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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.
by 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.
- mreome 6y agoThis is an interesting idea. It reminds me of the idea of "I’ll break the cookie in two; you choose your piece." I’d have to work through the implications of how this would play out between large corporations, but the most immediate issue I would see with it is for the smallest inventors/companies. In many industries, a new/small company would never be able to price it’s patents out of the reach of its largest competitors, it would put them in the position of either spending huge amounts of their working capital in taxes to defend their patents, or let the patents be sold and compete with their large competitors on production, logistic, and support costs (which is a loosing position for a new small/new company). It would be even worse in the case of a solo inventor. Imagine you come up with an idea so good it’s clearly worth a billion dollars, but only in an industry with a single, or small number, of big players. If that one big player, or several big players collectively, refuse to buy or license your patent, you won’t be able to afford the taxes and end up with nothing once it expires (and they are free to use it). If you want to try to develop it yourself, you now need to find a huge amount of additional investment just to cover the taxes.
- chii 6y ago> the case of a solo inventor. does this actually happen in practise? If the invention is clearly worth billions (that is, either it is capable of generating billions in value, or save costs of billions in value), then why wouldn't the big players license it? If these big players openly collude (via contractual agreements for example), then it sounds illegal (or should be). If these players aren't colluding per se, but "individually" decide to not purchase a license, then the first player that buys the license gets a head-start in their savings/rewards from using the patent.
- mreome 6y agoThere are industries where one company has an effective monopoly, and others where the relevant players have tacitly/privately agreed to split or share the market. Competition is good for the consumer, but companies can usually make more money by forming business cartels and not competing with each other. Price fixing, market division, and bid rigging are all examples of this kind of collusion. These tactics are usually illegal, but they still happen regularly. Google any of those terms and you'll find lots of examples and related case-law, and those are just the times companies did it so egregiously that they got caught. Companies collectively agreeing not to pay for a patent, and all profiting when it becomes public domain soon after, would just be a variation-on/extension-to price fixing and market division. The inventor would usually not have the resources to pursue legal action and would have a hard time proving that the companies involved didn't just think that licensing the patent was a bad investment at the time. Also, just to clarify, "solo inventor" here really applies to any entity/organization that is tiny compared to the companies it's trying to licensee its patents to.