Friday, February 1, 2013

Patents - It's Complicated

Last night's post led to a couple of good comments on the patent system at large.  As I've done a few times over the years, when someone's comments lead me to writing several paragraphs, I turn it into the next post.  First off, read the comments here.  At this time, there are only two: this one and another here.  There may be more by the time you read this.

To begin with, I think all systems of laws can broadly be broken into "The Good, The Bad and The Ugly", to borrow a term.  I think Anon@11:06, waxes close to the "knowledge should be free" ideal (and pardon me if I'm putting words in your mouth), saying that all patents are unlawful monopolies and anti-intellectual.

I think I've said before that I'm too pragmatic to be a good idealist; I can hold mutually contradictory opinions on many topics, and this is one.  Personally, I've developed a couple of really large Intellectual Property efforts in my life, totally outside my profession, and I've given both of them away.  We're talking working nights and weekends for years, just to give away what I know. Giving them away was my choice.  If those weren't spare time projects, they could have been done faster and arguably better, but then there's that whole "how do I make a living?" question if I'm doing it without a job or any other income to live on. 

The reality is that developing products often takes a lot of time, energy and money, and someone has to pay for it.  The people who develop those products work hard and deserve to be paid for that work.  Think of the products that take a team of 10 or 100 or thousand workers several years and huge amounts of money to develop.  Think about developing a new microprocessor: how many people work on a new processor at Intel or AMD?  What about the invention of the semiconductor itself?  What about a new jet like the 787?  How many thousands of people in hundreds of companies developed things that go on to that plane?  The companies that develop big things like those tend to be big, publicly traded companies and they're betting other people's money.  Is a company going to spend that kind of money if there's no promise of at least some period where they can protect that hard-won knowledge - or some of it? 

How much of modern life wouldn't exist if that motive wasn't there?  I think one of the reasons that our country has developed such might is the patent system and inventors keeping the rights to profit from their inventions.  When you look around the globe, it seems that the countries that allowed this with a good patent system are all the free, prosperous, Western countries, while the countries that don't recognize IP are, well, China, the former USSR, and other, less-desirable places.

That's the good side of patent law. 

In terms of the " it should be freely available for others to improve upon " argument, patent lawsuits can only be won if the company can prove they lost money, so if you want to improve someone's product, you are free to do as much of that as often as you want, as long as you don't sell it.  Post about it online.  Post videos of how you hacked it.  Just don't sell it.  That puts you in competition with the patent holder. 

And that's where DiveMedic's comment, about "Large companies with armies of lawyers game the system, taking what they want and either settling out of court or tying it up in court for years,"  He's exactly, 100% right.  This is the bad side of patent law.  Or the ugly side.   

They could be trying to protect their investments, or they could just be predatory.  If it goes to court, just being predatory gets kicked out (or it should). 

Consider when Pepsi Dude (John Sculley) was at Apple, and seemed to be determined to sue everyone for everything, rather than innovate.  When a company has a building full of lawyers on retainer, it costs them the same amount whether they're out suing someone or not, but if those lawyers bring in money, they can cut expenses or actually be a profit center.  It pays for management to beat those lawyers like rented mules to get every cent that they can. They are specifically going after small guys because the small guy is likely to be unable to afford lawyers and fold early.  Just like our government goes after small fries and not the big corporations with whole floors in HQ filled with lawyers (here, for example). 
(Dilbert, obviously)
This is why, as I mentioned yesterday, smaller companies are looking at patents differently than 20 years ago.  The money to be made in high tech is being the first on the market with the cool product.  A 20 year patent doesn't mean much in that world.   They don't waste a minute, they get it on the market.  When the Chinese (no IP laws) buy one, copy it and start selling it at half the price, the originator cuts their price and profit margin, all the while running like crazy to get the Next Big Thing out on the market. 

This is just scratching the surface of a big topic.  It's a mixed bag of good, bad and ugly stories. There are stories from the past of brilliant inventors being shut down by patent holders (see for example the story of  Edwin Armstrong and David Sarnoff) and important inventions being blocked from the market.  There are predatory uses of patents.  On balance, like everything else, bad people will use it for bad ends; good people won't.  


5 comments:

aurictech said...

Is a company going to spend that kind of money if there's no promise of at least some period where they can protect that hard-won knowledge - or some of it?

Or, as Nathan Detroit put it in Guys and Dolls:

"Well, being I assume the risk, is it not fair I should assume some dough?"

Graybeard said...

Excellent quote!

Steve D. said...

The first to file is simpler - requires less bookkeeping and work. That’s motivation 1. Every other country in the world uses it (so far as I know). That’s motivation 2. It merges the US system with those of its trading partners making everything even easier. That’s motivation 3.

Oh, and BTW, it also destroys the entire point of patent law and ensures that only those with the money and resources to file and maintain active patents can benefit from them, thereby enlisting one more method to transfer wealth from the middle class to the wealthy. That’s motivation 4.

Steve D said...

If you come up with an invention, doesn't that BELONG to you?

Graybeard said...

That's certainly the way I see it. I don't see why anyone else would think they have the slightest claim of a right to it.

While I'm here, I like your previous comment, too. I think that's a good analysis of the change.