
Addressing the Chilling Effect of Patent Damages - e15ctr0n
https://blog.mozilla.org/netpolicy/2016/01/22/addressing-the-chilling-effect-of-patent-damages/
======
jimrandomh
This is about the triple-damages rule, which says that if you're found to
infringe on a patent willingly then the damages are increased, while if you
didn't know about it, they aren't. This, combined with a large number of very-
low-quality ambiguous patents and the fact that the patent office's screening
only creates a legal presumption of validity but not a practical one, means
that everyone is strongly incentivized to avoid ever looking at anything the
patent office publishes. Which makes things even worse, because the problem is
hidden and the patent office can't draw on public knowledge to shoot down bad
patents.

~~~
eganist
I appreciate your explanation, though I can also appreciate why the rule was
introduced. It would seem the consequences of it were entirely unforeseen.

A devil's advocate argument: should the rule be tossed, might there not
suddenly be a bottleneck imposed on new projects where legal teams would now
have to research whether a particular feature duplicates an existing patent?
I'd say it's an unwinnable game since doing away with software patents might
also harm any commercial motivation to produce a service with even a hint of
transparency into how that service does what it does.

I almost feel like the Treble damages rule is the least-bad of all of them,
but that's just a gut feeling. Any armchair-lawyers (or actual ones!) want to
weigh in? I'm not anywhere near qualified to actually express an opinion on
this.

~~~
jeswin
> doing away with software patents might also harm any commercial motivation
> to produce a service with even a hint of transparency into how that service
> does what it does

Do you have examples of FOSS or other projects benefiting from companies
revealing information through patent filing? To rephrase, what exactly do we
lose out if patents didn't exist?

Even if there is some marginal value in the knowledge sharing that happens in
patent filings, not allowing software patents would be a much bigger benefit.
To support this point, we can look at the prevalence and utility of Open
Source software projects; which work without patent protection.

~~~
throwawaykf05
_> To rephrase, what exactly do we lose out if patents didn't exist?_

There is a lot of empirical evidence showing patents incentivize investment of
resources into innovative efforts, such as R&D expenses in large corporations
and VC investment in startups. Of course, it's hard to quantify how much
innovation this really drives because it's very hard to measure "innovation"
itself. The drawbacks of patents include, amongst other things, the potential
to reduce follow-on innovation. Again, this is very hard to measure at any
meaningful scale.

 _> To support this point, we can look at the prevalence and utility of Open
Source software projects; which work without patent protection._

Open source projects are driven by people willing to donate their efforts for
free. (Well, it's not really free, is it? They are, to a great extent,
sponsored directly or indirectly by organizations that typically extract value
from something other than the software itself, such as, maybe data.) Do you
expect that business model to work for everybody?

Not to mention that the vast majority of open source projects actually don't
do anything innovative other than just re-implementing known technologies in a
different context. There can be a lot of minor, follow-on innovation in open-
source projects, but in my experience, the big advances come from other
sources, such as academia, startups or corporate R&D labs.

~~~
laotzu
>There is a lot of empirical evidence showing patents incentivize investment
of resources into innovative efforts

Do you have any sources of this empirical data? In many cases especially with
software the opposite is the case now. Legacy patent holders are able to
obtain such broadly vague patents and then sit on them and do nothing but try
to sue anyone who tries to actually innovate.

~~~
throwawaykf05
See this comment for a link to start with for patents in general:
[https://news.ycombinator.com/item?id=10962996](https://news.ycombinator.com/item?id=10962996)

To my knowledge, empirical evidence that incumbent patent holders in the
software industry are suppressing innovators is mixed. This paper from 2006
claims no ill-effects have been felt:
[http://papers.ssrn.com/sol3/papers.cfm?abstract_id=926204](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=926204)

Another 2005 studies also suggests that patent thickets do not prevent the
creation of young firms, and the use of patents may actually help startups:
[http://papers.ssrn.com/sol3/papers.cfm?abstract_id=510103](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=510103)

On the other hand, this 2006 study finds that product areas with patent
thickets see fewer new entrants:
[http://www.nber.org/papers/w12563](http://www.nber.org/papers/w12563) \--
Interestingly, this paper also finds that startups with patents of their own
are much more likely to enter a patent-infested product area.

------
skywhopper
The sanity of any laws built on top of the patent system require that granted
patents make sense and represent actual "inventions". A patented invention
should provide enough detail in the patent filing to allow other experts in
the same field to recreate the "invention". For any sensible definition of a
patent that could be related to software, such a filing would include actual
source code (or at least very detailed pseudocode.

Alas, until issued patents actually represent real inventions, then all the
rest of the laws surrounding their use and enforcement will appear utterly
insane as well.

------
Animats
Without treble damages, there's no incentive to license a patent. Worst case
is paying roughly the same fee it takes to license.

The trouble with requiring "willfulness" is that it requires proving the state
of mind of the infringer. This is difficult, and it's not even clear what
"state of mind" means for a corporation. See _in re Segate_ , where the CAFC
tried to define "willful infringment" with an objective test.[1]

A stronger remedy than triple damages exists in patent law - an injunction
against infringement. Some years ago, Polaroid won an injunction against Kodak
for infringing their instant photography patents. Kodak was given 30 days to
exit the instant photography business and had to buy all their cameras for
that process back from consumers. They did, and that was the end of Kodak's
instant photography business. The injunction remedy still exists, but is no
longer routinely available since _eBay vs. MercExchange._ in 2006.[2]

Without patents, there's little incentive to innovate unless you can throw
enough money at a startup to get dominant market share before someone else
copies you. VCs used to want to see a strong intellectual property position
before putting in money; then they had some assurance of not losing their
investment even if the technology works. This has been less of an issue for
non-technology startups; Doordash, etc. are not technology companies.

The case to which this brief is attached is not about software. It's about a
new way to attach transformers to printed circuit boards with surface-mount
soldering. Halo, a small startup, developed a way to do this which solved a
problem with the solder joints cracking during heating. Pulse, a much bigger
company whose transformers tended to crack loose after soldering, copied this
and refused to pay royalties. Halo has won the infringement issue; the only
remaining question is how much Pulse has to pay them.

[1] [http://www.law360.com/articles/102863/seagate-the-issue-
of-w...](http://www.law360.com/articles/102863/seagate-the-issue-of-willful-
patent-infringement) [2] [http://www.bna.com/supreme-courts-
ebay-n17179924841/](http://www.bna.com/supreme-courts-ebay-n17179924841/)

~~~
tbrownaw
_Without patents, there 's little incentive to innovate unless you can throw
enough money at a startup to get dominant market share before someone else
copies you._

I don't believe this matches what we know of history. It also doesn't match
personal experience -- I've worked on open source projects because they're
fun, and on trying to grow better ETL tools because they make the rest of my
job easier.

It probably does change _who_ does the innovating, tho. Patents mean that
instead of people innovating things to make their own lives easier, you get
outsiders throwing money at trying to innovate around what they've guessed
other people's problems to be.

~~~
throwawaykf05
Curious, how innovative would you say were the open source projects you worked
on? How much was it doing entirely new stuff (to the best of your knowledge),
as opposed to re-inventing stuff that some project somewhere else already did?
I ask because the word "innovation" has no meaning if nothing novel is being
done, yet everyone constantly uses it to refer to _any_ technical development.

~~~
tbrownaw
The main one I'm thinking of is monotone, which is a distributed version
control system that started to gradually lose activity after git was released
and took over.

The primary conceptual difference I think, is that git is federated-like-email
while monotone is distributed-like-usenet. It's a far prettier model, but it
makes getting consensus on who has commit privileges (or in equivalent modern
terminology, what blockchain appends are valid) somewhat of a PITA (especially
when the list of approved committers can change over time). We never did get
that working completely, but the work done since on bitcoin probably has some
useful insights.

A couple other things to keep in mind, are that _innovation_ is not quite the
same as _invention_ ; and that all inventions build on previous knowledge.

------
BatFastard
Patent system is a great system, for 100 years ago. Throw it out, it would do
more for innovation than all of the VC money invested over 10 years.

~~~
antome
It's more of an optimisation problem. You want inventors to invent a lot of
things, so you give them patents. But if you give them too long a patent, they
will just invent a few things, then sit on the IP.

Nowadays, there should really be ~5 year hardware patents, and ~1 year
software patents, which mostly reflects the time-to-market after invention.

~~~
em3rgent0rdr
The optimization should be ~0 year hardware patents, and ~0 year software
patents. All the patents will do is slow down market deployment and
innovation.

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CuriousSkeptic
"Designing around patents is, in fact, one of the ways in which the patent
system works to the advantage of the public in promoting progress in the
useful arts, its constitutional purpose."

To me that just sounds stupid. It's akin to the argument that breaking windows
promtes growth by stimulating the glass industry.

~~~
laotzu
It's doublespeak. Like the CNN article whose title reads "Encryption a growing
threat to security".

In software, working around existing patents has resulted in vast
fragmentation on every platform. Thereby greatly increasing the time
investment needed per developer when creating cross platform compatible apps.

Want to reach your audience with a simple app? Learn to use all of the native
android dev suite tools and language. Learn all of the native iOS dev suite
too. Make a Web app. Make that web app compatible for all browser platforms:
IE, Mozilla, Chrome, Safari. Make that web app responsive for mobile users for
all the different device types they might be using...

If you want to stimulate innovation, cooperation is imperative. A cooperative
society would realize that the more unified and open your innovation processes
are, the less time investment is needed for everyone else.

------
throwawaykf05
Recent reports suggest the threat of treble damages is, statistically
speaking, largely theoretical. Only about 0.6% of cases ever get enhanced
damages, and even then the amounts are typically pretty low. Source:
[http://www.law360.com/articles/557734/the-truth-about-
patent...](http://www.law360.com/articles/557734/the-truth-about-patent-
damage-awards) (Article may be paywalled - clicking via Google may help.)

------
rdtsc
And interesting effect indeed. I can imagine someone seeing their company
releasing some new technology. And then realizing there is an existing patent
on that issued to another company.

What is that employee to do? If they say something, all of the sudden they 3x
the liability their company would face if litigation happens. If they don't
say anything, the product will continue to be released and it would increase
the chance of the patent owner suing as well.

~~~
greglindahl
The standard Silicon Valley answer is to say nothing. Patent owners rarely
sue, so the latter risk isn't much of one.

------
boulos
What an interesting group that banded together...

> Check Point Software Technologies, Inc., LinkedIn Corporation, Mozilla
> Corporation, Netflix, Inc., Pinterest, Inc., Roku, Inc. and Twitter, Inc.
> (Amici) are technology and Internet companies.

I understand why the media ones are together (MPEG, etc.) but I don't
understand Checkpoint (LinkedIn as I remembered by writing this purchased
Lynda.com, so it cares a lot about serving video). Can anyone explain?

~~~
nickpsecurity
A ridiculous amount of modern tech is patented in some way. All of those
companies can be hit with lawsuits over patents with too much control of
outcome in hands of patent holders. The enemies of their enemies are their
friends.

