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February 24, 2008

No Surprise

Rick Frenkel's setup for blogging always seemed a bit queer - anonymously blogging voyeuristically, by supposedly peeking behind the curtain of non-practicing patent holders quietly enforcing their patents, as if anyone should care about that ipso facto. That the blog name was Patent Troll Tracker was a dead giveaway to the author being a serious case of IP arrested development. That he did so anonymously was the silly irony: wanting to unmask others while staying masked himself.

Frenkel started his blog "mainly out of frustration."

I was shocked to learn that a huge portion of the tech industry's patent disputes were with companies that were shells, with little cash and assets other than patents and a desire to litigate, and did not make and had never made any products. Yet when I would search the Internet for information about these putative licensors, I could find nothing. I was frustrated by the lack of information, and also by the vast array of anti-patent-reform bloggers out there, without a voice supporting what I did believe and still believe is meaningful reform."

Frenkel was shocked to learn that licensing companies enforce patents for inventors without generating much publicity. Apparently Frenkel never bothered to consider why patent holders couldn't just get a license for their patents from companies practicing their inventions without resorting to litigation. We're talking about Cisco's IP Director. Earth to Frenkel, come in....

Why did Frenkel blog anonymously in the first place? If you knew that Frenkel was who he is when you read his blog, maybe you'd discount the content, figuring it tainted by the messenger. Since you knew, by the very title of the blog, that the author had an axe to grind, maybe you'd discount the content, figuring it tainted by the messenger. That's quite an echo.

In his self-outing yesterday, Frenkel cites fear:

Why blog anonymously? For one, I really didn't want the publicity. Second, I feared that someone would claim to have the patent on blogging, and I might face a retaliatory lawsuit.

It brings to mind replicant Roy Batty's line in Blade Runner: "Quite an experience to live in fear, isn't it? That's what it is to be a slave."

While Frenkel and I may agree on an important part of the big picture: patent quality is important; we appear to disagree on devilish details. I think that patents are a commodity, and that the patent system ought to be a level playing field, as practically as that can be achieved for the "sport of kings." Frenkel seems to have a different perspective.

Which is why I hope Frenkel will keep blogging - because complex issues ought to be looked at from every angle. Now that the mask is off, hopefully Frenkel will come clean and do a better job of explaining his views, rather than just picking on trolls.

By way of comparison for blogging motivation, Patent Hawk took the opposite tack of Rick Frenkel, albeit irony still romps. I started The Patent Prospector, among other motivations, as a publicity vehicle for my practice.

What I didn't think I'd do was self-immolate by spouting opinions inimical to my business self-interest. Companies like Intel, Oracle, and Cisco are my natural client base.

But I wear naked self-interest like a hair shirt. And integrity isn't something worn on the sleeve and sent to the laundry when it gets a little soiled, to be scrubbed clean and put back on for display. I accept that ubiquitous corruption constitutes human existence, but that doesn't mean I shouldn't squeak about it in my own small voice.

While Gary Odom, Patent Hawk proprietor, plays many roles in the patent game, Patent Hawk's bread-and-butter business is helping litigation defendants by invalidating asserted patents. The client feedback consistently received is that Patent Hawk is the best in the business on that score. Rick, if fending off pesky patent trolls is part of your frustration, make a smart move by picking up the phone and enlisting Patent Hawk's assistance. Comity does not preclude airing disagreements, at least in my book. While I don't mind publicly slapping you upside the head when you are not a client, I'd also be tickled to help you out, Rick; and keep my mouth shut about it when you are a client. (206) 529-5146.

Posted by Patent Hawk at February 24, 2008 2:51 PM | Patents In Business

Comments

"What I didn't think I'd do was self-immolate by spouting opinions inimical to my business self-interest."

I.e., if you are a patent lawyer, you ought to be in favor of the patent system, whether it's justified or not; or, at least, pretend that you are.

Posted by: Stephan Kinsella at February 24, 2008 5:29 PM

Stephan,

You claim to be a patent attorney yet you seem to be opposed to the basic principles of the patent system in general. Go figure...
It's the same as a full-time butcher participating in the animal right's movement or a career hooker writing articles for "The joy of celibacy" magazine...
Poor boy...
Why don't you find something else to do for a living ?

Posted by: angry dude at February 24, 2008 6:01 PM

Stephan, anyone with an interest in invention ought to be in favor of a just patent system.

angry dude, I take it your comment was directed to Rick "the Cisco kid" Frenkel, not Stephan Kinsella, commenter. Careful where you point that gun....

Posted by: Patent Hawk at February 24, 2008 10:17 PM

Hawk: "Stephan, anyone with an interest in invention ought to be in favor of a just patent system."

Can you explain why? No one believes a patent system is necessary for invention--some invention would surely exist even absent a patent system. So at most it encourages additional (marginal) invention--but this comes at some cost. Are you sure the value of the marginal invention stimulated is greater than the various costs of such a system? I'd be curious to know how you know this, if so.

Posted by: Stephan Kinsella at February 24, 2008 10:25 PM

Stephen:

Invention would naturally occur without patents, as you observed, but patents accelerate the rate of invention.

That patents are a good thing is appreciated worldwide.

Justifying the specifics of cost/benefit with regard to duration is not so easy; though simulation modeling might be insightful, being careful about the data base as well as the modeling parameters. I don't know of any studies done on this subject.

One could make an argument that different technologies deserve different levels of patent protection, but, considering the sometimes substitutability of technologies, for example, between computer hardware and software, that argument is problematic.

You may be interested in my six-part series written early in my tenure as a patent blogger, about patent economics. Begin with "Patent Economics: Part 1" - http://www.patenthawk.com/blog/2005/04/patent_economics_part_1_market.html

Posted by: Patent Hawk at February 25, 2008 1:32 AM

"Can you explain why?"

Perhaps you could direct your question to the Founding Fathers rather than PatentHawk. (Yes, that would require a little historical research.

Unfortunately, there are too many people today who flatter themselves into thinking they are smarter than the Founding Fathers, and that the Constitution is no longer relevant in today's society. But usually the motives of such people are superficial and self-serving, unlike those of the Founding Fathers.

"To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;"

Posted by: NIPRA anonymous at February 25, 2008 3:31 AM

I had asked how Hawk knows that "anyone with an interest in invention ought to be in favor of a just patent system." This was his own claim--he claimed it as true. So I don't have to ask the founding fathers. I'm asking him.

I asked him to explain why, since it's clear there would be some invention without a patent system; so the only purpose of a patent system is to induce extra innovation, at some cost. For this system to be "worth it," the value of the extra innovation has to be greater than the costs of that system. There are undeniably lots of costs. So I'm simply asking him how he knows that the costs are less than the purported benefits. What is the dollar amount of the benefits, the dollar amount of the costs? From this simple subtraction tells us the purported net benefit. I'm just asking what it is. You seem confident it's positive--I'm asking what the numbers are, and how you know this? Or is it possible the number is negative, and we'd be better off without a patent system?

Hawk answered: "Invention would naturally occur without patents, as you observed, but patents accelerate the rate of invention."

How do you know this is true? Some say that patents actually stifle the overall amount of invention, in addition to the other costs of the patent system. What is the evidence for your assertion?

"That patents are a good thing is appreciated worldwide."

This is not an argument. Sure, some people think it's a good thing. I'm asking for your reasons or evidence for your claiming this as true.

"Justifying the specifics of cost/benefit with regard to duration is not so easy; though simulation modeling might be insightful, being careful about the data base as well as the modeling parameters. I don't know of any studies done on this subject."

Well, then how do you know it's positive? Why do you assume this?

In fact, many studies have been done. None of them show that it's a net gain; most show that it's a net loss, or difficult to answer. See: my article There's No Such Thing as a Free Patent, http://www.mises.org/fullstory.aspx?Id=1763; also
Kinsella, Revisiting Some Problems With Patents http://blog.mises.org/archives/006930.asp; Jonathan M. Barnett, Cultivating the Genetic Commons: Imperfect Patent Protection and the Network Model of Innovation, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=786545 37 U. San Diego L. Rev. 987, 1008 (2000) (“There is little determinative empirical evidence to settle theoretical speculation over the optimal scope and duration of patent protection.”) (citing D.J. Wright, “Optimal patent breadth and length with costly imitation,” 17 Intl. J. Industrial Org. 419, 426 (1999)); Robert P. Merges & Richard R. Nelson, “On the Complex Economics of Patent Scope,” http://cyber.law.harvard.edu/IPCoop/90merg2.html 90 Colum. L. Rev. 839, 868-870 (1990) (stating that most economic models of patent scope and duration focus on the relation between breadth, duration, and incentives to innovate, without giving serious consideration to the social costs of greater duration and breadth in the form of retarded subsequent improvement)); Tom W. Bell, Prediction Markets for Promoting the Progress of Science and the Useful Arts, 14 G. Mason L. Rev. (2006) http://papers.ssrn.com/sol3/papers.cfm?abstract_id=925989 (“But [patents and copyrights] for the most part stimulate only superficial research in, and development of, the sciences and useful arts; copyrights and patents largely fail to inspire fundamental progress. … Patents and copyrights promote the progress of the sciences and useful arts only imperfectly. In particular, those statutory inventions do relatively little to promote fundamental research and development ….”); Thomas F. Cotter, “Introduction to IP Symposium,” 14 Fla. J. Int'l L. 147, 149 (2002) ("[E]mpirical studies fail to provide a firm answer to the question of how much of an incentive [to invent] is necessary or, more generally, how the benefits of patent protection compare to the costs."); Mark A. Lemley, Rational Ignorance at the Patent Office, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=261400 95 Northwestern U. L. Rev. (2001), at p. 20 & n. 74 (“The patent system intentionally restricts competition in certain technologies to encourage innovation. Doing so imposes a social cost, though the judgment of the patent system is that this cost is outweighed by the benefit to innovation. … There is a great deal of literature attempting to assess whether that judgment is accurate or not, usually without success. George Priest complained years ago that there was virtually no useful economic evidence addressing the impact of intellectual property. … Fritz Machlup told Congress that economists had essentially no useful conclusions to draw on the nature of the patent system.”); Julie Turner, Note, “The Nonmanufacturing Patent Owner: Toward a Theory of Efficient Infringement,” 86 Cal. L. Rev. 179, 186-89 (1998) (Turner is dubious about the efficacy of the patent system as a means of inducing invention, and would argue against having a patent system if this were its only justification); F.A. Hayek, The Fatal Conceit: The Errors of Socialism (U. Chicago Press, 1989), p. 36 (“The difference between [copyrights and patents] and other kinds of property rights is this: while ownership of material goods guides the use of scarce means to their most important uses, in the case of immaterial goods such as literary productions and technological inventions the ability to produce them is also limited, yet once they have come into existence, they can be indefinitely multiplied and can be made scarce only by law in order to create an inducement to produce such ideas. Yet it is not obvious that such forced scarcity is the most effective way to stimulate the human creative process. I doubt whether there exists a single great work of literature which we would not possess had the author been unable to obtain an exclusive copyright for it; it seems to me that the case for copyright must rest almost entirely on the circumstance that such exceedingly useful works as encyclopedias, dictionaries, textbooks, and other works of reference could not be produced if, once they existed, they could freely be reproduced. … Similarly, recurrent re-examninations of the problem have not demonstrated that the obtainability of patents of invention actually enhances the flow of new technical knowledge rather than leading to wasteful concentration of research on problems whose solution in the near future can be foreseen and where, in consequence of the law, anyone who hits upon a solution a moment before the next gains the right to its exclusive use for a prolonged period”, citing Fritz Machlup, The Production and Distribution of Knowledge (1962))

***

Continuing w/ Hawk's comments:

"One could make an argument that different technologies deserve different levels of patent protection, but, considering the sometimes substitutability of technologies, for example, between computer hardware and software, that argument is problematic."

But this does not answer the primary question of whether the costs of the patent system are less than its benefits in the first place, for any technology at all.

Another poster replied:

""Can you explain why?"

"Perhaps you could direct your question to the Founding Fathers rather than PatentHawk."

The FF thought it would stimulate publication and dissemenation and invention. They did not prove that the costs of this system would be less than its benefits. Hawk however made the positive statement, so I am asking him for the jsutification of it. He points to what is "commonly believed," but this is no evidence or proof at all.

"Unfortunately, there are too many people today who flatter themselves into thinking they are smarter than the Founding Fathers, and that the Constitution is no longer relevant in today's society."

I'm a libertarian and a strict constitutionalist. The Constitution clearly authorizes Congress to enact patent and copyright law (but not trademark law!--the Lanham act is unconstitutional). That does not mean Congress *must* enact such laws; and it also does not mean such law is justified: the founders were not 100% right.

"But usually the motives of such people are superficial and self-serving, unlike those of the Founding Fathers."

Attacking motives (I'm a practicing patent lawyer, BTW; my motive is only truth and justice) is a standard tactic, and not worth replying to.

Posted by: Stephan Kinsella at February 25, 2008 8:48 AM

Take a hike little Stephan, we are not stupid

Patent protection is the ONLY motivation for us (small underfunded entities without manufactoring and marketing power) to invent in the first place IF invention cannot be protected by trade secrets

The proverbial case of a "better mouse trap" is the perfect example of this: any manufacturer in China or elsewhere can take it apart and start making the same, at a fraction of a cost..
Are you from this planet, Stephan ?
You sound like an alien :)
Beter read what Patent Hawk wrote a while ago:
http://www.patenthawk.com/blog/2005/04/patent_economics_part_1_market.html

Last but not least: please, do us all a big favor and find something else to do for living

Posted by: small inventors at February 25, 2008 9:04 AM

"the founders were not 100% right."

And you are? [Sigh.]

David Testardi

P.S. I was not attacking your motives - only making the observation that most people who second guess the Constitution do so not for selfish reasons. Obviously, the Founding Fathers intended a certain effect by the promote the progress clause, and if you look at history, they likely achieved it:

http://corporate.britannica.com/press/inventions.html

(I am not saying patents are the only reason for American ingenuity, but there certainly is something that has made America innovative beyond all other countries, and that something may in fact be our patent system.)

Posted by: NIPRA anonymous at February 25, 2008 9:56 AM

Sorry, most people who second guess the constitution do so for selfish reasons (or they have an inflated perception of their own intellect... or both.)

Good thing the Founding Fathers didn't make it easy to amend the Constitution.

Posted by: NIPRA anonymous at February 25, 2008 10:00 AM

This is the weakest, most muzzy-headed, confused and amateurish set of replies I've ever seen.

Posted by: Stephan Kinsella at February 25, 2008 11:18 AM

Obviously we're not as smart as you, Mr. Kinsella. Hopefully, we haven't defiled you.

:-)

Posted by: NIPRA anonymous at February 25, 2008 11:22 AM

It would seem to me (perhaps mistakenly) that a libertarian would appreciate a system that allows individuals a process for protecting their inventions. Isn't this about property rights?

Without a patent system, any disclosed invention becomes part of the social collective, free for the taking by whomever. And clearly not all inventions can be practiced without disclosure.

So the real question shouldn't be is there a sufficient ROI for having a patent system (though my gut tells me there is); the right question is how do we protect intellectual property from social "confiscation"?

This is essentially the same reason I think patent "trolls" play a valuable role in patent valuation ... they are the catalyst for activating the judicial "teeth" in the patent system. A patent doesn't deserve protection merely because it's being practiced; it deserves protection in the absence of practice.

Analogizing with the 1st Amendment: The right to free speech also includes the right not to speak; prohibition of coerced speech is as important as protecting uncoerced speech.

Analogy #2: Should your property be open to confiscation from some third party merely because they don't approve of the way you are utilizing it?

So let's ignore the social value side of this ROI argument ... speaking as someone who thinks of themselves as libertarian, I think it's the less important consideration. I reject the concept that an individuals creative effort unreservedly "belongs" to mankind.

The patent system seems to be a practical compromise (in a world of parties with radically differing negotiation powers) to giving some kind of enforceable property rights to the individual.

Posted by: ruralcounsel at February 27, 2008 8:13 AM

Stephan is not a libertarian, just another crazy dude :)

The true libertarians strongly opposed US Supreme Court's Kelo decision about taking real estate property from its rightful owners

Patents are property too...

Posted by: angry dude at February 27, 2008 8:37 PM

Mr. Kinsella "has extensive patent prosecution experience in computer, electronics, software, optoelectronics, oil & gas, and other technology, for clients such as Intel Corporation...."

I would analogize patent grants to the land grants (called "patent" grants) given by the government in the 19th century for promoting Westward Expansion to the first settlers on unappropriated public lands.

From the Homestead Act of 1862:

"Provided, however, That no certificate shall be given or patent issued therefor until the expiration of five years from the date of such entry;"

http://usgovinfo.about.com/blhomesteadact.htm

"Ironically, the Homestead Act was often used as a scam. Usually, the land that was available was in too poor a shape to farm on, especially in the middle of the plains where droughts were common occurrences. Because of hardships like these, not many families actually stayed for the entire five years.

Many corporations also took advantage of this act. They would pay people to buy the top-of-the-line property which contained an abundance of resources such as timber, minerals, and oil. Then the settlers would claim later on that they had "improved" the land. In reality, the improvements made to the land were minimal."

http://www.legendsofamerica.com/AH-Homestead.html

Technology, the final frontier.

Posted by: NIPRA anonymous at February 28, 2008 5:01 AM

Stephan, I do not think your antagonism is warranted. Let's cut to the chase. You need merely observe countries with a strong patent system, and those without. I think you will find that a strong patent system facilitates invention, and a weak one does not.

Posted by: confused SCOTUS at March 2, 2008 5:39 PM

"Stephan, I do not think your antagonism is warranted. Let's cut to the chase. You need merely observe countries with a strong patent system, and those without. I think you will find that a strong patent system facilitates invention, and a weak one does not."

I must agree. I think strong patents also help to improve patent enforcement and decrease patent infringement. Inventors deserve to be compensated for their ideas and not to have them stolen and violated.

http://www.generalpatent.com/2009/05/07/response-andy-grove

Posted by: Ray Subs at May 18, 2009 11:03 AM

angry dude is on the mark, having read the entry, and connected the dots.

I wrote, with good reasoning: "Kappos, who, as long-time corporate mook..."

Kappos has been rabid to the point of duplicity in the interests of computer tech corporations. What other perspective does he have? None other, by any appearance.

Posted by: perdre du poids at October 5, 2009 10:46 PM

Thanks perdre du poids,

Timely considering the row at IPWatchdog.

Posted by: Truth in Advertising at October 6, 2009 3:08 AM