The Wall Street Journal ran an interesting write-up about Priceline founder Jay Walker and Walker Digital’s aggressive patent licensing effort–a topic of prolific coverage here at Gametime IP. The piece predictably swallows the anti-patent propaganda, referring to Walker as a troll and quoting from sources that completely misunderstand the operation of the patent system. Consider this quote from Robert Barr of the Berkeley Center for Law & Technology at the University of California, Berkeley, and a former patent counsel for Cisco:
We’re not rewarding the people bringing products to market. That’s a net negative for the economy.
First, the patent system operates to reward invention thereby promoting industrial progress. To paraphrase James Carville, it’s the invention, stupid! Your reward for bringing products to market are sales. The patent system ensures that you share your profits with those who invented the technologies exploited by your products. Of course technology takers would prefer to use knowledge produced by the labor of others without compensating the creators, but the patent system is in place to prevent exactly that.
Second, how does Barr propose to prove that patent licensing represents a net negative? Under the current system, which relies heavily on litigation, a large portion of licensing revenue flows to facilitators like law firms and other middlemen, making the situation is far from ideal. However, Barr makes an unjustified leap to suggest this creates a net negative. As Dale Halling observed yesterday, patent licensing facilitates division of labor between creators of technology and developers of products. The secondary patent market facilitates division of labor by rewarding investors for identifying essential inventions than enable future product development.
As far as curing some of those inefficiencies, Walker’s work may ultimately prove essential. Quoting from IP Navigation Group Chairman Erich Spangenberg, the WSJ piece concludes by pointing out that Walker’s aggressive commitment to patent enforcement may enable him to avoid the expense of litigation in the future. Hopefully, a residual effect will benefit other inventors as well.
- Patent Licensing Is The Answer, But What Is The Question? (gametimeip.com)