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IV and RPX are so-called "patent aggregators" which dedicate themselves to buying and then licensing out patent rights. should be: IV and RPX are so-called "p

IV and RPX are so-called "patent aggregators" which dedicate themselves to buying and then licensing out patent rights. should be: IV and RPX are so-called "patent trolls" which dedicate themselves to buying patents and then extorting money from genuine innovators while creating zero value themselves.

andrewcross 14y ago
Exactly what I thought when I read that.
rayiner 14y ago
The value created by IV and RPX in this situation is of the same character as the value created by any transactionary middle-man: they create liquidity. They enable "genuine innovators" to quickly cash out their invention in a single transaction instead of either litigating themselves, or waiting to sell the patents piecemeal to someone who will "actually use them." In this case, Kodak isn't going to continue as an ongoing entity. It's better for Kodak, the original inventors, to sell the patent to an aggregator than to drag out the bankruptcy selling the patent portfolio piecemeal to companies that will "actually use it." In turn, IV and RPX aren't doing anything Kodak, the original inventors, couldn't already do. They are just taking advantage of Kodak's need for expediency, hoping to make a profit on the discount Kodak is willing to take in order to complete the transaction quickly. Also, the use of the phrase "genuine innovator" is more than a bit editorial. Who is to say that they aren't just opportunists seeking to take advantage of the fact that Kodak can no longer practically enforce its rights? Kodak isn't a software company--the probability that IV and RPX will just be going after "innocent" third parties that just happened to stumble on the same invention is lower than it would be in say the software patent context.
- angersock 14y ago
  Their patents are ideas, though--I can't imagine something with much more liquidity. Better to have simply found some way of assigning the patents to the public domain or somesuch. How can you do much better for improving business than releasing the things to everyone to try and build a business on, instead of having to license or fight in court?
  - rayiner 14y ago
    First, you can't just ignore the fact that the quick sale of the patents helps Kodak's pay off its creditors, etc. Facilitating that transaction has a certain value. Second, you can't just look at the situation post-facto. Kodak spent billions on research over the years, partly in reliance on the fact that it would book the resulting patents as assets. Simply assigning them to the public domain upon Kodak's dissolution doesn't protect that reliance. We can have an argument about whether treating ideas as property creates value, but that's a separate argument. Once you decide to treat ideas as property, then as with any other kind of property there is a value created by entities that facilitate transactions of that property.
    - angersock 14y ago
      Those problems are the creditors' problems, and it matters not a hoot in hell how many billions Kodak spent previously--look where they are now. Better to make the world a better place than try and help some creditors recoup a percent of their investment. EDIT: It doesn't matter to anyone who isn't on the Kodak board or a creditor that those patents aren't being wrung out for every penny they're worth. Let's not pretend that to everyone else in the market free access to those ideas wouldn't be somehow a preferable state of affairs.
      - rayiner 14y ago
        None of your points are relevant to the issue at hand, which is that if you are going to treat patents as property, then entities that don't actually use that property directly, but exist to facilitate transactions regarding that property, have a place in the market. There is a whole debate about whether you should treat patents as property, but I'm not really interested in getting into that debate in this thread.
        angersock 14y ago
        If you aren't interested in the patents/ideas-as-property debate, my objections/observations here carry without complain. You haven't explained how, exactly, my points are incorrect--do you disagree that everyone would be better off if these patents unencumbered were available?
- dbrian 14y ago
  Liquidity in the patent market isn't the issue. Building tangible things and pushing forward the pace of innovation is. Kodak would still innovate without the ability to liquidate their patent library during bankruptcy. Is the reduced risk to investors really worth having technology hoarded by non-practicing entities?
  - rayiner 14y ago
    That's like saying we should assign real estate to the public domain on bankruptcy, because people will still develop land even if the can't liquidate that real estate in bankruptcy.
    - pyre 14y ago
      That's a poor example. Patents are almost always way more broad (and far-reaching) than real estate holdings.
    - dbrian 14y ago
      Intellectual property is not the same thing as physical property. They serve entirely different purposes.
      - rayiner 14y ago
        The point is that "Kodak would still innovate without the ability to liquidate patents in bankruptcy" isn't any more or less true when it comes to patents than when it comes to any other kind of property, because the mecahnism is the same, even if the purposes underlying the two kinds of property are different.
        dbrian 14y ago
        Patents expire. The ownership of your house does not. We already have different rules for governing each.

andrewcross 14y ago

Exactly what I thought when I read that.

rayiner 14y ago

The value created by IV and RPX in this situation is of the same character as the value created by any transactionary middle-man: they create liquidity. They enable "genuine innovators" to quickly cash out their invention in a single transaction instead of either litigating themselves, or waiting to sell the patents piecemeal to someone who will "actually use them." In this case, Kodak isn't going to continue as an ongoing entity. It's better for Kodak, the original inventors, to sell the patent to an aggregator than to drag out the bankruptcy selling the patent portfolio piecemeal to companies that will "actually use it." In turn, IV and RPX aren't doing anything Kodak, the original inventors, couldn't already do. They are just taking advantage of Kodak's need for expediency, hoping to make a profit on the discount Kodak is willing to take in order to complete the transaction quickly. Also, the use of the phrase "genuine innovator" is more than a bit editorial. Who is to say that they aren't just opportunists seeking to take advantage of the fact that Kodak can no longer practically enforce its rights? Kodak isn't a software company--the probability that IV and RPX will just be going after "innocent" third parties that just happened to stumble on the same invention is lower than it would be in say the software patent context.

angersock 14y ago
Their patents are ideas, though--I can't imagine something with much more liquidity. Better to have simply found some way of assigning the patents to the public domain or somesuch. How can you do much better for improving business than releasing the things to everyone to try and build a business on, instead of having to license or fight in court?
- rayiner 14y ago
  First, you can't just ignore the fact that the quick sale of the patents helps Kodak's pay off its creditors, etc. Facilitating that transaction has a certain value. Second, you can't just look at the situation post-facto. Kodak spent billions on research over the years, partly in reliance on the fact that it would book the resulting patents as assets. Simply assigning them to the public domain upon Kodak's dissolution doesn't protect that reliance. We can have an argument about whether treating ideas as property creates value, but that's a separate argument. Once you decide to treat ideas as property, then as with any other kind of property there is a value created by entities that facilitate transactions of that property.
  - angersock 14y ago
    Those problems are the creditors' problems, and it matters not a hoot in hell how many billions Kodak spent previously--look where they are now. Better to make the world a better place than try and help some creditors recoup a percent of their investment. EDIT: It doesn't matter to anyone who isn't on the Kodak board or a creditor that those patents aren't being wrung out for every penny they're worth. Let's not pretend that to everyone else in the market free access to those ideas wouldn't be somehow a preferable state of affairs.
    - rayiner 14y ago
      None of your points are relevant to the issue at hand, which is that if you are going to treat patents as property, then entities that don't actually use that property directly, but exist to facilitate transactions regarding that property, have a place in the market. There is a whole debate about whether you should treat patents as property, but I'm not really interested in getting into that debate in this thread.
      - angersock 14y ago
        If you aren't interested in the patents/ideas-as-property debate, my objections/observations here carry without complain. You haven't explained how, exactly, my points are incorrect--do you disagree that everyone would be better off if these patents unencumbered were available?
dbrian 14y ago
Liquidity in the patent market isn't the issue. Building tangible things and pushing forward the pace of innovation is. Kodak would still innovate without the ability to liquidate their patent library during bankruptcy. Is the reduced risk to investors really worth having technology hoarded by non-practicing entities?
- rayiner 14y ago
  That's like saying we should assign real estate to the public domain on bankruptcy, because people will still develop land even if the can't liquidate that real estate in bankruptcy.
  - pyre 14y ago
    That's a poor example. Patents are almost always way more broad (and far-reaching) than real estate holdings.
  - dbrian 14y ago
    Intellectual property is not the same thing as physical property. They serve entirely different purposes.
    - rayiner 14y ago
      The point is that "Kodak would still innovate without the ability to liquidate patents in bankruptcy" isn't any more or less true when it comes to patents than when it comes to any other kind of property, because the mecahnism is the same, even if the purposes underlying the two kinds of property are different.
      - dbrian 14y ago
        Patents expire. The ownership of your house does not. We already have different rules for governing each.