One of our complaints with the patent system is that some of the incentives are designed in a way to actually punish success and reward failure. In the RIM/NTP case, for example, the company that failed in the market place gets tons of cash while the company that actually figured out what the market really wanted gets punished. It's that aspect that we find troubling about the way the patent system currently works. Capitalism has great mechanisms for rewarding those who successfully innovate: it's called having people buy your product. However, it seems we're increasingly hearing stories of failed businesses that suddenly think they're entitled to some part of the profits of success stories, just because they were somehow "first" -- even if their implementation failed. Take, for example, the story of Kane Kramer, who this article generously describes as creating the first MP3 player. That's not really accurate, of course. He did build a very early digital music player (pre-MP3), but it couldn't store more than a few minutes of music. Various business factors kept the product from succeeding. Perhaps he was just a bit too early -- but that's the nature of business. Of course, now that Apple is so successful with the iPod, what's he doing? Calling the lawyers, of course: "Kramer is consulting lawyers to see whether he has any claim to the design and technology behind the MP3 player." Hopefully, the lawyers explain to him that he has no claim whatsoever. His patents have all expired and his company folded a decade and a half ago. It's unlikely his plan to hit up Apple for money will go anywhere -- but just the fact that he's trying says something about the type of behavior the system is encouraging these days.
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