11.07.12

Gemini version available ♊︎

Guest Post on Patent Collusion

Posted in Patents at 5:27 am by Dr. Roy Schestowitz

Patent bubbles

Balloons

Summary: Reader with advanced qualifications in the said field remarks on a cartel-like structure of cross-licensing deals among mega corporations

An interesting set of facts is coming out of the Microsoft versus Motorola trial. Details here. Particularly interesting is the analysis further down on the page:

I have always considered these cross licensing deals to be something of a circular investment program.

All of these companies have vast patent portfolios, some are worth more than others, but this is a situation where A pays B who pays C who pays D who pays A and variations.

In investment funds that kind of dealing/trading is specifically banned because it is (and has been) used to artificially inflate the value of the fund portfolio. It looks great till someone tries to liquidate their investment, get the money, at which point the downward spiral starts and accelerates very rapidly and another bubble bursts/market crashes.

So that’s one thing, at the other end, we all know just how rubbish most of these patents are and what value we would place on them, zero in most cases; but how much money do these companies book to these cross licensing deals for these worthless patents and then just how much corporate tax is lost due to these companies moving money away from the profit line with this trick.

So you lose because your government doesn’t get it’s due, and you lose again because these guys are basically running a cartel that artificially inflates their costs so you are charged more for your goods.

Starbucks recently got caught in the UK avoiding billions in tax, by ‘licensing’ it’s own logo from itself for pretty much all of it’s profit.

Indeed avoidance is not wrong, as they said, they followed the rules, but it is just as stinky as politicians writing their own expenses claim rules and then claiming that they were only following the rules as they repeatedly dipped their hands into the till.

Is it possible that Googles “do no evil” policy prevents them from joining in the game and may result in the cat getting out of the bag?

I didn’t write that analysis, but looking at it, I am sure the author is fundamentally correct. It would explain many anomalies in the IT sector.

For example, something was obviously wrong when the Dick Smith electronics chain,including inventory and real estate was sold for only A$ 20 million, i.e. valued the same as a large house in Sydney.

That tells me that Apple, Microsoft, Sony, Panasonic, and to a lesser extent Intel and AMD products were simply not selling. So for them to keep booking ever increasing amounts of ‘income’ and ‘earnings’ they had to be doing something shonky – I’m pretty sure this is it.

Another thing that leads me to that conclusion is that during the ‘tech boom’ the Australian tax office changed the accounting rules with respect to IP to ‘bring them into line with international standards’. Before they changed the rules, IP expenses (outgoings, i.e. real cash expenses) were considered costs (liabilities) on a company’s balance sheet and tax forms. After the changes, those expenses were to be shown as ‘assets’, which is clearly the opposite of business realities!

“That tells me that Apple, Microsoft, Sony, Panasonic, and to a lesser extent Intel and AMD products were simply not selling.”One effect of this was that small to medium enterprises immediately cut back or eliminated licensing and patent applications – or even patent renewals (which are expensive). I suspected at the time this was to give further advantage to large foreign multinationals. Now I realize it gives a certain set of them an (ultimately infinite) advantage for accounting purposes (selling of stock and borrowing).

Think about it, the ‘money’ (book keeping entries) they have coming in from IP licensing is shown as earnings, but the ‘money’ they have going out in IP royalties is shown as an increase in assets! The book value of every company involved in this round-robin scheme increases toward infinity even in the complete absence of any actual sales! Nice work, if you can get it!

I think this scheme needs to get as much news coverage as possible, don’t you?

Share in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email

Decor ᶃ Gemini Space

Below is a Web proxy. We recommend getting a Gemini client/browser.

Black/white/grey bullet button This post is also available in Gemini over at this address (requires a Gemini client/browser to open).

Decor ✐ Cross-references

Black/white/grey bullet button Pages that cross-reference this one, if any exist, are listed below or will be listed below over time.

Decor ▢ Respond and Discuss

Black/white/grey bullet button If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

DecorWhat Else is New


  1. Links 26/10/2021: Vulkan 1.1 Conformance for Raspberry Pi 4 and Tor Browser 10.5.10

    Links for the day



  2. [Meme] Sounds Legit

    When not cheating on the wife, the EPO‘s “doyen” cheats in the exams and makes it into the epi Council, in effect working “[t]owards a common understanding [sic] of quality” with “patent attorneys nominated as “assessors” by the EPO, epi and BusinessEurope” (notorious lobbyists for dictators, litigation, and monopolies, neither business nor science)



  3. [Meme] Mayoral Patent Office Chief

    As it turns out, political 'double-dipping' isn't just a thing in North Macedonia, Austria, and EPOnia



  4. Romania's Patent Office (OSIM): Nine Different Chiefs in Just Eight Years

    The Romanian State Office for Inventions and Trademarks (OSIM), being the equivalent of the U.S. Patent and Trademark Office (USPTO) in the sense that it covers both patents and trademarks, is a very flaky institution with no shortage of scandals; for our English-reading audiences we now have a summary of a decade’s worth of blunders and leadership changes



  5. The EPO’s Overseer/Overseen Collusion — Part XXIV: The Balkan League - Romania

    Romania’s patent office has been in flux this past decade, occasionally led by people with no relevant experience, but rather political connections (like EPO President António Campinos) and sometimes forged documents and fake degrees



  6. IRC Proceedings: Monday, October 25, 2021

    IRC logs for Monday, October 25, 2021



  7. [Meme] “Social Democracy” at the EPO

    Some comments on the current situation at the European Patent Office from Goran Gerasimovski, the new EPO Administrative Council delegate for North Macedonia and Social Democratic candidate for mayor of Centar (a municipality of Skopje)



  8. [Meme] António Campinos Visits the OSIM

    António Campinos visits OSIM Director-General Ionel Muscalu in February 2014



  9. [Meme] [Teaser] Meet the President

    Later today we shall see what Romania did for Battistelli



  10. Links 26/10/2021: Latte Dock 0.10.3 and Linux 5.15 RC7

    Links for the day



  11. Gemini Protocol's Originator: “I Continue to Care About This Project and I Care About the Community That Has Formed Around It.”

    'Solderpunk' is back from a long hiatus; this bodes well for Geminispace, which grew fast in spite of the conspicuous absence



  12. Bulgarian Like Bavarian Serfdom

    Bulgarian politics seem to have played a big role in selecting chiefs and delegates who backed Benoît Battistelli‘s unlawful proposals, which treat workers almost like slaves and ordinary citizens as disposable ‘collaterals’



  13. The EPO’s Overseer/Overseen Collusion — Part XXIII: The Balkan League - Bulgaria

    Today we examine the role of Bulgaria in Benoît Battistelli‘s liberticidal regime at the EPO (as well as under António Campinos, from 2018 to present) with particular focus on political machinations



  14. Links 25/10/2021: New Slackware64-current and a Look at Ubuntu Budgie

    Links for the day



  15. Links 25/10/2021: pg_statement_rollback 1.3 and Lots of Patent Catchup

    Links for the day



  16. Microsoft GitHub Exposé — Part III — A Story of Plagiarism and Likely Securities Fraud

    Today we tread slowly and take another step ahead, revealing the nature of only some among many problems that GitHub and Microsoft are hiding from the general public (to the point of spiking media reports)



  17. [Meme] [Teaser] Oligarchs-Controlled Patent Offices With Media Connections That Cover Up Corruption

    As we shall see later today, the ‘underworld’ in Bulgaria played a role or pulled the strings of politically-appointed administrators who guarded Benoît Battistelli‘s liberticidal regime at the EPO



  18. IRC Proceedings: Sunday, October 24, 2021

    IRC logs for Sunday, October 24, 2021



  19. Links 25/10/2021: EasyOS 3.1 and Bareflank 3.0

    Links for the day



  20. The Demolition of the EPO Was Made Possible With Assistance From Countries That Barely Have European Patents

    The legal basis of today's EPO has been crushed; a lot of this was made possible by countries with barely any stakes in the outcome



  21. The EPO’s Overseer/Overseen Collusion — Part XXII: The Balkan League - North Macedonia and Albania

    We continue to look at Benoît Battistelli‘s enablers at the EPO



  22. Links 24/10/2021: GPS Daemon (GPSD) Bug and Lots of Openwashing

    Links for the day



  23. Links 24/10/2021: XWayland 21.1.3 and Ubuntu Linux 22.04 LTS Daily Build

    Links for the day



  24. IRC Proceedings: Saturday, October 23, 2021

    IRC logs for Saturday, October 23, 2021



  25. Links 24/10/2021: Ceph Boss Sage Weil Resigns and Many GPL Enforcement Stories

    Links for the day



  26. GAFAM-Funded NPR Reports That Facebook Let Millions of People Like Trump Flout the So-called Rules. Not Just “a Few”.

    Guest post by Ryan, reprinted with permission



  27. Some Memes About What Croatia Means to the European Patent Office

    Before we proceed to other countries in the region, let’s not forget or let’s immortalise the role played by Croatia in the EPO (memes are memorable)



  28. Gangster Culture in the EPO

    The EPO‘s Administrative Council was gamed by a gangster from Croatia; today we start the segment of the series which deals with the Balkan region



  29. The EPO’s Overseer/Overseen Collusion — Part XXI: The Balkan League – The Doyen and His “Protégée”

    The EPO‘s circle of corruption in the Balkan region will be the focus of today’s (and upcoming) coverage, showing some of the controversial enablers of Benoît Battistelli and António Campinos, two deeply corrupt French officials who rapidly drive the Office into the ground for personal gain (at Europe’s expense!)



  30. Links 23/10/2021: FreeBSD 12.3 Beta, Wine 6.20, and NuTyX 21.10.0

    Links for the day


RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

Recent Posts