The Patent Mafia and What You Can Do To Break It Up 205
colinneagle sends this quote from an article about the ever-growing patent racket in the tech industry:
"The lawsuits are raging all across the tech world. Oracle sues Google, Yahoo sues Facebook, they counter-sue. Others threaten, others buy more patents and the circle goes round and round. Don't be fooled by the lawsuits between these tech titans though. The real cost that the patent mafia extracts from the tech world is on the smaller companies who can't afford to battle the Apples and Microsofts of the world. Their choices are far simpler. They can abandon their innovations or they can choose to pay and allow the Mafiosos to wet their beaks. Also, don't be fooled about who the real losers are here. The the real losers are you and me. ... So what do do? Here is my opinion. I would make it just as expensive for the offensive patent prosecutors. Just as the government put in the RICO act to combat organized crime, I would put a similar law in place on patents. RICO calls for treble damages. I would have treble awards of costs and legal fees. If a patent holder sues another entity for patent violation and that suit fails, the plaintiff who brought the suit should pay treble damages to the defendant. Three times what the defendant paid to defend."
What happened to innocent ? (Score:5, Interesting)
Very good idea. Another problem that nobody seem to notice is that the patent system is the wrong way arround. In normal criminal cases it is up to the prosecution to prove that the defendant perpetrated a crime. Inocent until proven guilty.
The patent system works the other way around it is up to the defendant to prove that they have not violated a patent. Guilty until proven innocent.
Do not really make sense to me. How about you ?
Re:Nice idea... Won't happen. (Score:4, Interesting)
The end result is that the innovators move elsewhere.
Where?
The FIX (Score:5, Interesting)
- Abolish UI/Gesture and all software patents
- Abolish lifeform and seed patents.
Re:The little guy. (Score:4, Interesting)
This is where the lawyers win. There will be law firms who will examine your case and, if it looks 80-90% winnable, will take it on commission - say 60% of the final award. You'll probably be on the hook for fixed percentage of the costs plus expenses in the case of a loss. The lawyers either cover their costs or win big, the little guy comes out even in the best scenario, and the megabucks write it off on the balance sheet and design around your patent.
Re:sounds reasonable to me (Score:5, Interesting)
It sounds like a great idea, but here's the problem: if there were one or more bona-fide legal issues that required a jury trial to decide, and losers had to pay the defendant's legal fees if they lost, the doctor's lawyers would move for summary judgment to dismiss without prejudice for lack of demonstrating the means to pay the doctor's legal fees if you were to lose. ("Without prejudice" means you could come back and file a new lawsuit someday if you manage to scrape up the money to post a bond sufficient to cover the doctor's potential legal expenses before the statute of limitations runs out).
If you were lucky, you might be able to obtain the services of someone whose newly-invented role fell somewhere between bail bondsman and investor, who'd agree to underwrite your liability for the doctor's legal expenses in return for $10,000 up front and 70% of anything you were awarded.
Patent-wise, it's even worse. Let's suppose you're sued for infringement by EvilMegacorp. The first thing they do is seek an injunction to make you stop allegedly infringing. The next thing they do is move for summary judgment to make the injunction permanent until you can demonstrate that you have the means to pay their legal fees if they win. Or, let's suppose you're an inventor who patents something, and EvilMegacorp blatantly infringes upon it. You file a lawsuit against them, and they pull the same stunt -- they certify to the judge that they've put $20 million in escrow to cover your legal fees if you win, and move for summary judgment to dismiss unless you can do the same.
Put another way, lobbying for a change to make the loser pay is a dangerous strategy, because it ultimately gives large corporations with deep pockets yet another weapon to use against everyone else.
A far better strategy would be to reform the way licensing itself works and come up with a fair framework for low-ceremony compulsory licensing at statutory rates that are high enough to encourage both the patent's owner and potential licensor to negotiate directly, but are ALSO aggregate among the holders of all patents. In other words, if you invent something and someone says you're infringing their patent, you could pay something like 70% of your gross revenue into escrow, then walk away and let everyone who thinks they have a patent stake in it fight over the funds among themselves at their own expense without involving YOU... and any funds that are unclaimed after 18 years would automatically revert to you. If your product allegedly makes use of 490 patents, the owners of those 490 patents can duke it out against each other to claim their share.
Re:Damages (Score:3, Interesting)
Does not reduce exposure to patent litigation (Score:4, Interesting)
You're right for more than just the reason you give. TFA also fails to understand that the patent system is structured to encourage litigation and to benefit the legal profession on both sides of a patent conflict. TFA's suggestion would do nothing to change this.
Ideally software and business method patents should disappear altogether, but if one is seeking alternatives then the first goal should be to limit the audience exposed to patent litigation.
That can be done in a number of ways, one being to exclude private citizens and corporations below a certain turnover from patent liability altogether.
This would encourage the creation of many small competing businesses and would be hard for megacorps to argue against, because all politicians pay lip service to supporting small businesses. Also, the turnover cap automatically ensures that competing corps cannot grow to the size of the patent holder, so arguments against it are really quite weak.
As you point out, the incumbents would still fight tooth and nail against it, but they would be on much weaker ground than today, and most importantly, lawyers would be presented with a much reduced population of potential victims.
Note also that the many calls to limit patent duration drastically, eg. to 5 years, would have exactly the same effect of reducing the number of people exposed to patent litigation. That idea is good too, but it doesn't level the playing field as well as a turnover cap would do. Perhaps both approaches should be used together.
Re:Damages (Score:2, Interesting)
Patent reform:
1) Each patent owned by a company requires an annual fee of $50,000 starting five years after the patent is valid
- Fees are waived for the first 50 patents owned
- Fee proceeds are used to hire additional patent clerks and improve patent processing
- Fee is indexed to inflation
2) Transfer of a patent to another company incurs a one-time $50,000 transfer fee
- Fee is pro-rated based on length of time remaining on the patent
- Fee is indexed to inflation
3) A company may choose to donate a patent to the public domain and receive a tax break
- Fee is pro-rated based on length of time remaining on the patent
- Capped annually at $1 Million
- Cap is indexed to inflation
4) Patent licensing requires public disclosure of full license costs, terms, and conditions
5) Any company whose patent related gross revenue exceeds its non-patent related gross revenue will incur an additional tax
- Additional tax is a flat 15% of all patent related gross revenue
- To increase the cost of running patent shell companies