When companies pay cash upfront for issued patents, without a courtroom battle, the price rarely exceeds $10 million and is usually well under $5 million.
When companies decide, instead, to try to cut corners, pirate the technology, build a business around it, and then go through all kinds of deceiptful and contemptuous lawyering to avoid paying anything at all to the patentee, then they end up paying the large centimillion damage awards that can approach or even exceed $1 Billion.
That is, as it should be. The law should be structured to encourage compliance and discourage cheating. No reduction in penalties or costly political lobbying needed.
If companies want to reduce their cost of acquiring new technology, all they need to do is show some respect for the risks taken by inventors and also for the law. This would also reduce their political lobbying expense as well, which has obviously become a big part of their new technology acquisition strategy.
It is their cheating and trying to avoid paying anything at all that leads to the high cost legal battles and high damage awards.
Very few "players" in capitalism take as much financial risk as new technology developers.
To ask for 20% of the profits created by new technology is not only fair, in terms of basing the reward on the value created, but it is also reasonable considering the great risks taken on.
Unfortunately, piracy is all-too-common and only increases the risks that new technology developers take. When a technology is pirated, the new technology development team takes on the additional "collection risk", which can requires many years of very costly litigation.
Those who understand finance know that financial returns are measured not only by dollar amount but also by the time to payback. The "time value of money" is a common phrase in measuring returns.
Piracy not only increases the dollar amount of the risk of new technology development, but it also increases the time to payback, sometimes as much as a decade.
If pirates and would-be pirates of new technologies want to reduce the costs of innovation and new technology, the best way to do it is to simply stop pirating, show some respect for the law and for the risks taken by the technology developers, and pay a fair price to begin with. To the extent that the costs and risks of new technology development are reduced, both in dollar amount and in time, by avoiding lengthy & costly collection measures, then technology developers are happy with a smaller reward.
But, to the extent that pirates force us to incur much greater financial risk and time-to-payback, then we deserve, & rightfully so, to collect higher returns for our work in the form of treble damages.
In my personal opinion, the penalties should also include tough criminal penalties. Like securities and investment advisor regulations, it sometimes becomes necessary to use the threat of criminal punishment as a deterent to misbehavior.
Very few "players" in capitalism take as much financial risk as new technology developers.
To ask for 20% of the profits created by new technology is not only fair, in terms of basing the reward on the value created, but it is also reasonable considering the great risks taken on.
Unfortunately, piracy is all-too-common and only increases the risks that new technology developers take. When a technology is pirated, the new technology development team takes on the additional "collection risk", which can requires many years of very costly litigation.
Those who understand finance know that financial returns are measured not only by dollar amount but also by the time to payback. The "time value of money" is a common phrase in measuring returns.
Piracy not only increases the dollar amount of the risk of new technology development, but it also increases the time to payback, sometimes as much as a decade.
If pirates and would-be pirates of new technologies want to reduce the costs of innovation and new technology, the best way to do it is to simply stop pirating, show some respect for the law and for the risks taken by the technology developers, and pay a fair price to begin with. To the extent that the costs and risks of new technology development are reduced, both in dollar amount and in time, by avoiding lengthy & costly collection measures, then technology developers are happy with a smaller reward.
But, to the extent that pirates force us to incur much greater financial risk and time-to-payback, then we deserve, & rightfully so, to collect higher returns for our work in the form of treble damages.
In my personal opinion, the penalties should also include tough criminal penalties. Like securities and investment advisor regulations, it sometimes becomes necessary to use the threat of criminal punishment as a deterent to misbehavior.
Very few "players" in capitalism take as much financial risk as new technology developers.
To ask for 20% of the profits created by new technology is not only fair, in terms of basing the reward on the value created, but it is also reasonable considering the great risks taken on.
Unfortunately, piracy is all-too-common and only increases the risks that new technology developers take. When a technology is pirated, the new technology development team takes on the additional "collection risk", which can requires many years of very costly litigation.
Those who understand finance know that financial returns are measured not only by dollar amount but also by the time to payback. The "time value of money" is a common phrase in measuring returns.
Piracy not only increases the dollar amount of the risk of new technology development, but it also increases the time to payback, sometimes as much as a decade.
If pirates and would-be pirates of new technologies want to reduce the costs of innovation and new technology, the best way to do it is to simply stop pirating, show some respect for the law and for the risks taken by the technology developers, and pay a fair price to begin with. To the extent that the costs and risks of new technology development are reduced, both in dollar amount and in time, by avoiding lengthy & costly collection measures, then technology developers are happy with a smaller reward.
But, to the extent that pirates force us to incur much greater financial risk and time-to-payback, then we deserve, & rightfully so, to collect higher returns for our work in the form of treble damages.
In my personal opinion, the penalties should also include tough criminal penalties. Like securities and investment advisor regulations, it sometimes becomes necessary to use the threat of criminal punishment as a deterent to misbehavior.
Very few "players" in capitalism take as much financial risk as new technology developers.
To ask for 20% of the profits created by new technology is not only fair, in terms of basing the reward on the value created, but it is also reasonable considering the great risks taken on.
Unfortunately, piracy is all-too-common and only increases the risks that new technology developers take. When a technology is pirated, the new technology development team takes on the additional "collection risk", which can requires many years of very costly litigation.
Those who understand finance know that financial returns are measured not only by dollar amount but also by the time to payback. The "time value of money" is a common phrase in measuring returns.
Piracy not only increases the dollar amount of the risk of new technology development, but it also increases the time to payback, sometimes as much as a decade.
If pirates and would-be pirates of new technologies want to reduce the costs of innovation and new technology, the best way to do it is to simply stop pirating, show some respect for the law and for the risks taken by the technology developers, and pay a fair price to begin with. To the extent that the costs and risks of new technology development are reduced, both in dollar amount and in time, by avoiding lengthy & costly collection measures, then technology developers are happy with a smaller reward.
But, to the extent that pirates force us to incur much greater financial risk and time-to-payback, then we deserve, & rightfully so, to collect higher returns for our work in the form of treble damages.
In my personal opinion, the penalties should also include tough criminal penalties. Like securities and investment advisor regulations, it sometimes becomes necessary to use the threat of criminal punishment as a deterent to misbehavior.
Let's not forget that most of us wouldn't have the slightest idea of how to build a cell phone. Indeed, 20 years ago, there weren't really many cellphones at all.
There has been true innovation and invention that has enabled this industry. Of that, there can be no question.
And, those who invented those true, enabling inventions deserve credit, respect, and strong patent rights.
Those who violate those rights and that respect are the ones who deserve disrespect, not the inventors and their lawyers.
To portray someone who invented, for example, an important new computer chip that advances cell phone technology as simply a 'troll' who contributes nothing but frivilous litigation to the economy is rude, to say the least, and more to the point, very disingenuous, disrespectful, and obnoxious.
Those who seek to advance the cause of piracy by weakening patents, labeling inventors as 'trolls', and otherwise devalue the work of scientific advancement are the low lives of society, not the inventors.
Is it any wonder that the US is falling behind in science, when smart, diligent people are bullied throughout their lives ... first in grade school, and then right on up through to their days as inventors, there are bullies out there seeking to put them down, for no reason other than lifting their own, less-skilled selves up.
Let's not forget that most of us wouldn't have the slightest idea of how to build a cell phone. Indeed, 20 years ago, there weren't really many cellphones at all.
There has been true innovation and invention that has enabled this industry. Of that, there can be no question.
And, those who invented those true, enabling inventions deserve credit, respect, and strong patent rights.
Those who violate those rights and that respect are the ones who deserve disrespect, not the inventors and their lawyers.
To portray someone who invented, for example, an important new computer chip that advances cell phone technology as simply a 'troll' who contributes nothing but frivilous litigation to the economy is rude, to say the least, and more to the point, very disingenuous, disrespectful, and obnoxious.
Those who seek to advance the cause of piracy by weakening patents, labeling inventors as 'trolls', and otherwise devalue the work of scientific advancement are the low lives of society, not the inventors.
Is it any wonder that the US is falling behind in science, when smart, diligent people are bullied throughout their lives ... first in grade school, and then right on up through to their days as inventors, there are bullies out there seeking to put them down, for no reason other than lifting their own, less-skilled selves up.
Let's not forget that most of us wouldn't have the slightest idea of how to build a cell phone. Indeed, 20 years ago, there weren't really many cellphones at all.
There has been true innovation and invention that has enabled this industry. Of that, there can be no question.
And, those who invented those true, enabling inventions deserve credit, respect, and strong patent rights.
Those who violate those rights and that respect are the ones who deserve disrespect, not the inventors and their lawyers.
To portray someone who invented, for example, an important new computer chip that advances cell phone technology as simply a 'troll' who contributes nothing but frivilous litigation to the economy is rude, to say the least, and more to the point, very disingenuous, disrespectful, and obnoxious.
Those who seek to advance the cause of piracy by weakening patents, labeling inventors as 'trolls', and otherwise devalue the work of scientific advancement are the low lives of society, not the inventors.
Is it any wonder that the US is falling behind in science, when smart, diligent people are bullied throughout their lives ... first in grade school, and then right on up through to their days as inventors, there are bullies out there seeking to put them down, for no reason other than lifting their own, less-skilled selves up.
Let's not forget that most of us wouldn't have the slightest idea of how to build a cell phone. Indeed, 20 years ago, there weren't really many cellphones at all.
There has been true innovation and invention that has enabled this industry. Of that, there can be no question.
And, those who invented those true, enabling inventions deserve credit, respect, and strong patent rights.
Those who violate those rights and that respect are the ones who deserve disrespect, not the inventors and their lawyers.
To portray someone who invented, for example, an important new computer chip that advances cell phone technology as simply a 'troll' who contributes nothing but frivilous litigation to the economy is rude, to say the least, and more to the point, very disingenuous, disrespectful, and obnoxious.
Those who seek to advance the cause of piracy by weakening patents, labeling inventors as 'trolls', and otherwise devalue the work of scientific advancement are the low lives of society, not the inventors.
Is it any wonder that the US is falling behind in science, when smart, diligent people are bullied throughout their lives ... first in grade school, and then right on up through to their days as inventors, there are bullies out there seeking to put them down, for no reason other than lifting their own, less-skilled selves up.
Some patent scofflaws like to argue that patents hurt consumers, because they create monopoly pricing without competition. That is also a false argument.
First, patents don't prevent competitors from developing competing products. A patent only protects one product. Others are always free to develop better mousetraps and sell them at lower prices.
Second, to the extent that patents do enable a patentee to monopolize the supply chain and customers for his particular product offering, they have a cost reducing impact on that product, not a cost increasing impact, because they allow the patentee to achieve greater economies of scale in manufacturing.
For example, if 10 different vendors split a market 10 ways, then each will only achieve an economy of scale of equal to 10% of the volume of the market for that product. If, on the other hand, the patent is respected, then the patentee can achieve a lower cost of production, because the patentee produces at 10X the volume, or 100% market share.
In practice, the best example of the power of patents to reduce costs and make a product more available to consumers, is none other than Henry Ford. He was a prolific inventor, with 163 patents, which helped to enable him and his investors to achieve greater economies of scale in manufacturing.
Had there been, for example, no patents at all in the early years of the auto industry, then the industry would've been extremely fragmented, and none of the companies would've been able to achieve the large market share and product volumes needed to reduce the unit cost and make autos more widely available.
Patents give an inventor, entrepreneur, and his investors that ability to consolidate the supply chain for their product in a manner that reduces the costs of production, and makes the product more available to consumers, not less.
And, at the same time, the other competitors are still free to develop a better mousetrap. They just can't copy the patentee's mousetrap. That's all.
Contrary to the assertions of patent pirates and would-be pirates who want to weaken patent law, devalue the contributions of scientists and inventors, and fragment industries to the detriment of consumers and to their own personal benefit, patents are not anti-competitive, nor do they produce higher pricing in the long run.
Some patent scofflaws like to argue that patents hurt consumers, because they create monopoly pricing without competition. That is also a false argument.
First, patents don't prevent competitors from developing competing products. A patent only protects one product. Others are always free to develop better mousetraps and sell them at lower prices.
Second, to the extent that patents do enable a patentee to monopolize the supply chain and customers for his particular product offering, they have a cost reducing impact on that product, not a cost increasing impact, because they allow the patentee to achieve greater economies of scale in manufacturing.
For example, if 10 different vendors split a market 10 ways, then each will only achieve an economy of scale of equal to 10% of the volume of the market for that product. If, on the other hand, the patent is respected, then the patentee can achieve a lower cost of production, because the patentee produces at 10X the volume, or 100% market share.
In practice, the best example of the power of patents to reduce costs and make a product more available to consumers, is none other than Henry Ford. He was a prolific inventor, with 163 patents, which helped to enable him and his investors to achieve greater economies of scale in manufacturing.
Had there been, for example, no patents at all in the early years of the auto industry, then the industry would've been extremely fragmented, and none of the companies would've been able to achieve the large market share and product volumes needed to reduce the unit cost and make autos more widely available.
Patents give an inventor, entrepreneur, and his investors that ability to consolidate the supply chain for their product in a manner that reduces the costs of production, and makes the product more available to consumers, not less.
And, at the same time, the other competitors are still free to develop a better mousetrap. They just can't copy the patentee's mousetrap. That's all.
Contrary to the assertions of patent pirates and would-be pirates who want to weaken patent law, devalue the contributions of scientists and inventors, and fragment industries to the detriment of consumers and to their own personal benefit, patents are not anti-competitive, nor do they produce higher pricing in the long run.
To the undereducated reader, a diagram like that depicted above can and does appear to be a maze of wasteful litigation on first glance, which all most readers will give it.
But, to the real inventors of the true advances that enabled cell phone technologies and companies to even exist, that maze can probably be explained very clearly.
To the real inventors the true advances that enabled cell phone technologies and companies to even exist, there is probably quite a bit at stake, including reputation, earnings, profits, and plain old justice.
Those real inventors and their investors risked capital on new technologies, only to be pirated by competitors with impunity. To those real inventors and their investors, patent litigation is the only means to justice against those who would pirate their technologies.
Patents, and patent litigation, are the means of protecting new innovation on its way to market, just like US maritime law and the US Navy protects tankers full of oil on their way to market.
Those who try to weaken patents and patent enforcement with a wave of the hand and a scoffing remark about the wastefulness of litigation are simply trying to reduce the penalties for their misdeeds. They are trying to get away with murder.
Those who scoff at patents as frivilous litigation tend to be the less technological types, who disrespect and devalue scientists, and want to pirate the work of scientists with impunity.
US Patent Law
The Importance of Federal Patent Law to
Freedom, Prosperity, & Justice
Those who oppose US patent law or want to weaken it, may argue that patents are anti-competitive ... that they create a monopoly that only increases prices at the expense of the consumer.
NOT TRUE. Patents do enable an inventor and his investors to exclude others from producing THAT PARTICULAR product or process. But, there is nothing in patent law that prevents competitors from devising a new and different product or process that accomplishes the same thing.
By giving an inventor and his investors exclusivity on their product or process, US patent law challenges competitors to come up with another way of meeting that need or creating that value for customers. Instead of allowing them to just use someone else’s technologies, it encourages them to compete by coming up with something better. This has the effect of channeling the competitors investment resources towards coming up with new & better solutions, while protecting the investment returns of the inventor & his investors. Both impacts are just, righteous, and in the best interest of the consumer.
US patent law raises the standards of the competitive landscape, requiring competitors to develop a better mousetrap, rather than copying the existing mousetrap. It also encourages the civility of competition and protects certain property rights from violation. Theft & piracy are not valid means of competition. They are criminal acts. To exclude those who haven’t invested in the invention and development of a technology from marketing it as their own is not anti-competitive. Rather, it is merely protecting of the property rights of inventors and their investors and requiring competition on other grounds.
It is clear to civilized business people that cargo ships crossing the open seas are not just ‘fair game’ for anyone who comes along. They are owned. A great deal of labor and capital went into the production of their cargo, not to mention the construction of the vessel, and its safe operation. Pirates and would-be pirates have contributed nothing at all to the vessel or its cargo, and therefore have no right to acquire it from its rightful owners without their permission. For inventors & their investors, patented ideas are like the vessel full of cargo on pirate infested waters.
Solving an issue, for example, like "How can we economically extract the corn oil out of the DDG by product of corn ethanol plants?", as GreenShift Corporation and its affiliates spent nearly a decade and $10’s of millions of dollars doing, is now worth nearly $1B per year in extra profits, plus another $1B or so in one-time installation revenue to the US ethanol industry. That is the service that GreenShift, its inventors, management, and investors have provided to the economy of the US and the ethanol industry, but it wasn’t done as a public service. It was done as a private investment, with a great deal of risk of capital. That is the ‘cargo on the open seas’ for a patent holding innovator like GreenShift. For pirates to use that solution without giving at least a reasonable royalty to the inventors & their investors is "theft of services" on a grand scale. And, US patent laws are the means of justice, just as US Maritime Law and the US Navy enforce the rights of vessels on the open sea.
Like laws against maritime piracy, which protect the value chain of products like subsurface crude oil on its way from well to market, US patent laws protect the value chain of new ideas and innovation on their way to market. As a tanker full of oil might get hijacked by pirates on the open seas, innovations like GreenShift’s Corn Oil Extraction technology are vulnerable to domestic piracy right here in the US.
US patent laws are the "rules of the road" for the innovation economy. They ensure that competition is civil, moral, fair, just, and equitable and that it is gentlemanly. They attract investment capital to an activity, namely
new technology development, that is extremely risky. Without the chance for high rewards, many investors simply wouldn't invest in new technology development at all.
And, in the process of attracting investment capital, standardizing the rules of innovation, & ensuring gentlemanly competition, the US patent system produces greater and greater value for society in the form of new inventions. The consumer benefits as well.
Contrary to some assertions, the consolidation of market share into a single, patent-holding vendor of a product or service actually has a price-reducing impact on the cost of the product or service.
If, for example, there are 10 different customers, and they each buy the same product from 10 different off-patent vendors, then each of those vendors will manufacture only 1 unit of product. Since each vendor is manufacturing only a single unit, none of the vendors are able to take advantage of economies of scale in manufacturing.
If, on the other hand, all 10 customers purchase from the same patent-holding vendor, then that vendor can achieve a lower unit cost of production, because that vendor can achieve economies of scale in its manufacturing process. Instead of ten different vendors producing 1 unit each, the single, patent-holding vendor produces 10 units and achieves a lower per unit cost of production, as a result.
When one extrapolates to a 100 million unit marketplace, then those economies of scale will make a big difference. That will then enable the patent-holding, single vendor to reduce costs and pass on cost savings to the customers, creating more value for the customers, relative to what the 10 different, off-patent vendors can do with their single unit cost structure.
The impact of such economies of scale on manufacturing can be enormous. Henry Ford, and many others, have shown that impact in practice. The automobile is now widely available at very competitive prices, not inspite of Ford's patents, but rather because of them. They gave him the ability to consolidate orders from large numbers of customers and also to consolidate his supply chain, which in turn enabled him to reduce pricing, thereby making cars more affordable to customers. This was the beginning of a virtuous cycle of cost reductions, volume increases, and quality improvements that resulted, many years later, in automobiles being available to most of society, including the lower rungs.
As an inventor and entrepreneur, his patents, not his personality or charisma, enabled Henry Ford to achieve those economies of scale in the early years and to begin that virtuous cycle, which produced decades of declining auto prices and increasing auto quality. Without that patent-powered ability to consolidate his suppliers and customers, he would’ve been just one of many, fragmented competitors, none of whom would’ve had the ability to achieve economies of scale necessary to reduce prices for consumers. Not only would he have failed, but his competitors would’ve as well. In fact, the whole industry would’ve grown more slowly, if at all, making cars less available all around. That consolidating power of patents actually helped to make cars more affordable, not less as some contend.
Rather than weakening patents, we should be strengthening their enforcement with tough criminal penalties on top of the existing civil penalties. Those who violate patents are not only uncivilized scoff-laws, like the Somali marine pirates, but they also destroy wealth, investment dollars, and the consolidating power of rightful patentees, which could’ve created benefits for consumers, not to mention returns for investors. They deserve nothing but the strictest and toughest criminal and civil penalties.
Patent pirates violate inventor’s property rights, on a grand scale, and they destroy investment dollars as well as consumer benefits, all of which would’ve otherwise accrued to the economy, if the piracy had not occurred. Patent infringement often runs well into the millions of dollars. By all US criminal standards, patent infringement would be a felony on a scale far larger than average and punishment should meted out commensurately. Indeed, even the terms, ‘grand larceny’ and ‘grand theft’ don’t seem to quite capture the enormity of this heinous crime that too often goes unpunished in America.
US Patent Law
The Importance of Federal Patent Law to
Freedom, Prosperity, & Justice
Those who oppose US patent law or want to weaken it, may argue that patents are anti-competitive ... that they create a monopoly that only increases prices at the expense of the consumer.
NOT TRUE. Patents do enable an inventor and his investors to exclude others from producing THAT PARTICULAR product or process. But, there is nothing in patent law that prevents competitors from devising a new and different product or process that accomplishes the same thing.
By giving an inventor and his investors exclusivity on their product or process, US patent law challenges competitors to come up with another way of meeting that need or creating that value for customers. Instead of allowing them to just use someone else’s technologies, it encourages them to compete by coming up with something better. This has the effect of channeling the competitors investment resources towards coming up with new & better solutions, while protecting the investment returns of the inventor & his investors. Both impacts are just, righteous, and in the best interest of the consumer.
US patent law raises the standards of the competitive landscape, requiring competitors to develop a better mousetrap, rather than copying the existing mousetrap. It also encourages the civility of competition and protects certain property rights from violation. Theft & piracy are not valid means of competition. They are criminal acts. To exclude those who haven’t invested in the invention and development of a technology from marketing it as their own is not anti-competitive. Rather, it is merely protecting of the property rights of inventors and their investors and requiring competition on other grounds.
It is clear to civilized business people that cargo ships crossing the open seas are not just ‘fair game’ for anyone who comes along. They are owned. A great deal of labor and capital went into the production of their cargo, not to mention the construction of the vessel, and its safe operation. Pirates and would-be pirates have contributed nothing at all to the vessel or its cargo, and therefore have no right to acquire it from its rightful owners without their permission. For inventors & their investors, patented ideas are like the vessel full of cargo on pirate infested waters.
Solving an issue, for example, like "How can we economically extract the corn oil out of the DDG by product of corn ethanol plants?", as GreenShift Corporation and its affiliates spent nearly a decade and $10’s of millions of dollars doing, is now worth nearly $1B per year in extra profits, plus another $1B or so in one-time installation revenue to the US ethanol industry. That is the service that GreenShift, its inventors, management, and investors have provided to the economy of the US and the ethanol industry, but it wasn’t done as a public service. It was done as a private investment, with a great deal of risk of capital. That is the ‘cargo on the open seas’ for a patent holding innovator like GreenShift. For pirates to use that solution without giving at least a reasonable royalty to the inventors & their investors is "theft of services" on a grand scale. And, US patent laws are the means of justice, just as US Maritime Law and the US Navy enforce the rights of vessels on the open sea.
Like laws against maritime piracy, which protect the value chain of products like subsurface crude oil on its way from well to market, US patent laws protect the value chain of new ideas and innovation on their way to market. As a tanker full of oil might get hijacked by pirates on the open seas, innovations like GreenShift’s Corn Oil Extraction technology are vulnerable to domestic piracy right here in the US.
US patent laws are the "rules of the road" for the innovation economy. They ensure that competition is civil, moral, fair, just, and equitable and that it is gentlemanly. They attract investment capital to an activity, namely
new technology development, that is extremely risky. Without the chance for high rewards, many investors simply wouldn't invest in new technology development at all.
And, in the process of attracting investment capital, standardizing the rules of innovation, & ensuring gentlemanly competition, the US patent system produces greater and greater value for society in the form of new inventions. The consumer benefits as well.
Contrary to some assertions, the consolidation of market share into a single, patent-holding vendor of a product or service actually has a price-reducing impact on the cost of the product or service.
If, for example, there are 10 different customers, and they each buy the same product from 10 different off-patent vendors, then each of those vendors will manufacture only 1 unit of product. Since each vendor is manufacturing only a single unit, none of the vendors are able to take advantage of economies of scale in manufacturing.
If, on the other hand, all 10 customers purchase from the same patent-holding vendor, then that vendor can achieve a lower unit cost of production, because that vendor can achieve economies of scale in its manufacturing process. Instead of ten different vendors producing 1 unit each, the single, patent-holding vendor produces 10 units and achieves a lower per unit cost of production, as a result.
When one extrapolates to a 100 million unit marketplace, then those economies of scale will make a big difference. That will then enable the patent-holding, single vendor to reduce costs and pass on cost savings to the customers, creating more value for the customers, relative to what the 10 different, off-patent vendors can do with their single unit cost structure.
The impact of such economies of scale on manufacturing can be enormous. Henry Ford, and many others, have shown that impact in practice. The automobile is now widely available at very competitive prices, not inspite of Ford's patents, but rather because of them. They gave him the ability to consolidate orders from large numbers of customers and also to consolidate his supply chain, which in turn enabled him to reduce pricing, thereby making cars more affordable to customers. This was the beginning of a virtuous cycle of cost reductions, volume increases, and quality improvements that resulted, many years later, in automobiles being available to most of society, including the lower rungs.
As an inventor and entrepreneur, his patents, not his personality or charisma, enabled Henry Ford to achieve those economies of scale in the early years and to begin that virtuous cycle, which produced decades of declining auto prices and increasing auto quality. Without that patent-powered ability to consolidate his suppliers and customers, he would’ve been just one of many, fragmented competitors, none of whom would’ve had the ability to achieve economies of scale necessary to reduce prices for consumers. Not only would he have failed, but his competitors would’ve as well. In fact, the whole industry would’ve grown more slowly, if at all, making cars less available all around. That consolidating power of patents actually helped to make cars more affordable, not less as some contend.
Rather than weakening patents, we should be strengthening their enforcement with tough criminal penalties on top of the existing civil penalties. Those who violate patents are not only uncivilized scoff-laws, like the Somali marine pirates, but they also destroy wealth, investment dollars, and the consolidating power of rightful patentees, which could’ve created benefits for consumers, not to mention returns for investors. They deserve nothing but the strictest and toughest criminal and civil penalties.
Patent pirates violate inventor’s property rights, on a grand scale, and they destroy investment dollars as well as consumer benefits, all of which would’ve otherwise accrued to the economy, if the piracy had not occurred. Patent infringement often runs well into the millions of dollars. By all US criminal standards, patent infringement would be a felony on a scale far larger than average and punishment should meted out commensurately. Indeed, even the terms, ‘grand larceny’ and ‘grand theft’ don’t seem to quite capture the enormity of this heinous crime that too often goes unpunished in America.
Techdirt has not posted any stories submitted by Pirate Hater.
Just Compensation for Inventors
When companies pay cash upfront for issued patents, without a courtroom battle, the price rarely exceeds $10 million and is usually well under $5 million.
When companies decide, instead, to try to cut corners, pirate the technology, build a business around it, and then go through all kinds of deceiptful and contemptuous lawyering to avoid paying anything at all to the patentee, then they end up paying the large centimillion damage awards that can approach or even exceed $1 Billion.
That is, as it should be. The law should be structured to encourage compliance and discourage cheating. No reduction in penalties or costly political lobbying needed.
If companies want to reduce their cost of acquiring new technology, all they need to do is show some respect for the risks taken by inventors and also for the law. This would also reduce their political lobbying expense as well, which has obviously become a big part of their new technology acquisition strategy.
It is their cheating and trying to avoid paying anything at all that leads to the high cost legal battles and high damage awards.
Risks, Rewards, Patents, & Pirates
Very few "players" in capitalism take as much financial risk as new technology developers.
To ask for 20% of the profits created by new technology is not only fair, in terms of basing the reward on the value created, but it is also reasonable considering the great risks taken on.
Unfortunately, piracy is all-too-common and only increases the risks that new technology developers take. When a technology is pirated, the new technology development team takes on the additional "collection risk", which can requires many years of very costly litigation.
Those who understand finance know that financial returns are measured not only by dollar amount but also by the time to payback. The "time value of money" is a common phrase in measuring returns.
Piracy not only increases the dollar amount of the risk of new technology development, but it also increases the time to payback, sometimes as much as a decade.
If pirates and would-be pirates of new technologies want to reduce the costs of innovation and new technology, the best way to do it is to simply stop pirating, show some respect for the law and for the risks taken by the technology developers, and pay a fair price to begin with. To the extent that the costs and risks of new technology development are reduced, both in dollar amount and in time, by avoiding lengthy & costly collection measures, then technology developers are happy with a smaller reward.
But, to the extent that pirates force us to incur much greater financial risk and time-to-payback, then we deserve, & rightfully so, to collect higher returns for our work in the form of treble damages.
In my personal opinion, the penalties should also include tough criminal penalties. Like securities and investment advisor regulations, it sometimes becomes necessary to use the threat of criminal punishment as a deterent to misbehavior.
Risks, Rewards, Patents, & Pirates
Very few "players" in capitalism take as much financial risk as new technology developers.
To ask for 20% of the profits created by new technology is not only fair, in terms of basing the reward on the value created, but it is also reasonable considering the great risks taken on.
Unfortunately, piracy is all-too-common and only increases the risks that new technology developers take. When a technology is pirated, the new technology development team takes on the additional "collection risk", which can requires many years of very costly litigation.
Those who understand finance know that financial returns are measured not only by dollar amount but also by the time to payback. The "time value of money" is a common phrase in measuring returns.
Piracy not only increases the dollar amount of the risk of new technology development, but it also increases the time to payback, sometimes as much as a decade.
If pirates and would-be pirates of new technologies want to reduce the costs of innovation and new technology, the best way to do it is to simply stop pirating, show some respect for the law and for the risks taken by the technology developers, and pay a fair price to begin with. To the extent that the costs and risks of new technology development are reduced, both in dollar amount and in time, by avoiding lengthy & costly collection measures, then technology developers are happy with a smaller reward.
But, to the extent that pirates force us to incur much greater financial risk and time-to-payback, then we deserve, & rightfully so, to collect higher returns for our work in the form of treble damages.
In my personal opinion, the penalties should also include tough criminal penalties. Like securities and investment advisor regulations, it sometimes becomes necessary to use the threat of criminal punishment as a deterent to misbehavior.
Risks, Rewards, Patents, & Pirates
Very few "players" in capitalism take as much financial risk as new technology developers.
To ask for 20% of the profits created by new technology is not only fair, in terms of basing the reward on the value created, but it is also reasonable considering the great risks taken on.
Unfortunately, piracy is all-too-common and only increases the risks that new technology developers take. When a technology is pirated, the new technology development team takes on the additional "collection risk", which can requires many years of very costly litigation.
Those who understand finance know that financial returns are measured not only by dollar amount but also by the time to payback. The "time value of money" is a common phrase in measuring returns.
Piracy not only increases the dollar amount of the risk of new technology development, but it also increases the time to payback, sometimes as much as a decade.
If pirates and would-be pirates of new technologies want to reduce the costs of innovation and new technology, the best way to do it is to simply stop pirating, show some respect for the law and for the risks taken by the technology developers, and pay a fair price to begin with. To the extent that the costs and risks of new technology development are reduced, both in dollar amount and in time, by avoiding lengthy & costly collection measures, then technology developers are happy with a smaller reward.
But, to the extent that pirates force us to incur much greater financial risk and time-to-payback, then we deserve, & rightfully so, to collect higher returns for our work in the form of treble damages.
In my personal opinion, the penalties should also include tough criminal penalties. Like securities and investment advisor regulations, it sometimes becomes necessary to use the threat of criminal punishment as a deterent to misbehavior.
Risks, Rewards, Patents, & Pirates
Very few "players" in capitalism take as much financial risk as new technology developers.
To ask for 20% of the profits created by new technology is not only fair, in terms of basing the reward on the value created, but it is also reasonable considering the great risks taken on.
Unfortunately, piracy is all-too-common and only increases the risks that new technology developers take. When a technology is pirated, the new technology development team takes on the additional "collection risk", which can requires many years of very costly litigation.
Those who understand finance know that financial returns are measured not only by dollar amount but also by the time to payback. The "time value of money" is a common phrase in measuring returns.
Piracy not only increases the dollar amount of the risk of new technology development, but it also increases the time to payback, sometimes as much as a decade.
If pirates and would-be pirates of new technologies want to reduce the costs of innovation and new technology, the best way to do it is to simply stop pirating, show some respect for the law and for the risks taken by the technology developers, and pay a fair price to begin with. To the extent that the costs and risks of new technology development are reduced, both in dollar amount and in time, by avoiding lengthy & costly collection measures, then technology developers are happy with a smaller reward.
But, to the extent that pirates force us to incur much greater financial risk and time-to-payback, then we deserve, & rightfully so, to collect higher returns for our work in the form of treble damages.
In my personal opinion, the penalties should also include tough criminal penalties. Like securities and investment advisor regulations, it sometimes becomes necessary to use the threat of criminal punishment as a deterent to misbehavior.
Patent Thicket or Pirate Cove?
Let's not forget that most of us wouldn't have the slightest idea of how to build a cell phone. Indeed, 20 years ago, there weren't really many cellphones at all.
There has been true innovation and invention that has enabled this industry. Of that, there can be no question.
And, those who invented those true, enabling inventions deserve credit, respect, and strong patent rights.
Those who violate those rights and that respect are the ones who deserve disrespect, not the inventors and their lawyers.
To portray someone who invented, for example, an important new computer chip that advances cell phone technology as simply a 'troll' who contributes nothing but frivilous litigation to the economy is rude, to say the least, and more to the point, very disingenuous, disrespectful, and obnoxious.
Those who seek to advance the cause of piracy by weakening patents, labeling inventors as 'trolls', and otherwise devalue the work of scientific advancement are the low lives of society, not the inventors.
Is it any wonder that the US is falling behind in science, when smart, diligent people are bullied throughout their lives ... first in grade school, and then right on up through to their days as inventors, there are bullies out there seeking to put them down, for no reason other than lifting their own, less-skilled selves up.
Patent Thicket or Pirate Cove?
Let's not forget that most of us wouldn't have the slightest idea of how to build a cell phone. Indeed, 20 years ago, there weren't really many cellphones at all.
There has been true innovation and invention that has enabled this industry. Of that, there can be no question.
And, those who invented those true, enabling inventions deserve credit, respect, and strong patent rights.
Those who violate those rights and that respect are the ones who deserve disrespect, not the inventors and their lawyers.
To portray someone who invented, for example, an important new computer chip that advances cell phone technology as simply a 'troll' who contributes nothing but frivilous litigation to the economy is rude, to say the least, and more to the point, very disingenuous, disrespectful, and obnoxious.
Those who seek to advance the cause of piracy by weakening patents, labeling inventors as 'trolls', and otherwise devalue the work of scientific advancement are the low lives of society, not the inventors.
Is it any wonder that the US is falling behind in science, when smart, diligent people are bullied throughout their lives ... first in grade school, and then right on up through to their days as inventors, there are bullies out there seeking to put them down, for no reason other than lifting their own, less-skilled selves up.
Patent Thicket or Pirate Cove?
Let's not forget that most of us wouldn't have the slightest idea of how to build a cell phone. Indeed, 20 years ago, there weren't really many cellphones at all.
There has been true innovation and invention that has enabled this industry. Of that, there can be no question.
And, those who invented those true, enabling inventions deserve credit, respect, and strong patent rights.
Those who violate those rights and that respect are the ones who deserve disrespect, not the inventors and their lawyers.
To portray someone who invented, for example, an important new computer chip that advances cell phone technology as simply a 'troll' who contributes nothing but frivilous litigation to the economy is rude, to say the least, and more to the point, very disingenuous, disrespectful, and obnoxious.
Those who seek to advance the cause of piracy by weakening patents, labeling inventors as 'trolls', and otherwise devalue the work of scientific advancement are the low lives of society, not the inventors.
Is it any wonder that the US is falling behind in science, when smart, diligent people are bullied throughout their lives ... first in grade school, and then right on up through to their days as inventors, there are bullies out there seeking to put them down, for no reason other than lifting their own, less-skilled selves up.
Patent Thicket or Pirate Cove?
Let's not forget that most of us wouldn't have the slightest idea of how to build a cell phone. Indeed, 20 years ago, there weren't really many cellphones at all.
There has been true innovation and invention that has enabled this industry. Of that, there can be no question.
And, those who invented those true, enabling inventions deserve credit, respect, and strong patent rights.
Those who violate those rights and that respect are the ones who deserve disrespect, not the inventors and their lawyers.
To portray someone who invented, for example, an important new computer chip that advances cell phone technology as simply a 'troll' who contributes nothing but frivilous litigation to the economy is rude, to say the least, and more to the point, very disingenuous, disrespectful, and obnoxious.
Those who seek to advance the cause of piracy by weakening patents, labeling inventors as 'trolls', and otherwise devalue the work of scientific advancement are the low lives of society, not the inventors.
Is it any wonder that the US is falling behind in science, when smart, diligent people are bullied throughout their lives ... first in grade school, and then right on up through to their days as inventors, there are bullies out there seeking to put them down, for no reason other than lifting their own, less-skilled selves up.
The Value of Patents to The Consumer
Some patent scofflaws like to argue that patents hurt consumers, because they create monopoly pricing without competition. That is also a false argument.
First, patents don't prevent competitors from developing competing products. A patent only protects one product. Others are always free to develop better mousetraps and sell them at lower prices.
Second, to the extent that patents do enable a patentee to monopolize the supply chain and customers for his particular product offering, they have a cost reducing impact on that product, not a cost increasing impact, because they allow the patentee to achieve greater economies of scale in manufacturing.
For example, if 10 different vendors split a market 10 ways, then each will only achieve an economy of scale of equal to 10% of the volume of the market for that product. If, on the other hand, the patent is respected, then the patentee can achieve a lower cost of production, because the patentee produces at 10X the volume, or 100% market share.
In practice, the best example of the power of patents to reduce costs and make a product more available to consumers, is none other than Henry Ford. He was a prolific inventor, with 163 patents, which helped to enable him and his investors to achieve greater economies of scale in manufacturing.
Had there been, for example, no patents at all in the early years of the auto industry, then the industry would've been extremely fragmented, and none of the companies would've been able to achieve the large market share and product volumes needed to reduce the unit cost and make autos more widely available.
Patents give an inventor, entrepreneur, and his investors that ability to consolidate the supply chain for their product in a manner that reduces the costs of production, and makes the product more available to consumers, not less.
And, at the same time, the other competitors are still free to develop a better mousetrap. They just can't copy the patentee's mousetrap. That's all.
Contrary to the assertions of patent pirates and would-be pirates who want to weaken patent law, devalue the contributions of scientists and inventors, and fragment industries to the detriment of consumers and to their own personal benefit, patents are not anti-competitive, nor do they produce higher pricing in the long run.
The Value of Patents to The Consumer
Some patent scofflaws like to argue that patents hurt consumers, because they create monopoly pricing without competition. That is also a false argument.
First, patents don't prevent competitors from developing competing products. A patent only protects one product. Others are always free to develop better mousetraps and sell them at lower prices.
Second, to the extent that patents do enable a patentee to monopolize the supply chain and customers for his particular product offering, they have a cost reducing impact on that product, not a cost increasing impact, because they allow the patentee to achieve greater economies of scale in manufacturing.
For example, if 10 different vendors split a market 10 ways, then each will only achieve an economy of scale of equal to 10% of the volume of the market for that product. If, on the other hand, the patent is respected, then the patentee can achieve a lower cost of production, because the patentee produces at 10X the volume, or 100% market share.
In practice, the best example of the power of patents to reduce costs and make a product more available to consumers, is none other than Henry Ford. He was a prolific inventor, with 163 patents, which helped to enable him and his investors to achieve greater economies of scale in manufacturing.
Had there been, for example, no patents at all in the early years of the auto industry, then the industry would've been extremely fragmented, and none of the companies would've been able to achieve the large market share and product volumes needed to reduce the unit cost and make autos more widely available.
Patents give an inventor, entrepreneur, and his investors that ability to consolidate the supply chain for their product in a manner that reduces the costs of production, and makes the product more available to consumers, not less.
And, at the same time, the other competitors are still free to develop a better mousetrap. They just can't copy the patentee's mousetrap. That's all.
Contrary to the assertions of patent pirates and would-be pirates who want to weaken patent law, devalue the contributions of scientists and inventors, and fragment industries to the detriment of consumers and to their own personal benefit, patents are not anti-competitive, nor do they produce higher pricing in the long run.
Patent Thicket
To the undereducated reader, a diagram like that depicted above can and does appear to be a maze of wasteful litigation on first glance, which all most readers will give it.
But, to the real inventors of the true advances that enabled cell phone technologies and companies to even exist, that maze can probably be explained very clearly.
To the real inventors the true advances that enabled cell phone technologies and companies to even exist, there is probably quite a bit at stake, including reputation, earnings, profits, and plain old justice.
Those real inventors and their investors risked capital on new technologies, only to be pirated by competitors with impunity. To those real inventors and their investors, patent litigation is the only means to justice against those who would pirate their technologies.
Patents, and patent litigation, are the means of protecting new innovation on its way to market, just like US maritime law and the US Navy protects tankers full of oil on their way to market.
Those who try to weaken patents and patent enforcement with a wave of the hand and a scoffing remark about the wastefulness of litigation are simply trying to reduce the penalties for their misdeeds. They are trying to get away with murder.
Those who scoff at patents as frivilous litigation tend to be the less technological types, who disrespect and devalue scientists, and want to pirate the work of scientists with impunity.
Patents
US Patent Law
The Importance of Federal Patent Law to
Freedom, Prosperity, & Justice
Those who oppose US patent law or want to weaken it, may argue that patents are anti-competitive ... that they create a monopoly that only increases prices at the expense of the consumer.
NOT TRUE. Patents do enable an inventor and his investors to exclude others from producing THAT PARTICULAR product or process. But, there is nothing in patent law that prevents competitors from devising a new and different product or process that accomplishes the same thing.
By giving an inventor and his investors exclusivity on their product or process, US patent law challenges competitors to come up with another way of meeting that need or creating that value for customers. Instead of allowing them to just use someone else’s technologies, it encourages them to compete by coming up with something better. This has the effect of channeling the competitors investment resources towards coming up with new & better solutions, while protecting the investment returns of the inventor & his investors. Both impacts are just, righteous, and in the best interest of the consumer.
US patent law raises the standards of the competitive landscape, requiring competitors to develop a better mousetrap, rather than copying the existing mousetrap. It also encourages the civility of competition and protects certain property rights from violation. Theft & piracy are not valid means of competition. They are criminal acts. To exclude those who haven’t invested in the invention and development of a technology from marketing it as their own is not anti-competitive. Rather, it is merely protecting of the property rights of inventors and their investors and requiring competition on other grounds.
It is clear to civilized business people that cargo ships crossing the open seas are not just ‘fair game’ for anyone who comes along. They are owned. A great deal of labor and capital went into the production of their cargo, not to mention the construction of the vessel, and its safe operation. Pirates and would-be pirates have contributed nothing at all to the vessel or its cargo, and therefore have no right to acquire it from its rightful owners without their permission. For inventors & their investors, patented ideas are like the vessel full of cargo on pirate infested waters.
Solving an issue, for example, like "How can we economically extract the corn oil out of the DDG by product of corn ethanol plants?", as GreenShift Corporation and its affiliates spent nearly a decade and $10’s of millions of dollars doing, is now worth nearly $1B per year in extra profits, plus another $1B or so in one-time installation revenue to the US ethanol industry. That is the service that GreenShift, its inventors, management, and investors have provided to the economy of the US and the ethanol industry, but it wasn’t done as a public service. It was done as a private investment, with a great deal of risk of capital. That is the ‘cargo on the open seas’ for a patent holding innovator like GreenShift. For pirates to use that solution without giving at least a reasonable royalty to the inventors & their investors is "theft of services" on a grand scale. And, US patent laws are the means of justice, just as US Maritime Law and the US Navy enforce the rights of vessels on the open sea.
Like laws against maritime piracy, which protect the value chain of products like subsurface crude oil on its way from well to market, US patent laws protect the value chain of new ideas and innovation on their way to market. As a tanker full of oil might get hijacked by pirates on the open seas, innovations like GreenShift’s Corn Oil Extraction technology are vulnerable to domestic piracy right here in the US.
US patent laws are the "rules of the road" for the innovation economy. They ensure that competition is civil, moral, fair, just, and equitable and that it is gentlemanly. They attract investment capital to an activity, namely
new technology development, that is extremely risky. Without the chance for high rewards, many investors simply wouldn't invest in new technology development at all.
And, in the process of attracting investment capital, standardizing the rules of innovation, & ensuring gentlemanly competition, the US patent system produces greater and greater value for society in the form of new inventions. The consumer benefits as well.
Contrary to some assertions, the consolidation of market share into a single, patent-holding vendor of a product or service actually has a price-reducing impact on the cost of the product or service.
If, for example, there are 10 different customers, and they each buy the same product from 10 different off-patent vendors, then each of those vendors will manufacture only 1 unit of product. Since each vendor is manufacturing only a single unit, none of the vendors are able to take advantage of economies of scale in manufacturing.
If, on the other hand, all 10 customers purchase from the same patent-holding vendor, then that vendor can achieve a lower unit cost of production, because that vendor can achieve economies of scale in its manufacturing process. Instead of ten different vendors producing 1 unit each, the single, patent-holding vendor produces 10 units and achieves a lower per unit cost of production, as a result.
When one extrapolates to a 100 million unit marketplace, then those economies of scale will make a big difference. That will then enable the patent-holding, single vendor to reduce costs and pass on cost savings to the customers, creating more value for the customers, relative to what the 10 different, off-patent vendors can do with their single unit cost structure.
The impact of such economies of scale on manufacturing can be enormous. Henry Ford, and many others, have shown that impact in practice. The automobile is now widely available at very competitive prices, not inspite of Ford's patents, but rather because of them. They gave him the ability to consolidate orders from large numbers of customers and also to consolidate his supply chain, which in turn enabled him to reduce pricing, thereby making cars more affordable to customers. This was the beginning of a virtuous cycle of cost reductions, volume increases, and quality improvements that resulted, many years later, in automobiles being available to most of society, including the lower rungs.
As an inventor and entrepreneur, his patents, not his personality or charisma, enabled Henry Ford to achieve those economies of scale in the early years and to begin that virtuous cycle, which produced decades of declining auto prices and increasing auto quality. Without that patent-powered ability to consolidate his suppliers and customers, he would’ve been just one of many, fragmented competitors, none of whom would’ve had the ability to achieve economies of scale necessary to reduce prices for consumers. Not only would he have failed, but his competitors would’ve as well. In fact, the whole industry would’ve grown more slowly, if at all, making cars less available all around. That consolidating power of patents actually helped to make cars more affordable, not less as some contend.
Rather than weakening patents, we should be strengthening their enforcement with tough criminal penalties on top of the existing civil penalties. Those who violate patents are not only uncivilized scoff-laws, like the Somali marine pirates, but they also destroy wealth, investment dollars, and the consolidating power of rightful patentees, which could’ve created benefits for consumers, not to mention returns for investors. They deserve nothing but the strictest and toughest criminal and civil penalties.
Patent pirates violate inventor’s property rights, on a grand scale, and they destroy investment dollars as well as consumer benefits, all of which would’ve otherwise accrued to the economy, if the piracy had not occurred. Patent infringement often runs well into the millions of dollars. By all US criminal standards, patent infringement would be a felony on a scale far larger than average and punishment should meted out commensurately. Indeed, even the terms, ‘grand larceny’ and ‘grand theft’ don’t seem to quite capture the enormity of this heinous crime that too often goes unpunished in America.
Patents
US Patent Law
The Importance of Federal Patent Law to
Freedom, Prosperity, & Justice
Those who oppose US patent law or want to weaken it, may argue that patents are anti-competitive ... that they create a monopoly that only increases prices at the expense of the consumer.
NOT TRUE. Patents do enable an inventor and his investors to exclude others from producing THAT PARTICULAR product or process. But, there is nothing in patent law that prevents competitors from devising a new and different product or process that accomplishes the same thing.
By giving an inventor and his investors exclusivity on their product or process, US patent law challenges competitors to come up with another way of meeting that need or creating that value for customers. Instead of allowing them to just use someone else’s technologies, it encourages them to compete by coming up with something better. This has the effect of channeling the competitors investment resources towards coming up with new & better solutions, while protecting the investment returns of the inventor & his investors. Both impacts are just, righteous, and in the best interest of the consumer.
US patent law raises the standards of the competitive landscape, requiring competitors to develop a better mousetrap, rather than copying the existing mousetrap. It also encourages the civility of competition and protects certain property rights from violation. Theft & piracy are not valid means of competition. They are criminal acts. To exclude those who haven’t invested in the invention and development of a technology from marketing it as their own is not anti-competitive. Rather, it is merely protecting of the property rights of inventors and their investors and requiring competition on other grounds.
It is clear to civilized business people that cargo ships crossing the open seas are not just ‘fair game’ for anyone who comes along. They are owned. A great deal of labor and capital went into the production of their cargo, not to mention the construction of the vessel, and its safe operation. Pirates and would-be pirates have contributed nothing at all to the vessel or its cargo, and therefore have no right to acquire it from its rightful owners without their permission. For inventors & their investors, patented ideas are like the vessel full of cargo on pirate infested waters.
Solving an issue, for example, like "How can we economically extract the corn oil out of the DDG by product of corn ethanol plants?", as GreenShift Corporation and its affiliates spent nearly a decade and $10’s of millions of dollars doing, is now worth nearly $1B per year in extra profits, plus another $1B or so in one-time installation revenue to the US ethanol industry. That is the service that GreenShift, its inventors, management, and investors have provided to the economy of the US and the ethanol industry, but it wasn’t done as a public service. It was done as a private investment, with a great deal of risk of capital. That is the ‘cargo on the open seas’ for a patent holding innovator like GreenShift. For pirates to use that solution without giving at least a reasonable royalty to the inventors & their investors is "theft of services" on a grand scale. And, US patent laws are the means of justice, just as US Maritime Law and the US Navy enforce the rights of vessels on the open sea.
Like laws against maritime piracy, which protect the value chain of products like subsurface crude oil on its way from well to market, US patent laws protect the value chain of new ideas and innovation on their way to market. As a tanker full of oil might get hijacked by pirates on the open seas, innovations like GreenShift’s Corn Oil Extraction technology are vulnerable to domestic piracy right here in the US.
US patent laws are the "rules of the road" for the innovation economy. They ensure that competition is civil, moral, fair, just, and equitable and that it is gentlemanly. They attract investment capital to an activity, namely
new technology development, that is extremely risky. Without the chance for high rewards, many investors simply wouldn't invest in new technology development at all.
And, in the process of attracting investment capital, standardizing the rules of innovation, & ensuring gentlemanly competition, the US patent system produces greater and greater value for society in the form of new inventions. The consumer benefits as well.
Contrary to some assertions, the consolidation of market share into a single, patent-holding vendor of a product or service actually has a price-reducing impact on the cost of the product or service.
If, for example, there are 10 different customers, and they each buy the same product from 10 different off-patent vendors, then each of those vendors will manufacture only 1 unit of product. Since each vendor is manufacturing only a single unit, none of the vendors are able to take advantage of economies of scale in manufacturing.
If, on the other hand, all 10 customers purchase from the same patent-holding vendor, then that vendor can achieve a lower unit cost of production, because that vendor can achieve economies of scale in its manufacturing process. Instead of ten different vendors producing 1 unit each, the single, patent-holding vendor produces 10 units and achieves a lower per unit cost of production, as a result.
When one extrapolates to a 100 million unit marketplace, then those economies of scale will make a big difference. That will then enable the patent-holding, single vendor to reduce costs and pass on cost savings to the customers, creating more value for the customers, relative to what the 10 different, off-patent vendors can do with their single unit cost structure.
The impact of such economies of scale on manufacturing can be enormous. Henry Ford, and many others, have shown that impact in practice. The automobile is now widely available at very competitive prices, not inspite of Ford's patents, but rather because of them. They gave him the ability to consolidate orders from large numbers of customers and also to consolidate his supply chain, which in turn enabled him to reduce pricing, thereby making cars more affordable to customers. This was the beginning of a virtuous cycle of cost reductions, volume increases, and quality improvements that resulted, many years later, in automobiles being available to most of society, including the lower rungs.
As an inventor and entrepreneur, his patents, not his personality or charisma, enabled Henry Ford to achieve those economies of scale in the early years and to begin that virtuous cycle, which produced decades of declining auto prices and increasing auto quality. Without that patent-powered ability to consolidate his suppliers and customers, he would’ve been just one of many, fragmented competitors, none of whom would’ve had the ability to achieve economies of scale necessary to reduce prices for consumers. Not only would he have failed, but his competitors would’ve as well. In fact, the whole industry would’ve grown more slowly, if at all, making cars less available all around. That consolidating power of patents actually helped to make cars more affordable, not less as some contend.
Rather than weakening patents, we should be strengthening their enforcement with tough criminal penalties on top of the existing civil penalties. Those who violate patents are not only uncivilized scoff-laws, like the Somali marine pirates, but they also destroy wealth, investment dollars, and the consolidating power of rightful patentees, which could’ve created benefits for consumers, not to mention returns for investors. They deserve nothing but the strictest and toughest criminal and civil penalties.
Patent pirates violate inventor’s property rights, on a grand scale, and they destroy investment dollars as well as consumer benefits, all of which would’ve otherwise accrued to the economy, if the piracy had not occurred. Patent infringement often runs well into the millions of dollars. By all US criminal standards, patent infringement would be a felony on a scale far larger than average and punishment should meted out commensurately. Indeed, even the terms, ‘grand larceny’ and ‘grand theft’ don’t seem to quite capture the enormity of this heinous crime that too often goes unpunished in America.