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October 2, 2005

Published Patent Tripe

James Kanter, supposed journalist, cut one about patents in the Sunday International Herald Tribune. Let's give Jimmy's novella the smell test.

In another era, a nation's most valuable assets were its natural resources — coal, say, or amber waves of grain. But in the information economy of the 21st century, the most priceless resource is often an idea, along with the right to profit from it.

Poetic, and probably untrue. Prove me wrong, but I suspect that revenues from patented technologies outpaced natural resource revenues even in the 19th century, and most certainly in the 20th century.

Patents ''are becoming the highest-value assets in any economy,'' said Jerry Sheehan, an economist with the Organization for Economic Cooperation and Development in Paris.

Jerry was being a bit first-world here in overstatement. Patents aren't that big yet in Botswana, or even Saudi Arabia, for that matter.

At a time when many of their most valuable assets can be shared and exchanged easily, businesses and governments scrambling to redefine who owns what.

The battles pit companies against companies, creators against distributors, almost everyone against the United States — and, some say, China against the rest of the world.

Jimmy, always with the drama.

Some intellectuals say that the more such rights are expanded, the less good the public reaps, a benefit that government's protection of innovation once intended.

Here, Jimmy descends into statistical fictionalization of marginal diminishing returns from incrementally strengthening patent protection. No names of "intellectuals" are mentioned.

''In certain cases,'' said Elsa Lion, an analyst at the London research firm Ovum, ''technology companies are beginning to realize they have more to gain by releasing patents to the general public than by hoarding licensing income.''

By giving away some of their knowledge, companies like IBM and Nokia are not just polishing their image among the Internet generation.

Jimmy buys into the public relations stunt. IBM gleans more than $1.5 billion a year from patent licenses.

If savvy entrepreneurs can manipulate the system by locking down valuable ideas, true pioneers will find it too tough to win rewards for their inventions.

For "savvy entrepreneurs", substitute "inventors", for "true pioneers" substitute "patent infringers".

''Our standards-setting process risks being corrupted by having people filing for, and getting, any patents they want. That poses a real danger to the effectiveness of innovation,'' said Josh Lerner of Harvard Business School.

Josh is joshing about people filing, and getting, any patents they want. If you don't believe me, try it some time. And what exactly is "the effectiveness of innovation"?!

And patent offices worldwide, overwhelmed by new applications, are under growing pressure to cut backlogs by using hasty assessments, creating the conditions for what Harhoff called ''a vicious cycle of deteriorating quality.''

More unsubstantiated assertion, and more drama - note that it's a non-sequitur to have a "vicious cycle" of "deteriorating quality"; wouldn't it be a "vicious slide", and when was sliding ever vicious?

Critics say the skyrocketing volume of patent applications makes it increasingly difficult to assess whether the underlying ideas are valuable, nonessential or even valueless. Critics also say the current system encourages using the courts to sue other firms for using ideas you registered first.

Using the courts to sue; that's novel. Those wily critics seem to miss that infringement damages may be determined through adjudication, hence "using the courts".

''Today's collaborative technologies are presenting a real challenge for patent law,'' Jaffe, the patent expert, said, ''and for the kinds of thinking that emerged at the time of Thomas Edison and Alexander Graham Bell, when individual inventions seemed much more distinct, much less complex."

Another non-sequitur. Its seem ominous, but why would collaborative technologies present a patent statute challenge? Mr. Jaffe appears ignorant of patent history. Thomas Edison only had 1,073 lifetime patents because of incremental innovation; i.e, not so distinct. As to new technology becoming more complex, how about stating the obvious of a historical continuum.

''As a result, we are moving into a world where patent holders won't be islands anymore, but knowledge-sharing organizations.''

Apparently, inventors are subject to some hitherto unknown geologic force, and cloning will turn individuals into altruistic groups.

Like any other form of property or asset, patents can be bought, sold, leased or mortgaged. Businesses even give patents back to the government in exchange for tax breaks. Start-up companies use patents — often their only collateral — to lure investment from venture capitalists. Midsize businesses swap and barter patents, even with rivals, to build products they could not make on their own. And many companies license patents to bolster their balance sheets.

Wow. Sounds like patents could be a smart business tool. How did that creep in? Oh, the illusion of "fair & balanced".

Posted by Patent Hawk at October 2, 2005 10:41 PM | Patents In Business


I think this is a well done article on this critical subject.

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