My Patent Reform Ideas

It is a slow news day and in an effort to keep my regular reader(s) regular I decided to finally write down some of my thoughts on how I would implement patent reform. Note that there is zero chance of any of this happening, so this is really just nonsensical wishful thinking…

The original intent of offering patents (the legal monopoly right for an invention or discovery) was to _increase_ the rate of innovation. Sadly, our current patent system has evolved (devolved?) into a system that _decreases_ innovation because corporation’s primary use of patents is to block competitors rather than to make money. Personally I consider that a crime against society, but like so much other crime (whether there be legal statutes behind it or not) by the ruling oligarchy, nothing is ever done. My proposal is a rather radical solution compared to what we have today, and is specifically intended to foster innovation and is clearly tilted to the ‘little guy’ who today finds it nearly impossible to make money off any innovations.

Today all a patent gets you is the legal right to sue someone for infringing, which naturally means that those with deep pockets can go ahead and infringe all they want against the little guys (and companies) intellectual property. Since the whole point of having a monopoly on a product is to gain outsized profits, the bare fact that an infringer is successful means the inventor is losing access to (potentially) vast revenue and in the case of small startups, without that revenue they basically dry up and blow away. Thus, the infringer knows that by simply tying up the case in court for a few years the IP holder will have gone bankrupt and while the IP rights might be bought by some vulture investor, the infringer likely won’t be hit with significant punitive damages, certainly not enough to make up for the damage they have done.

So, in addition to patents primary being used to stifle innovation, patent holders are often forced into years of expensive litigation just to protect their turf (unless, of course, the invention is worthless, then no one cares). I propose to resolve these two problems by turning the whole process on its head, in a manner of speaking. First, patents will no longer give rights of litigation to the patent holder, those rights will instead be held by a non-profit organization that will manage the IP on behalf of the IP holder. Specifically, once a patent has been granted the inventor will get license fees from the IP management organization and will no longer have any say in who makes use of his or her IP. Naturally companies will scream bloody murder at this since it completely strips them of the ability to block competitors from using their IP, but that is the beauty of the thing, _anyone_ can make use of the IP and, since the IP management organization has as its goal the maximization of revenue through licensing, innovation is actually intensified because anyone can make use of the invention. Second, since the IP will be owned by the management company, any litigation against infringers will be done with their resources (which I expect to be substantial) which will go a very long way toward eliminating huge corporations strategically infringing.

As one might imagine, this greatly impacts the current system. In addition to companies no longer being able to block competitors from making use of the patented information (and thus wildly enriching patent attorneys), this allows the little guy to make a living by creating intellectual property and getting it patented. Since licensing will be done by this third-party (as well as any infringing litigation), the small-time inventor can focus on inventing yet still have a revenue stream. I can envision a situation where corporations simply eliminate their research departments since they can now rely on licensing any new invention and no longer have to worry about being blocked by strategic IP from their competitors. Little guys like me could develop a revenue stream that could allow them to work full-time on their inventions as well as supply the money needed for a workable lab.

I also think that there needs to be a distinction made between protecting an _idea_ and protecting an _implementation_. There are lots of ideas that are simple in conception (or at least simple once articulated), yet can be incredibly complicated to reduce to practice. If someone gets a patent on an idea, but is unable to make the product a reality, if someone else comes along and is able to actually realize a working product that person (or organization, there is no reason why companies can’t stay in the inventing business, they just can no longer use them to block competitors) would then have separate IP rights and would also get a slice of the revenue. Indeed, if multiple distinct ways are developed to implement the idea, then multiple people could get the same rights. Of course, if a licensee wants to use the IP, he would only have to pay the idea IP holder as well as one of the implementers, not all of them.

For any product that has the potential to infringe on any IP, the management organization would determine what proportion of which patents are involved in the product and assign some sort of per-unit fee that needs to be built into the price of the product. The management organization would then apportion the revenue generated between any relevant patent holders (or their designated beneficiaries).

This model is sort of built on the idea of University’s IP management. While I am sure that not all Universities are the same, I believe many of them operate in this fashion. It is a rare inventor who also has the business savvy and personal contacts to take an idea to economic reality, so the average inventor should focus his or her time on invention, not on sitting in courts trying to recover money from infringers. As mentioned several times above, most companies are interested in owning IP simply to successfully market their products or to keep their competitors from marketing theirs. By eliminating this dynamic I suspect a whole lot of derivative patents would never get produced since there would be no value in doing so.

So, whadyathink? I mean besides that this has no chance in hell of ever happening. Step out of the real world for a moment and imagine a clean slate where something like this can be put in place. What do you envision would be problems? How might this be twisted to stifle innovation?

Author: Tfoui

He who spews forth data that could be construed as information...