The Patent Thicket That May Destroy VoIP

from the helping-spur-innovation,-huh? dept

You have to wonder how many times fans of the patent system have to repeat the mantra that "patents encourage innovation" before they can actually believe it. There continues to be new evidence on nearly a daily basis of patents doing the exact opposite that it's hard to believe the patent system retains as many supporters as it does. The latest is that a ton of patent holders are preparing to sue over various VoIP-related patents, following the news of Verizon's big win over Vonage for VoIP patents. The problem, of course, is that tons of companies (some big, some small) all claim patents on various aspects of VoIP -- creating the very definition of the "patent thicket." That is, there are so many patents around the very concept of VoIP that no one company can actually afford to offer a VoIP service, since the cost to license all the patents is simply too prohibitive. Expect plenty more lawsuits in the near future as this all comes out in court. The big players will use their patents to keep out competition, and the small players will use the patents to try to create an NTP-style lottery ticket. The lawyers will all win -- but consumers who just want to use VoIP will lose big time. What's wrong with letting companies simply compete in the marketplace and letting the natural forces of competition encourage innovation? Instead, we get patent holders trying to hold back competition and hold back innovation.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    icon
    lavi d (profile), Mar 27th, 2007 @ 8:35am

    The Beginning

    The beginning of the end of America's leading position in technology.

    How long before people wake up and realize that US patents and copyright have virtually destroyed the technological landscape in America?

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Ed, Mar 27th, 2007 @ 9:21am

    The end...

    I totaly agree.

    I'ts stonishing that the americans are deeeeeeply sleping.

    They are dreaming about to make money and support the future on patents and copyrights. who only make money on it? lawyers.

    Hello! Wake up !!

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    erinol0, Mar 27th, 2007 @ 9:31am

    Re: The end...

    I'm American, and not happy with the way things are being run. I vote. I write my representatives.

    Am I asleep? No.
    Am I steering the ship? No. And anyone who is steering is not listening to me.

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    steve, Mar 27th, 2007 @ 9:49am

    re the end

    Our government refuses to listen to 98% of the people. Why?, because we do not send them millions of dollars in campaign funds. Go figure why they spend millions of dollars to get a job that pays maybe what 100,000 dollars?. We the American people are screwed no matter what we do.

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Jack Sombra, Mar 27th, 2007 @ 10:08am

    "Our government refuses to listen to 98% of the people."
    On patents, i doubt much more than 5% of the "people" know about and understand the patent system, never mind recognize the problems with it

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    Missing, Mar 27th, 2007 @ 10:17am

    the truth is...

    as an American, I can say we have been a government for the corporations for a long time. From everything from the FDA to the FCC to the greedy SOBs in congress to Mr Bush himself, we are being governed, not governing ourselves. We are viewed as criminals and livestock. You have seen so many stories about how our laws are being changed to suit the interest of the corporations. This will not change. That is, not as long as the goverment is in it's current incarnation. like a dirty pair of sweatsocks, it should be removed, cleansed and replaced. we keep talking about changing the DMCA and the Patent Laws, that thinking is backwards, like many appraches to medicine here in the states, we are treating symptoms, not the cause of the disease. If you are sick you NEED to treat the cause, otherwise the symptoms will reoccur. We need to wipe, reformat, and reinstall a better OS for the US.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    squik, Mar 27th, 2007 @ 10:37am

    How long before people wake up and realize that US patents and copyright have virtually destroyed the technological landscape in America?

    Actually, it has created the landscape. Without patent protection, there is lowered incentive to invent and innovate.

    Remove the patent system and everything becomes a commodity with marginal pricing. Great for the consumer who wants something old for a cheap price. Horrible for the consumer who wants something new, but can't find it at any price because no one will waste the millions to invent something that, even if wildly successful, won't generate enough revenue to cover the cost of development.

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Casper, Mar 27th, 2007 @ 10:45am

    Re: by squik

    You may believe that, but I do not. I am a software developer, and we do not copyright any of our code. In fact, the only code we have that has any protection on it is the only piece we have problems with.

    People will always innovate, all patents do is make sure that only companies take turns innovating. There is no evidence to the contrary, other then greedy people complaining that they may not get another Ferrari if someone competes with them.

    Demand drives innovation, not patents.

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Overcast, Mar 27th, 2007 @ 10:47am

    The lawyers will all win

    The only 100% completely true statement about all these 'patent' lawsuits...

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    RandomThoughts, Mar 27th, 2007 @ 10:51am

    Wow, it has been the beginning of the end for a long long time.

    VoIP is not a "new" thing, it is a new way of doing the same old thing. If anyone thinks that a VoIP start-up would be a good idea, they are just nuts. It really has nothing to do with IP though. Voice is a commodity, it doesn’t change the game, it just is a different way of delivering phone service. Voice is trending to zero. Who would really think its a good idea to build a company around a product that has strong competitors with big bank accounts? Why is it a good business model to set out to attain razor thin margins?

    Vonage will die not because of patent issues, but because a business based on voice was doomed. Can Vonage survive? Not as long as it stays a one trick pony. Can it innovate and come up with something new? That is a good question. If they can't innovate, they will die. Protecting innovation is what IP is all about.

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
    angry dude, Mar 27th, 2007 @ 10:59am

    techidiocy

    Idiots, the purpose of the Patent System is to encourage people to publicly disclose their inventions.
    Without patents we are back to the Middle Ages - trade secrets, and many of those secrets died with their original inventors.

    As for VoIP troubles, it will be sorted out...
    That's what standard's organizations are for: to establish official standards and to list all patents involved so there is no guessing.

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    Anonymous Coward, Mar 27th, 2007 @ 11:04am

    Re:

    Why bother inventing anything at all. If you come up something new just let your neighbor copy it. You get nothing for your hard work. Lets all be socialist, screw capitalism.

     

    reply to this | link to this | view in thread ]

  13.  
    identicon
    A PATENT ATTORNEY, Mar 27th, 2007 @ 11:04am

    Firstly,

    I don't see stanaphone infered with in any way.

    The problem is not with the patent system, but in the idiots who duing claim construction make it too abstract in greed!

    want a better system, look no further than the patentee!

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    acousticiris, Mar 27th, 2007 @ 11:04am

    Non-obvious?

    It would seem a technology with so many patents associated to it would almost certainly indicate that the patents and the technology should fail the obviousness test.

     

    reply to this | link to this | view in thread ]

  15.  
    identicon
    sam, Mar 27th, 2007 @ 11:10am

    patents

    hi..

    i'm amazed that the owner(s)/writes of this site continue to hammer about patents/drm...

    does the patent office do a poor job in some cases for some patents.. sure... no doubt.. is drm a major hassle for some people who wnat to listen to music... sure.. no doubt...

    but as far as patents are concerned.. you have every right to innovate/create something that's entirely new, and then to freely give it to the world to use however the world wants to, or you could create something entirely new, and tell the world you can use the patent/build on the patent, provided you in turn make the subsequent work subject to the same kind of licensing...

    the problem with the vast majority of people who are screaming about patents... you've never gone through the effort of being innovative enough, where you've created something worth patenting..!!!!

    if i've created something that's innovative, then i damn well deserve to be compensated for my efforts. if you as a consumer don't like it, don't buy whatever product/service is covered by my patent!!

    or better yet. stop whinning, and create something that's innovative enough to make my patented approach/technology irrelevant.

    the same goes for the bitching about drm.. if you want music that's drm free... raise a bunch of cash, find your favorite artist/musician and pay them to produce/release fully free mp3 music for anybody to listen to..

    what's that you say.. you don't want to front the costs. you think someone else should front those costs, so you can have music at the cost you want to pay for it... go f* yourself...

    or better yet. learn how to hum/sing a song...

    there's nothing to stop anybody from creating music and for making it free.. except musicians like to eat, pay their rent, etc...

    you guys simply want artists to play by your rules..

    peace..

     

    reply to this | link to this | view in thread ]

  16.  
    identicon
    Dan L., Mar 27th, 2007 @ 11:15am

    Re: RandomThoughts

    Random thoughts for the Random thoughts….
    Vonage did innovate, and got sued because they did and somebody else noticed they were doing something in the market and decided they wanted a cut. If Vonage hadn’t been at successful then I doubt they would have been sued at all.
    The ‘little guy’ going against the ‘big guys’ is what allowed for a lot of the advances we have today. If this wasn’t the case then the yellow pages would only be a couple pages long (no Mom and Pop shops). And if that was the case then do we have anti-monopoly laws? The patent is meant to allow a limited time monopoly to encourage innovation, not stifle competition (read up on T. Jefferson’s concerns and what is written in the Constitution).
    If voice a business based on voice is doomed why are the Bells so powerful?
    Would Vonage have survived? Who knows since they were sued and prohibited from trying anymore.
    Patents aren’t entirely to blame here; it is the culture that has developed to take advantage of their own complacency and failure to innovate (not invent, there is a difference). Now there are so many ambiguous patents that why should I try to innovate at all? The lawyers are the only winners.

     

    reply to this | link to this | view in thread ]

  17.  
    identicon
    Mark Murphy, Mar 27th, 2007 @ 11:19am

    Patents and innovation

    Without patent protection, there is lowered incentive to invent and innovate.

    One could argue that too muchpatent protection lowers incentive to invent and innovate. Take this very case under discussion: VOIP. Lots of companies innovated. Few, if any, invented -- VOIP has existed in crummy forms for a long time. Why should I bother innovating something if it's eminently likely that somebody else will snag a patent on it, because they have more/better/faster patent attorneys?

    Idiots, the purpose of the Patent System is to encourage people to publicly disclose their inventions.

    And so long as there's treble damages for knowledge of existing patents covering your work, public disclosure becomes weakened, because nobody wants to look.

    Why bother inventing anything at all. If you come up something new just let your neighbor copy it. You get nothing for your hard work. Lets all be socialist, screw capitalism.

    Do you think Toyota is having GM and Ford for lunch based on patents? Or might it be based on better manufacturing processes, long-range forecasting (e.g., ever-increasing fuel prices in turn increasing demand for high-mileage cars), and the like? Patent protection neither ensures success nor is a prerequisite for success.

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    Dan L., Mar 27th, 2007 @ 11:34am

    Re: techidiocy

    Just more musings...

    JPEG standard anyone, anybody remember what JPEG stands for?

    Get everybody using it then...BAM! Somebody brings out a patent that 'kind of covers the idea'.

    Or will it drag out like HDDVD vs Blue Ray? Whatever happened to wireless USB?

     

    reply to this | link to this | view in thread ]

  19.  
    identicon
    dorpass, Mar 27th, 2007 @ 11:37am

    Squik, coward, sam....

    You must have been hiding in the cave for the past few years to hold these idealistic views of how patent system works. If you show me a product that NTP has successfully created and is selling, then we'll talk about patents helping with innovation. Until then, read another fairy tale.

     

    reply to this | link to this | view in thread ]

  20.  
    identicon
    squik, Mar 27th, 2007 @ 11:37am

    patent redux

    Demand drives innovation, not patents

    Both supply and demand drive price. Without patent protection, anyone can copy the invention of someone else. Supply skyrockets. Simple microeconomics tells you that price will stabilize at marginal cost. That is, no one will make money.

    One could argue that too muchpatent protection lowers incentive to invent

    The problem we have with our current patent system is that it is overly generous in rewarding patents. Something are awarded patents which should not be because they are obvious to practitioners of the art. Some patents have overly broad claims that should be denied. Our patent office is overburdened and has chosen to allow bad patents through for the court to make the final decision should dispute arise.

    This state of affairs does hinder innovation. But it isn't clear to me that all of the allegations in the VOIP case can be dismissed as flawed patents. Verizon clearly has a right to protect its IP with patents, even if the company violating those patents has gone beyond Verizon's original work and layered their own innovations on top.

    Do you think Toyota is having GM and Ford for lunch based on patents

    I think you'll find that GM, Ford, and Toyota have their share of patents. But they likely also cross license so they make more money off of their inventions.

    The solution to the VOIP case is for the bad patents to be struck down in court and for Verizon and Vonage to find a licensing arrangement on the valid patents.

    Patent protection neither ensures success nor is a prerequisite for success.

    But it has been the impetus for invention and has been an ingredient of success for many enterprises.

     

    reply to this | link to this | view in thread ]

  21.  
    icon
    Steve R. (profile), Mar 27th, 2007 @ 11:46am

    Re: squik

    The assertion that patent protection is necessary to foster innovation is superficial and neglects that many people invent/innovate simply for the intellectual challenge the ability to help society.

    The purpose of the patent system is to provide a patent holder with a LIMITED (in time) monopoly. What is unfortunately happening is that the intellectual property crowd is expanding the concept of patents to apply to abstract concepts such as ideas and business models. Additionally, they are attempting to do away with reverse engineering; a time honored method of developing competing technologies.

    I also find it ironic that many people who theoretically advocate free market concepts, instantly do an about face and become monopolists in regards to intellectual property. In the free market you compete or go out of business there is NO right to product protection (Patents are a form of product protection). From the historical perspective, patents have not been around for very long and it seems that we have made significant technological advances even in the absence of patent protection.

    I am not against copyright/patent rights provided that they are for a very limited time and are narrowly defined. The current state of patent/copyright law is an absurdity.

     

    reply to this | link to this | view in thread ]

  22.  
    identicon
    Vincent Clement, Mar 27th, 2007 @ 12:26pm

    Re: Re:

    Invention is one part of innovation. The other part of innovation is marketing. If you can't market your invention, it's worthless. There literally are thousands upon thousands of patents gathering dust at the USPTO.

     

    reply to this | link to this | view in thread ]

  23.  
    identicon
    RandomThoughts, Mar 27th, 2007 @ 12:34pm

    DanL, I agree with a lot of what you are saying, but Vonage has never shown a profit and was in a market where its only product was trending to zero. The lawsuit might speed up the death, but the patient was in ICU before the suit. I 100% agree with your point about how companies need to take control of their destiny though. I do think that companies should be worried less about what someone else does and more about what can they come up with next.

    The problem is that coming up with what is next is hard and Wall Street can be a difficult taskmaster. The Bells are powerful because of where they are, but if they stay in that mode, they would have zero revenue by 2015. Imagine that, Verizon Wireline with zero revenues. That is the environment they face. Cable companies are the ones that are really hurting them, and they are forced to spend billions to upgrade their network as to offer video/data alongside voice and wireless. I believe that Verizon went after Vonage because they could. They may go after some of the other small pureplays, but I think this is just because they can, for kicks. I seriously doubt that they will go after a big and powerful cable company. No one wants to get into something like that with someone who has an army of lawyers.

     

    reply to this | link to this | view in thread ]

  24.  
    identicon
    davidwr, Mar 27th, 2007 @ 12:43pm

    Patent pools will solve individual problems

    The auto and radio industries had this problem a century ago. They solved it with patent pools.

    The ultimate answer is some form of mandatory licensing for goods and services deemed "essential." I don't think VoIP would qualify as essential, not in the same way as cars.

     

    reply to this | link to this | view in thread ]

  25.  
    identicon
    kweeket, Mar 27th, 2007 @ 1:23pm

    Re: patents

    but as far as patents are concerned.. you have every right to innovate/create something that's entirely new...

    What's we're seeing here is the opposite of creating somethig new. Filing overly broad patents, waiting for someone else to independently invent something similar, then sue the hell out of them - that's the business model to which Mike is objecting.

    you've never gone through the effort of being innovative enough, where you've created something worth patenting!!

    Like many Techdirt readers, I'm a software developer - and I refute that claim. If "one-click shopping" was granted a patent, I'm sure some of the code I've worked on could be too.

     

    reply to this | link to this | view in thread ]

  26.  
    identicon
    theotherhalf, Mar 27th, 2007 @ 1:28pm

    so so sad

    we are all in such a pickle. i could put the blame on the consumer, i could put the blame on large publicly owned tycoons, or i can blame the government but non of that will do any good. lets think about this. companies check mate each other with patents they don't even intend to use just so they can control the market (consumer looses). we miss out on technology, competition to drive down prices and so on. But its the consumer that buys the products made by the larger companies, only to feed the greed. So lets change all this, right? We can ban large greedy companies and just bite the bullet, go without. Now the stock prices of each banned company because of poor sales and poor publicity...... out dam, you own there stock! you cant ban them. your retirement is going down the drain! we could all pull out but what would that to do the stock market as a whole? as soon as the government steps in and makes some half a(ss effort to put a stop to it tax money goes to legal fees...



    ... you can all see where this is headed. as i can see it from down here, we are all f. u c ke d. This is years in the making. everyone needs to think about what and why they buy, government needs to think about what there kids get to look forward to, and CEOs need to be hung (sorry) this stuff is complex beyond one brains comprehension so i don't blame "the Americans". but who ever is at fault... shame on you!? something is about to give and its nothing money will fix.

     

    reply to this | link to this | view in thread ]

  27.  
    identicon
    squik, Mar 27th, 2007 @ 1:30pm

    Re: Re: squik

    The assertion that patent protection is necessary to foster innovation is superficial and neglects that many people invent/innovate simply for the intellectual challenge the ability to help society.

    And many do it to make a living while doing those other things. Unfortunately, if you take away the profit motive, you limit drastically the amount of invention that will happen. I wish it weren't so, but you can't argue against the history of Communism, though you are welcome to try. Tell me three great inventions that have come out of Cuba since Castro took over. Tell me about the economic powerhouse that is China BEFORE it opened itself to capitalist incentives.

    I also find it ironic that many people who theoretically advocate free market concepts, instantly do an about face and become monopolists in regards to intellectual property

    You may be right, but I supported the patent system, which is not a free market concept. The corporatists in libertarian clothing do as you say. They argue for their own monitary interests at the expense of their intellectual integrity. I am neither corporatist nor libertarian. I'm only interested in the proper balance of rights and privileges that maximize the values that society wishes to promote. Like it or not, one of those values is the ability to profit from your work. And that is something patents do.

    From the historical perspective, patents have not been around for very long and it seems that we have made significant technological advances even in the absence of patent protection.

    Patents were used in ancient Greece. Modern patent ideas originated in 1474 in the Republic of Venice. King James I of England instituted patent law in 1623. The US patent system was established in 1790. While significant technological advances have been made in the absence of patent protection, history is not on your side. Vastly more technological advancement has been made under the protection of patents than not.

     

    reply to this | link to this | view in thread ]

  28.  
    identicon
    EdB, Mar 27th, 2007 @ 4:22pm

    Re: Re: Re:

    And if you choose to market the intellectual property instead of an item made possible by that intellectual property?

     

    reply to this | link to this | view in thread ]

  29.  
    identicon
    EdB, Mar 27th, 2007 @ 4:27pm

    Re:

    Problems with how patents are granted (too broad, obvious) does not equate to problems with the patent system in general. Kinda like saying since some babies grow up to be criminals the problem is babies. derrrr...

     

    reply to this | link to this | view in thread ]

  30.  
    icon
    Mike (profile), Mar 27th, 2007 @ 5:55pm

    Re:

    Actually, it has created the landscape. Without patent protection, there is lowered incentive to invent and innovate.

    This is false. It's a total myth. The incentive to innovate is the market itself. You make money from the market. The only thing that the patent system creates incentives for is getting more patents. That's not the same as innovating by any stretch of the imagination.

    Remove the patent system and everything becomes a commodity with marginal pricing

    This is also false -- as we've discussed extensively around here.

    You can see some examples here:

    http://www.techdirt.com/articles/20070320/113946.shtml
    http://www.techdirt.com/articles/20 070219/021201.shtml

    because no one will waste the millions to invent something that, even if wildly successful, won't generate enough revenue to cover the cost of development.

    You make a huge (and very wrong) assumption in there, that without patents you can't generate enough revenue to cover the cost of development.

     

    reply to this | link to this | view in thread ]

  31.  
    icon
    Mike (profile), Mar 27th, 2007 @ 5:58pm

    Re: patents

    if i've created something that's innovative, then i damn well deserve to be compensated for my efforts.

    This is entirely false. You deserve the right to *try* to get compensated for what you've created, but if the market doesn't value it, you do not get compensated for it. That has nothing to do with patents. What patents do is create an artificial monopoly. While you have the right to try to get compensated, that doesn't explain why you should have the right to a monopoly over an idea.

    you guys simply want artists to play by your rules..

    No. We want people to recognize that the patent system, as it stands, is more harmful to society overall than helpful. The system is supposed to benefit society (not individual inventors) and there's increasing evidence that it does not.

     

    reply to this | link to this | view in thread ]

  32.  
    icon
    Mike (profile), Mar 27th, 2007 @ 6:01pm

    Re: patent redux

    Both supply and demand drive price. Without patent protection, anyone can copy the invention of someone else. Supply skyrockets. Simple microeconomics tells you that price will stabilize at marginal cost. That is, no one will make money.

    Go back to the econ books. The point is that if you STOP innovating, no one makes money -- and that's perfectly reasonable. However, if you keep innovating and keep creating new and better products you can continue to charge a premium over marginal cost and can continue to make profits. That's what we're arguing. Your view is of a static world, rather than the dynamic world we actually live in.

    Innovating is an ongoing process, not a one-off event. The patent system slows down innovation by pretending it's a one-off event and then making the process stop until the patent runs out, or making the process much more expensive. Neither is beneficial to society.

     

    reply to this | link to this | view in thread ]

  33.  
    icon
    Mike (profile), Mar 27th, 2007 @ 6:07pm

    Re: Re: Re: squik

    And many do it to make a living while doing those other things. Unfortunately, if you take away the profit motive, you limit drastically the amount of invention that will happen.

    This is false and demonstrably so. First of all, we are NOT talking about taking away the profit motive. We are just saying that the profits should come from serving customers in the marketplace, just as the free market demands. So claiming that removing patents removes the profit motive is wrong.

    However, if you are claiming that removing patent protection limits the amount of innovation, again you will find that you are wrong. Take a look at the history of the Netherlands when they went without patents. Take a look at the industrial revolution in Switzerland when it went without patents (or very limited patents). You'll find that your arguments that patents are needed for innovation fall apart quite quickly.

    but you can't argue against the history of Communism, though you are welcome to try. Tell me three great inventions that have come out of Cuba since Castro took over. Tell me about the economic powerhouse that is China BEFORE it opened itself to capitalist incentives.

    Yikes. This is a total non sequitor, and actually doesn't help your point at all. We're not arguing for communism. We're actually arguing for the opposite: a free market NOT supported by gov't mandated monopolies. The problem with communism is that it supports gov't mandated monopolies in the form of central planning. The patent system itself is an example of such central planning, rather than support for a capitalist system.

    What we're discussing is making the system much more capitalistic, by allowing the market to reward innovation, rather than a gov't granted monopoly.

     

    reply to this | link to this | view in thread ]

  34.  
    identicon
    Tyshaun, Mar 27th, 2007 @ 6:51pm

    Mike, give it up...

    You know, up until about 2 weeks ago I had techDirt on my google home page. I took it off simply because every time I read an "article" here, it made me soo mad I could feel my blood pressure go up.

    Let me make this easy for you, sure, patents may have been INTENDED to foster innovation, but todays paradigm of patents is as a protection for profit generators, or as a profit generator itself. I make no assertion that this is a correct paradigm, but it is the current interpretation accepted in most business ndeavors, and more importantly, in the courts. This by no means is abnormal, the only purpose I can see for having lawyers is that although we'd like to think laws are "obvious" as written, they are interpretive, and in fact, are interpreted based on the particular time period. We see it all the time where something that was considered "OK" 10 years ago suddenly is not OK because of some new interpretation of the law based on societal norms of the present time.

    The other thing that techDirt authors seem to gloss over again and again is that the purpose of a corporation is to generate a profit (except for non-profits like 501c). Corporations primary responsibility is to its stockholders, anything else is secondary. Given that assertion, how companies pursue, use, and attempt to protect patents make perfect sense. Even patent trolls make sense under that paradigm.

    In conclusion, maybe the problem here is that techDirts assertions on patents are wishful thinking more than solid theory. Or maybe it is solid theory, I'm not an economist, but as an engineer the first thing we are told in school is that theory often is proven wrong when placed in to the complex system of the real world.

     

    reply to this | link to this | view in thread ]

  35.  
    icon
    Mike (profile), Mar 27th, 2007 @ 7:31pm

    Re: Mike, give it up...

    Let me make this easy for you, sure, patents may have been INTENDED to foster innovation, but todays paradigm of patents is as a protection for profit generators, or as a profit generator itself.

    Tyshaun, I'm not sure what you're suggesting? We should shut up and take it while companies harm society?

    The other thing that techDirt authors seem to gloss over again and again is that the purpose of a corporation is to generate a profit (except for non-profits like 501c). Corporations primary responsibility is to its stockholders, anything else is secondary. Given that assertion, how companies pursue, use, and attempt to protect patents make perfect sense. Even patent trolls make sense under that paradigm.

    We don't gloss over that at all. In fact, the point is that there are opportunities to make even more profits by focusing on providing consumers what they want, rather than wasting time and resources on patent lawsuits and protecting existing models. Instead, if they put that money towards new innovation, they could continue to profit -- and, in fact, could profit much more by expanding the overall market.

    In conclusion, maybe the problem here is that techDirts assertions on patents are wishful thinking more than solid theory. Or maybe it is solid theory, I'm not an economist, but as an engineer the first thing we are told in school is that theory often is proven wrong when placed in to the complex system of the real world.

    Again, I'm confused by what you're saying. The "theory" is that the patent system encourages innovation. The evidence is showing that in this "complex system" of the real world, that's false. Therefore, it makes sense to show that the theory isn't being supported, so that perhaps we can change public policy to improve society.

    Doesn't that seem like a valid pursuit? Do you not support removing bad laws just because they're already there? That doesn't seem very helpful.

     

    reply to this | link to this | view in thread ]

  36.  
    identicon
    RandomThoughts, Mar 27th, 2007 @ 7:56pm

    Mike, do you agree that investment chases return? If someone innovates and can't protect their investment, why would they bother? If they invent something, bring it to market only to have a competitor copy it, don't you agree that would limit investment in research?

     

    reply to this | link to this | view in thread ]

  37.  
    icon
    Mike (profile), Mar 27th, 2007 @ 8:11pm

    Re:

    Mike, do you agree that investment chases return? If someone innovates and can't protect their investment, why would they bother? If they invent something, bring it to market only to have a competitor copy it, don't you agree that would limit investment in research?

    There are a bunch of false assumptions in those questions. Yes, investment chases return, but it is wrong to suggest that you can't protect your investment without patent protection (see the links I posted above for more details). It's not so easy to just have a competitor "copy" everything that you do.

    Studies have shown that "first to market" is a huge competitive advantage -- even if others have identical products. And since innovation is an ongoing process, the leader of the pack can keep innovating and staying ahead of any copiers, helping not only to build up its own reputation (and profits) but continue to make it harder and harder for others to copy.

    So, no, I disagree with the premise that not being able to lock up your idea with a patent limits research. I'd argue the opposite. Patents give people monopoly control that lets them kick back and relax rather than continue to invest in innovation.

     

    reply to this | link to this | view in thread ]

  38.  
    identicon
    RandomThoughts, Mar 27th, 2007 @ 8:23pm

    Mike, Tivo probably won't be along much longer, they invented DVR's, but first mover status didn't help. First movers get initial return, but quick followers usually win.

    Patents can let lazy people kick back and relax, but how long do they hang around? There are good companies and there are bad companies, the good ones continue to innovate. The ones that don't don't stick around.

    I agree, the innovation can be in different areas, Nordstroms for customer service, 4 Seasons for same reason, but when it comes to consumer products, patents are needed. If someone comes out with an iPod clone that looks exactly like an iPod for $10, you think Apple will still sell as many iPods as they do now?

    Now, I do think that the patents do favor big companies, but not for the obvious reasons. Big companies usually have big legal staffs. Companies with big legal staffs can spend a lot of time on issues such as this. They can afford to go to court. Just because they go to court doesn't mean they can't innovate at the same time. Hey, you have to innovate to get the next product to patent.

    Would I rather make the consumer want to do business with me rather than force the consumer to do business with me? If its either/or, I would rather force the consumer to do business with me. Its easier. If I don't have that choice, then of course I want the consumer to want to do business with me.

     

    reply to this | link to this | view in thread ]

  39.  
    icon
    Mike (profile), Mar 27th, 2007 @ 10:36pm

    Re:

    Mike, Tivo probably won't be along much longer, they invented DVR's, but first mover status didn't help. First movers get initial return, but quick followers usually win.

    TiVo made a bunch of boneheaded moves early on in their business life (and I'm not sure I agree with your assessment that they won't be around much longer).

    I never said that first mover advantage was the only thing. But it is often helpful. And there's nothing wrong with quick followers winning either -- if they're providing a better product. That's what competition is all about.

    Patents can let lazy people kick back and relax, but how long do they hang around? There are good companies and there are bad companies, the good ones continue to innovate. The ones that don't don't stick around.

    But why put in place incentives for being lazy? Why do we need extra incentives beyond the market? And, they hang around for quite some time. That's what we keep pointing out. It's the patent system that lets them hang around because they can sue anyone who challenges them.

    If someone comes out with an iPod clone that looks exactly like an iPod for $10, you think Apple will still sell as many iPods as they do now?

    I've discussed exactly that point. There are actually a ton of extremely similar iPod-like devices -- all of which are cheaper than the iPod. However, they've made no noticeable dent in iPod sales. Why? A few reasons -- all of which have helped Apple to differentiate: (1) iTunes integration. The others simply don't have it. (2) The Apple brand is incredibly strong. People are clearly willing to pay a premium to have the "official" Apple device. (3) The upgrade path. You know if you start with Apple you'll always be able to move up to the next latest and greatest -- and you know it'll be much better than whatever anyone else comes out with. So, no, your example isn't particularly compelling.

    Would I rather make the consumer want to do business with me rather than force the consumer to do business with me? If its either/or, I would rather force the consumer to do business with me. Its easier. If I don't have that choice, then of course I want the consumer to want to do business with me.

    I'm not sure what the above statement has to do with anything.

     

    reply to this | link to this | view in thread ]

  40.  
    identicon
    Anonymous Coward, Mar 28th, 2007 @ 12:18am

    Now, I do think that the patents do favor big companies, but not for the obvious reasons.

    They also protect the little guy. I was working in Software Architecture and sat on a Marketing board at IBM in the 90s. I saw many instances of technologies where IBM was paying little guys for their inventions.

    There are actually a ton of extremely similar iPod-like devices

    Not really similar in all aspects. The innovative wheel control and sleek design of the iPods are unique to Apple and protected by patent. Others try to do something similar, but have to stick just far enough outside what Apple has done because of patents.

     

    reply to this | link to this | view in thread ]

  41.  
    identicon
    JR, Mar 28th, 2007 @ 1:36am

    silly patents

    a silly thing going on with patents is that someone has an idea, patents it, and then just waits until someone else has the same idea and tries to build something on it. Ideas are not unique, execution is.

    Those bastards who have lots of patents and do nothing with them, just waiting to sue whoever dares to CREATE something, should go to jail. And those who claim such vague patents that could mean anything and everything, too.

     

    reply to this | link to this | view in thread ]

  42.  
    identicon
    JR, Mar 28th, 2007 @ 1:46am

    Another problem with patenting is that only those who can afford attorneys/lawyers and going to court can actually defend a patent. A patent is worthless unless you can afford defending it.

    Think about all those small companies that Microsoft copied from. What did they get? At first, nothing, after years of figthing, some money. Did those patents keep Microsoft from copying them and staying as a monopoly? No. Did those patents protect those small companies to stay in market and keep innoving? No.

    The same goes with capitalism. Think about all those much better products than the average that never made it just because the Big Ones had much more money to pressure, run marketing campaings, and disinform people to stay with their product.

    Think of VHS and BETA. Which one was better? which one stayed? Windows and Mac OS.. furthermore, how the hell did Microsoft get to where it is now? Innovating? No. Being better than the competition? No. Money, Marketing, Lawyers.

     

    reply to this | link to this | view in thread ]

  43.  
    identicon
    squik, Mar 28th, 2007 @ 2:26am

    A patent is worthless unless you can afford defending it.

    That is demonstrably false. Ever hear of lawyers taking cases on contingency?

    Think of VHS and BETA. Which one was better?

    Let's see. VHS gave quality acceptable to the vast majority of video consumers at a price they were willing to pay. Beta gave superior video quality, but was priced so high that it appealed only to a higher-end niche market.

    So, I guess it depends on your criteria. Beta was superior in video quality. VHS was a superior product as judged by consumers.

    The same goes for Mac and Windows. Apple created Mac as a high-end premium product. Meanwhile, it was much cheaper to buy that Windows crap. As a Mac user for over 20 years, I can tell you that Apple has provided a superior technology package. Microsoft, however, has provided a superior product because it delivers what the majority of consumers want at a price they are willing to pay.

    Here's a better way for you to think about these things. Think of evolution. Darwin taught us that those fittest for the environment survive and reproduce. It is the same for product markets. Those that are fittest survive. Don't confuse "fit" with some subjective notion of "superior". Neither evolution nor the market care what you think is superior. That which is fit is the organism/product which does that which is necessary and doesn't expend excess energy/money on that which has little to no additional survival value.

    The cheetah that runs 100mph may seem superior to the cheetah that runs 70 mph, but both will catch their prey. The difference is, the "superior" 100 mph cheetah expends more energy doing it and thus requires more prey and thus has reduced survival chances over the 70 mph "adequate" cheetah.

    The product that has superior technical specs in all features, even those which most people don't care about costs more than the product that is adequate for the majority of consumers. That "superior" product will naturally have fewer customers than the "adequate". Sometimes, as with Beta, it will have so few that it can't sustain itself. Sometimes, as with Mac, it has been enough to barely survive, while Windows thrives.

     

    reply to this | link to this | view in thread ]

  44.  
    identicon
    Charles Griswold, Mar 28th, 2007 @ 2:49am

    Patents Necessary for Innovation?

    Patents are necessary for innovation? Yeah, sure. Tell that to Apple, who built the latest version of Mac OS on top of FreeBSD. Tell that to the thousands of people who work on free software out of the sheer joy of (you guessed it) innovating.

    Or tell that to the guys who actually try to innovate but end up getting their butts sued off by patent-squatters who couldn't innovate their way out of a wet paper bag.

     

    reply to this | link to this | view in thread ]

  45.  
    identicon
    angry dude, Mar 28th, 2007 @ 7:03am

    Re: silly patents

    "a silly thing going on with patents is that someone has an idea, patents it, and then just waits until someone else has the same idea and tries to build something on it. Ideas are not unique, execution is.

    Those bastards who have lots of patents and do nothing with them, just waiting to sue whoever dares to CREATE something, should go to jail. And those who claim such vague patents that could mean anything and everything, too."

    I have one US patent and can't do anything with it at the moment.
    In order to build something based on my patent I will have to license at least 100 more patents from the current big market players. Do you really belive that those big guys would be willing to allow a potential competitor destroy their profits ?

    So, one solution is to wait until those patents owned by big guys expire and only then try to build something.
    Or I can do it now and be sued to bankrupcy by the big guys.
    Or I can sue the big guys for violating my patent, which I much prefer...
    This is a dog-eat-dog world out there...
    Go fuck yourself

     

    reply to this | link to this | view in thread ]

  46.  
    identicon
    RandomThoughts, Mar 28th, 2007 @ 7:05am

    Charles, Apple didn't invent the iPod, some inventor did. Apple then hired the guy. Where would the innovator had been had Apple just looked at the devise, copied it and started producing it?

    Could the guy been able to bring it to market and be as successful? Doubtful. Without a patent, that guy could have been left out. Without patents, you turn the playing field into who can market it the best. Does the little guy stand a chance in that equation? Nope, not at all. If it goes that way, would I be happy? Sure, I am in marketing.

    Patents and patent law isn't broken, its the way the courts decide things that is the problem.

     

    reply to this | link to this | view in thread ]

  47.  
    identicon
    dorpass, Mar 28th, 2007 @ 10:19am

    Re: to squik

    Amazing. You gave an example of VHS and BetaMax fight and VHS won... without a use of patents. That goes against your earlier assertions.

    The cheetah that runs 100mph may seem superior to the cheetah that runs 70 mph, but both will catch their prey. The difference is, the "superior" 100 mph cheetah expends more energy doing it and thus requires more prey and thus has reduced survival chances over the 70 mph "adequate" cheetah.

     

    reply to this | link to this | view in thread ]

  48.  
    identicon
    squik, Mar 28th, 2007 @ 11:05am

    Re: Re: to squik

    You gave an example of VHS and BetaMax fight and VHS won... without a use of patents.

    1) I responded to someone who used VHS and Beta as an example, asserting that money, marketing, and lawyers won the battle for VHS even though Beta was a "better" product. "Better" is a subjective term and one must define the criteria.

    Beta was only better on one measure: video quality. VHS was arguably the better product because it's picture quality was good enough for the public, the price was more acceptable to the majority of consumers, fast forward and rewind were much faster on VHS, and it had superior recording length, which is acknowledged by most people to be VHS's coup de grace.

    To be sure there were many good marketing moves made by JVC and some stupid moves made by Sony. But what ultimately prevailed here was product marketing -- producing the right product for the market, not salesmanship.

    2) Both VHS and Beta were protected by patents. And patents did play a role in VHS coming to dominance.

    First, to produce VHS, JVC required the license of several patented technologies from Sony, the creator of Betamax. The fact that Sony did license the technologies counters the argument that patents stifle innovation. Where money is to be made, companies will license technology.

    Second, JVC was much more liberal about licensing its technology than Sony. And in that effort to license the technology they listened to their potential licensees. It was RCA that requested the longer recording format, which allowed consumers to tape full-length movies, something Beta could not do because of its initial 60-minute limitation.

     

    reply to this | link to this | view in thread ]

  49.  
    identicon
    Dewy, Mar 28th, 2007 @ 3:11pm

    Re: patents

    How poetic... your insult everyone who disagrees with you, tell them to go F* off... then sign out with "peace".

    Let all back up just a bit (its been done but your ignoring it) and review WHY patents were a good idea. Lets say I invent a sweet little tip for your acetylene torch that uses half the fuel. I decide to market at cost +20% and get a good little business going.

    Now Bob's Torch parts and supplies buys one of my torch tips and decides to mass produce them, thus incurring a lower cost, and undersells me... the inventor.

    If I was smart and patent the Idea, I don't SHUT DOWN Bob's cheap tip production, I just get due credit and some compensation for my innovative design.

    Today Patent law has gone beyond absurd... I have several Ideas out under the understanding that its free for personal use, but anything that is used commercially should compensate me in some manner.

    I can't afford a patent lawyer or the testing and review processes required to actually WIN a patent in today's process. It has become an industry club for teams of hired and directed "engineers" backed by corporate sponsorship and lawyers.

    Further the recorded cases of little guy being sued / harassed out of the market, or financially destroyed because their ideas threatened the status quo do not encourage any small ideas.

    So in conclusion... patents do help encourage innovation if applied properly. As tools of the lobbyist driven government they only stifle it. NO Patent system would be better than the existing system.

    And no Sam... we don't want everything for free... but we do want it at the lowest cost with the most value, and thats the way a consumer driven FREE MARKET is supposed to work. If your costs to reproduce and deliver the song to market are $.00001 then you better get the price down to a penny buddy, or someone is going to undersell you.

    This isn't Hollywood where you invent a better bottle opener and the world showers you with riches. You sound like one of the old time tradesmen who died with secrets of his trade in his head because he found no one worthy of teaching. Because his value of his knowledge was inflated the world lost knowledge.

    Relax, release your invention under a GNU and get back to work. If your Idea is worth compensation, you'll get it.

    Don't tell me to F*ck off , then expect a signout like "peace" to set it right.

     

    reply to this | link to this | view in thread ]

  50.  
    identicon
    Moshe, Mar 29th, 2007 @ 2:42pm

    There is an offer on the table for $3.22

     

    reply to this | link to this | view in thread ]

  51.  
    identicon
    Zeeshan, May 15th, 2007 @ 8:52am

    VOIP access

    Please excuse my ignorance, but isn't the cheap cost associated to VOIP for casual users going to be a thing of the past? Once the quality of this technology is perfected, telecomm companies would own it and charge the same rates as land line phone systems. A wireless provider in Dubai, "du Inc.", recently got a court order to get the local ISP to block access to VOIP sites. Dubai is a city with 80% of the population coming from abroad to work, so people use the phone plenty to keep in touch with families. Du Inc. was losing tonnes of business.

    Band together and keep the internet from becoming a capitalist play-ground! Someone needs to develop an open-source VOIP technology platform, like what Linux did to operating systems.

     

    reply to this | link to this | view in thread ]

  52.  
    identicon
    Jamie Powers, May 18th, 2007 @ 11:07am

    When is a Legal Right A Weapon?

     

    reply to this | link to this | view in thread ]

  53.  
    identicon
    Jamie Powers, May 18th, 2007 @ 11:10am

    When is a Legal Right A Weapon?

    When you can't afford to fight back.
    A legal right might be wrong but if the price to find out is between $100,000 and $1million dollars will you ask?
    No, you won't.
    Only large entities can and will.
    And small ones will be crushed by the sheer transactional expense associated with an IP claim or issue.
    This is the hegemony that IP is becoming. It's here, its now and it has to be addressed.

     

    reply to this | link to this | view in thread ]

  54.  
    identicon
    Andrew Mottaz, Jun 26th, 2007 @ 9:57pm

    Defensive Patents and Patent Holding Companies

    The idea that you patents should encourage innovation is a good one, it's just not the result of our current system. Instead, patents are available to those with the means to acquire them, and they are basically used defensively ( Toyota, GM and Chrysler don't pay for their cross-licensing. A practicing IP lawyer lecturing to one of my law school classes said "Patents are like nuclear weapons" meaning that the threats and the penalties are so huge, that companies just need to get their hands on a few to join the club.

    So . . . while encouraging innovation COULD result from a patent system, our current system just does not do it. Patent holding companies clearly do not encourage innovation. They discourage efforts to actually bring these ideas to market. Maybe just reforming the law would solve the issue -- a patent today is almost a guarantee of winning your case and recovering mega damages. Even if you believe in the idea of owning IP ( and owning it because you were the FIRST to figure it out and file, not the only one -- if I come up with the same idea 2 weeks later with no knowledge about your product, I can't benefit from the fruits of my effort ), you can still agree that our current system does not serve both the public good and your private ownership interests.

    Basicallly - my idea of a good patent system would be that you can patent only inventions that are so unique and innovative that it's highly unlikely that anyone could repeat your innovation or build on it without knowledge of the inner workings of the patent. Right now, you basically have to have a "non-obvious" idea. Well, every GOOD idea seems non-obvious to lawyers . .

     

    reply to this | link to this | view in thread ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Follow Techdirt
A word from our sponsors...
Essential Reading
Techdirt Reading List
Techdirt Insider Chat
A word from our sponsors...
Recent Stories
A word from our sponsors...

Close

Email This