. Not differentiating these two
is ignoring history.

~~~
throwawaykf05
_> Sadly, some of them profit (immensely) from putting up that huge barrier
for smaller companies to compete with them._

Patents go both ways. Studies that while patent thickets may discourage entry
[1], this effect is limited, and smaller companies are more likely to enter
the same markets (and succeed) if they have patents themselves [1, 2, 3, 4].

 _> Oracle gets to claim $9B for 37 methods in the Android code._

This has nothing to do patents and everything to do with copyright licenses
like the GPL. And just to be pedantic, it's 37 whole packages. And without
this, Google would have been rip off Sun's hard work of building a developer
base for Java. "Free software" should not mean "freeloading".

 _> Apple gets to sue Samsung over icons, among other things._

And without those, as ridiculous as they are, Samsung would have gotten away
with ripping off Apple wholesale.

 _> Being Open Source friendly isn't about releasing code under liberal
licenses. It is about the commitment to software freedom._

False dichotomy:
[https://news.ycombinator.com/item?id=11583749](https://news.ycombinator.com/item?id=11583749)

1\.
[http://people.bu.edu/cockburn/cockburn_macgarvie_entry_and_p...](http://people.bu.edu/cockburn/cockburn_macgarvie_entry_and_patenting_in_software.pdf)

2\.
[http://papers.ssrn.com/sol3/papers.cfm?abstract_id=510103](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=510103)

3\.
[http://papers.ssrn.com/sol3/papers.cfm?abstract_id=989592](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=989592)

4\.
[http://papers.ssrn.com/sol3/papers.cfm?abstract_id=926204](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=926204)

------
Joeri
How to fix? Getting rid of it is probably the only way. Especially software
patents. The trouble that the EFF faces here is that the only correct move is
one that is politically unpalatable. They're giving advice on how to make an
unfixable system a little less broken, but there is no happy path for that
strategy that leads to a healthy software patent system. Such a thing cannot
exist in an industry where the cost to invent is lower than the cost to
patent, and where the spread of knowledge has nothing to do with what is
patented.

------
beagle3
Here's an idea I've seen before that makes sense to me:

You have property tax; You have (so called) intellectual property. Why don't
you have "intellectual property tax"?

Similar to e.g. how property tax works in the US, you would pay something like
1% of the value of your "property" in taxes each year -- and when you sue, you
can only sue for how much of that "value" was taken away from you (with
perhaps treble damages or something). Then, all of a sudden, it's not enough
to claim that your copyrights are worth $18B to sue Google for $9B - you have
to have actually paid $180M/year or so in taxes in the last few years to make
that claim.

Devil is in the details, of course, but if "intellectual property" is
property, it should be taxed like one.

~~~
koolba
> Similar to e.g. how property tax works in the US, you would pay something
> like 1% of the value of your "property" in taxes each year -- and when you
> sue, you can only sue for how much of that "value" was taken away from you
> (with perhaps treble damages or something). Then, all of a sudden, it's not
> enough to claim that your copyrights are worth $18B to sue Google for $9B -
> you have to have actually paid $180M/year or so in taxes in the last few
> years to make that claim.

So poor small time developer can't sue any large company for a substantial
payout because they can't afford the $N x 1% fee? I don't think that'll work.

The real solution to this is time. We'll eventually get a new set of judges
and legislators that understand technology. The former is all that's really
needed though their extended terms make change very slow

Once you've got level headed judges willing to throw out bullshit cases and
impose punitive fees on trolls, this entire problem goes away. Until then, it
makes financial sense for trolls to operate and even legitimate companies have
to play that game to survive.

~~~
beagle3
> So poor small time developer can't sue any large company for a substantial
> payout because they can't afford the $N x 1% fee? I don't think that'll
> work.

Do you think a small developer can sue a large company for substantial payout
today? They cannot - litigation costs start at $100K and go north from there
(Not to mention, filing and maintaining a patent costs a minimum of
$20K-$30K). Today, when these lawsuits actually go to court, you have
investors in the lawsuit - either someone financing it, or the lawfirm itself
("contingency") is the investor. So things might change a little, but not by
much.

If your invention is really worth $100M, and you can't find a way to get $10M
out of it -- then it's not worth $100M. The problem with the current system is
that it lets you claim (and believe) that it is worth that much.

> The real solution to this is time. We'll eventually get a new set of judges
> and legislators that understand technology. The former is all that's really
> needed though their extended terms make change very slow

Every generation believes that things will change for the better once the
older generation steps down. That has been wrong every single time, and I bet
it will be wrong with respect to patent judges as well.

> Once you've got level headed judges willing to throw out bullshit cases and
> impose punitive fees on trolls, this entire problem goes away. Until then,
> it makes financial sense for trolls to operate and even legitimate companies
> have to play that game to survive.

The problem is not trolls. Trolls are a (relatively) recent phenomenon banking
on the brokenness of the patent system. They might go away with minor changes
or a change of the guard -- I don't disagree.

But what I argue is that the problem is much deeper - the patent system is
broken by virtue of allowing the patenting of software, business patents, and
other intangible processes -- as it is (even if all trolls disappeared
tomorrow), it lets the incumbents (IBM, Intel, AT&T, Microsoft, Google) kill
any new competitor easily and cheaply, by virtue of holding a 100,000 strong
portfolio of patents that shouldn't have been awarded in the first place.

The fact no company has yet done this is not proof that the system is fine.
See e.g. Shkreli & drug pricing - the broken market structure was there all
along, but the incumbent players raise prices slowly (albeit at 5x inflation)
so it's not noticed. But then Shkreli came along and did a fast-forward,
exposing the system, which got everyone mad, and Shkreli retaliated against.
The other players are not more fair - they are just more patient. And similar
brokenness exists with respect to patents.

------
sevenless
Get rid of patents.

The purpose of patents and copyright is to promote innovation and reward
creators, and there are plenty of alternative possibilities for doing that. If
patents and copyright laws are stifling innovation, for example in drug
development, we should scrap them and look for a new model.

Dean Baker has written a lot about this and has proposed a public bounty purse
for useful innovations. He would reward an organization that developed a cure
for malaria with several billion dollars, and there would be another reward
system for creative work, for unexpected innovations that benefited society,
etc.

[http://cepr.net/blogs/beat-the-press/more-thoughts-on-
patent...](http://cepr.net/blogs/beat-the-press/more-thoughts-on-patents-and-
copyrights)

[http://cepr.net/publications/reports/financing-drug-
research...](http://cepr.net/publications/reports/financing-drug-research-
what-are-the-issues)

------
basicplus2
perhaps patents should only ever be in the name of the people who actually did
the inventing, and the only way a company can have an interest is to pay said
persons a fee for a right for use, AND must have an active interest in
developing and persuing the patent in the form of a product to be able to sue
others to prevent others using the intellectual property.

Wages may be sufficient payment but if they leave the company, the people who
do the inventing are the ones who should continue to be rewarded in continued
payment for succesful invention giving companies advantage in the form of
patents.

this would kill off trolls and exploitation of inventive people.

~~~
loup-vaillant
So. You want to get rid of this piece of lucrative property. Now what about
the others? I like this idea of killing off the exploitation of creative
labour. Now what about menial and manual work?

We're talking about abolishing (a piece of) corporate capitalism. Expect some
resistance.

------
Animats
The EFF is broken. They started as a First Amendment organization. Now they've
become a front for the anti-patent lobby.

The EFF's own data on demand letters exposes their false claims about "patent
trolls". [1] Only six patent holders on their list have sent more than two
demand letters. There was one big patent troll who sent out hundreds of demand
letters, and he lost in court years ago. With that one lawyer out of the
picture, the "troll" problem went away.

Their legislative proposals are terrible. Allowing "independent invention" as
a defense encourages companies to lie. A five year patent term is so short as
to be useless; it takes about 3 years to get a patent issued.

Stop the EFF before they kill invention.

[1] [https://trollingeffects.org/patent-
owners](https://trollingeffects.org/patent-owners)

~~~
jeswin
> Only six patent holders on their list have sent more than two demand
> letters.

The point is that monopolies on ideas are fundamentally unfair, and can only
be justified if they provide substantial value over the norm. That _might be_
true in some industries like Pharma, but it is provably false in Software.

When has something (in software) been invented by building on some text in a
patent filing?

~~~
throwawaykf05
_> The point is that monopolies on ideas are fundamentally unfair_...

I could just as easily say "free-riding off somebody else's ingenuity is
fundamentally unfair".

 _> ... but it is provably false in Software._

Citation needed? Many of the sources cited in OP have flaws and/or have been
refuted elsewhere, especially studies by Bessen & co. Many of their other
sources are from people who don't know the first thing about patents. They
cite that "This American Life" episode where the clueless dude from M-CAM
suggested there's a patent on toast, something that you'd know is BS with a
glance at the actual claim and 5 minutes of research on Google.

On the other hand, there are studies showing that having patents increases the
chances of software startups get VC funding and successful exits by a factor
of four. How much innovation happens without funding? Even the majority of
open source is financed by various industry sources.

 _> When has something (in software) been invented by building on some text in
a patent filing?_

And how often is something in software _not_ been built by simply copying
somebody else's ideas? Some ideas are harder to generate (e.g. RSA) than
others (e.g. online pet store) and deserve protection.

~~~
phaemon
> I could just as easily say "free-riding off somebody else's ingenuity is
> fundamentally unfair".

You could, but it would be ludicrous. The very existence of human civilisation
is due to "free-riding off somebody else's ingenuity".

> And how often is something in software not been built by simply copying
> somebody else's ideas?

Who cares. Not copying ideas is not the purpose of patents, it's the exact
opposite.

> On the other hand, there are studies showing that having patents increases
> the chances of software startups get VC funding

Again, irrelevant. Getting startup funding is not the purpose of patents.

If you want the role of patents to be to help startups then that should _be_
their stated role. In which case, you'd probably only allow companies <5 years
old to hold a patent, they'd only be valid for 5 years, and ownership could
not be transferred. Of course then you have something very different from our
current system, but frankly it sounds a lot better.

