A triad of comments by "Morinville" on TCS Daily last Friday illustrate some important themes:

+ Patents are more important to individual creators than to big companies;
+ IP is crucial to raising investment capital;
+ The delays in the current system are doing serious damage;
+ Injunctions impose an important discipline on the system, and it would be better to deal with quality and delay issues than to undermine the property right.
+ There is an important market niche for innovation companies that can partner with inventors to turn invention into innovation, and to deal with big platform companies.

Comment #1:

Just the fact that the patent office takes 6 or more years to process a patent creates patent trolls. Most inventors invent things to start companies, but can't get investment until the patent is approved. Fixing that is not in HR2795. In fact HR2795 effectively adds a year or more of litigation thru a challenge period before an approved patent can be enforced. And then everything that was brought up in the challenge period can be brought up again in an infringement action. It justs adds time and cost so the infringer can continue to make money a little longer and hopefully run the inventor out of money.

The vetting process within the patent office can be improved to eliminate junk. Some of this is in HR2795, but the real problem is that the Fed's siphon money from the patent office for other things leaving them short of staff. This is not addressed in HR2795.

HR2795 makes it virtually impossible for an inventor to get an injunction against an infringing company. They must prove that the company stole it and they must have a product. The loss of a potential injunction is why most infringement cases get settled out of court. Injunctions will all but be eliminated providing more incentive to steal. Further, and seldom discussed, is an injunction is the right to exclude others and it's a constitutional right spelled out specifically.

HR2795 wants infringement cases filed in a town where the infringer has a major presence. Sue Microsoft in Redmond, Wal-mart in Benton or Dell in Round Rock and try to find a jury not economically tied to the infringer. Try to find a fair jury. Also if you don't live there and you're broke, how can you afford it? Lastly, a whole new industry of highly expensive lawyers will spring up who only sue specific companies in specific towns.

If you want to eliminate patent trolls, which the process has made me, fix the speed of the USPTO. If patents are approved in months instead of years, infringing companies will not have the incentive to steal. Patent holders will get investment to build thier products and large companies can get the ideas the old fashioned way... they can buy them at fair market value.

My "still" pending patents are a series of utility patents in the domain of software, however these are not code patents and are very non-obvious. They are (or were in Feb 2000 when I filed for them) a completely new industry managing a matrix organization within large companies that involves three new data structures and two algorithms holding them together along with a complex nested state workflow engine to transact data. It enables role-based access and approval management without very much administration at all. It also enables an overarching system to manage multiple enterprise applications from a single user interface.

I went out to find funding after I filed the patent applications and since then virtually every company that I talked to has created products based on them. They're betting that I go away. And, they have another 5 to 10 years of legal maneuvering before they need to reconcile. If HR2795 passes, they won't every have to reconcile.

Had I been able to get approval for the patents within two years of filing, I would have been able to get investment. No investor in their right mind would invest now. The market is established by the top enterprise software players. A little guy with or without patents can no longer compete.

My last resort to recoup the several hundred thousand dollars of my own and of course friends, fools and family money, my career and a lot of personal pain is litigation.

I am the guy that the legislation and changes in the USPTO are aimed directly toward. They guy who noodles something until he finds a better way do it and applies for a patent, tries to build a company but can't and then get's ripped off by major corporations who create the product and establish the market.

Most companies actually set up legal defenses to protect against infringement from the onset with things like policies precluding anyone from even looking at patents. They then send their people to all the cutting edge trade shows to garner ideas and build products from them. Often these new technologies are patent pending or already patented. They are set up to deliberately steal and establish a defense.

What amazes me is how well their PR engines spins what really happens and how effective their lobbying groups are at getting changes or legislation.

You're saying that an idea that saves millions of dollars should only be protected if it takes years to make. How long did it take to figure out barbed wire? He simply had the idea to twist two wires around a barb and then he built the machine to do it in a few days. That invention changed the world because it could be mass produced. I'll bet it took about half a second to think of it. Perhaps in your mind there should be no patents at all, so let's take a look at that world.

Currently, the vast majority of new inventions come from individuals and small businesses. The simple fact is that it only takes an epiphany moment to discover a new idea, however to refine that idea and produce a product requires much more. If that idea is not legally protected the inventor cannot get investment to bring the idea into fruition. Anyone with more money, established market or other assets could produce it without the inventor, but would not know of it.

Why would an invetor spend time developing the idea when he could be out fishing? I suspect it is because he may be able to better himself finacially, or in some other way - challenge accomplishment, etc. In your world, why would he risk pretty much everything (money, career, family and health) to make it into something if it can't be protected? Would it not be a pretty high risk bet if a big company could simply take it from him and leverage their existing distribution network and customer base. The inventor would end up with nothing and, of course, lose everything he had put into it. Wouldn't he just go fishing and forget about it?

I would expect that a society [without patent protection] would pretty much stop all innovation. Ideas would just be fleeting thoughts in creative minds. A world would exist where the only power is money. A world where investors and corporate executive call all the shots. A world where nobody gets ahead except those folks. If someone else innovates, squish them and take their stuff.

posted by James DeLong @ 7:30 AM | Patents

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