Unions Make Ridiculous Arguments Against Patent Reform

from the a-little-economics-would-be-good-here dept

Ronald J. Riley runs an organization called the Professional Inventors Alliance, which fights vehemently against any kind of patent reform that might make life harder for patent trolls or those who obtain horribly obvious or broad patents. He has been known to show up here at Techdirt to argue with us in the comments, but his arguments are based on the faulty assumption that pretty much all patents are good and anyone accused of patent infringement has clearly "stolen" the hard work of someone else. The fact is that that's very rarely the case. As we've seen repeatedly, many patents should never have been issued as they don't qualify as non-obvious or they're too broad. In those cases, patents are clearly an economic hardship, and there's plenty of research to back that up. Also, most cases of patent infringement occur when multiple companies come up with the same type of solution independently, which is hardly "stealing." No matter though. By focusing on the false idea that all patent infringement is stealing, it can be a very compelling case for those who don't delve into the details.

The latest news is that Riley has convinced the AFL-CIO to come out against the latest attempt at patent reform. Now there's a lot to dislike in the latest attempt at patent reform, and we'd be upset if it passed as is. But the two specific things that the unions are complaining about are the two most reasonable things in the reform package. The first would change how damages are calculated, so that if the infringing component is only a small piece of a larger product, the damages shouldn't be based on the value of the larger product, but the value of that small piece. That seems completely fair. Why shouldn't the damages be reflective of the actual value? It's hard to see why that's controversial, but it is if you hold completely irrelevant patents and you want to hold up those companies that are actually making useful technologies. The second complaint is with making it easier to contest a patent after it's been issued. This is also a no-brainer. Given how little review goes into a current patent, along with the fact that patent examiners are given incentives to approve, rather than reject -- combined with the length of time it currently takes to get a patent reviewed, the incredibly arcane rules that everyone is required to go through to contest a patent and the quick draw of some courts who refuse to wait for the patent office to review patents, it makes sense to have a better system to make sure a patent is valid. Why would anyone be opposed to improving the quality of patents... unless they hold questionable patents?

Unfortunately, Riley's organization appears to have blinded the AFL-CIO to what's really happening. In convincing them that this is about stopping theft, he apparently left out all the economic research showing that it would actually do plenty of harm to the industries that most employ AFL-CIO workers. That's because it would limit their ability to innovate, make it more expensive to do research, and open up opportunities for foreign companies to do a much better job innovating and beating us in the market. Of course, given the history of the AFL-CIO, they must be used to that kind of effect, because that's been the result of previous policies in previous decades. In the meantime, Riley is hoping that by getting the support of unions, Democrats will feel compelled to vote against patent reform -- and, in fact, a Wall Street Journal article on this same subject suggests that the AFL-CIO's letter has been effective in slowing the reform effort. Hopefully, though, someone will explain to both the unions and the politicians the basic economics of monopolies and how they slow competition and innovation. If the folks at the AFL-CIO would like a detailed explanation for why their letter actually goes against the best interests of the people they supposedly represent, they should give us a call.


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    Rick, Aug 27th, 2007 @ 3:39pm

    They're covering their own butts too...

    Many unions, including the AFL-CIO buy patents and hoard them so nobody can use them.

    In the 80's I recall a Popular Mechanics article where they bought the patent for a carburetor. They paid a million dollars for it - a hefty sum in 80's dinero. It got much better gas mileage than what we currently get, I want to say 200MPG, but I can't recall the specifics. Apparently they bought it out because it would have cost them thousands of jobs, since it only had about a dozen parts as opposed tot he 200 some parts used at the time.

    There have been many other patents they have boughten up for the same reasoning.

    Unions are just as evil as corporations, they all only think about themselves, not society. That carb patent alone would have eliminated the current dependence on foreign oil and kept us out of this stupid war for oil in Iraq.

    As far as I am concerned, a patent should not be valid without a marketed product that is freely available. That's one step towards real patent reform.

     

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      Glurbie, Aug 27th, 2007 @ 5:18pm

      Re: They're covering their own butts too...

      If the article was written in the 80s, wouldn't this patent be nearly expired by now?

       

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    Marc, Aug 27th, 2007 @ 5:20pm

    Rick- you are full of it

    This "patent" would have expired LONG AGO and we would all be "enjoying" this "breakthrough" today (I would LOVE to get 200 MPG) because the knowledge would revert into the public domain.
    I guess it DIDNT happen and I guess you are an IDIOT who knows NOTHING about patents.
    It's OK to support patent "reform" but please do not try to do so by spreading lies.

     

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      Darkeye, Aug 27th, 2007 @ 6:15pm

      Re: Rick- you are full of it

      Trolls and arguments aside, Patent reform is needed for the reasons he intends. The current patent restriction hurts the market by restricting innovation into the process of acquiring the patents you need to make something.

      Inventing is the process of using old ideas in new ways. If we cant use the old ones, we wont have any new ones.

       

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    Richard Cauley, Aug 27th, 2007 @ 5:28pm

    Patent reform -- damages

    What drives me crazy in all of this is that the patent reform bill doesn't actually change the law on damages -- it just puts explicitly in the statute what the courts have already said is the law. The problem has been that no one, including the courts, has applied the law correctly, leading to damages awards which make little sense, either economically or legally. The patent-holder's lobby is in a panic that the courts might actually apply the law correctly and thus are trying to keep the issue thoroughly confused.

     

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    Ronald J Riley (profile), Aug 27th, 2007 @ 5:36pm

    Mike, like usual you have the facts wrong.

    It is important to note that unions have entered the fray on patent reform for a multitude of their own reasons. There are many very intelligent and committed people in organized labor. They are perfectly capable of judging the merits of the respective arguments for themselves. I very much doubt that any of the people from organized labor I have had the pleasure of meeting could be bought or mislead into backing the agenda of disreputable interests. Frankly, if I was on the side of patent pirates I would be afraid to show my face in public.

    I most certainly was not surprised to see Mike paint the unions as being "blinded". It is this kind of arrogance by the patent pirating crowd which has led to broad spread disrespect of the Coalition for Patent fairness & PIRACY and their agenda being discredited in Congress.

    I do want to profusely thank organized labor for their insight related to patent pirating companies massive propaganda campaign. A warm relationship is blossoming and the Professional Inventors Alliance is looking forward to working with organized labor to both preserve and create jobs so that America and other developed countries can preserve a decent standard of living in the face of globalization.

    In regards to the economic issues surrounding patent piracy I believe that I can safely assume that you are personally ill qualified to comment on the issues. For that reason I suggest that you should consult someone like Pat Choate who is in fact an economist and an expert in the economic impact of patent deform. Also, the patent reform fight has gone on for may years and we were fortunate to have the support of three Nobel in economics recipients.

    If someone is going to spout off about the impact of patent reform perhaps it would be wise to consult someone who is actually an expert. Professor Irving Kayton is the leading patent law expert in the US. While others are strutting around claiming expertise in the hope of being put on the dole by one of the infamous patent pirates, fully 75% of practicing patent practioners have taken patent law classes created by Professor Kayton.

    It is unfortunate that so many people in the software community rationalize that recoding another's invention in a marginally different way somehow makes them an inventor. And even if they by some miracle invented something their failure to teach the invention clearly leaves them with no rights. So what we have are a bunch of parasitic people and companies who are doing their best to socialize other's property. We and they know that they are at best second rate, and majority of them are far below that!

    Ronald J. Riley,
    President - www.PIAUSA.org - RJR at PIAUSA.org
    Washington, DC
    Direct (202) 318-1595 - 9 am to 9 pm EST.

     

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      Mike (profile), Aug 28th, 2007 @ 1:54am

      Re: Mike, like usual you have the facts wrong.

      Mike, like usual you have the facts wrong

      Ronald, it's great that you've taken the time to stop by and say this, but then you fail to point out which facts are actually wrong while also failing to explain why the two broken assumptions you use constantly are wrong. Instead, you simply repeat yourself.

      Also, last time you stopped by you noted that you had more important things to do than argue with us. So I'm glad that we've risen up the importance scale in your book.

      There are many very intelligent and committed people in organized labor.

      I don't deny this. If you knew my educational background, you'd understand why.

      I very much doubt that any of the people from organized labor I have had the pleasure of meeting could be bought or mislead into backing the agenda of disreputable interests.

      I don't doubt it at all... because when you set up the false assumptions that you lay out, it's not hard to then be tricked by the sleight of hand that you pull in suggesting that these particular points of patent reform are dangerous. It's all in how you frame the debate -- and even you like to brag about how good you are at spinning the story in a way that makes people support your position. The problem is that it's based on a very dangerous house of cards that will do quite a lot to hurt our economy.

      Frankly, if I was on the side of patent pirates I would be afraid to show my face in public.

      This is a bizarre statement Ronald. Are you accusing me of being a "patent pirate"? See, rather than actually discuss the actual points, you've reduced the discussion to inaccurate name-calling. I'm not a patent pirate and I'm not ashamed to show my face in public. In fact, I'll stand up proudly and provide these folks with stacks upon stacks of evidence concerning the harm our current patent system has done to innovation and the economy.

      I most certainly was not surprised to see Mike paint the unions as being "blinded". It is this kind of arrogance by the patent pirating crowd which has led to broad spread disrespect of the Coalition for Patent fairness & PIRACY and their agenda being discredited in Congress.

      Again with the name calling, but you still haven't pointed out which facts I got wrong or explained why you still rely on the false assumptions. Instead, you try and tar and feather me as a "patent pirate" when nothing is further from the truth.

      I do want to profusely thank organized labor for their insight related to patent pirating companies massive propaganda campaign. A warm relationship is blossoming and the Professional Inventors Alliance is looking forward to working with organized labor to both preserve and create jobs so that America and other developed countries can preserve a decent standard of living in the face of globalization.

      If you were really concerned about job creation, then wouldn't the studies and statistics showing how strong patent policies have *hurt* job creation and *hurt* industrial growth, while weaker (or non-existent) patent policies have helped industrial growth mean you'd have to change your tune? Or will you continue to deny the evidence?

      In regards to the economic issues surrounding patent piracy I believe that I can safely assume that you are personally ill qualified to comment on the issues.

      You could assume it, but you'd be wrong. I'm not sure why you'd make that assumption, other than you don't like what I have to say... and you still refuse to point out what facts I actually have wrong, or why you continue to use false assumptions as the very core of your argument.

      For that reason I suggest that you should consult someone like Pat Choate who is in fact an economist and an expert in the economic impact of patent deform. Also, the patent reform fight has gone on for may years and we were fortunate to have the support of three Nobel in economics recipients.

      I could just as easily name equally well known economists and experts on the other side of this debate. Dr. Paul Romer, who is considered the leading expert in the economics of ideas and intellectual property, in a podcast just released today talked about what a good thing it is that the courts and the Congress are trying to push back the pendulum on patents. Dr. David Levine has been fighting this fight for many years, publishing research paper after research paper highlighting the dangers of patents.

      But naming experts is silly. You can always find an "expert." What interests me much more is the actual research that shows, time and time again, how excessively strong patents slow down innovation and industrial growth, rather than increase it. I've pointed you to all of this research in the past. The fact that you continue to ignore it says that you have either a mental block or an ulterior motive for not explaining away the conclusive evidence of the dangers of gov't backed monopoly protection of ideas.

      It is unfortunate that so many people in the software community rationalize that recoding another's invention in a marginally different way somehow makes them an inventor.

      You change the subject again, resorting to calling people names, but without addressing the actual question. You again make the false assumption (that we already suggested you abandon) that two people coming up with similar ideas at the same time means that one person "stole" the idea from someone else.

      And even if they by some miracle invented something their failure to teach the invention clearly leaves them with no rights.

      This is absolutely false. Everyone has rights to bring their invention to market and see how it does in the market place. That's called capitalism. What's your problem with capitalism?

      So what we have are a bunch of parasitic people and companies who are doing their best to socialize other's property. We and they know that they are at best second rate, and majority of them are far below that!

      This shows an astounding misunderstanding of history. I'd suggest you read "A Culture of Improvement" by Robert Friedel. You might learn something about innovation. Or read "How We Got Here" by Andy Kessler. Or read "The Lever of Riches" by Joel Mokyr. Anyone of those books will tell you that innovation isn't about "parasites socializing other's property" as you proclaim. It's about the competitive marketplace pushing others to improve on ideas, driving innovation faster and faster in a competitive marketplace.

      Based on your reasoning, each city should only have one restaurant. After all, that second restaurant is simply the second restaurateur "socializing" the idea of the first's. Is that the world you want to live in?

      So, Ronald, if you do decide to come back, again, please point out the *facts* I got wrong and please explain why you insist on making these two false assumptions:

      1. That all patents, no matter how broad or vague are good, and any attempt to improve patent quality is dangerous.

      2. That any patent infringement is stealing -- even if the ideas were developed totally independently.

       

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    Mark Murphy, Aug 27th, 2007 @ 6:12pm

    Open Letter to Mr. Riley

    If your comment (#5) on this thread is an example of your writing skills, you would serve your organization better by not writing. For example:

    "Frankly, if I was on the side of patent pirates I would be afraid to show my face in public." -- over-wrought hyperbole makes you look weak.

    "Coalition for Patent fairness & PIRACY" -- name-calling your opponents makes you look weak.

    "I believe that I can safely assume that you are personally ill qualified to comment on the issues." -- there's a oft-cited assertion regarding assumptions you may wish to research.

    "Professor Irving Kayton is the leading patent law expert in the US." -- citing as an example someone with a vested financial interest in the prevalence of patents (http://www.patentresources.com/) makes you look weak, as if the only people who back your cause are lawyers who make money off the existence of patents, rather than actually inventing things themselves. You would do better citing a "leading patent law expert" who does not have a financial stake in the outcome of your cause.

    "one of the infamous patent pirates" -- claiming a category as "infamous" and failing to provide any examples makes you look weak.

    "fully 75% of practicing patent practioners have taken patent law classes created by Professor Kayton" and "We and they know that they are at best second rate, and majority of them are far below that!" -- citing statistics without sources makes them look fake and, therefore, makes you look weak.

    I will skip the multiple spelling, grammatical, and punctuation errors, which would have this comment get a sub-par grade in any high-school English composition class worth its salt.

     

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      Darkeye, Aug 27th, 2007 @ 6:22pm

      Re: Open Letter to Mr. Riley

      Whereas, you not replying directly to his post, and citing the wrong post number (the second post was a reply to the first, and my post bumps Ron Riley down to #6 as of the time of this writing) only makes you look a little bad.

      That aside, I agree with you. I do not trust any organization before I'm aware of their motives, and R.R. there makes his well known.

       

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        irl, Aug 28th, 2007 @ 10:40am

        Re: Re: Open Letter to Mr. Riley

        Darkeye, you are the one that looks a little bad. I appreciate your sentiment, but his comment is indeed still #5. Nitpicking over someone's post and then being wrong about it must be embarrassing. Maybe you will be a little more cautious before you do it next time.

         

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    RandomThoughts, Aug 27th, 2007 @ 6:22pm

    Mark Murphy, I bet you wish you could have posted that in red, don't you? WTF is this, a blog or a debate site for Harvard?

    I do have to say though, the line about "I very much doubt that any of the people from organized labor I have had the pleasure of meeting could be bought or mislead into backing the agenda of disreputable interests." is pretty funny.

    Ever been to Jersey Mr. Riley?

     

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    Rusty Mase, Aug 27th, 2007 @ 6:45pm

    Get a Grip

    To start, at least you acknowledge that "Now there's a lot to dislike in the latest attempt at patent reform, and we'd be upset if it passed as is". So do not pass it. Simple solution.

    Starting with "Why shouldn't the damages be reflective of the actual value?". Then just eliminate the infringing technology in your product if the actual value of that improvement is not important. This is like the intermittent windshield wiper patent that drug out for so long in the courts. Surely you can make a useful automobile without an intermittent windshield wiper.

    Adding "but it is if you hold completely irrelevant patents and you want to hold up those companies that are actually making useful technologies". If the technology is truly irrelevant then who cares. Making products is unrelated to developing useful technologies.

    Then "Given how little review goes into a current patent, along with the fact that patent examiners are given incentives to approve, rather than reject -- combined with the length of time it currently takes to get a patent reviewed...". How do you know this! Do you have an issued patent and been through hassling with the process of patenting a technology?

    Unions represent the right's of American citizens; people. The US Constitution grants patent rights to American citizens and then implements these rights in patent laws and patent regulations. I would expect our workers unions to strongly support protecting the rights of individual American citizens versus the self-serving interest of a few multi-national corporations.

     

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      Mike (profile), Aug 28th, 2007 @ 2:11am

      Re: Get a Grip

      So do not pass it. Simple solution.

      Sure, but that doesn't mean I give up on patent reform entirely... and when the unions are arguing against the two provisions that actually make sense, I have to speak up.

      Then just eliminate the infringing technology in your product if the actual value of that improvement is not important.

      Of course, this goes against the very purpose of the patent system, which is to encourage innovation. But, you knew that... right?

      Surely you can make a useful automobile without an intermittent windshield wiper.

      Sure. But can you explain to me why someone who invented the intermittent windshield wiper deserves to stop all automobile production? Or deserves a piece of the profits of *cars* rather than the tiny portion derived from that windshield wiper?

      In fact, I think you're actually agreeing with me...

      Making products is unrelated to developing useful technologies.

      Indeed... as I've said repeatedly. And, of course that's another argument against patents. Making useful products is what drives the economy -- and it does so by the mechanism known as the market. Putting monopoly rights for minor components deprives the market of value -- and that's harmful to innovation.

      How do you know this! Do you have an issued patent and been through hassling with the process of patenting a technology?

      Ah, my favorite red herring from patent defenders. First, I'll ask you, if this is your standard for who's allowed to judge patent reform laws, then why shouldn't I ask you for proof of an economics degree. Because, honestly, we're not talking about patents here. We're talking about what makes the most economic sense for innovation.

      The way the patent system works and the length of time it takes to get a patent reviewed, as well as the arcane process are simply factual information. You can look them up. They're well reported. It's not some secret society that only those who hold patents know about.

      Unions represent the right's of American citizens; people.

      Again, if you knew anything about my own educational history, you'd realize I know this. However, I also know that unions often have trouble understanding the downsides of monopolistic practices to their own members. This is a case where that's happening.

      The US Constitution grants patent rights to American citizens and then implements these rights in patent laws and patent regulations

      No. The US Constitution grants patent rights to American citizens *for the sole reason of promoting the progress of science and useful arts*. If the patent system is NOT promoting the progress of science and useful arts, then it is not protected by the constitution. The patent clause of the constitution does NOT mean that Congress can create an unfettered patent system that causes more harm than good.

      I would expect our workers unions to strongly support protecting the rights of individual American citizens versus the self-serving interest of a few multi-national corporations.

      Yes, they should support the rights of American citizens. I never said otherwise. The problem is that Riley's policies don't support those rights. Instead, they support the weakening of American innovation by strangling the ingredients of growth: ideas.

       

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        Rusty Mase, Aug 28th, 2007 @ 9:50am

        Re: Re: Get a Grip

        Mike, this is a great collection of comments resulting from your article. Thanks!

        The point here is something is wrong with the US patent system and we all agree on this. I would attribute these problems with reducing the budget of US PTO during the 1990's that damaged US PTO's ability to process patent applications. Maybe that is not the entire problem but it is that problem we must initially solve.

        The current patent reform proposals do nothing to solve that problem.

        Stephen Wren in his comments mentions very accurately the RIM debacle with NTP and the suite of patents developed by Thomas Campana and others associated with him. The present proponents of proposed patent reforms use the RIM case as a billboard screaming the need for patent reform.

        Campana was an American inventor whose brain child was remote handling of emails using a mobile phone device. He could not sell or license his patents to American industry and went broke in the process. I believe it was ATT/Bell Labs, later Lucent, told him it would cost too much to implement a system like this and nobody would likely use it. So RIM, in Canada, used the technology embodied in Campana's patents to build their Blackberry system. When challenged with patent infringement in the US they acted like recalcitrant adolescents and ended up paying for it in a moderately large way.

        I propose that the biggest losers in this issue is not RIM or the American people or even Campana but it is Lucent. They refused to acknowledge the values that an independent inventor brought to the table and it ended up costing Lucent and their investors greatly. They are now a subsidiary of French company and the value of their company is a pittance of what it was when Campana was negotiating with them.

        I see two immediate needs in patent reform:

        an infusion of cash into US PTO so they can staff and train to handle the current load of patent application. Congress should allocate $250 million to this as soon as possible;

        large American corporations need to realize the value of working with small entities and independent inventors as innovation resources. I think this is a largely a corporate ego problem and I do not know what Congress can do to alleviate this.

         

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          angry dude, Aug 28th, 2007 @ 10:40am

          Re: Re: Re: Get a Grip

          Rusty,

          Although I fully agree with your basic point that the USPTO needs to be fixed ASAP, you apparently haven't been to the real corporate jungle trying to manufacture or license your patents...

          it's all about money, connections, timing and yes, luck
          Campana was a little early and he was lacking funds and connections in the telecom bussiness community
          And when the time was right to actually implement the technoliogy I believe he was already too ill to pursue commercialization of his inventions (he died of lung cancer before the conclusion of the patent trial)

          And don;t even mention Lucent - it's a just an shameful example of a fine R&D institution (I mean the former Bell Labs) going into complete obscurity ( what a shame - a famous American research institution acquired by the french...)
          The management at late Lucent lacked any ethics - they would rip you off without thinking twice- the ship was already sinking, who the f*** cares about company investors ?
          Those crooks tried to get something for nothing from me too, on behalf of their chief honcho at the time- The pres of late Bell labs
          Now that piece of shit of course is no longer there - he is VP of Novell or something -they all have golden parachutes - why should they care about their investors and the future of their company ?
          There is avsolutely no fucking corporate acountability for wilfully stealing other's IP . When the fact of willful stealing becomes known, usually many years later, after court depositions, those execs who gave the orders to steal are already retired at the Bahamas or with some other companies.
          Until they institute some jail time for those corporate thiefs there will be court stories with very large jury awards again and again

          Sorry for the angry rant - I am deeply disgusted to watch all those attempts to "reform" US patent system starting back in 2005 (I filed my patent app in early 2002 and it was granted in late 2006, after waiting 4 years for the first office action from the PTO)
          Had I known all this shit beforehand I would most certainly go the trade secret route... and to hell with promoting the progress by publicly disclosing inventions...

           

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            Rusty Mase, Aug 28th, 2007 @ 1:21pm

            Re: Re: Re: Re: Get a Grip

            OK 'angry dude', your rendition of history and the state of the union is not dissimilar to mine. Kudos! Patent reform is intended to benefit those with already deep pockets.

            Patent reform has nothing to do with promoting innovation. You stated that Campana "was a little early" and that is the real soul of innovation. You promote innovation by promoting people like Campana, not by selling the patent process to a select group of multinational corporations.

             

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    Richard Cauley, Aug 27th, 2007 @ 7:19pm

    Reply to Rusty Mase's excellent comment on damages

    Rusty raises exactly the point on damages that the courts miss -- the "value" of a patent is the benefit the infringer gets over the next best [non-infringing] alternative. The way damages [at least reasonable royalty damages] are supposed to be calculated is to assume that the parties were actually negotiating, assuming the patent is valid and infringed. What the infringer would pay is governed by the benefit he gets from infringing over not infringing [i.e. taking the infringing feature out or using a non-infringing alternative]. So, if I can sell a car for $20K with an intermittant wiper and for $19900 without it, the patent is "worth" $100 per car -- the patentholder normally gets half of this benefit. If I could make an intermittant wiper in another way without infringing the patent, but it cost $50 more per car to make, the patent is "worth" $50 per car and the patentholder would get $25.

    If I could not sell the car at all without an intermittant wiper and I could not design around it, the roaylty would be based on the entire market value of the car -- a relatively rare occurance in my experience.

    This s what the law is at present and this is exactly what the patent reform bill provides. And why the arguments over patent reform damages drives me nuts.

     

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      Rusty Mase, Aug 28th, 2007 @ 10:08am

      Re: Reply to Rusty Mase's excellent comment on dam

      Apportionment of damages should be a real no-brainer and I am simple-minded enough to see that if you want to put a patented feature into your product then you need to get a license from the patent holder. Sort of ethical is you ask me.

       

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    Ronald J Riley (profile), Aug 28th, 2007 @ 5:14am

    Mike said:

    "Yes, they should support the rights of American citizens. I never said otherwise. The problem is that Riley's policies don't support those rights. Instead, they support the weakening of American innovation by strangling the ingredients of growth: ideas."

    No, what they do is give the inventor time to enjoy the fruits of their creativity and in so doing allow the inventor to recover the investment they made in making the invention.

    Here is reality for you Mike. The Patent Pirates are scrambling to get their bill on the floor next week because they know that time is on the side of those who actually invent. What they don't quite understand yet is that patent deform is essentially dead but we will continue to see the Coalition for Patent fairness & PIRACY and their stooges thrash around for the next month or so. It is dead because it was never about actual reform or about addressing the real problem which is exactly what unions are experts about.

    The problem is classic, in that there are not enough examiners and the management of the USPTO is grossly incompetent. The solution is to hire another 10,000 or so examiners and to do a management house cleaning at the USPTO. We are addressing both those problems.

    The second part of the solution is to give every patent pirating company their day in court. That problem is also being addressed. Of course those companies are being handed their heads for their disreputable conduct, and that is why they are spending hundreds of millions of dollars in an attempt to mitigate the consequences of their taking liberties with other's property.

    I am going to leave the rest up to your limited imagination. Keep your eye on media coverage of this issue. I promise you that you will have much more to whine about in the coming weeks.
    Sorry, but I have to return to toiling away in obscurity to promote truth and justice. I hope that you all enjoy the upcoming show as much as I expect to enjoy it.


    Ronald J. Riley,

    President - www.PIAUSA.org - RJR at PIAUSA.org
    Washington, DC
    Direct (202) 318-1595 - 9 am to 9 pm EST.

     

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      Mike (profile), Aug 28th, 2007 @ 1:59pm

      Re:

      Ronald,

      I find it fascinating that you came back, but did NOT address a SINGLE point that I raised, other than to again call me names ("patent pirate" which is meaningless and not applicable to be anyway). Why do you ignore the points I raised?

      Why do you continue to make false assumptions that the research has shown to be wrong over and over again?


      No, what they do is give the inventor time to enjoy the fruits of their creativity and in so doing allow the inventor to recover the investment they made in making the invention.


      Ronald, I've discussed this with you in the past. Either your memory is going, or you simply chose not to deal with arguments that show you are wrong. You keep MISTAKENLY assuming that I'm saying the inventor doesn't get money from his inventions. That's simply false. I'm just saying there are better methods for compensating the inventor. By setting up a false period of time where only they can control an idea (especially when it's an idea that many others are working on) is an obvious danger to innovation.

      Even you have to admit that's true.

      It is dead because it was never about actual reform or about addressing the real problem which is exactly what unions are experts about.

      If it's dead because of your lies and false assumptions, that's a shame. You should be ashamed of the damage you have done to US innovation.

      The problem is classic, in that there are not enough examiners and the management of the USPTO is grossly incompetent. The solution is to hire another 10,000 or so examiners and to do a management house cleaning at the USPTO. We are addressing both those problems.

      This is false, again, as I've pointed out to you in the past. The reason there "aren't enough" patent examiners is because changes to the patent system over the past 25 years have massively increased the number of patents filed. Why? Because the patent office and the courts were repeatedly approving and upholding ridiculous patents -- making it quite lucrative to file a patent on anything and everything. If it wasn't so easy to get a patent, the influx of patent apps would decrease and there wouldn't be such a scramble for examiners. If you hire more patent examiners while leaving the system as is, the patent influx will just continue to increase and you'll face the same exact problem.

      Oh sure, it'll be great for those who patent stuff just to sue actual innovators, but it'll slow down innovation.

      The second part of the solution is to give every patent pirating company their day in court. That problem is also being addressed. Of course those companies are being handed their heads for their disreputable conduct, and that is why they are spending hundreds of millions of dollars in an attempt to mitigate the consequences of their taking liberties with other's property.

      Again, based on the two faulty assumptions, both of which have already been disproved. Do you just stick your fingers in your ears when people prove you wrong?

      So Ronald, I again ask you directly to explain why you insist on making those two faulty assumptions?

      Mike

       

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        Rusty Mase, Aug 28th, 2007 @ 3:46pm

        Re: Re:

        Mike, I will take on a little of this one, specifically your statement;

        "The reason there "aren't enough" patent examiners is because changes to the patent system over the past 25 years have massively increased the number of patents filed. Why? Because the patent office and the courts were repeatedly approving and upholding ridiculous patents --....."

        US PTO is set us as a self-funded government entity. They set fees, etc., paid for by patent and trademark applicants, to cover the costs of their operation. Applicants pay for this function of government. If the administration and congress take money away from PTO collected as fees as they did for several years then PTO cannot afford to maintain adequately trained staff to handle the task of reviewing applications.

        This is the truth Mike and it cannot be refuted. Give the PTO back the money its users paid for these services and lets look for other issues to resolve. International patent harmonization and problems that select multi-national corporations are having with the patent system is not a reason to deprive American citizens of their rights under the US Constitution.

         

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          Mike (profile), Aug 28th, 2007 @ 11:29pm

          Re: Re: Re:

          Rusty:


          This is the truth Mike and it cannot be refuted.


          I wasn't talking about fee diversion. I was talking about the real problem. It's not about hiring more patent examiners. As we've discussed repeatedly, patent examiners simply don't scale. The problem isn't that we need more patent examiners -- but we need the patent examiners to be working on legitimate patents, not being overwhelmed with bogus patent apps.

          International patent harmonization and problems that select multi-national corporations are having with the patent system is not a reason to deprive American citizens of their rights under the US Constitution.

          Well, there's a mischaracterization if I ever heard one. It's not "problems that select multi-national corporations are having...", it's PROBLEMS PERIOD with the system. The problems with the system are problems. We're not one of these "multi-national corporations." I don't have a personal bone to pick here -- other than my own common sense and my own knowledge and research into the economics of innovation.

          It's abundantly clear that the patent system is hindering innovation in this country and it's setting us up for massive economic problems.

          Secondly, no one is depriving American citizens of their rights under the constitution. The Constitution ONLY allows for patents in cases where it promotes innovation. When patents DO NOT DO SO, then those patents ARE NOT CONSTITUTIONAL. The problem is that you want dangerous, unconstitutional patents to stand.

           

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            Rusty Mase, Aug 29th, 2007 @ 8:16am

            Re: Re: Re: Re:

            Mike:

            We both agree on this statement:

            "It's abundantly clear that the patent system is hindering innovation in this country and it's setting us up for massive economic problems."

            But we disagree on the sources of problems that plague our patent system as well as issues that threaten continued innovation in this nation. We could sit down at a table together and consume many beers discussing this and still probably disagree on this. We are looking at this from different perspectives.

            But none of this is pertinent to patent reform as currently proposed by the US Congress. The Patent Reform Act of 2007 as contained in HR 1908 and S.1145 does not resolve issues brought out here in this blog related to promoting real innovation in the US.

            If this proposed legislation will not accomplish this it should not be passed by Congress.

            Your original article stated:

            "Unfortunately, Riley's organization appears to have blinded the AFL-CIO to what's really happening."

            then pointed out two issues you think the AFL-CIO's membership would actually benefit from if they did a better evaluation:

            "The first would change how damages are calculated,....."

            This to me is an issue the courts have handled well and will continue to handle well. You cannot get to this point in a patent infringement lawsuit without a decision that there is an actual infringement occurring. So why erect rules at US PTO to protect those infringing on valid US patents? How will that promote real innovation? One would not need to blind-side the AFL-CIO and fool them into not supporting the proposed patent reform. They are likely well aware of the best interests of their members and are opposing patent reform solely for that reason.

            "The second complaint is with making it easier to contest a patent after it's been issued. This is also a no-brainer."

            Patents must have a sense of built-in validity after they issue. Future patent validity is then determined largely by the courts. That system seems to work fine. To have an open-ended patent validity review system at US PTO would be complete folly. The proof of this is easily demonstrated by what US PTO did about several of Thomas Campana's patents when all the politicians became involved. US PTO rolled over like beaten dogs and quickly decided maybe some of Campana's patents were not really any good after all. The validity of patents needs to be determined if necessary by the courts. It is a matter of law, not a regulatory or administrative matter subject to political manipulation.

            Otherwise our patent system is dead, Mike. Or at least a lot sicker. Innovation is born from people like you and your group, not from Dell or Cisco or any other groups promoting "The Patent Reform Act of 2007."

            So propose reforming the patent system as you will. I propose leaving it alone and adequately funding trained staff to produce quality patents in the first place. Then there is no problems requiring patent reform.

            Next time I am going to use your HTML option so I can use better text rendering! I am most impressed with how well you site functions. Keep up the great work.

            Rusty Mase

             

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              Mike (profile), Aug 29th, 2007 @ 12:57pm

              Re: Re: Re: Re: Re:


              But none of this is pertinent to patent reform as currently proposed by the US Congress. The Patent Reform Act of 2007 as contained in HR 1908 and S.1145 does not resolve issues brought out here in this blog related to promoting real innovation in the US.


              We agree. There are serious problems with the legislation. But what worries is me is that people are arguing over the wrong problems. The things there are arguing over are the good points.

              This to me is an issue the courts have handled well and will continue to handle well.

              But they're not. I can list off dozens of cases where companies were facing complete shutdown due to a tiny obvious idea that was a minor part of their offering. That's not fair and that's not promoting innovation.

              So why erect rules at US PTO to protect those infringing on valid US patents? How will that promote real innovation?

              The rules are to be FAIR in determining punishment. It will promote real innovation by not shutting down innovative products due to one small component being patented by someone else. Innovation is about getting products to market successfully. By making that much more expensive and difficult, excessive patent damages harm innovation. Making the damages reflect real value will increase innovation by making it easier to bring these products to market.

              One would not need to blind-side the AFL-CIO and fool them into not supporting the proposed patent reform. They are likely well aware of the best interests of their members and are opposing patent reform solely for that reason.

              No, you would need to blindside the AFL-CIO. Without this, fewer products get to market. Fewer products are made. That's *bad* for the AFL-CIO. They should be encouraging increased production.

              Patents must have a sense of built-in validity after they issue.

              Not when they get so little review, are judged by those who are not that knowledgeable about a space, who don't review *real* prior art and who have no "obviousness" test to speak of. Not when they're approving vague, broad patents on obvious ideas. Then you DO NOT need a sense of built-in validity. In fact, such a thing is incredibly harmful to innovation.

              I would agree if the process for granting patents was solid. But the number of bogus patents out there shows that it is not. At all.

              Future patent validity is then determined largely by the courts. That system seems to work fine.

              Oh please! What court system have you been looking at? The one in Marshall, Texas? CAFC? You're making me laugh. The courts have done a HORRIBLE job of this. They (until just a few months ago) had no test for obviousness. They wouldn't wait for the USPTO to do its own review.

              The proof of this is easily demonstrated by what US PTO did about several of Thomas Campana's patents when all the politicians became involved. US PTO rolled over like beaten dogs and quickly decided maybe some of Campana's patents were not really any good after all.

              They didn't ROLL OVER. They rejected them because they were AWFUL PATENTS that NEVER should have been granted in the first place. They were for incredibly broad and obvious ideas. That's why we need that kind of review system, so dreadful patents like Campana's that are granted with little review don't hold up an entire industry from innovating.

              The validity of patents needs to be determined if necessary by the courts.

              The USPTO rewards examiners for granting patents, not rejecting them. The incentive structure is designed to get more patents through the system, not to reject them. There are terrible patents being granted all the time, creating patent thickets and making it impossible for real innovation to occur without being prohibitively costly for small companies to participate in important new arenas. It has made it impossible for new entrants to get into important industries. It has allowed other countries to innovate where we cannot. It is hurting our industry and our economy, because all of these patents have made it prohibitively expensive to actually design and build products that people want.

              If the USPTO cannot review patents in a wise way, then it is reasonable to ask them to do a more thorough review of the patent BEFORE it wastes a ton of time and taxpayer money in the courts. It would allow important innovation to move forward, without having to wait 5 years for a court ruling to play out.

              Or at least a lot sicker. Innovation is born from people like you and your group, not from Dell or Cisco or any other groups promoting "The Patent Reform Act of 2007."

              I don't care who is promoting which side. I could just as easily mock your side for the support of the patent industry who wants to make the next version of Claritin/Clarinex/Clarinoose or whatever they want to call it -- that does nothing but has patent protection because of a dumb system that is harming everyone.

              I just want innovation to be free from a million gov't monopolies that make it impossible for innovative ideas to hit the market and flourish.

               

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                Rusty Mase, Aug 29th, 2007 @ 5:32pm

                Re: Re: Re: Re: Re: Re:

                Mike, if this statement is reflective of your opinions;

                I just want innovation to be free from a million gov't monopolies that make it impossible for innovative ideas to hit the market and flourish.

                Then you and I do not have much to further discuss on patent reform. Patents are short-term monopolies granted by the US government to encourage innovation. There are currently several million active patents creating these "monopolies". They are based on rights granted by the US Constitution under Article I. Section 8 which states, paraphrased:

                The Congress shall have Power...........To promote the Progress of Science ............ by securing for limited Times to ............. Inventors the exclusive Right to their ............. Discoveries;

                That, Mike, constitutes more than a million government sanctioned monopolies. If you do not like these monopolies then you need to change the US Constitution, not just reform the patent system.

                Rusty Mase

                 

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                  Mike (profile), Aug 30th, 2007 @ 1:38am

                  Re: Re: Re: Re: Re: Re: Re:

                  Patents are short-term monopolies granted by the US government to encourage innovation

                  Yes, but you need to be very clear in that statement. They are short term monopolies granted ONLY IF they will encourage innovation. The record of conversation between Jefferson and Madison was quite clear on this. They knew that monopolies were dangerous and should only be given out in the *rarest* of circumstances when it is clear it will encourage innovation. In cases when it does not do that, when it prevents and hinders innovation, then monopolies are not to be given.

                  The problem is you seem to be confusing *any patent* with being an encouragement to innovation. That's simply not true. If the patent is for something obvious. Or something broad. Or something that's already been done, I think you'd agree that it's a hindrance to innovation.

                  That, Mike, constitutes more than a million government sanctioned monopolies. If you do not like these monopolies then you need to change the US Constitution, not just reform the patent system.

                  No. As you quoted, it says "To promote the Progress of Science." When the patents DO NOT promote the progress of science (and the useful arts), then they are unconstitutional. That's all I'm saying. I have no problem with patents that are issued correctly. The problem is that so many are issued incorrectly, against the very purpose of the Constitution and the intentions of both Jefferson and Madison.

                   

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                    Rusty Mase, Aug 30th, 2007 @ 9:38am

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    Mike, please forgive my selectivity in this response.

                    No. As you quoted, it says "To promote the Progress of Science." When the patents DO NOT promote the progress of science (and the useful arts), then they are unconstitutional. That's all I'm saying. I have no problem with patents that are issued correctly.

                    It is a commonly held belief that 98% of all patents that are still in force have very little or no commercial value. So the vast majority of patents grant monopolies that also have no value. Those neither promote nor hinder innovation. Other than possibly showing which technologies are actually viable, which might be very important contribution to innovation in itself. That is the reason in order to obtain a patent in the first place you have to disclose the technology to the public so people will have access to the technology the patent teaches.

                    The remaining 2% of active patents may be important contributions to technology. I heard that there are nearly 1700 patents involved in each notebook and desktop computer made by Hewlett Packard. Just how many of those do you suspect really contribute to innovation and truly "promote the sciences"? The simple fact that these are technologically null and void does not mean they are unconstitutional.

                    People have a constitutional right to get patents, even dumb ones. They just have to comply with the rules of patent prosecution and pay the fees just like everyone else.

                    The problem is that so many are issued incorrectly, against the very purpose of the Constitution and the intentions of both Jefferson and Madison.

                    I am not sure what you mean by an "incorrectly issued patent". Patents prosecuted under fraudulent circumstances? That comes down to a law enforcement problem, does it not? Possibly the US Attorney General and the Federal Court system? Patents issued with an insufficient review of prior art are also subject to being rejected by the Courts. These are matters of law, even criminal law, and need to be handled as that.

                    US PTO's responsibilities under the Constitution is to establish and operate a process whereby American citizens can avail themselves of their rights granted to them under the Constitution.

                    It is not US PTO's task to assess whether a patent application "promotes the progress of science" nor is to determine whether an individual patent either hinders innovation or promotes innovation. How could they evaluate this a prioi anyway?

                    Mike, I think somewhere along the road you are going to have to take a hard look at your opinions of this Nation's patent system and do some house cleaning. I am at a loss as to why you choose to believe most of the opinions you have espoused anyway.

                    I highly recommend you go to Google Patents and do a search for patents issued to Thomas Campana, review a few of those dealing remote email, and evaluate in a more studied fashion your statement in an earlier response that:

                    .......AWFUL PATENTS that NEVER should have been granted in the first place. They were for incredibly broad and obvious ideas. That's why we need that kind of review system, so dreadful patents like Campana's that are granted with little review don't hold up an entire industry from innovating.
                    .

                    You might be a little forgiving in that he "innovated" and patented much of this technology before anyone participated in this forum even used an email address.

                    That is just a hunch

                     

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                      Mike (profile), Aug 31st, 2007 @ 1:31am

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      So the vast majority of patents grant monopolies that also have no value. Those neither promote nor hinder innovation.

                      If they do neither, then who really cares about them?

                      Other than possibly showing which technologies are actually viable, which might be very important contribution to innovation in itself. That is the reason in order to obtain a patent in the first place you have to disclose the technology to the public so people will have access to the technology the patent teaches.

                      There are ways to disclose technologies without getting patents. The idea that patents are necessary for disclosure has already been shown to be a myth:

                      http://www.techdirt.com/articles/20070814/015013.shtml
                      http://www.techdirt.com/articles/20 070321/021508.shtml

                      With most patents being written in ways today that don't actually reveal very much important, the idea of patents having value for disclosure isn't believable any more.

                      People have a constitutional right to get patents, even dumb ones. They just have to comply with the rules of patent prosecution and pay the fees just like everyone else.

                      Yes, but if those patents are hindering innovation, then they are NOT protected by the constitution. That is, if the patents are on obvious ideas or ideas that have prior art (and it's important to note these are not the same thing). If the patents are vague or broadly worded. If the patents are on ideas that multiple people have developed independently... they should not be issued. They are then holding back innovation.

                      I am not sure what you mean by an "incorrectly issued patent".

                      The USPTO (and many folks, such as Ronald) do not understand the purpose of patents. They were designed to be used only in the rarest of circumstances -- when there was a clear market failure and a product would not have come to market in any other way. Over the years, the USPTO and the courts were hijacked by people who made a living from their being *more* patents out there, and so the real purpose of the patent system has gone away. It's for that reason that the patent system continually issues patents for things that should not be patentable. That's what I mean. It's for things that are the next obvious step in the progression of a space. Or for something that multiple people have come up with simultaneously (which should make it clear that it's an "obvious" idea to those skilled in the art). Yet, the USPTO doesn't function that way and issues many patents that go against the spirit and purpose of the patent system.

                      US PTO's responsibilities under the Constitution is to establish and operate a process whereby American citizens can avail themselves of their rights granted to them under the Constitution.

                      The USPTO's responsibilities are to abide by the Constitution in helping to promote the progress of science and the useful arts. When it is not doing so, by issuing harmful, broad, vague or obvious patents, then it has failed in its responsibility, ignored the Constitution and harmed the American economy.

                      Again, you seem to be falling back on Ronald's faulty assumption that patents are universally good.

                      It is not US PTO's task to assess whether a patent application "promotes the progress of science" nor is to determine whether an individual patent either hinders innovation or promotes innovation. How could they evaluate this a prioi anyway?

                      They don't need to assess the patent's ability to promote progress of science. They need to live up to the standards of granting a patent: which is only in cases where there is clear market failure.

                      Mike, I think somewhere along the road you are going to have to take a hard look at your opinions of this Nation's patent system and do some house cleaning. I am at a loss as to why you choose to believe most of the opinions you have espoused anyway.

                      I've been studying and researching the patent system for well over a dozen years at this point, and am constantly evaluating my position and going through all of the new research on this. My position is based on an awful lot of research and data that makes it clear that the patent system does a lot more harm than good. The more you read on this topic, the worse it gets. I was a supporter of the patent system for many years. However, as the research on it piled up higher and higher, you have to simply be blind to ignore the damages of the patent system.

                      I highly recommend you go to Google Patents and do a search for patents issued to Thomas Campana, review a few of those dealing remote email, and evaluate in a more studied fashion your statement in an earlier response that:

                      I have read the Campana patents multiple times. They never should have been granted. All he did was combine two well known things which were on many people's minds at the time. He then tried to implement it and failed. That's what capitalism is good at. He couldn't execute, so he failed.

                      RIM did execute, but not because of Campana's patents. They had the idea independently and figured out a much better way to execute, and they were rewarded for it. That's capitalism at work and it (not patents) is what drives innovation. RIM, of course, has been nearly as bad as Campana on filing for bogus patents, so it was a big of karmic justice that they got bit by patents as well.

                      None of this changes the fact that his patents never should have been granted.

                      You might be a little forgiving in that he "innovated" and patented much of this technology before anyone participated in this forum even used an email address.

                      You seem to have confused the term "innovation" with "wrote down." Innovation is about successfully bringing a product to market. That involves a lot of things, including having the idea as well as executing on it. Campana did not innovate. He had an idea, but he could not execute. Again, that's capitalism at work. He doesn't deserve anything from the company that did correctly what he couldn't do.

                      If I open a sandwich shop in my town and it fails because I picked a bad name, and then someone else takes it over and changes the name, do I deserve a piece of their profits because they learned to succeed where I failed? According to your reasoning, I would. To me, that's a recipe for disaster because you've just added a huge tax on success to be paid to the losers. Capitalism works well because there are winners and losers, and that drives the losers to keep innovating so they can win the next time around.

                      That's the engine that drives innovation and patents don't aid that. They tend to muck it up.

                       

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                        Rusty Mase, Aug 31st, 2007 @ 9:32am

                        Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                        Mike, I am enjoying and becoming better educated participating in this discussion but I am getting out of my "knowledge base" and besides I think I am discussing something different that your original article suggests.

                        Your post has a lot of material in it and I have lots of responses but I might suggest something else. You use the term "clear market failure" and I am unfamiliar with it. I sense it may be similar to Clayton Christensen's terms "Nonconsuming Occasions" and "New Market Disruption".

                        If so, there may be something in that line of reasoning that would assist in distinguishing between "innovation" and just "wrote down". At this moment I am a little rusty on Christensen but that might make a good topic for you as an economist. I am a professional field biologist - a duck out of water here you might say.

                        I also do not want to be backed into the corner of championing all patents. I am an independent inventor working in the area of relatively complex devices. I find software and business method patents troublesome and would not defend them as I do not understand them or actually like them.

                        But I see the patent system when it involves physical devices to be extremely important and will defend that aspect of the patent system vigorously. Well, many aspects.

                        So I will go back into Christensen's works and see what I can apply to all this. If you take it on I will be most happy to read that article.

                        Also, on your restaurant example. By simply opening a pizza parlor at a specific street address there is no restrictions on future use of that location for another pizza parlor at some date in the future by anyone else if the site becomes vacant.

                        Why not reverse the scenario; the pizza guy picks a great location (street address), serves fantastic pizzas based on proprietary recipes, develops a customer base that Ted Turner envies, and has a famous, trademarked name. What values would he have to offer to anyone seeking to open a pizza parlor at that location? He may have a ton of intellectual property but no patents. Nor does he need them.

                        Rusty Mase

                         

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    RandomThoughts, Aug 28th, 2007 @ 7:00am

    Most of the complaints I see here are directed at how poorly the patent office actually operates, how they overlook things, how they don’t research enough or how slow they are to review a patent. These are of course valid, but you can’t just throw out the baby with the bath water. It is worth doing, it is worth doing right. I believe there is an attitude within certain circles that believe everything should be free. Forget patents, copyright, IP rights. I argument is for advancement but actually just boils down to not wanting to pay.

    Countries that don’t respect IP rights can become good imitators, but not good innovators. China is facing that now, they became the manufacturer of the world, they now serve America, but their goal is not to serve America, it is to pass America. They are strengthening their IP rights in order to take the next step. India with its education system turned itself into a generic drug manufacturing powerhouse. They could supply its people with cheap drugs of high quality. They grew, they knew they didn’t want to just copy other companies’ drugs; they wanted to be the next Pfizer or Merck, not just make cheap pills. They increased their IP rights laws.

    There are many ingredients to growth and innovation. Respecting and enforcing IP rights is part of the recipe. Don't scrap the system, fix the process.

     

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      Mike (profile), Aug 28th, 2007 @ 11:38pm

      Re:

      I believe there is an attitude within certain circles that believe everything should be free.

      That's not the argument we're making, so I'm not sure why you even bring it up, other than to make us look like we're suggesting something that we're not.

      Countries that don’t respect IP rights can become good imitators, but not good innovators.

      This is simply false. Go look at the research of Eric Schiff. Or Petra Moser. Or David Levine. All of whom have shown that countries without patent systems are often tremendous innovators. You make assertions, but you fail to back them up with facts.

      China is facing that now, they became the manufacturer of the world, they now serve America, but their goal is not to serve America, it is to pass America. They are strengthening their IP rights in order to take the next step.

      Again, go look at Dennis' other post on China. The US sped up its industrial growth by ignoring copyrights and foreign patents. Same is true of other countries. Adding in IP rights only happens when *established* players want to protect their success, not innovate.

      India with its education system turned itself into a generic drug manufacturing powerhouse. They could supply its people with cheap drugs of high quality. They grew, they knew they didn’t want to just copy other companies’ drugs; they wanted to be the next Pfizer or Merck, not just make cheap pills. They increased their IP rights laws.

      That's a false history of the situation in India. India was *forced* into agreeing to TRIPS, against its will, but under pressure from the WTO and (mainly) pressure from the big foreign pharma firms. Take a look at the recent paper by Shubham Chaudhuri, Pinelopi K. Goldberg, and Panle Jia on how much this change is going to HURT the Indian economy, while helping foreign drugmakers.


      There are many ingredients to growth and innovation. Respecting and enforcing IP rights is part of the recipe. Don't scrap the system, fix the process.


      This is a myth, and if you look at the economic history, you'd see it's true. Stronger IP protections always come *after* the innovation from those who want monopoly protections. It's not for creating the incentives to innovate.

      RandomThoughts, you've bought into the myth of the patent system. Go look at the real history and your eyes will be opened.

       

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    angry dude, Aug 28th, 2007 @ 7:16am

    Mike, you are WRONG !!!

    OK, dude, you don't like patent trolls (aka small inventors who are unable to produce their creations in large volumes) We already know it
    You don't like arguments Unions make in support of US competitiveness.

    How about this letter from the IEEE President sent to the Senate Majority Leader:
    http://www.patenthawk.com/blog_docs/070827_IEEE-USA_Patent%20Reform-Senate.pdf

    Read it, dude
    It speaks for all of us, scientists and engineers
    of this great country
    Of course, you don't care
    You are just a PR hack, probably on a payroll of some of those "Patent fairness" corporate bullies
    Or maybe you are a Chinese ? :-)

     

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    Patent Guy, Aug 28th, 2007 @ 7:39am

    Who's Behind Patent Reform and Who's Against It?

    The Patent Reform bill is the brainchild of a small group of very large computer technology companies, including Microsoft, Intel and Oracle. It is not coincidental that each of these companies has been a defendant in an antitrust suit. They rely upon market power to maintain their dominant positions and are serial patent infringers. Patent infringement on the cheap is part of their business plans.

    The state of innovation at these companies is best summarized by Larry Ellison's statement that software technology innovation can no longer be accomplished in large companies. Microsoft spends billions to come up with incremental improvements.

    The Patent Reform Act is "almost everything an infringer could ever want," says Phil Johnson, chief patent attorney for Johnson & Johnson.

    Who opposes the current patent reform bill? Here's a representative sample of a much longer list:

    IEEE
    The University of California system
    MIT
    Every Big Ten University
    The National Venture Capital Association
    General Electric
    Every major biotech company
    Dow Chemical Company
    Motorola
    Northrup Grumman
    Texas Instruments

     

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      angry dude, Aug 28th, 2007 @ 8:07am

      Re: Who's Behind Patent Reform and Who's Against I

      PatentGuy,

      You forgot to include someone important in your list of entities opposing "Patent Deform" of 2007..
      A small independent inventor, the proverbial LITTLE GUY

      Inventions are not made by corporations, they are dreamed up by some bright individuals, scientists and engineers
      Most of them, of course, work for hire and do not own their inventions
      But at least some of these inventors manage to break free from corporate slavery and start companies on their own, creating high-paying local jobs in USA
      These individuals depend heavily on their patent rights
      to fight off large corporate bullies
      US Congress should try to protect American inventors, not the filthy rich executives of huge multinational corporations like MS, Intel or Cisco.

       

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    Both sides, Aug 28th, 2007 @ 7:49am

    A thought

    I'm not even a lay person when it comes to patents but couldn't this whole thing be at least helped for both the holders and the people who are being wronged ;which is us IMO, If holders weren't intentionally stopping people from using the tech. I can understand R&D costs but come on you can't really expect to recoup costs by not selling your product or technique(or worse yet not advertising your invention instead waiting for it to be essentially invented again and then suing because inventor #2 is actually going to use it for something) . If the market is not willing to bear your price then it is not because your invention is irrelevant but that it does not have as high a market value as you hoped and you need to lower your price. Isn't that what licensing is about. You don't have to sell out to one company. I mean why invent something just to wave it front of all of us going NA NA NANA NA you can be helped by this invention. I thought invention was for the benefit of all humanity (as well as for profit) If you don't use it you should lose it because eventually it will go to someone who will allow it to be used ( for a reasonable and market acceptable price) for the benefit of us all.

     

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    George H. Morgan, Aug 28th, 2007 @ 7:57am

    AFL/CIO patent reform position

    After many years in management with a variety of manufacturing companies, as well as other organizations, I have nothing but respect for organized labor.

    They have their own sources of information, are patriotic, and not stupid. They represent their constituently well against many powerful and hostile companies that can hire the sharpest lawyers and anti-union consultants in the world.

    Abraham Lincoln, who was disappointed many times in his career by people, said something to the effect of "Always listen to the people, they will never steer you wrong".

    I remember an experience while working for Schlumberger, an oil field service company in 1960 in the Louisiana off shore oil fields, where two thirds of our operators (i.e. laborers) had lost time injuries during a period of six months. Schlumberger was a French owned corporation, both non-union and anti-union.

    The writer of the anti-union position in this matter comes across as a paid tout for companies who do not have the interests of inventors or patents at heart.

    George H. Morgan
    Professional Engineer

     

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    steve, Aug 28th, 2007 @ 8:13am

    Say That Again

    re:
    Say That Again
    by Mike Masnick
    Mon, Aug 27th 2007 1:55pm
    http://www.techdirt.com/articles/20070824/170344.shtml#comments


    Mike:
    Thank you for your article. Please permit me to respond to a few things.

    What is a patent troll?

    According to some a patent troll is a firm who licenses patents they do not themselves commercialize. Yet many of the large firms who are most critical of the practice do it themselves. Out licensing is now an important profit center of most every firm. Often, as a result they end up licensing out patents covering technologies they themselves do not use as they are not consistent with their corporate plan. Rather hypocritical isnt it?

    Still, there is nothing illegal or unethical about a small entity only licensing or selling their inventions. In fact, the traditional approach for many if not most independent inventors is to solely license or sell the rights to their invention. This is because most inventors, while they may be quite creative and even have genius in their field, are not always so adept at business, such as marketing or manufacturing, or simply lack the money. Inventors frequently find they are better off leaving the business end of it to someone else. Then again, some just love inventing and don't want to be bothered with the business end of it so that their time is fully focused on invention, not on business. Edison himself, one of the world's most prolific inventors, most often sold or licensed his patents to others that they might commercialize his inventions. No one derided him as a "patent troll". Many times when he attempted to manufacture and/or market his products himself he struggled with profitability. Therefore, the argument by large multinationals and other parties that there is something wrong with inventors solely selling or licensing their inventions is mere dissembling or only signals a lack of understanding in invention and inventors. So they should stop this childish name calling.

    Sadly, some legislators and other parties have been duped by these slick firms and their well greased lawyers, lobbyists (some disguised as trade or public interest groups), and stealth PR firms. Don't be surprised to find the Washington lobbyist scandal spreading into the patent deform proceedings.

    All this talk of "patent trolls" is then but a red herring fabricated by a handful of large tech firms as a diversion away from the real issue...that they have no valid defense against charges they are using other parties' technologies without permission. The objective of these large firms is not to fix the patent system, but to destroy it or pervert it so only they may obtain and defend patents; to make it a sport of kings. Patents are a threat against their market dominance. They would rather use their size alone to secure their market position. Patents of others, especially small entities, jeopardize that. For example, the proposed change to eliminate the use of injunctions would only further encourage blatant infringement. Any large company would merely force you to make them take a license. They would have little to lose. Everything would be litigated to death -if a small entity can come up with the cash to pursue. That's what these large multinationals are betting against. This legislation in regressive, not progressive.

    Actually, even the present threat of injunction is not sufficient to deter would be infringers. Just look at the Blackberry case. RIM had to have known they were infringing or likely so and yet they still held out to the bitter end. They took the nuclear option and guess what...they got nuked. If anything, we need harsher penalties to force large aggressive firms into thinking twice before thumbing their nose at small patent holders. I recently noticed one country is considering jail time for infringers. That sounds like a great solution to me. "Don't bother to pack boys, we've got your suits all ready...pinstripes!"

    The problem is that companies who are using your technology aren't so genteel as to stop using it merely because you politely ask them to do so. Invention is rough and tumble. The fact is, a patent is merely a right to sue someone to not make your invention without permission. Unless you have the will and money to sue them, they will turn a deaf ear. Unless you have a good patent, you will not get the money. It's sad, but it's the reality of business. All this talk about patentees gaming the system with bad patents is then a hoax. Why do these detractors never identify these supposed bad patents? Surely if they exist they can be identified?

    If anyone is gaming the system, it is large multinationals. After losing in court they coerce the Patent Office into conducting a reexamination on the patents they have been found guilty of infringing. That is pure abuse of process!

    The fact is, there is no systematic abuse of the patent system by patentees which would require an overhaul of the system. To the contrary, there is a reason why the patent system works the way it does. We didn't get here by accident. That's because of past abuse of the system by large companies who used their wealth to give inventors the run around and make a sham of the system. Take a look at the RCA/Armstrong case of years ago on FM radio. RCA ruined Armstrong with a legion of attorneys. They so destroyed Armstrong and made a mockery of the patent system that he committed suicide. Check out Tom Lewis's "Empire of the Air", chapter 10, p313 and p356. Part of RCA's outrageous conduct was to string Armstrong along making him think they were interested in his invention only to copy his work and file patent applications of their own. Later they then entered into an interference against him at the patent office -a fraudulent act. RCA committed similar abuses of the patent system against electronic television inventor Philo Farnsworth. See "The Boy Who Invented Television" by Paul Schatzkin.

    As to the quality of patents; based on court rulings of the last several years, roughly half of all litigated patents are upheld in court. That's pretty balanced and suggests there is no problem with patent quality. Further, seldom do cases ever make it to trial as the parties settle out of court. The facts do not support the contention that there is a patent quality issue. Still, with almost half a million patent applications filed each year a few are bound to be issued that shouldn't. However, rarely are they ever an issue because you can't enforce them without money and you wont get the money unless you have a good patent. Keep in mind it costs the patent holder about as much in a patent suit as it does the accused infringer. Investors are not stupid. If they don't have confidence in your patent, they will not invest. It's that simple. Bad patents do not get funded.

    If there is a problem with the patent system, it is not that patents are issued too hastily but rather that many are issued too slowly. Witness the current backlog and pendency. I for example have applications with a pendency of 15 years! In one instance it took 3 years just to get a first office action. With this kind of pendency by the time an inventor gets their patent their technology is of no value. That is the problem everyone should be focused on -not this imaginary issue of patent quality trumped up and propped up by large multinationals as a way to stifle innovation and further cement their market control. Can you say "monopoly"?

    Further, certain large multinationals speak of the need for harmonization. Why is that necessary? If others are backward would we want to modify our system just to match theirs? When one looks at the efficacy of patent systems throughout the world the US patent system has produced far more innovation than those of other countries over the last several decades. If anything, other countries should be changing their systems to get inline with ours. Rather what's going on is these large multinationals and those they have duped are using specious arguments to get what will benefit them personally. The rest of the country be damned.

    Ours is a finely tuned patent system developed over 200 years which has led to US dominance in technology. We had better think carefully and move cautiously lest we create more problems than we solve and reap unintended and unforseen consequences.

    All this is then not about present abuse of the system by inventors or a need for patent reform, but rather systematic past and present abuses by large companies. Witness the present conduct of firms like RIM in using the courts to drag out a final verdict. The judge in that case remarked about how delays frustrate justice. Also, look at the exploitations and predations of Medtronic.

    Even worse; not only is there no need for reform, but the proposed changes will actually damage our functional system.

    When corporate America agrees to not use our inventions without consent, American inventors and small entities will agree to stop suing them.

    Sincerely,
    Stephen Wren
    actuary/inventor
    StL, MO
    314-594-0080
    stevewr@varianthlds.com


    For further balance and fairness, please contact the following...

    F. Scott Kieff
    Associate Professor of Law
    Washington University School of Law
    One Brookings Drive, Campus Box 1120
    St. Louis, MO 63130
    Phone: 314-935-5052
    Fax: 314-935-5356
    Email: kieff@wulaw.wustl.edu
    Web: www.law.wustl.edu/kieff
    For papers on the SSRN, see:
    http://ssrn.com/author=231064

    balanced article example-
    http://www.coxwashington.com/hp/content/reporters/stories/BC_INVENTOR_ADV16_COX.html

     

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      Ken, Aug 28th, 2007 @ 10:10am

      Re: Say That Again

      While respect Steve's position, one of his comments was especially telling: "roughly half of all litigated patents are upheld in court. That's pretty balanced and suggests there is no problem with patent quality." I beg to differ. That means that half of the litigated patents were wrong -- i.e useless, worthless, bad, should never have been issued. So, we are defending a system that gets it right only half of the time?

      BY the way, way has no one mentioned the National Academy of Sciences and the Federal Trade Commission studies that called for patent reform?

       

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    David Kline, Aug 28th, 2007 @ 8:41am

    Patent Reform

    The need for some sort of sensible patent reform is real, and periodic reform has always been part of a healthy U.S. patent system that truly promotes innovation.

    In fact, whenever the United States has undergone a major industrial renaissance -- such as occurred during the 19th century when first steam and then later the telegraph, telephone and electric power industries emerged -- patenting rates have skyrocketed, as have concerns about a resulting decline in patent quality and an increase in patent litigation.

    As Senator John Ruggles noted in 1836: "The quality of patents has suffered, many are neither novel nor useful. And the courts are overwhelmed by patent infringement and validity suits."

    Boy, does that sound familiar or what?

    In any event, in 1836, and again in 1870, Congress reformed the patent system to better enable it to meet the challenges created by new technologies and new industries. Examination became more thorough and more strict, and requirements for novelty and non-obviousness did likewise.

    Today's renaissance boom in information age technology has once again strained our patent system. Patent quality has suffered and litigation rates have risen -- although at .0018% of all issued patents they are still far below the litigation rate of 2% of all issued patents which prevailed during the patent heyday of the late 1800s.

    The simple fact is that the PTO does not have the resources or technological skills to respond to the three-fold increase in patent applications over the past 20 years.

    Hence the need once again for reforms to help the patent system meet the challenges of today's new technologies and new industries.

    The fact that competing interests (e.g., big companies vs. small inventors) are fighting over certain proposed reforms does not diminish the overall need for sensible reform.

    By the way, patent licensing is NOT the same thing as investors buying up patents for the express purpose of litigation. Licensing in the 1800s is precisely what created the world's first national marketplace for independent invention, which all large firms relied on for their internal R&D needs until early in the 20th century when legal and other changes enabled large firms to hire a permanent staff of inventors and own the work that these inventors created.

    And incidentally, licensing is increasingly becoming a vehicle for collaboration between firms (i.e., "open innovation") rather than strictly a money machine. According to a recent Economist Intelligence Unit report, 68% of European firms now say their primary innovation strategy is to increase collaboration with other firms via licensing.

     

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    David Kline, Aug 28th, 2007 @ 8:51am

    Correction

    A correction to my post above:

    Today's litigation rate is .0018% of all the 1.7 million ACTIVE patents, not issued patents. Likewise, the 2% litigation rate of the late 1800s applied to active rather than issued patents.

    Sorry for the error.

     

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    Steve C, Aug 28th, 2007 @ 10:31am

    Bad patent reform

    You say

    "The first would change how damages are calculated, so that if the infringing component is only a small piece of a larger product, the damages shouldn't be based on the value of the larger product, but the value of that small piece."

    Let's look at the quick-release socket wrench. That invention only took three little ball bearings and three little springs, cost .0001 cents. But because of this system Sears made a killing.

    Of course if you make it easy to contest a patent then big companies will swamp smaller companies with law suits and things will be worse than they are now.

    The best reform would be to pay patent reviewers a lot of money to make it a desirable job. I would not leave my job to be an under paid reviewer. The patent reviewer is in the same boat as teachers, under paid and over worked and no amount of "patent reform" is going to fix that.

     

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    David Kline, Aug 28th, 2007 @ 10:52am

    Regarding the role of independent inventors, it's worth noting that the Founders of our country very deliberately set out to construct a patent system that would stimulate the inventive genius of the common man.

    Unlike the British patent system, which charged exorbitant application fees equal to 10 times the annual per capita income of its average citizen, U.S. patent fees were reduced to a level that even ordinary workers and farmers could afford. Administrative procedures were also simplified. And through a host of other means as well -- including allowing anyone applying for a patent by mail to do so postage free -- the patent system encouraged innovation on a mass scale.

    The results were immediate and dramatic -- as Thomas Jefferson put it, the new American patent system "has given a spring to invention beyond my conception." Only 13 years after the first patent law was enacted by Congress, the United States had already surpassed Britain -- until then the acknowledged leader in the industrial revolution -- in the number of new inventions patented. By the 1860s, the number of new inventions patented in the U.S. was an astonishing seven times the number in Britain.

    One very important reason for this dramatic surge in American innovation, of course, was the fact that by design the American patent system encouraged a much broader range of creative individuals to take part in inventive activity than was the case in Britain or other Old World countries. Whereas most British inventors were of privileged status, the vast majority of America's new inventors came from humble beginnings -- farmers, factory workers, carpenters and other artisans for the most part.

    According to the economists Kenneth L. Sokoloff and B. Zorina Khan, who studied patent records and biographical data from the period, nearly 70 percent of the 160 "great inventors" of the 19th century had only a primary or secondary school education. Half had little or no formal schooling at all. And many of the most famous names in American invention -- men such as Matthias Baldwin (the locomotive), George Eastman (roll film), Elias Howe (the sewing machine), and Thomas Edison (the electric light and the phonograph) -- had to quit school at an early age to help support their families.

    But the American patent system did not simply encourage the masses to participate in inventive activity. It made it economically feasible for them to do so. Indeed, by granting secure property rights to inventions for a limited time, the patent system enabled innovators to make a full-time career of invention through the licensing of their discoveries. This in turn created the a national market for technology innovation -- the world's first -- which proved critical to powering America's emerging industrial economy to a position of world dominance by the end of the 19th century.

    As Abraham Lincoln (himself a patentee) noted, the brilliance of the U.S. patent system was that it "added the fuel of interest to the fire of genius."

    It wasn't until the end of the 19th century that most European nations amended their patent laws to match at least some of the innovation-enhancing character of the American system. It was this hundred-year lead in democratizing our patent system, more than any supposed special ingenuity of the American people, that made the United States the "arsenal of democracy" in the 20th century and the economic powerhouse that we are today.

    The independent inventor's role in national innovation went into decline between the 1930s and 1980s when large-scale in-house corporate R&D dominated the scene. But there is good evidence that with today's increasingly rapid and fragmented nature of technology development -- along with the rise of Open Source and "Open Innovation" development -- the independent inventor is gaining new importance in innovation.

    Given the emergence of new kinds of intermediaries between independent inventors and corporate licensing arms, I wouldn't be surprised to see the re-creation of a viable independent marketplace for independent invention in the next 5-10 years.

     

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    RandomThoughts, Aug 28th, 2007 @ 4:07pm

    Mike, reading your initial article, Ron's reply then your reply, I have to say that while you charge that he is just name calling, it seems thats your tactic also. Some of the posts here have been very interesting, but if you are going to dish it out, expect to take it.

     

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      Ronald J Riley (profile), Aug 29th, 2007 @ 5:58pm

      Using this forum in the best manner.

      Random Thoughts, you hit my approach dead on. Mike simply spews out Microsoft, Cisco, Micron, Dell and the rest of the Piracy Coalition's propaganda. There is no point in trying to carry on a conversation with him.

      Also, he reveals a profound ignorance of what is really happening in the patent reform fight, which tells me he is a pretty low level player. He is intellectually dishonest in his replies.

      Collectively all this tells me that it is not worth spending much time on him because he will continue to advocate for the Piracy Coalition's agenda no matter how compelling counter arguments are.

      So I am not here to convince Mike about anything. The reason I drop in is to take advantage of the fact that his outrageous comments draw potential inventor supporters. So by spending a small amount of time on the sites which are stooging for the Piracy Coalition I attract new solders to our side.

      Thank you Mike of helping me identify and recruit kindred spirits :)

      By the way, the Piracy Coalition and their elected stooges have been running around this week begging legislators to tell them what changes they can make to save the bill. I smell the blood of our arch enemies!

      Piracy Coalition members and their shills are also running around telling legislators that union opposition is soft. They are about to be handed their heads for that one. I cannot think of anything more they could have done to help drive even more labor support for inventors. These guys have tons of money, most of which they are stealing from real inventors, but they surely are not the brightest bulbs in the pack.

      There you go Mike, some real honest to goodness intelligence about what is going on in the trenches.

      One more thing Mike, your article which started this discussion had a distinct whine about the turn of events. I promise you that when you come to understand the full scope of what is happening that both the pitch and the volume will greatly increase.

      Ronald J. Riley,
      President - www.PIAUSA.org - RJR at PIAUSA.org
      Washington, DC
      Direct (202) 318-1595 - 9 am to 9 pm EST.

       

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        Mike (profile), Aug 30th, 2007 @ 1:50am

        Re: Using this forum in the best manner.

        Mike simply spews out Microsoft, Cisco, Micron, Dell and the rest of the Piracy Coalition's propaganda. There is no point in trying to carry on a conversation with him.

        This is funny, because as I've clearly said, I do not agree with any of those company's position on patent reform. I do not support the current bill, which they are pushing for. I think all of those companies have abused patents in dangerous ways. I've made all of those things clear. For you to then accuse me of spewing their propaganda suggests, once again, that you have not actually read what I have written.

        This doesn't surprise me, since you still refuse to answer a very simple and very important question:

        Why do you base your entire argument on the two faulty assumptions I laid out? I will note, once again for the record that you have not refuted the fact that those assumptions are both wrong, and that without them, your entire argument falls down.

        Also, he reveals a profound ignorance of what is really happening in the patent reform fight, which tells me he is a pretty low level player. He is intellectually dishonest in his replies.

        This is also amusing to me Ronald. I don't care about the politics behind the patent reform fight. That's for you and your friends. I care about promoting innovation.

        As for being intellectually dishonest, I've asked you to point out where, and you have not done so. I back up my points with pointers to actual research. You do not. I answer the questions you put to me directly and honestly. You do not. I have no financial stake in this game. You do.

        It would be a lot easier for me to sit this out. It makes no direct difference to me what happens with patent reform. But it makes a huge difference to this country, and the evidence shows that our patent system is strangling American innovation.

        I smell the blood of our arch enemies!

        And this says quite a lot about you Ronald. I don't see anyone in this debate as an "arch enemy." Aren't we all aiming for the same end result? Encouraging innovation and helping the American economy? We just disagree about how that's done. I believe you disagree with me because of your faulty assumptions -- which is why I keep asking you about it (and your refusal to respond is quite telling).

        These guys have tons of money, most of which they are stealing from real inventors

        Talk about intellectual dishonesty. Again, I have pointed to example after example of obvious ideas patented or cases where multiple parties came up with the same thing independently. There is no way you can reasonable claim that's theft. And almost every major patent case falls under those scenarios these days -- so for you to claim that companies are stealing from real inventors shows a total blindness to what's really happening.

        Once again, Ronald, why do you insist on making this faulty assumption? It's hurting American innovation. It's hurting the inventors you claim to protect. Who is it benefiting?

         

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        rhetoric, Aug 31st, 2007 @ 5:39am

        Re: Using this forum in the best manner.

        Is it possible that Richard Riley can make a coherent argument without resorting to ad-hominem attacks? Mr. Riley, I might be sympathetic to your arguments if you could articulate them rather than simply keep repeating that everyone else is an evil idiot.

         

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    RandomThoughts, Aug 29th, 2007 @ 7:10am

    Mike, I think it may be you who buys into the myth.

    From your own suggested reading on India, page 8, paragraph two, I quote "Our approach does not address the potential dynamic benefits of innovations that may result from international property rights protection." So while you talk of innovation, your example (of proof) does not. From page 35 "Hence, we do not find much support for the claim that TRIPS would have detrimental effects on the Indian pharmaceutical industry. In fact, under some scenarios we find that the profits of domestic firms may even increase"

    Read Fabio Pammolli's (Professor of Economics and Management at the U of Florence) paper on the decline on Europe's pharmaceutical industry. He writes "Europe can most effectively boost its competitiveness by abandoning protectionist pricing and marketing strategies that discourage pharmaceutical innovation. European Union (EU) member-state governments should guarantee and enforce strong patent protection for innovative medicines, and their national health authorities should avoid excessive intervention in pharmaceutical markets in ways that restrict patient access and discourage innovative research. In particular, EU countries should foster a wider variety of mechanisms and sources for financing healthcare and pharmaceuticals, and they should adopt more open formularies as a way to spur market competition."

    Your proof just does not pass the moron in a hurry test. People say that time travel isn't possible, because if it were, someone from the future would have come to visit us. Innovation growth in pharmaceuticals without patents? Tell me, that is possible today, right now. A company or inventor could discover something and choose not to patent it, why isn't that happening, or happening more often?

    Are all patents good? Of course not, but they are not all bad either.

     

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      Mike (profile), Aug 29th, 2007 @ 12:42pm

      Re:


      From your own suggested reading on India, page 8, paragraph two, I quote "Our approach does not address the potential dynamic benefits of innovations that may result from international property rights protection." So while you talk of innovation, your example (of proof) does not. From page 35 "Hence, we do not find much support for the claim that TRIPS would have detrimental effects on the Indian pharmaceutical industry. In fact, under some scenarios we find that the profits of domestic firms may even increase"


      Selective quoting, of course. RandomThoughts, we had this discussion a few weeks ago, and you're doing the same thing again: focusing very narrowly on the specific benefits to *pharmaceutical companies*. When I pointed out that had little to do with healthcare, you disagreed, and implied that pharmaceutical was a proxy for healthcare.

      This report shows that's wrong. This report showed that there is a MASSIVE welfare loss to the Indian economy and to the healthcare of people there.

      I said in my response to you that this agreement would hurt the Indian economy, and you responded that the report shows it would help the *pharma* industry. See the difference? Should the gov't be protecting the pharma industry when the net result for both the economy and the wealthfare of its people are harmful? That seems to be your position.

      Read Fabio Pammolli's (Professor of Economics and Management at the U of Florence) paper on the decline on Europe's pharmaceutical industry. He writes "Europe can most effectively boost its competitiveness by abandoning protectionist pricing and marketing strategies that discourage pharmaceutical innovation. European Union (EU) member-state governments should guarantee and enforce strong patent protection for innovative medicines, and their national health authorities should avoid excessive intervention in pharmaceutical markets in ways that restrict patient access and discourage innovative research. In particular, EU countries should foster a wider variety of mechanisms and sources for financing healthcare and pharmaceuticals, and they should adopt more open formularies as a way to spur market competition."

      Ha! That's a "from worse to still bad, but not as bad". All he's talking about is moving from one awful form of gov't protectionism to a slightly less bad one. Besides, I'd argue that Prof. Pamolli's arguments are based on a bunch of faulty assumptions.

      And, once again, it's focused SOLELY on pharmaceuticals, not better healthcare. His argument may make sense for making European pharmaceutical firms more powerful, but that doesn't mean it's better for healthcare or the economy.

      Innovation growth in pharmaceuticals without patents? Tell me, that is possible today, right now. A company or inventor could discover something and choose not to patent it, why isn't that happening, or happening more often?

      Er, because monopoly profits are very tempting and easy. Who wouldn't want easy, gov't backed profits? But, there are ways to make much more money without them....

       

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    RandomThoughts, Aug 29th, 2007 @ 4:48pm

    Mike, I find it funny that I read something you pointed to and then say that I am "selective" in what I quote. Your paper stated that it does not cover innovation and it does not attempt to.

    OK, so companies can do it the easy way and use Govt. granted monopolies orrrr they could make even more money by not patenting things. Wow, all these companies are doing the dead wrong thing here. All these artists are doing the dead wrong thing by signing with labels. They should just do it themselves, not worry about patents or copyrights and they will make more money.

    Somehow I think the line for that boat is pretty short.

     

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      Mike (profile), Aug 30th, 2007 @ 1:18am

      Re:

      RandomThoughts, I like how you ignore most of my points and then just key in on the one you can argue with. :)

      OK, so companies can do it the easy way and use Govt. granted monopolies orrrr they could make even more money by not patenting things. Wow, all these companies are doing the dead wrong thing here. All these artists are doing the dead wrong thing by signing with labels. They should just do it themselves, not worry about patents or copyrights and they will make more money.

      Sarcasm, thy name is RandomThoughts. Yes, all those companies are doing the dead wrong thing... and it's due to a pretty massive misunderstanding of economics. But that's ok. Some of them are starting to get it. And those that don't will go out of business. It's that simple. Lots of companies will do the wrong thing for a long time, because they don't understand they can do better doing something else. That's why there's always room for improvement.

       

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

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    RandomThoughts, Aug 30th, 2007 @ 7:19am

    Mike, by saying that India recognizing patents and introducing patents into their country, you are in fact stating that you are against patents. How can I come to any other conclusion?

    I agree, there are bad patents out there, but if you advise that countries don't recognize any patents, how can it be imagined that you are not against all patents?

     

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

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      Mike (profile), Aug 30th, 2007 @ 11:03am

      Re:

      Mike, by saying that India recognizing patents and introducing patents into their country, you are in fact stating that you are against patents. How can I come to any other conclusion?

      I agree, there are bad patents out there, but if you advise that countries don't recognize any patents, how can it be imagined that you are not against all patents?


      I have made this position clear in the past. Patents can make sense in cases of marketfailure. Any gov't regulation makes sense in the presence of marketfailure. In fact, that's the reason for gov't in the first place -- to deal with market failure situations.

      So I'm not against patents in cases of market failure. The problem is that the belief now is that patents make sense in all cases, whether or not there is market failure. And, if you look at the studies, you realize that patents are generally not needed. However, if there are clear cases of market failure, then patents are perfectly fine.

      And I never said I was against India "recognizing patents." India has recognized patents for quite some time. I was against them recognizing a very specific kind of patent that hasn't been shown to be needed.

       

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


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