Universities warn Congress that patent reform would harm US innovation | Hacker News Reader

Universities warn Congress that patent reform would harm US innovation

aau.edu

74 pointssinak291 comments

I'd like to say...

I just attended a talk where one of the professors is using NSF funding to conduct research, then patent all of their work. Companies are then forced to pay the university based research group for use of their products and for further development.

Personally, I cannot decide whether or not this is for the best or not. The research group can bring in more money to produce quality work. On the other hand, the tax payers are benefiting the creation of patented items they have to pay for?

It seems really strange to me.

There is so much of that kind of thing going on. It's even worse when public money paid for "research" that resulted in a product that is then sold back to the government and then additional contracts are issued to improve, change, customize, or alter the product. All of which is funded at wildly overpriced rates without any controls or solid guidelines.

Government procurement is an important part of how products are brought to market in our current system. That's not to say it's just or efficient at all. But it would be a mistake to view it as mere waste that ought to be excised without broader reform. Currently it fills the gap between the research and commercialization phases.

Prove it.

Ok: That thing you are typing on. The first computer was built in the early 50s funded by the Pentagon. They filled entire rooms and were hugely expensive. For the next 25 years or so the government was the primary customer. Few companies could afford them. In the 70s they finally reached a stage of development where they were affordable. Government procurement was a critical part of the development of computers.

Oh, please.

I'm a University professor who does much work funded by the NSF (millions of dollars), whose university (Univ of Washington) is on that list. My tech transfer office tried hard to make me keep some of my software work closed source and succeeded for years (see http://sagemath.blogspot.com/2014/08/what-is-sagemathcloud-l...). In December I realized to my surprise that some of my NSF grants that funded my work had an explicit open source requirement. This was entirely because of a new requirement in a specific NSF program -- search open source at http://www.nsf.gov/pubs/2014/nsf14520/nsf14520.htm to see it. This was something that a program officer (Dan Katz) at NSF added a few years ago; I asked him about it a few weeks ago when he visited UW, and he said it was inspired by when he worked as a researcher at Caltech and he wanted to open source his work and used grant requirements to do so.

Granting agencies like NSF can have a massive impact on ensuring the work they fund with tax payer money is made available to tax payers for free. The NSF SI2 program is a rare new example of exactly this happening in practice today. I couldn't find any other similar NSF requirements for other NSF programs, but I am going to hold this up as an example whenever I have a chance to advise NSF in the future. Little by little things may change.

Wait, I don't understand.

Are the non-free parts of SMC there because the university demands that they stay non-free or because you want them to? Does this particular grant involve any of the non-free code you've already written?

Also, the grant speaks about releasing software. Do they consider it a "release" if you only give web access to the frontend, but keep all of the backend private?

Sadly, the open sourcing of software does not address the patent aspect. It makes subversion easy... perhaps common place, but is probably not really enough.

Unless of course if you put in your grant application that the code will be licensed under GPLv3 or any other license that requires submittors to provide a license for patents.

1. There are no non-free parts of SageMathCloud (here it all is: https://github.com/sagemath/cloud). It used to all be closed source, since the University tech transfer office required it in order to work with me... but I've since open sourced everything as required by the grants.

2. Regarding your next question, "the grant" I linked to is actually a program solicitation. It's the instructions for people preparing grants for the program, and also the guidelines for other people reviewing these grant proposals. The thing that is actually legally binding on the university is what the actual grant itself says. In my case the grant said (basically) "We will release all code under the GPL." I didn't write that phrase -- some other co-PI on the grant did -- but it was still signed off on by my office of sponsored research.

The NIH has similar requirements in some RFAs, and has funded the creation and maintenance of a number of open-source, widely-used libraries such as ImageJ, the Visualization Toolkit, and the Insight Toolkit (either directly or indirectly via support for clinically-focused applications utilizing those).

Thanks for bringing this up, Bill.

Regarding the larger issue, SI2 does not require open source, but it suggests that it is a good idea.

So the NSF should attach strings to the funding.

The elephant in the room is that taxpayers are subsidizing private tech industry that gets to keep all the profits from commercializations of public research, save for the pittance they sometimes pay for tech transfer licenses.

There is a bit a selective outrage going on here. How dare those universities try to profit from taxpayer research! The nerve!

Meanwhile tech companies make billions of profits on these inventions without paying a dime back to the government, apart from the taxes that all companies pay.

At least the pittance that some pay back to universities via tech transfer helps support further public research. The government grants don't always cover the full cost of labs and professorships.

One reason why grants don't always cover the full cost of labs/professorships is because Universities would grab a significant % of the grant into "general overhead" fund. Just another source of revenue for the University as a whole.

As a taxpayer I'm certainly entitled to think that the work I am paying for, I own. Just as in almost any other business relationship.

As far as I can see, if a professor runs a lab, he or she gets grants to fund it. If they can not get grants, they don't run a lab. The profits from university patents and tech transfer feed the general fund, they don't generally all go back to academic work. That general fund subsidizes many things, like the administrators' and football coach's salaries and the glitzy new student union. I don't really want to subsidize those things.

If you really want the NSF-funded work to subsidize more research, then the NSF should own and license the patents. But personally, I'd rather the research be free and have it benefit society.

How much of the total government budget did your taxes contribute to? And how much of that budget was assigned to fund research? How many people share your sentiment that your tax money should benefit corporations (domestic and foreign) that don't pay their fare share of taxes? And how many of these even would have agreed to fund this research due to their political biases (think anti-vaxxers and vaccine research)? Would all your collective tax contributions give you a say in this matter?

I don't think this issue is nearly as easy as "publicly funded research should be free".

Additionally, is it better (along any number of metrics) to make it free and let existing companies use it, or patent it and give a startup a better chance of commercializing it? (If there are any studies on this question I'd love to read them.)

>But personally, I'd rather the research be free and have it benefit society.

"Benefit society" sounds nice in theory, but it glosses over an important and long-standing economic problem, that of free-riders. Which is exactly what grandparent comment refers to.

Your entire first paragraph is straw men. It doesn't matter how much any individual pays, it doesn't matter what any individual's sentiment is. If Google pays a researcher to do some research, they own it, regardless of how much any individual shareholder paid of that amount or what any individual's sentiment about that research is. Those things are irrelevant.

It's not as easy as "publicly funded research should be free", I agree. As I said, it's that funded research should benefit the funders.

Startups don't benefit from patents. There is plenty of (probably publicly funded) research to show that. Here's a recent paper on patents and innovation: https://www.aeaweb.org/articles.php?doi=10.1257/jep.27.1.3, or read Joel Mokyr's "The Enlightened Economy" or "The Lever of Riches" and see how James Watt held up the widespread commercialization of the steam engine by refusing to allow his patents to be used downstream (or read the NBER financed study on the impact of patents on downstream innovation: http://www.nber.org/papers/w20269). This paper (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2029098) is probably the most targeted towards whether patents help startups or not. The conclusion they came to was "the patent system was working 'neither well nor poorly for [startups]' and tended to favor larger companies."

And last, if it benefits "society", that is, all people, how can there be free riders? If you mean it benefits non-taxpayers as well as taxpayers, well, that is one of the points of taxes (as opposed to fees.)

> It's not as easy as "publicly funded research should be free", I agree. As I said, it's that funded research should benefit the funders.

It does benefit the funders in the case of government grants. The NSF gives a researcher a grant to scientifically study some specific thing. The researcher makes scientific discoveries about the thing.

The researcher publishes the research, and also (possibly in collaboration with people who were not involved in the research) thinks about how the new science can be applied to produce real world products. The research gets patents on some of those real world applications of the research results.

Note that the public that contributed to funding the research did benefit. The research was released, and they can use it as the basis of further research, or think up useful applications for it (and patent those if someone hasn't already).

I think people tend to confuse the research (which is often paid for by government grants, at least in part), and development of practical commercial applications for the results of the research, which is generally not paid for by government grants.

Note that if the researcher had not worked on coming up with practical applications and patented them, but instead just published the research and moved on to the next project, that doesn't mean there would not be patents. Anyone would be free to take the published research, figure out how to apply it to practical problems, and likely get a patent on that use of the research results. Their patents would not cover the underlying research--just the use of it as described in their patent.

Fair enough in theory. But in my experience both the research and the commercialization efforts leading to patents are paid for via grants. Perhaps that would be a fair trade, since the University provides the opportunity for all of this to happen, except that the University usually also taxes the grants to pay overhead. They have their cake and eat it too.

> If Google pays a researcher to do some research, they own it, regardless of how much any individual shareholder paid of that amount...

Do you assume you are Google rather than the shareholder that you get any say in what happens with that research?

> Here's a recent paper on patents and innovation...

I would take with a jarful of salt anything Boldrin and Levine say. This is a rehash of their "Against Intellectual Monopoly" book, and they do the same mischaracterizing of other research, mis-portraying of actual events and claiming outright falsehoods.

Case in point, the myth that Watt's patents held up steam development (which you too repeated): https://news.ycombinator.com/item?id=6865980. What's really egregious is they refused to admit the truth when called out on it.

Another comment pointing more falsehoods on their part: https://news.ycombinator.com/item?id=7890441

And before anyone else mentions it, the "Wright patent held up US aircraft industry" thing is a myth too: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2355673

The startup / patents paper indeed is interesting, thanks, but the results are more nuanced than the quote you selected: patents do help startups with financing and making successful exits, but they cannot be leveraged effectively because enforcing them is more expensive. That is something that can be fixed if people focused on it rather than the "patent troll" bogeyman.

The "Cumulative Innovation" paper is new to me, but a quick glance suggests some problems with it right away:

1. They derive a model to evaluate their claims, and unless backed up by solid empirical proof, this can be made to support arbitrary hypotheses (see this exchange on an unrelated field: https://news.ycombinator.com/item?id=9082932).

2. Their final data set is very small (1200 or so patents out of millions) and highly biased, since they relate only to litigated patents, and even then, on those they deem to be the "stronger" ones. Indeed, they admit that most other patents being invalidated has no effect whatsoever on their metric for downstream innovation. Even if valid, it is impossible to generalize these results to all patents as a whole.

On the other hand, there are many, many papers that point out the benefits of patent systems that you may not have considered. Yet another comment of mine mentioning some:

https://news.ycombinator.com/item?id=8155043

The number of links to my own comments should give you a hint as to how often I debate this topic on HN :-) As usual, I'll wrap up by saying it's a complex and nuanced topic, and point to a meta-study that looks at a large number of other studies that explore both the pros and cons of current patent systems:

"Recent Research on the Economics of Patents" - Bronwyn H. Hall, Dietmar Harhoff, (Google for PDF.)

Meh, I still think your first paragraph is straw men. I do have some voice in the matter, as I do with the government. That I have very little voice is not really the point here.

Thanks for the links. A couple of new papers to read there.

FWIW, my assertion that Watt held up development of the high-pressure steam engine and thus the locomotive came from Mokyr, not from Boldrin and Levine. I hold Mokyr in pretty high esteem, so I trust his interpretation, but I have not read the primary sources myself. It's interesting that the paper you mention has had almost no cites...even though it mentions that Mokyr et al commented on it. If they believed it threatened their views, you would think they would respond.

I tried to be evenhanded with the last paper by cutting to a neutral quote. I agree with your interpretation, but what that says to me is that patents are, on average, neither good nor bad for a startup. The plethora of papers arguing one way or the other, almost all with some flawed methodology (c.f. "do patents cause more patents to be filed?" or "why doesn't stronger patent law cause more patents to be filed?", etc.) says to me that there is not yet an answer to this question. This is a problem because patent law consumes a ton of resources, so there should be a rather more definitive answer about its efficacy. (It also seems eminently answerable, albeit with a lot more work defining and collecting metrics; I think, given that academics generally despise "business" questions, that simply counting patents is about all the work they are willing to do. That last paper I cited is the most actual roll-up-your-sleeves work I have seen addressing the question.)

My slant comes from 30+ years in the computer industry, 20 of it backing startups. My general rule of thumb is that if a founder's pitch puts a ton of emphasis on their patents, I pass. Patents have simply proved an ineffective way to defend a new business, in my experience.

Of course, if I were in a discovery-based business, like pharma, rather than an engineering-based business, I would have seen a different sequence of events and so have a different opinion.

My point was that you do have a little say, but so do millions of others, and a lot of these are conflicting, which makes it difficult to settle on a policy.

> It's interesting that the paper you mention has had almost no cites

I assume you mean the "Strong Steam" paper? I guess it is not as highly cited since most simply don't question the myth and cite those that propagate the myth instead. However, the paper is well-researched and compelling. I also found it a surprisingly good read, fascinating for the historical perspective it offers of technology and industry at the time.

> If they believed it threatened their views, you would think they would respond.

I'm not sure about Mokyr, but Boldrin and Levine did respond, and as the second paper shows, they responded by simply changing their falsehoods.

I mostly agree with your views on the papers in this field. However, I don't think the question is easily answerable because from most of the papers I've read, comparing the benefits and costs of patents is like comparing apples and oranges.

> Patents have simply proved an ineffective way to defend a new business, in my experience.

I actually agree. My experience comes from a startup that was ripped off by the big guys and prevailed with patents, but only after it almost died and most of the original team was laid off. As such the patents could not defend the business, and were only good for some after-the-fact remediation.

To me, this makes it seem like patent law needs to be strengthened to avoid such cases, but more and more "patent reform" is all about making it easier for the big guys to defend themselves.

> I'd rather the research be free and have it benefit society.

I do too, but the system of private corporations collecting all the profits of public investment is a twisted concept of "benefiting society". Benefiting society ought to mean that the profits of public investment get distributed among the taxpayers in an equitable manner, not just the 1%.

Not just by commercializing & marketing products, but actually paying an appropriate share of profits back to the government as you would an early stage investor. Or, conversely, making the products available at a proportionately lower cost, thus benefiting society in a manner proportionate to the risk of the taxpayer investment.

I work in the biotech industry and from my perspective, I don't see a problem at all with private companies getting rich off of the development of public research. Keep in mind that the company is fronting the hundreds of millions of dollars it takes to commercialize a product. Shouldn't they profit off it?

Also, the few example of drugs that have been discovered in an academic setting, the universities got wealthy off of the royalty rights. Hell, Northwestern sold a portion of those rights to Lyrica for $700M cash.[1]

[1]http://www.northwestern.edu/newscenter/stories/2007/12/lyric...

> Shouldn't they profit off it?

Not saying they shouldn't profit at all. The question is whether they should pay something back to the government for doing all the early stage investment.

Consider: Seed Investor A puts 70% of the funding in at the earliest most risky stage. Venture Capitalist B puts in 30% of the funding to take it to market. Yet all of the profits go to VC B, save for a small percentage of sales/payroll. Would you call that a fair deal?

Except it's not an analogy. Taxpayers are the seed investor. They are massively subsidizing the tech industry.

Which is made even more ironic by how "Libertarian" and "anti big government" Silicon Valley likes to fashion itself. Silicon Valley! A kind of psychological overcompensation, if you ask me. Silicon Valley is a product of DARPA and government spending.[1] Not entirely of course... just the earliest, most risky, most sustained stage of investment over the decade plus it takes to produce fruit, which is then plucked and brought to market. The question is not whether private industry has a role to play or should profit, but rather should private industry keep all of the profits? I think this makes people very uncomfortable, to admit that the state plays a huge role in our allegedly "free market capitalist" economy.

[1] The High Return on Investment for Publicly Funded Research https://www.americanprogress.org/issues/technology/report/20...

Consider Kickstarter. Just because the public pays for the development of the product, does that mean the product should be free (or at least, sold at the cost of materials)?

I call this the "MIT model" of R&D. MIT, moreso than Stanford, is famous for participating in the military-industrial-educational complex. It's anything but ideologically pure, but it's also been amazingly successful at developing "hard" technology.

Kickstarter is considerably different:

1. Donors are able to choose which projects to contribute to.

2. There is often a direct benefit associated with the contribution, such as a discount, advanced release, or special version of the product.

IMO Contributing to a Kickstarter project is much more like shopping than it is like paying taxes or making charitable donations.

Your (2) is a valid point. The public should get some sort of discount when public funding leads to patentable technology, such as a shortened term. But (1) is neither here nor there. A necessary principle of Kickstarter is that the developer of a product should be able to keep some upside from doing the actual work, even when other people pay for the development.[1] Whether that investment is public or private is irrelevant.

[1] A startup would also never take an investment where the VC committed to paying all development costs, but demanded 100% of the profits in return.

Whether that investment is public or private is irrelevant.

It's not at all irrelevant. With Kickstarter, the private transaction is between two parties that are fully aware of the terms of the transaction, and explicitly agree to them.

In the case of taxpayer money paying for university R&D that is then privatized and locked away, I find that repugnant. I am a party to the transaction that does not at all agree with the way this works, that does not at all agree with my money flowing to this private company for no benefit to me or the public or the society in which I am a participant.

You're mixing up two issues here.

Say someone holds a gun to your head and forces you to sell your house for $500,000. Your neighbor's almost identical house sold for $490,000 just a few weeks ago.

Do you agree that both points can be true at the same time:

1) It's wrong to hold a gun to someone's head to force them to sell a house.

2) $500,000 is a reasonable price for the house.

Now, realize that the two issues are independent. You've got a gun to your head, no matter what price you get for the house, and the price for the house is reasonable or not whether or not you've got a gun to your head.

Now, so long as you support government subsidization of R&D, you're stuck with (1). Your dollars are paying for something and you have no choice or control. But your argument isn't that the government shouldn't support R&D with public money, so your beef must really be (2)--you think the government is getting a bad deal for the money. Whether the deal is good or bad can be evaluated standing alone.

Objectively, you're right--the public should get some sort of discount. But it's also true that it's unreasonable to demand that the technology be released freely. Just because you invest the money to develop something does not mean the developer should get zero upside on the arrangement. That's not how it works in any other context.

This isn't a theoretical nit-pick. Practically, the government is just another investor. If you constrain the government to only offering unreasonably bad deals, then you'll only attract bad prospects that have no other options.

> But it's also true that it's unreasonable to demand that the technology be released freely.

I disagree entirely with this blanket statement. In fact, somewhere in this thread you'll find a university researcher speaking to how me eventually got everything open sources, and how certain funding is coming with open-source requirements.

We can debate whether or not it's in the public interest for the tech to be released, but it's never unreasonable to consider whether it should be released freely.

> Now, realize that the two issues are independent.

No they're not. #2 is entirely irrelevant. This is why eminent domain laws are so hotly debated - because fair compensation is often not fair compensation.

> Practically, the government is just another investor.

There is no investor that invests money in to private enterprise and gets no return when that private enterprise profits.

> I disagree entirely with this blanket statement. In fact, somewhere in this thread you'll find a university researcher speaking to how me eventually got everything open sources, and how certain funding is coming with open-source requirements.

When I say "reasonable" I mean commercially reasonable. There's a certain idealism about academia, which I don't subscribe to, but I'm not interested in arguing about it because it's subjective. What I'm talking about is how an investor or company seeking investment would view an offer in the market.

> There is no investor that invests money in to private enterprise and gets no return when that private enterprise profits.

At the same time, no sensible private enterprise takes investment for part of the cost of developing a product, then agrees to give up all rights in the product in return.

I agree the public should get some return when public funding results in patentable technology. But to say that such technology should be released free-and-clear is to say that the public, as investor, should get all the rights to a product just by paying for part of the development cost.

Not even close to a fair comparison. On Kickstarter you choose what you want to back and, if all goes well, you get something in exchange. And, no, you are not buying a piece of the business or the IP. And you know this before you pledge.

I can't choose not to have my tax money used for grants that keep the results of the research private. I can't even choose what research program, university or researcher it goes to.

The question is: is it reasonable for researchers to keep the upside when someone else pays for the cost of development? Why does choice matter to answering the question?

Wow. Universities trying to protect their franchise as businesses (even if they're non-profit, they pay salaries to the people making this pronouncement...), rather than advancing their core mission.

Seems a lot like the publishers of journals. Yay! (Perhaps they can die in the same fire.)

Shocked! I'm just shocked! Gambling at Rick's!

(Since universities have an overwhelming interest in making tons of money, this is a typical non-story-story "dog bites man". The only thing of interest is the contortions the players will go through to keep the cronyism humming along. The joke above references the movie Casablanca. Everybody knew that there was a lot of money changing hands but the official position had to be that there was total surprise when it was discovered. If you can't see the money changing hands here, you're not paying attention)

Presumed credibility is the pretext for all con-artist scams.

So hypocrisy is always a story...

> Universities trying to protect their franchise as businesses rather than advancing their core mission.

While I'm generally skeptical of Bayh-Dole, in part because it incentivizes universities to fake their research results, I also think their actual points may be valid. E.g. because the private sector has more money than them to spend on lawyers, this would leave them unable to enforce their I.P. rights, which would cause their patents to become basically worthless.

Even if you could make a good case for eliminating the patent system, which I think would be difficult, undoubtedly it's much more difficult to make a good argument for why only the super rich should be allowed to own intellectual property.

undoubtedly it's much more difficult to make a good argument for why only the super rich should be allowed to own intellectual property.

In that case, Rightsholders become the new aristocracy: a patent or something is akin to a coat of arms.

> Even if you could make a good case for eliminating the patent system, which I think would be difficult, undoubtedly it's much more difficult to make a good argument for why only the super rich should be allowed to own intellectual property.

Um, have you looked at the patent system lately?

Only the super rich can afford the legal fees to enforce their patents, anyway. It doesn't matter if I have a patent if the big guys can just grind me into dust, anyway.

The universities are one of the biggest problems in all of this. They mostly exist to siphon funds away from the government and individuals (via subsidized loans) and spend lavish amounts on administration, all while claiming they can't come up with $34,000 a year for a professor. Let them rot. They've somehow convinced people their product is worth more than an individual's own drive in learning something, and artificially slow education.

Usually there is no funds transfer between university research and undergraduate education. Whatever issues you have with the value of undergraduate education doesn't really have any bearing on their function as research institutions.

President of my university made $600k per year, sold off endowment land for private condo development at a bargain price (surprise, development corp was a gov crony corp) then spent the money on lavish dorms and frats only foreign students could afford. He also chaired a 2 billion research gov public grant fund where money was used for patenting research and (surprise) sold them to megacorps that were government cronies. He then claimed we had no money and had to jack tuition, and allow in banks to shill credit cards to students (surprise, he used to be on that bank's directors board).

The loser is the student who has to pay ever increasing fees to afford these giant salaries and siphoning of endowment to cronies.

No surprise there, universities are patent trolls and they stand to lose from it. Fuck them. I'm a student at UW-Madison. WARF stands for Wisconsin Alumni Research Foundation, and they're responsible for whoring out patents held by the school.

WARF was ranked the 5th worst patent troll by business insider in 2012. [1]

[1]: http://www.businessinsider.com/biggest-patent-holding-compan...

Eolas, one of the more notorious patent trolls to hit the web, began as a UCSF spinoff, founded by a UCSF employee in 1994.

Eolas claimed to have invented the first interactive web browsing experience, and patented[1] the concept of interactive web browser plugins (applets). Doyle (founder of Eolas) first targeted Microsoft in what would turn into a long streak of litigation; he initially approached Microsoft with an offer to license his invention. The company declined, and Doyle sued. After drawn out legal proceedings, the parties reached a settlement, with a $30.4 million chunk [2] going to the University of California. Eolas went on to sue[3] 22 other of the largest internet companies for violating the same patent.

Eolas wasn't claiming to have invented "interactive" computer programs in general, since this would be absurd. Eolas simply had the foresight to be first in line to file for a patent that combined the idea of interactivity (via external programs) with the nascent technology of web browsing, which was, to my knowledge, still "non-interactive" in 1994. That said, Eolas might not [4] have even been the first to demonstrate the idea of interactive web browsing. In fact, I'd be surprised if Engelbart's line of research at SRI in the `60's didn't establish prior art decades before.

Regardless of whichever party happened to come up with an idea as simple as interactive web browsing, it hardly makes sense to give this party such sweeping power to extort the rest of the industry for the decade or two that follow.

[1]https://www.google.com/patents/US5838906

[2]http://blog.seattlepi.com/microsoft/2007/10/10/microsofts-eo...

[3]http://blog.seattlepi.com/microsoft/2009/10/06/after-beating...

[4] http://lists.w3.org/Archives/Public/www-talk/1995JulAug/0446...

Just a nit: IIRC their patent didn't cover the idea of "interactivity", but something more along the line of "plugins", which is what the "external programs" refer to. Active-X is why they targeted Microsoft.

Thank you, you are correct--I should have been more careful.

Just claiming the idea of plugins (and not interactive browsing in general) is less ridiculous, but still dangerous.

Are we sure this is about "innovation" and not revenue?

http://www.nature.com/news/universities-struggle-to-make-pat...

Yes, s/US innovation/university revenue/g

Many successful companies started as university startups working with federal funds. If the university was not able to patent, then the startups could never happen. Since startups are credited with being the innovation driver in the commercial world, killing off all of these startups would have a stifling effect on innovation in the US.

A similar situation is with the small business innovative research program (SBIR). The main purpose of this program is to provide federal funds to perform research in order to help new small businesses grow, which in turn become large companies or get acquired by large companies. If all federal research dollars ended up resulting in no patents for the companies performing the research, then these startups wouldn't exist, and the purpose of the program would be destroyed.

Everyone agrees that public dollars should result in public benefit. However, there is more public benefit to be had by creating lots of startups than there is by creating a bunch of non-patent publications.

The US thrives due to it's technological advancement, which is driven by startups. Let's be careful to not destroy that benefit.

There is a big leap between 'not being able to patent' and 'startup could never happen' that you need to explain.

Many, many people create businesses out of open source technologies.

> Many, many people create businesses out of open source technologies.

Many people use open source technologies to sell some other product. That's different from being in the business of building and selling an open source product.

Say you invent a new kind of power amplifier. You open source it, and don't patent it. You start selling the chips, and some Korean company immediately copies it and undercuts you on price. So what's your business model now?

Many times the product being sold is so closely related to the actual open source software that they're indistinguishable. For instance, buying RedHat (support). Other times, you're buying the software, under a commercial license. And maybe the most common is, buying the software as a hosted service. In all these cases it's hard to undercut (and offer more value) than the company who has the most expertise and generally copy rights.

However, your example is hardware and I don't know enough to comment on that.

That could happen even if you did patent it.

Say you invent a new kind of power amplifier. You spend 3 years securing a patent and bringing the product to market. You discover that some Korean company copied the reference implementation found in your patent application. You also discover that the Chinese manufacturer you licensed to produce your product has been running ghost shifts to make low-quality knockoffs. Bunnie dips the chips in fuming nitric acid and posts the photos to the web. You sue to enforce your patent and discover that the best you can do is to prevent x% of the knockoffs from entering the US as discrete parts in containerized shipping through the largest ports. Your amp design somehow shows up in dozens of low-end consumer products anyway. You silently rage into your ramen noodles, and your lawyer stops answering your phone calls the same day.

You focus on support services, quality assurance, and brand identity. You seize the center of the market by determining what the product is. Notice how well ARM does without a chip fab. Why do companies pay for ARM licenses (oops, licences--they're a UK company), when they could make OpenCores chips? Because the other chips are not ARM chips. They might not use the ARM instruction set. They aren't the same as what's in your iPad. When people lack the ability to fully comprehend what it is they are buying, they invariably rely at least partially upon brand reputation. Defending your trademark is far more important in this context than defending a patent.

People don't buy ARM cores because of the trademark or support services. They do it because key implementation techniques for the ARM instruction set are patented, and the high-performance softcores are protected by copyright: http://semiaccurate.com/2013/08/07/a-long-look-at-how-arm-li.... Yes, they support it just like any company supports their products, but it's not a "free product, pay for support" play like RedHat.

People don't buy iPads because of the ARM chips. But if the alternative is a Xiangdi Industries "10 Tablet" with a zhMIPS CPU and a not-entirely-unlike-Android OS, the lack of any familiar brand names may influence the consumer to just pay more for the sure thing (to them).

(I made those names up. Any similarity to actual brands is entirely coincidental.)

In any case, I was not trying to say that ARM cores are free to use. I was comparing their business to open hardware, and pointing out that people often prefer to pay for the ability to not delve too deeply into the details of what they are buying.

The ARM case does seem to be working out fairly well for most involved. On the other hand, look at x86. While of course competing with Intel would be hard under any circumstances, I bet the market for x86 processors (compatible with x86 software) would be more competitive if ISA patent licenses weren't limited to a certain few grandfathered-in companies.

You can also sue anyone using the power amplifier in any product sold in the USA.

I don't know why you use ARM as an example. I don't see how ARM would survive in a patent free country. In fact it's probably example 1A of why patents are useful device.

Why would Apple pay ARM if they were totally free to use it.

>If the university was not able to patent, then the startups could never happen.

You make some interesting points. Would you mind explaining this one a bit more? It's not self-evident to me.

If you're doing a startup outside of software/web, one of the things VC's ask you about is IP protection. The development cycles are longer, the costs are higher, each prototype is precious. Once you have succeeded, the VC needs to know that a large company cannot swoop in and make the exact same product as you.

Let's say I'm working at a university and come up with a new type of GPU, it's 10x faster than NVIDIA's & AMD's. If I have a patent, I can raise VC funding and take on NVIDIA/AMD because NVIDIA/AMD cannot make the same thing and sell it in the USA (a large market). Now there is NVIDIA, AMD, and QUANTICLES selling in the market. The products are improved because QUANTICLES is 10x faster, and NVIDIA and AMD have their own selling points. EDIT: The public benefits here because improved products are on the market and jobs are created in the USA.

Let's say I'm working at a university and come up with a new GPU but cannot patent it because University Patents Are Evil. Now NVIDIA/AMD are free to pursue it, or not, if they chose. Likely they wont because there is a significant ground to cover between university project and actual product. Usually there are many issues and tradeoffs to solve, solving these issues/tradeoffs is risky, and NVIDIA/AMD cannot take on the risk or are not aware they should.

Main point: startups are a proving ground for new ideas that big companies can't afford to take on, or choose not to. The university comes up with the idea and then the startup tries to prove that it works in a commercial environment. If there is no protection for that company after it's proven then investment is a losing bet.

Software/Web companies have a different sort of protection than hardware companies: users. A user is a customer that gets entrenched in a product. For example, how often do you change email services? How often do you change online photo catalogs? Each year I do my taxes on the same site since I can import my settings from the previous year and I know how to use it.

Hardware companies do not get entrenched as easily. Many times hardware can be switched in and out with other hardware (for example, GPUs). This also creates a feast or famine environment - you either have big sales because you're best product on the market, or you have none because you don't. If a startup cannot protect itself then it may not be worth investing in.

I think it is a fallacy that startups create jobs.

http://www.technologyreview.com/featuredstory/531726/technol.... "According to Chris Benner, a regional economist at the University of California, Davis, there has been no net increase in jobs in Silicon Valley since 1998; digital technologies inevitably mean you can generate billions of dollars from a low employment base."

I worked at a startup that was awarded SBIRs. We were developing e-learning software and our government client was an Air Force base. It's true that being able to retain copyright ownership was the reason the startup existed. However, no patents were ever filed.

I think we should just do away with software patents. Math formulas and rules to games are not patentable and I think software is exactly a fusion of formulas and rules--apps in pure functional languages are functions after all.

The exception could be firmware/software driving machinery where the invention is more than software (or the combination of software and commodity hardware).

>> If the university was not able to patent, then the startups could never happen. Since startups are credited with being the innovation driver in the commercial world, killing off all of these startups would have a stifling effect on innovation in the US.

No, the research would still go on. Much of it is funded by government grants and that would still continue. The results of the research would be published and anyone could make use of it. That simplifies everything and results in more competition to commercialize things.

I tried to address this in my reply to Bjartr

Universities are an interesting case in patent reform. By many people's definitions they would be the patent trolls that we are trying to get rid of: They are not the inventors, and they don't make anything.

As an engineering student at one of the schools on the list I like that my school is willing to pay to file a patent with my name on it even if any revenue would mostly go back to the school.

>They are not the inventors, and they don't make anything.

This is highly misleading if not down-right ignorant. Academic research is and has been absolutely necessary for most of the technologies we use today - patent's might not be the best way of financing said research, but we should be clear on the first part; before we roll the barrel on bad administrations and wasteful spending at universities. The toxic response to universities in general here on HN is rather astounding.

Agreed, and it sound like the type of comment made by a clever university student that hasn't experienced the typical soul crushing workplace.

Well you're not explicitly wrong. Universities don't make things, but people at universities do. And universities are directly impacting inventors and researchers by providing education, professional networking and support, and infrastructure.

To be entirely honest, I'm not familiar with all the channels that researchers can get funding, but to discount all these factors by saying universities don't make anything is kind of lame too.

Read: It would harm the gravy train of patenting government funded research. Not good for Corporate U.

It is worth to note here, that the universities don't speak against patent reform as such, but against special parts of the current reform.

I am not familiar with the current reform, but problem is the fixation of so called "patent trolls". Many legitimate patent holders can be easily hurt by a reform that just is pleasing for the big corporations.

When (for example) patent trolls are identified by the notion "don't produce the invention", than small inventors (and universities) can be hurt extremely, since small inventors have to sell their inventions to big corporations, when the production is out of their reach. Of course, the big corporations will be happy, when they can just steal such inventions and accuse the inventor as "patent-troll".

Right. The one thing that (tangentially related) is the quote "The prospect of substantially increased financial risk would discourage universities and other patent holders lacking extensive litigation resources from legitimately defending their patents".

Do universities really see themselves as the ones "lacking extensive litigation resources"? I think they don't understand the nature of 'small inventors'.

I also can not see universities as big heroes here, but I think the whole patent discussion is so twisted and biased with factions that cover their real intentions, that one must be very careful what to support or judge what is a good development.

Also in our country, we have a long list of "reforms" in different areas -- and "reform" sounds always positive, but in very few areas the so called "reforms" where directed in the right direction. I thus really got tired of "reforms". Oftentimes the word "reform" is used by factions that cover their real agenda ...

Intellectual property is not necessary for innovation and likely hinders progress. http://www.dklevine.com/general/intellectual/against.htm

These people are fucking snakes. American universities are becoming part of the problem. If my tax dollars touch even the paper some research is printed on, it better be IMPOSSIBLE for that shit to sit behind a paywall or otherwise allow someone to restrict my ability to access or use it. THIS GOES FOR CORPORATE RESEARCH AS WELL which uses public funds (or taxpayer-funded subsidies) which is something nobody ever wants to talk about. I'd also like to see an explicit line item on a university budget where the money brought in through patents on research derived from NSF funds is piped back into the research program. It almost assuredly never is.

Hold on a second. Research funded by tax payer money is not in the public domain?

Just to play devils advocate:

One can be pretty innovative if he has to develop CPU without using XOR operation.

Are there technologies developed solely as alternative to patent? I can think of PNG x GIF, OGG x MP3, Display Port X DVI...

I would say that patent creates sort of monopol, which forces others to go with open solutions. Similar situation was when Windows caused Linux to emerge. Without patents we would be stacked with whatever comes. And that would be probably badly designed proprietary technology.

> Similar situation was when Windows caused Linux to emerge.

I know you are playing devil's advocate, but you don't actual think anybody could reasonably believe that do you? There is a reason it is called Linux and not Lindows :)

> Without patents we would be stacked with whatever comes.

Or we'd have a marketplace of ideas, where merit wins.

Actually, innovation through forced workarounds of patents has long been one of the reasons for patent systems. Though not originally stated explicitly, many jurists and economists over time have espoused this line of thought in support for patents.

Can you give any pointers? It's plausible to claim patents do little harm because they can be worked around but saying they bring net benefit because the must be worked around feels bizarre.

Anyone know why Harvard and Stanford not on the list?

Maybe their endowments are big enough for them to not care about having to resort to patents to pay their faculty?

Ding ding ding!

I would have thought you are correct. Harvard is sitting on $32B and Stanford $18.7B in tax-free endowments, the largest and 3rd largest endowments respectively.

However, Yale is on the list and they have $20.7B (2nd largest). It does seem disingenuous for Yale to claim "[t]he prospect of substantially increased financial risk would discourage universities and other patent holders lacking extensive litigation resources from legitimately defending their patents." Not a whole lot of businesses are sitting on +$20B in cash period, much less +$20B tax free.

As a side the top 10 school endowments in 2013 = ~$141B.[1]

[1] http://www.usnews.com/education/best-colleges/the-short-list...

really misleading title. they are speaking only of currently pending legislation specifically, not patent reform in general.

Yeah, and they're mainly talking about two specific proposals in the currently proposed bill too. I'm not sure what effect those two proposals would have, but instead of discussing said proposals the comments here are rambling about vaguely related issues.

Welcome to HN :-)

Dear 144 Universities,

I believe I am not alone in holding the opinion that public funds should not result in private gains. The Bayh-Dole Act of 1980 screwed the taxpaying public for your benefit. The public is not wrong to ask that it be reversed or corrected.

If you wish to enjoy the benefits of private research, stop asking for the grant of public research funding. If you wish to enjoy the benefits of public research funding, stop asking for the grant of a limited monopoly.

University administration is already treading upon thin ice by employing ever-increasing numbers of underpaid temporary and part-time employees to undertake one of the essential and indispensable functions of a university: teaching. At the same time, tuition charged to students has risen much higher than the rate of inflation, and student loan debt burdens have skyrocketed.

Thus, I have no sympathy for you. The remedy already available to you for an increased cost in defense of patents is to produce fewer, more defensible patents.

The truth of the Bayh-Dole legacy is that it has allowed the profit motive to corrupt science to an even greater extent than the "publish or perish" culture and the bias against negative results. You are no longer doing research for the sake of the advancement of knowledge, but research for the advancement of the university's revenues, and those motives produce vastly different results in practice.

Furthermore, you are not rare and privileged centers of innovation. Advancement in technology has removed certain areas of research from the sole demesne of universities and national research laboratories to private corporations, or even to crowd-funded campaigns for a single individual.

Doppler radar: invented before Bayh-Dole.

Web browsers: Berners-Lee testified at the Eolas trial that he did not attempt to patent the web. Further evidence showed that Berners-Lee had previously described the U.S. patent system as "incentive for obfuscation" and that the threshold for patentability is set "ridiculously low." Yes, bringing that up as an example of university innovation was a great idea. Berners-Lee never tried to squeeze a dime out of his web browser, and the entire world has benefited from that generosity and foresight in far greater measure than he ever could have hoped to keep for himself.

The Internet: invented before Bayh-Dole. Unpatented.

CT scans: invented in 1971, before Bayh-Dole, in the UK.

MRI: invented in 1971, before Bayh-Dole. SUNY chose not to patent it.

FluMist (LAIV): I'm not entirely certain why vaccination is held out as an example of why university innovation should be patent protected, as Edward Jenner became a physician through apprenticeship, and the Royal Society did not even publish his initial reports. FluMist does not seem all that remarkable an innovation in light of the facts that other influenza vaccines exist, and the side effects of FluMist are more severe than for injected vaccines.

GPS: This one was unequivocally driven by the U.S. DoD, and the first satellite launched before Bayh-Dole. The invention of more accurate timepieces have always, throughout the whole of history, been driven by navies, for whom that technology is the Holy Grail of navigation.

Barcodes: This was invented by Woodland and Silver, based upon Morse code and motion picture soundtracks. Neither were employed by a university at the time. Their 1952 invention preceded Bayh-Dole.

Could those universities not come up with examples of how PATENTED and DEFENDED innovations changed the world? Perhaps they might have also done us the honor of fact-checking their own claims to establish that their examples were also attributable to a university?

> I believe I am not alone in holding the opinion that public funds should not result in private gains

How the heck could that ever work? When a commercial vehicle uses a public road, public funds are resulting in private gains. When a city transit system buys a bus from a for-profit bus maker, public funds result in private gains.

Most of what public funds are spent on results in private gain.

Did you phrase things more expansively than you meant?

You are forgetting that private entities are also members of the public. Just because one private entity may benefit does not mean others cannot. When the commercial vehicle uses the public road, it does not exclude anyone else from using it, except to the extent that it causes traffic congestion. When the public buys a bus, it has the bus. The company it buys from could have sold that bus to anyone else who wanted one.

In this case, the private patent-holders take the benefit and exclude the rest of the public from it.

If you need it to be more clear, public funds should not be used in a manner that exclusively benefits only a few enumerable private parties. It doesn't quite roll off the tongue as easily, but there it is.

Reply on news.ycombinator.com