What a ridiculous system we all operate under. You come up with a mathematical formula for ranking some text on a page (in this case, what ads to show first), and you could now owe $250M/year to some company you've never heard of because they already bought the rights to that formula. It turns my stomach; sorry that I have nothing of more substance to add to this story.
* Obviousness. Patents are required to be non-obvious to a "person holding ordinary skill in the art", but obviousness is highly subjective and difficult to assess (especially for a non-technical jury). In contrast, evaluating whether something was independently invented, while not necessarily simple, is a more objective test.
* Utility. One of the rationales behind the patent system is that we want to encourage inventors to share their ideas with the world instead of just keeping them secret for as long as possible. While the patent system requires publication of the invention, it doesn't require publication in a manner that's particularly useful. If you could only assert patents against people actually using them, then you would have a strong incentive to make them useful (e.g. source code).
* Supply and Demand. The current system grants a flat 20 years to each patented invention, regardless of how difficult or expensive it was to invent. Recognizing independent invention creates the opportunity for a more flexible system. Inventions that are hard to reproduce independently are more valuable to society and should enjoy a longer term than easier ones.
The obvious problem with all of the above of course is how feasible it is to assess whether something was invented "independently". I've addressed that to some degree in this blog post (http://www.techdirt.com/articles/20121011/14171220681/yes-in...), but I admit it's a hard problem.
EDIT: Typos
That applies to all economic domains. Patents worked back when it was extremely hard to sell your goods to its entire market, because you were either distance limited, communication limited, or production rate limited. In the first two situations someone could just take your idea, set up half way across the country, and made all the returns.
Today, I can invent anything I want and have it on ebay overnight and ship it anywhere in the world. I can advertise on most major ad services if I want, with an audience of the entire first world. The only limiting factor for me is demand, but that just means I have to be safe when bringing inventions to market, but it is good for the economy overall because it means if I can't meet demand, someone else will pick up the slack.
It is still, like I said, advantageous to the first to market with an idea, enough so that I wouldn't predict much of a drop in novel ideas. Like I said, I would expect more if technology and designs were more open and people could cheaply iterate and extend past concepts more readily.
Without patents, the rational thing to do is not invest any more in an invention than you can recoup in the short window before someone clones it and undercuts you on price. Moreover, it diminishes inventors and elevates manufacturers. The smart strategy in a world without patents is to build up massive overseas manufacturing capacity, because you can always quickly copy designs and then undercut the original designer with your manufacturing muscle.
'Andrewfong has a good point about independent invention being a defense. The idea of inventing something on your own only to have someone else claim they patented it is most of what bugs people about patents. In engineering circles where that is much less common, you don't have an anti-patent sentiment. When I was studying aerospace engineering in college, nobody I encountered perceived patents as anything but a good thing.
Though I think this mainly just points out the squishiness of the term.
(PS: Please don't use the term "India" to refer to certain Indian Biotech companies that reverse engineer patented pharmaceuticals developed in the US)
No one spends $1 billion to make a drug if anyone can copy it simply.
Additionally there are international problems related to abolishing patents.
it required research. Just like a car required crash tests, etc.
(I saw quotes yesterday from the founders or presidents(?) of Merck and Bayer, which espoused both philosophies, and both claimed successes.)
I'm not entirely convinced that patents are necessary to ford the research and regulatory approval. Even in a market where generics are relatively trivial, there are ample opportunities for profit.
I invented miracle-drug and can now produce miracle-drug at 0.04$ per pill, can you can produce miracle-drug at 0.06$ per pill. You would think I should win because I can product the pill cheaper, but the full story is your very first miracle-drug pill costs you 0.06$ and my very first miracle-drug pill cost 1.5 billion dollars. I lose because I invented.
The alternative is to not make any money at all. As long as that drug produces you a net profit in the long run, which I imagine would fund additional research after recouping anyone investing in the project, then the fact someone else can also make money is irrelevant.
Think of it from the alt-companies perspective: X is sold at $0.06 a pill, but I could sell it for $0.04! There is demand, I can create supply, and everyone benefits except X.
But I don't buy that selfish interests wouldn't still invest heavily in medicine even if it is a risky investment - nobody considers the emotional fact that rich people do get sick, and are likely (in the absence of big pharma research) to directly invest to see the diseases they suffer or are concerned about cured or abated. Think of how kickstarter works - you throw money at a project that may or may not succeed, but it happens all the time because people want the outcomes regardless of the financial risk associated. Same could easily happen with pharma.
Unfortunately, it's not alway possible, there are sometimes very few people in the first place:
My favourite part is just how good the Microsoft lawyers are - "we will pay 5% of whatever Google pays" is an incredibly good deal and shafts Google quite nicely at the same time.
And anyway, isn't this really obvious - to anyone? I have scanned the patents referenced and frankly I don't see any algorithm that is not "return information relevant to the search term presented, and mark the users profile if they liked it"
No implementation details, which frankly seems to be the whole difference in software vs hardware.
Edit: my calculation ignored US only
"the original participating manufacturers (OPM) agreed to pay a minimum of $206 billion over the first twenty-five years of the agreement" - 4 companies, 25 years, works out at $2.1bn a year each. 10x more than the article thinks Google will pay out...
Only if you take a very generous interpretation of "independent". For an reinvention to be truly independent, the reinventor would not only need to not have read about the original invention, but also to have not read about anything inspired by the original invention, and not talked to anyone who read about anything inspired by the original invention, etc.
Before software engineering, the probability of this happening may very well have been low enough to where nobody cared.
But if you're writing code, you are relying on and creating thousands of "inventions" a day. To "claim" one of those inventions so that nobody else can use it is absurd.
The law just doesn't get that yet, which is weird, because big tech companies have been getting burned by it for decades now. I guess they just figure the benefits>costs for them, and when peons get screwed, who cares?
Ie look at the patent, come up with a problem that would make this patent obvious, lock some engineers in a sealed room with the problem, and wait for something like the patent to fall out. Was that independent invention, then?
* More like discovered (don't want to imply math is patentable), but the point remains the same.
If several people would claim independent invention, it is obviously a statement about obviousness. So the patent would already be invalid under the current law.
Now, since everyone involved in patents, they don't want to interpret the law that way. So there is a non-written agreement that no one will go that route. and that is idiotic.
http://techcrunch.com/2012/03/31/why-google-might-be-going-t...
edit: I am rate limited from replying to fpgeeks reply below so I will post my reply here.
First, the author is extremely clear that he invested in Vringo, in fact the whole article is about why he did so., so I am not sure why you talk about it as if it is kind of a revelation. Second, the article is very informative about the history of the patents and is highly relevant. Third,which of my comments are pro Vringo, really? Fourth, can I be suspicious that you're short Vringo stock, or do you get a free pass just because you have an older HN account.
"Protection of intellectual property is what America is built on?" Hyperbole much?
"Smart people invent things. Then they get to protect [...] what they invents." Oversimplification much?
Not exactly a home-run defense of patents by Mr. Altucher.
[1]: As admitted by the article, there was no "stealing" here anyway.
Is it? I recall the story of how the textile industry in America was built upon designs illegally smuggled out of Britain.
Also, the movie, auto, and aviation industries were all hobbled for years under patent lawsuits. It was so bad in the aviation business that development in the US pretty much ground to a standstill and the center for aviation progress switched over to Europe for a decade or two.
Intellectual property protection became important to America once it had leapfrogged other nations by ignoring their rights. Which is what makes the current stance on international intellectual property a little hypocritical, especially when it comes to generic drugs in third world countries.
However, the Yankees turned it around on the British and owned the term. Classic.
Edit: the actual origin of the word is lost in obscurity. There are lots of theories.
Separately, given the allegations in the Ars comment thread:
http://arstechnica.com/tech-policy/2014/01/court-orders-goog...
I'm more than a bit suspicious of a brand-new account that's posting pro-Vringo comments.
> http://techcrunch.com/2012/03/31/why-google-might-be-going-t...
That link is definitely worth a few minutes. Thanks.
Being the Vringo is the motivation to invent things before the competition does.
Moreover, the current system creates a perverse incentive to obfuscate your patent. Although all patents are (eventually) published, there's no requirement that they be published in a manner that's useful (no source code) or discoverable (non-standard jargon). The incentive is not always to make the patent well known until after a party has already invested significant resources into an enterprise, at which point the patent can be used for something pretty close to extortion.