Patent Lawyers And Business Model Patents: Perfect Together

from the think-they-have-a-bias? dept

With all the discussion concerning problems with the patent system, it's no surprise that we often get patent lawyers contacting us, claiming that we misunderstand patent law. We have spent plenty of time discussing things with them, and the summary always seems to boil down to a tautology: "the patent system works fine, because it works." However, as we see case after case where the patent system is clearly stifling innovation and rewarding those who either failed in the marketplace or chose not to compete at all, what's become even clearer is that the patent system works for patent attorneys. They make a killing off of the system, and have every incentive in the world to keep it as is -- even to the point of rationalizing all sorts of reasons why the system "works" in the face of increasing evidence that there are real problems with the system. There's a concise article over at that points out that making business model patents legal (such as the one Netflix is now threatening Blockbuster with) was almost entirely the work of one specific patent attorney. Almost no one had been pushing for business model patents, but the judge who wrote the decision allowing such patents had been one of the patent attorneys who helped draft the patent law it relied on (the article doesn't mention him by name, but it's Giles Rich). In his decision, he claimed that it was "Congressional intent" to allow business model patents -- which he should know if he helped draft the law, which is why he's sometimes referred to as "the father of the patent system (though, it makes you wonder why he was presiding over this case). Unfortunately, that very same judge had written elsewhere that there was no real Congressional intent in the redraft of the patent law. They had been too busy to think about it, and simply turned it over to the patent attorneys (such as himself) to draft the new law as they saw fit. So, we have a patent attorney, who stands to greatly benefit from getting more patents out there writing the law -- and then later being the very judge who said business model patents were perfectly legal.

Meanwhile, if you think this is only a US-based issue, that may not be true for long. Simon Hart, who was involved in the case, alerts us to a new patent ruling in the UK, that also touches on the issue of business model patents. While the decision in the US noted there was no such thing as a "business method exception" to patents (claiming such a concept was obsolete), such an exception does still work in the UK -- and is apparently used quite frequently to reject questionable patents. However, in this latest rulling, the judge appears to have made something of... well... an exception to the business model exception. He recognized that it could be possible to allow a patent for business models if the business model is simply a component to the overall business, rather than an entire description of the business. If this sounds both confusing and potentially problematic, there are probably plenty of patent attorneys out there who are willing to start using this new loophole in the UK to push through some fun new patents there as well. In other words, it doesn't look like things are going to get better any time soon.
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  1. identicon
    Ed Pool, 6 Apr 2006 @ 4:57am

    Patent Lawyers And Business Model Patents: Perfect

    I do not often write to blogs or share information about my present situation as a patent holder who has seen his patented ideas on computer integration of myriad of components involved in the international commercial transaction infringed. Meaning the years of development and millions of dollars invested (hard cash and unpaid payroll – known as sweat equity) exploited firstly by the largest of the large and now via trickle down effect by many smaller entities, glad I could help all of you out and get reduced to poverty at the same time.

    The debate that you engage in is warranted, warranted in that indeed there are deficits in the patent system. But it is not the patent prosecution system as much as it is the mechanism of redress of grievance. This is where the real exploitation occurs. Let us be perfectly clear over 90% of the American population cannot afford to take any grievance to the federal court system on their own patent or otherwise. Since I am living the process I can testify that in a serious patent infringement case (meaning against a corporate giant you will need a minimum of 5 million dollars) you are barred from enforcement just by the cost. Thus the incentive for the major to steal – why not only a small fraction of the inventors will be able to hold them accountable. I will take a hard position against anyone who states that these firms practice any moral code other than greed and theft by market dominance.

    Now before you start screaming that the lawyers are more than willing to go fee contingent you need to understand the ROI for the law firm. Firstly, most major corporations spread the work around to many law firms especially those with a history of helping out the small inventor. By doing this conflict of interest will bar that firm from helping you if the infringer is the share the wealth corporate giant. This is a major problem in the system! I would submit you would not have heard about Ebay and Mercexchange nor NTP had we had strong injunctive relief in the offing which is frankly why the corporate giants exploit the way they do. For a fee contingent case to be handled two factors must be present:

    1.) A strong patent prosecution history
    2.) A valuable licensing revenue stream. While not documented my experience says the patent must have a royalty stream around 100M or greater per annum to secure assistance. 5 million is the minimum but these cases through appeal can easily run north of 15 million. This is CRAZY!

    Frankly, I do not have to read the back and forth of what you think is going on I am living it so I do deal with the facts as they exist and do not have to guess or get my information from third party sources. This is the most brutal thing I have been through to date lasting now over 12 years and costing me my family, my home and my professional career as a seasoned trade specialist and broker. I am in my fifty’s now so not much chance at a restart. I agree wholly with No. 7 “I’ve stopped innovating.” Portions of my technology are incorporated in the back bone of the material tracking systems now exploited by DHS to control ports and I have many other significant improvements that need to be put in place. But do not worry you will never see them from me (no pay no ideas), in fact if I had the curer for cancer which killed both of my parents and grand parents and will probably get me as well – I will take it to the grave before I would ever utter a word. I really know what will happen if I open my mouth and I am not going through that again for anyone or any nation.

    You should carefully read Nathan Myhrvold’s article here to see just how Redmond Washington’s piracy incorporated really approaches the situation (they are not the only ones they learned it from the best). After all he was the CTO for 14 years. They know the economics and they believe in the “possession is nine tenths of the law” philosophy. I refuse to be treated as a serf any longer with my hard fought efforts to plant and grow the crops only to hand them over to royalty and then beg for a ration to feed my family. My advice do not be innovative, tell the kids to RUN, run away from science and useful arts or you are headed for a life of extreme misery. The inventive landscape is awash with these horror stories.

    Mike I am willing to discuss many of these issues and I am not beating up on you for engaging in this dialogue frankly that is a good thing to discuss the issues. But I do get reasonably offended when all the people doing the talking have never gone through the full process. It is much more than one thinks it is and if your opinion gets based on the host of press spun articles both positive and negative then your basis of information includes propaganda from both sides, which is not grounded in fact. That is what scares me. Remember we have the best government money can rent and the revolving door is well spun on this issue.

    Queue me back about specific issues (seriously) and I can bring real facts to the table and then you and your readers can make your judgments. I think it is of critical importance for those of you who will never leave the paycheck milk bottle to strive and strike out to listen earnestly to your fellow citizens who have been and are continuing to be intellectual raped by multinational corporations and the Wall Street usury bandits that fund them and deny funding to innovators. I really think it would benefit all of use to listen to those who are on the front lines living this issue in lieu of just accepting the propaganda of the press (corporate owned and controlled).

    Who am I?

    Ed Pool
    Former innovator

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