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Comment by javindo | Hacker News Reader

One of the main arguments for patents is just the fact that some things require a bit of capital to get going and what is to stop some venture capitalist from taking pitches, telling the person it's a rubbish idea then going off and funding the idea himself?

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Patents won't help the engineer anyway, patents are made to protect the venture capitalist who invests the significant amount of money required to file the patent. That's the difference between the "inventor" and the "owner" as in patent law.

With all due respect, I don't think you actually understand what patents do. Every year we hear of companies where people have invested much of their time and energy in giving life to an inventive idea or process, which at some point is acquired by another company in exchange for cash, stock, or both. And those negotiations would often not even start if the engineers building their idea were not able to protect their work using a patent.

That single process is the difference between an acquirer taking all of their work and just re-implmenting, now that its clear what the issues are, and giving them nothing. And that company having to negotiate with the engineers about their work and pay them fairly for it if they want it.

Patents have not always existed, and it is useful to see what it was like when they didn't exist to understand what it is they protect.

That said, patent administration has not kept up with technology, although if you've been involved with the patent office as long as I have you will know it has gotten much better at figuring out what should and what should not be patentable. Further, the judiciary is getting much more in tune to the abusive nature that people wielding bad patents can have on an industry. It is getting better, and the people who need to make it better (the Supreme court in the US and the 'patent' court) are motivated to make it better and have been making changes along those lines. Not a quickly as some might like but being quick in complex areas of law is often dangerous so some caution is advised.

This is a nice story, but not an accurate reflection of reality. Look at the statistics on who are issued patents, who receives royalties. It's not the noble independent inventor, it's old MegaCorp that doesn't blink at underwriting the massive expense of prosecuting a good patent.

The story you describe is a convenient myth to justify a system that benefits established interests.

You could actually do some research if you wanted to and realize the truth of the statement, I'll give you the couch potato version, watch 'Shark Tank' or 'Dragon's Den' and rank all of the engagements where the question of a patent came up. Or you could do as I have done and participate in on M&A discussions for over a decade as part of the due diligence team and compare outcomes when patents exist and when they don't. Or you could approach the question using some basic reasoning, if the BigCorp is spending millions a year to develop a patent portfolio, how much of that value would carry over into the acquisition of SmallCorp with or without patents? Zero? Non-zero? How much non-zero? Can that number be deduced?

You don't have to believe some random guy commenting on Hackernews here, but you do have to actually think about it and test your assumptions.

ChuckM, I appreciate your polite tone and sincerity.

To illustrate my point, consider my story. I'm a software developer with entrepreneurial ambition and I'm developing a product I have dreams of marketing and selling. Last week I probably came up with 5 methods of doing some novel data analysis that are patent-able.

How many will I patent? Well considering it would cost about 100-150k to adequately protect that intellectual property and I have only my own boots to my name, ... I'll patent zero of them.

Clearly the system does not work for me.

This is one extreme scenario, but consider the continuum. What about a startup with 500k in seed funding? Should they spend 50% of their capital to protect their intellectual property before they've finished a product and made sales?

Meanwhile large companies spend millions on patent programs which sweep up wide swaths of IP on nebulous grounds of validity. Not only can I not afford to prosecute a patent, I can't even afford to respond to a cease and desist letter based on an invalid patent which came out of the "innovation process" of MegaCorp.

Sorry, but the system is not for the little guy or the start up.

Actually, it would be much more expensive than that if you end up having to defend you patent in court http://www.cnet.com/news/how-much-is-that-patent-lawsuit-goi...

Fair enough, I've got a couple of questions for you though.

First, and perhaps most importantly, how did you arrive at a cost for filing a patent? I ask because there is a lot of mis-information out there spread mostly by patent attorneys that try to make this case. The actual fees for filing a patent are not all that high, however attorney fees are astronomical by comparison. Also did you know there are people who are registered patent agents (not attorneys) who can help you file a patent at a much lower cost? I guess the real question is how deeply have you investigated patents with available online resources before deciding they were not worth pursuing?

I've got just over a dozen patents issued to me, they range from the quite simple (protecting a laptop screen from onlookers using lcd glasses) to fairly complex (protecting executable code with bi-directional authentication). I've also been the advisor to a number of startups which have filed for and received patents. The most expensive cost was probably the bi-directional authentication one because it got the department of state involved (long story) but the first one was quite inexpensive, about $15K from deposition to issuance. Part of the expense can come from trying to patent something really broad (like "breathing air") which gets a lot of 'office actions' from the patent office for prior work and restatement of claims. That burns a lot of attorney hours and that is a lot of cost. For things that are narrowly claimed and there is little to no prior art in the patent database, they are very quick to patent and thus very cheap.

Now a patent attorney will advise you to "get as broad coverage as possible" to maximize the "value" of the patent. Which is good, but somewhat self serving advice. They will start with something really broad and the repeated office actions will pare it down into something much less broad, but arguably "as broad as possible." Also "as expensive as possible."

Not a lot of people who argue for or against the patent system have been through it, I've been through it as an inventor, an acquirer (due diligence), and expert witness (defender) of various patents. That experience has helped me get to the point where I've separated my opinions about patents and patent administration into two camps. The latter is problems with how they are vetted, prosecuted and defended, the former is about the concept of protecting the person who did the work from exploitation.

Given changes in the JOBS act there was some additions more cost effective ways to file patents that made it easier for folks in your position to file them. There are also systems like provisional patents, where you put down that you're going to file them in a durable way, so that if you go talk to BigCorp and tell them what you are doing, and they "steal" your idea and implement it, you can "steal it back" by asserting your patent rights to it.

I guess my point is that it is a lot more complex than "good" or "bad" and the information that is readily available may not always come from a disinterested source.

Patents as you describe them simply reward the first party to encounter a particular problem and apply the obvious solution. It's all well and good to say that the USPTO is "getting better" at recognizing what claims are acceptable in a patent, but the reality is that the examiner has no real incentive to apply any sort of quality ethic. By the time anyone challenges his/her work in court, it will be somebody else's problem.

A few moments' thought should lead one to the realization that productive engineers have much more to lose from patents than they could ever stand to gain. Even the most creative among us consumes a thousand times more than we create.

Chuck, if experts in their narrow field, such as myself, do not always know all the state of the art everywhere, what hope do the employees of the patent office have, who aren't experts in all narrow fields?

Why does it cost more to for the patent office to find out if there is an existing parent than there is to get one granted? Explain that one!

In short, we are getting more or less a coin toss when it comes to patents being granted. And then the cost shifts to legal proceedings, and sadly the threat of these proceedings causes many innovative startups to settle BEFORE any trial. The trolls then cite their success in obtaining licensees as they go and intimidate more small victims in a legal racket.

   > In short, we are getting more or less a coin toss 
   > when it comes to patents being granted. And then the 
   > cost shifts to legal proceedings, and sadly the threat 
   > of these proceedings causes many innovative startups to 
   > settle BEFORE any trial. The trolls then cite their 
   > success in obtaining licensees as they go and 
   > intimidate more small victims in a legal racket.

I think we need a bit more evidence before we can make (or accept) the claim that granting a patent is a 'coin toss' (which for me implies that all patents are equally likely to be granted regardless of merit). My experience is that the number of "stupid" patents being issued, especially software patents, has consistently been reducing. Further the scrutiny that later software patents of which I'm familiar (two at Google, one at Blekko) were given a much more thorough going over than earlier patents I've been a part of. I attribute that to three things, one the number of examiners who are aware of modern technology is rising, two the image of the 'non practicing entity' as a leech is becoming accepted, and three politicians who supported a dysfunctional system have been made to look silly. All of those put pressure on the system to be better, as not to make people look silly or facilitate legal predation on small business.

Part of the reason this is coming to a head now is because we're at the opening of the great unravelling. The dot com boom, and the software patent equivalent of the Cambrian explosion occurred starting in 1995. The 20 year anniversary of which, and the maximum lifetime of any post GATT patent[1], is 2015. We will be seeing upwards of 10,000 patents a month expiring and that is only going to get faster. This leads to desperation on the part of NPEs to get some value out of their patent portfolio before it goes poof. Unlike copyright there will be lots and lots and lots of things that not only can you use them for 'free' but they won't be biting you in the behind later.

[1] http://patentlyo.com/patent/2012/05/how-many-us-patents-are-...

[2] http://www.uspto.gov/web/offices/ac/ido/oeip/taf/us_stat.htm

In that specific case, a contract could easily protect the inventor.

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