Is Building An Active Marketplace For Buying And Selling Patents A Good Thing?

from the something-to-think-about dept

One of the criticisms we often have about the patent system is that in recent years it's been setup in a way that encourages people to sit on patents and sue, rather than actually bringing products to market. We'd much rather see products compete in the marketplace, where their true value can be judged. With the growth of patent hoarding and nuclear stockpiling, however, it doesn't seem like we're going to get there any time soon. Instead, patents are now being used either for defensive purposes or to attack others -- rather than to help bring real innovations to market. That's unfortunate. Of course, with all this attention on patents, it's not just patent lawyers looking to cash in. There was a ton of buzz for a big new patent auction, even if very few buyers actually showed up. Part of that could just be the "first time" nature of the event. However, the folks behind it plan to have them regularly... and eventually try to turn the whole system into a regular "marketplace for patents." This is definitely an interesting idea, and one worth watching. One of the reasons for setting this up in the first place, they claim, is to get a more positive image out there of patents and the market for intellectual property -- but it seems just as likely to open things up to further abuse of the system. Those in the best position to hold back the innovation of others could very likely use such a marketplace to hoard patents to prevent others from innovating. Since true innovation often occurs by actually getting stuff done and products to market, the fear is that those who are actually innovating won't even be paying attention when some random patent goes up for sale that could eventually stop them from actually bringing their product to market. When we say we want to see innovations compete in the market, we didn't mean this kind of market -- but one where actual products get developed.


Reader Comments (rss)

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  1.  
    identicon
    Bob, Apr 7th, 2006 @ 5:38am

    Marketplace

    I think a marketplace where you could choose a couple of lisence options and go would be cool and allow people to lisence things more easily. I'll take the .01 cents per click for Amazon's one click patent.

     

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  2.  
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    Thomason, Apr 7th, 2006 @ 5:53am

    pricing patents

    In "bringing products to market" it's all sunk costs. Recently-patented, but as of yet untested-by-the-market, product ideas are tough to get fully ramped up. Believing that inventors just invent to sit on the thing overlooks all of those who put their heart, soul, home equity credit line, etc., into trying to get a product to launch, as well as those, who travel to all sorts of inventor fairs, and trade expos, etc..
    The Ocean Tomo affair is a clear example of the difficulty of valuing inventions that have not been marketed. Valuation is typically based on revenue stream, but if it's never been marketing, then it's all guesswork. Inventors may expect too much, or more $$ than the marketers are willing to commit to launch the product. I presume a fair number of those bidding at Ocean Tomo just hoped to flip what they bought, thinking that they could promote the invention more effectively than the inventor did/could.

     

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  3.  
    identicon
    Ryan, Apr 7th, 2006 @ 7:25am

    re: pricing patents

    "Software patents are the roadside bombs of the information superhighway" -me

     

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  4.  
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    Director Mitch, Apr 7th, 2006 @ 7:47am

    It's really apparent that you never have worked with patents.

    Thomason is right. Patents in and of themselves have no value - more money has to be invested in them. If used to develop, then marketing, prototyping, etc. have to be done. If used for licensing, defense, or "trolling", money has to be invested on the legal side. And just because something is patented, doesn't mean that it will hold up in a reexamination, a prior art search, etc.

    A patent has never stopped a start-up or small company from putting a product on the market. I have been in both places where "patents be damn let's move forward" was yelled when told by counsel that we infringe. After all, no one goes after you unless your product is successful, and we'll worry about the patent issue when we get there.

    So this whole "patents stop innovation" meme you're pushing is getting really, really old since it doesn't hold up to close inpsection.

     

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  5.  
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    Mousky, Apr 7th, 2006 @ 8:02am

    Re: pricing patents

    "Believing that inventors just invent to sit on the thing overlooks all of those who put their heart, soul, home equity credit line, etc., into trying to get a product to launch, as well as those, who travel to all sorts of inventor fairs, and trade expos, etc.."

    It's not a case of believing, it's a fact. The overwhelming majority of patents never get used. The trend towards hoarding and stockpiling will make this worse and will only cause more people to overlook real inventors with real patents.

     

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  6.  
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    Mike (profile), Apr 7th, 2006 @ 9:42am

    Re:

    It's really apparent that you never have worked with patents.

    Hmm. That's not true. Not sure why you'd say so.

    Thomason is right. Patents in and of themselves have no value - more money has to be invested in them. If used to develop, then marketing, prototyping, etc. have to be done. If used for licensing, defense, or "trolling", money has to be invested on the legal side. And just because something is patented, doesn't mean that it will hold up in a reexamination, a prior art search, etc.

    Not disagreeing with any of this. Not sure why you think I am. In fact, this has been my whole point all along. The system puts way too much emphasis on the *invention* stage and giving all the rights and power to the "inventor" and much less to anyone who actually *does* all the work to bring a product to market.

    So, I don't see how this goes against what I've been saying. It actually *supports* my position.

    A patent has never stopped a start-up or small company from putting a product on the market. I have been in both places where "patents be damn let's move forward" was yelled when told by counsel that we infringe. After all, no one goes after you unless your product is successful, and we'll worry about the patent issue when we get there.

    Yeah, I've discussed that before as well. In fact, just recently I discussed exactly that concept, and why it's problematic.

    So this whole "patents stop innovation" meme you're pushing is getting really, really old since it doesn't hold up to close inpsection.

    Er, sure it does. You don't think the $600+ million RIM just handed over to NTP (not to mention the millions they spent on lawyers) couldn't have been better spent on research and bringing products to market?

    There's no doubt it's holding back innovation. Hell, it's already stopped us from working on something, and we get stories all the time about innovation patents have held back. We posted a story not so long ago about scientific researchers talking about all the work they won't do because of patent infringement.

    So help me here. What's not holding up to scrutiny -- because we're seeing evidence everywhere?

     

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  7.  
    identicon
    Ron Johnson, Apr 7th, 2006 @ 11:23am

    Selling Patents

    Good article..........but you must consider the fact that many perfectly valid patent applications are currently being blocked by the patent office because of pressure from the Fortune 500 companies (through Government lobbying, of course). This is because these valid patent applications will, if granted, conflict with current corporate business models in which millions of dollars have been invested - often without the need to protect the corporation by patent filing. Why punish innovation?
    I often thing what would Edison be able to to today?
    Probably work for some 3rd tier electrical service provider :)

     

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  8.  
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    Mike (profile), Apr 7th, 2006 @ 11:25am

    Re: Selling Patents

    but you must consider the fact that many perfectly valid patent applications are currently being blocked by the patent office because of pressure from the Fortune 500 companies (through Government lobbying, of course). This is because these valid patent applications will, if granted, conflict with current corporate business models in which millions of dollars have been invested

    Huh? How could they possibly be "perfectly valid" if they would conflict with an existing offering? Isn't that clearly prior art?

     

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  9.  
    identicon
    Ronald Johnson, Apr 7th, 2006 @ 11:30am

    Re: Re: Selling Patents

    This is the problem - there is no prior art. Personally having been in a battle with the Patent Office for 7 years over an application that has no existing prior art - and there are many others like me. And on the other hand - how can Amazon be granted a patent last December for product reviews where they can enforce such a public domain feature over the entire internet community.
    Patents are granted today provided there are no large corporations that would be affected by granting them - that is a fact!

     

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  10.  
    identicon
    Ronald Johnson, Apr 7th, 2006 @ 11:31am

    Re: Re: Selling Patents

    This is the problem - there is no prior art. Personally having been in a battle with the Patent Office for 7 years over an application that has no existing prior art - and there are many others like me. And on the other hand - how can Amazon be granted a patent last December for product reviews where they can enforce such a public domain feature over the entire internet community.
    Patents are granted today provided there are no large corporations that would be affected by granting them - that is a fact!

     

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  11.  
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    angry dude, Apr 7th, 2006 @ 11:48am

    Re: Re: Re: Selling Patents

    Hear, Hear,

    PTO's upper management doesn't like american small inventors... (Isn't it a PTO job to protect small guys from the big evil corporations ? apparently not these days...)

    The whole thing looks more and more like a scam to me...

     

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  12.  
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    Mike (profile), Apr 7th, 2006 @ 12:36pm

    Re: Re: Re: Selling Patents

    This is the problem - there is no prior art.

    But you said there was prior art because they were already using the process.

     

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  13.  
    identicon
    jamie, May 11th, 2006 @ 10:59am

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  14.  
    identicon
    oswald, May 21st, 2006 @ 4:43am

    underwater timed release

    Dear Sir my name is Oswald and over the last 9 years have been working on my release tool, now that this is complete and functional I require your assistance as to the sales of my product.
    its designed to economically retrieve goods from the ocean floor with a countdown timer programmable up to 8 years pending the type of battery's used , the release loads are up to 300KG instantly with precise timing. even over longer periods of time delays.
    as a stand alone unit, it can be used for the following. acoustic back up releases, subsea blue and white water monitoring sensing. acoustic modems for one. travick monitoring at subsea level, decoy preposes for military purposes, simultaneously monitoring of currents at sea air enz, salinity, Tsunami, warning, at greater depths, auto deployment for escape vessels as missions for frogman. remote recovery for hasitors materials, political information that can be released , like documents.and corordenence with individual security, smuggling of food and medicine of people that are deprived of such, combating commercial monopolisation. fishing traps, retrieval.
    its too many to educate you, A fantastic tool, if this can be applied to your customers, you may contact me for a demonstration soon to be held hopefully with the assistance of the defence force,in South Australia this tool is so well designed, in some cases it is more economical to recover the goods 100s of Kilometres of shore by helicopter, as a helicopter cost $1000. per hour, and a ship and its manpower can due to the timefactor cost and investment of equipment be more expensive. depth rating 1000meters or more release loads from 5KG to 300KG more with heavy duty plate, deeper with disposable timers, cost evective both in its use and purchase , compact and easily handled , light weight storage, and small, strobe light for night recovery is additional and only rated to 8 bar or atm. we are still working on this, so please contact me . if you find use for this tool thank you for your attention Oswald.


    --------------------------------------------------------------------------------

     

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  15.  
    identicon
    Anonymous Coward, Aug 18th, 2006 @ 9:33am

    Re: Selling Patents

    Hey Ron

    Liked your comment. Actually had a first hand go around with the patent office, 9 years to be exact fighting examiners and corporate lobbyist for a patent that would actually upset Apple, Microsoft, and the big guns. Spent close to 2 Million in fees. The patent system in this country is a joke........ and thats being kind

     

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  16.  
    identicon
    Timothy B Newland, Mar 15th, 2007 @ 2:41am

    Selling my patent

    every company that is out there wants alot of money to promote my patent. I have already put alot of money in my idea to get a patent. My patent is called, the Aqua-loc system #D/510,772 No one said this would be that exspencieve to do. All I want to do is sell it to a manufactor that can save the govt. and insurance millions a year. and the people that looses so much in floods. Can you help. Thanks for listening.

     

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  17.  
    identicon
    myrna brayford, May 2nd, 2007 @ 4:44pm

    I have two patents I wish to sell

    How would I go about that??

     

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  18.  
    identicon
    Robert L. Sharp, May 29th, 2007 @ 6:12pm

    Selling Utility Patent

    I also have a Utility Patent that was issued on February 14, 2006. I am interested in selling the Patent for a
    reasonable amount of money. The key word is reasonable.
    You can read more about my new and innovative ladder by
    looking at Patent # 6997282.

    I am not a greedy person looking for Billions of dollars.
    I am looking at an amount to help me with my retirement
    in a couple of months.

    Does anyone have an idea as to where I could pursue the
    selling of my invention? I have had a ton of Marketing
    Companies approach me in the last year, and they are all
    money greedy leaches, and a number of them are totally
    unscrupulous, according to the Better Business Bureau and
    other reporting agencies.

    I would gladly work as an advisor or technical assistant
    with the Marketing of my ladder. Obviously, royalties are
    a big factor in something like this, and I would work with
    someone on a sensible basis.

    Thanks,

    Robert L. Sharp

     

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