Stephen Foley, evidently a prolific writer for the UK journal The Independent, evidences fundamental misunderstandings of the patent system. After oversimplifying the “mortgage crisis” in America, Foley relates the phenomenon to the US patent system:
Now consider the US patent system. An explosion in the number of patents being filed with the US Patent and Trademark Office, up from 312,000 a decade ago to 509,000 last year – an increase of almost two-thirds – is, sad to say, only partly a result of the increasing innovation of American business.
Mirroring the mortgage market before it, what has happened is that patents’ value to speculators has gone up and their quality has gone down. This is the era of sub-prime patents.
Foley claims that the US system allows patents on “everything from the idea of synching email to the look and feel of touchscreen menus.” In this respect, Foley is no more or less guilty than any other journalist that oversimplifies the nature of patent rights, but I’ll repeat again what I’ve been screaming for years: You CANNOT patent ideas. Period. Patents are reserved for specific processes and apparatuses. Ideas are products of nature. Inventions are manifestations of natural laws to solve practical problems.
Foley also repeats the typical “patent troll” rhetoric, which I’ve mentioned before is becoming increasingly intolerable. For the sake of my blood pressure and the continued enjoyment of my Sunday afternoon, I won’t say any more than that about the ridiculous “T” word. Against this backdrop, Foley lobs up a Google softball (emphasis added):
This is the depressing context in which Google decided this week to bid $900m (£550m) for patents on software and hardware that it didn’t invent. The portfolio of around 6,000 technology patents owned by the bankrupt Canadian firm Nortel Networks covers wireless 4G, data networking, semiconductors and a host of other technologies that are adjacent to the things that Google has invented for its Android mobile phone operating system.
First of all, it makes no difference that Google’s employees didn’t invent anything in the Nortel patents. No company in the history of this country has ever invented anything. As I’ve been explaining, and as Justice Breyer recently acknowledged, human beings invent things, not organizations. The identity of your employer at the time you invent something is often little more than circumstance.
Second of all, what’s actually depressing is the fact that a company with as many well-paid, highly educated and seemingly intelligent people as Google actually needs 6000 patents from a bankrupt company in the first place. After all, Google only needs these patents on inventions “adjacent to the things [it] invented” because it failed to patent those things in the first place. Like I said last week, it is the lack of patents (or the failure to adequately use the patent system) that is Google’s hindrance, not the patent system itself.
Foley continues brown-nosing Google by suggesting that the legislature’s efforts in putting together the America Invents Act “fall[s] far short of what is necessary to remedy the situation” Google has put itself in. He then repeats the same patent reform booster rubbish that I’ve gotten used to reading:
Best of all, it will switch from a “first-to-invent” system to the “first-to-file” principle used by every other major country. In the US at the moment, vast amounts of time and money are spent trying to prove when an inventor came up with their idea; this expense and uncertainty will be lifted at a stroke, when the patent automatically goes to the first party to file with the USPTO.
Ah yes, “best” of all, eh? In other words, expediency is preferable to accuracy. Oh, and the claim that “vast amounts of time and money” are poured into the first-to-invent system? An astute commenter points out that the reform booster’s own arguments disprove such a claim, indicating that Foley is flatly incapable of even reading to the end of the talking points he’s handed:
Not true at all. Even the head of the USPTO Kappos admits as much. Most of the time such proof is just used administratively within the US Patent Office itself and costs nearly nothing to pursue. Compared to actual infringement suits First to Invent legal disputes including so called “Interferences” are less then 0.1% of all patent related litigation.
(Comment from Vic Kley)
But Foley’s ignorance of the situation is brutally exposed by his remark on patent value:
Remember again what the problem is: patents’ value to speculators has gone up and their quality has gone down.
Simply wrong, as anyone who works in the patent transactional market can tell you. Speculator’s interest in patents has gone up, not their value. (Consider that a grand total of $325,000 was paid at the last ICAP Ocean Tomo auction for a total of 3 lots, including 2 lots that sold for $50,000 each). The rise in interest is more likely due to the increased need to resort to litigation for basic patent licensing, coupled with the increased uncertainty and cost of litigation. In other words, inventors are increasingly less likely to successfully license a patent without the kind of funding available from venture capital, and are therefore increasingly more desperate for those VC dollars. This puts the inventor in a bad situation because the VC dollars are quite fungible (and the VC has many investments to pick from), the patent is not.
Speculators are more interested in patents because they can negotiate more favorable terms than in other investments. With that said, the investments they are making are those that would be available even in a more efficient licensing market (albeit on substantially more favorable terms for the inventor). In other words, because of the uncertainty I mentioned earlier, bad patents are simply not more likely to be funded simply because interest in patent investment is up. (Sure, you have entrance of “dumb” VC dollars that likely exist in any “hot” market.) Also, there are more patents being issued now than ever before. Thus, it may be that poor quality patents are issuing, and it is almost certainly true that speculators are increasingly more interested in patents, but there’s simply no evidence that one flows from the other.
The only thing “sub-prime” that I see is Mr. Foley’s knowledge of patents.
- Patent Reform Boosters Invent Facts To Combat Real Arguments (gametimeip.com)
- Congressman Proposes Sensible, Two-Step Patent Reform Process (gametimeip.com)
- What Is An Invention? The Google Doodle Patent As An Example (gametimeip.com)
- Patently absurd system encourages litigation, not innovation (sfgate.com)