6 ms·

Don't blame the patent system. While it is true that patent system should be reformed/eliminated, those companies chose to take advantage of it. Just because y

Don't blame the patent system. While it is true that patent system should be reformed/eliminated, those companies chose to take advantage of it. Just because you can steal something when nobody is looking doesn't mean it's justified to be stolen.

VikingCoder 13y ago
Companies are required to maximize their profits, and patents are a legal framework for creating profit. I absolutely blame the patent system, and it's absurd of you to suggest otherwise.
- moocowduckquack 13y ago
  How about blaming both. These positions don't seem exclusive.
- jasonlotito 13y ago
  > Companies are required to maximize their profits, This meme needs to die. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/09/how-the-cult-of-shareholder-value-wrecked-american-business/ http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/09/h... "There are no statutes that put the shareholder at the top of the corporate priority list." "Nor does the law require, as many believe, that executives and directors owe a special fiduciary duty to shareholders." It needs to die. Edit: And there are many, many other places you can find support for this.
  - dd36 13y ago
    There may not be statutes but there absolutely is case law. In fact, I'm sure there are indirect statutes. There's just no way that the purpose of a for profit company is not to maximize profits to the owners of that company. There may be reasonable debate about where best to deploy capital but those decisions should be justified.
    - moocowduckquack 13y ago
      A company can have more than one purpose and sometimes maximising profits gets in the way of the other purposes of the business, so just because a business is for profit, does not neccessarily mean that it will seek to maximise that profit or that the owners want it to as they may be just as interested in the other purposes that the business can be put to. Money alone makes a poor measure of business as business is there to do stuff and money is just one of the processes involved.
    - oijaf888 13y ago
      What is the timeframe for maximizing profits? If I can liquidate the entire company and maximize profits for that quarter am I required to do so? If I can avoid instigating expensive legal battles and the associated bad PR to maximize profits in the next 10 years wouldn't I be just as required to do that?
    - philwelch 13y ago
      I think I addressed this point in another thread once: http://news.ycombinator.com/item?id=6505161 http://news.ycombinator.com/item?id=6505161
    - gamblor956 13y ago
      The company's duty is to maximize the value of its shareholder's holdings in the company (i.e., stock). This can be done by maximizing profitability (see, e.g., Caterpillar, most publicly traded companies), but it can also be done through growth (i.e., Amazon, most startups) at the expense of maximized profitability. It's easier to maximize profitability than it is to maximize growth. This is why more companies pursue the first path.
      - mgkimsal 13y ago
        "Maximum profitability" still needs a timeframe to judge against. Maximum in the next quarter? Next year? Next decade? Maximizing in short term may harm or prohibit maximizing profits in long term, which would be just as bad (or worse) for shareholders.
  - talmand 13y ago
    Actually I think that article points out my take on the matter. For most corporations, its duty is to maximize shareholder value; the problem is that too many people have forgotten what that actually means.
  - VikingCoder 13y ago
    Shareholders can and have replaced the Board of Directors of public companies, based on their lack of faith in the company's ability to maximize profits. The Board of Directors is in charge of hiring and firing for the senior executives. The Board of Directors and Senior Executives know this, and aren't stupid. All that has to happen is that shareholders (which are often other corporations) need to act RESPONSIBLY, and you're right, this meme will die. I expect the sun to go red giant, first, though.
    - chc 13y ago
      If you are seriously suggesting that Tim Cook would have been ousted had Apple not gone down this road, I think you and the rest of the world are just going to have to agree to disagree.
      - mark-r 13y ago
        You misunderstand. Tim Cook wouldn't have gotten the job in the first place if the board had thought he would shy away from such a decision.
        timberlane 13y ago
        Unless pg is right, and this will actually hurt aap's share price. And pg is not always wrong.
        sigzero 13y ago
        I predict it isn't going to do anything to hurt share price.
      - VikingCoder 13y ago
        Yeah, it would be crazy to think that a corporation like Apple would ever replace their CEO. I'm reminded of the phrase, Those who do not read history are doomed to repeat it.
  - cwoods 13y ago
    Interestingly it doesn't seem to talk about this case. http://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Company http://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Company "The Court held that a business corporation is organized primarily for the profit of the stockholders, as opposed to the community or its employees. The discretion of the directors is to be exercised in the choice of means to attain that end, and does not extend to the reduction of profits or the nondistribution of profits among stockholders in order to benefit the public, making the profits of the stockholders incidental thereto. Because this company was in business for profit, Ford could not turn it into a charity. This was compared to a spoliation of the company's assets. The court therefore upheld the order of the trial court requiring that directors declare an extra dividend of $19.3 million."
cloverich 13y ago
> Don't blame the patent system. While it is true that patent system should be reformed/eliminated ... But thats the point. You can blame the companies all you want, another will always be there to step up and take advantage of it. I do blame the companies, but what does it matter? Are we likely going to see an Apple Boycott? I doubt it, and changing one companies business practices will have little impact on the industry as a whole. But the patent system - that's a single target we can all align against, whose elimination would solve these issues immediately.
- yock 13y ago
  Every system has its exploits, will you blame those systems for their failures? Individuals are always to blame because individuals are the actors in the broken system. The blame must always lie with those doing wrong, or else we're just absolving ourselves of the hurt we cause each other.
  - justinsteele 13y ago
    It doesn't have to be one or the other, it can be both. A system that does it's best to prevent abuse, and individuals who do not seek out ways to abuse it, combined make a best case scenario.
  - cloverich 13y ago
    I'm a pragmatist at heart is all. I look for the action that leads to the outcome I want, and I don't believe outcry against companies will ever have any impact on the patent system, outside of resultant legislative action. > Every system has its exploits, will you blame those systems for their failures? The system is responsible for maintaining the most beneficial incentives possible. In some cases, it is difficult or even impossible to remove those exploits, and in those cases I look to blame individuals to the maximum extent possible. But in this particular example, there is little to no apparent benefit to having (the current) patent system in place, and only perverse incentives. While it doesn't absolve the companies of their behavior, I don't see how it can be viewed as anything other than an inevitable outcome (given the system design). In that light, I may avoid Apple products for instance, but am generally uninterested in any complaint or action that isn't targeted at the root cause which for all intents and purposes can be fixed!
hcarvalhoalves 13y ago
> They chose to take advantage of it. What would they do, just let Google acquire even more mobile-related patents? You think Google would never sue them? Let's not be naive, the only reason Google is a good citizen with patents today is because a retaliation would make a dent on them, and they know it. The parent is right, the problem is the patent system, which gives a disproportional power to the holder and creates these power dynamics, "eat or be eaten". There's no space for ethics or fairness there.
- samspenc 13y ago
  That's not quite true. The newer generation of tech companies (Google, Facebook, Twitter) have taken to using patents very very defensively, at least so far. Google has gone as far doing an "open patent non-assertion pledge" which is far beyond just not using patents: http://www.google.com/patents/opnpledge/ http://www.google.com/patents/opnpledge/ Twitter has an Innovator Patent agreement: https://blog.twitter.com/2012/introducing-innovators-patent-agreement https://blog.twitter.com/2012/introducing-innovators-patent-...
  - overgryphon 13y ago
    That's because the newer tech companies haven't had enough time to build a catalog of patents to rival older Microsoft, Apple, and so forth. Do you really think Google won't do the same to younger tech companies a decade from now?
- gutnor 13y ago
  The problem here is rather that Google chose not to participate in the company buying the patents. What do you do after that. Leave the companies that didn't pay alone ? There used to be a time where companies would have been doing just that. But in mobile market, there is no competition anymore, there is a very rough war. 2 market leader (Nokia, Blackberry) have basically been pushed out of the market in less than 5 years. That's like incredible speed ( I work in financial software company, it takes decades of continuous bad strategy to doom a company ). Their error of judgement was all considered minor and the correction they have done should have been more than enough to limit the losses. In addition of that, only 2 players on the market manage to make money, a lot of money. In that climate, anything that can give you even a few months edge can be the difference between competing and becoming irrelevant. The smartphone market is brutal - too brutal for regular competition strategies.

VikingCoder 13y ago

Companies are required to maximize their profits, and patents are a legal framework for creating profit. I absolutely blame the patent system, and it's absurd of you to suggest otherwise.

moocowduckquack 13y ago
How about blaming both. These positions don't seem exclusive.
jasonlotito 13y ago
> Companies are required to maximize their profits, This meme needs to die. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/09/how-the-cult-of-shareholder-value-wrecked-american-business/ http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/09/h... "There are no statutes that put the shareholder at the top of the corporate priority list." "Nor does the law require, as many believe, that executives and directors owe a special fiduciary duty to shareholders." It needs to die. Edit: And there are many, many other places you can find support for this.
- dd36 13y ago
  There may not be statutes but there absolutely is case law. In fact, I'm sure there are indirect statutes. There's just no way that the purpose of a for profit company is not to maximize profits to the owners of that company. There may be reasonable debate about where best to deploy capital but those decisions should be justified.
  - moocowduckquack 13y ago
    A company can have more than one purpose and sometimes maximising profits gets in the way of the other purposes of the business, so just because a business is for profit, does not neccessarily mean that it will seek to maximise that profit or that the owners want it to as they may be just as interested in the other purposes that the business can be put to. Money alone makes a poor measure of business as business is there to do stuff and money is just one of the processes involved.
  - oijaf888 13y ago
    What is the timeframe for maximizing profits? If I can liquidate the entire company and maximize profits for that quarter am I required to do so? If I can avoid instigating expensive legal battles and the associated bad PR to maximize profits in the next 10 years wouldn't I be just as required to do that?
  - philwelch 13y ago
    I think I addressed this point in another thread once: http://news.ycombinator.com/item?id=6505161 http://news.ycombinator.com/item?id=6505161
  - gamblor956 13y ago
    The company's duty is to maximize the value of its shareholder's holdings in the company (i.e., stock). This can be done by maximizing profitability (see, e.g., Caterpillar, most publicly traded companies), but it can also be done through growth (i.e., Amazon, most startups) at the expense of maximized profitability. It's easier to maximize profitability than it is to maximize growth. This is why more companies pursue the first path.
    - mgkimsal 13y ago
      "Maximum profitability" still needs a timeframe to judge against. Maximum in the next quarter? Next year? Next decade? Maximizing in short term may harm or prohibit maximizing profits in long term, which would be just as bad (or worse) for shareholders.
- talmand 13y ago
  Actually I think that article points out my take on the matter. For most corporations, its duty is to maximize shareholder value; the problem is that too many people have forgotten what that actually means.
- VikingCoder 13y ago
  Shareholders can and have replaced the Board of Directors of public companies, based on their lack of faith in the company's ability to maximize profits. The Board of Directors is in charge of hiring and firing for the senior executives. The Board of Directors and Senior Executives know this, and aren't stupid. All that has to happen is that shareholders (which are often other corporations) need to act RESPONSIBLY, and you're right, this meme will die. I expect the sun to go red giant, first, though.
  - chc 13y ago
    If you are seriously suggesting that Tim Cook would have been ousted had Apple not gone down this road, I think you and the rest of the world are just going to have to agree to disagree.
    - mark-r 13y ago
      You misunderstand. Tim Cook wouldn't have gotten the job in the first place if the board had thought he would shy away from such a decision.
      - timberlane 13y ago
        Unless pg is right, and this will actually hurt aap's share price. And pg is not always wrong.
        sigzero 13y ago
        I predict it isn't going to do anything to hurt share price.
    - VikingCoder 13y ago
      Yeah, it would be crazy to think that a corporation like Apple would ever replace their CEO. I'm reminded of the phrase, Those who do not read history are doomed to repeat it.
- cwoods 13y ago
  Interestingly it doesn't seem to talk about this case. http://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Company http://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Company "The Court held that a business corporation is organized primarily for the profit of the stockholders, as opposed to the community or its employees. The discretion of the directors is to be exercised in the choice of means to attain that end, and does not extend to the reduction of profits or the nondistribution of profits among stockholders in order to benefit the public, making the profits of the stockholders incidental thereto. Because this company was in business for profit, Ford could not turn it into a charity. This was compared to a spoliation of the company's assets. The court therefore upheld the order of the trial court requiring that directors declare an extra dividend of $19.3 million."

cloverich 13y ago

> Don't blame the patent system. While it is true that patent system should be reformed/eliminated ... But thats the point. You can blame the companies all you want, another will always be there to step up and take advantage of it. I do blame the companies, but what does it matter? Are we likely going to see an Apple Boycott? I doubt it, and changing one companies business practices will have little impact on the industry as a whole. But the patent system - that's a single target we can all align against, whose elimination would solve these issues immediately.

yock 13y ago
Every system has its exploits, will you blame those systems for their failures? Individuals are always to blame because individuals are the actors in the broken system. The blame must always lie with those doing wrong, or else we're just absolving ourselves of the hurt we cause each other.
- justinsteele 13y ago
  It doesn't have to be one or the other, it can be both. A system that does it's best to prevent abuse, and individuals who do not seek out ways to abuse it, combined make a best case scenario.
- cloverich 13y ago
  I'm a pragmatist at heart is all. I look for the action that leads to the outcome I want, and I don't believe outcry against companies will ever have any impact on the patent system, outside of resultant legislative action. > Every system has its exploits, will you blame those systems for their failures? The system is responsible for maintaining the most beneficial incentives possible. In some cases, it is difficult or even impossible to remove those exploits, and in those cases I look to blame individuals to the maximum extent possible. But in this particular example, there is little to no apparent benefit to having (the current) patent system in place, and only perverse incentives. While it doesn't absolve the companies of their behavior, I don't see how it can be viewed as anything other than an inevitable outcome (given the system design). In that light, I may avoid Apple products for instance, but am generally uninterested in any complaint or action that isn't targeted at the root cause which for all intents and purposes can be fixed!

hcarvalhoalves 13y ago

> They chose to take advantage of it. What would they do, just let Google acquire even more mobile-related patents? You think Google would never sue them? Let's not be naive, the only reason Google is a good citizen with patents today is because a retaliation would make a dent on them, and they know it. The parent is right, the problem is the patent system, which gives a disproportional power to the holder and creates these power dynamics, "eat or be eaten". There's no space for ethics or fairness there.

samspenc 13y ago
That's not quite true. The newer generation of tech companies (Google, Facebook, Twitter) have taken to using patents very very defensively, at least so far. Google has gone as far doing an "open patent non-assertion pledge" which is far beyond just not using patents: http://www.google.com/patents/opnpledge/ http://www.google.com/patents/opnpledge/ Twitter has an Innovator Patent agreement: https://blog.twitter.com/2012/introducing-innovators-patent-agreement https://blog.twitter.com/2012/introducing-innovators-patent-...
- overgryphon 13y ago
  That's because the newer tech companies haven't had enough time to build a catalog of patents to rival older Microsoft, Apple, and so forth. Do you really think Google won't do the same to younger tech companies a decade from now?
gutnor 13y ago
The problem here is rather that Google chose not to participate in the company buying the patents. What do you do after that. Leave the companies that didn't pay alone ? There used to be a time where companies would have been doing just that. But in mobile market, there is no competition anymore, there is a very rough war. 2 market leader (Nokia, Blackberry) have basically been pushed out of the market in less than 5 years. That's like incredible speed ( I work in financial software company, it takes decades of continuous bad strategy to doom a company ). Their error of judgement was all considered minor and the correction they have done should have been more than enough to limit the losses. In addition of that, only 2 players on the market manage to make money, a lot of money. In that climate, anything that can give you even a few months edge can be the difference between competing and becoming irrelevant. The smartphone market is brutal - too brutal for regular competition strategies.