Hacker News Reader

Comment by dodo53 | Hacker News Reader

This is why I like the idea (from someone around here I think) that patent owners should state a value of the patent when filing, and fees should be a percent of that value. Then value of patent limits maximum damage for infringement. So the amount of damages that can be sued for depends on the amount of funded attention at USPTO on checking the patent is valid (and patent owners could have the option of increasing stated value later, in which case extra fees would be used to revalidate patent). But I guess the whole culture that the number of patents = amount of innovation in economy = success of USPTO would have to be battled.

View on HN

> that patent owners should state a value of the patent when filing, and fees should be a percent of that value.

In that system, only huge corporations will be able to afford to file patents that are worth anything. Everyone else gets screwed.

Are you referring to this comment of mine?

"So I had an idea the other day for a patent reform: property tax on patents.

As long as a company wants to keep the monopoly rights over a patented invention, they are taxed a percentage of the patent's market value each year. They can choose either to pay that tax or sell the patent to someone else.

The government would offer to buy any patent for its market value, using tax revenue gathered from other patents, in doing so putting the invention into the public domain.

This would discourage companies from building large 'defensive' patent portfolios, since they'd be expensive to maintain. It works for the 'lone inventor' scenario too, since the market value of a new, untried invention would be low.

Once a patent's value is proven by developing the patent, its value will rise. At some point, the benefit derived from the patent's monopoly rights will no longer be worth the cost, and the rational thing to do is sell the invention."

http://news.ycombinator.com/item?id=4558402

possibly, doesn't seem to be exactly like I remember but is quite possibly my memory fail. Although it's not clear in your comment where the market value comes from (e.g. is it essentially the government is the market maker? that seems like a bad idea as central authority is unlikely to understand and price everything correctly). What stops people from understating the patent value?

EDIT - I guess main point is - is the patent value declared by owner and does the value affect ability to litigate?

I'm sure it wouldn't be unlike assessors for home value property tax. A bit trickier, but I'm sure it's doable.

One way you may be able to do it is to make patents always available for sale at their declared value. By declaring a patent's value, anyone (including the government itself) can offer to buy it from you for that amount of money. You must then either accept the offer, or block the sale by increasing its value beyond what the other party is willing to pay.

That also completely screws the little guy, which is one of the big reasons the USPTO is said to exist.

We're talking in the context of a court case involving two enormous multinational corporations going at it for over a year and a half with probably another half-year to go, minimum. The "little guy" can't even afford to sit in the bleachers of this fight. If some "little guy" actually had filed these patents he'd have been bankrupt a year ago.

There's probably a patent regime that actually would protect "the little guy" but it's long past time to let the USPTO wear that fig leaf over the current system. (Which is to say, I'm not saying you're wrong, I'm more saying, your point is inapplicable. And that's a shame.)

I don't think there is any basis for your assertion that patents don't protect the little guy. I worked for two small companies that had, used, and licensed patents on their key technologies. These technologies took us millions of dollars and years to develop, and were our way of competing with companies that could out-manufacture us, but not beat us at the R&D game.

If you had to pay up front on the "value" of the idea, a little guy (be it a solo person or small company) could never file a truly novel patent. That would be even worse than the system now where you could patent it but not afford to litigate (but you would be able to sell it or if it's a great case find someone to take it on contingency).

In my mind, the little guy would patent with a small declared value - so on the downside they wouldn't be able to litigate for large amounts. But they would have a defensive patent, and that patent would also have value for larger acquiring companies because if they believed in the validity of the patent they could apply for revaluing at higher price (at which point there would be extra funding to make sure it is valid).

If it's not a valuable patent then big players won't respect it (cheap to litigate) and who will want to acquire it? You'll just be run over.

Yes, while it's low-valued it's not much of a deterrent to big players which is a disadvantage (depending on how often small players realistically can afford to challenge the big players legally under current system).

But by defensive usage I mean then at least you know someone else isn't going to patent your key stuff. And once you've got funding/get acquired, the patent could be declared as higher value (and additional fees paid/validation done), and then future litigation to anyone who infringed after that date could be for higher amount.

I would also love to have 1 sq mile of land in downtown Manhattan on which to develop a high-rise.

But I'm just a little guy. The darn property tax system is set out to screw me.

This is really the whole reason that corporations were invented: so that people could pool their resources together to achieve things that a single person could not achieve. In fact, they used to just be temporary and when the original stated project on the charter was complete then the corporation disbanded.

If a little guy company wants to own a patent under this scheme either a) they have to file the patent with a lower value so they can make the annual "property tax" but that may cap their wins in the future if it's infringed on. or b) get funding from investors to make the property tax payments. Or c) sell or license the patent to a larger entity that could benefit from it. In the case of (c) if it's truly as valuable as they say it is to the patent office then they should be able to find a suitable buyer.

Flat capped taxes on things produce market inefficiencies such as you see in the domain name arena: It costs very little to hold onto things that might be valuable one day. If instead there was a sliding scale to renew a domain based on it's value then you wouldn't really see domain squatters. They'd be forced to sell their domains to someone that could make more productive use out of the resource. Same with land and property taxes. And maybe the same for patents? I kind of like this idea.

a little guy can't buy a plot of land in manhattan, so you're not comparing like with like: it's not the taxes that stop you from buying land in manhattan, it's the original cost of entry.

there isn't the same cost of entry for having a good idea.

@andrewcooke: There is an analogous situation to property taxes though -- Rezoning a property. If you can acquire land zoned for something cheaper like residential or agriculture and get the city to re-zone it to commercial it's almost always worth a lot more. Overnight the property is worth a lot more and the property taxes will jump, so you'll either need to get the money to develop it yourself or sell it off to a developer who can do so.

And as far as the cost of entry, there are countless fields where patents could only conceivably be filed by someone with a lot of capital: auto, aerospace, medical, pharma, etc. There are certainly lone inventors working in these spaces trying to file patents but it's unlikely they're working on stuff where you need access to enormous wind tunnels or a medical testing population.

EDIT TO ADD: And aren't we as software developers going on and on about how software patents are worth anything? The cost of entry isn't very high at all and therefore they'd be worthless. Patents were supposed to protect the little guy from losing his large up-front research and development costs to the big established guys.

Patents were supposed to protect the little guy from losing his large up-front research and development costs to the big established guys.

I always understood the purpose of patents was to provide incentive to bring trade secrets out into the documented open for the long-term benefit of society by having a great body of knowledge that anyone can use. So understanding of great inventions didn't disappear with the inventor. A short-term exclusivity on using the technology was the way to provide renumeration for being willing to share your discoveries with the public.

Rubber band scrolling is a cute, even useful, discovery, but it seems like it could be duplicated by just about anyone without any knowledge of what would otherwise be trade secrets. Is that worth documenting for future generations in this way given the high social costs of taking such documentation?

Hmm, my comments don't really reflect this, but I agree with you. I think the end result of a system like this would be that software patents would be next-to-nothing worthless and people just wouldn't bother, except perhaps in the cases of truly innovative works of software (I can't even think of any worth patenting right now...).

Would Apple really file their rubber-band scrolling patent at a value of $1bil, then pay some multiple of that per year when it's so easily avoided by their competitors? Probably not.

And if they do then more power to them. But it would put an upper bound of the amount of silly patents that a single large company could file and maintain (think IBM, MSFT, Apple, etc). Right now it costs a company hardly nothing to file all these and maintain them but they have a huge potential upside if your competitor steps on that patent landmine.

Reply on news.ycombinator.com