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Patents – Reality and Misconceptions

Amazon are being sued this week over the Kindle Fire. There’s a patent troll who, while not actually creating anything that they can sell, are accusing Amazon of violating a number of patents. The specific patents aren’t important in this case because this is a rather straightforward example of extortion.

I’ve been sitting on an editorial about patents for a while now. While I have covered this topic once or twice (mainly when Microsoft blackmailed smaller and weaker companies), I’d always had this post in the back of my mind.

The facts of each story and lawsuit are not in dispute, but I feel  that the reality of the patent system doesn’t get the coverage it deserves.

Where to begin?

How about a few basic facts. A patent is supposed to be a way for an innovator to protect one’s ideas. You come up with the idea, document it, file the paperwork, and after a long time you might be awarded the patent. That’s the way it’s supposed to work, but that  stopped being true a long time ago.

In this day and age, a patent is not used to protect your ideas so much as it is used as a club to bludgeon your competition or as a shield to protect yourself against groundless lawsuits.

Or it’s used as a means of extortion.Yes, extortion.

Amazon got sued not because they copied anything but because the patent troll hoped that Amazon would just give in (that probably would have been the cheaper option). The patent troll did not invent any products nor did they think up an original idea. All they did was file the paperwork as well as buy patents form other companies.

This is the same group of trolls that have sued Apple and a bunch of other gadget makers, as well as other tech companies. Do the patents cover anything innovative? No. They’re all obvious. One covers the basic idea using a touch screen on a tablet, for example.

But never mind the trolls; surely patents have some value to an innovator? I would say no.

It’s been a long time since a patent had any more to do with creating a product than the support docs. Both a patent and support docs are paperwork, and they are both secondary and sometimes extraneous. You can pass on them and still get the product out.

For example, I know someone who, while working for Microsoft 8 years ago, filed for a patent that covers the  idea of buying an ebook on a website (and it covers most ecommerce sites, for that matter). Microsoft were awarded the patent this year (seriously). In the intervening decade everyone and their brother came up with the same idea and implemented it, and that should show you the real value of the patent.

The reality about patents is that the system is broken. It is all too easy for someone to define a basic concept and then file for a patent. Often times the idea is so basic that the patent holder wasn’t the only one to come up with it. Take the Microsoft patent I mention above, for example. Is the idea of an ebookstore really all that original? Do you think it deserves protection or would you agree that a bunch of different people probably thought it up on their own?

Speaking of Microsoft, they’ve descended into patent trolling as well. Another example of their trolling broke today. Quanta (maker of the Playbook, Kindle Fire, and other gadgets) signed a patent agreement with Microsoft. In exchange for an undisclosed sum of money, Quanta got to keep running their business without being sued by Microsoft.

I’ve covered Microsoft’s patent agreements before (here and here), and they all pretty much come down to the deal announced today. All the companies pay a vig to Microsoft so they keep innovating and shipping new products. Why not? it’s cheaper than being sued.

Even when companies aren’t sued, they’re still wasting vast sums buying up patents just to protect themselves (or to sue others, TBH. Next time that you hear about a patent portfolio selling for millions or billions of dollars, please remember that the buyer isn’t getting the patents for the ideas, they’re buying  patents for protection. The buyer is betting that the billions spent to buy up a huge portfolio will cut the legal costs of patent lawsuits. In any case, this is money that they’re not using to develop a new and better product or service.

And that is the greatest tragedy of the patent system. It no longer helps a creator protect an invention. Now patents are only a financial drain on  people who are doing the real work of coming up with new ideas and new products.

That’s one man’s opinion, anyway.

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RobBrown October 13, 2011 um 9:14 pm

1) I think the greatest tragedy is jobs. Jobs that are not created because companies are spending their money on patents or litigation, entrepreneurs who are too scared to commercialise their work lest they be sued, etc. Obvious to say but literally the only winners in the game, are the lawyers.
2) A key characteristic of Microsoft’s trolling is that their victims must sign an NDA to even get to see the patents that MS is accusing them of violating. B&N resisted and the matter got taken to court so we can see the patents at issue. They’re pathetic, so trivial and obvious that I’d be embarrassed to be associated with them.
3) "IP Innovations", another Acacia shell, sued Red Hat and Novell in 2007. They got completely slapped down, with their patents invalidated, due in part to community help in finding prior art (see It would be great to see something similar happen here.

Dan October 13, 2011 um 10:16 pm

Have you ever read Kinsella’s essay on IP?

Nate Hoffelder October 13, 2011 um 10:48 pm

Not yet.

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