Calling For An Independent Invention Defense In Patents

from the an-idea-who's-time-has-come dept

For quite some time we've wondered why there's no independent invention defense to patent infringement. It's hard to come up with any justifiable reason for not only barring those who come up with an idea on their own from making use of such an invention, but also for potentially making them liable for millions of dollars in damages for just making use of something they came up with on their own. For years, I've been waiting to hear any justification for this -- either economic or moral -- and I've never heard anything that makes any sense at all. Patent attorney Stephan Kinsella has now written up a post that also calls for an independent inventor defense, noting how incredibly rare it is for a client to ever have actually been accused of copying an idea. He notes that about the only reason most are against this idea is that they realize it would put a lot of patent lawyers out of work.

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Venture Capitalist Explains How Patents Can Be A Tax On Innovation

from the not-all-vcs-demand-them dept

Whenever we get into discussions on the massive downsides associated with patents, someone has to chime in with some ridiculousness about how "venture capitalists won't invest in companies without patents." There are a few easy responses to that -- including, if the VC you're talking to demands patents to invest, he or she is probably so clueless you're better off going elsewhere. That may sound flippant, but it's not. Patents have so little impact on the success of a startup that anyone focused on patents before investing has probably never helped lead a brand new startup to success. If they had, they'd know that it's execution that matters significantly more than any "patents."

Besides, over the years, we've seen more and more venture capitalists come to the realization that in many cases, patents do a lot more harm than good. We've written about a few venture capitalists who have come out about problems with patents -- and over the weekend Union Square Ventures' Fred Wilson (a friend, and Techdirt reader), wrote about just how much damage patents have done towards innovation -- specifically with some of his portfolio companies. Specifically, he's talking about having those companies sued by non-practicing entities (he uses the term "trolls" which we like to avoid). He also mentions -- in the comments -- how USV doesn't require companies to have patents, and he's invested in plenty of companies without patents.

At one point, Wilson writes:

I'm a fan of allowing market forces to work in most cases, but not in the area of patents.

But, of course, patents are not a proper market mechanism. They're the opposite of one. They're about the gov't creating monopolies. That's not "letting markets work." It's declaring that the first company to claim an invention gets to control the market, rather than letting the actual market decide which company can best execute in delivering the product to the market. A supporter of free markets shouldn't support the patent system. It's not a free market at all.

From there, though, Wilson kicks off a good discussion on how to deal with such things. He points out that it's often cheaper just to pay off the patent holders (and most companies do that), but that just encourages them to continue creating a "tax on innovation." So, instead, he wants to discuss what reforms can be put in place, with two initial suggestions:

1. If you sue someone for infringement and lose, you pay the defendants' legal costs.
2. "Use it or lose it." If you're not putting the patent into practice, you don't get to use it.

There are problems with both of these, unfortunately. The first is utterly dependent on the already screwed up judicial process for patent lawsuits (hello East Texas!). There are plenty of awful patent lawsuits where the patent holder wins. So, I'm not against this proposal as a way of making patent holders think twice about totally bogus lawsuits, but it's not going to stop a lot of suits. In fact, it may just encourage more suits in the hopes that hitting one "big one" pays for all the bad ones.

The second one is also a little troubling, because if a patent is valid (a huge if), you could potentially see a situation where it makes sense for the company to license it rather than develop it. Instead, however, I'd offer an alternative: if the patent holder is not developing a product based on the patent, then (a) the courts cannot issue any kind of injunction to stop the production of the product by others (which is the direction we're moving in thanks to the MercExchange decision) and (b) any damages should be greatly limited to the cost of a reasonable license plus a small penalty.

However, if Wilson is serious about looking for ways to fix the patent system, he should look to support an independent invention defense that would invalidate the patent. This one change would solve so many of the problems with the patent system. Since the patent system was designed to encourage independent invention, it shouldn't be discouraging it and denying those inventors who came up with an idea on their own the ability to commercialize their inventions. Furthermore, since patents are only supposed to be granted on inventions that are non-obvious to a person skilled in the art, the fact that multiple individuals came up with the same idea should be proof enough that the idea doesn't pass that test.

It's no secret that I'm not a fan of the patent system at all. There is so much evidence out there that patents do nothing to increase innovation and plenty of evidence to show how they actually stifle innovation, that I think the patent system actively works against its stated purpose ("to promote the progress of science and the useful arts"). However, if we must have such a system, then put in place an independent invention defense which also invalidates the patent, and we'd be a lot further towards a reasonable system -- especially since it's so rare to find patent infringement lawsuits that involve any actual copying.

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Lawyer Points Out That Simultaneous Invention Can Get Patents Tossed

from the well,-it's-a-start dept

For years, we've pointed out how ridiculous it is that our patent system doesn't include an independent invention defense. It seems rather against the concept of promoting innovation to say that someone who invented something entirely independently should be barred from using his own invention just because someone else invented the same thing slightly earlier. Considering just how many major discoveries are discovered independently by multiple people, this seems especially troublesome. In fact, various research papers have been written about why an independent invention defense makes a lot of sense.

However, beyond just a "defense" on patent claims, we've often pointed out that independent invention actually should represent pretty good evidence that an invention doesn't meet the criteria for "non-obviousness" to those skilled in the art that is required for a patent. After all, if multiple folks skilled in the art are all coming up with the same invention, it seems to be rather definitive proof that the concept was an "obvious" next step to those skilled in the art. Of course, whenever we bring this up, patent system defenders talk about what a ridiculous idea this is and how it would be a disaster in practice. Unfortunately for them, the actual research suggests it would actually be quite reasonable.

However, with so many patent attorneys insisting that it's ridiculous that simultaneous or independent invention would be used to prove obviousness, it's interesting to see a patent attorney over at Patently-O point out that it's perfectly reasonable to use simultaneous invention as proof of obviousness, even though he admits it's "seldom used." Hopefully, that's going to start changing. If the purpose of the patent system is only to protect "new and non-obvious" inventions -- it would seem like de facto evidence of obviousness that others are doing the same damn thing. If you have to keep the patent system at all, such a test for obviousness (rather than just in court cases, as is suggested here) would be a tremendously useful step in the right direction.

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Ideas Are Everywhere... So Why Do We Limit Them?

from the gladwell-missing-the-point dept

Malcolm Gladwell is a truly fantastic writer. However, sometimes he gets so interested in making a story sound good that he misses the real point. His latest piece for the New Yorker starts out as a puff piece on Nathan Myhrvold's Intellectual Ventures (which gets way too many puff pieces), but then turns into a much more interesting article about how just about every major invention or scientific or mathematical discovery came from multiple, entirely independent people at almost exactly the same time. As Gladwell points out -- rarely is it about "genius," but about the fact that all of the previous work in the field naturally leads to this end result -- and if it wasn't one person discovering it, someone else would. The article lists out big name invention after invention that all have "multiples" -- multiple entirely independent individuals who came up with the same thing at the same time. Not only that, but almost always the person who gets credit for the discovery isn't actually the person who discovered it. In fact, someone even coined a term for it: Stigler's Law: "No scientific discovery is named after its original discoverer."

Gladwell uses this to talk up what Myhrvold is doing, suggesting that Intellectual Ventures is really about continuing that process, getting those ideas out there -- but he misses the much bigger point: if these ideas are the natural progression, almost guaranteed to be discovered by someone sooner or later, why do we give a monopoly on these ideas to a single discoverer? Myhrvold's whole business model is about monopolizing all of these ideas and charging others (who may have discovered them totally independently) to actually do something with them. Yet, if Gladwell's premise is correct (and there's plenty of evidence included in the article), then Myhrvold's efforts shouldn't be seen as a big deal. After all, if it wasn't Myhrvold and his friends doing it, others would very likely come up with the same thing sooner or later.

This is especially highlighted in one anecdote in the article, of Myhrvold holding a dinner with a bunch of smart people... and an attorney. The group spent dinner talking about a bunch of different random ideas, with no real goal or purpose -- just "chewing the rag" as one participant put it. But the next day the attorney approached them with a typewritten description of 36 different inventions that were potentially patentable out of the dinner. When a random "chewing the rag" conversation turns up 36 monopolies, something is wrong. Those aren't inventions that deserve a monopoly.

What Gladwell misses (though others have discussed it in detail) is that while ideas may be a dime a dozen, executing on those ideas is what's difficult. Innovation isn't idea generation. Innovation is taking an idea and making it do something useful. Yet, in giving monopoly rights to Myhrvold and his friends, we make it much more difficult for others (even those who discovered the same things totally independently) to help actually make them useful.

In the end, the Gladwell article inadvertently makes the best case against Myhrvold's Intellectual Ventures, while hyping up the company at the same time. It's a strange disconnect, and it's too bad that Gladwell, like so many others, fell so under Myhrvold's spell, that he missed the real story he held in his hands.

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