Patents And Misaligned Incentives

from the what-are-you-encouraging? dept

One of the problems with the patent system, is that too many people seem to think that a “patent” is the final output. If that’s the case, then we’re failing in living up to the Constitution’s mandate for progress in science and useful arts. Part of the problem is the incorrect belief that innovation is a one-off process, as opposed to an ongoing process of bringing things to market and improving on them to increase the utility. However, when people end up getting millions of dollars for failing in the market, but still holding an invalid patent, the incentives get shifted. Over at Forbes, they have a typical “about the patent process” article that basically just says patents are a good thing for business. However, at the end, in talking about how to get your company’s engineers to help you get more patents, it talks about one company that has its engineers spend 10% of their time on patents, and rewards them for each patent they get (which, of course, the company keeps). There are plenty of other companies that have similar programs in place — but shouldn’t the emphasis be more about spending their time on actually bringing products to market? When the incentive is set to focus on patents being the end-products, then people just spend their time trying to come up with ideas they can patent rather than actual innovation. The two are increasingly less aligned — especially as the US patent office refuses to use any test of obviousness. This is part of the reason why we’re seeing all these obvious patents. If you’re an engineer, and your company will reward you solely for the patent, you focus on what’s patentable, not what’s actually innovative. Since obvious ideas increasingly are perfectly patentable, and they take a lot less effort to come up with, of course the trend is going to be for all these engineers to put together as many obvious patents as possible.


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Comments on “Patents And Misaligned Incentives”

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19 Comments
David T (user link) says:

SCOTUS is already looking --- It all depends on th

The Supreme Court seems to have the same idea in mind and granted cert on _Metabolite_. It’s not a patent troll case, but it might begin to put some limits on what is patentable. After talking to some of the people involved (Mark Lemeley, et al) it seems that the Supreme Court was very active in making this a question of patentable subject matter even though the parties didn’t think it was.

In other words, hold your horses until the opinion comes down in Metabolite. If it comes down to limit patentable subject matter then I’d keep my eyes open as to what cases come next.

ThinkSolveDo (user link) says:

Mike Wants You To Work For Free...

Once again we see Mike explaining to us why only the rich and wealthy have a right to profit from ideas. Oh, how I too wish to live in Mike’s world where SLAVE labor serves the few.

A Patent is the rights one gets for showing the world HOW TO do something. It is a right that one entity or person works for and pays for and expects to own the innovation. The US Patent system has worked well for many years and only now is being questioned because companies and countries are looking for ways to get innovation for free. That is not right…

The person who invents the idea should own it. And this is common sense. Incentives produce results. Take away the incentives and you will not see results. No one will patent anything if the innovation needs to be donated to someone else.

Mike’s arguments are as stupid as saying, “the person who wrote the play should not get any money! Only the person who produces the play should.” Complete stupidity…

Mike… try to focus on learning how to create and less on how to pilfer others creations. You will look less like a pig and more like a decent person.

Anonymous Coward says:

Re: Mike Wants You To Work For Free...

ThinkSolveDo,

It would help if you would think about the issues at hand.

The patent trolls Mike is against are companies that do nothing but buy/produce patents. They are not creating anything other than legal headaches for people attempting to really innovate by bringing the (often ‘obvious’) patented ideas to market. They also pilfer from the real innovators by demanding absurd amounts of money just because they simply own a patent, (which they never intended to develop into a viable product).

Take away the incentives and you will not see results. No one will patent anything if the innovation needs to be donated to someone else.

This assertion is false. Humans were innovating LONG BEFORE the idea of patent laws and IP existed out of necessity. The need to innovate will never go away.

angry dude says:

Re: Re: Mike Wants You To Work For Free...

You people are just totally, 100 % clueless about patents and high-tech in general…

Mike is especially ridiculous with his BS ideas.

Patents are for INVENTIONS, not products

Write it on your forehead.

Every modern high-tech product includes multiple inventions covered by many different patents.

Unless you are extremely well funded, you just can’t produce anything based on just one or two patents of yours.

That is why all those big tech corporations put forward a “patent troll” BS – they just want to get other’s inventions for free, so they can make more profits producing gadgets and selling them to morons like you…

Mike (profile) says:

Re: Re: Re: Mike Wants You To Work For Free...

angry dude, once again is angry, but again refuses to back up a single statement. Let’s try this again. Angry dude: please back up JUST ONE statement.

Patents are for INVENTIONS, not products

Well, no. The patent system is specifically for progress of science and useful arts… and in order to be useful, it damn well better be about products. It’s about innovation, which is about bringing products to market.

The problem is that, traditionally, the patent system *has* been about inventions and not products… and what we’re saying is that’s exactly the problem. We should be focused (as the Constitution says) on products, not inventions. It’s the products that bring our economy and our society forward.

Every modern high-tech product includes multiple inventions covered by many different patents.

This is sort of reverse (or perverse) logic. Of course, most high tech products today involve many patents. That’s because the patent system encourages so many useless, innovation-hindering patents to be filed and approved.

I could just as easily point out that all of these patents have clearly INCREASED the cost of innovation, since every product has to pay so many different rights holders.

Increasing the cost of innovation is NOT what the system is supposed to be doing.

Unless you are extremely well funded, you just can’t produce anything based on just one or two patents of yours.

Again, this is false. Lots of companies (including ours) have produced plenty of innovative products, without being “well funded” or relying on patents. So, your absolute case is disproved immediately.

Second, if you really have a good idea, we have very efficient capital systems that allow startups to raise money. If you read some of the other posts on this site, you’d notice that VCs are just shoving each other aside to invest in any good idea they can find.

If YOU can’t raise money to build a product, that’s YOUR problem — but it suggests that whatever you’ve patented (and the fact that you still refuse to give us a patent number again makes us think you’re full of it) isn’t worth very much.

That is why all those big tech corporations put forward a “patent troll” BS – they just want to get other’s inventions for free, so they can make more profits producing gadgets and selling them to morons like you…

Again, from our standpoint, we’re just as upset with big companies that abuse patents. I’ve said that repeatedly, and yet you insist that we’re somehow supporting big companies. Once again, your inability to actually respond to our points hurts your credibility.

Joe Smith says:

Re: Re: Re: Mike Wants You To Work For Free...

Every modern high-tech product includes multiple inventions covered by many different patents.

Precisely. So who does the value of the product belong to. The patent trolls say that one hundred percent of the value of the product belongs to the last patent holder to agree to licence his product or the patent that was missed and that is just plain wrong. Hold-outs are a huge problem in economics and business. NTP squeezed more money out of RIM than RIM has made in profit in the US.

Mike (profile) says:

Re: Mike Wants You To Work For Free...

Once again, we see ThinkSolveDo not actually reading or responding to what I wrote, and making statements that make it clear he hasn’t bothered to think about what we’re talking about, but just reacts emotionally.

Let’s look through his points.

Once again we see Mike explaining to us why only the rich and wealthy have a right to profit from ideas. Oh, how I too wish to live in Mike’s world where SLAVE labor serves the few.

Um. Not much to respond to here, but it has absolutely nothing to do with what I said, so…

A Patent is the rights one gets for showing the world HOW TO do something. It is a right that one entity or person works for and pays for and expects to own the innovation. The US Patent system has worked well for many years and only now is being questioned because companies and countries are looking for ways to get innovation for free. That is not right…

First of all, it’s true that a patent should show someone how to do something, but many of them these days describe something so obvious no one needs to be told how to do it. As for the US patent system “working well”… there are a couple of problems with that statement.

First, you have nothing to compare it to. How do you know thing scouldn’t be better?

Second, there have been a number of changes to the patent system in the last 25 years that have clearly made the system worse. I suggest you learn a bit of hte history.

The person who invents the idea should own it. And this is common sense. Incentives produce results. Take away the incentives and you will not see results. No one will patent anything if the innovation needs to be donated to someone else.

Once again, I suggest you learn your history. There’s plenty of incentive to innovate without patents. It’s called *profits from the market*. There are a number of cases where it’s clear patents delayed innovation. In fact, one clear case is one that patent supporters love to support: the steam engine. The market was slow to develop until *after* James Watt’s patents expired. And, after that, as opposed to your claim that people would just steal the idea, Watt’s business thrived — despite the competition. And that was a case where everyone else had many years (during the patent protection) to copy his idea.

Mike’s arguments are as stupid as saying, “the person who wrote the play should not get any money! Only the person who produces the play should.” Complete stupidity…

Um. That shows a COMPLETE misunderstanding of what I’m saying. I’m wondering if you’re making these mistakes on purpose, or if you have a real problem in understanding. At no point do I ever say that anyone shouldn’t get money. All I’m saying is that the value is in bringing a product to market successfully — and the rewards system in place (called “the market”) is already there to reward it.

Mike… try to focus on learning how to create and less on how to pilfer others creations. You will look less like a pig and more like a decent person.

Again, an emotionally wrong reaction. I’m not talking about pilfering creations. I’m talking about innovating.

chaoticset says:

Re: Mike Wants You To Work For Free...

…of course, the only problem with this is that a *human being* holding a patent means that the patent passes back into public domain, whereas a *corporation* holding that patent could theoretically hold it forever.

Ideas being the trivially inventable things they tend to be, that means that public domain’s just going to get smaller and smaller, and even large corporations will find it difficult — although not impossible — to get their products made with all the overlapping obvious patents involved.

Of course, there will be a certain category, the penniless innovators, who will be utterly screwed by such a situation. But who cares about them?

Oh, wait.

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