02.20.18

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Replacing Patent Sharks/Trolls and the Patent Mafia With ‘Icons’ Like Thomas Edison

Posted in Patents at 5:52 am by Dr. Roy Schestowitz

Dolphins and “innovation” not quite what the optimistic vision of patent systems led to

Dolphin

Summary: The popular perceptions of patents and the sobering reality of what patents (more so nowadays) mean to actual inventors who aren’t associated with global behemoths such as IBM or Siemens

WHEN I was a lot younger I was told that patents were supposed to make life better. When I won some competitions which the media covered it oddly enough chose to frame that as “our youth is getting us lots of patents” (I still have that newspaper headline preserved). But we hadn’t applied for any patents. We had no interest in patents. I was in charge of finances for that particular project, which flew us to Denmark to represent the country. That was a long time ago, almost exactly 20 years ago. Back then I (aged 15-16) knew next to nothing about patents, except by name. I had only done programming for a year or two. I could do electronics (relatively simple circuitry, which our next project revolved around — a gadget to be attached to doors).

“Back then I (aged 15-16) knew next to nothing about patents, except by name.”Anyway, this post isn’t about my school days; the point is, a lot of people know next to nothing about patents. My mother still knows next to nothing about them (she thinks they’re synonymous with “things” that do clever things), so I’ve quit trying to explain that to her. It would probably be interesting to give people a 10-question survey in order to understand just what proportion of the population really understands what patents are and how they work.

Yesterday (February 19th) this press release said that Siemens had joined an LTE patent pool. Good for Siemens. They can afford it. They have the money and the patents. But what about those who aren’t a multi-billion, multi-national, multi-faceted corporation like Siemens? What about that legendary (or mythical) ‘lone wolf’, ‘small guy’, ‘independent’ inventor? That sort of inventor just looks at these ‘pools’ as a rich people’s club, intended for the most part to guard them from competition. It’s like a cartel, to put it quite bluntly…

We’ll never forget how Siemens lobbied for software patents in Europe (something which the EPO practices now). We wrote a lot of articles about that at the time…

“It would probably be interesting to give people a 10-question survey in order to understand just what proportion of the population really understands what patents are and how they work.”Over the past couple of weeks we’ve gathered some other stories about patents. Yesterday, for example, someone glorified Edison again. He said: “February 19, 1878 – Thomas Edison received a US patent (No. 200521) for the phonograph. Edison created many inventions, but his favorite was the phonograph. While working on improvements to telegraph and telephone, Edison found a way to record sound on tinfoil-coated cylinders.”

“It’s wrong to say “created many inventions”,” I told him. “You mean he saw what poor inventors did, then applied for patents on these, eventually suing people like a patent troll over things he did not even invent?”

That negative legacy of Edison is rarely spoken about in the mainstream. They want to keep the legend alive. Victors write history.

Days prior to this someone wrote about “When Patent Royalties Are Not Capital Gains” — a concept that was explained as follows: “A key factor in the Court’s analysis was that Cooper retained the right to terminate the transfer at will. Cooper exercised this right for some of the transferred patents. TLC had returned certain patents to Cooper for no consideration, even though the patents had commercial value. The Court therefore affirmed the Tax Court’s determination that the patent royalties were not entitled to capital gains treatment.”

“That negative legacy of Edison is rarely spoken about in the mainstream. They want to keep the legend alive.”We often see misleading claims about “R&D” and other things that tend to be associated with patents. In reality, so-called ‘royalties’ tend to flow into shareholders’ pockets, not invested in “R&D” (in any shape or form). Spot the overuse of their gross euphemisms (especially in the above article from McDermott Will & Emery’s Blake Wong). They speak of royalties…

To conflate patents with value of an industry is also quite common a thing; it’s pure mythology. Sometimes branding (or brand recognition), too. Sure, it helps to have protectionism and access to market, but that alone does not determine one’s value. Here’s yet another site of lawyers choosing to prop up the nonsense from the Chamber of Commerce. To quote:

The U.S. Chamber of Commerce’s Global Innovation Policy Center released its 5th annual study that ranks intellectual property systems worldwide. In the Chamber of Commerce’s latest study, the U.S. patent system has dropped to 13th in the world, well behind such diverse countries as Singapore, France, Ireland, Japan, South Korea, Spain, Sweden, Switzerland, and Italy. See “U.S. Chamber International IP Index” (“2018 Report”) at p. 35 (Category 1: Patents, Related Rights, and Limitations). The U.S. Chamber International IP Index uses 40 discrete indicators covering policy, law, regulation, and enforcement. The Chamber’s stated goal: to determine whether “a given economy’s intellectual property system provide[s] a reliable basis for investment in the innovation and creativity lifecycle.” 2018 Report at p. 1.

What makes this nonsensical is the assumption that the more patents (or patent lawsuits) a nation has, the more investment it will attract. In reality, lawsuits rather than innovation thrive in such nations and this can actively discourage investment, development etc. How many companies would wish to base a new office in the Eastern District of Texas for instance? Unless they’re patent trolls or law firms… to merely have operations in there means to be subjected to ruinous lawsuits, even after TC Heartland.

And on we move to a docket report from CACD, dated a week ago. To quote the outline:

The court granted plaintiff’s motion for monetary sanctions against defendant and its counsel following plaintiff’s successful motion to compel further contention interrogatory responses because defendant’s behavior was not substantially justified.

Oh, good, “monetary sanctions”… and how exactly does that help anyone?

Here’s another very recent docket report. This one is about ‘royalties’ (euphemism with the Crown connotation):

The court granted defendant’s motion to exclude the testimony of plaintiff’s damages expert regarding reasonable royalties for three patents because his application of the Rubinstein bargaining model was unreliable.

They’re debating how much money will be passed from one company to another. Spot the overuse of their gross euphemisms again. It’s as if the whole thing is justified using some royal decrees and laws of the land.

Here’s one more docket report. “The court denied plaintiff’s motion for attorney fees under 35 U.S.C. § 285 for defendant’s unsuccessful motion for summary judgment under the on-sale bar,” it said. When the patent aggressor not only taunts a potentially innocent party but also demands lawyers’ fees be paid (for the aggressor). What has this system turned into?

“It’s as if the whole thing is justified using some royal decrees and laws of the land.”We don’t know the pertinent details of § 285 (created in part by lobbyists), but here’s something about § 257. It says that “a patent owner may file a request for supplemental examination asking the USPTO to consider, reconsider, or correct information…”

As if patents aren’t even an immutable thing. We wrote about this before. Are patents like a wiki now (something you can just edit as you go along)? To quote the whole paragraph:

According to 35 U.S.C. § 257, a patent owner may file a request for supplemental examination asking the USPTO to consider, reconsider, or correct information in a patent or its file history. Within three months, the director will determine whether the information presented in the request raises a substantial new question of patentability. If so, the examiner will order ex parte re-examination in view of the submitted evidence, during which the patent owner can argue for patentability of the claimed invention and/or amend the issued claims. Importantly, anything considered by the USPTO in the request for supplemental examination or the ensuing ex parte re-examination is, by statute, barred as the basis for a later finding of inequitable conduct.

“Today, most patents are awarded some patent term adjustment, but the numbers continue to drop,” Patently-O wrote some days ago.

“Remember what EPO actually came from. It was a repository of information rather than a proper patent office.”Yes, well, maybe all these “adjustments” sort of defeat the purpose of a patent system as we know it. Some EPO insiders have long told us that. They too recognise that a sort of wiki of information might be of better service in the days/era of the Internet. Remember what EPO actually came from. It was a repository of information rather than a proper patent office.

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