Is A 'Patent First, Develop Second' Approach Promoting The Progress?

from the wait,-don't-build-anything-yet dept

A few weeks back, Mike wrote a piece about the recently passed America Invents Act. One of the details he noted was that the US Patent system would be switched from a first-to-invent to a first-to-file platform under the notion that this would both bring us in line with how most other nation's patents work and cut down on wasted time required to prove the difficult matter of who was first to invent. As the post noted, this could cause some problems:
First, it encourages inventors to file for lots of patents as early as possible to beat anyone else to the Patent Office, rather than making sure that the invention is actually worth patenting. It also seems to go against the basic principle of the patent system, if it's supposed to reward actual inventors.
Of course, this attitude of focusing on filing first before doing anything else is already permeating many businesses. BusinessWeek has the story of a company called Tactus Technology, who hired patent attorney Jeffrey Schox and managed to make its first priority the filing of twenty patent applications. It did this before getting funding. It did it before even beginning to build a prototype for their invention. And it did it because their attorney is teaching the company to use its patents not as a defense, but as a weapon:
The Schox method revolves around teaching startups to view intellectual property as a weapon. How might a rival get around those patents? What features might they think of? Schox often asks engineers who haven’t even built their first prototype to conceptualize unusual extensions of the technology, so that these ideas can be protected just in case. It’s well worth the trouble. Schox says the going rate for a hot patent now is about $1 million. “Decades ago a machine might have five or 10 patents,” says Schox. “Today, the phone in your pocket has about 5,000. It’s just a much different landscape to think about.”
This is how broad-based patent applications get written. The strategy appears to no longer be to have a great idea and invent it. Instead, the strategy is to have a great idea, patent the ever-living hell out of it, then patent every conceivable other use for anything similar to your idea, then maybe actually build something (note: Tactus is actually building something), but also get your wallet ready for all the licensing money that is going to come your way.

Now, perhaps some will suggest that all of this pre-emptive patenting is the incentive that sparks the work on inventions to begin with, but it certainly can't be what the originators of patent law had in mind. And I think there's a better argument made that all the time spent working with lawyers and filing patents, which the article says, in Tactus' case, took years, is time lost on having a great invention built, marketed, and sold. After all, we might already have experienced the next great innovation if Tactus' invention had been built three years earlier, but instead, the market only gets the fruit of their labor now because of the drawn-out patenting process resulting from a first-to-file mentality. Tactus' owner, Craig Ciesla, even admits as much in the article:
Following Schox's advice, the company avoided looking for new investors even during the lean times out of fear that its ideas would be exposed. “We made a choice to go with the intellectual property,” Ciesla says. “Now that choice is paying off.”
Wonderful for Ciesla, I guess. However, that certainly doesn't sound like a mentality that fosters "promoting the progress." If anything, it sounds like delaying the progress.


Reader Comments (rss)

(Flattened / Threaded)

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    That Anonymous Coward (profile), Aug 17th, 2012 @ 4:54am

    And I think part of getting the patents first, is to appeal to investors. That if it fails, the patents can be pooled and used to get payments.

    Look at the insane amounts of cash being paid to acquire patents on absolutely silly things so corporate lawyers can engage in saber rattling and earn their keep running giant lawsuits against each other that in the end... do nothing but pad some bank accounts and maybe crush someone who built a similar but better mousetrap.

     

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    abc gum, Aug 17th, 2012 @ 5:30am

    "IP" trading is very similar to the Emperor being sold new clothing.

     

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    Argonel (profile), Aug 17th, 2012 @ 5:40am

    Why can't we go to a patent system where a working model must be submitted with the application. Having an idea is great, but you don't get a patent unless you can prove that it can be made into an actual device or product. Also assess a storage fee for the model tied to how long the inventor wants patent protection. This way a company could secure their patent protection for a shorter time for a reduced cost if they are in a field that is rapidly changing.

     

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      M Lang, Aug 17th, 2012 @ 7:35am

      Re:

      Indeed, a patent for an idea that doesn't actually work prevents others from developing it into something that does work.

      Patents restrict the opportunities to improve things.

       

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    Anonymous Coward, Aug 17th, 2012 @ 5:47am

    I think the worst part is not that first-to-file encourages inventors to file patents early, but that it requires them to file patents. After all, if you invent something and don't put in an application, then anyone who sees it and decides to file subsequently owns your idea (because nothing but a patent application counts as prior art) and can sue you.
    Of course, coming from the USPTO, whose purpose is to get people patents (regardless of whether that is a good thing), this should not come as a surprise.

     

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      Richard (profile), Aug 17th, 2012 @ 6:19am

      Re:

      (because nothing but a patent application counts as prior art)

      Is that REALLY true - even for a first to file system.

      If so I'm going to file a patent on the wheel!

       

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        Alex Macfie (profile), Aug 17th, 2012 @ 6:57am

        Re: Re:

        No it is not. It is based on a misunderstanding of the term "prior art", which is nothing to do with someone having invented it first, but instead is about the thing already been known about.

         

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      Alex Macfie (profile), Aug 17th, 2012 @ 6:46am

      Re:

      This is not true. Prior art is a completely separate issue from first-to-file vs first-to-invent, since it refers to what is public knowledge about a claimed invention. Prior art, whether patent or non-patent, always invalidates a patent regardless of the system.(Unfortunately, in some jurisdictions patent offices do not perform substantive prior art searches before granting patents, instead leaving it to the courts to decide whether a patent is valid... this is yet another issue.)

      Actually first-to-file makes it *easier* to invalidate patents based on prior art, because the priority date of the patent is the filing date, which is later than the putative invention date.

       

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      Alex Macfie (profile), Aug 17th, 2012 @ 6:47am

      Re:

      This is not true. Prior art is a completely separate issue from first-to-file vs first-to-invent, since it refers to what is public knowledge about a claimed invention. Prior art, whether patent or non-patent, always invalidates a patent regardless of the system.(Unfortunately, in some jurisdictions patent offices do not perform substantive prior art searches before granting patents, instead leaving it to the courts to decide whether a patent is valid... this is yet another issue.)

      Actually first-to-file makes it *easier* to invalidate patents based on prior art, because the priority date of the patent is the filing date, which is later than the putative invention date.

       

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        Richard (profile), Aug 17th, 2012 @ 7:06am

        Re: Re:

        In that case "first to file" could actually reduce the number of valid patents - since if two companies do the same thing and the first to file for a patent is not the first to publish (remember - in the US you can still patent something up to a year after journal publication) then neither can get a patent.

         

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      Anonymous Coward, Aug 18th, 2012 @ 11:51am

      Re:

      If you invent something and show it to another person under and NDA they cannot patent it. If it is not under and NDA then your showing it to them is prior art against their later patent. In either case they cannot sue you. Don't worry.

      There are problems with first to file. However there are an amazing number of problems with the previous US system that caused cases to be a huge mess. This is probably "a step forward" TM

      By the way - the USPTO has very very few first office action allowances - the notion that their goal is to get people patents is not substantiated with the data that I've seen. They obviously make mistakes but the crap that gets heaped upon their work is well beyond any reasonable measure.

       

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    Anonymous Coward, Aug 17th, 2012 @ 5:53am

    “Today, the phone in your pocket has about 5,000. It’s just a much different landscape to think about.”

    So if the holder of all 5,000 of those patents demand 1 penny royalty rate for the phone in your pocket that adds $50.00 to the cost of your phone.

    But lets be real, they aren't going to be satisfied with just 1 cent, they'll likely demand at least 10 times that, maybe even 100 times that. Which means your phone then costs $500 or $5,000 extra from the patent system.

    Yeah... such insane royalty rates on phones (plus the cost of building them, and the labor in building them and getting those royalty agreements in place and fighting all the lawsuits from patents you miss) are completely unsustainable.

     

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    Anonymous Coward, Aug 17th, 2012 @ 6:01am

    Patent first build later is a recipe for disaster, is like telling others to just dream without bothering to build anything.

    The day the patent office stop asking for working prototypes was the day the patent system died.

     

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    Anonymous Coward, Aug 17th, 2012 @ 6:15am

    Excellent breeding ground for abuse!

     

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    Wally (profile), Aug 17th, 2012 @ 6:52am

    Needs

    I don's see why certain parts of the bill are necessary. Filing for a patent has always been first come first serve. As for the "Invent/patent now prototype later" bit, that's also within policies of the patent office.

    Although I do agree, there needs to be a way to more efficiently build a patented product.

     

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    BeachBumCowboy (profile), Aug 17th, 2012 @ 7:18am

    Copying Others

    So Congress took the former American patent system, in the country that traditionally was the model of economic growth, progress, and entrepreneurial spirit compared to the rest of the world. And Congress decides to scrap all that and do what the rest of the world does. Smart. Real Smart.

     

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      Anonymous Coward, Aug 18th, 2012 @ 11:53am

      Re: Copying Others

      They took one specific element that the entire rest of the world uses because it is infinitely more reasonable in practice and adopted that. They did not "scrap all that ..."

       

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    Shmerl, Aug 17th, 2012 @ 7:35am

    These kind of brain dead "lawyers" are probably the same ones that consult mafia for the best way of doing racket.

     

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    Anonymous Coward, Aug 17th, 2012 @ 7:44am

    They see me trollin', they hatin'....

    "Patent first, develop second"?

    I thought it was "Patent first, troll second, develop never".

    Oh wait, I'm not being politically correct, am I? I guess I should call it "Patent first, non-practice second".

     

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    John Fenderson (profile), Aug 17th, 2012 @ 10:10am

    Patents should not be products

    In my opinion, to be consistent with the entire purpose of patents, this kind of thinking couldn't be more destructive.

    Patents should not be products themselves, which is what Jeffrey Schox is treating them as. Patents should protect inventions.

    Treating patents as products means that they are no longer tools, but ends in and of themselves. This is wrong, wrong, wrong, obviously will act to retard invention, not encourage it.

     

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      Shmerl, Aug 17th, 2012 @ 11:24am

      Re: Patents should not be products

      Here is an interesting related post about how even standardization can be poisoned by the patent arms racing.

       

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      Anonymous Coward, Aug 18th, 2012 @ 11:55am

      Re: Patents should not be products

      Patents are in the constitution as property rights. You seem to want to say that patent rights should not be transferable in a sale - which make them unique among property rights and be "unamerican".

      It is far from clear that using patents this way retards invention. Can you point to a small company that was put out of business because of such actions? I can point to a few that were saved by them.

       

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