Making patents better

[andrewducker]

I am full of stupid ideas this week. This one has been percolating for a while, and I'm finally spurred into sharing it by the latest fuckwittery in the patent wars - whereby Apple has had to remove the iPhone and iPad from its online store in Germany (see here).

The great thing about patents is that they give companies a good reason to both carry out R&D, and to share the results openly. They then get a limited period to use the patents exclusively, and at the end of the period everyone else then gets to use the public knowledge. Theoretically it's a win-win situation - enforced monopoly + public knowledge.

The awful thing about patents is that they're frequently used to enforce a wider monopoly - if you want to get into the computer processors then you have no choice but to license patents from numerous companies already making them, because they've already cross-licensed them from each other, and now basically have a cosy cartel that nobody else can get into unless they feel like letting them in. This leads to situations like the current one where Apple and Samsung are throwing patents at each other in an attempt to lock them out of the market - and frankly not only are most of these patents overly broad*, but they're also frequently invalid - in use before they were patented. But small companies can't afford to fight this through the courts.

I have two possible solutions to this. They're entirely independent, so no complaining if the two of them don't work well together.

1) An anti-patent alliance. Get a few large companies together, and they all agree - entirely openly - that they will not use their patents on anyone else in the alliance. Additionally, if someone outside of the alliance uses a patent against one of them then the entirety of their patent pools will be used against this one company. Now, in some ways this _is_ cartel behaviour, except for the fact that it's entirely open - anyone can join. I suspect this would cause major heart palpitations across the tech industry, a lot of publicity, and politicians stamping their feet. But it might also cause a major rethink of patents, which would be a good thing.

2) Firewalls. If the companies can't be trusted to behave like adults then they can't look after their own patents. All patents must be sold off to a company which does not do work inside the industry. That company must then license it out to all people for exactly the same terms. So if Siemens comes up with the patent for "Batteries that last for weeks, even if you use your phone all the damn time" then that's great - they sell it on to AwesomeCorp for millions of dollars, and AwesomeCorp then license it to everyone at whatever cost seems reasonable to them. Siemens make their cash, and anyone can sell phones which last for a decent amount of time - it's a winner for everyone.

Now, tell me why neither of these would ever work :->

*i.e. they cover things like "Using a finger to press a button that causes the phone to make a call"

Comments

[nameandnature]

1) isn't quite what the various wireless standards bodies do, but there are similarities, especially with the Bluetooth SIG. My understanding of that is that joining gets you a licence to use the patents without being sued as long as your product passes qualification tests, the idea being that you get to use the patents (and make the Bluetooth ecosystem bigger, so everyone wins) as long as your stuff works with other people's stuff. Of course, I'm not a lawyer, so there are probably fine details I've missed. Joining the SIG is not free, and as far as I know there's mutual retaliation clause.

Of course, a mutual retaliation clause only helps against companies who have some other business than suing people for patent infringement, where that other business might be covered by patents owned by companies in the group. It doesn't really help against patent trolls, and there are a lot of those about.

[andrewducker]

Mutual retaliation doesn't help against pure patent owners (I don't object to companies selling/buying patents). But many patents are invalidated by prior art - frequently by prior patents. So having a massive bank of them will probably help invalidate ridiculous ones.

[kerrypolka.livejournal.com]

Who regulates AwesomeCorp and its ilk and keeps them from become a cartel?

[andrewducker]

Like I said, they _have_ to give equal terms to everyone. So if they want to charge £500/phone to make them run better then that's fine, but I suspect that they'll want to offer the terms that gets them out to more people than that (and maximise their profit over the period they have the patent for).

[danieldwilliam.livejournal.com]

I think the Awesome Corp model stops firms using one or more patents as part of a more general and longer term competitive strategy. A firm might not be interested in the cash prize of the invention but keen to use it to gain some other advantage. Is it your intention to limit firms ability to use patents for indirect competition?

For example, going way back to when I could understand state of the art technology, if I owned a textile mill in the 1750’s and invented a new form of water mill that was more efficient I could license the technology so that anyone who wanted a water mill used my water mill and paid me a little bit of money or I could use it to make sure my textile mill and *only* my textile mill was really cheap and then my ability to undercut my competitiors to force them out of business leaving me as the only owner of textile mills in Europe.

That’s a stark example and I guess you’d say Awesome Corp was a better result for folk generally and I’m trying to think of an example where the use of a patent for indirect advantage was more ambiguous.

All firms are probably trying to create and maintain a situation where they and only they can solve a problem and then leverage this into a monopoly.

The ability of firms to do patentable research is itself a competitive advantage. The fact that Sony used to be recognised by consumers as people who did good innovation and were therefore trusted when they brough out a new product was worth quite a lot to them. How does Awesome Corp deal with allocating the reputational kudos that come from being good at innovation?

[andrewducker]

All firms are probably trying to create and maintain a situation where they and only they can solve a problem and then leverage this into a monopoly.

Yes. I don't want that.

How does Awesome Corp deal with allocating the reputational kudos that come from being good at innovation?
In this case it's Siemens that's doing the innovating - and they can still get their designs out the door first. Let's say I do the research into new batteries - I can file a patent _and_ work on the product that uses it at the same time. So my ForeverPhone(TM) will get out the door before anyone elses does, and I get the kudos (and cash) for that. Even with patents being open it takes companies time to pivot and catch up.

[fanf]

I think both of these already exist. pw201 already mentioned standards licensing consortia. In (2) you basically describe patent trolls.

[andrewducker]

Standards Licensing consortia only cover certain patents and you have to pay to join. Which makes them quite different.

And patent owners don't have to license freely at the moment, nor are companies forced to use them. Which was rather the point of the suggestion.

[fanf]

I agree that mandatory reasonable and non-discriminatory licensing would be a good thing. I don't see what is the benefit of handing patents over to a non-practicing entity, and there's a clear downside that an NPE has a greater drive to make more money by suing more since it doesn't have any income from making useful things.

[andrewducker]

The point is to get them out of the hands of a practising entity that has an interest in using them to give itself a monopoly. I agree that an NPE is more likely to enforce its rights rather than making deals or refusing to license, but that will at least get everything out in the open, rather than the current situation.

[calum]

Since we became part of Toshiba Ive been learning a lot more about how patent pools work in reality, and it was nothing like how I thought it did.

I suspect the issue with Apple is that Apple refused to play the game at some point...

Not sure Ive got the time or mental energy to write about this just now, but ask me about it in person sometime if you like.

[andrewducker]

I know that Nokia sued Apple because Apple wouldn't pay up. But the same is apparently true of all of the Android makers and Apple - Apple tried to get Samsung shut down, and Samsung launched patent claims in retaliation.

[nmg.livejournal.com]

re: 2, this is one of the ways in which W3C are made of WIN.

Their patent policy is that they will only issue Recommendations that can be implemented on a Royalty-Free basis (most other standards bodies insist on FRAND rather than RF).

[andrewducker]

Yeah, I thoroughly approve of this. I know it's why the Video tag has had issues - you can't have a standard if people aren't willing to give up their patents - but I'd rather have that than not be able to have open source/free browsers because the patent pools need paying off.

[nmg.livejournal.com]

The video *tag* is fine - it's just the existence of a standard codec that's the issue.

[andrewducker]

What I meant was that it's my understanding that the spec didn't state what video formats should be used by default because there were none that weren't covered by patents. The stuff detailed here, which I'm sure you already know all about and are sick to death of :->

[steer.livejournal.com]

I'm curious how (1) is different to "no patents" if the cartel is free to join?

[andrewducker]

That would rather be the point :->

Of course, not all businesses are willing to get rid of patents, so many companies would probably remain outside of the cartel. For those inside of the system they could worry less about patents.

I'd like to hope that the network effects would be pretty massive, especially if you got a couple of big companies to kickstart it. But you could still end up with a situation like that with Open Source, where a large chunk of companies opens everything, and another large chunk keeps everything closed.

[steer.livejournal.com]

Fair enough -- after this morning's debacle on your journal I thought I had best recheck my understanding. To my shame I have my name on an overly broad and foolish patent. Fortunately the company since died so it will never be taken up.

[pete stevens (from livejournal.com)]

I'd start with a patent isn't valid unless an expert in the field can implement the technology from the description in the patent.

[ipslore.livejournal.com]

How about making patents expire faster?

[andrewducker]

Might put people off R&D if they can't get the cash back.

And the problem is unless the expiry is three years that's enough time to grab a very large chunk of market.

[allorin.livejournal.com]

Which came first - the patent or the idea?

I rest my case, m'lud.


Now - back to the referendum, please. Haahaahaa.

[andrewducker]

You've got three years until a referendum! Plenty of time to talk about it over and over again :-p

[rhythmaning.livejournal.com]

I've clearly had too much to drink: I read your title as "making parents better". And then I got awfully caused confused.

Time for bed, I think, and I'll look at this tomorrow...