5 ms·

> It requires the discoverer of the refinement to obtain the permission of Lab A before they can make any money Not necessarily; they (lab B) can license the r

by _greim_ 12y ago

> It requires the discoverer of the refinement to obtain the permission of Lab A before they can make any money Not necessarily; they (lab B) can license the refinement to whoever they want, for example lab A. Or to a third party who licenses both technologies.

AnthonyMouse 12y ago
> Not necessarily; they (lab B) can license the refinement to whoever they want, for example lab A. Or to a third party who licenses both technologies. In which of those cases is permission from Lab A not supposed to be required in order to make the product? There are two scenarios here. In the first case Lab A doesn't license the base patent because it wants to make the product itself or (equivalently) sells or exclusively licenses it to a single manufacturer. In that case Lab B is dealing with a monopsony buyer and is hosed. The holder of the base patent can offer Lab B some fraction of their research cost for their patent, secure in the knowledge that Lab B's only alternative is to eat the entire cost and get nothing. In the second case Lab A is licensing the patent to lots of people and you're proposing that Lab B license the improvement to the same people. The trouble is Lab A still has all the leverage. The availability of the improvement increases the value of the base patent, which allows Lab A to squeeze the licensees harder and leave less for Lab B. Lab B can't respond in kind because the licensees can do business with the Lab A patent without the Lab B patent but not vice versa.
- nkurz 12y ago
  I think you are missing some of the subtlety of _greim_'s point by presuming that Lab A and Lab B are on equal footing and that Lab B has a genuine interest in producing a product based on the patent they were granted. If the patents have sufficient overlap and Lab B has sufficient funds and legal firepower, they can convincingly threaten to sue Lab A and/or Lab A's customers. This may help to persuade Lab A to license the patent on terms more favorable to Lab B. If they are not in a position to do so themselves, Lab B can sell the patent to a non-practicing entity. In fact, even the theoretical existence of a sufficiently powerful NPE who could purchase Lab B's patent may compel Lab A to purchase or license it at the asking price just to prevent it from falling into adverse hands. Viewed from this angle, rather than being harmed, Lab B can be treated as a beneficiary of the patent system rather than a victim.
  - AnthonyMouse 12y ago
    If Lab A has the original patent then it can make or license the original invention. Nothing Lab B does afterwards is supposed to be able to prevent that, and as long as Lab A and its licensees have that in their pocket as an alternative course of action, they have Lab B over a barrel. Lab B spent money improving the invention and the only way they can recover any of it is on Lab A's terms. You're introducing an alternative scenario in which Lab B is an unscrupulous patent troll with no qualms about filing frivolous lawsuits for nuisance value. Sure, they can do that, but that isn't an incentive to improve the technology, it's an incentive to engage in patent trolling. And it's just as profitable whether Lab B makes a genuine improvement to the technology or not, so it provides no incentive to actually make the improvement.
    - nkurz 12y ago
      The fallacy with your first paragraph is that it assumes that a patent grants the holder a positive right to produce something, whereas what the patent really grants is the right to prevent others from making something. These two are only equivalent if somehow the entirety of the invention is embodied by the patent, which for almost any useful invention won't be the case. Rather than B extending A's patent, the reality is a tangled web of patents, all of which require licensing all of the rest to produce a real product without infringement. Or more realistically, the solution involves licensing from those more powerful than you, staring down those at an equal level, and infringing with impunity on those below you. This reality is known as the "Patent Thicket"[1]. I agree with you on the second part, but the counter-argument would be that the potential future marketability of the patent incentivized Lab B to do the research, which they otherwise would not have done. I'm sure there is some effect in this direction, but personally I think it's small. The sad part is that Lab B is practically forced to abuse their patents merely as a defensive tactic, on the theory that if they don't defect first their opponent will. (I'll quit at this point, overcome by my own cynicism. Likely I agree with all your points. I started out trying to be a genuine devil's advocate, but at this point I realize I'm veering toward trollhood. I apologize, and recommend the link below for a more balanced assessment.) [1] Patent Thickets: Strategic Patenting of Complex Technologies (http://www.researchoninnovation.org/thicket.pdf http://www.researchoninnovation.org/thicket.pdf)

by _greim_ 12y ago

AnthonyMouse 12y ago

> Not necessarily; they (lab B) can license the refinement to whoever they want, for example lab A. Or to a third party who licenses both technologies. In which of those cases is permission from Lab A not supposed to be required in order to make the product? There are two scenarios here. In the first case Lab A doesn't license the base patent because it wants to make the product itself or (equivalently) sells or exclusively licenses it to a single manufacturer. In that case Lab B is dealing with a monopsony buyer and is hosed. The holder of the base patent can offer Lab B some fraction of their research cost for their patent, secure in the knowledge that Lab B's only alternative is to eat the entire cost and get nothing. In the second case Lab A is licensing the patent to lots of people and you're proposing that Lab B license the improvement to the same people. The trouble is Lab A still has all the leverage. The availability of the improvement increases the value of the base patent, which allows Lab A to squeeze the licensees harder and leave less for Lab B. Lab B can't respond in kind because the licensees can do business with the Lab A patent without the Lab B patent but not vice versa.

nkurz 12y ago
I think you are missing some of the subtlety of _greim_'s point by presuming that Lab A and Lab B are on equal footing and that Lab B has a genuine interest in producing a product based on the patent they were granted. If the patents have sufficient overlap and Lab B has sufficient funds and legal firepower, they can convincingly threaten to sue Lab A and/or Lab A's customers. This may help to persuade Lab A to license the patent on terms more favorable to Lab B. If they are not in a position to do so themselves, Lab B can sell the patent to a non-practicing entity. In fact, even the theoretical existence of a sufficiently powerful NPE who could purchase Lab B's patent may compel Lab A to purchase or license it at the asking price just to prevent it from falling into adverse hands. Viewed from this angle, rather than being harmed, Lab B can be treated as a beneficiary of the patent system rather than a victim.
- AnthonyMouse 12y ago
  If Lab A has the original patent then it can make or license the original invention. Nothing Lab B does afterwards is supposed to be able to prevent that, and as long as Lab A and its licensees have that in their pocket as an alternative course of action, they have Lab B over a barrel. Lab B spent money improving the invention and the only way they can recover any of it is on Lab A's terms. You're introducing an alternative scenario in which Lab B is an unscrupulous patent troll with no qualms about filing frivolous lawsuits for nuisance value. Sure, they can do that, but that isn't an incentive to improve the technology, it's an incentive to engage in patent trolling. And it's just as profitable whether Lab B makes a genuine improvement to the technology or not, so it provides no incentive to actually make the improvement.
  - nkurz 12y ago
    The fallacy with your first paragraph is that it assumes that a patent grants the holder a positive right to produce something, whereas what the patent really grants is the right to prevent others from making something. These two are only equivalent if somehow the entirety of the invention is embodied by the patent, which for almost any useful invention won't be the case. Rather than B extending A's patent, the reality is a tangled web of patents, all of which require licensing all of the rest to produce a real product without infringement. Or more realistically, the solution involves licensing from those more powerful than you, staring down those at an equal level, and infringing with impunity on those below you. This reality is known as the "Patent Thicket"[1]. I agree with you on the second part, but the counter-argument would be that the potential future marketability of the patent incentivized Lab B to do the research, which they otherwise would not have done. I'm sure there is some effect in this direction, but personally I think it's small. The sad part is that Lab B is practically forced to abuse their patents merely as a defensive tactic, on the theory that if they don't defect first their opponent will. (I'll quit at this point, overcome by my own cynicism. Likely I agree with all your points. I started out trying to be a genuine devil's advocate, but at this point I realize I'm veering toward trollhood. I apologize, and recommend the link below for a more balanced assessment.) [1] Patent Thickets: Strategic Patenting of Complex Technologies (http://www.researchoninnovation.org/thicket.pdf http://www.researchoninnovation.org/thicket.pdf)