Video Explaining the Need for Patent Reform…

Patent reform is largely being driven by corporate entities who argue that patent protections are currently too strong. The following video offers a skeptical version of this lobbying activity:

The real question: Can Apple & Microsoft combine forces to create a better video about the harms caused by today’s patent laws — and will they allow it to be posted on youtube?

31 thoughts on “Video Explaining the Need for Patent Reform…

  1. Ironicslip,

    By inefficiency, I mean the economic inefficiency of any substantial resource allocation to a technology that is doomed to failure. By doomed to failure, I mean in a situation such as a standards situation a natural monopoly is likely to form. By that I mean that one de facto standard is likely to emerge while others will wither.

    In a situation where the standard is strongly patented (Qualcomm – CDMA), absent licensing pools and the like, the likelihood of a successful infringement (a unlicensed competitor successfully making a profitable standards compliant product) or an alternative standard prevailing is small.

    Where the standard is not patented or in a weak patent regime, any one can try to make a product to meet the standard or to meet another “standard” (read Betamax), and it will become more difficult for a winning technology to emerge and if it does (VHS), there will be huge net economic losses in the area of the other “standard.”

    If there is no strong patent system to guide the flow of capital and the development of technology by way of patentees with established rights in a development area, then you wind up with a haphazard and tepid development environment with economic net losses and mediocrity – a race to the bottom.

  2. That’s a great video! Somebody should now make a similar video about the the new continuation rules. You’d have the following people: 1) examiner; 2) innovator; 3) attorney; 4) corporation; 5) analyst, 6) Mr. you-know-who at the patent office. #1, #2, #3, #4, all decry these new rules claiming they will harm their interests, #5) issues a study that the rules will have little positive effect on pendency, and #6 has a blindfold and earplugs on and just keeps repeating the words “pendency problem” over and over.

  3. CaveMan … this is your quote, I believe :: “This is how we avoid the extremely economically inefficient VHS/Betamax-type result. Also, apologies in advance to all the communists out there, but patents protect the ability of new technology developers to actually make profits/rents at least for a while.”

    I agree with part of the analysis, especially the part about strong property rights!!and understand that you have a dsp background…

    but … VHS/BetaMax was hardly inefficent. 1st) the goal of the copyright owners is to reverse universal v sony, the napster cases did not do this but the original sup ct decision was only 5-4…

    the betamax and vhs situation, however, and ironically, served very different purposes in retrospect … beta is the reuslt of sony’s make it small mentality and enabled sony to own the 8mm maarket many years lkater as they had developed manufacturing efficienies that took some time for others to catch up with (not to mention that a lot of material in video is still using beta).

    but, vhs was not a winner (even if some think because hollywood chose it), but the porn business went ahead and made it a market success. hollywood came later as the first of several marketing windows shrunk (theater attendance was going down and cable was fgoing up — blockbuster was still growing as an m&a play). recently, think >> movielink and cinemanow :: similar failures that were “chosen” as in a soviet pricing scheme by major studios.

    as with many technologies that enable personalized access to information, think streaming, it was hardly the embrace of hollwood that pushes technoloigists (besides drm) foirward. money, here is the money shot, >>> it was the porn business, as salacious as it might seem, and a very good example of schumpeter’s creative destruction especially since sex is :free: … that served as the inital market for vhs… on a recording capacity basis vhs made more sense than the smaller, better video quality beta… it is also the porn biz that pushed streaming way in advance of any other major copyright owners and also serves as a great test bed for litigation in such things as improved network streaming, etc. etc.

    money doesn;t get it, because now all of these people are in the same boat ;;; software is being grafted onto hardware/old business models (think DRM) for which the copyright folks & the CE folks including sony and matsushita/jvc sit on the same fence…

    my own specific example that fits an uneconomic “choice” betrween technologies, if you pardon my exception, which caused them both to “fail” is SACD (Philips/Sony trying to extend their CD roytlaties out and discovision tagging along) and DVD-Audio >>> pushed and preened and pushed by the content and ce folks while college kids (a primary music market segment) prefered mp3s (hardly an improvement in any form of quality a la beta, let alone SACD/DVD-Audio but also the prefered mode of consumers who want personalized access with little interference, rightly or wrongly, btw).

    An inefficieny in not *listening*, aha, to the market…

    Mr. Sutter: not to belabor the point >> “China’s cyber army is preparing to march on America, says Pentagon September 8, 2007 China’s cyber army is preparing to march on America, says Pentagon Tim Reid in Washington Chinese military hackers have prepared a detailed plan to disable America’s aircraft battle carrier fleet with a devastating cyber attack, according to a Pentagon report obtained by The Times.”

  4. Sorry Mooney, I don’t get the connection between my comment that you carefully quoted and your silly quip.

    I suspect you probably don’t get the connection with my post about Betamax and VHS either (on a different thread). Fortunately, many others who are far smarter than you did. Unfortunately, the large numbers of the uninformed such as yourself that seem to be glomming on to the whole patent thing are probably the main reason things seem to be headed in such a lame direction.

  5. aj sutter, i respectfully disagree with your points but do appreciate your view!

    i will still stick with the dr. luntz that words do matter that KISS is true (keep it simple).

    “As for Ironicslip’s notion that the US military will fall behind because no one in US has incentive to invent stuff (did I understand this correctly?): if US inventors are so unpatriotic as to put their own interests *always* ahead of the nation’s then US doesn’t have long to last in any case, China or not. In any case, Pentagon will have enough funds to reward inventors outside the patent system. (Suitable contract drafting can craft economic incentives, you can make royalty-like payments even when payee doesn’t own patent, etc.)”

    i did not say we would fall behind, but priorities are priorities — there were no pro-military type sponsors of this bill, nor any discussion or analysis of how this may effect military superiority — there was more debate on this issue concerning public key cryptography! (which some would argue retarded our data security abilities by several years until nsa engineers were allowed to publicly interact with public libertarian types in the crypto community (was that around 1998?)

    my point was a reaction to schunder’s scenario. however, we are not “ahead” in broadband and many other areas for reasons brought on by ourselves, namely poor communications policy, more debate of censorship of programming and piracy than advancement of broadband. even advanced encryption standard was “won” by belgian mathematicians, not US academics.

    however, patriotism has little to do with these reforms, what did the vast majority of America get in trading these horses? >> the sponsors are the same who pushed ahra, dmca, wipo, and the bono copyright extensions…

    an increasing number of talented engineers are repatriating to their home countries >> without immigration reform, and this bill’s sponsor’s own export of IP to foreign shores, is token proof that this was helpful to Americans. and who owns all those american treasuries, patriots?

    “Nor that Chinese et al. will be under the same limitations as US inventors when it comes to filing patents in the US. When it comes to IP, US patent bar is protectionist extraordinaire. No need to be, esp. when so much international law, TRIPS especially, has been rigged through political processes to protect US companies already.”

    Tax policy is hardly arbitrary but protectionist… what is the point of having property rights if you cant protect the property? … more US patents are issued to foreigners than americans. whatever changes there was no quid pro quo with any foreign interest that has been discussed or debated, americans will not get “better” rights in other countries regardless of trips and wipo… just more disney programming.

    how we got here:: the reason has to do with the function of the market (read litigation) is as objective as you get here versus litigating in a home country… hypothetical :: Samsung versus Toshiba, in which country will they get a fair hearing? Japan or Korea? Flip a coin. And the coin reveals :: rocket docket east texas … Americans have the best lawyers not the best politicians or bureaucrats, at least in this realm…

  6. Dear A.J. Sutter (whoever you are):

    I talked to many independent inventors of this great country (U.S.A.) and they all advised me against filing patent applications outside of USA – a huge waste of money
    and time they told me….l

    Of course, this was a few years ago. Nowdays I would advise any independent inventors against filing patent applications in US.
    Alas, no more promoting the progress by publicly disclosing discoveries, at least for me

    Sorry guys, but I have to pay my mortgage and utility bills…

    Property taxes too !!!……………

  7. The video is just an emotional assertion about possible scary consequences of reform, it doesn’t attempt to explain the issues about reform. Schunder’s Chinese scenario is the same. Given the current condition of the American polity, arguments at this level are all too often sufficient. So Schunder’s type of reply might be more politically astute than a more analytical, rational argument. (Honorable mention to those who wrap first-to-invent in the flag and Constitution for their contributions to irrational and emotional debate.)

    As for Ironicslip’s notion that the US military will fall behind because no one in US has incentive to invent stuff (did I understand this correctly?): if US inventors are so unpatriotic as to put their own interests *always* ahead of the nation’s then US doesn’t have long to last in any case, China or not. In any case, Pentagon will have enough funds to reward inventors outside the patent system. (Suitable contract drafting can craft economic incentives, you can make royalty-like payments even when payee doesn’t own patent, etc.)

    Interesting that no one has mentioned that the reforms considered by the HR would bring US patent system into line with the rest of the world. Nor that US inventors already deal with first-to-file in other countries. Nor that overseas inventors who file first in their home jurisdictions already have priority in US under applicable treaties. Nor that Chinese et al. will be under the same limitations as US inventors when it comes to filing patents in the US. When it comes to IP, US patent bar is protectionist extraordinaire. No need to be, esp. when so much international law, TRIPS especially, has been rigged through political processes to protect US companies already.

  8. KCB —

    I agree wholeheartedly. But if not for DOE/Festo issues many attys would not have had to file as many claims.

    More importantly the snideness of many practitioners here are not observing that patent prosecution is not some black art… the market will severely shrink the market and you will see more GC/IP combinations working to develop more comprehensive approaches to legal strategy in any given company.

    They used to say you are measured by the number of people who report to you … now it is the number of attorneys who bill you.

  9. Schunder (or Should-be-Under)

    “Ironicslip – Your points about fairness, property rights and democracy use to be the way it was – when America and other rights-loving nations were the masters of the world.”

    I am no brainiac but the fact is the US is still the envy of the world with unparalleled freedoms and a robust debate about policy (and I spent over 1/3 of my life in Asia –oops, info about me leaked) — it is still the only place where a foreigner can actually get a fair hearing in a court bound by the rule of law with lawyers appointed by the State.

    Not out of disrespect and certainly not as a result of the disastrous policy over the past 6 years denigrating these Constitutionally mandated rights and freedoms, this patent reform bill included — but I don’t think the Congress is going to let India or China counterfeit just because it reforms the patent act.

    It is specifically that issue that was not behind the reform — get it? No BigPharma here, my friend. They got theirs in the Medicare package restricting the US government from negotiating lower drug prices, not allowing Canadian drug imports — SO, IRONICALLY Americans already PAY/SUBSIDIZE for the drugs you speak off vis-a-vis India, China and were-ever — a completely off-topic subject. The financial services industry pushed this over the top as they believe that IP is distortive in many valuations — BUT , as argued, there are plenty of models to provide liquidity to patents to establish valuations, without having to change the rules of the game to hurt innovators.

    “For America to continue to succeed I think we’ll need to rely on trade secrets. More exactly: We need those industries that can have a monopoly through trade secrets – rather than IP laws that stop at the border. I hope I’m wrong.”

    — What are you talking about? On the one hand you argue patents are not fair because of pricing — on the other you argue trade secret which inherently prevents the disssemination of knowledge to the very countries you speak of — are you competent enough to understand that when you need to get paid — you typically need lawyers guns and money (in no particular order). In the arts I deal with trade secrets are suicidal. The technology must be peer-reviewed to be accepted by even the smallest customer.

    No American asked any Chinese, Indian or whoever to file a US patent. But they do more than Americans, so what is your flawed argument proof of? Neither do any of them have to read or believe in our Constitution. But, as an American, I still find your ideas to be inherently flawed and unfortunately your friends in all those countries will continue to get region coded dvds! And, your Chinese yachtsman might as well be Russian (I dont recall buiying anything made in russia though — so who is innovating there?)

    Getting paid fairly is the heart of this debate.

  10. “The patent reform will do more to hurt corporations than small inventors.”

    Hey, KCB,

    on what planet do you live ?

    Are you really a patent professional or some C-grade law student lurking here ?
    You are pissing me off, dude

  11. “Look at 35 USC 123″

    Whoa – that’s unbelievable they put that under “Additional Information” – I missed it completely. So the USPTO issues an unreal number of bad patents for more than a decade, and then Congress creates a stick to hit the applicants. Yup, our bad.

  12. Alright I am chiming in now. The patent reform will do more to hurt corporations than small inventors. Firstly, the corporations are gonna have to jump through a tremendous amount of hoops with respect to their existing patent applications or they will all go abandoned. The individual inventor usually has one or two patent applications and that is it. Now what will cease to exist are those patent families in which the inventor has one idea and the patent attorney files 25 different cases on the one idea. The patent system was never meant to be used like that. Hey for all those who made fun of me over the years when I told you that you should always perform a search before filing . . . I told you so. Look at 35 USC 123. Now you will have to provide a search and an analysis as to why your claims are patentable. I suspect that will end the careers of no less than 20% of the so-called patent practitioners out there.

    I mean I have read cases that were filed as if the person who filed it never intended to have to prosecute the same.

    Now for you partners in law firms. No longer will you be able to tout that you wrote a patent application in 8 hours only to leave a poor associate with a minimum amount of time to correct the P.O.S. that you called a patent application. In short, these changes are needed and are long over due.

    Now back to work. . . that is all!

  13. Ironicslip wrote: your logic is way off — money will go to the innovators, no matter what or where, for that matter

    Great! We don’t need the patent system at all. Invovation will be rewarded no matter what or where! Halleulah!

  14. Ironicslip – Your points about fairness, property rights and democracy use to be the way it was – when America and other rights-loving nations were the masters of the world. But now there are many countries: China, India, Russia, Brazil and even Canada who are finding it easier and easier to say, “We aren’t going to pay market value for your drugs (or whatever), if you don’t give us a far lower price, we’ll just make it ourselves.” For America to continue to succeed I think we’ll need to rely on trade secrets. More exactly: We need those industries that can have a monopoly through trade secrets – rather than IP laws that stop at the border. I hope I’m wrong.

  15. Schunder

    also, about the Grand Canyon. As with the Exxon building and Rockefeller Center — how are they going to take it back with them?

    once said by a very bad man: “how many divisions does the vatican have?”

    i strongly disagree with the cuteness of your argument … your logic is way off — money will go to the innovators, no matter what or where, for that matter. making so that people can fail and start right back at it is the best and proven way to keep america strong– we have booms and busts but dynamic innovation.

    patents let people get market value for their inventions >>> simple and there is plenty of expensive people who can determine just how much that is.

  16. Schunder:

    Scene 7 : Chinese yachtsmen determined to be higher up in the Red Chinese Military’s investment arm.

    Scene 8: American military cannot seem to find anyone willing to spend several years to {[{{innovate}}}} as their inventions are clearly below market value (the Chinese obviously paid in some cosnideration for technology, maybe it was truly sweat equity, all sweat no equity.

    Scene 9 >> they can figure out your credit card statement and billable utility units (kiulowatts anyone) but they cant write objective patent rules.

    Last, freedoms in a democracy require at least two, well three, ingredients strong property rights, fairness in administering justice and liquity of information corresponding to openness.

    Ain’t no inventors in your yahct. Invention, true innovation, can be objectified for a judge, jury, attorneys, engineers, and the public at large. it’s like magic.

  17. “Many companies will form to try to “develop” the technology and they will all freely produce a lame version of the technology – or some slightly different technology, but since no one can gain a competitive advantage through the ownership of strong intellectual property rights, there will be no incentive to improve upon it and in the end the technology will languish.”

    Poor CaveMan. He’s still upset about that Beta video tape player he bought in 1980.

  18. scene 1: 20 various IP sorts (inventors, lawyers, politicians, judges etc.) arguing.
    scene 2: 20 Chinese scientist working in a lab
    scene 3(30 years in the future): American President selling the Grand Canyon to the Chinese Premire for a barge full of grain.
    Scene 4: Starving American babies
    Scene 5: Prosperous Chinese yachting.
    Message on screen: We can have our corporations spend their money on lawyers to protect inventions that the Chinese will copy anyways, or we can let them invest in innovation to stay ahead of the Chinese forever – and keep America always one step ahead.

  19. EFF and OSS, while laudable in some respects, are not a credible source of public policy, period. About all they accomplish is counterbalancing Micro$oft.

  20. Benjamin Franklin comment by “wjbiopat” — Huh?

    Ben Franklin was a bit advanced in age when the Constitution was written but to wit — he founded the U of Penn the nations first “university” not harvard’s “college”) and was reportedly our nationis first millionaire … see ANY freudian slips there?

    I’ll stick with Jefferson: “information wants to be free” (as in freely accessible not “free beer” or “patents”)

  21. it is a great video.
    it summarizes the issues.
    it provides simple talking points that are clearly arcticulated (thanks dr. lutz)

    the money shot >>> government wants the golden gooses AND the eggs

    if they were incapable of identifying who the gooses are, they have a *very clear idea* now that so much money is spread around to “win” friends, influence people, make subjective standards and populate patent pools with largely weak defensive-type patents. goose, goose, duck — the proponents should be careful what they wish for … net neutrality, anyone?

    while you may not like watching the sausage of government being made … no one with serious observations of politics can ignore we live a more money-centric democracy (the rule of law and judges and juries be damned when it costs over 500 mil to run a presidential campaign — sounds like better ROI than paying a small company with solid patent rights – even after repeated losses at the appeal level.)

    a long way from the old liberatrian streak of the valley who only started lobbying in earnest when financing was essentially zero cost (dot-com days) and only started worrying about patents when they got successfully litigated by real innovators by real juries and by real judges (i am not naive to think there has been bad litigation – so what? it aint any different than any form of litigation)– hello to the handouts of hollywood // goodbye to assuring a level playing field for the inventor.

    EFF? it is a non-profit. and, what reform have they proposed — they sound the same alarm bell they did with napster and ignored the obvious tech arguments (drm wont work, etc.). it is EASY to point to problems it is quite a different matter to point to solutions.

    similarly, it is easy to cut taxes. it is quite a different matter to determine who gets what services that are remaining but for the contributors to expensive campaigns.

    a side note on the EFF: i recall john perry barlow getting eaten alive by stephen colbert on the eff’s views on copyright and fair use a few months back… probably a good copyrighted video to check out the views of the eff from a copyright holders perspective — and in light of the google-related copyright cases.

    sadly, over the history of this country many inventors never saw wealth, financiers and others reaped most of that benefit. Just when they start to see wealth from their inventions … well the story is being written now.

    the swing to reduce patent value will be followed by a swing in the direction of other protections (DMCA, anyone? — that has been getting a lot of unusual activity in the unlikeliest of places. anti-trust, not just RICO-type actions, will suddenly look a lot cheaper to inventors seeking recourse — even if the ftc and doj are currently a work-in-progress)

    (if money is reading this … besides some mooney dollars, why is it that congress and the judiciary always want a piece of the action? did you miss that angle?)

  22. “A vigorous patent system allows rapid emergence of new technologies that might disrupt the status quo; and rapid generation of wealth” …what I meant to say is that the rapid emergence of new technology disrupts the status quo for large corporations and provides for rapid generation of wealth for the technology developer and not the large corporation.

  23. Large corporate entities support “patent reform” (emasculation of the patent system) because large corporate entities don’t really want any competition and these days don’t really produce any meaningful products. A vigorous patent system allows rapid emergence of new technologies that might disrupt the status quo; and rapid generation of wealth. And socialists (like most law professors – and people who live in California and work for Apple) don’t like to see people making money.

    Even though recent news articles indicate that Silicon Valley is clamoring for the “next big thing,” once it is found, thanks to the deconstruction of the patent system, no one will have a lock on it and therefore its development will be haphazard and uncertain and bereft of profit potential. Many companies will form to try to “develop” the technology and they will all freely produce a lame version of the technology – or some slightly different technology, but since no one can gain a competitive advantage through the ownership of strong intellectual property rights, there will be no incentive to improve upon it and in the end the technology will languish.

    We call this a race to the bottom.

  24. “There’s a huge amount of support for patent reform in the open source community.”

    Reform? Can you give me a link that shows someone at EFF (or in FOSS) wanting reform of software patents rather than annihilation? (Not to speak on way or the other on the merits of the debate.) Yes, I know some of them will participate in peer-to-patent until they realize what the outcome of that will be.

  25. Many non-corporate entities support patent reforms. These include EFF, other public interest groups, [probably] most law professors, and ‘the open source community.’ However, corporate entities are the ones driving reform.

  26. Looks like we need a new equivalent of “astroturfing” that describes bogus ‘Hey I’m just a guy doing a video’ vids.

    There’s a huge amount of support for patent reform in the open source community. Would you argue that the EFF is a corporate entity?

  27. That is pretty funny!

    I’m sure it is not how things actually happen, but I do get a feeling like Congress gets bought off all the time. What might make the video a little better would be for a few of the Benjamin Franklins to go to the government….

  28. Oh Pleez. You would need to have the lobbist take the corporate money – Jack abramoff – and then meet with the government and then the government ordering a reexamination (first window, second window – always open window, etc). and therefore, effectively have the government hand over the innovators work to the transnational.

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