81 thoughts on “Erich Spangenberg’s predictions for 2015 Patent Law

  1. 7

    Have been using the “reference extractor” tool in Edan to get the references out of IDS’s.

    Got a 5 page IDS with idk, 100 refs on it. Extractor go go go! 5 references extracted.

    /facepalm

  2. 6

    Regarding IPRs, they remain a serious problem in patent law because

    1. Lower standard of proof.

    2. Broadest reasonable interpretation.

    3. No standing requirement.

    4. And decision rendered by a political branch of government who can and do pursue agenda’s a Erich suggested. There is a reason for “separation of powers.”

    IPRs are structured to not simply to reduce costs as is evident from the above.

    Can anyone really remember why we created a Federal Circuit? Because it some circuits were perceived as having a very high bar before a patent was deemed worthy causing a forum shopping war. IPRs make the time before the creation of the Federal Circuit look like a golden age by comparison.

    Patent owners have a right to have their patents judged in an independent judicial branch.

    Patent owners have a right that their patents not be invalidate on flimsy — and this is not simply because examination is deemed perfect. It is because patents are property.

    And, standing has a purpose and IS important. Without standing, the mighty can and will use IPRs to bankrupt small businesses with litigation by IPRing the small business entire portfolio if necessary.

    IPRs have to go.

    1. 6.1

      Separation of powers should not be so selective.

      You would gain more credibility for your concerns here if you did not advocate for a blurring of the separation of powers between the judiciary and the legislature.

        1. 6.1.1.1

          So does the Supreme Court – you continuously miss that point, and your miss lessens your credibility when you want to use a separation of powers doctrine to support your views – even as here those views may be in agreement with my views and otherwise have my support.

        2. 6.1.1.2

          Ned, et al, when are you going to quit smoking the dream that the Supreme Court is going to hold that all PTO decisions against any issued patents in Congressionally enacted interferences, reexaminations, IPRs, CBMs, PGRs or otherwise are all unconstitutional? [Not even to mention ITC proceedings, etc.] No matter how many times it has been unsuccessfully argued?

          1. 6.1.1.2.1

            But Paul, the Supreme Court has been very active since Patlex in the “public rights” arena, giving it definition. Since Patlex was premised on “public rights,” your suggestion that this is a well settled issue is a bit off the mark.

            Stern v. Marshall, 2011, extensively dealt with public rights and carefully cabined them to actions by the government in its sovereign capacity. See also, Executive Benefits Ins. Agency v. Arkison, 134 S. Ct. 2165 (2014) (applying Stern)

            In 1989, the Supreme Court held in Granfinanciera that if an action was litigated in the courts of England, law equity or admiralty, prior to 1791, it was not a public right. In 1996 the Supreme Court held in Markman that patent infringement actions had a right to a trial by jury because they were tried in the law courts of England prior to 1791. Perforce then, explained to me how it patent could be a public right.

            As well Lemley has done a lot of research recently on the right to a jury trial and determined that there was a right to a jury trial in scire facias actions to repeal a patent prior to 1791. Of course, because such actions to repeal a patent were tried in the courts of England prior to 1791, actions to repeal patent cannot be public right.

            So on what basis can Patlex stand? It is overruled.

            1. 6.1.1.2.1.1

              Interesting Ned. That would be absolutely fabulous if IPRs were ruled unconstitutional, but my guess is —given that the SCOTUS acts more like the legislative branch than the judiciary — that if there is any wiggle room at all that they will take it.

              Hmmm…let me try: how about at least post AIA that the patent isn’t a full right granted as before but a conditional right with the PTO reserving the right to revisit its patent grant.

              Not sure where the wiggle room is pre-AIA, but maybe also in the post-grant procedures too.

                1. I think that at least you and I recognize that the Supreme Court is not the Constitution.

                  They are the leaders of the branch charged with interpreting the Constitution, but their work is not a free-for-all-whatever-they-want.

                  They have been in error far too many times for any responsible person to anoint them with infallibility.

              1. 6.1.1.2.1.1.2

                I think anon is right.

                However, I don’t think congress has the power to grant “exclusive rights” for an indefinite term even if it is limited by some date.

                Regardless, under Marbury, if congress provides a right for a fixed term, that right is property and can only be invalidate by courts. That is what congress does with patents – provide patents for a fixed term.

                The move to take validity litigation to the Office is more of a direct violation of Marbury than making a patent a revokable privilege.

          2. 6.1.1.2.2

            ITC proceedings do not result in the revocation of a patent. Their judgments have no collateral estoppel effect. If they did, losing defendants would lose their right a jury trial on liability.

            Also consider that the patent owner is not thrown into the ITC involuntarily.

    2. 6.2

      Ned, that “standing” argument is a red herring. Who goes to the considerable expense of an IPR if they are not actually threatened by a patent? In fact, more than 80% are filed by a party that has already been sued for infringement! Anyone who has no personal interest in the patent now has no standing to appeal an IPR to the Fed. Cir.
      As for the “Broadest reasonable interpretation” standard for all PTO proceedings making a big difference, that is another myth. No one has yet been able to point to IPRs where that BRI claim interpretation would have clearly given a different decision under the Fed. Cir. litigation claim interpretation standard, including the actual claim interpretation decision, which is the en banc Phillips decision.
      As to proofs, IPR APJ’s require it from submitted prior art that is limited to only prior art patents and publications, which they can read, and are not swayed by mere attorney argumentation.
      Two REAL differences are that in IPRs the subject claims versus the prior art are reviewed by APJ patent attorneys who know how to read claims, not lay jurors, and, if the IPR is fast enough, or gets a stay of the parallel litigation, defendants cannot be forced into settlements on invalid patents just to avoid litigation discovery costs.

      1. 6.2.1

        Paul,

        How do you feel about the aspect of a takings from the bundle of property rights? (the presumption of validity at the point in time of the institution of the IPR)

        1. 6.2.1.1

          The “presumption of validity” is not a “property right,” It has never applied to any PTO re-examination proceedings including reissues and interferences. IPRs et al require the petitioner to prove invalidity. Where is the evidence that the presumption of validity would make any significant difference in PTO outcomes?
          What would be the logical basis for apply a presumption of validity for claims in an IPR when those claims were originally issued without any consideration of the new and much better prior art being cited in the IPR?

          1. 6.2.1.1.1

            You are quite mistaken Paul.

            It is indeed a specific stuck in the bundle of the rights of a granted patent.

            By law.

            1. 6.2.1.1.1.2

              It is indeed a specific stuck in the bundle of the rights of a granted patent. By law.

              By what law? The “bundle of rights” is a pedagogical construct, not a legal one. The reason it’s a useful pedagogical construct is that the various “sticks” in the bundle of rights are rights that can be transferred from one person to another. You can’t transfer the presumption of validity.

              The presumption of validity is not a personal right at all. It’s a procedural standard imposed on the courts.

              1. 6.2.1.1.1.2.1

                When I say “transferred” above, I mean “transferred independently of the other sticks,” of course.

              2. 6.2.1.1.1.2.2

                By what law…

                That would be 35 USC 282 (yes, note the wording)

                A pedagogic tool… for legal rights (just like other property)

                Surely transferring a patent transfers the stick of presumption of validity (I think that you are trying to be too clever by half and what to think of transfer different sticks separately, but there is no notion or requirement that such separate and distinct transfers of individual sticks must take place)

                You are quite incorrect about the personal nature – again, read the words of the statute. The presumption attaches to the patent itself, and the patent is personal property – that that right affects court proceedings does not make it not a personal right.

                Once again you challenge the wrong person on the wrong thing.

                1. Surely transferring a patent transfers the stick of presumption of validity (I think that you are trying to be too clever by half and what to think of transfer different sticks separately, but there is no notion or requirement that such separate and distinct transfers of individual sticks must take place)

                  No, it’s not me being particularly clever – the whole point of the “bundle of sticks” analogy is that the sticks can be transferred separately. If you want to argue that the presumption of validity is a personal right, fine, but your statement above that “it is indeed a specific stick in the bundle of rights” doesn’t help you, since it’s clearly false.

                2. Simply not correct DanH – nowhere is there the requirement that the sticks MUST be so separable.

                  Nowhere.

                  (I note that you do not reply to my other comments – from this shall I take that you acquiesce those points?)

          2. 6.2.1.1.2

            And, yet, Paul, in i4i, the Supreme Court just gave you the reasons why the burden of proof is by clear and convincing.

            As to the topic of an IPR being patents, that still is a red herring as the battles typically still come down to the credibility of experts.

            1. 6.2.1.1.2.1

              Ned, IPRs are NOT usually decided by subjective battles over the credibility of experts, because APJs are not lay jurors. They are decided by noting where the claim elements are taught, or not taught, in the cited prior art patents and publications which had been missed in the original examination.

              1. 6.2.1.1.2.1.1

                Paul, I’m sorry Paul, but experts remain large in IPRs. If you want the pristine system you envision, ban experts. Let the PTO consult its own examiners on technology if necessary.

          3. 6.2.1.1.3

            Paul says: >What would be the logical basis for apply a presumption of validity for claims in an IPR when those claims were originally issued without any consideration of the new and much better prior art being cited in the IPR?

            This is a fallacy. The PTO is supposed to be experts and they are applying the art most relevant in their expert opinion. Just because art is not specifically addressed does not mean it was not considered or known by the examiner.

            In fact, you are trying to switch the burden from the PTO to the applicant in knowing the prior art.

            1. 6.2.1.1.3.1

              It’s even more of a fallacy than that, as a patent grant is judged to have passed PHOSITA, whom does have knowledge of all published prior art.

              This is also why the heightened standard of clear and convincing is appropriate, and why the level of preponderance is not.

            2. 6.2.1.1.3.2

              As noted on the Vringo thread, the logic of the Morgan/MaxDrei path leads inescapably to a pure registration system.

              It simply makes no sense to incur the cost of Billions of dollars for a “right” that is neither a true right standing alone nor so easily challenged as simply grabbing some art not ‘made of record.’

              Until that point, one side effect not mentioned here is that the logic used also dictates that applicants should bury the office with truckloads of every (even remotely) conceivable reference to ward off such silliness as the “well this reference is not of record, so the C+C should not apply” ‘patent-friendly‘ mindset.

      2. 6.2.2

        Paul, standing is important. The expense of an IPR is a two edged sword. Simply filing one puts a patent owner to great expense.

        You simply assume that something that can be abused will not be abused. There is nothing in the law that protects a small company from being crushed by a larger. Nothing.

      3. 6.2.3

        The standing issue is not a red herring. Shell companies and friendly relationships can make control almost impossible to pin down. This means you can repeatedly file IPRs with no estoppel.

        That is just one problem.

        1. 6.2.3.1

          Except that there are now more than enough IPR decisions to show that that is not happening, and, as noted, that more than 80% of IPRs are brought by the named defendant in a parallel patent suit. It is trolls, not defendants, that typically make use of shell companies to hide the real parties in interest. Furthermore, any patent owners bringing suits who have any reason to think that the defendant may be estopped by a third party IPR from a party “in privy” with the defendant can conduct discovery to find it. Furthermore, of the very small percentage of patent suits that are not settled, the vast majority are decided on non-infringement, not invalidity based solely on prior patents or publications, and thus there are very few patent suits in which the limited scope of IPR estoppel would make any difference.

          1. 6.2.3.1.1

            Except that 80% is not 100% and that the system is just starting. And we don’t know how much threats of filing IPRs is affecting the system. And your suggestion that discovery will get to the bottom of it is absurd. In other contexts that has proven to be very difficult.

            Moreover, if all is fine as you say then why not make standing a requirement.

    3. 6.3

      Ned, with respect to the fascinating question of CAFC jurisdiction over decisions to deny requests for stays of litigation following the filing of a CBM petition (see, e.g., link to therecorder.com), don’t miss the great oral argument recording in Intellectual Ventures v. JP Morgan (found here: link to cafc.uscourts.gov).

      Very well-articulated, very thoughtful arguments and a vigorous, thoughtful discussion.

    4. 6.4

      Ned: Patent owners have a right that their patents not be invalidate on flimsy

      Surely you can provide hundreds of examples of patents that were invalidated “on flimsy” in the course of an IPR.

      Maybe you can show everyone ten or twenty of them, Ned. Then we’ll know that the problem you are describing has some relationship to reality.

      IPRs aren’t going away. Ever. Get used to them.

      1. 6.4.1

        Well, MM, not only is there a lower standard of proof, the Fed. Cir. must respect PTO findings of fact on substantial evidence standards.

        The PTO has all but become prosecutor, judge and jury, with no real right of appeal.

        What can one expect of such a system?

        There really is a good reason for an independent judiciary, MM.

    5. 6.5

      This argument is goofy because there is an inverse analog argument to (or the same argument against) the original grant anyway. Returning the decision to the original granting agency doesn’t seem to change the equities or mechanics. If the PTO shouldn’t have granted the claims in the first place, why does a “mistake” there entitle them to judicial review?

      What’s more, in many ways, the fact that the patent is granted ex parte and (if you were right) would bind non-parties to the agency mistakes makes your position less persuasive.

      1. 6.5.1

        The nature of ex parte (or not) has been noted previously – and dismissed.

        Congress indeed has been granted the (sole) authority for writing patent law and they decided that ‘ex parte’ was good enough.

        The point that you are missing is the notion of scire facies (Ned, feel free to explain that), and the fact that once granted and out of the Office, a patent truly does have a bundle of property rights attached, and at that point even Congress must respect the other constitutional guarantees concerning the protection of property.

        1. 6.5.1.1

          Congress indeed has been granted the (sole) authority for writing patent law and they decided that ‘ex parte’ was good enough.

          That’s plainly false because Congress created inter parte review as well.

          the fact that once granted and out of the Office, a patent truly does have a bundle of property rights attached

          Whatever those rights are, they are subject to inter partes review.

          Go ahead and challenge the Constitutionality of inter partes review if you like. At the end of the day, nothing will change — at least nothing for the better if you want “stronger” patent rights.

          We’ll still have inter partes review. It’s not going away, ever, at least not absent some major compensatory changes in the rest of the system that you will be equally disappointed with.

          1. 6.5.1.1.1

            MM, sorry for asking this, but do you even believe in the concept of a “right?”

            If the issuing authority can revoke something on its own, one does not have a right, but a privilege.

            Consider marriage. The government confirms two people are married. They build lives together. They invest and rely on the legality of the bond.

            But what if the government could unilaterally revoke a marriage because they believe a mistake was made. Huh?

            When rights are involved, one has a right in the United States to a day in court. Not even Congress can revoke rights by fiat.

            1. 6.5.1.1.1.1

              I look forward to the resolution of the discrepancy in views between such friends as Ned and Malcolm on this topic.

              Any type of “well let’s agree to disagree on something so fundamental would only reinforce the fallacy of “all opinions are valid” as clearly, a resolution is required for a working real world system.

      2. 6.5.2

        Mike, but the judge of the mistake has to be the Court system, not the granting authority.

        See, e.g., Marbury v. Madison and is progeny McCormick Harvesting v. Aultman.

        It is the principle of these cases that one a patent has been granted, it cannot be reexamined or revoked by the Executive. It is the property of the owner, and it can only be invalidated by a court.

        1. 6.5.2.1

          Ned is their a case that talks about what a “patent” means in the Constitution? I would image that the case is going to be from England since the U.S. incorporated all of English common law at the time of the Constitution.

          1. 6.5.2.1.1

            Night,

            Cammeyer v. Newton, 94 U.S. (4 Otto) 225, 234-35 (1876); see also James v. Campbell, 104 U.S. 356, 357-58 (1881); Crozier v. Fried, Krupp Aktiengesellschaft, 224 U.S. 290, 306 (1912).

    6. 6.6

      Ned: There is a reason for “separation of powers.”

      Can you tell us why we have a judiciary in the first place, Ned?

      Seems to me that you could have a system where people who don’t like a law passed by Congress or a patent granted by the PTO could simply lobby Congress and have the law changed so that the law disappears or the patent is invalidated. What’s the point of the Federal judiciary then?

      It’s a rhetorical question, of course. That’s because one of the reasons for having a Federal judiciary is, and always has been, to give people who lack the resources and means to force the hand of Congress directly another less costly and more efficient means of addressing their grievances.

      Unfortunately, in some circumstances, the judiciary, for whatever reason, isn’t always up to the task. And Congress occasionally recognizes that and looks for alternatives. Here we see Congress assigning that task to the same administrative agency that created the problem in the first place, with the assistance of the public that is directly served by that same administrative agency. Seems eminently reasonable to me … far more reasonable, anyway, than the implicit assumption that the improvident granting of an intellectually property “right” — with potentially enormous consequences for the public — is immune from re-examination by the agency responsible for the screw-up in the first instance.

      Does the existence of a de novo administrative review of a granted patent negatively affect the “value” of everybody’s patent portfolio? To some degree it almost certainly does. But there’s nothing “unconstitutional” about that sort of devaluation provided there’s a rational basis for it. Given what we know about the patent system, I don’t think there’s any shortage of rational bases for inter partes review, whether that review is de novo (without a presumption of validity) or not.

      Can anyone really remember why we created a Federal Circuit? Because it some circuits were perceived as having a very high bar before a patent was deemed worthy causing a forum shopping war.

      I think there’s a big difference between a dozen different circuits applying a dozen different laws versus one administrative agency applying a single circuit’s case law.

      1. 6.6.1

        On forum shopping, it wasn’t a dozen different laws that was the perceived problem. It was the very high standard of patentabilty being used in some that cased the forum shopping.

      2. 6.6.2

        We have an independent judiciary for a reason, Mike. Without an independent judiciary, the whole idea of “right” or property is a fantasy.

        This is fundamental and important.

        1. 6.6.2.1

          Sorry, MM, for addressing this post to “Mike.”

          But if Congress or the Executive can revoke a right, one does not have a right in the first place.

          While no one has a vested interest in a law, one does have a vested interest in one’s patent. A patent cannot be invalidated based on a newly passed law.

      3. 6.6.3

        One should note that Malcolm completely sidestepped the question asked of him regarding separation of powers.

        He did this by “answering” with a question (and a rhetorical question at that) before simply moving the goal posts and talking about something else.

        I eagerly look forward to an actual answer to the question asked of Malcolm in such a friendly manner.

    7. 6.7

      I agree Ned. IPRs are outrageous for many reasons. Not least of which is that we can’t trust the patent judges not to be politically driven.

      1. 6.7.1

        You guys get all concerned about “politically” driven or “politics”. When, in fact, the guys in the administrative branch have little of that going on. Instead, we have a whole corps of people more concerned with invalidating on patents than any “political” concerns.

        Unless of course you’re talking about the “political” (aka legal) concern of certain applications going down the 101 drain.

    8. 6.8

      “Patent owners have a right to have their patents judged in an independent judicial branch.”

      I feel your pain, but I think you mean they “did” have such a right. Then certain irresponsible/bottom feeding elements abused it and it was taken away.

      “Without standing, the mighty can and will use IPRs to bankrupt small businesses with litigation by IPRing the small business entire portfolio if necessary.”

      Exactly. Predictable. And in fact I did predict it. It’s so highly effective. Huge leverage. You don’t even need to worry about infringing one little patent all that much if they have a whole portfolio of other patents licensed out when you have the means to destroy all the rest of that stream.

      Advanced patent strategeries FTW!

  3. 5

    The unbiased comments of a man who has moved to a palace in Paris for unknown reasons after making many millions without ever starting or enhancing any business or created any jobs other than for a few trial lawyers.

    1. 5.1

      cur, if I understand IPNav, it really operates as a glorified licensing enforcement agent for the firms/inventors who created and patented the invention asserted. IPNav therefore performs and important function in the market and incents invention by providing investors in startups and security for their investment in their patents. After all, almost all new jobs are created by startups.

      Destroying firms like IPNav can only harm innovation and jobs in the US if I am right about how it is structured.

      Your post is a smear.

      1. 5.1.1

        Part of the ‘fallacy’ of posting with a real name is that such posters garner some notion of ‘validity’ because they dare to use their real name and they choose to place their background into the discussion as part of this notion of ‘validity.’

        So as much as I would prefer a singular focus on the content instead of the speaker, if we do grant (even implicitly) some notion of increased validity because a poster is using their real name, it is only fair that such implied veracity be subject to critical review.

        So while you may decide to view the post as a smear, it is a legitimate post to be made. Of course, my support for the ability to so post is not – and should not – be taken as validating the veracity of the post. On that point, I offer no opinion.

  4. 3

    Spangenberg: I hope my predictions are off the mark. Because if they are accurate, there will be an overall negative impact on the US economy.

    Never underestimate the self-importance of the speculators who got rich off the patent bubble and whose relatively luxurious comfort for the rest of their lives and rest of their children’s children’s lives is pretty much guaranteed absent some truly horrible decision making.

    Erich tries to make so hay about law firm layoffs. While it’s certainly true that patent firms whose bread and butter was solely derived from the lowest forms of “innovation” out there may take a hit, intelligent and skilled patent attorneys will simply shift their focus away from patents on “financial instruments” and “do it on a computer claims” back to where it always belonged: bona fide new machines and compositions and methods for making them.

    In addition, you don’t have to look hard to find the most vociferous proponents of patent expansion bragging proudly about how patent reform just helps to further line their pockets because it gives them another subject to opine about in exchange for cash. Are those “experts” wrong?

    The down-sizing of the patent “industry” as a result of reform (judicial and legislative) will be virtually undetectable compared to that which followed the predictable collapse of the credit/housing bubble in 2008. And it’s exactly that sort of collapse that is being avoided by fixing the patent system now instead of waiting for guys like Spangenberg to inflate the patent bubble further and siphon more money into their pockets.

    And that downsizing, of course, will be compensated at least in part by an increase in lawsuits brought against individuals and entities who recklessly informed “investors” that highly suspect patents were going to make them fabulously wealthy, even as well-informed attorneys were articulating in plain terms exactly why those patents were not worth the paper they were printed on.

    A commenter at the webpage states: If Eric is even 75% correct, we’re all pretty much screwed. … I dedicated my entire professional life to patent law to see it flushed down the toilet by our ignorant lawmakers.

    That’s ridiculous. Anybody who’s “dedicated their entire professional life to patent law” is incredibly lucky. Of course, to realize that you’d have to step out of the shiny bubble many patent attorneys live in and look around to see how the vast majority of the rest of the people in this country are doing by comparison.

    As a patent attorney who never once believed that writing claims on methods of, e.g., creating “virtual friends”, was compatible with a healthy conscience, I do have to chuckle at the irony of suggestion floated a while back that my views on subject matter eligibility were motivated by angst over having “bet on the wrong horse” when I studied molecular biology in grad school. Profoundly amusing stuff that just gets funnier as time goes by.

    1. 3.1

      Patents have been the great engine of our economy. The OBM says there is no NPE problem. Patents have enabled employees to freely move from company to company which is considered to be one of the great hallmarks of the success of our high-tech economy. Patent attorneys are hard working people that make a decent living comparable to other professions considering their educational background and experience.

      The reforms are by and large misplaced and poorly thought out. The lobbying of giant tech companies like Google is behind the degradation of our patent system to all of our detriment. The patent system is like our bridges. We are not keeping house and instead pandering to the wants of Google.

      There is no analogy between the housing bubble created by free money from the Fed. and patents. Patents have increased with the enormous increase in innovations. Information processing for example have had patents for over 20 years and have flourished with patents. The demise of patents will like result in a great shock to our economy has we loose competitiveness.

      Signed,

      Reality.

      1. 3.1.1

        There is no analogy between the housing bubble created by free money from the Fed. and patents.

        In fact, there are many analogies to be drawn between various speculative bubbles created by and far the wealthiest people in society for their own enrichment at the expense of everyone else. Those analogies were recognized before the housing/credit disastrously collapsed and before the current (and predictable) deflation of the ridiculous patent bubble.

        Had we followed the wishes of the professional patent expansionists who tried to make patent litigation a part of “doing business” for every business, things would have gotten far, far worse before they improved and the “landing” would be that much harder.

        The OBM says there is no NPE problem.

        That’s nice. I have a problem with NPEs and so do a lot of other people.

        Patents have enabled employees to freely move from company to company

        Employees are still free to move from company to company. They continue to do so all the time, every day, in huge numbers. And people are still obtaining patents, all the time, in huge record breaking numbers.

        The reforms are by and large misplaced and poorly thought out.

        Not at all. The reforms put in place have been given far more consideration by far more thoughtful people than any other reforms in the history of our patent system.

        The lobbying of giant tech companies like Google is behind the degradation of our patent system

        This is an incredibly simplistic view of what is happening and barely worth addressing. Suffice it to say that many of us could care less what Google thinks about anything, much less patents (after all, they are responsible for some of the very worst patents out there). But we still favor the existing patent reforms and will continue to push for more reforms until the system begins to resemble a sane system again.

        Information processing for example have had patents for over 20 years and have flourished with patents

        Patents are not necessary for information processing to “flourish”. They never were necessary, and in short time it will be perfectly clear that, if anything, they were just a drag on the ability of ordinary skilled people to develop new logical protocols for processing information with old computers. In twenty years everyone will look back on 1990-2010 era and marvel that a case as goofy as State Street Bank was ever written.

        The demise of patents will like result in a great shock to our economy has we loose competitiveness.

        This vastly overstates the importance of information processing patents to both the economy and to progress in information processing.

        Frankly, it’s amazing how readily people become confused about a mythical imaginary future where beings exist only to consume and produce information and the reality where the vast majority of actual human beings are going to living, with or without patents, for a long, long, long, long time (absent some devastating event which will render your fears even less relevant and believable than they are now).

        1. 3.1.1.1

          MM says, ” I have a problem with NPEs”

          In other words you have been caught with your sticky fingers in other people’s patent cookie jars, and those sticky fingers were bruised when an inventor or an agent for inventors such as Mr. Spangenberg slammed the lid on your sticky fingers.

          Big business and small business hucksters feel entitled to make a quick bunch by stealing independent, academic and small business inventions. prior to globalization America collectively prospered because inventions they stole were manufactured in America.

          Today, under globalization, transnational corporations, and even most invention pilfering start up companies ship most of the value of those inventions outside America.

          1. 3.1.1.1.1

            Ronald J Riley is calling me a “huckster”?

            Now I’ve seen everything.

            Sorry, Ron, but my problem with the increasing participation and prevalence of NPEs in the patent system has nothing to do with cookie jars or sticky fingers.

            Nice try, though.

            1. 3.1.1.1.1.1

              No it is focused on your believe that information and information processing machines are about the same thing.

              The entire world of science educated people is laughing.

              1. 3.1.1.1.1.1.1

                You have to claim those differences for them to matter, Night. Most information processing claims do not claim those differences. That is one part of the problem.

                No one disagrees with the idea that computers and information and information processing are very important. The claims are the problem.

                1. Those differences are claimed Go Author. Please tell me how they are not? Please remember to include a PHOSITA and how they would interpret the claim. Please go to a site where real people that are PHOSITA are bidding to build real machines like elance. Please report back on the language they use that is functional and looks a lot like the claims.

                  Reality calls. Nice that you can spout nonsense but reality will win in the end–science always does.

                2. Moreover, Go, how cute of you to run interference for MM. The reality is that he has been trying push an outrageous analogy. Shameful nonsense. Each time I confront him about it he changes the topic. Clearly shameless propaganda for the science illiterate. In 20 years you lot will be seen as people that intentionally fabricated nonsense to try to burn our patent system down. Nothing more and nothing less.

    2. 3.2

      I’ve worked at three different law firms and never once counseled anyone that patents would make them “fabulously wealthy”. Nor did anyone at the law firms counsel people in this manner. In fact, we told small inventors they would be unlikely to make any money from the patent itself.

      You have a skewed version of patent attorneys from what I can see.

      1. 3.2.1

        PatenBob: I’ve worked at three different law firms and never once counseled anyone that patents would make them “fabulously wealthy”. Nor did anyone at the law firms counsel people in this manner.

        That’s super wonderful.

        You’ll note in my comment that I referred to “individuals and entities who recklessly informed “investors” that highly suspect patents were going to make them fabulously wealthy”. Whether any of those people were patent attorneys is anybody’s guess.

        You have a skewed version of patent attorneys from what I can see.

        I am a patent attorney. I’ve been around the block, just like you. And I’ve met all kinds of patent attorneys. Some of them say the darndest things. Just the other day some patent attorney told me that “software was in everything.” I laughed. He also said that it was difficult to determine whether a claim described software. That was even funnier.

        we told small inventors they would be unlikely to make any money from the patent itself.

        That’s wonderful. Again: I spoke about investors who were misled into believing that some patent describing an otherwise ineligible or old method performed “on a computer” would be a wise investment. Perhaps for some of them, the investment was wise. It’s always a bit of a gamble but a wise investor should consider (and should have considered) getting a second opinion from someone who isn’t directly invested in or cheerleading for the inflation of the patent bubble.

        Spangenberg’s predictions about additional patent reform seem reasonable to me. But Spangenberg will never admit that (1) he already made his money and (2) his behavior (among that of others) is part of the reason that we are seeing this patent reform sooner rather than later.

    3. 3.3

      When the lawsuits come through and writedowns happen, litigation WILL NOT be the only area to take a haircut.

      Some companies (no names mentioned here) have used and continue to use intellectual property to fudge their book value. This is a well known phenomenon. Which is also why it is no secret as to why there have been few if any write downs. Its great for executives whose pay is largely based on share price. Every new patent in the portfolio adds just a little bit more to the book value which eventually trickles into the share price. Given the gamesmanship in valuation, this strategy has proven very very lucrative.

      When this strategy disappears, A LOT of prosecution work is going to go out the window with it.

      A large segment of the patent bar has been a party to one of the largest shareholder scams in history. Of course no one will admit that, as we are a club whose main rules are “shhh! dont say that” and “dont rock the boat.”

  5. 2

    I don’t think that there will be as big an impact on the bottom line of most operating companies as some seem to believe. There’s a really good argument that resources for operating companies that were diverted to defense, response, and investigation might offset some of the loss of value in any given patent portfolio — if you don’t think it’s a drain, then you haven’t paid the salaries or the fees for addressing even stupid demands.

    Similarly, I see IPRs as a quick way to clear the way to product release will probably help more companies than hurt. The cost of doing that than incurring the cost of litigation will be a boon for some operating companies in crowded spaces.

    1. 2.1

      patents cannot be a net positive to the profits of any industry. Every cent made on a patent comes out of some other company and the lawyers have to be paid too.

      The benefit of patents is in the long term where they promote invention. As an accounting matter, the economy would look much better right now if patents were simply abolished. Only a lack of care about precision could lead to the suggestions in the original article that large companies will suffer net accounting losses.

      1. 2.1.1

        Implicit in your view Owenthurman is that not only would such innovation happen anyway, but that the timing of the innovation is not material.

        Your view is not borne out by ANY history of record and goes against the grain of even having a patent system to begin with.

        I will ask of you the same task as I have asked of others with this mindset: show me one modern day advanced society that has chosen your view and made it work.

        Just one.

        Thanks.

  6. 1

    For the general economy, the “other shoe” might be Erich’s prediction 4:

    Significant GAAP write-downs are coming.

    1. 1.1

      How would that be bad?

      It was a fraudulent inflated value to start with.

      The result would be where the value SHOULD have been.

      1. 1.1.1

        You realize of course jesse that the person alleging fraud has a higher standard to meet than mere allegation, right?

        Oops, wait, that’s a legal notion and how silly of me to expect legal discussions to follow legal notions…

        You also realize that the view of “inflated” does NOT track the actual improvements in effecieincies and other fruits of innovation, right?

        The ad hominem reply of “Amish” here would be a valid use of ad hominem. I will leave it to jesse to grasp the logic as to why that would be so.

        1. 1.1.1.1

          So call it a market “correction”. That still doesn’t mean the value wasn’t improperly inflated.

          1. 1.1.1.1.1

            Market corrections happen all the time without any sense of impropriety.

            I realize that you are backtracking from your over the top “fraud” statement, and for that, I thank you, but you are still over the top with your lack of appreciation for the role of intellectual property in modern day business evaluations (with NO improprieties present at all).

          2. 1.1.1.1.2

            This is, of course, not to say that individual and selected improprieties absolutely do not exist in valuations just because intellectual property may be involved. Human nature, being what it is, means that any venture dealing with humans is exposed to that human factor.

            It is just not the driver that you would make it out to be, based on your Belieb system that patents are “bad.”

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