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"In most [industries], the cost of invention is low; or just being first confers a durable competitive advantage because consumers associate the inventing company's brand name with the product itself; or just being first gives the first company in the market a head start in reducing its costs as it becomes more experienced at producing and marketing the product; or the product will be superseded soon anyway, so there's no point to a patent monopoly that will last 20 years; or some or all of these factors are present. Most industries could get along fine without patent protection."

Wow, this guy really gets it. This is how markets and competition work. There's no need to give a company a legal monopoly. If anything, that lack of monopoly, will force companies to keep trying to invent new things to keep staying one step ahead of the competitors.

I also love this one:

"forbidding patent trolling by requiring the patentee to produce the patented invention within a specified period, or lose the patent"

These days big tech corporations are filing patents as fast as they can print them on paper. And then 95% of them will probably never be used in products that are shipping in the market.



"forbidding patent trolling by requiring the patentee to produce the patented invention within a specified period, or lose the patent"

That bit is, I think, is the key to unravel whole patents issue.

The other day I was wondering why it was that, somehow, I considered some patents valid and others invalid. For example, I consider many codecs (DivX, JPEG) to be valid patents, but consider patents on certain algorithms to be invalid. Weird, huh? Because codecs are just a specialized algorithm. I just couldn't put my finger to it.

And then it hit me: all the patents I considered valid were actual products. DivX and JPEG were patented, implemented and licensed. The codecs themselves provided a leap in technology, and without that particular codec the product wouldn't exist at all. The patents I considered invalid are either bells and whistles or lack a real implementation. In other words, the creators of DivX and JPEG were making real money by developing and marketing a new technology, whereas Apple (just using the example du jour, please spare me the faboyisms) is trying to shut down competing products by just pointing at a tiny feature and screaming "COPYCAT! COPYCAT!".

The day Apple shows that it's the rounded corners in the iPad that is making them money, and not the fact that they developed a really thin tablet with great battery life and a decent OS, I might reconsider.


Aren't those two very weird examples? Jpeg is mostly free to use and no one uses the bit that isn't. Divx is just a proprietary twist on mpeg standards that got famous on the back of piracy. And the standard itself was considered a bit crappy in both technical and licence terms and might not have succeeded at all if not pushed by an industry cartel.


You're confusing a patent and a design patent. The rounded corners on an iPad is a design patent. It's more like a copyright for a physical object and is completely different than a patent.


Posner is a legal genius, I just finished law school and we probably read at least 30-50 of his opinions.

He truly understands the field of law and even more, he understands the ramifications that laws and regulations have and how they will affect us in the future. If there was any hope of changing Patent law, this is where its going to start, through Posner.


I totally agree -- Posner's contribution to the law in general is incredible, and this article is a great example.

Tangent, re: Posner and his place in the law:

The thing to keep an eye on is where his approach is helpful and where it isn't. His hammer is the field of law and economics -- he predicts and explains the ramifications of laws and regulations by casting them in economic terms and applying economic theories to them. That's really useful because economics is all about predicting how people will behave and how much value they'll create in various systems, and those are things the law should worry about.

It breaks down, however, in cases where the debate is about how to assign value to behavior. For example, his 2005 discussion of same-sex marriage vs. civil unions weighs the "outrage cost" of the passionate opponents of same-sex marriage against the interests of people who want to get married, coming down in favor of the first group.[1] That might make sense if you assume that one person's outrage at another person's marriage is something that should be valued, like float(10-pissed-off-Tea-partiers) > float(1-happily-married-couple) -- but the whole point of the debate is whether that outrage deserves a voice in our law.[2] His argument added basically nothing to the debate (other than, in my case, a tickling sense of annoyance) because he encoded his answers to the important issues in hidden assumptions about what was valuable and what wasn't.

This is not to drag the man down at all, who I think is amazing. Just to say that when you see a law and economics argument -- "we should do X, because if you view condition Y in economic terms it should lead to condition Z" -- you have to decide not only whether you agree with the internal reasoning, but also whether you agree with the implicit translation between economic terms and reality. Patents, of course, are the embodiment of an economic theory -- so they're the perfect nail to Posner's hammer, and I'm happy to see him out there swinging.

/Tangent

[1] http://books.google.com/books?id=IRMgP6-EjDMC&pg=PA14... [2] In legal terms, whether it constitutes a rational basis or compelling interest for a discriminatory law. In social terms, whether it's something we want to care about and cater to.


"forbidding patent trolling by requiring the patentee to produce the patented invention within a specified period, or lose the patent"

I don't see how this could help, especially with software patents. For every nonsense patent, you could always hire an intern to code it up in an app. Even if it gives you zero business value, you can claim that you're using it internally (or including it in something that you're selling to users). The courts are not well equipped to debunk such claims.

I mean really, could you quickly determine which pieces of infrastructure at google are actually not useful? Which pieces of iOS code?

And for hardware patents, it seems even worse. If I come up with an awesome idea for implementing an adder on SOI, it might take years and millions of dollars of fab time to get that idea into production. Should Intel be able to take it for free just because they already have a fab ready to go?


For trademarks, you have to actually use the trademark in commerce. Just sitting on a trademark means you lose it.


Patent trolls don't have interns, internal software, or anything to sell.


They have more than enough money to hire patent lawyers though, who are very expensive, which means that they can definitely hire a college code to write some code, toss it into a useless Android market app, sell a few copies to their friends and tell the court "see? We are too a real business using this important patented technique in this thing that we're selling".

If your plan to eliminate patent trolls can be easily thwarted by spending a few grand hiring an intern, it is not a really good plan.


Judges aren't stupid. If the language specifies some honest attempt to use the patent in the marketplace, I could see judges making a judgement on whether or not the example in front of them qualifies. Unlike computer systems, subjectivity and interpretation is a part of the law.


I don't see how a judge could distinguish "my startup is failing to gain traction" from "my company's product is a sham designed to bypass anti-patent-troll regulation".


If we can tell the difference, a judge can.

Also, as noted elsewhere in the thread, trademarks do behave like this: use 'em or lose 'em. They could be similarly gamed, yet it works in practice.


Eh, maybe. I know a guy who was a patent troll. He did everything on contingency. (And he made tens of millions doing it.)


There's one big problem with this simplification: In many (perhaps most) industries, small players can innovate by creating new methods that have real value in that sector However these small players are likely too small to be able to bring a full product to market... e.g. they cannot take advantage of the consumer branding value.

Small entities can only hope to be bought by or licence their IP to larger entities to see the fruits of their innovation brought to actual consumers.

Small entities create innovation across the board and the judge is missing out on them here, imagining most relevant patents as being ascertained by large organizations.




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