The Free Market Case For Patent Reform
from the let's-start-with-it's-not-property dept
A modest attempt at patent reform (mainly targeting egregious patent trolling practices) is making its way through Congress these days at the usual glacial pace. However, even if it does eventually make it through, there is still a tremendous amount left to do on patent reform. Derek Khanna, who famously wrote the wonderful House Republican Study Committee report urging major copyright reform — which so upset Hollywood that favors were called in to get the entire report retracted and cost Khanna his job, has now tried to write a similar report on patent reform. This one is for Lincoln Labs — a think tank trying to present more free market/libertarian ideas into the technology policy arena.
As Khanna notes in this new paper, it’s unfortunate to see many conservative groups have come out against patent reform, often based on a misuse of the word “property.”
Recently, several conservative organizations? many of whom receive funding from industries with vested interests?have tried to preempt any form of patent reform by arguing how patent reform would violate their ?property rights.?
Nothing could be further from the truth: janitors do not have ?property? in how to clean a building; Apple does not have ?property? in rounded rectangles and ?slide to unlock?; Amazon does not have ?property? in one-click checkout; Priceline does not have ?property? in the concept of reverse auctions; Microsoft does not have ?property? in squiggly lines when you mistype a word; Smuckers doesn?t have ?property? in peanut butter and jelly sandwiches, anymore than a known patent troll has a ?property? in the entire practice of podcasting; certainly no one ought to have ?property? in the concept of the hyperlink; and we should probably all agree that no one ought to have ?property? in the idea of exercising a cat by using a laser pointer.
Instead, as we’ve noted for years, patents are a form of a monopoly right, and for those who claim to support the free market, you’d think they’d be very concerned about a slew of government granted monopolies (being granted at an ever increasing rate these days — to the tune of hundreds of thousands a year).
Khanna also points out, rightly, that this massive rise in patent monopolies is a form of crony capitalism, used to keep out competition and to hold back free markets. He compares it to other highly regulated markets where it’s quite obvious the regulations have little to do with the stated purpose, but now are designed mainly to protect those who already are in power.
As Khanna points out in the report, “more patents” does not equal “more innovation.” If there are too many patents, it will only serve to clog the field and limit a vast amount of innovation. Thus he suggests there’a “curve” of patent optimality, and it’s important to consider that in designing a patent system.
So how do we reform all of this to make the system work better? He has a bunch of suggestions (some of which are already being considered):
- Increase patent quality requirements: There’s a lot of detail in the report about how this can be done, and it’s incredibly important. The incentive structure of the current patent system today encourages allowing crappy patents, which is why a huge number of patent applications are eventually approved. One important sub-suggestion in this arena is in fixing the “prior art” setup. Right now, patent examiners are not allowed to do crazy things like search the internet for prior art. Instead, they focus on older patents and journal articles. But in lots of areas, such as programming, that misses tons of prior art.
- Make patent applications accessible and require them to actually teach: Patent system supporters will often tell you that the true purpose of the patent system is to “disclose” the invention so that others can use it (either by license during the patent term or by anyone after). But, for many (especially in the software field) that’s a joke. The patents almost never reveal anything useful at all in those fields. Khanna suggests a higher standard such that the patents actually do need to be useful to others in the field. That would be tremendously helpful.
- Reduce or eliminate business method and design patents: A large number of the worst patents are “business method” patents that are often just patenting common sense. There is no reason for this. Design patents are so similar to trademark law that most of the reasons for design patents can and should be covered by trademark law instead.
- Create an independent invention defense: This is my own personal favorite and the most important fix in my own list of recommendations. The idea that someone who came up with an idea entirely on their own isn’t allowed to make use of their own invention seems like a much bigger “property rights” violation than invalidating bad patents. This would solve many of the worst problems of the patent system today, since so many shakedown efforts have absolutely nothing to do with copying, but just multiple people coming up with similar concepts.
- Loser pays: Also known as fee-shifting, this is a key component to patent reform that is currently on the table today to scare off frivolous patent suits that are just designed to shake people down.
- Speed up the patent approval and rejection process: Unfortunately, the report doesn’t have much in the way of details as to how this would be done — but I would argue that if most of the other recommendations were put in place, this wouldn’t be much of a problem, because there would be a lot fewer bogus patent applications to deal with.
- Couple the US patent system with other systems to encourage innovation: The key idea here: look for things like the famous “x prizes” to incentive big bang innovations, rather than patents. This is an idea that’s been out there for a while, and has support from a number of Nobel Prize winning economists. The UK just recently endorsed this idea as well. It’s also pretty non-partisan, seeing as the biggest supporter of such an idea in Congress is Senator Bernie Sanders.
It’s a really good report and well worth reading. It is lacking a couple of my own favorite suggestions, though. I still think we need to go beyond just an “independent inventor’s defense” to the point that independent invention is seen as a sign of obviousness. Patents are only supposed to be granted if the invention is considered “non-obvious” to a person who is “skilled in the art.” If we’re seeing multiple people “skilled in the art” coming along and inventing the same damn thing, that certainly seems to suggest obviousness to me. Thus, if there is widespread independent invention within a short time frame, without any evidence of knowledge or copying, it should stand to reason that any such patents are invalid. This would clear out a ton of the problem patents.
It’s unfortunate that some free market supporters have hijacked the story of patents to pretend that they’re about the free market, when they’re really about the opposite. Papers like Derek’s hopefully move things back in the other direction.
Filed Under: derek khanna, independent invention, patent reform, patents
Comments on “The Free Market Case For Patent Reform”
Obvious when you think about it.
I’ve said this for 20 years now. Another thing I’ve said for the same period is, if it takes a lawyer to understand it, it’s invalid. Patents are SUPPOSED to be replicable by someone with average skills in the field the patent is in. The vast majority of patents are now written by lawyers, for lawyers. It keeps the lawyers in business at a job that shouldn’t exist in the first place.
Re: Obvious when you think about it.
There is a section of the report on solutions that does try to create independent invention as evidence of obviousness. I would wonder if people on this comment section have ideas to strengthen or improve this, but this was the aim:
From the end of the report, Section A. 7. “Create new statutory language to specify that independent creation by others is evidence that the patented idea is not “non-obvious” to someone skilled in the art; if others are creating the same idea at the same time independently then this indicates the idea is obvious to someone of average skill in the art.” (bottom of Page 16)
Re: Obvious when you think about it.
The Free Market Case For Invention Theft by Copy-Cats
from the let’s-start-with-an-incorrect-understanding-of-patents dept:
1. Increase patent quality requirements – Mr. Masnick and Khanna – have you been an inventor and spent time pouring a rejection of your patent application and have you see how liberally patent Examiners reject patents? If so, and you didn’t have greatly difficulty getting your patent approved, then you are a very lucky man. The standards are already quite high.
2. Make patent applications accessible and require them to actually teach – Mr. Masnick and Khanna , nearly all patents are published 18 months after filing, and some are published w/in a few months at the request of the applicant. Most patents already teach quite a bit, but the patents are written a rather precise grammar and syntax because infringers have in the past been able to convince judges that patents written like articles in technical journals are imprecise.
3. Reduce or eliminate business method and design patents. Mr. Masnick and Khanna – the Alice decision about one year ago has completely invalidated business method patents. You can read up on the effect that the Alice decision has had, but the decision is so encompassing that the Patent Office is even rejecting applications for drugs as being improper subject for a patent.
4. Create an independent invention defense. Mr Masnick and Khanna – are either of you familiar with the competition between Elisha Grey and Alexander Bell? They had indendent invention around the same time, are you really willing to say the the telephone was obvious in 1876 ? Nearly everyone thinks the telephone was genius, even though 2 people thought of it at around the same time. You are very far out of the mainstream.
5. Loser pays. Mr. Masnick and Khanna, we already have that, please see Supreme Court case Octane Fitness v. Icon Health from April 2014.
6. Speed up the patent approval and rejection process. Mr. Masnick and Khanna we already have this, it’s called Priority Track I process. Costs an extra $1000, but well worth the price.
Re: Re: Obvious when you think about it.
6. Speed up the patent approval and rejection process. Mr. Masnick and Khanna we already have this, it’s called Priority Track I process. Costs an extra $1000, but well worth the price.
Great list! The funny thing is that Masnick complains that patent examiners don’t spend enough time evaluating patent applications when it suits him. For example: https://www.techdirt.com/articles/20120816/01045920068/why-do-we-assume-patents-are-valid-when-patent-offices-own-numbers-show-they-get-things-wrong-all-time.shtml Yet here he wants faster patents. Just don’t ask him to explain. He doesn’t do that.
Re: Re: Re: Obvious when you think about it.
Great list! The funny thing is that Masnick complains that patent examiners don’t spend enough time evaluating patent applications when it suits him. For example: https://www.techdirt.com/articles/20120816/01045920068/why-do-we-assume-patents-are-valid-when-paten t-offices-own-numbers-show-they-get-things-wrong-all-time.shtml Yet here he wants faster patents. Just don’t ask him to explain. He doesn’t do that.
You are (purposely?) conflating two separate issues.
1. Is the overall time from application to rejection/approval — which takes years. That’s too long.
2. The amount of time that an examiner spends looking at a patent. That’s way too short.
Now, you might argue that if you change 2 then you necessarily increase 1 — which is why I actually think that bullet point in Khanna’s report is the weakest one. But I think that if you increase patent quality, reject more bad patents, then the number of applications would decrease drastically and you could easily decrease overall time to a decision while increasing the time each examiner spends reviewing a patent.
Oh, and next time, instead of saying “just don’t ask him to explain…” maybe just ask me to explain. Or, you know, don’t conflate two separate issues and falsely imply I have a contradictory stance.
Re: Re: Re:2 Obvious when you think about it.
Oh, and next time, instead of saying “just don’t ask him to explain…” maybe just ask me to explain.
That’s a great one, Mike! If you hadn’t been running away from direct questions about your beliefs for years and years, you might have a point.
Want to prove me wrong? I truly hope you do!
Let’s start with this: Do you think that authors should have exclusive rights to their writings? That is, are you pro-copyright? If so, exactly what parts of copyright law do you support, and why?
I anxiously await your answer! You said “just ask me to explain.” I’ve asked you explain. I can’t wait to hear your answer! I’ve been waiting years to hear it.
Let’s have it!
Re: Re: Re:3 Obvious when you think about it.
Ah. Didn’t realize it was you.
I’ve answered your questions repeatedly and you just move the goalposts and do what you did above — conflate issues, misrepresent what I said, set up strawmen and flat out lie about me.
I’ve answered your questions and played your games. I told you why I stopped doing so.
So, I will amend my statement above: for everyone but you, feel free to ask questions. For you: I’ve answered your questions and you became an asshole and threw temper tantrums. I should have realized it was you from the conflation of ideas, the false statements and the ad hominems. And, now, of course, from the failure to apologize for that above and the resorting to the bullshit questions I’ve already responded to in the past.
Grow up, dude. Life’s too short to act like you do.
http://www.techdirt.com/articles/20120818/01171420087/funniestmost-insightful-comments-week-techdirt.shtml#c1210
Re: Re: Re:4 Obvious when you think about it.
Good grief, Mike. Just answer the question. Why won’t you go on record with your exact position concerning copyright? What are you so scared of?
The excuse that you won’t answer because it’s me asking is totally lame. No one’s buying it.
Re: Re: Re:5 Obvious when you think about it.
Why do you even bother having an insider account and complain about getting your IP address blocked after spamming the site? It’s clear none of that has stopped you.
Re: Re: Re: Obvious when you think about it.
Masnick and Khanna are amateurs at patents, neither have any experience in patents, not even an educational background that would give them any credibility in patents. In particular, Khanna’s education has been at universities that hate private ownership and constantly advocate for gov’t control of everything. I personally have worked as an employee of the federal govt and for a large contractor of the federal gov’t, and I have seen the worst idiocy of my entire career at those 2 places, and here we have talking heads Masnick and Khanna telling us to take private property from companies and that somehow putting control of these inventions in the hands of the federal gov’t will be better for the world.
Masnick and Khanna have only a cursory academic knowledge of the patent world, neither of them have developed a hardware or software product with their brains and hands, they have never drafted and prosecuted a patent for a small tech company that has put millions of dollars into the invention, they have never negotiated a license of a patent with a company that is stealing the invention from the inventor, they have never drafted a Markman claim chart, they have never participated in federal court oral arguments, BUT they have spent a lot of time absorbing nonsense from nitwits at Ivy schools. Masnick and Khanna think that the people who invent our great computer products have also just died and passed the torch of opinion to Masnick and Khanna.
I am shareholder of a number of small tech startups that have in aggregate invested over $10 million in new harware and software products, only to have nit-wits like Masnick and Khanna help run a campaign of half-truths against companies and inventors that have patents in order to stop the members of the Consumer Electronics Assoc from stealing all of our good ideas that we developed through a lot of blood, sweat and tears and cash.
2 of the small tech startups I am involved with will be hiring alot of people in the future, and i will make sure that none of our new-hires have attended the universities that Masnick and Khanna have attended.
Masnick and Khanna are 2 great examples of self-appointed talking-head experts that are destroying companies and laughing all the way to the bank from the ad revenues that their websites produce.
Re: Re: Re: Obvious when you think about it.
correction: Masnick is also paid a mouthpiece for the Computer and Communications Industry Association (CCIA), another industry trade group of invention thieves.
http://www.theregister.co.uk/2012/08/24/google_amended_shills_list
Re: Re: Obvious when you think about it.
1. Increase patent quality requirements – Mr. Masnick and Khanna – have you been an inventor and spent time pouring a rejection of your patent application and have you see how liberally patent Examiners reject patents? If so, and you didn’t have greatly difficulty getting your patent approved, then you are a very lucky man. The standards are already quite high.
Approximately 90% of patents eventually get approved. https://www.techdirt.com/blog/innovation/articles/20130408/08244222623/new-study-uspto-drastically-lowered-its-standards-approving-patents-to-reduce-backlog.shtml
Those are not high standards. Plus, we’ve detailed many crap patents that got approved.
2. Make patent applications accessible and require them to actually teach – Mr. Masnick and Khanna , nearly all patents are published 18 months after filing, and some are published w/in a few months at the request of the applicant. Most patents already teach quite a bit, but the patents are written a rather precise grammar and syntax because infringers have in the past been able to convince judges that patents written like articles in technical journals are imprecise.
In the tech world they almost never teach anything. I spend my time with tons of engineers. They laugh at the idea they’d ever look at a patent to teach anything. And, yes, the law requires the 18 month publication, but Khanna is suggesting even that is too long.
3. Reduce or eliminate business method and design patents. Mr. Masnick and Khanna – the Alice decision about one year ago has completely invalidated business method patents. You can read up on the effect that the Alice decision has had, but the decision is so encompassing that the Patent Office is even rejecting applications for drugs as being improper subject for a patent.
We’ve written extensively on the Alice decision and its impact. And, yes, it has helped deal with many business method patents, but it hardly “completely invalidated business method patents.” That’s simply wrong, since you can see business method patents still being approved today.
4. Create an independent invention defense. Mr Masnick and Khanna – are either of you familiar with the competition between Elisha Grey and Alexander Bell? They had indendent invention around the same time, are you really willing to say the the telephone was obvious in 1876 ? Nearly everyone thinks the telephone was genius, even though 2 people thought of it at around the same time. You are very far out of the mainstream.
Yes, I’ve written about that story a few times. Of course, the “myth” of Alexander Graham Bell has grown over time (along with the evidence that he flat out cheated to appear to “beat” Grey to the patent office). But, yes, I think that no patent was deserved there. Do you think it was appropriate that Grey put in all that work and then couldn’t even make use of his own work?
5. Loser pays. Mr. Masnick and Khanna, we already have that, please see Supreme Court case Octane Fitness v. Icon Health from April 2014.
We’ve written extensively about that as well. And, no, you’re wrong. What Khanna is asking for — and what’s in the currently proposed patent reform, goes way beyond what Octane Fitness setup, which is merely a lower standard for assigning attorneys’ fees, but not making it standard. Big, big difference.
6. Speed up the patent approval and rejection process. Mr. Masnick and Khanna we already have this, it’s called Priority Track I process. Costs an extra $1000, but well worth the price.
Or, you know, you could stop approving bogus patents, and it would clear out the docket fast — and everyone could get equal access to the patent system.
Hmm, that “Khanna Patent Curve” Khanna looks like the “Taborrok Curve” …
Re: Re:
Hmm, that “Khanna Patent Curve” Khanna looks like the “Taborrok Curve” …
Huh. You’re right. I hadn’t seen the Taborrok Curve, even though I was aware of some of his writings on patents. Now, if Taborrok has any IP on that… he could go after Khanna. 🙂
Re: Re:
Hi, when we were putting this report together I surveyed many patent lawyers, patent expert types and tech policy people and asked them if this principle was expressed as an economic “curve.” Unfortunately none of them, including myself were familiar with the Tabarrok Curve. I have read some of Tabarrok’s work at one point, but never encounted his Curve. I recognize they are very similar concepts and have been considering revising the piece accordingly. Thanks for pointing it out, but wanted to clarify as it wasn’t intentional.
Derek,
How do you square your claim that patents aren’t property with what the Supreme Court said earlier this week?
Opinion link: http://www.supremecourt.gov/opinions/14pdf/14-275_feah.pdf
You say “nothing could be further from the truth.” Is the statement from the Court a lie, in your opinion?
Thanks!
I haven’t read the full opinion to be honest. But the Supreme Court has pretty regularly said that patents are not the same as property. I cite to a few cases, but it’s not cherry picking there are 100’s of them, the Supreme Court specifically refers to patents as monopolies 100’s of times in majority opinions.
In that segment you pulled, they are still actually not saying that patents are necessarily property – they are saying that patents operate as an exclusive property right. The distinction is this, when the govt gives taxi medallians, it is a form of property, it is alienable (you can sell it), but clearly that property right is created through statute so it’s also regulation. It’s not a “natural right” to property. Similarly, patents are created by statute.
Now that holding relied upon the idea that removing or reducing patents requires just compensation under Takings Clause. One view of the Takings Clause is that it’s about expectations, so even taking away a taxi medallians medallian should be compensated if they paid a market value for that good.
As for what the Court said, I’m an originalist, so if a Court in 2015 says something dumb I kind of shrug my shoulders.
Here’s one case specifically on copyright that makes a similar conclusion, Feist v. Rural:
“The limited scope of the copyright holder’s statutory monopoly. . . reflect as balance of competing claims upon the public interest. . . The primary objective of copyright is not to reward the labor of authors, but ‘to promote the progress of science and useful arts.”
And on patents:
“The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent monopoly is the benefit derived by the public from an invention with substantial utility.” Brenner v. Manson (1966)
Re: Re:
I haven’t read the full opinion to be honest. But the Supreme Court has pretty regularly said that patents are not the same as property. I cite to a few cases, but it’s not cherry picking there are 100’s of them, the Supreme Court specifically refers to patents as monopolies 100’s of times in majority opinions.
I think the nuance you’re missing is that they say it’s a monopoly and it’s property. You appear to think these things are mutually exclusive. They’re not. The Court has many times called patents both.
In that segment you pulled, they are still actually not saying that patents are necessarily property – they are saying that patents operate as an exclusive property right.
No, they’re saying it’s “property” under the Takings Clause. That is, the government cannot take a patent without just compensation. They said it in the 1800s, and they’re saying it again here. Your attempt to split hairs by saying they’re talking about “exclusive property rights” doesn’t work. The Takings Clause says “property.”
The distinction is this, when the govt gives taxi medallians, it is a form of property, it is alienable (you can sell it), but clearly that property right is created through statute so it’s also regulation. It’s not a “natural right” to property. Similarly, patents are created by statute.
Lots of property interests are created by statute. So what? That doesn’t mean they’re not property. The rule isn’t that anything created by statute cannot be property. Your premise is false. Moreover, just because patents are secured by statutes, that doesn’t mean they aren’t grounded in natural rights. If you actually read how courts treated patents in the eighteenth and nineteenth centuries, you’ll see how courts treated them as privileges, that is, civil rights justified by natural rights philosophy. There are many mentions of patents as property. To brush them all off seems silly.
As for what the Court said, I’m an originalist, so if a Court in 2015 says something dumb I kind of shrug my shoulders.
Shrug all you want, but the Court this week was quoting itself from 135 years ago. Courts have always treated patents as property. There are numerous cites to back this up. Many grounded patents in the labors of inventors. Courts routinely incorporated concepts from property law into patent law. For example, notions of title, assignment, and license. I don’t think your position is originalist at all.
Here’s one case specifically on copyright that makes a similar conclusion, Feist v. Rural:
“The limited scope of the copyright holder’s statutory monopoly. . . reflect as balance of competing claims upon the public interest. . . The primary objective of copyright is not to reward the labor of authors, but ‘to promote the progress of science and useful arts.”
And on patents:
“The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent monopoly is the benefit derived by the public from an invention with substantial utility.” Brenner v. Manson (1966)
Yes, they are monopolies. But they’re not economic monopolies in the sense that they shut out all substitutes. My electric company has a monopoly. I can’t get electricity from any other company. But a copyright doesn’t give an author a monopoly. If you write a book about space aliens, I don’t have to buy your book. There are many books about space aliens that I can buy instead. Same for patents.
When a property interest is created through statute, it’s effectively a form of regulation. That regulation must generally be done for the public interest, in patents cases to “promote the progress of the sciences and useful arts.”
The property rhetoric is inaccurate and unhelpful, because we don’t grant people rights to real property or chattel property because it’s good for the public, but because people own their own property. So there is a big difference between property interests created through statutes, like spectrum auctions, taxi medallians, fisherman catch-shares, and patents/copyright, and real property.
This difference is loosely the difference between regulation and free market oriented policy. This is embodied in the terminology of monopoly. While monopoly now has a different meaning based upon economics, it’s an important distinction, especially to the Founders. Especially given that Adam Smith explained that monopolies including patent/copyright are not free market (but are useful).
Once we conclude that patents are a form of regulation, that takes effect through the granting of a property interest, we need to ask what would an optimal system of regulation look like to solve a market failure. This is why property based rhetoric is unhelpful, granting real and chattel property rights has minimal or no effect upon others liberty and freedom. But if you imagine a world where EVERYTHING is patented, forever, that’s a world of zero freedom and liberty. You would have to get permission to turn on your laptop, to sell t-shirts, to send an e-mail etc. So obviously patents can limit liberty, the question is when is that limitation limited enough but also beneficial enough. This is not a pro/con analysis that we do with actual property.
Re: Re:
When a property interest is created through statute, it’s effectively a form of regulation. That regulation must generally be done for the public interest, in patents cases to “promote the progress of the sciences and useful arts.”
Nonsense. Look at the Statute of Quia Emptores (1290), the Statute of Gloucester (1278), the Statute of Uses (1535), and the Statute of Wills (1540). All of these statutes defined the property rights in land. People have property interests in land despite them being grounded in statutes. Of course, all property laws are thought to promote the public interest. So what?
The property rhetoric is inaccurate and unhelpful, because we don’t grant people rights to real property or chattel property because it’s good for the public, but because people own their own property.
That’s circular. You’re saying we grant people property rights in land because people have those property rights. It’s nonsensical. I disagree that private property generally is not thought to promote the public good. Do you think we have private property despite it being bad for the public good? That makes no sense. And it’s certainly not what the Framers thought.
So there is a big difference between property interests created through statutes, like spectrum auctions, taxi medallians, fisherman catch-shares, and patents/copyright, and real property.
There are differences and similarities in the justifications for granting various property rights. It’s not nearly as black and white as you contend. There’s much overlap.
This difference is loosely the difference between regulation and free market oriented policy. This is embodied in the terminology of monopoly. While monopoly now has a different meaning based upon economics, it’s an important distinction, especially to the Founders. Especially given that Adam Smith explained that monopolies including patent/copyright are not free market (but are useful).
Patents are intentionally anti-competitive. As the Supreme Court also said just this week: “The patent laws—unlike the Sherman Act—do not aim to maximize competition (to a large extent, the opposite).” Opinion link: http://www.supremecourt.gov/opinions/14pdf/13-720_jiel.pdf Patents, by design, don’t maximize competition. That’s not the point of the patent system. It never has been. Ask the Framers.
Once we conclude that patents are a form of regulation, that takes effect through the granting of a property interest, we need to ask what would an optimal system of regulation look like to solve a market failure.
I’m glad you clarified that patents are property. But why do we “need” to look at what the optimal system is? The Constitution doesn’t demand economic efficiency. This modern notion you’re citing wasn’t on the minds of the Framers of the Patent Clause.
This is why property based rhetoric is unhelpful, granting real and chattel property rights has minimal or no effect upon others liberty and freedom.
Huh? All property rights limit what others can do. Property rights create duties in everyone else not to do certain things with the property. That’s what property does.
But if you imagine a world where EVERYTHING is patented, forever, that’s a world of zero freedom and liberty. You would have to get permission to turn on your laptop, to sell t-shirts, to send an e-mail etc.
Note how you have to imagine a ridiculous world that doesn’t exist to make your point. Let’s talk about the real world.
So obviously patents can limit liberty, the question is when is that limitation limited enough but also beneficial enough.
Of course patents limit liberty. So do copyrights. So do all property rights. All of them. Every single one. So what?
This is not a pro/con analysis that we do with actual property.
We do this kind of pro/con analysis with many things, including all types of property rights. Conflicting interests are balanced all of the time. Property law has done this since the Framing.
There’s a lot that’s inaccurate and misleading information here, but just as a clarification.
If patents limit liberty, in fact quite severally so, then we can agree that that limitation should be done when it’s most beneficial for its intended purpose, with minimal costs to society as a whole. Which is to say, patents can incentivize innovation, but also reduce innovation when wrongfully granted or with poor policy. This is a typical regulatory type policy analysis. The regulatory anlysis is generally inappropriate in the context of real and chattel property because granting permanent rights to chattel and real property have no discernable effect upon others.
My right to a house in the woods, doesn’t limit your right other than your ability to use my house. This isn’t the case with 380,000 patents which can affect all of us.
Re: Re:
There’s a lot that’s inaccurate and misleading information here
What’s inaccurate and misleading? I can provide numerous citations. I’m happy to back up my claims. You haven’t disproved my claims by just saying I’m wrong about some stuff I said earlier.
If patents limit liberty, in fact quite severally so, then we can agree that that limitation should be done when it’s most beneficial for its intended purpose, with minimal costs to society as a whole.
Again, all property rights limit liberty. You haven’t refuted this, nor do I think you can. Can you name a single property right that doesn’t limit the liberty of others? Just one? You single out patents as requiring this maximization of public good, but not other property rights. Why not?
Which is to say, patents can incentivize innovation, but also reduce innovation when wrongfully granted or with poor policy.
No doubt. I disagree, though, that you can mathematically calculate the perfect patent term or breadth. I also disagree that there’s a “need” to in the constitutional sense. You can argue that it’s good policy to do something. And I can argue that your policy arguments fail to take other things into account. Neither one of us is right or wrong. And neither position would be mandated by the Constitution.
The regulatory anlysis is generally inappropriate in the context of real and chattel property because granting permanent rights to chattel and real property have no discernable effect upon others.
Everything that is my personal or real property is property that you and everyone can’t use. How is that not a “discernable effect”?
My right to a house in the woods, doesn’t limit your right other than your ability to use my house. This isn’t the case with 380,000 patents which can affect all of us.
Your right to the house in the woods affects the ability of every other person on earth to use that house. How is that not so? Why do patents affect everyone else, but your property rights in your home do not?
Further, the application of principles that apply to rivalrous goods are not an obvious fit to then apply to non-rivalrous goods. We protect a property right to chattel and real property in particular strongly because, in part, your receiving my chattel and real property requires my deprivation of that chattel and real property.
But in the case of patents, if I come up with the same idea at the same time, were you deprive of anything? You may not be able to earn as much money as if you had a sole monopoly, but I see little in the Patent Clause that guarantees you maximum return. So enforcing statutorily created property rights for patents as a regulation means that our liberty, specifically our natural rights to engage in trade and business, is inherently violated or abridged. In contrast, we never had the liberty to take someone else’s house to begin with.
In other areas of law when we violate someone’s natural rights, such as limiting someone’s right to speech, that is done with “strict scrutiny” requiring it be narrowly tailored for a compelling governmental interest. Would patent policy pass a strict scrutiny (or similar) test?
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Further, the application of principles that apply to rivalrous goods are not an obvious fit to then apply to non-rivalrous goods. We protect a property right to chattel and real property in particular strongly because, in part, your receiving my chattel and real property requires my deprivation of that chattel and real property.
But in the case of patents, if I come up with the same idea at the same time, were you deprive of anything?
When a patentee discovers something new and useful, he creates something new that did not exist before. He’s not taking anything away from the public because the public never had it in the first place. So the moral claim is even stronger with patents, since the public is not deprived of anything as with tangible property.
With simultaneous discoveries, there is a rule that decides who has the superior claim. From a moral standpoint, I agree that both have equal claims. But the tie-breaker is the rule about who gets the property rights (first to file, first to invent, etc.). The rule settles the competing moral claims.
You may not be able to earn as much money as if you had a sole monopoly, but I see little in the Patent Clause that guarantees you maximum return.
The Clause doesn’t guarantee any returns whatsoever. It instead envisions a free market system where the inventor is given exclusive rights that he can attempt to market to make returns.
So enforcing statutorily created property rights for patents as a regulation means that our liberty, specifically our natural rights to engage in trade and business, is inherently violated or abridged.
Again, so too with all property rights. Your house in the woods abridges my rights to live wherever I want. But you’re not calling for those property rights to be “reformed.”
In contrast, we never had the liberty to take someone else’s house to begin with.
You never had the liberty to use an invention that didn’t exist until the inventor created it either. Since it didn’t exist, you couldn’t have used it. So what?
In other areas of law when we violate someone’s natural rights, such as limiting someone’s right to speech, that is done with “strict scrutiny” requiring it be narrowly tailored for a compelling governmental interest. Would patent policy pass a strict scrutiny (or similar) test?
Another false premise. The test is not that everything grounded in natural rights gets strict scrutiny. Free speech gets strict scrutiny because of the First Amendment limitation on the government to abridge freedom of speech. Patents get rational basis scrutiny because Congress is exercising an Article I power when it creates the Patent Act. You might consider my right to live where I want a natural right, but I don’t get strict scrutiny if I challenge your right to exclude me from your house in the woods. I think you’re mixing things up badly.
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“It instead envisions a free market system where the inventor is given exclusive rights”
This is a self-contradicting statement. Giving monopolies is not a “free market” mechanism. I’m not saying the idea of patents is wrong, but they certainly aren’t “free market”.
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This is a self-contradicting statement. Giving monopolies is not a “free market” mechanism. I’m not saying the idea of patents is wrong, but they certainly aren’t “free market”.
Nonsense. Property rights are what make the market work. Without those rights, there is no market. If you own a home, you have a monopoly in it to the exclusion of others. You can sell that home on the market precisely because you have exclusive rights in it. Without those exclusive rights, there’d be no market for homes. Same with patents. A free market doesn’t mean that anybody can sell anything.
Re: Re: Re:2 Re:
I have been reading the comments by Masnick and Khanna, and what I see in nearly every post by them is that their answers ignore a lot of law on patents and copyright. It’s like trying to argue the Bible with Lucifer, every answer by them is an attempt to lead others away from the truth of the matter. These two gentlemen have no credible background in the field, Mr. Masnick is not much more than a journalist hack and Khanna has no background in any technical subject matter, not in school on his his work experience. Neither have anywhere near the credentials to practice patent law, and yet, these 2 self-appointed patent experts hold out their opinions based on not even half of patent jurisprudence as if they actually have anything to contribute. Mr. Khanna, I am a U.S. Supreme Court litigator, licensed patent attorney, major shareholder in a number small tech startups and active Republican, and while I have not run across you yet, I am sure we know some people in common. Thank you for outing yourself here as an enemy of private property rights so I can work towards marginalizing your influence. With Republicans like you, there is no need for liberals and anarchists. BTW – I think you absorbed a lot more liberalism at your schools than you will ever recognize. On this board, you are in perfect agreement with anarchist (and generally hateful guy) Mike Masnick.
See above comment, I already addressed several of your points before you posted.
I would also refer you to Thomas Jefferson who had a good explanation of the distinction:
“If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it.
Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property.
Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from anybody.” (Jefferson to Isaac McPherson http://press-pubs.uchicago.edu/founders/documents/a1_8_8s12.html)
Jefferson should be read in context, as he was originally against the patent clause because he thought it dangerous, but he does a great job of distinguishing between rivalrous and nonrivalrious property within policy making contexts.
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Jefferson should be read in context, as he was originally against the patent clause because he thought it dangerous, but he does a great job of distinguishing between rivalrous and nonrivalrious property within policy making contexts.
Yes, the letter to McPherson. Note how Jefferson acknowledges an exclusive right to profits from intangible property in the last sentence. Jefferson had even written Madison in 1789 suggesting language for the IP Clause. When Madison suggested a 14 year term, Jefferson suggested a 19 year term instead. He’s not the anti-patent guy he’s painted to be in modern policy discussions.
Here’s Jefferson in 1790: “An act of Congress authorizing the issuing patents for new discoveries has given a spring to invention beyond my conception. Being an instrument in granting the patents, I am acquainted with their discoveries. Many of them are indeed trifling, but there are some of great consequence which have been proved by practice, and others which if they stand the same proof will produce great effect.” That doesn’t quite fit the Jefferson-hated-patents narrative.
Regardless, as an originalist, I would think you’d give Jefferson little weight. He wasn’t at the Constitutional Convention. He wasn’t a Framer. Why should he be a source of interpreting Article I?
I get your broader point that intangible and tangible property have significant differences. But just pointing to those differences doesn’t tell us how they should be treated differently. How do you get an ought from an is?
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What foolishness Mr. Khanna – on very same day that the US Supreme Court redefined marriage to include homosexuals after 6000 years, you try to convince us the redefinition of property to include patents, trademarks, copyrights, tradesecret and tradedress from Jefferson’s theory shouldn’t have been done in the 100 years after Jefferson. You don’t have a leg to stand on there.
It’s a false premise to assume that without IP you would have no new inventions, I think the data is pretty solid on that point.
As for strict scrutiny, I am aware that patents are not currently under strict scrutiny (DUH), which is why I am saying the construct we use should change. Rational basis is silly, it’s an extremely low barrier. Economic liberty should be protected by strict scrutiny (or something similar) across the board.
Your right to a cabin has zero limitations upon my natural rights. In a state of nature I would never have been able to take your cabin anyway. But rights to a patent directly affects my natural rights. If I want to release a smartphone I have to navigate 400,000 patents, that’s a major, government imposed, restriction upon my liberty. If I use rounded rectangles or slide to unlock then that’s a violation of Apple’s patents. If I use one-click check out on my website, that’s a violation of Amazon’s patents.
Every week on Tuesday the patent office grants 6,000 things that Americans can’t do, and those last for 17/20 years. I think it’s pretty obvious how 380,000 patents a year directly effects economic liberty, and even individual liberty. Masnick runs a podcast, should he have to pay someone for the privilege of using that “invention.” The impact upon liberty for real property versus for patents is just not even comparable. It’s a silly argument (and I think you know this).
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It’s a false premise to assume that without IP you would have no new inventions, I think the data is pretty solid on that point.
It’s a false premise to say that anyone actually thinks that without IP, there’d be no new inventions. It’s a straw man.
As for strict scrutiny, I am aware that patents are not currently under strict scrutiny (DUH), which is why I am saying the construct we use should change. Rational basis is silly, it’s an extremely low barrier. Economic liberty should be protected by strict scrutiny (or something similar) across the board.
As a matter of descriptive constitutional law, we don’t apply strict scrutiny. Congress’s powers under the IP Clause, combined with the Commerce Clause, are all but plenary. The notion that strict scrutiny should be applied when Congress exercises an Article I power has no grounding in originalism. I thought you were an originalist.
Your right to a cabin has zero limitations upon my natural rights. In a state of nature I would never have been able to take your cabin anyway. But rights to a patent directly affects my natural rights. If I want to release a smartphone I have to navigate 400,000 patents, that’s a major, government imposed, restriction upon my liberty. If I use rounded rectangles or slide to unlock then that’s a violation of Apple’s patents. If I use one-click check out on my website, that’s a violation of Amazon’s patents.
So you don’t think that any private property rights affect your natural rights, but that IP rights do? That makes zero sense. How does wanting to make a smartphone differ from wanting to use someone else’s house? They are both limitations on what you can do. Why deny that?
Every week on Tuesday the patent office grants 6,000 things that Americans can’t do, and those last for 17/20 years. I think it’s pretty obvious how 380,000 patents a year directly effects economic liberty, and even individual liberty. Masnick runs a podcast, should he have to pay someone for the privilege of using that “invention.” The impact upon liberty for real property versus for patents is just not even comparable. It’s a silly argument (and I think you know this).
It’s a silly argument to pretend that every single property right in the world doesn’t limit what you can do. That’s exactly what they do. Why do you deny this?
Misuse of the word "right"
I’d call it a monopoly privilege rather than a right. Their existence isn’t guaranteed by the constitution or anything.
amazing twist of truth by Khanna
‘Recently, several conservative organizations— many of whom receive funding from industries with vested interests—have tried to preempt any form of patent reform by arguing how patent reform would violate their “property rights.” ‘
“Vested interests” lobbying against further destruction of patent rights?
Well, Mr. Khanna, perhaps you haven’t noticed by nearly all lobbying in D.C. on economic issues is done by “vested interests”. Are you aware of the defamatory lobbying and media campaign by Consumer Electronics Assoc. ? They are leading the lobbying effort and pretty much every large tech company is in CEA. Nearly the entire consumer electronics industry is lobbying to steal every invention from every small tech company. Already, over 90% of patent claims are being invalidated in Inter Partes Review, and you want even more invalidation. Many patents do you think are worth enforcing. here is some food for thought:
“In the early decisions (first 26), the win rate for cancellation of all claims was 85 percent for IPR and 100 percent for CBM. This has cooled down a bit. In 126 final decisions (as of Sept. 11, 2014), petitioners have succeeded in having the PTAB cancel all challenged claims in 65 percent of the cases.”
Yes, the is in 85% of patent in IPR, ALL CLAIMS were invalidated.
http://www.law360.com/articles/581512/trends-from-2-years-of-aia-post-grant-proceedings
Have you read Judge Radar comments on IPR? You should know what the former chief judge of the CAFC says about IPR. He says that the PTAB IPR is the “death squad” of patents. And you want even MORE invalidation of patents ? My goodness, you are a disgraceful human being.
Re: amazing twist of truth by Khanna
There is a huge problem with canceling patents after they have been granted, they cost the people who challenge them money to get rid of a patent that should not have been granted. Further, some have only been challenged and invalidated after other people were forced to license them because it was cheaper than trying to fight the bad patent. Therefore rather than protecting inventions, the patent system has been turned into a parasite that feeds off of the labors of productive people.
Most of those patents should have never been ‘canceled’ in Inter Partes Review . The Inter Partes Review is out of control, and only now is being changed to reduce the number of ‘cancelations’. It’s been a total disgrace and has cost the U.S. Economy $1 trillion http://patentlyo.com/patent/2015/06/america-invents-trillion.html
Shilling for fun and profit
Wow, this article REALLY brought out the shills. If you scan through the comments, a handful of shills are trolling every single thread in the comments. It’s not surprising given the amount of money at stake. Big businesses face losses due to competition, and lawyers face losses due to loss of frivalous suits. Is it any wonder shilling is a big business right now? It’s the flip side of lobbying, which is also a big business right now.
Re: Shilling for fun and profit
Well, congratulations for shilling for Big Tech. It’s all about Big Tech theft of inventions from small companies. Are they paying you or do just believe that Big Tech will return the favor of your support?
By no small coincidence, at the same minute that I received email notice of your comment, I received a email from one of the shareholders and CTO of one of my small tech startup holdings about the new product he is developing that we fully expect Big Tech to copy at their will and just pay some attorneys to destroy our patents if we try to sue them.
Re: Re: Shilling for fun and profit
See? Prime example. Every sentence is just chock full of typical paid shill responses. Start with an attack, pretend to be sympathetic to the “small guy”, then throw out a mention of a supposed personal correspondance from said small guy that promotes the continuance of patent trolling and dominance by major corps as somehow what the small guy wants.
Text book shilling. New shills can learn a lot from this guy… he should sell lesson plans.
Re: Re: Re: Shilling for fun and profit
I AM the small guy. I own 20% of that company that has had $1 mil invested by a man who wants the smarthome technology to help wounded veterans in their homes.
Big Tech does not want patents at all. Haven’t you figured that out? Look at the CCIA and the CEA and their lobbying against patents. Have you ever noticed that none of their legislation has nothing to do with companies that don’t manufacture the inventions in the patents, their laws affect ALL patent owners, and don’t tell me that after $400 mil in lobbying by Big Tech in 2013 that was just an oversight.
Re: Re: Re:2 Shilling for fun and profit
I’m going to guess that you believe Intellectual Ventures was the small guy, too? And the company that set up shell companies to sue people for scanning documents and attaching them to emails?
Re: Re: Re:3 Shilling for fun and profit
No one would think of Intellectual Ventures as the small guy, but why throw us in with them; along with other larger manufacturers ?
How about limiting patent enforcement to current or former manufacturers of the invention in the patent ? I know that would kill the value of patents for us if Big Tech stole our inventions and drove us out of business and we wanted to sell our patents to Intellectual Ventures, but it’s lot better than killing patents on a large-scale basis for everybody.
Re: Re: Re:4 Shilling for fun and profit
Small guy? You mean like the unknown website that sued other photographers over a patent on photography contests?
That IS a stupid patent, lots of reasons why that isn’t enforceable. In the real world, lots of nonprofits and legal clinics help people with stupid lawsuits, and in this case EFF is taking up the cause. This is a nuisance lawsuit, such as slip and fall lawsuits, and over time the courts and industries have learned how to deal with these (going to nonprofits such as EFF and law school legal clinics), which is now happening too in the tech world.
But people on this website want to kill all patent lawsuits including the one’s that my companies will file when we find out that Siemens, GE, Honeywell, Google, Microsoft and Apple have stolen out best ideas that the have spent $1mil in cash and $2.5 mil in time developing into products that are way better than anything else out there in the market.
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Just because you have spent time and money, and think you have the hottest thing since sliced bread, does not actually mean that you haven’t reinvented the wheel. Indeed the probability of reinventing the wheel is higher than coming up with a genuine new idea, just because no one can be familiar with all the developments in any field these days.
There are only 2 other companies in our field, unless someone came up with a better system and never introduced it into the marketplace, we can be certain that ours works much better than any other system.
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There are only 2 other companies in our field,
And yet you think Google is going to steal your idea? That’s funny.
Look: the idea is meaningless. Nearly all innovation comes from the execution, not the idea. The struggle is that you want people to copy the idea because it means there’s a market. And if you know it best, then you’ll succeed.
Get to market, and win that way. Let’s see if you can do it. From everything you’ve said to date, I doubt it.
Oh, the talking head shows up, telling me how to run a business. Well, Mr. Masnick, once again you presume incorrectly. We have sales, and so do our competitors. Want to take another swipe ? We are in a niche of a larger market that has gotten a lot of attention by Google, Microsoft, there is even an entire accelerator devoted exclusively to the larger market that we are in, and we are currently in discussion with a PE group for an initial $13 mil investment. I own 1/5 of that. And that’s not my only equity position. What a joke you are. Anything else you want to tell me ?
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So you went from “if you try to improve on the laws we currently have we’ll be irreparably screwed because Google” to “we’re untouchable, only two companies compete with us” in a matter of seconds? Really?
Small wonder you’re willing to support people who sue based on bogus patents.
I did not say we are untouchable, if we don’t have patents, anyone can steal our invention from us, especially Big Tech once they figure out this is a multi-billion dollar market. Masnick presumed we only have an idea – that’s not true, we have started sales, and eventually the profit margins on our products will be figured out, and all kinds of companies will want to copy our products. But how can we stop them when somewhere around 85% of the patent claims in Inter Partes Review are being invalidated, that leaves us with a less then 85% chance of having any patent claims to enforce. (the best and most likely infringed claims are being invalidated at a greater rate of 85%). So, this board here is telling me too bad after $1 mil in cash and $2.5 mil in sweat equity over 7 years, and a little bit of genius on the part of our CTO that we should stand by and watch Big Tech copy our products and use their big marketing and financing resources to squash us. How is that great ?
And I never said “if you try to improve on the laws we currently have”. What a snarky dishonest way to twist my words. I have never once had the idea that you are trying to “improve on the laws we have”. All I hear on this website is destruction of patents.
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Right there, in the title. It says “patent reform”, not “patent destruction”.
If what you took away from “reform” was “patent destruction”, it’s obvious that any attempt at improvement will rub you the wrong way.
Re: Re: National Venture Capital Association Announces Opposition to H.R. 9
“We believe H.R. 9 will create unintended consequences that will discourage investment in innovation and entrepreneurship by making it more difficult for any patent-reliant startup to defend their intellectual property. The net result would have a chilling effect on the innovation ecosystem, threatening the crown jewel of the broader U.S. economy and a key driver of American job creation.”
Re: The National Venture Capital Association Announces Opposition to H.R. 9
NVCA’s Position:
“We believe H.R. 9 will create unintended consequences that will discourage investment in innovation and entrepreneurship by making it more difficult for any patent-reliant startup to defend their intellectual property. The net result would have a chilling effect on the innovation ecosystem, threatening the crown jewel of the broader U.S. economy and a key driver of American job creation.”
http://nvca.org/pressreleases/nvca-announces-opposition-to-h-r-9-following-committee-markup/
The SpinMaster speaks: “It’s not destruction, why it’s ‘reform'”
Mao and Stalin couldn’t have said it better.
It appears that Mark Syman is bent on portraying this site and any attempt at reform as “destruction”, which is why he so fervently claims that all he can see on the site – namely, profiling of people who regularly abuse the system – is intent of “patent destruction”.
Considering that these articles tend to bring the spambots like Ronald J. Riley out of the woodwork, it’s probably not a surprise that Mark Syman shares similar motivations, being cut of the same cloth.