Patent Nonsense – some problems with the current Patent Copyright and IP system

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Hi, this is your occasional correspondent, Joseph Friedlander writing for Next Big Future on Professor Bolonkin’s ideas (and some of my own) on patent reform. Key insight: the massive lion’s share of the benefits of invention—if any (most inventions are unsuccessful)—should go to encourage inventors, not the patent law establishment or their hangers on—

Professor Bolonkin’s Patent Suggestion Letter.

Professor Bolonkin has written his representative in Congress as well as his senator with the following letter:

I write you as a man born in 1933, who has both witnessed and taken part in some of the greatest scientific undertakings of our age, including jet age, nuclear age and space age scientific inventions. You well know the importance of American superiority in technical progress as the foundation and lodestone of our society’s strength, our military’s power, and our people’s well being.Our very health depends on innovation in many, not just a few scientific areas, and our future lifespan may well be lengthened– or, sadly, shortened– depending on events occurring now in the United States Patent Office.

Sadly, the Patent Office is broken. This would probably not even be on your radar screen given the other military, economic and societal disasters happening almost monthly now, but it in fact may be one of the root causes for this historic decline in the future projected power of the American State.

What was in the very beginnings of the American system, a source of national strength has instead in the last 60 years become a brake on American progress.

Just as in the area of copyrights, major corporations have had their lawyers writing legislation favorable to their interests as opposed to those of society as a whole, so the small inventor has been shoved to the side in favor of a Patent Office system that limits innovation in the quest for money to fund the patent bureaucracy itself. Literally the bureaucracy favors fewer but more renumerative applications: Less work for more money. This may be more fun for the Patent Office and the corporate people, but it throttles innovation.

America is a nation of small inventors, technicians, hackers and innovators, and they can fight the entire world and win, but they CANNOT fight our own Patent Office. You will not hear this from anyone who is younger than myself because they frankly fear the retaliation of the bureaucracy. I have nothing to fear or prove anymore, and I am writing this letter in order to help pay back the country that has given me so much, including my freedom (and quite possibly my life; I was in the Siberian punitive camp system of the USSR as a political prisoner, and, I assure you, not as a tourist.)

Should you desire to regenerate the US economy in the next decade– when we face the huge competition of many more Chinese engineers than American– when they start from savings, and we from debt, they from boom and we from near-depression– one of the few cheap ways open to you is to take this suggestion—

I suggest the following system and law: Any individual applications (or poor inventor) presented to the US Patent Office in electronic form should be published as is (in electronic form for economy’s sake) in an internet library either by the Patent Office, (or, if they resist, the another organization, for example, DARPA or the Library of Congress) without examination and any payment. The Library automatically indicates only date of receiving in case of future dispute.

The whole expensive patent process then only would begin (request of patent payments, fees, etc) when inventor will ask about it. It is possible, when the first listed inventor finds a buyer or investor of interest relative to his inventions, or if a company uses the invention without permission and the inventor can then find a lawyer to take the case in return for a percentage. Note that this does not stop patent law from happening but massively increases American prior claims to inventions, of great value in world competition. As most patents do not find a use or company illegal uses this invention. If an inventor did not find the buyer or interested company in during the conventional 20 years, it is open for any company and all people to use the invention. Consider the massive quantity of inventions to which the inventive but poor American workshop or pensioner could come up with– and the income it could bring to the Nation. As it is now, the cash-poor but idea rich inventor does not even bother, and often foreigners claim rights to an idea that Americans thought of first.

The patenting of invention (payment just to the Patent office) costs about $1200, plus about $30,000 to lawyers, plus mountains of costs in the many thousands of dollars–quite beyond the reach of most inventors. All poor inventors CAN NOT patent their inventions and take part in the parade of American progress. The patenting process takes some years (and this comes off the top of the useful life of the patent). If you complaint, sometimes folks in the Patent Office may begin to treat your applications with ‘special care’.

Patent law that favors the deep pocketed empties the pockets of the Nation it alleges to serve.

I urge passage of a law enacting the simplified system above so that the Patent Office can become the main enabler of technical progress in the USA rather than the main obstacle on the way to inventors.

If you require more details please contact me and I will be happy to help.

Sincerely,

Doctor of Science, Professor (Retired)

Alexander A. Bolonkin

Author of 172 scientific articles and books and 17 inventions.

•I would like to discuss this topic of Intellectual Property (IP) and its’ legal protection and the resulting societal consequences.

•Types of IP.

There are more than patents in the world— there are “copyrights”, “trade secrets”, “ “patents”, and “trademarks” “contracts” and many other species of crystallized thought (words on paper) which seek to bind people according to the will of those who draft the terms and those who agree (or force others to agree) to them.

Personally, I have no problem with trade secrets—a man’s right is to keep his cards close to his chest. Trademarks are not specifically allowed in the Constitution, but personally my feeling is that it should be OK to make a perfect replica of a Rolls Royce—but ONLY to market it as a replica (say, an X brand replica of a Rolls Royce). To market it as an actual Rolls Royce should be fraud—just so people know what they are really paying for and getting. Contracts are a huge subject, but plainly necessary to reliable business function. Copyrights have been hugely abused (by gratuitous extension of terms that nearly eliminates the coming out into public domain of orphan works) but that is a topic for another day.

Patents are what we will mostly focus on in this article (for lack of space and in keeping with the brevity of Bolonkin’s letter)
–The most remarkable feature of patent law as currently exists is the ability to (by suing) obtain an injunction (‘injunctive relief’) literally shutting down a rival’s business for using a patentholder’s protected patent. This is like a nuclear strike, able to force a major competitor out of an entire market in the most extreme cases.

Another key feature is the ability to force payment of royalties, with the power of an injunction (the shutdown strike) as the leverage to exact as much as the victim of the suit will bear. As there is no upper royalty limit given by statute, this also can cause a rival’s shutdown, although not as directly.

In case “willful infringement” (as legally defined not necessarily as ordinary people would interpret the phrase) is proved, triple damages can ensue.

If all these penalties were applied solely in truly heinous cases of criminal conspiracy and premeditated ripoff, that would be one thing. But the legal system does not work that way. Once something is allowed to be done at all,, it is allowed to be done in circumstances that meet the letter of the law, but are wildly different in spirit. It doesn’t matter how much the lawmaker swears it will never happen; those are declarations of pure intent, not promises you can collect on in court. And invariably these new laws are applied in ways most convenient for the prosecutors, not society as a whole: Selectively, capriciously. Martha Stewart told an untruth to a government agent (as have countless others) but she was convicted whereas many professional criminals who have done much, much worse were not.

Simply put (and I frankly cannot prove this but I leave looking up occurrences as an exercise for the reader) great prosecutorial careers appear to be advanced by snagging famous people (and it certainly is much safer than going after actual murderers or other actual threats to society). I can, however point out that if every single rich person who had told untruths and violated financial laws had been convicted at that time with equal severity the 2008 and after financial crisis would not have happened with its’ present severity, if at all. (If you have time to read 95 listings of unprosecuted (or nearly so) corruption (at last count) feel free to click here http://market-ticker.denninger.net/categories/18-Corruption. Selective justice of the least connected famous people attackable on the evening news in a way calculated to advance prosecutorial careers is not justice, just the illusion of justice.
Those interested in particularly disturbing versions of prosecutorial abuses and misconduct can read more at

http://volokh.com/posts/1168638846.shtml
All this is merely tangential, however to the main point, that dragging invention through the wounded legal system we have does no considerable favor to invention, inventors or society’s advantage from inventions. It does, however, open the door to considerable rent-seeking behavior.
Popular image of patents:

I would imagine a majority of the readers of this blog, interested in science from youth, would have spent some time gazing (looking in the back of Popular Science or Popular Mechanics) at those patent agency/attorney, etc. advertisements) and daydreaming of inventing something, patenting it and getting rich from the royalties. It is a common fantasy, which is why those ads keep on appearing over the generations And we are talking many generations: I have seen similar ads from the 1890s in old publications. Hope springs eternal. But the cow still gets milked.

Patent System—like legal system—nowadays organized for benefit of most connected and powerful superusers.

But the reality is different from the fantasy. Just as a computer network has several classes of users—ordinary (users) and privileged (superusers) so does the legal system. (A network engineer might be tempted to hypothesize a rather corrupt restatement of Metcalfe’s Law– http://en.wikipedia.org/wiki/Metcalfe’s_law– that the power of a politically ‘connected’ person goes up as the square of the number of his connections…) In any case, both the interests of large corporations and the organizational conveniences of the Patent Office and those who benefit it have been well represented in the last fifty years. The small inventor has not been.

The Iron Law of Bureaucracy.

Jerry Pournelle’s Iron Law of Bureaucracy states that “in any bureaucracy, the people devoted to the benefit of the bureaucracy itself always get in control, so that those dedicated to the goals the bureaucracy is supposed to accomplish have less and less influence, and sometimes are eliminated entirely.”

http://www.jerrypournelle.com/archives2/archives2mail/mail408.html#Iron

“In any bureaucracy, the people devoted to the benefit of the bureaucracy itself always get in control and those dedicated to the goals the bureaucracy is supposed to accomplish have less and less influence, and sometimes are eliminated entirely.”

another way he has stated it:
“…in any bureaucratic organization there will be two kinds of people: those who work to further the actual goals of the organization, and those who work for the organization itself. Examples in education would be teachers who work and sacrifice to teach children, vs. union representative who work to protect any teacher including the most incompetent. The Iron Law states that in all cases, the second type of person will always gain control of the organization, and will always write the rules under which the organization functions.”

This degenerative tendency applies to the legal system, prosecutorial system and patent system in general as well as any fixed (as opposed to temporary) organization. Given long enough, this sort of organizational arthritis sets in. (That is why volunteer organizations, though haphazard are superior in my view to governmental agencies—they die out, or at least lose personnel when deteriorating, rather than grow in power precisely because of that deterioration.—And if you think that last jibe unlikely, ask yourself this: Which agency is likely to be more effective in the lobbying process: One staffed with ‘politics surfers’ who neglect their official duties to concentrate on lobbying Congress for more money and ingratiating themselves, or one quietly doing those very duties, which cannot spare essential personnel from a lean organization for what are essentially political, not technical tasks? Obviously the former. If nonperformance of work by the lobbying agency is an issue, new ‘grunts’ can be hired to cover any shortfall from the gains of successful lobbying—a loss for society as a whole, but who cares within the agency, as long as the money faucet spurts forth?) A similar dynamic explains how Communist agents could take over unions in the 1930s and 1940s—they simply were willing to put more time into the procedural behaviors required to seize the organization that any ‘normal’ person who just wanted to do his job and go home to his family. When lobbying behaviors and office politics are rewarded, they are selected for. This applies to corporate bureaucracies as well, but at least individuals can choose not to support them and not to do business with them. Not so governmental agencies…

The Societal Price of Patents.

It is well to remember that patents are a survival of an ancient form of royally granted privilege. If a connected person wanted to ‘milk’ the market through a monopoly on a given commodity, he would turn (possibly with appropriate gifts to smooth the way) to his lord the king, who would command that anyone who wants to buy X (say salt) would have to do business with the patent holder. What Ghandi (for one) thought of the injustice done the poor whose cost of living was inflated by such profitable monopolies may be inferred from his ‘salt march’ to the sea…
http://en.wikipedia.org/wiki/History_of_the_British_salt_tax_in_India

In 1764, following the victory at the Battle of Buxar, the British began to control all the revenues of Bengal, Bihar and Orissa. Robert Clive, who returned as Governor-General in 1765 made the sale of tobacco, betel nut, and salt apart from other accessories and essential spices andcondiments, the monopoly of the senior officers of the British East India Company. Contracts were given to deliver salt to depots.[3] Merchants then had to buy all their requirements from these depots.[3]

http://en.wikipedia.org/wiki/Salt_Satyagraha

Time magazine declared Gandhi its 1930 Man of the Year, comparing Gandhi’s march to the sea “to defy Britain’s salt tax as some New Englanders once defied a British tea tax

Monopolies increase the cost of living for everybody. Consider just the sheer nerve and gall required to tell people that they must from now on allocate part of their money to you for the privilege of doing something that they had a perfect right to do until now (use salt, or pay to use an invention that you patented first). but which they independently invented.
This is obviously an infringement on individual rights that can only be justified by some overwhelming need. The United States Constitution allowed patent monopolies however in order to glean the benefits to society of publicly spread inventions and innovations as opposed to trade secrets that die with the user or his line or his company.

http://en.wikipedia.org/wiki/Copyright_Clause

rticle I, Section 8, Clause 8 of the United States Constitution, known as the Copyright Clause, the Copyright and Patent Clause (or Patent and Copyright Clause), the Intellectual Property Clause and the Progress Clause, empowers the United States Congress:
“ 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.

http://en.wikipedia.org/wiki/United_States_patent_law
Upton Sinclair’s comment encompasses this and analogous situations:
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”
This holds for people in the patent law establishment, the corporate world, and the government. Their personal return is far greater than the societal return from the present patent system.

Also at work is the Shirky Principle:
http://www.kk.org/thetechnium/archives/2010/04/the_shirky_prin.php
(hat tip to Kevin Kelly for publicizing the idea and to Clay Shirky himself!)

“Institutions will try to preserve the problem to which they are the solution.”

What this means in practice is that the above groups would wield their considerable influence to stop any structural change, no matter how much it would benefit society and civilization, because their money/income/position/etc. depends on things staying as they are.

For a totally discouraging view of the chances of getting rich by patent, see the links on this page (Don Lancaster’s Guru’s Lair patent sub page ) http://www.tinaja.com/pasamp1.asp 1.

Anyone that wants to can use the patent
system to cause you no end of grief No matter how solid
the case or how much time and energy you spend, patent law
can and will easily turn against you. In fact, it is almost certain to do so.

on another page, Don makes key points:

For most individuals and small scale startups, patents are virtually
certain to result in a net loss of time, energy, money, and sanity.
One reason for this is the outrageously wrong urban lore involving
patents and patenting. A second involves the outright scams which
inevitably surround “inventions” and “inventing”.

A third is that the economic breakeven needed to recover patent costs
is something between $12,000,000.00 and $40,000,000 in gross sales.

It is ludicrously absurd to try and patent a million dollar idea.

This library explores many tested and fully proven real-world alternates
to patents and patenting. http://www.tinaja.com/patnt01.asp

See also Don Lancaster’s free e-book, “The Case Against Patents” http://www.tinaja.com/glib/casagpat.pdf
Don’s conclusions on the patent system may be summarized by the remarkable figure of 1 to 500—the ratio he calculates that raw ideas lead to a marketable patent with net positive cash flow.
“The 500:1 figure assumes that you are a knowledgeable
industry insider. Who aggressively uses the trade journals,
professional associations, and online resources. And who
thoroughly understands the engineering, mathematical,
marketing, distribution, and economic underpinnings for
the target field. If you are an outsider, your odds are likely
to end up worse than 1,000,000:1 instead.”
What this suggests however, is we need to get the gross number of ideas way up to emerge with an increased number of profitable inventions at the end of the 500:1 pipeline. And the way to do that is through freeing inventors. But more of that later.

The basic thesis of this essay is that the progress of technology would be much faster if the hoops lawyers and politicians make for inventors to jump through were either abolished or made easily navigable by a low income inventor. Professor Bolonkin’s proposal is to still let the lawyers feed at the trough, but have the government pay for it (in other words, everyone). And there is much to recommend this over the present system. Why should private inventors pay up front without reward to benefit the entire society while the patent-lawyers and other legal personnel have guaranteed incomes from the system? It merely confirms what statistics show—that Chinese and Japanese systems have a far greater representation of engineers in their government than we do. We have lawyers instead, and are not doing too well for it. Under Bolonkin’s suggestion, society will pay for what society gets—the benefit of all but the ‘greatest hit’ inventions. Those few most lucrative patents will still benefit their inventors—but unlike now the expense of paying for the patent system would go to the true benefactor (other than the patent law system)—society.

But what of the prospect of actual comprehensive patent reform?

Consider the thesis advanced in The Public Domain: Enclosing the Commons of the Mind – Chapter 3: The Second Enclosure Movement

http://yupnet.org/boyle/archives/69

“…a world of rapacious, state-aided “privatization,” a conversion into private property of something that had formerly been common property or perhaps had been outside the property system altogether. One kind of “stealing” is legal, says the poet, because the state changes the law of property to give the “lords and ladies” a right over an area formerly open to all. But let a commoner steal something and he is locked up.”
It’s a great book, and we recommend reading the whole thing. Chapter by chapter or whole free PDF.

Read

(The author would probably be happy if you wanted to buy a paper copy. Brian will probably be happy to put an Amazon link here.
It is ironic that when discussing large scale patent reform, someone will call the advocate of small inventor’s rights a “patent socialist” as has occasionally happened.
(Apparently the ‘patent socialist’ term was coined by someone who wanted an exclusive claim on a keystone idea to force others to pay rent to him) Refutation of this pejorative is fairly easy–consider that all the negative effects mentioned are results of the failure of state interference in a prexisting free market of ideas—that is, if there were no patent restrictions, none of these effects would have manifested. State action caused all these problems—and the person fighting against state action is a ‘patent socialist’?!.

It appears to me that the pathologies mentioned here are cases of “I want therefore I must have”—I want an income stream, so I am going to reengineer society so I get one. This is pretty close to the definition of rent-seeking.

Remember however that the purpose of patents is to maximize innovation (the raw material of technical progress) and the return to society by giving incentive to inventors to create, not by making a permanent aristocracy of people who at one time contributed something useful. Because if such an entitled group is allowed to arise—as it lately has been in the process of doing— technical progress, the subject matter of this blog, is in for rough times. Always the advocate of unlimited patent rights aims the income stream to his door, never to the door of the heirs of the hundreds of generations of dead inventors who preceded him and provided the very foundations of his new invention by their older inventions. (It is difficult to conceive of an Internet without reliable electronics, and to conceive of electronics without harnessed and reliable electricity) But the rent-seekers ignore the debt they owe to the past; all debts are owed only to them, and payment will be assured by an arrangement with the legislature.

The rent-seekers also ignore the debt they owe to the future—that they are just a link in the chain of generations, that they have no right to stop unseen levels of future progress by building a dam on the river of invention and holding things upstream by putting a check on progress.
If you think this is a florid metaphor you are certainly right—but if you think it does not describe a real dynamic, think again. All new inventions are enabled or made possible by assembling enabling chains of older inventions or insights, or arts and so forth.

http://en.wikipedia.org/wiki/Standing_on_the_shoulders_of_giants

In software the previous art instructs the following art. By restricting the flow of ideas and insights, we restrict the flow of progress itself. This is as true for copyright as patent, but there the term problems are even larger scaled. If terms were only under 10 years (or say 5 years for software patents), again I probably wouldn’t be writing this essay. But generational—or even multigenerational copyrights and patents restrict access of society as a whole to teachings already paid for in order to generate private income streams for as close to perpetuity as the legi$lature can be per$uaded to accept by means of legal contribution$…
This is not progress but regression, to the age of entitled monopolies. This is actually a reincarnation of mercantilism (if you are feeling calm) or fascism (in the minimal sense of a corporate state, if you are not) What it is not is a free market in ideas or indeed a free republic of supposedly equal citizens before an objective legal system. . Why should millions of losers in this influence contest be inconvenienced for every one winner when they seek not the right to use what they invented in peace, but the right to ‘stake out’ as vast a land grab of idea space as possible, in a way which is essentially an act of aggression against those not playing this game, or not wanting to?

Note also that it is impossible for example, to simply sign a declaration akin to conscientious objection saying that “I want out”— I want neither to be benefited by nor oppressed by your patent laws. I wish to invent and market my own small invention without having to worry about legal downsides on a scale, say, not to exceed $30 million dollars a year. On the other hand, anyone who wishes to reverse engineer my product can do so; I just have to keep ahead of them.” (Without a cap this proposal would be hugely vulnerable to abuse; even then to work it would need to apply to individuals, not subsidiaries of large corporations, for obvious reasons). If such an ‘opt out’ clause giving fair use and independent invention were a valid defense, again, I probably would not be writing this essay.

But independent invention is no excuse, ignorance of the law is no excuse, http://en.wikipedia.org/wiki/Ignorantia_juris_non_excusat ignorance of the state of the art is no excuse (a person may be considered to be ‘constructively warned’ or imputed to be warned

http://en.wikipedia.org/wiki/Category:Legal_fictions

of the state of the art while being perfectly ignorant, even though in fact it would be the equivalent of hundreds of hours of searching and self-education to acquire the knowledge the law insists you be construed as already knowing), in fact nothing is an excuse if too inconvenient for our legal masters. Even the calendar is no defense as laws may be—and have—been changed retroactively. We are supposed to live our entire lives in a sort of legal arena, insecure, vulnerable to attack, only able to rest if we have a lawyer (or politician!) on retainer. I think it safe to say that this state of affairs was far more likely brought about by lawyers or politicians than the independent inventor…

There is also the problem of ‘regulatory capture’, which has become a far more famous phrase lately simply because of the misconduct involving financial firms in the events of 2008-2010 and their putative regulators. The people supposedly regulating top actors in many fields really end up being controlled by them, in an interesting dynamic which has no place in this essay (but may have something to do with the psychology of keeping an eye on one’s future job prospects in the private sector involving expertise in the very area of restricting that sector—in other words, one generation of cunning regulators writes the yet more cunning evasion of their own regulations, while lobbying the new, inexperienced regulators (possibly planting ‘trapdoors’ http://en.wikipedia.org/wiki/Backdoor_(computing) for their future use. Thus the regulatees—with deep pockets—may end up owning the system they supposedly are controlled by). Money generates its’ own awe.

One also notes gently a similar dynamic where former prominent politicians end up millionaires by serving on boards, introducing people to the new generation of politicians, etc. This also (alas) works with some ex-flag officers, and is a sign of the corruption of our society as well. Another similar phenomenon is the ‘Iron Trangle’ noted by such observers as Theodore J. Lowi, The End of Liberalism (New York: Norton, 1969). http://www.google.com/search?hl=en&source=hp&q=lowi+iron+triangle&aq=f&aqi=&aql=&oq=&gs_rfai= or what later observers call “issue networks” http://www.ruf.rice.edu/~dho/

The latter source (which may or may not be the work of 1. Douglas A. Schuler of Rice U. Ohio,
“Interests have become entrenched, with subgovernments developing around each program area (subgovernments are the congressional subcommittee, executive bureau, and interest group, forming the “iron triangle”). The subgovernments have a lock on policy in their area.”
This process was well advanced as of 40 years ago, to the point that then President Nixon (who had served as Eisenhower’s vice-president) was stunned (in some readings) by the lessened effective power of the Presidency to actually get things done. (see for example http://www.jstor.org/pss/193930) (This may have been the root of the Nixon administration’s unfortunate supralegal activities) The flexibility of the Federal machine surely has not improved since.

James Boyle describes the process of ‘legislative (not regulatory!) capture’ as I call it—http://yupnet.org/boyle/archives/85
Intellectual property legislation had always been a cozy world in which the content, publishing, and distribution industries were literally asked to draft the rules by which they would live. The law was treated as a kind of contract between the affected industries. Rationally enough, those industries would wish to use the law not merely to protect their legitimate existing property rights, but to make challenges to their basic business plans illegal. (Imagine what would have happened if we had given the lamp-oil sellers the right to define the rules under which the newfangled electric light companies would operate.) There would be no easy counterweight to these pressures, as Jessica Litman points out in a wonderful set of reflections on copyright lawmaking, because the potential competitors to existing titans were just being born and could thus be strangled safely in their cradles… Certainly the public would have little grasp as yet of what was at stake.

In a similar vein, James Boyle writes—http://yupnet.org/boyle/archives/69

In practice, if not theory, the law was predominantly a form of horizontal industry regulation of unfair competition—made by the people in the affected industries for the people in the affected industries. The latter point is worth stressing. Congress would, and still does, literally hand over the lawmaking process to the industries involved, telling them to draft their intra-industry contract in the form of a law, and then to return to Congress to have it enacted. The public was not at the table, needless to say, and the assumption was that to the extent there was a public interest involved in intellectual property law, it was in making sure that the industries involved got their act together, so that the flow of new books and drugs and movies would continue. Members of the public, in other words, were generally thought of as passive consumers of finished products produced under a form of intraindustry regulation that rarely implicated any act that an ordinary person would want, or be able, to engage in.

It is hard to dispute one of Benford’s conclusions:

http://yupnet.org/boyle/archives/31

(Intellectual property legislation) “intended to be the servant of creativity, a means of promoting access to information, is becoming an obstacle to both.”

There is, for example, no software company more powerful than Microsoft. Theoretically their hull should be thick enough to withstand anything. Yet

as documented in Mike Masnick’s writing

Bill Gates, Microsoft CEO, 1991: “If people had understood how patents would be granted when most of today’s ideas were invented and had taken out patents, the industry would be at a complete standstill today… A future start-up with no patents of its own will be forced to pay whatever price the giants choose to impose.”

Brad Smith, Microsoft general counsel, 2007: “Protection for software patents and other intellectual property is essential to maintaining the incentives that encourage and underwrite technological breakthroughs. In every industry, patents provide the legal foundation for innovation. The ensuing legal disputes may be messy, but protection is no less necessary, even so.”

I believe that to be a mistaken point of view, but one you would expect of a lawyer’s professional perspective. In fact, the legal foundation for innovation is freedom—the protection AGAINST this very kind of legal firestorm that only the thick hulled can survive
In http://blog.mises.org/7126/open-source-patents/ by Stephan Kinsella, we see one counter-tactic—defensive pooling of patents to form just such a thick hull against patent attacks in the Linux world.

” It’s purpose is simply to force companies not to sue “programmers, independent software vendors, distributors and businesses” who use Linux…let’s assume this works: the size of the…. pool snowballs and pretty soon there are no companies left who can afford to assert their patents against LinuxWhat it means ismillions of dollars have been spent: …we have tens of millions of dollars of investment, and thousands of companies holding patents that they have all agreed not to use against each other.
In other words, it’s similar to the situation that would exist in the absence of IP–without all the effort and waste to get a bunch of flaccid scraps of paper..”

As bluntly as possible, if only one will be paid: Patent lawyers or inventors—who do you think its’ going to be? I would think it more productive to society for the sake of future innovation that the inventors would be paid. But today’s system is rigged precisely the other way. The corporate and legal and government people draw assured salaries—the inventors and engineers and other innovators are fleeced, or prone to layoff or not given their societal due in many other ways.
Concept of IP ‘reform’. I venture this prediction: Any ‘reform’ that has a chance to get approval from all the current beneficiaries of the current system is not worth having simply because the very people it would affect have veto power over it. See the part about the Iron Triangle above.
Civil liberties ‘foot in the door’. Because patents are enforced by the legal system, and there is ‘no judge without a policeman to enforce his orders’, ( translating that in today’s more corrupt system, ‘no legal elite without its’ militarized SWAT teams to kick down someone’s computer room door in a midnight raid when a simple request to drop by or phone a regulatory office at 10 AM would have done as well’) We can see that when the big players put big lobbying money into the pot we will get phenomenae like open and massive violations by connected people that the police will not get too excited about, (think political favor games for contractors or fraud on Wall Street in the midst of both-sides contributions to the eternal reelection campaigns… ) versus simultaneous enforcement actions against people copying CDs or other nonviolent crime. The small criminal has no connections, the great criminal does. Yet better than the current system would simply be lessening the bounds of the law and legislature-proscribed activities to cut the list of crimes down to something common custom considers crimes and no kidding enforce those laws. When laws are reasonable and enforced with common sense, people will obey them and respect the police. When laws are one thing for the powerful, another for the weak, and used to skim revenue, confiscate wealth and levy fines with an eye to revenue rather than justice, people act accordingly. This is legal decay and is not a good thing for society, as history teaches.
If there were only one lesson I could teach a new national leader it would be this: “Soldiers are NOT police, and police are NOT tax collectors. Confuse these job descriptions at your peril.” But the militarization of civil police and the asset forfeiture programs proceed merrily on their way, so let’s go on ours, to the next point:

USA patent imperialism. Nothing irritated me more when I was younger than to hear some foreigner talk about “USA Imperialism.” But when the term fits, use it. It’s one thing to mess up our own economy. It’s another to cram this bad advice down the throats of countries who have yet to develop sufficiently to provide for their own peoples’ welfare.
It is not clear to me that it would be a wise move for a developing country to accept the official US position on IP rights. More logical would be a very short patent term to respect the rights of the developer without depriving a generation or more of inventors the new doors that development has opened—as the inventor of the patent in question himself based his work on preexisting work. You don’t want to deprive the inventor of his right to benefit from his own invention. But you don’t owe him the equivalent of a lifetime peerage either. (Remember, in the old days titles of nobility and grants of patents were cousins of each other. The US Constitution forbade the one and permitted the other because of the risk-benefit ratio—but both are dangerous in terms of power over the common people)

However, what usually happens on the IP front in nations anxious to please the US is is pressure and lobbying by agencies or representatives of the US Government or those in the great coalition of beneficiaries of the current system. In other words, they want to ‘harmonize’ and ‘make uniform’ the latest ratcheting down of the laws in favor of big players and big corporations and make still more hostile to new and small players.
A senior lawyer at Microsoft is calling for the creation of a global patent system to make it easier and faster for corporations to enforce their intellectual property rights around the world….
Microsoft’s backing for greater cooperation on the issue has the backing of other organisations. The World Intellectual Property Organisation is planning to hold a conference on global enforcement of intellectual property rights in Geneva on the 17th and 18th of September. “IP systems need to keep pace with globalizing trends in innovation and business practices,” the organisation said in a statement. “The symposium offers stakeholders an opportunity to explore how existing highly diverse national and regional IP infrastructures can be developed to support the dynamics of innovation which is increasingly transnational and borderless.”
Notice I have italicized a few words there. Stakeholders. I wonder who exactly those ‘stakeholders’ are? The reader who has suffered me thus far will forgive my suspicions that they are beneficiaries of the current system. Notice also ‘enforcement’. Alas, I suspect it is to enforce the will of the strong upon the weak. Notice also ‘globalizing’. I suspect the sentence fragment after it is in the wrong order– business practices will almost certainly come before innovation.

In general this is just one more case of an attempt to impose a business monoculture on the world favorable to the key players, and to the disadvantage of many alternate business models and pathways of innovation. Almost certainly many more productive arrangements are in this unexplored space of potential societal arrangements.
Also frankly malevolent business models are encouraged, such as so-called ‘patent trolls’. Given the reality of the patent system as it is, accumulators of patents actually provide some liquidity by forming a market for single patent holders. However, this is again, the business tail wagging the inventing dog—a maladapted method of functioning made necessary only by previously maladapted laws….

Given that the entire reason for the invention system and permitting patents at all is to encourage innovation, every dollar spent on legal and business games is a dollar that will not be so spent on innovation.
Consider that if one’s business model is producing no product, producing nothing other than filing lawsuits and threatening litigation (and a patent is nothing more or less than a right to sue over an invention) we can see that the typical $1 million pretrial and several million for a comprehensive major scale patent trial (even if successful) will lead to the defendant of an unjust accusation preferring settlements of about 10% those amounts just to save the money, let alone take the mental unpleasantness of being on the legal defensive while trying to build up a business that may end up being taken by force of law from you anyway in the end. The previously mentioned penalties (toward the beginning of this article) can literally shut down your business directly or in time.
We are now in a great economic downturn caused, in the last analysis, (in the case of the USA and the UK at least) by a great increase in historical consumption patterns and a great decrease in historical production patterns. For about a century, from 1850 to 1950, the US and UK together produced nearly half the world’s industrial production, were the center of inventions, and the high tech center of the world. (There were specific centers of excellence elsewhere, but we speak generally) We can be so again, but we need to decrease the ease of throttling innovation, and increase the ease of promoting innovation. Professor Bolonkin’s proposed patent reforms look like a good place to start.



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