There needs to be a "use it or lose it" doctrine/law around technological IP. I get all the arguments around creating a market for the patent rights, but it just leads to these bottom feeders creating no value and increasing costs for the industry and consumers.
Patents are property and we need taxes/fee on it. $500/year per patent, will ensure use it (if you think it is valuable) or lose it. This is no different from domain names, most people pay $10 - $100/year just to keep a domain name. Some domain names are used, most aren't. These taxes can fund free education or healthcare or defense.
Not really.
Some patents are fantastically valuable to patent trolls. Some are not. A $500/year fee isn't going to deter a "company" of lawyers who are making millions soaking businesses with patents that should never have been granted.
If you want a scheme that actually does what you want, you'd need something like:
The owner of the patent chooses the fee that they pay per year. And anyone can pay that fee * the remaining years on the patent * some multiplier (probably in the 2-10 range) to prematurely end the patent.
So, if someone's got a patent on a hamster powered submarine, they can keep it for $1 per year (or whatever the minimum should be). And that's fine... because it isn't harming any one since no one wants to build such a thing.
But a patent that a troll is using to milk the industry with will need to have a pretty stiff fee or people won't play ball, they'll just buy out the troll.
Invalidity arguments and IPRs suddenly aren't things?
I'm sure that you're aware that when you go to court, the result is never certain. Bad ruling happen all the time.
The vast majority of these decisions are against the patent owners, which I'm sure you are aware of. Also, I wasn't the one who characterized something as a patent that "should never have been granted."
The troll can price their licenses slightly less than the presumed legal costs. Then most victims won't fight.
Presumption of validity is what makes patent trolling more lucrative than other forms of predatory litigation. You're guilty until proven innocent, because the law assumes that the patent office is generally doing the right thing.
It's just an evidentiary presumption that is trivially rebutted with any evidence.
So basically ending patents? If you invent something fantastic, say a way for a self driving car to perfectly sense its surroundings, Ford could just come in and pay whatever amount to invalidate your patent and prevent you from bringing your invention to market?
Not having a patent doesn’t _prevent_ you from bringing your invention to market, it just accelerates _someone_ bringing it to market, and that’s a net good for society if the invention is useful, no?
Patents are vital to bringing things to market. It lessens the risk associated with investors getting returns, which allows funding for development.
I get that people don't like patents because they sometimes get abused, but on the whole I think we wouldn't have a lot of the things we take for granted if they didn't exist.
I don't think that the patent should be allowed to be ended early; the fee is paid to keep the patent protection in place.
Maybe when you file the patent, you have to submit an anticipated value statement and you are taxed some % / year on that anticipated value. If somebody violates the patent, you can sue them for up to the amount you anticipated, but not more.
In the future you can amend the value claim, but you can only adjust it down.
That's awful for protecting innovation. You don't know the market value of each individual invention with that level of granularity.
Companies and researchers should be free to patent to protect themselves, but patent trolls with no clear technological development (no lab, no product, no licensing+developing) should be stopped.
It seems easy to me to draw a bounding box around these behaviors with a simple test. Perhaps like a Howey test [1], but for patent trolling.
[1] https://en.wikipedia.org/wiki/SEC_v._W._J._Howey_Co.
Those 'taxes' already exist (at least in the US system). They are called "maintenance fees".
See https://www.fr.com/insights/ip-law-essentials/everything-abo...
Failing to pay the fee causes the patent to expire, and be unable to be used to sue someone. So these troll firms must also be paying these fees to be able to sue based on the patent.
This is interesting. So Oracle holding around 52000 patents pays around 23.000.000 USD a year in maintenance?
Yes, having patents is expensive. Large corporations often file patents for defensive reasons, and for this they employ multiple patent lawyers full time.
Domain names pay per year because there's an ongoing service attached. There's no such thing for patent (besides fee to file)
Why punish patent holders because of patent trolls or garbage patents ?
Make it unprofitable to be a troll, and they will go away. Trolls need to be tagged , like pirates. There should be rules to make hunting for trolls profitable. For that, you need a "bounty". Here's my take:
In any patent dispute[1], the loser will pay as punitive damages (this is the "bounty") to the winner, the lower of (i) the winner's legal costs, OR the loser's legal costs x 2, plus (ii) loser must disclose the ultimate name of the beneficial owners (or material, if public) of the loser. EINs not allowed. The "trolls" are thus, branded.
The next lawsuit ensues. During research, it is found that one of the parties is a known troll that has lost 1 prior case. Now the damages, should troll lose, are 2X of any settlement OR punitive amount.
Should troll lose again, an extra 2x (total, 4x) gets applied on the punitive damage[1] to the troll and so on. If troll wins, his x is halved.
This does 3 things:
1- Incentivize public to seek out weak patents, or trolls, for a payout.
2- Makes Trolling much harder at scale.
3- Ensures huge companies face risks if they throw their weight around. Bigco can afford $$ penalties vs small fish, but cannot afford to be tagged a 2-4x troll. It makes them an attractive target for bigger fish looking for the 2X or 4X reward challenge of Bigco patent portfolio.
Erm, what service? A record in a database? How's that different from a patent office? I guess there's fancy registrar website...to do what...help me pay my recurring bill?
So TrollCo will just pay a different homeless person $100 to be the owner on paper for each of their patents?
Why only those things?
Appeal to emotion. Taxes go towards all publicly funded projects, but it’s easier to convince people that a new tax is a good thing when it goes towards these things that benefit everyone.
is it is always a bad idea to ear mark a tax for a specific purpose. Especially if you desire to use the tax as a punitive measure to reduce that which you deem bad for society, if it works now you need to come up with the money for the thing you funded elsewhere because all government programs are permanent
Look at smoking, all kind of things were funded on the back of smoking taxes, and when those punitive taxes worked to reduce smoking the revenue dried up but the budgets for for those programs did not so now the money had to come from somewhere else....
Using the tax code to punish or reward behavior is always bad
Isn't that pretty much the entire purpose of the tax code and why it's so complicated?
It's one of the tools the government has to shape behavior.
Actual tax revenue doesn't really matter since a permanent deficit and ever-growing debt is apparently fine.
Never used a fixed number for anything. Just tie it to a percentage of yearly revenue of the entity. This way you can ensure:
- small companies and private people can afford patents
- big corps do not get an advantage, in fact the bigger they get, the more expensive holding a patent becomes, ensuring they have to use those patents and not patent everything just because
- number of patents any single entity can hold is limited, unless they want to go in debt for holding patents
- there could still be a minimum yearly amount as proposed by you
Tie it to the expected value of the IP? If you think your idea is worth $1 billion, pay $10 million (1%) every year.
patent maintenance fees are already higher than that.
amusing opinions that remind me not to trust them
Another valuation/taxation scheme I've read about is: you can value your patent however you want, and it's taxed based on that value.
The kicker is: the values are public, and if anybody wants to buy it for something higher than the assigned value (or maybe some fixed percentage above the assigned value), you HAVE to sell. Of course, the buyer is then taxed at the higher value.
No, the fee should be exponential, to keep people from keeping technology out of the public domain longer than necessary.
For example, maybe the fee is $10000 for the first year. This doesn't come close to recouping the cost of a single enforcement action, but it makes sure that someone has some skin in the game. Then every year the cost gets 10x more expensive. Of course you are free to choose your own base and multiplier.
For someone to keep a patent for 5 years, the total cost would be $10k + $100k + $1M + $10M + $100M = $111110000. Maybe it's worth it for a patent like the light bulb. Probably not worth it for a drinking bird toy. But either way, the value decision is up to the patent holder, and the cost of the patent incentivizes rapid monetization rather than squatting.
We need a fair-valuation tax; patents taxed yearly on their declared value and mandatory sale of the patent to anyone willing to pay the declared value. Some kind of deferred tax schedule (maybe 5-10 years?) for R&D.
This is an interesting point of view. Reminds me in some sense of some of the ethical justifications behind land value tax or property taxes.
The intention of legally enforced ownership is primarily to encourage development - and not to incentivize speculation as we seem to be doing in many situations. It seems reasonable to tax such speculation.
I'm inclined to agree with you.
There are research companies who only do research and get money by licencing their patents. I mean, I really would like to live in a world without patents, but currently those companies do provide value, but cannot exist, without guarding their IP. Yet they would cease to exist, with your proposal.
Issuing a license is a form of "using it" in a use it or lose it scenario.
Those are not patent troll companies. Patent troll companies file patents and then sit on the patent until they can sue another party for infringement, and never make an attempt to commercialize their patent.
Another example of not using it in the use it or lose it scenario is Pfizer's acquisition of Esperion Therapeutics in 2004. Esperion was developing a competitor to Lipitor, so Pfizer purchased Esperion for $1.3BB and shelved the technology to prevent competition with their best selling drug. Had Pfizer "lost" their patent for failing to commercial Esperion's drug, that drug could have entered the market as a generic to compete with Lipitor and severely reduced the cost of statin drugs for consumers.
That is hard I think, as there are patents that are not licenced because no one wants to - but I think every holder of a patent must licence it to any party interested. So just "sitting on patents" is not really possible to my knowledge. (but I am really not an expert here)
If I'm understanding what you're saying correctly, then I'm not sure where you got that idea.
Patent holders are not required to license their patents last time I checked. You are simply required to acquire a license prior to using patented technology.
If they don't want to license it, you're SOL.
(edit: if you were speculating on what should be, and not what is, then my bad... :)
"Patent holders are not required to license their patents last time I checked."
That is apparently right and I learned it wrong (but it does seems wrong to me).
edit: after reading the siblings answer, I apparently wrongly overgeneralized the way it works with patents in standards
Only for patents used in standards - where the standard enforces FRAND/RAND/other licensing schemes to insure that 'standards-required' patents are available to all. https://en.wikipedia.org/wiki/Reasonable_and_non-discriminat...
This is Qualcomm's big business (and others), getting their patents into standards like 5G and then charging people a fair amount to use it - and they have to license it to everyone, even their arch nemesis. Or you just buy their chips.
For a patent of something you invented, but did not submit to become part of a standards-body, you absolutely can choose not to license it for any amount of money.
Many of the patents asserted by trolls were not actually filed by the trolls. Most often the troll company simply purchased the patent from the original owner (or, often, a bankruptcy court) and then they proceed to go about suing others using their newly acquired weapon.
Worse yet, the troll company was often created for the purpose of owning that specific group of patents. That limits the damage from a lawsuit gone wrong to just that group of patents, and not the many other patents owned by the hundreds of other similar troll companies that the same lawyer runs.
We really need a patent troll version of anti-SLAPP laws. To go past the shell company, and hit the people who run them.
What's your bargaining position when you lose a patent that might be useful for only a few companies if you don't issue a license?
If it's only useful to a few companies then it must be niche IP and therefore valuable.
Patent trolls will point to their prior victims as current licensees, proving successful commercialization.
Great point. And then if one of those companies sold a patent that wasn't immediately licensable to an IP firm for an immediate infusion of funds should the IP firm be considered a patent troll?
Maybe the patent system could work, without the possibility of selling patents at all? Have not thought it out, but I know musicians also seldom profit of selling their IP to the major labels. But they are pushed into it.
Based on the text of the IP clause of the US Constitution I have wondered whether selling or licensing of IP (or even assigning it to a corporation) is technically allowable.
https://constitution.congress.gov/browse/article-1/section-8...
: To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
"Exclusive Right" means exclusive right. And I don't think the definition has changed much since the US Constitution was written.
https://www.etymonline.com/word/exclusive
I think it must at least be licensable, or authors couldn't sell copies of their works. But whether the IP rights can be sold is another question.
It means the right is exclusively granted with them. I.e. no one besides the author gets to control the exclusive rights of a patent. By your logic, they can't even license it because "it's an exclusive right".
They control the license according to the terms of a license. But once a patent is sold the author of it no longer has any right to it.
Authors and inventors are mentioned with the same language in the clause. Since it has always been true that authors can basically only profit from their writings by selling copies or originals of their works (without selling the right to the copyrighted material itself) then some form of licensing is necessarily included in the clause for both copyright and patents.
There may have been journalists at the time who wrote works for newspapers owned by others. If so, this would be a reason to include the right of selling all of the rights to one's writings or inventions in the clause. I genuinely don't know if this was the case though.
Authors can license all of their rights away. They can sell their copyrights - I don't see your point...
Could you give examples of such companies (I am really curious)?
One example is ARM, which licenses the processor designs they create, and do not build or sell the chips themselves.
I am aware of a few orgs that license interesting software R&D often with engineering support, sometimes with an equity component. Another variant is the R&D holding company that creates separate companies to commercially exploit the R&D in different parts of the public or private sector. Most such R&D orgs are very low-profile, they usually don't have an internet presence. Many use few or no patents these days, those economics don't make sense unless the business is largely owned by lawyers, which creates a different kind of company (much closer to patent trolls).
It is a bespoke kind of business, tailored to the specific technology and investment network of the people involved.
Why wouldn't they be able to exist?
If you invent something, there's a work product. There is documentation, notes, blueprints, CAD files, software, etc. You can sell this and license it however you want. You can sue people that use it without a license. More importantly, you as the original author can use the IP as you see fit.
All of that is what I would put under the category of "use it." If you stop licensing it, then you "lose it."
Personally I don't think you should be able to sell the invention as an idea to another company that only relicenses it, but I get that there needs to be a market for IP itself.
These would only be protected by copyright. So if you invent something but do not have the resources to create the implementation yourself (and therefore cannot patent the invention under the scheme proposed by GGP), but you licence the work products (documentation, software) to one or more companies who can then implement it, a larger, well-resourced competitor can just reimplement it without paying you as long as they did not need to use any of your documentation or software. So that reduces the value of your work products.
But if the converse happened, e.g., your customer reimplements something invented by the large competitor, they can get sued, because the large company, being able to implement their invention, can therefore file a patent.
It would be fairer to treat the large company the same way, and only let them copyright the work products rather than patent the invention, putting them on the same level as a smaller inventor.
law of unintended consequences
the moment you put an expiration date on patents due to lack of use, watch moneyed competitors sitting around waiting for your patent to expire instead of using yours to bring it to market
then you shouldn’t form the patent then as you would still just be increasing costs for the industry by existing and delaying things
you could have just written about it on your blog and been the same place and been a net positive for society
You mean it would bring the price of licensing the patent down? I don't see the downside.
Whilst good intentioned, it might well work the other way:
Dedicated patent trolls will trivially overcome any hurdles by cheaply doing just enough to legally demonstrate they are working on future commercial applications blah blah honest.
Meanwhile, it likely puts up a prohibitive cost that will prevent the smallest genuine inventors from inventing?
That's the big problem with societies based on the letter of the law vs. the spirit of the law. Human nature has repeatedly demonstrated that if the letter of the law is what matters, people will work night and day to technically comply with the letter of the law, so they can continue to do the bad thing legally. Whole cottage industries will spring up to guide businesses right up to that legal line and sell them the tools and techniques to ensure they barely don't cross it.
In such a society, the rules need to be enormous and complex, much more than a 2 sentence HN post, to eliminate all the edge cases and loopholes everyone will naturally want to take advantage of.
just abolish the patent system entirely. at minimum, for software
compare and contrast to industry practices today
https://www.gnu.org/philosophy/software-patents.en.html
They will fake usage. Software parents should not exist
100% agree.
Pretty sure the original idea of patents was to protect the inventor while they brought a product to market or licensed the patent to others to improve their products.
Holding a patent without even attempting to bring the idea to market should invalidate the patent after some reasonable amount of time.
The whole system as it is today needs a hard sanity check.