3 ms·

Why are patent trolls allowed to exist? A company that only holds patents and does no productive job with them (research, production, ...) should not be allowed

Why are patent trolls allowed to exist? A company that only holds patents and does no productive job with them (research, production, ...) should not be allowed to exist. It stifles development and innovation for the short-lived monetary gain of a few people.

pas 2y ago
The naive explanation is that it helps inventors, because speculative investors (the trolls!) buy up patents. One analogy is pharma research. Rights for a promising candidate molecule are purchased by "big pharma" and they will do the grunt work to validate it and extract the big money from its therapeutic value. Substitute "FDA market authorization after successful clinical trials" with "that infamous East Texas court district and picking the right targets" (picking a too big target might backfire, picking a too small doesn't really worth the costs, etc.) Of course the questions are: does this really help inventors? do inventors need help? is it good for society that inventors get help? is the cost of helping inventors this way not unreasonable to the economy? and even if the cost is "low", how fucking fair is it that a lot of businesses are using a given invention but only a lucky few get dragged to court? can we do better? what kind of people patent trolls are? what do they do with the money?
- returningfory2 2y ago
  Yeah, I think pharma is the really tricky case. I worked at a small biotech company whose business model was (in part) to do early stage drug discovery research and then sell promising leads to bigger companies, who would take the leads through the FDA approval process. Actually taking a drug through to approval is a $1 billion+ endeavor (with a high probability that it just won't work; e.g. stage 3 trials just fail). Small companies cannot do this. So a naive solution like "don't allow patents to be sold" actually restricts a bunch of reasonable businesses.
  - ajb 2y ago
    There's an actionable difference between pharma and most other things. Property rights should "give notice" of the boundaries of a property, most obviously you lose certain rights if you fail to mark the edge of real property with a fence or something. But for most patents there's no realistic way to find patents you might be infringing (for software this is impossible in the general case as a corollary of Fines theorem). That's why we hate patents so much: you only find out if there is a patent if you get sued. But for pharma there is a way; chemicals are "indexable": because a standard mapping from chemical structure to names exists, if you are using a chemical and want to find whether anyone patented it, you can do so easily. In an ideal world, the law would recognise this and patents would only be valid in areas where there is a natural way of indexing - which is pretty much only pharma AFAICT
teucris 2y ago
It’s an unfortunate byproduct of allowing patents to be bought and sold. Let’s say you had a patent: you worked hard on your invention and you deserve to reap the financial benefits of it. But you do not have the legal resources to protect your right as the inventor. It feels fair and reasonable to me that you can sell your patent to a third party to license and protect as they see fit, so you can reap some financial reward. Now, how do you make sure that these companies buying patents don’t become trolls? I don’t think it’s fair to require them to use the patent, because that limits who the inventor can sell to. Personally I think the way IP lawsuits are filed and considered needs significant reform.
- MrDrMcCoy 2y ago
  > Now, how do you make sure that these companies buying patents don’t become trolls? The problem with patents is that they prevent use by 3rd-parties, either by the license being too expensive or by the patentee refusing to grant one. The patentee actually using their patent has no bearing on this. The real solution to this mess is to make patent licensing compulsory. The patent office could decide that in lieu of a contract staying otherwise, a patentee is guaranteed 10% of profits or 5% of production costs, whichever is greater. Patents used to provide ongoing services could be 1% of profits. Non-commercial users should be exempt.
- graemep 2y ago
  We could require someone to use it - get rid of submarine patents.
  - dghlsakjg 2y ago
    Then you get will into issues of what use actually is. What is a reasonable timeline for filing a patent, and getting it to market? What is a slow and methodical development program vs. footdragging? What if the market for your product doesn't support profitable operation for your company, but someone else claims they can do it?
  - toast0 2y ago
    Submarine patents is a different issue, effectively ended by changes in 2000 that require (most) patent applications to be published, and changes in 1995 that changed the term of patents to start from date of filing rather than date of issuance. There could possibly be a few unpublished patent applications from before 1995 that are still in the examination process; but case law from 2005 [1][2] makes it difficult to enforce patents if there has been 'unreasonable and unjustified' delay in the claims, and I'd suspect it would be hard to justify a delay of 30 years. [1] http://cafc.uscourts.gov/opinions-orders/04-1451.pdf http://cafc.uscourts.gov/opinions-orders/04-1451.pdf [2] https://www.pinsentmasons.com/out-law/news/appeals-court-confirms-invalidity-of-bar-code-patents https://www.pinsentmasons.com/out-law/news/appeals-court-con...
hosh 2y ago
The patent laws does not require such thing. If it were, there may be some unforseen consequences. For example, during the late 1800s, a number of companies bandied together to pool their patents together for a commercially viable sewing machine. No single company had been able to develop and file patents that resulted in a working sewing machine. As such, they pooled the patents and negotiated a portion of royalties for everyone who contributed. That would probably have been set up as its own legal entity. With a requirement to be an operating company, such a legal vehicle would not have worked. You could argue that such an entity is considered “productive”, but then you would have to define what that means and write it into the law. Any lawsuit involving patents would require demonstrating that. Another example is trademarks. In order to have a registered trademark, you must show that it is in active use, and it is distinct. That means that in order to keep a registered trademark, you must sue anyone who is infringing upon it. There is an indie author who came up on a litrpg genre concept combining it with a post-apocalypse setting. His book exploded upon the niche, progressive fantasy scene. People loved the idea and other authors wrote books for it. The original author tried to brand it and protect it with a registered trademark. Because the term had rapidly genericized, that author started sending cease & desist letters to other authors, because he was required to in order to keep the registered trademark. I don’t know if he knew he had do that when he registered it, but doing so drained the goodwill he had in the community. Progressive fantasy is a small indie community, and the authors who can, gather at Dragoncon to talk, exchange ideas. This is similar to sending cease and desist to your neighbors. You will quickly find yourself locked out of the community. I am thinking of the inventor of the bear suit. Making something to protect yourself from a grizzly bear seems like it has low value for society. It is also this off the wall perspective that allowed him to invent a gel that can absorb heat (probably a non-Newtonian fluid). If we’re trying to protect the livelihood of an indie inventor like that, would a requirement to demonstrate productivity help the Bear Suit inventor? Or would it have a chilling effect?
- MrDrMcCoy 2y ago
  I'm convinced that most of the problems inherent in patents can be resolved by replacing the monopoly they grant with compulsory licensing. It's important for patent holders to get paid of course, but the monopoly aspect stifles the very innovation that patents are supposed to protect. The monopoly is also bad for consumers because competition will be scarce, disincentivizing reasonable pricing.
grishka 2y ago
IMO patents should not be transferable. And maybe they shouldn't be assignable to corporate entities, only to people. Multiple people at once if they all contributed to the invention.
- jessriedel 2y ago
  This would massively disenfranchise small inventors, and force all inventive work into large companies. There is no reason that the person who does the inventing should also be the person developing and selling a product. It is weird and unfortunate that the longstanding deficiencies with patent law (chiefly: issuing patents for things that are too obvious or numerous) are being blamed on transferability of property rights. It’s the same broken intuition as over regulating housing construction and then blaming high housing costs on ownership by Chinese nationals.
  - ric2b 2y ago
    Inventors could just license their inventions, no need to produce themselves or transfer them.
_nalply 2y ago
In a perfect world this is arbitrage. Arbitrage helps making markets more efficient. However we don't live in a perfect world. Judgment is too expensive and risky. If it were quick, cheap and safe then patent trolls won't have the chance to do extortion. They would be limited to ... um... arbitrage!
acomjean 2y ago
Its a pure failure of the Patent office issuing dubious patents. The patent office is financially encouraged to keep issuing patents no matter the quality because it keeps the patent fees and those are payed by the applicants. The patent office seems to be protected financially from issuing bad patents as well (I can't find any record of them being sued by companies that have licensed patents that have been invalidated). Its gotten a little better with the Alice ruling. https://en.wikipedia.org/wiki/Alice_Corp._v._CLS_Bank_International https://en.wikipedia.org/wiki/Alice_Corp._v._CLS_Bank_Intern...

pas 2y ago

The naive explanation is that it helps inventors, because speculative investors (the trolls!) buy up patents. One analogy is pharma research. Rights for a promising candidate molecule are purchased by "big pharma" and they will do the grunt work to validate it and extract the big money from its therapeutic value. Substitute "FDA market authorization after successful clinical trials" with "that infamous East Texas court district and picking the right targets" (picking a too big target might backfire, picking a too small doesn't really worth the costs, etc.) Of course the questions are: does this really help inventors? do inventors need help? is it good for society that inventors get help? is the cost of helping inventors this way not unreasonable to the economy? and even if the cost is "low", how fucking fair is it that a lot of businesses are using a given invention but only a lucky few get dragged to court? can we do better? what kind of people patent trolls are? what do they do with the money?

returningfory2 2y ago
Yeah, I think pharma is the really tricky case. I worked at a small biotech company whose business model was (in part) to do early stage drug discovery research and then sell promising leads to bigger companies, who would take the leads through the FDA approval process. Actually taking a drug through to approval is a $1 billion+ endeavor (with a high probability that it just won't work; e.g. stage 3 trials just fail). Small companies cannot do this. So a naive solution like "don't allow patents to be sold" actually restricts a bunch of reasonable businesses.
- ajb 2y ago
  There's an actionable difference between pharma and most other things. Property rights should "give notice" of the boundaries of a property, most obviously you lose certain rights if you fail to mark the edge of real property with a fence or something. But for most patents there's no realistic way to find patents you might be infringing (for software this is impossible in the general case as a corollary of Fines theorem). That's why we hate patents so much: you only find out if there is a patent if you get sued. But for pharma there is a way; chemicals are "indexable": because a standard mapping from chemical structure to names exists, if you are using a chemical and want to find whether anyone patented it, you can do so easily. In an ideal world, the law would recognise this and patents would only be valid in areas where there is a natural way of indexing - which is pretty much only pharma AFAICT

teucris 2y ago

It’s an unfortunate byproduct of allowing patents to be bought and sold. Let’s say you had a patent: you worked hard on your invention and you deserve to reap the financial benefits of it. But you do not have the legal resources to protect your right as the inventor. It feels fair and reasonable to me that you can sell your patent to a third party to license and protect as they see fit, so you can reap some financial reward. Now, how do you make sure that these companies buying patents don’t become trolls? I don’t think it’s fair to require them to use the patent, because that limits who the inventor can sell to. Personally I think the way IP lawsuits are filed and considered needs significant reform.

MrDrMcCoy 2y ago
> Now, how do you make sure that these companies buying patents don’t become trolls? The problem with patents is that they prevent use by 3rd-parties, either by the license being too expensive or by the patentee refusing to grant one. The patentee actually using their patent has no bearing on this. The real solution to this mess is to make patent licensing compulsory. The patent office could decide that in lieu of a contract staying otherwise, a patentee is guaranteed 10% of profits or 5% of production costs, whichever is greater. Patents used to provide ongoing services could be 1% of profits. Non-commercial users should be exempt.
graemep 2y ago
We could require someone to use it - get rid of submarine patents.
- dghlsakjg 2y ago
  Then you get will into issues of what use actually is. What is a reasonable timeline for filing a patent, and getting it to market? What is a slow and methodical development program vs. footdragging? What if the market for your product doesn't support profitable operation for your company, but someone else claims they can do it?
- toast0 2y ago
  Submarine patents is a different issue, effectively ended by changes in 2000 that require (most) patent applications to be published, and changes in 1995 that changed the term of patents to start from date of filing rather than date of issuance. There could possibly be a few unpublished patent applications from before 1995 that are still in the examination process; but case law from 2005 [1][2] makes it difficult to enforce patents if there has been 'unreasonable and unjustified' delay in the claims, and I'd suspect it would be hard to justify a delay of 30 years. [1] http://cafc.uscourts.gov/opinions-orders/04-1451.pdf http://cafc.uscourts.gov/opinions-orders/04-1451.pdf [2] https://www.pinsentmasons.com/out-law/news/appeals-court-confirms-invalidity-of-bar-code-patents https://www.pinsentmasons.com/out-law/news/appeals-court-con...

hosh 2y ago

The patent laws does not require such thing. If it were, there may be some unforseen consequences. For example, during the late 1800s, a number of companies bandied together to pool their patents together for a commercially viable sewing machine. No single company had been able to develop and file patents that resulted in a working sewing machine. As such, they pooled the patents and negotiated a portion of royalties for everyone who contributed. That would probably have been set up as its own legal entity. With a requirement to be an operating company, such a legal vehicle would not have worked. You could argue that such an entity is considered “productive”, but then you would have to define what that means and write it into the law. Any lawsuit involving patents would require demonstrating that. Another example is trademarks. In order to have a registered trademark, you must show that it is in active use, and it is distinct. That means that in order to keep a registered trademark, you must sue anyone who is infringing upon it. There is an indie author who came up on a litrpg genre concept combining it with a post-apocalypse setting. His book exploded upon the niche, progressive fantasy scene. People loved the idea and other authors wrote books for it. The original author tried to brand it and protect it with a registered trademark. Because the term had rapidly genericized, that author started sending cease & desist letters to other authors, because he was required to in order to keep the registered trademark. I don’t know if he knew he had do that when he registered it, but doing so drained the goodwill he had in the community. Progressive fantasy is a small indie community, and the authors who can, gather at Dragoncon to talk, exchange ideas. This is similar to sending cease and desist to your neighbors. You will quickly find yourself locked out of the community. I am thinking of the inventor of the bear suit. Making something to protect yourself from a grizzly bear seems like it has low value for society. It is also this off the wall perspective that allowed him to invent a gel that can absorb heat (probably a non-Newtonian fluid). If we’re trying to protect the livelihood of an indie inventor like that, would a requirement to demonstrate productivity help the Bear Suit inventor? Or would it have a chilling effect?

MrDrMcCoy 2y ago
I'm convinced that most of the problems inherent in patents can be resolved by replacing the monopoly they grant with compulsory licensing. It's important for patent holders to get paid of course, but the monopoly aspect stifles the very innovation that patents are supposed to protect. The monopoly is also bad for consumers because competition will be scarce, disincentivizing reasonable pricing.

grishka 2y ago

IMO patents should not be transferable. And maybe they shouldn't be assignable to corporate entities, only to people. Multiple people at once if they all contributed to the invention.

jessriedel 2y ago
This would massively disenfranchise small inventors, and force all inventive work into large companies. There is no reason that the person who does the inventing should also be the person developing and selling a product. It is weird and unfortunate that the longstanding deficiencies with patent law (chiefly: issuing patents for things that are too obvious or numerous) are being blamed on transferability of property rights. It’s the same broken intuition as over regulating housing construction and then blaming high housing costs on ownership by Chinese nationals.
- ric2b 2y ago
  Inventors could just license their inventions, no need to produce themselves or transfer them.

_nalply 2y ago

In a perfect world this is arbitrage. Arbitrage helps making markets more efficient. However we don't live in a perfect world. Judgment is too expensive and risky. If it were quick, cheap and safe then patent trolls won't have the chance to do extortion. They would be limited to ... um... arbitrage!

acomjean 2y ago

Its a pure failure of the Patent office issuing dubious patents. The patent office is financially encouraged to keep issuing patents no matter the quality because it keeps the patent fees and those are payed by the applicants. The patent office seems to be protected financially from issuing bad patents as well (I can't find any record of them being sued by companies that have licensed patents that have been invalidated). Its gotten a little better with the Alice ruling. https://en.wikipedia.org/wiki/Alice_Corp._v._CLS_Bank_International https://en.wikipedia.org/wiki/Alice_Corp._v._CLS_Bank_Intern...