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By heimdal31, Section IP Articles
mikecwaslurker has an article up pointing out the idiocy of algorithm patents. I certainly believe that Business Method Patents are a bad idea and should be abolished. However, I would like to point out that it is not just these patents that are open to abuse. I do this not to suggest that all patents should be abolished. I do think that there are many examples of new manufacturing processes or new gadgets that represent a major investment in time and research that deserve a limited, government granted monopoly. I point this out so that as we suggest abolishing or revising BM patents, we keep in mind the potentials for abuse in the existing system in order that our arguments aren't undermined by people pointing out the analogy to non-BM patents. Because, even if you believe all patents should be abolished, you are going to convince no one with the power to change things of that.
So, a true story with the products changed to protect the guilty. The lesson of this story is not that patents are bad, but that capitalism is cutthroat and anyone who forgets that is doomed to painful failure. We have some people in our company that came from another manufacturing firm. I do not want to explain what they manufacture, because it would be easy to identify the companies involved. Instead, I want you to imagine that they manufacture printer cartridges in a world that does not exist. In this world, there are only about four or five different types of printer cartridges. Each printer created will only work with one of the types, but for each type of cartridge, there are many, interchangeable suppliers. In other words, imagine a world where printer cartridges are an off the shelf commodity and printers aren't sold under cost to get you hooked on the printer manufacturers supply of cartridges.
Also imagine in this world that the generic printer cartridge designs have been around so long that none of their base technology is patented. Sure, there are some innovations in packaging or other things that may be patented, but it is quite easy for anyone who can raise the capital to start making printer cartridges and selling them at WalMart. Think light bulbs--though the printer cartridge is a bit closer to the actual product. The company I'm thinking of made these printer cartridges, and many were sold at WalMart. Now, the company's name was not on any of the ones sold at WalMart. Instead, the company manufactured and branded cartridges for a couple of different other companies. Some were well-known brands that even advertised on TV. Others may have been generics. Now, this company that made the cartridges, did not simply rest on its laurels. It was actively involved in doing research on improving the technology. As it was working with a new "toner" formulation that would extend the life of the cartridge, one of the major cartridge brands got wind of the project. The manufacturing company patented their new way of formulating toner, and the major cartridge brand company signed an exclusive contract for a huge number of cartridges to be manufactured using the new technology. To pick a number out of the air, they asked for 500,000 cartridges a year. The contract did allow the major brand to pull out if demand was not there--in which case the manufacturer would not be bound by the contract. 500,000 cartridges represented close to 75% of their annual sales. They stockpiled some of the old versions, and then began converting three of their four manufacturing lines over to the new process. Once converted, they started churning out the new cartridges. The major brand then cited clauses in the contract and pulled out of the deal. When the manufacturer approached another major brand with the technology, the first major brand's lawyers informed the manufacturer that they owned the patent on using the newly formulated toner in a printer cartridge. You see, using the toner in a printer cartridge was the only possible way of actually using the toner, but the manufacturer had only patented the process of formulating the new toner--they did not patent using the new toner in a cartridge. The major brand offered to buy them out for a small sum. The manufacturer refused. They stockpiled their new cartridges--thinking they might eventually be able to sell them, and started converting their product lines back to the old system. The major brand canceled their contract for the old cartrdges and began dropping hints that they had quality control issues with the manufacturer. The manufacturer tried to stay in business, but eventually went bankrupt. The major brand bought the patent at the bankruptcy sale for pennies on their initial offer. Yes, the manufacturer had a clear civil lawsuit. But, they were one of many relatively small manufacturers that made these commodity cartridges. They were not awash in cash--particularly after going through bankruptcy--and the principals ultimately decided their chances of finding a lawyer willing to take the case on contingency and win against the mega-corp was nil. They never pursued anything The actions of the mega-corp was morally repugnant, but the manufacturer also should have had the foresight to patent everything they needed to patent. I do think that their toner patent was something that deserved a limited monopoly. I'm not sure that a civil case against the mega-corp would even be winnable. I'm not even suggesting that any reform of the patent system has to deal with a situation like this. But, what I'm saying is that any suggested reform has to take into account the reality that the situation described here is business as usual in the US and that attempting to fix this will likely lead nowhere. The real question is how do you change government stupidity? The traditional answer is to write your representatives, and it isn't a wrong suggestion, but it is also not one likely to ever gain enough critical mass to actually result in a change. A better way is to support the existing fight in Europe. If Europe doesn't have BM patents, then competition and innovation will move out of the US to other countries. That will eventually get the attention of the US Congress. Yet another way is to help the companies that are fighting it. Because they are more likely to get the ear of someone who can make a difference. Any argument that is going to convince those who can change it will need to include more than the idea that the system is stupid or broken. You will need to include the economic damage it will do--and there is already economic damage from the barrier to entry created by Business Method patents. As these idiotic patents began to create further and further barriers, the increased drag on the overall economy will begin to have a noticeable effect. MS has already spent loads of cash with their "Freedom to Innovate" meme. Hijack it. Talk about how the US patent system unfairly blocks innovation by providing patents on the obvious thus providing inequitable protections that will make it harder for anyone attempting to create real wealth in the economy.
These are the types of arguments that need to be used, without ignoring arguments pointing out how stupid the system is, but the stupidity arguments should not be the focus.
Patent Reforms Mustn't Undermine Traditional Patents | 54 comments (48 topical, 6 editorial, 2 hidden)
Patent Reforms Mustn't Undermine Traditional Patents | 54 comments (48 topical, 6 editorial, 2 hidden)
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Related Links~ mikecwaslu rker~ the idiocy of algorithm patents ~ Business Method Patents ~ More on Patents ~ Also by heimdal31 |