Monday, September 12, 2011

Patent Hypocrisy (and a proposed solution)

Check out this excellent short piece by Philip Elmer-DeWitt on the patent war heating up between Apple and Google (via Daring Fireball). Here's the gist:
The difference is that Apple actually invented the technology it accused HTC — and by proxy, Google — of “stealing”.... One of the patents Apple cited in its 2010 a 358-page document signed by Jobs himself that covers everything from the way a finger touches the screen of a smartphone to the heuristics that turn those touches into commands.

HTC and Google, by contrast, are accusing Apple (whose smartphone designs they have plainly copied) of violating patents they bought fourth or fifth hand.

"Patents were meant to encourage innovation," Google's chief legal counsel David Drummond wrote last month in his famous open letter "When Patents Attack Android." Google's enemies, he complained, were using "bogus" patents to try to "strangle" Android.

"Fortunately," he added, "the law frowns on the accumulation of dubious patents for anti-competitive means."

The endless repackaging and trading of patents has had a disruptive and distortional effect on the tech sector (much like derivatives re: the financial sector). What if law were changed so patent ownership could be transferred only once? Inventors ought to be able to sell their inventions, but further resale drifts society further and further from the original impetus of patent law...while stifling innovation and competition.

It strikes me as high time that we firmed up intellectual property rights for those who actually innovate, and stripped them entirely from litigious trolls.


Richard Stanford said...

Its an interesting idea, but I fear that if it came to be, every patent sale (or assignment) would be made to a separate company spun up for that purpose that did nothing except hold patents. That company would, of course, be a wholly owned subsidiary of the original company, and could be traded at will.

An interesting variant might be to see what would happen if patents couldn't be sold at all, but had to be licensed. They'd always be owned by individuals, though, and companies wishing to use them would need a reasonable license agreement in place. Less convenient for large corporations, I'm sure, but wasn't that the whole point?

Jim Leff said...

"every patent sale (or assignment) would be made to a separate company spun up for that purpose that did nothing except hold patents"

....which would doubtless be our first $1T company.

I'm not sure the subsidiary would appear. The monolithic holding company would more likely just settle in. Which wouldn't're right.

The problem with your proposal is that not every inventor has time, energy, interest in running a licensing operation (which would also, of course, have to function as a suing operation re: violators who dodge the fees).

We need to give inventors free reign to SOMEHOW outsource all that so they can get back to inventing more things. But we need to not overly product-ize such rights. It's a sticky wicket.

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