

Nathan Myhrvold’s Evil Genius - edw519
http://timothyblee.com/?p=781

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tptacek
You read this article and get the impression that Myhrvold hires people to sit
around saying things like "laptop batteries that get 40 hours per charge!",
which he writes down and files patents for.

But from what I understand, from being involved in several patent filings, you
can't just patent an idea. You have to patent an enablement of an idea. A
patent that can't be used by someone skilled in the applicable arts to
implement the patented concept isn't supposed to be defensible.

Commenters on this post repeatedly argue that engineers do all the real, hard
work, and that the ideas themselves are trivial. That's probably true. But all
that hard work is also patentable; if I'm dumb enough to file for "40 hour
batteries", and you file for the chemical process that makes 40-hour batteries
work without melting through the floor, you win, right?

~~~
raganwald
You and I both win provided neither of us tries to actually make the
batteries. Instead, we wait for someone who does and sue them. If we try to
make them, we discover that while you patented something about 40 hours and I
patented something about chemistry, neither of us patented something about
manufacturing them and a third troll sues us.

The point of the article is that the only losers are the ones who try to do
anything tangible that requires a collection of patented ideas to function.

~~~
tptacek
This implies that you can, sitting at a table with a pint, come up with the
key patentable ideas for the 40 hour batteries. The odds rather favor the
people building batteries in earnest, don't they?

~~~
CamperBob
In the modern patent business, the "odds" favor the first party to encounter a
particular problem in their field of art. If you're lucky enough to encounter
a problem first, you can patent the first obvious solution(s) that come to
mind, and effectively own the field later.

This is why nonobviousness was supposed to be a criterion for granting
patents, and why we're all worse off now that the USPTO has effectively
abandoned it.

~~~
tptacek
If the "non-obvious" battery implementation is better, you can build and
patent it no matter what me and raganwald come up with at the pub.

~~~
CamperBob
But if it relies on your patent as prior art, I still have to cough up the
baksheesh.

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bwd2
One of the comments on the article suggests applying for a patent on the
"patent troll" business model and then suing these guys. Fans of recursion
will notice that you could then apply for a patent on the "patent on the
'patent troll'" business model, and then we're really off to the races.

~~~
nomoresecrets
One day - just one day - I'd like to see a discussion about patents where
someone _doesn't_ suggest patenting something 'amusing' that already exists
and has years of prior art.

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ajb
I do wonder whether Nathan Myhrvold really believes that patents are a good
thing. There seem to be three possibilities:

\- Myhrvold really believes that patents make the world a better place.

\- Myhrvold is cynically extracting money from a broken system

\- Myhrvold wants to bring down the patent system; IV is intended to make the
absurdity of the system as blatant as possible, and make money at the same
time.

I hope it's the last one.

~~~
sriramk
First, I haven't met Nathan personally but from everything I see about him
internal to Microsoft (from his time at the company) and his time outside, he
is a very, very smart man. And quite rich. I think assigning simple labels
like 'good' and 'evil' doesn't quite cut it.

My opinion/guess (with zero inside knowledge) is that Nathan doesn't really
care about the patent side of the equation much. He just wants to do
interesting ideas and get people in the room to dream up of (and sometimes
build) cool stuff. Some of their work around nuclear power is super
interesting for example. The patents are just a revenue stream for them to
continue doing this.

~~~
pchristensen
Complex indeed:
[http://www.ted.com/talks/nathan_myhrvold_on_archeology_anima...](http://www.ted.com/talks/nathan_myhrvold_on_archeology_animal_photography_bbq.html)

"Nathan Myhrvold talks about a few of his latest fascinations -- animal
photography, archeology, BBQ and generally being an eccentric genius
multimillionaire."

------
henryl
I've considered becoming a patent lawyer for precisely this trend. It is a
type of investment vehicle that will get much more notice in the future and
subsequently make a few billionaires along the way.

~~~
CamperBob
Why not just skip all those pesky law classes, and become a bank robber?
You'll have the same net effect on society, and the women are better-looking.

~~~
henryl
While acknowledging your quip for what it is, I would argue that monetizing a
portfolio of patents that were legally acquired (either 1st or 3rd party)
while capturing profit due to inefficiencies in the system is no different
than what a typical hedge fund manager does so I don't see the problem.
Inventors are able to bring liquidity to their otherwise illiquid patents and
LPs get a return.

~~~
ajb
Arbitrage traders automatically eliminate the market inefficiencies which they
exploit. In theory, all purely financial operations, such as hedge funds, do
the same (although this orthodoxy is now less certain). This is not true for
patents, because patents are a government granted monopoly.

~~~
seertaak
> Arbitrage traders automatically eliminate the market inefficiencies which
> they exploit.

True enough, although, having worked in a stat arb hedge fund for four years,
let me assure you that the process is far from automatic ;)

> In theory, all purely financial operations, such as hedge funds, do the same

Aren't banks "financial operations"? Is franchise business not a "financial
operation"? There are many other reasons, but I disagree, even in theory, with
the idea that all financial operations eliminate market inefficiencies, aside
from the en-passant contribution to overall liquidity.

> This is not true for patents, because patents are a government granted
> monopoly.

This strikes me as a non sequitur. Just because patents are a government-
mandated monopoly doesn't mean there can't be an arbitrageable market in them.
After all, all property is in some sense government-mandated. And the fact
that patents are limited period presents no major difficulties -- I need only
point out that a large segment of the London property market is for leasehold,
which is in effect a owner-given (ultimately backed up by the force of the
state, of course!), time-limited monopoly on the use of the house.

Of course, there's not going to be an arbitrageable market in the sense you're
speaking of anyway, for an entirely different reason: bonds and, and to a
_much_ lesser extent, stocks, are easily comparable, whereas this is not the
case in patents. If you think that Greece is a lot more credit-worthy than the
rest of the market thinks it is, you can go long Greek 10 years, go short the
bund, and with virtually zero outlay you have the ability to profit from any
mispricing of "country risk". There's simply no analogue the "go long A, short
B" in the domain of patents.

I think the comment you replied to erred in characterizing the activity of of
a patent fund as "exploiting ineffciencies". It really is more akin to Warren
Buffett-style long-term investing. While it's certainly true that Berkshires'
activities reduce market inefficiencies, it's safe to say that that's not
what's at the forefront of Buffett's mind when he invests.

There are valid reasons to be opposed to the patent system in its current
form. I don't think the absence of Gordon Geko-style arbitrageurs from patent
market is one of them, though ;)

~~~
ajb
Well, I'll defer to your greater knowledge of the financial industry. I'll
just note that not only are patents not easily comparable, they aren't usually
substitutable.

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sfraser
It seems so appropriate that this truly evil venture is headed up by someone
coming from Microsoft.

~~~
tptacek
Yeah, I mean, just look at all the evil Bill Gates has wrought upon the earth
since he left.

