7 ms·

The system as we know it needs to be overhauled. We need to scrap everything and then think carefully about what should be patentable with the goal being a syst

The system as we know it needs to be overhauled. We need to scrap everything and then think carefully about what should be patentable with the goal being a system that’s good for society. Drugs that cost $1B to bring to market? Seems like they should get some kind of exclusive period though we can argue over what that period of time should be. Software? Nope. Keep copyright law for that, but even there, drastically reduce the copyright period.

amelius 6y ago
We need a system where a patent can be challenged in the initial period when someone applies for a patent. For example, someone wants to patent "one click shopping". The USPTO publishes the "objective" section of the patent application. Then, during the challenge-period, someone else reads the application, implements a one-click shopping button, sends the solution to the USPTO and the patent is denied. Optionally, the person who found the solution (either by implementation or by finding prior art) is then compensated for their work by the original applicant. The system could be extended by allowing the patent applicant to specify the expiration date for the patent, but a longer expiration time will also mean that the challenge-period will be longer and the cost for a rebuttal will be higher.
mjevans 6y ago
Much of the cost of that drug being brought to market has far less to do with innovation and much more to do with regulatory approval and clinical trials. A solution to address that might be in the form of designed profits, where the exclusivity period is determined by the profits generated. However I'd also still like to see second and more sources, so a compulsory license during this period is also desirable, but might focus on a fixed percentage of profits. (Also contributing to paying down the public liberation fee of the work.)
- ReptileMan 6y ago
  Bulk payment of couple of billion can get the job done.
beefield 6y ago
I think both patents and cooyright should be taxed so that the time progressivity is high. Say first year or two practically free, but if you want to keep your ip at 20 years, it should cost you billions. You can stop paying tax any time you want and your ip moves automatically to public domain. Solves also orphan works. (Yes, I know, Berne convention needs likely to be amended for this to be possible)
- chii 6y ago
  or treat intellectual property the same as physical property - pay a property tax. The value of the IP is the amount of transfers and licensing it has - so you cannot hide profit by "selling" IP from a foreign offshore tax haven.
  - mreome 6y ago
    I think the value of most IP is to abstract to apply a tax to it. Some patents are extremely valuable, most are worthless. Some are only useful to Patent Trolls, or for defensive purposes, etc. How would you tax a company that patents something it develops and sells itself? If the products/service they sell involves lots of non-patented features and/or multiple patented features, how do you determine the value of any individual patent? How do you determine the value of patents effectively licensed through an Agreement Not-to-Sue?
    - nielsole 6y ago
      You can charge a flat fee per patent. By this you avoid having to assess their value. For normal ip it would likely need to get registered in order to receive copyright protection. This way creators only pay taxes for their larger works. The biggest problem with this is that this tilts the playing field against smaller creators.
    - deleted 6y ago
      [deleted]
    - est31 6y ago
      You raise a good point. The way how real estate is valued is through a market where each item is looked at individually more or less, but patents are connected. A possible solution could involve letting the patent owner itself state how valuable owning the patent is to them. They could declare a monetary number X and then do annual payments of say 0.1% of that number. They could adjust the number monthly by statement to the patent office, but would have to pay the tax on the maximum number they told to the patent office within each year. Now comes the core of the idea: the number would be public, and any entity could "free" the patent by paying that amount X to the patent office which then redirects it to the patent's owners after deducting a tax. The patent would then enter the public domain. So company A invents something, patents it, and claims a billion dollars of value to the patent office. They have to pay a million in taxes annually. Company B thinks it could make a lot more than a billion dollars if the patent got lifted, and pays 1 billion to get rid of the patent. Company A is now 1 billion richer (minus patent freedom taxes), but now has to deal with competitors. So their next patent will have 10 billion as value number. I'm not sure the idea is good or not, it has some problems, e.g. it might lead to patents becoming even larger than they are today so that they get lots of valuable stuff into the patent's umbrella. Patent offices might become more willing to grant patents for things as they are now a major revenue source for the government, and many patents on promising stuff will need big investors so that they can afford the taxes until the patent matures. Also companies won't be able to plan as well as they are now. Making the tax progressive will help with some of these problems, but maybe not enough and maybe not with all of them.
defnotashton2 6y ago
Re drug development: Why should they get an exception? This is how we create a flawed system. There are lots of things in the markets with high entry costs that's part of the challenge to bringing a product to market. You still get a huge market share/reputation and likely can keep that by being the first to market which is enough reward imo to a product to market. If the public did subsidize any ip then that ip should be disimenated after the subsidy period to the public.
- creato 6y ago
  I think the thing that is unique about drugs is that they are incredibly expensive to develop and bring to market, but trivially cheap to reproduce. I just happened to watch this video [1] a few days ago, where the host gets, as a free sample, enough of a chemical to make $3 million at retail prices worth of a cancer drug. That doesn't seem to be true of anything else covered by patents. Software is cheap to develop, and other kinds of engineered products (cars, hardware, etc.) usually aren't that much cheaper to reproduce than they are to develop. I think patents should simply be far more expensive. For a drug (or a chip manufacturer or whatever), even a very expensive patent would be negligible relative to the R&D costs. However, it would make a lot of bullshit patents not worth getting. 1. https://www.youtube.com/watch?v=35XGfnmTm8E https://www.youtube.com/watch?v=35XGfnmTm8E
  - gentleman11 6y ago
    Expensive patents would price out hard tech startups
  - defnotashton2 6y ago
    Patents are already expensive enough to stifle innovation and even more expensive to enforce. This is already happening when they aren't artificially raised because of inherent costs in our legal system. I think modern drug manufacturing is a lot more nuanced then oh I can copy this chemical. And if it is then that's life of a drug manufacturer, you build that into the price. Like everybody else, I think it's a false political narrative that drugs are magically nuanced in ways other things aren't.
- 6y ago

amelius 6y ago

We need a system where a patent can be challenged in the initial period when someone applies for a patent. For example, someone wants to patent "one click shopping". The USPTO publishes the "objective" section of the patent application. Then, during the challenge-period, someone else reads the application, implements a one-click shopping button, sends the solution to the USPTO and the patent is denied. Optionally, the person who found the solution (either by implementation or by finding prior art) is then compensated for their work by the original applicant. The system could be extended by allowing the patent applicant to specify the expiration date for the patent, but a longer expiration time will also mean that the challenge-period will be longer and the cost for a rebuttal will be higher.

mjevans 6y ago

Much of the cost of that drug being brought to market has far less to do with innovation and much more to do with regulatory approval and clinical trials. A solution to address that might be in the form of designed profits, where the exclusivity period is determined by the profits generated. However I'd also still like to see second and more sources, so a compulsory license during this period is also desirable, but might focus on a fixed percentage of profits. (Also contributing to paying down the public liberation fee of the work.)

ReptileMan 6y ago
Bulk payment of couple of billion can get the job done.

beefield 6y ago

I think both patents and cooyright should be taxed so that the time progressivity is high. Say first year or two practically free, but if you want to keep your ip at 20 years, it should cost you billions. You can stop paying tax any time you want and your ip moves automatically to public domain. Solves also orphan works. (Yes, I know, Berne convention needs likely to be amended for this to be possible)

chii 6y ago
or treat intellectual property the same as physical property - pay a property tax. The value of the IP is the amount of transfers and licensing it has - so you cannot hide profit by "selling" IP from a foreign offshore tax haven.
- mreome 6y ago
  I think the value of most IP is to abstract to apply a tax to it. Some patents are extremely valuable, most are worthless. Some are only useful to Patent Trolls, or for defensive purposes, etc. How would you tax a company that patents something it develops and sells itself? If the products/service they sell involves lots of non-patented features and/or multiple patented features, how do you determine the value of any individual patent? How do you determine the value of patents effectively licensed through an Agreement Not-to-Sue?
  - nielsole 6y ago
    You can charge a flat fee per patent. By this you avoid having to assess their value. For normal ip it would likely need to get registered in order to receive copyright protection. This way creators only pay taxes for their larger works. The biggest problem with this is that this tilts the playing field against smaller creators.
  - deleted 6y ago
    [deleted]
  - est31 6y ago
    You raise a good point. The way how real estate is valued is through a market where each item is looked at individually more or less, but patents are connected. A possible solution could involve letting the patent owner itself state how valuable owning the patent is to them. They could declare a monetary number X and then do annual payments of say 0.1% of that number. They could adjust the number monthly by statement to the patent office, but would have to pay the tax on the maximum number they told to the patent office within each year. Now comes the core of the idea: the number would be public, and any entity could "free" the patent by paying that amount X to the patent office which then redirects it to the patent's owners after deducting a tax. The patent would then enter the public domain. So company A invents something, patents it, and claims a billion dollars of value to the patent office. They have to pay a million in taxes annually. Company B thinks it could make a lot more than a billion dollars if the patent got lifted, and pays 1 billion to get rid of the patent. Company A is now 1 billion richer (minus patent freedom taxes), but now has to deal with competitors. So their next patent will have 10 billion as value number. I'm not sure the idea is good or not, it has some problems, e.g. it might lead to patents becoming even larger than they are today so that they get lots of valuable stuff into the patent's umbrella. Patent offices might become more willing to grant patents for things as they are now a major revenue source for the government, and many patents on promising stuff will need big investors so that they can afford the taxes until the patent matures. Also companies won't be able to plan as well as they are now. Making the tax progressive will help with some of these problems, but maybe not enough and maybe not with all of them.

defnotashton2 6y ago

Re drug development: Why should they get an exception? This is how we create a flawed system. There are lots of things in the markets with high entry costs that's part of the challenge to bringing a product to market. You still get a huge market share/reputation and likely can keep that by being the first to market which is enough reward imo to a product to market. If the public did subsidize any ip then that ip should be disimenated after the subsidy period to the public.

creato 6y ago
I think the thing that is unique about drugs is that they are incredibly expensive to develop and bring to market, but trivially cheap to reproduce. I just happened to watch this video [1] a few days ago, where the host gets, as a free sample, enough of a chemical to make $3 million at retail prices worth of a cancer drug. That doesn't seem to be true of anything else covered by patents. Software is cheap to develop, and other kinds of engineered products (cars, hardware, etc.) usually aren't that much cheaper to reproduce than they are to develop. I think patents should simply be far more expensive. For a drug (or a chip manufacturer or whatever), even a very expensive patent would be negligible relative to the R&D costs. However, it would make a lot of bullshit patents not worth getting. 1. https://www.youtube.com/watch?v=35XGfnmTm8E https://www.youtube.com/watch?v=35XGfnmTm8E
- gentleman11 6y ago
  Expensive patents would price out hard tech startups
- defnotashton2 6y ago
  Patents are already expensive enough to stifle innovation and even more expensive to enforce. This is already happening when they aren't artificially raised because of inherent costs in our legal system. I think modern drug manufacturing is a lot more nuanced then oh I can copy this chemical. And if it is then that's life of a drug manufacturer, you build that into the price. Like everybody else, I think it's a false political narrative that drugs are magically nuanced in ways other things aren't.
6y ago