Nintendo Pays Innovation Tax To Patent Holder
from the good-for-innovation? dept
A year ago, we noted that Hillcrest Labs was going after Nintendo, claiming that the Wii violated its patents. And, like so many other patent holders, Hillcrest got to take two separate cracks at Nintendo, suing in court and also filing with the ITC to block imports. Recognizing just how ridiculously costly it is to defend both the lawsuit and the ITC process, it looks like Nintendo has just agreed to pay up. The company still insists that the Wii doesn’t infringe, but the system is stacked against companies who actually innovate. It’s so costly to defend yourself, that it’s usually just cheaper to settle. Consider it a tax on innovation… except the tax doesn’t even go to anything useful.
Filed Under: innovation, patents, tax, wii
Companies: hillcrest labs, nintendo
Comments on “Nintendo Pays Innovation Tax To Patent Holder”
Doesn't matter.
Well, there goes a price drop on the console and its software.
Oh, right.
Well Hillcrest does seem to be a real company with real products – didn’t Nintendo have some retaliatory options?
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“Well Hillcrest does seem to be a real company with real products – didn’t Nintendo have some retaliatory options?”
Yeah, probably something along the lines of a lengthy and costly defense in two separate venues, followed by any appeals or followup lawsuits, all of the pre-action motions/discovery, etc. etc. etc., all at $2000 an hour to some blood-sucking lawyer who is charging them for the time he spends thinking about the case in the shower while his sun-spotted, fake-tittied wife does a line of blow off of his tiny, tiny little penis because she can’t get up in the morning without it…
God I hate our legal system.
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OK – looks like I didn’t investigate Hillcrest’s website closely enough.
The real problem is this : If Hillcrest stood to lose as much as Nintendo did if they lost the case then they would never have filed it. The legal situation allows monopoly holders to sue at too low a risk to themselves making this kind of lawsuit into a hanami ko .
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i shudda gone to law skewl
= = =
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by Dark Helmet (profile)
“Well Hillcrest does seem to be a real company with real products – didn’t Nintendo have some retaliatory options?”
Yeah, probably something along the lines of a lengthy and costly defense in two separate venues, followed by any appeals or followup lawsuits, all of the pre-action motions/discovery, etc. etc. etc., all at $2000 an hour to some blood-sucking lawyer who is charging them for the time he spends thinking about the case in the shower while his sun-spotted, fake-tittied wife does a line of blow off of his tiny, tiny little penis because she can’t get up in the morning without it…
God I hate our legal system.
It’s these sort of cases that really solidify the need for patent reform. Nintendo develops everything, takes a huge risk bringing it to market, and now people use the system to leach off them. You are right to say it’s worse than a tax.
People always imagine themselves having a million dollar idea, and then wanting to get paid for it. But they never consider building a million dollar company, and then having a legal team carve off your profit.
—
And by the way, what the heck is an online DVD video? It’s just an extra word floating in there between online and video. But it makes that keylogging scam or whatever look even stupider.
I’ve posted this elsewhere but I’ll post it here again. I want to make sure people understand why the long length of intellectual property doesn’t make any sense even if intellectual property does make sense. It requires that you understand the concepts of future amounts, discount rates, and present values (which is pretty basic stuff, most here should understand it).
I think 20 year patents are entirely too long, I mean, how much does the future amount generated from a patent 20 years from now contribute to the present value of the patent compare to the present value of the money you will currently spend for R&D on the product that you have patented? It just doesn’t seem like the money generated for a patent twenty years from now will give you much incentive to add a lot of R&D dollars into a product you are developing now being that those dollars are worth a lot more now than the present value of that future amount generated by the patent.
But if you’re a big corporation why not lobby for the patents you apply for to last 100 years, what harm does it do to you? and there is incentive for patents that you currently do have not to expire any time soon no matter how old the patent is being that you maybe generating revenue on the patent now meaning it contributes more to your current present value (even if the patent is 100 years old, the current money you generate from it now contributes largely to the present value). This explains why corporations always try to lobby for intellectual property extensions.
Also, one has to realize that in twenty years from now many of the corporation’s executives and members and employees (ie: CEO, COO, CFO, etc…) would probably be either retired or working for another corporation and many of the stock holders are going to be different people (ie: stocks are bought and sold every day). Sure some current stockholders still may have stock in the corporation in the future (but again, what’s the present value of the future amount of a patent twenty years from now to an investor vs the money he could get now by simply having less money put into current R&D. Doesn’t seem there is much incentive to add that much more money into R&D now based on revenue generated in twenty years being that the present value to an investor of that money is easily worth substantially more than the future amount generated by the patent twenty years from now) but the corporation may have many new stockholders and many of the old stockholders may not even be with the corporation by then. Many many things could also happen in twenty years, the invention could be rendered obsolete by newer technology even, the economic conditions or some other changes (ie: political) might make the patent twenty years from now irrelevant, meaning that some investors and executives probably aren’t even really thinking twenty years down the line in terms of that patent right now, they’re thinking more of how they can make a fast buck with the patents they have now. I mean how often does the average American change jobs even, how many years? Many things would change in twenty years rendering the revenue generated from the patent twenty years from now irrelevant to many of the current investors and corporate employees and executives. and this is ESPECIALLY true for copyright which lasts much longer than 20 years even.
and when I say the present value of the future amount 20 years from now I mean the future amount on the twentieth year. Meaning the money generated in that year (alone) is not going to give you much additional incentive at all to invest a lot more money into R&D presently, so there really is little reason for patents to last that long.
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sp / Doesn’t seem there is much incentive to add that much more money into R&D now based on revenue generated in twenty years being that the present value to an investor of that money is easily worth substantially more than the future amount generated by the patent twenty years from now / Doesn’t seem there is much incentive to add that much more money into R&D now based on revenue generated in twenty years from now being that the present value to an investor of that invested money is easily worth substantially more than the present value of the future amount generated by the patent twenty years from now
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So basically there are diminishing returns on innovation investment for each additional year patents are extended.
If patents lengths are doubled, the investment into R&D may increase slightly, but certainly isn’t going to double.
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No, but the relevance of the patent might not also extend. What was a hot product 20 years ago (say, I dunno, 5 1/5 floppies) is today’s dinosaur. Can you imagine have a 20 year patent on a tube, when transistors come along?
Without the innovation of NEW deveopment, not just going over existing developments, we might all still be listening to tube radios and sending each other telegraphs. The tubes would be well developed, the telegraph would be very fast, but we wouldn’t have moved forward. To assume that the only way forward is via replication of existing ideas is a “fail whale” way to do things.
Make a patent 100 years, and it changes little.
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Which is just more reason why patents shouldn’t last 20 years, 20 years from now we should be investing in new innovations and not worried about wasting money and resources over lawsuits and maintaining 20 year old patents and lobbying for patent extensions.
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also often times new technology builds upon old technology and if a company has to worry about facing a lawsuit from an old patent held by another company it might deter it from investing in new technology even if the company thinks it’ll win the lawsuit (because lawsuits are expensive) or settle (which also costs money). So patents shouldn’t last that long.
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This is exactly right.
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and people must look at the interest rate/discount rate and the risk factor of the investment to determine how much each additional year of patent length would contribute to current R&D dollars. 20 year patents, it’s not going to be very much, so patents simply shouldn’t last that long.
Re: Re: Re:2 Re:
To simplify, imagine if someone said they’ll give you 100 dollars in twenty years but you have to give them a certain amount of money now. What’s the most amount of money you would be willing to give them now to earn $100 in twenty years from now. The answer, not much.
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(and you also must consider risk factor of course, the person may never pay you back).
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So basically there are diminishing returns on innovation investment for each additional year patents are extended.
If patents lengths are doubled, the investment into R&D may increase slightly, but certainly isn’t going to double.
— nicely put!
Re: Nintendo pays innovation tax...
I wonder, how many patent trolls watch others develop things, write patents with claims to match their target invention(s) (like Jerome Lemelson did) then sue the pants off those who did all the hard work for them, so they can get rich off of someone else’s work?
It’s all about greed. These people are nothing but parasites.
INCOME FOR LIFE
INCOME FOR LIFE! JUST SIMPLY FOLLOW THESE EASY STEPS!
1) Register common sense patents
2) Go after major corp’s and sue them
3) file with ITC to block imports of that major corp’s products
4) get large cheque
INCOME FOR LIFE!
… Scumbags!
I don’t feel sorry for Nintendo or any other large company hit with a patent lawsuit. Patent law is screwed up because of companies like Nintendo pushing patent law to ridiculous extremes.
Nintendo could team up with real muscle like Sony and Microsoft and push for real patent reforms. But it won’t. Because paying the innovation tax is a small price to pay for keeping patent law tilted to their advantage.
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I rarely agree with Ima when it comes to patents, but in this case, he is reasonably accurate. Companies such as Nintendo benefit from patents more than they are hurt by patents. What is not reported in the story is the number of patent applications filed by Nintendo on the Wii and the number awarded worldwide.
So, while in this case you may consider patents a tax on Nintendo’s invention & innovation, Nintendo had already benefited from the same system. If Nintendo and other companies were concerned that patent infringement was actually hurting them, they would have pushed for reform a long time ago. How many lobbyists does Nintendo, Sony and other electronics companies have in Washington lobbying for patent reform? On the other hand, Nintendo has 653 U.S. patents, Sony has more than 29 THOUSAND U.S. patents, and Samsung has more than 32 THOUSAND U.S. patents. These companies know that good fences make good neighbors, and while they may occasionally have to pay out (and I am willing to bet that the amount per Wii system is close to negligible or Nintendo would not have paid), as in this case, they have also reaped the benefits of patents hundreds and thousands of times themselves.
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I don’t feel sorry for Nintendo or any other large company hit with a patent lawsuit. Patent law is screwed up because of companies like Nintendo pushing patent law to ridiculous extremes.
Nintendo could team up with real muscle like Sony and Microsoft and push for real patent reforms. But it won’t. Because paying the innovation tax is a small price to pay for keeping patent law tilted to their advantage.
I agree with your first statement, but not the second. Yes, the big companies abuse the system as well, and we point that out all the time too.
But Sony, Microsoft and others *have* teamed up to push for patent reform — and that’s what’s currently in front of Congress. But the reform they’re pushing for isn’t real reform at all (even though folks like Ron Riley insist I’m in favor of it — the reform on the table won’t help things at all, other than for a few big companies who abuse the system just as much).
“innovation tax” makes it sound like Nintendo did all the work, that this company did nothing, and still wants to get paid. Yet, this company appears to be a valid company, the patent appears to be very valid, and totally on the level. Nintendo isn’t paying a tax on innovation, they are paying the price of replicated someone else’s work.
Terms like “innovation tax” are self-serving slurs against the system. Mike, I would think that someone who can make a decent argument about such things wouldn’t have to go down the road of such slanted terminology, especially not in a case where it isn’t even close to the truth.
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What evidence do you have that Nintendo actually used Hillcrest’s work to create the technology for the Wii? That’s right, none. Because they didn’t. Nintendo developed their tech without using anything from Hillcrest. The problem was simply that Hillcrest got a patent earlier. That’s it.
Why should anyone have to pay up to someone simply because they had the same idea, but just later? It makes no sense. Hillcrest contributed nothing to Nintendo’s success, so they should not be able to profit from it.
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Welcome to patent maximism.
Consider it a tax on innovation… except the tax doesn’t even go to anything useful.
Exactly. At least the governement has the common decency to at least pretend that the taxes we pay go to something useful (and admittedly a few of those dollars actually do go to some usefule things). However this is quite literally paying a company to not be innovative.
But at the same time what Ima says is true too. Those big companies see rulings like this as “cost of operation” and probably figure them into their annual budget and the small fries know this. Hillcrest knew that Nintendo would just give up a “small” amount of money just to keep them quiet instead going to battle in court (where Nintendo could probably win but would cost way more than the settlement price).
And this is why reform of the current patent system won’t be happening anytime soon. For the big companies its cheaper and easier to just pay the settlement and for the small companies it is cheaper and easier than actually innovating.
Damn
I guess my mobile phone also infringes on these patents then – I use it as an air-mouse using its tilt sensors etc…
This is exactly why there are so many patents (and so many bad ones). Having patents on your technology is a great defense when someone tries to sue you for ‘infringing’. Every company that I have worked for that has patented something did it to add value to company AND as a defensive move.
Re: diabolic
The problem with patent trolls is they have nothing to defend. A whole warehouse full of patents has no effect on trolls because they have no inventions, only patents, and there’s nothing you can countersue them for. Your best hope is to try to get the patent(s) invalidated, but unless you have very deep pockets that is going to be a prohibitively expensive proposition. It can take years to get a bad patent invalidated and the typical price tag on doing that can run anywhere from $4 to 12 million or more.
As for any real reform in congress, don’t expect it. This is a gravy train for patent lawyers, nearly all our congressmen are lawyers, and they’re not going to go against their own kind. Go figure.
And, yes, I’m being cynical. Maybe very cynical.
While calling it a ‘Tax’ is effective in getting across how distasteful this is; I think ‘Ransom’ is far better word. After all the idea (ideally) of a tax is to pull money together for larger efforts. Where as this is clearly a group of individuals who are taking the money for there own purposes.
It’s semantics, but calling it ransom takes away the possibly perceived ‘legitimacy’ that Tax can have as a tool of the state. Paid ransom can be seen as a necessity; however it always leaves a bad impression of the one demanding it.
While I do not disagree with the underlying premise (that patent reform is desparately needed,) this is an example of a very different problem – litigation is broken. This same thing happens with personal injury lawsuits, malpractice lawsuits, products liability lawsuits, and even contract lawsuits. Paying a ransom (the “nuisance value”) to avoid the costs and vicissitudes of trial has become a way of life for habitual defendants, because unethical plaintiffs and their lawyers make it so.
Adopting the English rule in all cases would help a bit. Coupling it with a cost-bond requirement for plaintiffs would help some more. Add personal liability for counsel to really make it stick.
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Acacia Research Corp. has followers
Here is a list of corporations that don’t want patent reform for anyone who is interested.
http://www.ipwatchdog.com/2009/02/10/us-manufacturers-tell-obama-patent-reform-will-cost-us-jobs/id=1995/
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BTW, it figures monsanto doesn’t want patent reform (they’re one of the most evil corporations, then and pharmaceuticals).
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You need to read the information on the link you provided. The companies listed disagreed with the patent reform legislation as it was proposed; many of these same companies have stated that they are for patent reform. In fairness, you could also have pointed out that many anti-IP people were also against the legislation for a variety of reasons.
This same link also contained actual facts that point out that amount of patent litigation has remained fairly constant and the average award has actually dropped in recent years. Great link when you actually read the content.
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Oh, I’m sure they want patent reform, but they want patents to last even longer and they want them to be more general and they don’t want anyone to be able to challenge their patents but they want to be able to challenge the patents of others.
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“Those supporting the controversial provisions of patent reform legislation merely want to insulate their market dominance and make it economically feasible to infringe with impunity”
No, what they want is to be able to do something, anything, without having to potentially infringe on bogus patents and have to fight them in courts. Those big corporations like Monsanto who are opposing patent reform benefit from our corrupt patent system at the cost of society. Sure, they may want patent reform, but they only want to make patents more restrictive and last longer in their own favor at the expense of society at large. It’s all a bunch of nonsense and I’m not buying it.
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Huh? I would love to see your evidence that Monsanto supports longer patent terms and wants them to be “more restrictive,” whatever that means.
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“This is why Monsanto Company, as a global leader for innovation and technology in agriculture, is joined by trade unions and countless other groups who strive to assure Greenspan’s voice is not lost in the din from hedge funds, offshore interests or others seeking short term gain by weakening our great patent system.”
http://www.patentlyo.com/patent/2009/03/guest-post-monsanto-companys-view-on-patent-reform-protect-innovation.html
They don’t want to weaken our patent system. If anything, they want it strengthened; ie: more restrictive and longer terms.
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You make a conclusion that does not logically follow from the post you linked to. What Monsanto said, very clearly, is that they are opposed to the current patent reform bill, and they ALSO said that patent reform should be thoughtful and meaningful. No where is a conclusion that they want more restrictions and longer terms. YOU MADE THAT UP.
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No, I didn’t make that up. They don’t want to “weaken” our patent system suggesting they are the type to want it strengthened, ie: by adding more restrictions. In fact they want it so restricted they don’t even want independent scientists to be able to study the environmental and health dynamics of their products.
http://www.ronpaulforums.com/showthread.php?t=192541
and when people do challenge their product as possibly being unsafe and bad for the environment they try to censor it.
http://www.huffingtonpost.com/jeffrey-smith/monsanto-forced-fox-tv-to_b_186428.html
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Again, you claim that do not want to “weaken” our patent system, therefore they must want to strengthen it. Where did you learn logic? In fact, most, if not all, the companies that oppose current patent “reforms” have said the current system is better than poorly thought out “reforms.” That does NOT equate to “strengthening” the patent system under any rules of logic.
Given that all your others links have lead to irrelevant crap, I decided to skip this one.
Re: Re: Re:7 Re:
“In fact, most, if not all, the companies that oppose current patent “reforms” have said the current system is better than poorly thought out “reforms.” That does NOT equate to “strengthening” the patent system under any rules of logic.”
That’s just a bunch of political rhetoric, it doesn’t mean anything substantial. That’s like a politician saying, “we need a patent system that encourages innovation instead of one that hinders innovation.” No one would disagree with that, duh. But what does that mean exactly.
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I mean, seriously, do you expect a politician or any company to say something like we want a poorly thought out system instead of what we have now?
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A poorly thought out system benefits no one. I believe that 99% of all companies and inventors want a system that rapidly exposes knowledge and helps to expand the pace of invention – if that is even possible in the current environment where speed of development is outpacing our ability to graduate technical people.
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Considering that the original post was full of illogical rhetoric, I guess we have a match, except I pointed out the illogic of the original rhetoric.
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You have yet to point out any illogic.
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I think we would all be pleased to see your evidence of these contentions.
In fact, approximately 60% to 70% of all patents are abandoned at the 11.5 year maintenance fee mark. Therefore, most patent holders are obviously not very interested in longer patent terms.
As for “more general,” the reforms proposed thus far do not address “more general,” which is an issue of examination.
Your last statement is interesting, and impossible. You cannot have a situation where one group of patents cannot be challenged while another group of patents can be used in challenge. Where is the logic, and the evidence, of that?
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“In fact, approximately 60% to 70% of all patents are abandoned at the 11.5 year maintenance fee mark. Therefore, most patent holders are obviously not very interested in longer patent terms.”
Because only a small percentage of patents are any good, the rest just require resources for their acquisition, which just takes away resources that could otherwise go into innovation. But for the patents that do generate revenue of course they want longer terms, why wouldn’t they?
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In fact the terms were extended from 17 to 20 and pharma and other corporations lobbied for it, so apparently they do want longer patents.
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Actually, your statement is misleading, at best.
The patent term WAS NOT EXTENDED FROM 17 TO 20 YEARS. You need to learn what an “extension” is.
In fact, the patent term was changed from 17 years from the date of issuance to 20 years from the date of filing, effectively SHORTENING the life of patents. Got that a little confused, did you?
Pharma and other corporations sort of lobbied for the change, but not for the reason you are claiming. Prior to the change, submarine patents were possible, where an applicant could delay issuance for years, sometimes decades, waiting until a market developed to allow their patent to issue. An individual by the name of Lemelson made an art of submarine patents, filing in the 1950’s and allowing the patents to issue decades later, giving him a patent life measured at 30 and 40 years from the date of filing.
By changing the term from date of issuance to date of filing, submarine patents that remained hidden for a decade or more to pop up with a 17 year life became an impossibility. So, the effect of the change was to SHORTEN patent term.
Ergo, pharma and other corporations who lobbied for it, according to you, were fine with a shorter effective life.
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At least you tacitly acknowledge that innovation happens because there is a market for something, not because patents somehow encourage innovation, and that, if anything, patents get in the way of innovation. Innovation will happen perfectly fine without patents.
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and if the PTO takes over three years to approve a patent then that suggests that our patent system is a bogged down failure because by the time a patent does get approved it’s obsolete and instead of wasting more resources on a failed system why not used those resources to innovate instead.
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As long as you no longer care about invention, that is fine. However, there is SIGNIFICANT evidence that patents do provide incentive for inventors, and innovation REQUIRES invention.
However, why does three years seem like a problem to you?
Invention happens…T0
Patent application is filed
Invention developed into product – T0 plus 2 to 10 years.
Patent issues, T0 plus 2 to 5 years.
Seems to me that the time frames are comparable.
Perhaps we should stop wasting so much time debating a system that has worked well for more than 200 years and do something useful, like inventing.
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One of the very reasons why America advanced more than other nations is because we, by and large, ignored the intellectual property of other nations at first. Many of today’s technology has precursors in other nations. But they were all tied up in intellectual property which slowed down the progress and America just ignored much of that which is why we advanced so quickly. Mike has talked about that on this blog a lot in the past. Intellectual property has gotten longer over the years, so no, our current system is not the same system that has worked for over 200 years. Copyright lasts far longer than it used to for one thing, it’s far different than it was 200 years ago. And the idea of intellectual property has been around and used by nations about 2000 years (it was Americas liberal view of Intellectual property that advanced innovation and the idea that we should really really limit it).
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Here is a graph telling the lengthening of copyright for instance.
http://www.techdirt.com/articles/20090811/0123105835.shtml
and here is how patents were before America
“The French patent system was established by Pontchartrain in 1699. The utility of an invention was examined by the Parliament of Paris. The Academy examined novelty. Digests were published irregularly starting in 1729 with delays of up to 60 years. Examinations were generally done in secret with no requirement to publish a description of the invention. Actual use of the invention was deemed adequate disclosure to the public. [29]”
http://en.wikipedia.org/wiki/Patents
The U.S., in comparison, did not allow patents to last so long. It was our liberal view on patents that caused us to innovate more.
and the first federal patent system in the U.S. was adopted in 1790
“In the United States, during the so-called colonial period and Articles of Confederation years (1778–1789), several states adopted patent systems of their own. The first Congress adopted a Patent Act, in 1790, and the first patent was issued under this Act on July 31, 1790 (to Samuel Hopkins of Vermont for a potash production technique).”
http://en.wikipedia.org/wiki/Patents
but we didn’t have the patent bureaucracy that we have now.
“The statute did not create a Patent Office.”
http://en.wikipedia.org/wiki/Samuel_Hopkins_%28inventor%29
It took a while for the patent system in the U.S. to turn into the mess it turned into now and the reason why innovation occurred so much in the U.S. is because we didn’t have such a restrictive patent system like the rest of the world.
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I partially agree, and partially disagree. As long as you exclude invention, you are right. If we never had patents, then by golly we would have had the most phenomenally outstanding buggies we could imagine – but perhaps not Corvette’s and Lexus’s.
Innovation does happen because there is a market, but invention happens with or without the market. Innovation is the process that takes the invention encouraged by patents and helps to make it more desirable by consumers. Patents are the reward for the risk of invention. Profit is the reward for the risk of innovation.
Question: Since ALL innovation builds on an invention, how can “patents” get in the way of innovation? Indeed, that would be comparable to saying that invention gets in the way of innovation. Hmmmm…
What a lovely system.
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“I partially agree, and partially disagree. As long as you exclude invention, you are right. If we never had patents, then by golly we would have had the most phenomenally outstanding buggies we could imagine – but perhaps not Corvette’s and Lexus’s.”
Unsubstantiated assertion, please substantiate. Do you have a machine that accurately demonstrates a parallel world in which this is true? Or are you just backing up your claims by hypotheticals. I can just as easily assert that if patents don’t exist we’ll all be driving perfectly safe and fuel efficient space shuttles by now.
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Let us flip that around. Where is your evidence that we would even have internal combustion engines without the additional incentive provided by patents? We certainly know they were patented – as were diesel engines. Looks like the system works fine.
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where is your evidence that they wouldn’t be invented or that better technology wouldn’t be invented without patents? Patents are a monopoly, they cause known economic harm to society, your trying to substantiate causing a KNOWN economic harm to society with hypotheticals that they may help society somehow, the burden of proof is on YOU.
Secondly, why weren’t combustion engines created in nations with more restrictive intellectual property years before America even came into existence if patents are so helpful to innovation?
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Actually, much of the development of the internal combustion engine took place in England, which its more restrictive intellectual property system years before it came to America. Indeed, the English system was so bad that Thomas Jefferson rejected adoption of the English system outright.
Any other questions?
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So then you seem to acknowledge that it was more restrictive patents that hindered the advancement of it.
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Actually, all the early significant advances were in the country with the most restrictive system. I never stated nor implied that advancement was hindered. If anything, the more restrictive system seemed to foster advances faster in England than elsewhere, since the Italians and the Indians had performed other work earlier than the English, but failed to capitalize on their experiments.
Re: Re: Re:13 Re:
“If anything, the more restrictive system seemed to foster advances faster in England than elsewhere, since the Italians and the Indians had performed other work earlier than the English, but failed to capitalize on their experiments.”
You are acknowledging that those with fewer restrictions (the Italians and the Indians) advanced earlier but then you change your measurement for advancement to capitalization/profiting from advancement. Sorry, advancement isn’t a measure of how much a company “capitalizes” or profits from an advancement.
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See, your definition of advancement is the monopolization of a product helping a special interest group at the expense of society resulting in less aggregate output, which is bad for society. However, you tacitly acknowledge that those with fewer retrictions, the Indians and Italians, advanced faster, the only difference is they didn’t have monopolies being used to reduce aggregate output and help the profits of a special interest group (ie: some business). So they didn’t have some dominant big business controlling all the resources with some fancy name that you could look and and say, “see the success” when in fact such a monopoly is a failure.
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here is more evidence of patents causing harm to innovation.
“The story of the steam engine is instrumental. Watt’s engine didn’t work. It was a piece of crap. But no one else could improve on it because he stopped them all with his patents. So there was little to no economic usefulness of his engine for years. Then his patents finally expired, and suddenly there was massive innovation from all those others who had perfected the invention but were unable to do anything with it for DECADES. That’s DECADES of economic growth down the drain. It’s incredibly sad.”
http://www.techdirt.com/articles/20090514/1115454885.shtml
But please, feel free to ignore all evidence that disagrees with you.
Re: Re: Re:10 Re:
Awesome. You have one example, from more than two hundred years ago. How often does that happen, versus the thousands of times patents have protected valuable, innovative inventions? How about an example from the last 50 years?
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Because only a small percentage of patents are any good, the rest just require resources for their acquisition, which just takes away resources that could otherwise go into innovation.
Nice, unproven assertion. I contend that if the money was not going into patents, it would go into the pockets of executives and directors as bonuses because they “saved” the company money that would have gone into patents. I seriously doubt that one dime more would go into innovation that would have gone into patents if patents were eliminated.
But for the patents that do generate revenue of course they want longer terms, why wouldn’t they?
Really? Why? Study, after study, after study, shows that in high tech fields technology turnover runs 5 to 10 years. The turnover matches well the time at which most patents are abandoned.
Of course, the remaining 1/3 of patents that make it to full term tend to be concentrated in fields where upfront R&D and fixed capital assets (tooling, factories, assembly lines, etc.) are relatively high, and technology turnover is slower. Yet, none of these companies, to my knowledge, are out lobbying for longer terms. They are lobbying for intelligent patent reform, but longer terms and more restrictions? No.
Re: Re: Re:4 Re:
“Nice, unproven assertion. I contend that if the money was not going into patents, it would go into the pockets of executives and directors as bonuses because they “saved” the company money that would have gone into patents. I seriously doubt that one dime more would go into innovation that would have gone into patents if patents were eliminated.”
Then competitors will produce a better product for a cheaper price, without letting patents get in the way, and the company would either have to compete or go out of business.
Re: Re: Re:5 Re:
Another nice, unproven assertion. There is zero evidence that this would be the case. Indeed, I can assert (with just as much proof as you) that if engine companies did not have patents that engine technology would develop at a substantially reduced rate – but the current engine technology would be innovated to death. Of course, engine technology would effectively freeze at 2009 technology levels, but it seems like “innovators” want exactly that.
Re: Re: Re:6 Re:
Even if competitors don’t increase innovation to take care of a market need, which they will, at the very least they will increase aggregate output until everyone earns a normal profit and the extra money will not go in the pockets of executives, it will be used to increase aggregate output. Why should a company innovate if they already have a government sanctioned monopoly on what exists or one that hinders competitors from innovating and creating a product that will force them to compete and innovate. In a free market innovation is required to increase market share and companies have an incentive to constantly innovate to take away market share from others and temporarily earn an above market profit. And there is also the first mover advantages to innovation.
But there is evidence for what I contend. For example see
http://www.techdirt.com/articles/20090721/0343325605.shtml
and read post Jul 25th, 2009 @ 10:53pm
Many scientists are becoming patent lawyers and many people, instead of becoming scientists that conduct research and development, instead are becoming patent lawyers which takes away from scientists that do research and development.
But you simply ignore all the evidence that suggests you are wrong, studies that Mike has shown that shows countries with less patent restriction innovate more and so forth just to try to claim that patents are somehow good for society based on unsubstantiated assertions and hypotheticals.
Re: Re: Re:7 Re:
sp/an above market profit/an above normal profit
Re: Re: Re:7 Re:
Great article. Note that for non-high tech, patents seems to be doing just exactly what they have always done.
Incidentally, I would love to see your evidence that the number of people becoming patent lawyers is any higher than it has ever been. The rate of registration of patent attorneys has held constant for some time, but if you have new evidence, we would love to see it, versus unsubstantiated allegations.
Re: Re: Re:8 Re:
read the link I gave you, it does have evidence. But you simply ignore the evidence.
Re: Re: Re:9 Re:
All the links you provided were full of non sequiturs and lacked evidence. You think I should open one more just because after 4 or 5 that were crap there might actually be ONE with evidence? Hmmmm….
Re: Re: Re:10 Re:
You simply ignore the evidence and you so far have refuted nothing. Nice try though.
Re: Re: Re:10 Re:
and despite the fact that you have completely ignored all the evidence that disagrees with you and you have completely failed to refute anything you have yet to demonstrate that patents are good for society or that anything (or something better) would not be invented if it weren’t for patents. Again, monopolies cause a KNOWN harm to society, everything you’re saying is completely hypothetical, so the burden is on you, and you have yet to provide evidence whatsoever, beyond hypotheticals and speculation, that patents help innovation. Instead you keep shifting the burden by asking me for evidence that patents are bad, I provide it, you ignore it, ignoring the fact that the burden is on you.
Re: Re: Re:11 Re:
You have completely ignored all the evidence I have provided and you have provided NO evidence of your own, only meaningless anecdotes and baseless assertions. Just keep on arguing without anything to back you up.
Re: Re: Re:8 Re:
“For at least some students who might otherwise gravitate toward a science career, the promise of much bigger paydays is a powerful lure. Others say the opportunities in academia are not as certain as they once were.
“It’s an exciting area of legal practice right now,” said University of Pennsylvania law professor R. Polk Wagner. “Every year I see more and more people coming into law school with technical backgrounds.”
“It almost scares me,” said Wagner, whose proteges include Weathers. “Who’s left in the lab?””
“Stanford University law student Dan Knauss left the lab at least in part to spread his wings. Knauss, who earned a Ph.D. in microbiology from the University of Wisconsin, thought academia would force him onto too narrow a path.”
“Last year, 140 students piled into his Introduction to Intellectual Property course, making it the largest class at the school.”
http://www.usatoday.com/tech/science/2007-05-20-patentlawyers_N.htm
Re: Re: Re:9 Re:
Having students take a class does not translate into patent attorney, which requires separate registration in the USPTO. Show me the numbers, not an anecdotal story indicating people are interested in intellectual property.
Re: Re: Re:4 Re:
“Nice, unproven assertion. I contend that if the money was not going into patents, it would go into the pockets of executives and directors as bonuses because they “saved” the company money that would have gone into patents. I seriously doubt that one dime more would go into innovation that would have gone into patents if patents were eliminated.”
See, what you don’t understand about free markets (ie: without patents) is that this sort of dishonesty doesn’t exist because your COMPETITORS keep you honest. If you’re not honest they will simply innovate and give a better product for a cheaper price and put you out of business.
Re: Re: Re:2 Re:
“Your last statement is interesting, and impossible.”
No, it’s perfectly possible for them to want this.
“You cannot have a situation where one group of patents cannot be challenged while another group of patents can be used in challenge.”
It’s possible. Perhaps it’s unlikely to get implemented but that’s not to say it’s impossible.
“Where is the logic, and the evidence, of that?”
The logic is that they’re self interested.
Re: Re: Re:3 Re:
Self-interest says that someone will find a way to obtain food so that they may live. Self-interest does not say that someone will attempt to take all the food in existence.
Fundamentally, you answered reasonable questions and statements with pure, unadulterated vaporware. Nice, meaningless response.
Re: Re: Re:4 Re:
“Self-interest says that someone will find a way to obtain food so that they may live. Self-interest does not say that someone will attempt to take all the food in existence.”
Except this is exactly what Monsanto tries to do.
http://www.percyschmeiser.com/conflict.htm
Re: Re: Re:5 Re:
The article you linked to points to a case of contract dispute, not Monsanto trying to control the world’s food supply. Indeed, billions of people grow food without Monsanto grown seed.
However, if you purchase seeds that are Roundup Ready, then you agreed to the purchase of those seeds under certain conditions. The person you linked to violated those conditions.
This case proves nothing with respect to all the seed in the world that did not come from Monsanto, which in fact is most of the seed in the world.
Care to try again?
Re: Re: Re:6 Re:
“However, if you purchase seeds that are Roundup Ready, then you agreed to the purchase of those seeds under certain conditions. The person you linked to violated those conditions.”
You did not read the article.
Re: Re: Re:4 Re:
Also, lets not forget that Monsanto threatens scientists who dare disagree with them.
“Then events took a very sinister turn. ‘He brings up my family’, recalls Chapela. ‘He makes reference to him knowing my family and ways in which he can access my family. It was very cheap. I was scared. I felt intimidated and I felt threatened for sure. Whether he meant it I don’t know, but it was very nasty to the point that I felt “why should I be here, listening to all this and I should leave”.'”
file:///D:/Downloads/Pages/article_17843.cfm.htm
Re: Re: Re:5 Re:
err, http://www.organicconsumers.org/articles/article_17843.cfm
Re: Re: Re:5 Re:
I tried cutting and pasting your link – no joy.
However, it is easy for someone to claim they were threatened. Talk is cheap. I feel threatened by you, so should I point out that people against the patent system are threatening supporters of the system developed by Thomas Jefferson and James Madison?
Re: Re: Re:6 Re:
The corrected link is in the post below it if you put everything in threaded view.
Re: Re: Re:
“Many of the problems identified by legislative reform proponents as reasons for such reforms are best addressed instead by reforms of USPTO operations.”
I want those at the USPTO who make the decision of what patents pass and what patents fail to be elected directly by the people with term limits of two years before re – election. They should be subject directly to the American people so they have a stronger vested interest in serving the public good.
Re: Re: Re: Re:
lol…Too funny. We go from technically qualified people struggling to apply laws passed by non-technical people and litigation judged generally by non-technical people to non-technical people passing laws and non-technical people elected to implement them. I am sure things will be WAY better then.
Next, we will elect police officers, road workers, and members of the military. That will give us better qualified employees with a “stronger vested interest in serving the public good,” or they will just figure out how to look good to voters so they may be re-elected. Guess the lobbying efforts by corporations will have no effects on these elections, so the 4,000 “elected” members of the examiner corps will be completely devoted to what voters believe is the “public good.”
Also found these stats interesting.
http://www.scienceprogress.org/2009/01/patent-trolls-erode-patent-system/
I also found this interesting.
http://law.bepress.com/cgi/viewcontent.cgi?article=1532&context=alea
(The Patent Litigation Explosion)
“Firms that spend more on R&D are more likely to be sued and firms that acquire more patents are more likely to sue.”
In other words, the firms that spend less resources on patents are the ones innovating only to have to waste resources defending themselves (taking away resources that would otherwise go into innovation) against firms that don’t innovate but instead waste their resources on patents and suing others for patent infringement. The only reason that firms that do spend money on R&D file for patents is to defend themselves by counter suing in case they do get sued by someone for infringing. But if it weren’t for patents then there would be less resources spent over worrying about patents and more resources spent on innovation instead.
Re: Re:
How about firms that spend more on R&D are more likely to obtain more patents, both of which may make them more likely to sue.
However, all of this information is irrelevant. There is plenty of evidence that litigation RATES are not only NOT increasing, but may be at the lowest rates in years, if not decades…
http://patentdocs.typepad.com/patent_docs/2008/10/nature-biotechn.html
I need to go find another statistic I saw recently that had numbers showing that the number of litigation suits versus the number of patents had decreased, fairly significantly.
Liars figure and figures lie. It is easy to twist statistics so that things look bad when they actually are not.
Re: Re: Re:
so then it’s easy to twist statistics to make patents look good when they’re not and to claim that they’re good based on hypotheticals when they’re not.
Re: Re: Re:
“I need to go find another statistic I saw recently that had numbers showing that the number of litigation suits versus the number of patents had decreased, fairly significantly.”
I found this interesting.
“The conclusion? According to the Patent Troll Tracker 2007 shows a 30% increase in patent litigation over 2006, fueled by a 40% increase in the Eastern District of Texas.”
http://271patent.blogspot.com/2008/01/patent-litigation-down-bollocks-says.html
and yes, the number of patents filed is increasing
http://ideas.repec.org/p/sol/wpaper/06-018.html
but that just means more resources into our patent system as well, resources that could go into R&D. It also means less innovation as well due to restrictions that hinder innovation.
Re: Re: Re: Re:
Just a moment, according to the SAME blog you are quoting, the EVIDENCE SHOWS that litigation is in fact FLAT:
http://271patent.blogspot.com/2009/03/us-court-report-shows-patent-litigation.html
The Judicial Business of the U.S. Courts released its annual report this week on the business of the Federal Judiciary for the fiscal year ending September 30, 2008. Overall, the report provides statistical data on the work of the Federal Judiciary, compares data for the current year to that for previous fiscal years, and, wherever possible, explains why increases or decreases occurred in judicial caseload.
In the world of IP, the number of cases sank by 11% in 2008. However, most of this drop is attributable to the reduction of new copyright cases (-26.5%). Trademark and patent cases, stayed relatively flat (-1.1% and +0.4%, respectively).
Claims of a patent litigation “explosion” continue to be unsupported by the latest data. Going back to 2004, the number of patent cases filed per year break down this way:
2004 – 3,075 patent cases
2005 – 2,720 patent cases
2006 – 2,830 patent cases
2007 – 2,896 patent cases
2008 – 2,909 patent cases
Considering that 9,573 IP lawsuits were filed in 2008, patent litigation made up only 30% of all IP litigation. Further, as 223,093 civil cases were filed in 2008, patent litigation made up only 1.3% of all litigation in the U.S.
WHERE IS THE “30% INCREASE” YOU CLAIMED?
Re: Re: Re:
“How about firms that spend more on R&D are more likely to obtain more patents, both of which may make them more likely to sue.”
again, this is not what the evidence shows, it shows the opposite and I have presented lots of evidence but you just ignore it. So you basically ignore the evidence that disagrees with you and you provide no evidence of your own.
Re: Re: Re:
Ok, lets examine your link.
“A study in last month’s issue of Nature Biotechnology calls into question the perception that litigation rates — at least for one particular industry — are rising.”
Your link even acknowledges that the perception is that litigation rates are increasing. Let me ask you why? The answer is because there is PLENTY OF EVIDENCE (some of which I have provided) that litigation rates are increasing. That’s why people are perceiving that litigation rates are increasing, as your article correctly points out. It’s the mainstream view now that litigation rates are increasing based on overwhelming evidence and this is one piece of evidence that tries to contend the massive evidence that disagrees with you, the evidence that you keep ignoring. Secondly, your study is only focused on one industry, the Biotechnology industry (which, btw, is not pharmaceuticals), not the overall litigation.
Re: Re: Re:
“I need to go find another statistic I saw recently that had numbers showing that the number of litigation suits versus the number of patents had decreased, fairly significantly.”
So basically you have little to no evidence to back up your contention that patent litigation is becoming less and that precious resources are not being taken away from research and development and put into litigation and maintaining the patent office by paying for patent applications so the best you can come up with is, “oh, well, there is a statistic that patent litigation is decreasing relative to patent applications.” Wow, is that the best you can do?
Re: Re: Re: Re:
Well, smart-ass, I found the reference and posted it. Interestingly, it disagrees with the “evidence” you presented earlier.
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Oh my, I guess in actuality there has been LESS patent litigation in EVERY YEAR after 2004 as compared to 2004. Who woulda thunk that the statistics show THAT THE NUMBER OF PATENT CASES HAS BEEN RELATIVELY FLAT EVEN THOUGH ABOUT A MILLION PATENTS HAVE ISSUED FROM 2004 TO 2008.
So, the bottom line is that a smaller percentage of patents are being litigated with time, which effectively means that litigation of patents is decreasing with time.
Just amazing.
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BTW, I want you to understand something. As much as I have said bad things about patents and how much they harm innovation, please note I am referring to our current patent system specifically, not necessarily patents in general. I do think that under appropriate conditions patents can help advance technology and that it has in the past as well, but I think our current patent system needs reform and that patents shouldn’t last very long and that they shouldn’t be so restrictive and, overall, patents should be the exception not the rule (ie: they should be rare).