8 ms·

Full text of the ruling here: https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule.pdf https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule...

Full text of the ruling here: https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule.pdf https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule... It's not surprising after thinking about it for a minute, but it did startle me to read that the FTC measures innovation by the number of patents issued. > In addition, the final rule is expected to help drive innovation, leading to an estimated average increase of 17,000 to 29,000 more patents each year for the next 10 years under the final rule. I've always thought of that as representing a stifling of innovation.

nerpderp82 3y ago
I'd say the number of patents filed and granted by practicing entities of small to mid-size would be a pretty good measure of innovation. I think patent fees and complexity should be progressive, esp if you have working hardware and don't just flip the patent to a troll.
akira2501 3y ago
> I've always thought of that as representing a stifling of innovation. The short lifetime of patents and the requirement that you publish detailed information about the invention significantly mitigates this. If they were measuring innovation by the number of copyrights filed, then I might agree with you.
- TaylorAlexander 3y ago
  Respectfully, how do you define the current patent terms as “short”? Sure copyright is much worse, but innovation regularly happens on the scale of months! The current term of 20 years seems incredibly long to me, and it’s not clear that even at 5 years patents would provide more benefit than harm. Most of the purported benefits of patents seem based on theories that most people don’t understand. We all take some received knowledge about their supposed operation, and usually proponents of patents know nothing about how powerful innovation in open source and other patent-free spaces can be.
- chii 3y ago
  > significantly mitigates this. not if patents become a weapon against actual innovation - which it has devolved into being today. Far from being made to progress science and the arts, patents have become a method for which large corporations can add moats to competition. Things like codecs for video/audio, which are purely mathematical expressions, have been patented. Genes and molecules, even tho they might occur naturally, can be patented (a very tenuous form of invention - it's discovered, even if not naturally occurring!). And not to mention design patents. I say the entire patent system needs to be abolished, or at least, made such that only applicable to physical mechanisms, and not software, nor biological systems.
- crote 3y ago
  In theory? Yes. In practice? No. For a lot of industries 20 years is an awfully long time to the point of complete irrelevance - and that "detailed information" is often vague enough to be unusable. Combine that with an overly-broad range of patent-able things and an overworked USPTO granting clearly invalid patents, and in practice (at least in the tech/software world) it's doing more harm than good. Patents are no longer about protecting R&D investments. They have become more about patenting the vaguest concepts possible, in the hope of making a profit when someone else does an actual invention which somehow stumbles into your patents' wording.
  - kiba 3y ago
    Patents are no longer about protecting R&D investments. Patents are always the tool of the moneyed and the lawyered, which is not the same thing as protecting R&D investment. There are exception, such as the guy who spent 12 years suing car companies over the windshield wiper, but that actually proves the rule because of time spent. It even apparently cause his marriage to break down. [1] 1. https://en.wikipedia.org/wiki/Robert_Kearns https://en.wikipedia.org/wiki/Robert_Kearns
    - saulpw 3y ago
      To be fair, this appears to be a case of greed: > Kearns sought $395 million in damages. He turned down a $30 million settlement offer in 1990 and took it to the jury, which awarded him $5.2 million; Ford agreed to pay $10.2 million rather than face another round of litigation.
      - kiba 3y ago
        Presumably, the point of a patent is to 'protect' the little guy which I would argued actually doesn't. Not that I don't agree with you, what makes Kearns' pursuit 'greedy'?
        Red_Leaves_Flyy 3y ago
        He rejected $30,000,000. Jury awarded 1/6 after litigation. Ford payed double to get rid of this nuisance. $30 million in 1990 was fuck you money. It’s still enough to comfortably retire on for a high school aged person.
- sanity 3y ago
  Depends on the industry, 20 years is a lifetime in software.
- wongarsu 3y ago
  "short lifetime" is relative. Had Apple been granted a patent on the idea of a smartphone the same year they released the iPhone, that patent would only expire in three years. There are some industries where due to slow-moving markets the 20 year patent period is still sensible, but for most sectors we would be better off with a 5 or 10 year patent period to account for the increased speed of innovation.
  - bluGill 3y ago
    Apple did not invent the smart phone. The invented several features that make them useful (even their version one lacked apps), but others made smart phones before them. What Apple really did was make them useful by eliminating several of the things that made them annoying not not useful before.
    - Nevermark 3y ago
      They didn't say Apple invented the iPhone. That was a counterfactual example to make a point. Also, the point counts even if Apple just patented enough to block comparable phones. The point: For the smartphone market, 20 years would be a very long effective time for any foundational or gatekeeping patents.
      - hhshhhhjjjd 3y ago
        Didn't Samsung and Apple have a tiff over the shape of the phone? "Rectangle with rounded corners"
    - paulmd 3y ago
      > What Apple really did was make them useful by eliminating several of the things that made them annoying not not useful before. that’s literally every patentable invention ever, though. Remington didn’t invent the hunting rifle… they didn’t even invent the first self-loading or lever action rifle, probably. “removing the annoyances and downsides that make a previous approach infeasible or impractical” is more charitably described as “a useful innovation that advances the field”. Now, the problem is that a lot of patents are issued for things that someone else already has done, so the recipient of the patent isn't actually advancing the state of the art. But on the face of it, "removing the annoyances and downsides that make a previous approach infeasible or impractical" is literally what patents are supposed to be granted for.
- cryptonector 3y ago
  > The short lifetime of patents 20 years is not short! 20 years might be appropriate for capital-intensive innovations (e.g., in pharma), but definitely not for industries where innovations are not typically capital-intensive. E.g., 20 years for cryptography and software patents is a disaster.
- _aavaa_ 3y ago
  In theory maybe, but in practice it seems like the opposite. The current growth of the 3D printer market is in part directly tied to the lapsing of several key patents in the area. Further, most patents may contain key details, but they also intentionally contain as much broad information as to create a massive exclusionary zone, not to mention burying any legitimately useful information.
  - deleted 3y ago
    [deleted]
- EasyMark 3y ago
  How is the lifetime of patents short? I mean they last for 20 years, that's an entire generation of time to make a profit?
  - patmcc 3y ago
    They're short relative to other IP (like copyright), and short relative to inventions that have long R&D and cost recovery timelines. If $NEW_DRUG takes 5 years to develop, 5 years to trial, 5 years to market, and 5 years to profit...20 years isn't all that long. If the invention takes 3 weeks and $0, yeah, 20 years is a long time.
    - bdowling 3y ago
      > If the invention takes 3 weeks and $0… …then the patent can be invalidated on the basis that it is obvious. If the invention is commercially valuable, then invalidating it (or just pretending it doesn’t exist until you get sued, then invalidating it) can make more sense than licensing it. A related issue is that there are many, many patents that most people (e.g., competitors) mostly ignore, because everyone, including the patent owner, knows that they would be invalidated if challenged.
      - patmcc 3y ago
        Yeah, it seems like we should have stricter "obviousness" testing when patents are issued. At least based on some of the software ones I've seen.
- fsckboy 3y ago
  for software patents they should have to disclose the sourcecode
  - mlhpdx 3y ago
    Any patent that fails to “teach” the innovation can be challenged and will likely prevail if it’s an egregious gap. That’s the public benefit part, in writing.
    - fsckboy 3y ago
      that's the idea, but challenging a patent in court is extremely expensive and not at all a slam dunk even for garbage patents
pictureofabear 3y ago
FRED has a good blog post on measuring innovation. https://www.stlouisfed.org/open-vault/2021/june/how-to-measure-innovation#:~:text=Research%20and%20Development%20Intensity&text=%E2%80%9CWhile%20patents%20are%20a%20measure,a%20correlation%20between%20the%20two https://www.stlouisfed.org/open-vault/2021/june/how-to-measu....
reaperman 3y ago
Text of the rule itself starts on page 561, "XIII. Other Matters"
ajb 3y ago
Both things - that the number of patents measures innovation, and that they serve to stifle it, can be true at the same time. Under a fixed patent regime, the more innovation there is, the more individual patents are necessary to stifle it. Of course, if we allow the patent regime to vary, then if it changes to make patents easier to acquire then that means less innovation. However, it's true that this property - of being a valid measure, but interventions to change it having the opposite effect on the inferred variable - is a very unfortunate one in a metric.
- bmicraft 3y ago
  It'd put it like this: the more patents there are, the (exponentially) more "innovative power" you need to achieve the next one.
crakenzak 3y ago
> leading to an estimated average increase of 17,000 to 29,000 more patents each year Insane to me that they use this as a measure of innovation, when almost by definition it is the antithesis of innovation.
- adastra22 3y ago
  What definition is that? Because the legal definition of patent I’m familiar with requires each patent to be a unique innovation.
  - naasking 3y ago
    That fewer patents are filed is not evidence that fewer innovations are taking place. Absence of evidence is not evidence of absence.
    - amalcon 3y ago
      That fewer patents are filed is not an absence of evidence. It's evidence that fewer patents are being filed. If one believes patent filings are correlated with innovation (which is debatable either way), then it is (non-probative but still significant) evidence that fewer innovations are taking place.
      - naasking 3y ago
        > If one believes patent filings are correlated with innovation This is exactly the claim I'm taking issue with. The OP implied that the legal definition of innovation was "patents filed" and implied that this is somehow meaningful, and I'm saying that the absence of patents is not evidence of a lack of innovation.
  - colinsane 3y ago
    a patent is a legal restriction affecting what others are allowed to produce. a person/group hit by such a restriction may elect to not produce the (innovative) thing they otherwise would have. so that's the viewpoint in which patents may be "the antithesis to innovation". i won't argue which one's correct, just providing it here since you requested.
no_wizard 3y ago
Wonder ultimately how this will be handled once the Chevron Deference case is ruled on by the Supreme Court. The interpretations I've seen from other sources is that this will be overturned if the courts decide against the principle
cratermoon 3y ago
They do stifle innovation when one company locks up a huge portfolio of them. Forcing the employees who came up with the patentable ideas to sign non-compete agreements prevents them from working on anything related to those inventions elsewhere.
l33t7332273 3y ago
I feel like, much like BMI, patent volume can be used to measure a population. Sure, for any individual‘s fitness or a company’s “innovativeness” they are useless, but in aggregate they can be revealing.
mrandish 3y ago
> I've always thought of that as representing a stifling of innovation. Sadly, over my long career as a tech startup entrepreneur, my experience has been that your assumption is correct the vast majority of the time. Now when I teach or mentor young tech entrepreneurs I'm often explaining why they probably don't want to prioritize filing patents as part of their startup strategy. While there are certain exceptions, especially in pharma, biotech, materials science or medical fields, the years it takes for a patent to become enforceable and then the upfront cost + further years required to actually get a judgement, make patents largely ineffective in most startup contexts. There's also substantial uncertainty as to whether a startup can get the patent granted at all. After that, there's the challenge of getting it granted in a form which remains defensible and can't be easily worked around. Many people don't realize patent examiners can refuse to grant a patent unless the applicant narrows the claims. Conversely, as a tech startup these days you do need to worry about patents potentially being used against you. The majority of tech patent cases are giant vs giant fighting over turf, a large incumbent trying to kneecap an emerging startup competitor (usually filing suit to make the startup unattractive to investors for a year and never intending to actually go to court) or patent troll vs everyone. Personally, I had both a giant trying to stop my startup's Series A funding and several patent trolls. Despite having no actual merit, the giant's suit did freeze our Series A and we nearly died. After seven months we'd demonstrated we could survive without a Series A so they dropped the suit (of course) but by then they'd cost us more than half our cash in just defending an obviously sham claim. As one investor told me, "Yes, it's clearly a bullshit claim but it will still cost serious money and a lot of founder attention over the next 18 months to get it thrown out and that, unfortunately, tips this deal over our risk threshold." And responding to the constant patent trolls just burns up startup founder attention and scarce cash in nuisance legal fees. Despite the old-school trope of "garage inventor patents invention, makes fortune", frankly, from the perspective of fostering typical tech startups, you'd probably prefer a world where there were no patents outside of pharma, medical, bio, etc.
- mncharity 3y ago
  I wonder how frequent that is, the "We've pointless patents. And legal budget larger than your last round. Thank for playing, goodbye." It seems a reoccurring theme. But as for the usefulness of patents to startups, at least with material-science-y hardware, I've heard possession of a defensive patent portfolio described as "table stakes" for existence, with enforceability et al being secondary. It was interesting watching patents and unicorn dreams shape VR. Instead of years of commercial ferment exploring low-hanging niches, we wait for monoliths to eventually create maximally-hard mass-market consumer tech, and will then backfill easier niches, eventually. An industrial policy optimized for pharma, yielding pharma-shaped industries.

nerpderp82 3y ago

I'd say the number of patents filed and granted by practicing entities of small to mid-size would be a pretty good measure of innovation. I think patent fees and complexity should be progressive, esp if you have working hardware and don't just flip the patent to a troll.

akira2501 3y ago

> I've always thought of that as representing a stifling of innovation. The short lifetime of patents and the requirement that you publish detailed information about the invention significantly mitigates this. If they were measuring innovation by the number of copyrights filed, then I might agree with you.

TaylorAlexander 3y ago
Respectfully, how do you define the current patent terms as “short”? Sure copyright is much worse, but innovation regularly happens on the scale of months! The current term of 20 years seems incredibly long to me, and it’s not clear that even at 5 years patents would provide more benefit than harm. Most of the purported benefits of patents seem based on theories that most people don’t understand. We all take some received knowledge about their supposed operation, and usually proponents of patents know nothing about how powerful innovation in open source and other patent-free spaces can be.
chii 3y ago
> significantly mitigates this. not if patents become a weapon against actual innovation - which it has devolved into being today. Far from being made to progress science and the arts, patents have become a method for which large corporations can add moats to competition. Things like codecs for video/audio, which are purely mathematical expressions, have been patented. Genes and molecules, even tho they might occur naturally, can be patented (a very tenuous form of invention - it's discovered, even if not naturally occurring!). And not to mention design patents. I say the entire patent system needs to be abolished, or at least, made such that only applicable to physical mechanisms, and not software, nor biological systems.
crote 3y ago
In theory? Yes. In practice? No. For a lot of industries 20 years is an awfully long time to the point of complete irrelevance - and that "detailed information" is often vague enough to be unusable. Combine that with an overly-broad range of patent-able things and an overworked USPTO granting clearly invalid patents, and in practice (at least in the tech/software world) it's doing more harm than good. Patents are no longer about protecting R&D investments. They have become more about patenting the vaguest concepts possible, in the hope of making a profit when someone else does an actual invention which somehow stumbles into your patents' wording.
- kiba 3y ago
  Patents are no longer about protecting R&D investments. Patents are always the tool of the moneyed and the lawyered, which is not the same thing as protecting R&D investment. There are exception, such as the guy who spent 12 years suing car companies over the windshield wiper, but that actually proves the rule because of time spent. It even apparently cause his marriage to break down. [1] 1. https://en.wikipedia.org/wiki/Robert_Kearns https://en.wikipedia.org/wiki/Robert_Kearns
  - saulpw 3y ago
    To be fair, this appears to be a case of greed: > Kearns sought $395 million in damages. He turned down a $30 million settlement offer in 1990 and took it to the jury, which awarded him $5.2 million; Ford agreed to pay $10.2 million rather than face another round of litigation.
    - kiba 3y ago
      Presumably, the point of a patent is to 'protect' the little guy which I would argued actually doesn't. Not that I don't agree with you, what makes Kearns' pursuit 'greedy'?
      - Red_Leaves_Flyy 3y ago
        He rejected $30,000,000. Jury awarded 1/6 after litigation. Ford payed double to get rid of this nuisance. $30 million in 1990 was fuck you money. It’s still enough to comfortably retire on for a high school aged person.
sanity 3y ago
Depends on the industry, 20 years is a lifetime in software.
wongarsu 3y ago
"short lifetime" is relative. Had Apple been granted a patent on the idea of a smartphone the same year they released the iPhone, that patent would only expire in three years. There are some industries where due to slow-moving markets the 20 year patent period is still sensible, but for most sectors we would be better off with a 5 or 10 year patent period to account for the increased speed of innovation.
- bluGill 3y ago
  Apple did not invent the smart phone. The invented several features that make them useful (even their version one lacked apps), but others made smart phones before them. What Apple really did was make them useful by eliminating several of the things that made them annoying not not useful before.
  - Nevermark 3y ago
    They didn't say Apple invented the iPhone. That was a counterfactual example to make a point. Also, the point counts even if Apple just patented enough to block comparable phones. The point: For the smartphone market, 20 years would be a very long effective time for any foundational or gatekeeping patents.
    - hhshhhhjjjd 3y ago
      Didn't Samsung and Apple have a tiff over the shape of the phone? "Rectangle with rounded corners"
  - paulmd 3y ago
    > What Apple really did was make them useful by eliminating several of the things that made them annoying not not useful before. that’s literally every patentable invention ever, though. Remington didn’t invent the hunting rifle… they didn’t even invent the first self-loading or lever action rifle, probably. “removing the annoyances and downsides that make a previous approach infeasible or impractical” is more charitably described as “a useful innovation that advances the field”. Now, the problem is that a lot of patents are issued for things that someone else already has done, so the recipient of the patent isn't actually advancing the state of the art. But on the face of it, "removing the annoyances and downsides that make a previous approach infeasible or impractical" is literally what patents are supposed to be granted for.
cryptonector 3y ago
> The short lifetime of patents 20 years is not short! 20 years might be appropriate for capital-intensive innovations (e.g., in pharma), but definitely not for industries where innovations are not typically capital-intensive. E.g., 20 years for cryptography and software patents is a disaster.
_aavaa_ 3y ago
In theory maybe, but in practice it seems like the opposite. The current growth of the 3D printer market is in part directly tied to the lapsing of several key patents in the area. Further, most patents may contain key details, but they also intentionally contain as much broad information as to create a massive exclusionary zone, not to mention burying any legitimately useful information.
- deleted 3y ago
  [deleted]
EasyMark 3y ago
How is the lifetime of patents short? I mean they last for 20 years, that's an entire generation of time to make a profit?
- patmcc 3y ago
  They're short relative to other IP (like copyright), and short relative to inventions that have long R&D and cost recovery timelines. If $NEW_DRUG takes 5 years to develop, 5 years to trial, 5 years to market, and 5 years to profit...20 years isn't all that long. If the invention takes 3 weeks and $0, yeah, 20 years is a long time.
  - bdowling 3y ago
    > If the invention takes 3 weeks and $0… …then the patent can be invalidated on the basis that it is obvious. If the invention is commercially valuable, then invalidating it (or just pretending it doesn’t exist until you get sued, then invalidating it) can make more sense than licensing it. A related issue is that there are many, many patents that most people (e.g., competitors) mostly ignore, because everyone, including the patent owner, knows that they would be invalidated if challenged.
    - patmcc 3y ago
      Yeah, it seems like we should have stricter "obviousness" testing when patents are issued. At least based on some of the software ones I've seen.
fsckboy 3y ago
for software patents they should have to disclose the sourcecode
- mlhpdx 3y ago
  Any patent that fails to “teach” the innovation can be challenged and will likely prevail if it’s an egregious gap. That’s the public benefit part, in writing.
  - fsckboy 3y ago
    that's the idea, but challenging a patent in court is extremely expensive and not at all a slam dunk even for garbage patents

pictureofabear 3y ago

FRED has a good blog post on measuring innovation. https://www.stlouisfed.org/open-vault/2021/june/how-to-measure-innovation#:~:text=Research%20and%20Development%20Intensity&text=%E2%80%9CWhile%20patents%20are%20a%20measure,a%20correlation%20between%20the%20two https://www.stlouisfed.org/open-vault/2021/june/how-to-measu....

reaperman 3y ago

Text of the rule itself starts on page 561, "XIII. Other Matters"

ajb 3y ago

Both things - that the number of patents measures innovation, and that they serve to stifle it, can be true at the same time. Under a fixed patent regime, the more innovation there is, the more individual patents are necessary to stifle it. Of course, if we allow the patent regime to vary, then if it changes to make patents easier to acquire then that means less innovation. However, it's true that this property - of being a valid measure, but interventions to change it having the opposite effect on the inferred variable - is a very unfortunate one in a metric.

bmicraft 3y ago
It'd put it like this: the more patents there are, the (exponentially) more "innovative power" you need to achieve the next one.

crakenzak 3y ago

> leading to an estimated average increase of 17,000 to 29,000 more patents each year Insane to me that they use this as a measure of innovation, when almost by definition it is the antithesis of innovation.

adastra22 3y ago
What definition is that? Because the legal definition of patent I’m familiar with requires each patent to be a unique innovation.
- naasking 3y ago
  That fewer patents are filed is not evidence that fewer innovations are taking place. Absence of evidence is not evidence of absence.
  - amalcon 3y ago
    That fewer patents are filed is not an absence of evidence. It's evidence that fewer patents are being filed. If one believes patent filings are correlated with innovation (which is debatable either way), then it is (non-probative but still significant) evidence that fewer innovations are taking place.
    - naasking 3y ago
      > If one believes patent filings are correlated with innovation This is exactly the claim I'm taking issue with. The OP implied that the legal definition of innovation was "patents filed" and implied that this is somehow meaningful, and I'm saying that the absence of patents is not evidence of a lack of innovation.
- colinsane 3y ago
  a patent is a legal restriction affecting what others are allowed to produce. a person/group hit by such a restriction may elect to not produce the (innovative) thing they otherwise would have. so that's the viewpoint in which patents may be "the antithesis to innovation". i won't argue which one's correct, just providing it here since you requested.

no_wizard 3y ago

Wonder ultimately how this will be handled once the Chevron Deference case is ruled on by the Supreme Court. The interpretations I've seen from other sources is that this will be overturned if the courts decide against the principle

cratermoon 3y ago

They do stifle innovation when one company locks up a huge portfolio of them. Forcing the employees who came up with the patentable ideas to sign non-compete agreements prevents them from working on anything related to those inventions elsewhere.

l33t7332273 3y ago

I feel like, much like BMI, patent volume can be used to measure a population. Sure, for any individual‘s fitness or a company’s “innovativeness” they are useless, but in aggregate they can be revealing.

mrandish 3y ago

> I've always thought of that as representing a stifling of innovation. Sadly, over my long career as a tech startup entrepreneur, my experience has been that your assumption is correct the vast majority of the time. Now when I teach or mentor young tech entrepreneurs I'm often explaining why they probably don't want to prioritize filing patents as part of their startup strategy. While there are certain exceptions, especially in pharma, biotech, materials science or medical fields, the years it takes for a patent to become enforceable and then the upfront cost + further years required to actually get a judgement, make patents largely ineffective in most startup contexts. There's also substantial uncertainty as to whether a startup can get the patent granted at all. After that, there's the challenge of getting it granted in a form which remains defensible and can't be easily worked around. Many people don't realize patent examiners can refuse to grant a patent unless the applicant narrows the claims. Conversely, as a tech startup these days you do need to worry about patents potentially being used against you. The majority of tech patent cases are giant vs giant fighting over turf, a large incumbent trying to kneecap an emerging startup competitor (usually filing suit to make the startup unattractive to investors for a year and never intending to actually go to court) or patent troll vs everyone. Personally, I had both a giant trying to stop my startup's Series A funding and several patent trolls. Despite having no actual merit, the giant's suit did freeze our Series A and we nearly died. After seven months we'd demonstrated we could survive without a Series A so they dropped the suit (of course) but by then they'd cost us more than half our cash in just defending an obviously sham claim. As one investor told me, "Yes, it's clearly a bullshit claim but it will still cost serious money and a lot of founder attention over the next 18 months to get it thrown out and that, unfortunately, tips this deal over our risk threshold." And responding to the constant patent trolls just burns up startup founder attention and scarce cash in nuisance legal fees. Despite the old-school trope of "garage inventor patents invention, makes fortune", frankly, from the perspective of fostering typical tech startups, you'd probably prefer a world where there were no patents outside of pharma, medical, bio, etc.

mncharity 3y ago
I wonder how frequent that is, the "We've pointless patents. And legal budget larger than your last round. Thank for playing, goodbye." It seems a reoccurring theme. But as for the usefulness of patents to startups, at least with material-science-y hardware, I've heard possession of a defensive patent portfolio described as "table stakes" for existence, with enforceability et al being secondary. It was interesting watching patents and unicorn dreams shape VR. Instead of years of commercial ferment exploring low-hanging niches, we wait for monoliths to eventually create maximally-hard mass-market consumer tech, and will then backfill easier niches, eventually. An industrial policy optimized for pharma, yielding pharma-shaped industries.