HideOur Black Friday weekend sale ends tomorrow! Shop now to save on all Techdirt gear »
HideOur Black Friday weekend sale ends tomorrow! Shop now to save on all Techdirt gear »

Andy Grove On Patents: You Should Use 'Em Or Lose 'Em

from the good-for-him dept

Earlier this year, we wrote about a rather thoughtful analysis of the problems of the patent system by Intel founder and former CEO Andy Grove. His view was that patents separate the important part (the actual innovation) from the "asset" (the patent), and that allows for bad behavior. He compared it to mortgage-backed securities, where the underlying mortgages were completely separated from the "asset," and bad behavior ensued. Apparently, he received a lot of criticism for this view -- but he's not backing down (if anything, he appears to be getting more aggressive). The Economist's tech quarterly issue includes a fascinating look at Grove and his views on innovation as a whole, and the wider economy. He mocks the idea that the gov't should ever prop up failing business models, noting that it stalls innovation. At the very end, he's asked if he believes what he said earlier this year about patents, and he not only defends his earlier statements, but makes an even stronger one:
"You can't just sit on your ass and give everyone the finger."
Unfortunately, with today's patent (and copyright) system, you can.
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: andy grove, innovation, patents


Reader Comments

Subscribe: RSS

View by: Time | Thread


  • icon
    Killer_Tofu (profile), 8 Sep 2009 @ 12:30pm

    Never compromise, even in the face of armageddon

    Good to see a man with as much prominence as Grove isn't backing down.
    Always good to see people stand up to a messed up system. Even better to see those who have a loud voice do so.

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

  • identicon
    Anonymous Coward, 8 Sep 2009 @ 12:45pm

    Grove is not standing up for a messed up system. He is making a very valuable point, and that is the recent separation of "inventions" from "patents", with the latter in many instances being treated less as a means for facilitating a patent holder's market entry and more as a piece of commercial paper.

    His point seems fairly clear. If you are going to get a patent it should be directed to products in your current and upcoming product portfolio. If it ceases to apply to either, dump it and move on to something else. Whatever may happen, it should not be separated from the invention/product and sold to the highest bidder merely because it holds some measure of exclusionary value.

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

  • icon
    Steve R. (profile), 8 Sep 2009 @ 12:55pm

    But What Consitutes "Use"?

    Excellent point. This should also apply to all products, especially when a company "discontinues" a product.

    But the devil is in the details. The problem that I see is that companies are now patenting concepts, such as "one-click". They are not patenting an actual device (asset). So what that means is that even if a patent troll owns a patent on some ambiguous "device" but someone else actually builds the device and puts it into the marketplace; the patent troll will still assert that the so-called patent is somehow in use, but that they were prevent by some nefarious obstruction from bringing it into the marketplace. For Grove's concept to work, we need to establish a clear definition of what a patent is and when a patent is actually put into use.

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

    • identicon
      angry dude, 8 Sep 2009 @ 1:04pm

      Re: But What Consitutes "Use"?

      "For Grove's concept to work, we need to establish a clear definition of what a patent is and when a patent is actually put into use."

      I'll make it easy for you, punky

      According to Grove (and the rest of corporate shysters) the only good patent is a patent owned by a large multinational corporation like Intel or Msgit and used to maintain their monopoly on the market

      All other patents are bad by his definition

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

      • icon
        Esahc (profile), 8 Sep 2009 @ 3:25pm

        Re: Re: But What Consitutes "Use"?

        Welcome back angry dude.

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

      • icon
        Derek Kerton (profile), 8 Sep 2009 @ 6:14pm

        Re: Re: But What Consitutes "Use"?

        AD, why not stick with the usual claptrap like:

        "If he had ever invented anything in his life, he would understand. He hasn't got a creative bone in his body."

        I mean, someone like you always lobs that gem out when Mike speaks againt the patent system. Oh, but with Grove you go with the big bad company line.

        Who, in your mind, would be qualified to make a case against the patent system?

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

        • identicon
          angry dude, 9 Sep 2009 @ 6:51am

          Re: Re: Re: But What Consitutes "Use"?

          "Who, in your mind, would be qualified to make a case against the patent system?"

          Certainly not that corporate stooge Grove or his cheap puppet Mikey

          Someone who made a genuine contribition to human progress

          Think Dean Kamen, or Raymond Kurzweil, or Robert Metcalfe, or Leroy Hood, or Gordon Gould etc. etc etc.

          These folks made important contributions and improved the quality of life, including your life, punky

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

    • identicon
      Anonymous Coward, 8 Sep 2009 @ 1:13pm

      Re: But What Consitutes "Use"?

      I own the patent on the idea of patent trolling so if you patent troll you must pay me.

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

  • identicon
    angry dude, 8 Sep 2009 @ 12:59pm

    Mikey is a corporate lackey

    Well,I have to give my middle finger to that old dishonest piece of corporate shit András

    WTF did he invent ? A transistor, a semiconductor chip ?

    Nope, he just managed to extract maximum profits from someone else's inventions

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

  • identicon
    angry dude, 8 Sep 2009 @ 1:09pm

    "You can't just sit on your ass and give everyone the finger."

    Old Andy is delusional

    Patents ARE property and like any other type of property they can be bought and sold

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

    • icon
      Esahc (profile), 8 Sep 2009 @ 3:24pm

      Re:

      If you want patents to be treated as property then they need to be taxed like all other property.

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

      • identicon
        angry dude, 9 Sep 2009 @ 7:00am

        Re: Re:

        They ARE taxed, punky

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

        • icon
          Esahc (profile), 9 Sep 2009 @ 8:13am

          Re: Re: Re:

          You pay an annual property tax on patents? Really? Can you give a citation please?

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

          • identicon
            angry dude, 9 Sep 2009 @ 8:17am

            Re: Re: Re: Re:

            Ever heard of patent issue and maintenance fees, punky ?

            If patent doesn't make any money those are the only fees you pay to the government

            If patent starts making money then you'll have to pay tax on that income of course

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

            • icon
              Esahc (profile), 9 Sep 2009 @ 8:33am

              Re: Re: Re: Re: Re:

              Why go angry? I was asking for a citation so I could read up on the subject.

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

            • identicon
              Anonymous Coward, 9 Sep 2009 @ 10:08am

              Re: Re: Re: Re: Re:

              Patents are treated like capital assets under our tax laws. Upon transfer of all or substantially all of the rights to a third party, the sale proceeds are subject to capital gains tax.

              In the case of income earned from licensing, such income is treated as earned income and subject to ordinary income taxes vs. capital gains.

              As you correctly note, maintenance fees are likewise a tax, payable at statutorily set times in order for a patent to remain in force.

              Filing, prosecution and issue fees are the most pernicious of all. Historically they have exceeded the amounts actually spent by the USPTO. This has not gone unnoticed by Congress who promptly began diverting fees for purposes unrelated to the running of the USPTO.

              These are just federal tax considerations. States do have concurrent power to levy taxes as well. To my knowledge, however, this is largely the exception and not the rule. For example, Florida at one time had (and may still have) its notorious intangibles tax. I say notorious because virtually everbody was unaware of the tax until a letter came in the mail saying "pay up".

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

              • identicon
                dorp, 9 Sep 2009 @ 10:57am

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

                As you correctly note, maintenance fees are likewise a tax, payable at statutorily set times in order for a patent to remain in force.

                Yes, do tell us about the horrible maintenance fees. Cry us a river.

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

                • identicon
                  Anonymous Coward, 9 Sep 2009 @ 1:03pm

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

                  As of this month maintenance fees are as follows (the first being the charge for "large entities" and the second for "small entities"). It is useful to bear in mind that if a small entity has granted a license, even a non-exclusive license, to a large entity then it is no longer eligible to avail itself of small entity status.

                  Patent Maintenance Fees
                  1551/2551 1.20(e) Due at 3.5 years 980.00 490.00
                  1552/2552 1.20(f) Due at 7.5 years 2,480.00 1,240.00
                  1553/2553 1.20(g) Due at 11.5 years 4,110.00 2,055.00
                  1554/2554 1.20(h) Surcharge - 3.5 year - Late payment within 6 months 130.00 65.00
                  1555/2555 1.20(h) Surcharge - 7.5 year - Late payment within 6 months 130.00 65.00
                  1556/2556 1.20(h) Surcharge - 11.5 year - Late payment within 6 months 130.00 65.00
                  1557 1.20(i)(1) Surcharge after expiration - Late payment is unavoidable 700.00
                  1558 1.20(i)(2) Surcharge after expiration - Late payment is unintentional 1,640.00

                  These are not exactly miniscule amounts, unless you happen to be someone who dislikes patents and who believe that such fees should be large enough to cover the many stimulus packages floating around.

                  Next time you want to wax poetic on an issue it would behoove you to first get the relevant data.

                  As I noted, these maintenance fees are just one part of the taxes that are levied against those who participate in the patent system.

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

  • identicon
    angry dude, 8 Sep 2009 @ 2:07pm

    shillin for livin

    Yeah, so I don't have any patent that I can make money off of either, but that's because people like Mikee here won't let me patent obvious crap so I could extort companies for money. Fine, I don't have any patents at all, but rich people make me jealous and wish I could be one of them too.

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

  • identicon
    Anonymous Coward, 8 Sep 2009 @ 5:01pm

    Patents ARE property and like any other type of property they can be bought and sold

    I just had an interesting thought (patent pending obviously) - if copyrights and patents themselves are property in the way that some people claim - could they be subject to eminent domain in the way that physical property is?

    In a way, this already happens with pharmaceutical patents - governments decide to manufacture their own generic drugs before the patent expires

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

    • identicon
      angry dude, 9 Sep 2009 @ 6:58am

      Re:

      "In a way, this already happens with pharmaceutical patents - governments decide to manufacture their own generic drugs before the patent expires"

      yeah, right, in Venezuela

      Go live there punky

      God save you from becoming seriously ill there

      They have a shortage of just about anything right now.
      A litlle more effort on Chavez part and they'll have to smuggle all new drugs from other countries

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

  • identicon
    Anonymous Coward, 8 Sep 2009 @ 6:17pm

    Breaking News

    AD is off his meds again

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

  • identicon
    Anonymous Coward, 8 Sep 2009 @ 8:52pm

    Sometimes I wonder if AD is just an elaborate satire to make patent trolls look even sillier.

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

  • identicon
    vic kley, 9 Sep 2009 @ 8:34am

    Grove in his groove

    Intel from the beginning and during Grove's tenure had people involved in new development. sometimes these people had ideas which were promising and deemed worthy of being patented and assigned to intel. Many of these ideas were never developed or turned into product. Did this not make Intel an NPE by Andy's definition?

    Now the question Andy can answer for us is if his competitor or some entity outside of Intel infringed or wanted to buy this invention from Intel what would Intel and Andy do? This almost certainly happened what did Andy and Intel do in a real specific instance?

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

  • identicon
    vic kley, 9 Sep 2009 @ 8:35am

    Grove in his groove

    Intel from the beginning and during Grove's tenure had people involved in new development. sometimes these people had ideas which were promising and deemed worthy of being patented and assigned to intel. Many of these ideas were never developed or turned into product. Did this not make Intel an NPE by Andy's definition?

    Now the question Andy can answer for us is if his competitor or some entity outside of Intel infringed or wanted to buy this invention from Intel what would Intel and Andy do? This almost certainly happened what did Andy and Intel do in a real specific instance?

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

    • identicon
      angry dude, 9 Sep 2009 @ 10:31am

      Re: Grove in his groove

      "...what would Intel and Andy do?"

      Let me guess...

      Screw the competitor using the patent Intel does not practice itself ?

      Right, Andy ?

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

  • identicon
    angry dude, 9 Sep 2009 @ 11:01am

    What would angry dude do?

    In case someone asks that question, obviously I would do screw other companies if I had a patent that let me do it. And that's regardless of whether I am doing anything about it or not. I just love double standards.

    Speaking of double standards, yes, I know that I call Mikee a corporate shill. And yes, I just raged and bitched about the system as it is screwing me over. And Mikee is against that system. But I am angry, so I am against everyone. Current system favors corporations with lawyers and it makes it hard for small fry. But to change it would mean admitting that I am wrong and there is no way in hell that's happening. Going back to being angry.

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

    • identicon
      angry dude, 9 Sep 2009 @ 12:33pm

      impostors be damned

      Punky

      you have no clue

      yes, patent game favors large corps but sometimes even small fry can get a lucky break

      But I'd love to see this country without patents

      How do you think non-compete employment agreements would look like ?
      Ever gave this any thought ?
      Any good engineer working on new high-tech products will be able to enjoy much better job security in a corporate world without patents
      Wonderful !!!

      Not gonna happen, dude

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

      • identicon
        angry dude, 10 Sep 2009 @ 1:00am

        Re: impostors be damned

        You are the impostor here, asswipe.

        When have I ever advocated getting rid of patents altogether? If that's what I was in favor of, I wouldn't have to bust Mikee's balls here. You are one of the sheeple here that follows everything Mikee says and now you are trying to pretend you are me and turn everything upside down. Go do something useful, punky.

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

  • identicon
    angry dude, 9 Sep 2009 @ 12:46pm

    The point I want to make is this

    Abolishing patent system altogether is OK with me (it will screw the country in a long run but who cares ?)

    But that is not what Andy, Mikey & Co are advocating

    They advocate making patents a sport of kings so only rich and powerful corporations can benefit

    Screw you all, Andy, Mikey and Co.

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

    • identicon
      Ed C., 9 Sep 2009 @ 4:10pm

      Re: The point I want to make is this

      How you can claim to read Mike's post and still have no clue about what he advocates is beyond me.

      Oh and BTW, IP is NOT real property--never has and never will be.

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

      • identicon
        angry dude, 9 Sep 2009 @ 6:56pm

        Re: Re: The point I want to make is this

        it is intangible property as opposed to tangible property like real estate

        Ah well, you don't have either so why do you care, punky ?

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

    • icon
      Mike Masnick (profile), 9 Sep 2009 @ 10:39pm

      Re: The point I want to make is this

      But that is not what Andy, Mikey & Co are advocating

      They advocate making patents a sport of kings so only rich and powerful corporations can benefit


      Really? When have I ever suggested anything like that?

      I have pointed out, repeatedly, that I think the current patent reform on the table makes things worse, not better. I don't quite understand why you keep insisting that I'm in agreement with it.

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

  • identicon
    staff1, 10 Sep 2009 @ 7:48am

    stop the shilling!!!

    I just checked on the PTO web site. From 1976 on there are no issued patents with Grove as an inventor assigned to Intel. I gather Mr. Grove is then no inventor. Sure, he and all the large tech firms would love to eliminate competition from upstart inventors and small firms. They prefer to secure their markets by their size alone. They hate patents because they are forever being beaten to the punch. Ever hear of AMD? Ever hear of anti-trust? Intel has.

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

    • identicon
      dorp, 10 Sep 2009 @ 8:34am

      Re: stop the shilling!!!

      I just checked on the PTO web site. From 1976 on there are no issued patents with Grove as an inventor assigned to Intel. I gather Mr. Grove is then no inventor. Sure, he and all the large tech firms would love to eliminate competition from upstart inventors and small firms. They prefer to secure their markets by their size alone. They hate patents because they are forever being beaten to the punch. Ever hear of AMD? Ever hear of anti-trust? Intel has.

      Err... what on god's green earth does anti-trust have to do with patents? And in case you have not heard of Intel (you seem to be confused about them), they have quite a broad patent portfolio that they use to beat up competition and others quite well. And that's under current system. Of course, why use facts when you can make shit up.

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

      • identicon
        angry dude, 10 Sep 2009 @ 9:03am

        Re: Re: stop the shilling!!!

        True, those multinationals like Intel do not want to abolish patents completely
        They just want to weaken patents in the hands of smaller upstarts and private individuals so they can keep their monopolies going on forever

        This was precisely the purpose behind attempted patent "reform" - to make patents unaffordable and unusable to smaller underfunded patent holders

        But I'd love to see those employment non-compete agreements for engineers in a world without patents :-)

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

  • identicon
    Al Davis, 10 Sep 2009 @ 8:35pm

    Patents

    Use them or lose them is OK for big companies. The small inventor needs licensees or investors. Both are hard to find. Wall Street sucks up all the money for speculation (casino gambling).

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

  • icon
    terry_allen (profile), 15 Sep 2014 @ 6:04am

    "You can't just sit on your ass and give everyone the finger."

    As the writer quite accurately concludes, in today's patent climate, unfortunately, you can.

    Also, you still have one hand free to 'use' the patent however you like, so Andy's otherwise excellent suggestion will quickly be undone by the myriad 'uses' a clever one-handed lawyer can still discover for the patent.

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


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Close

Add A Reply

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Insider Shop - Show Your Support!

Essential Reading
Techdirt Insider Chat
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.