Prof Jonathan Barnett (USC) has released his new article arguing that we’ve gone too-far — that those arguing for dramatic changes to the patent system did so with “little to no supporting evidence.” [READ IT HERE]. Barnett argues that
Depropertization of the patent system—yields three potential efficiency losses. First, depropertization impedes efficient resource allocation by shifting the pricing of technology assets from the relatively informed marketplace to relatively uninformed judges and regulators. Second, depropertization distorts markets’ organizational choices by inducing entities to undertake innovation and commercialization through vertically integrated structures, rather than contractual relationships now clouded by the prospect of judicial re-negotiation. Third, depropertization may facilitate oligopsonistic efforts to depress royalties on patent-protected inputs, resulting in wealth transfers to downstream entities and discouraging innovation by upstream R&D suppliers.
In the article, Barnett primarily focuses on the idea of a patent thicket and whether these patent thickets have inhibited downstream innovation. Barnett concludes: “Without a secure expectation of injunctive relief and compensatory damages, false prophecies of too many patents may result in too little innovation.” Of course this conclusion also rests upon weak empirical ground.
Worth repeating on top.
Greg stated:
Trespassers are to be evicted. Balancing hardships to decide whether they should just be made to pay a “reasonable” rent is absurd. Get them off the property first, and then if they want to rent the place, let them come back as negotiators on even terms, and find a real market price, not a judge’s best guess at a fair market price.
When the courts take off their “injunction is so harsh” blinders and realize that making the aggrieved whole is the equitable aim, and that an injunction is actually as close as possible to making a patent holder whole, then the courts will be aligning equity and law.
(to be clear, the second paragraph is mine)
Yes, by all means, kick someone out of their home when some of the leaves from one of their many trees “trespass” into a neighbor’s yard. Than you can figure how much it would cost to rake the leaves and have them removed.
Huh? No one is talking about kicking someone out of their home. We are talking about kicking someone out of my home, when they have not been invited in.
When my “smart” home has 100,000 patented elements, and the “trespass” is one of them, the character of the trespass is somewhat…..attenuated.
Is that one trespass essential to the functioning of the other 99,999 non-trespassory elements?
If not, then I guess I do not see what is the big deal about being evicted from the one. Just design around it.
If so, then I do not see why it is somehow unjust to be evicted. You are evidently deriving a great deal of value from that trespass. You should be willing to negotiate accordingly. It is unseemly to call down the power of the government to impose a “reasonable” rent for you, untethered from any actual market experience.
This goes an injunction, which would kick you out of the house, regardless of the immediate practicality of stopping the trespass.
Mr. Snyder, your reply is non-responsive.
Of course, this is because you are (once again) riding your own personal emotions into a battle for which you do not understand the terrain.
Everyone by now “gets” how you feel.
It is just that your feelings do not reflect the actual law or the legal understanding of the situation.
Let me note as well that your typical plea for “equity” does not save you here, as the truly equitable position – the reason for equity – is to make the transgressed whole.
Your position is merely one of the squatter, feeling that the trespass law in and of itself should not apply to you.
sometimes I wonder about your mental capacity anon
you deny that any hardship to any infringer should be weighed at all, and I analogize that a single infringement out of 100,000 cannot be cause to immediately cease all sales up and down the chain, regardless of cost to producer or consumer, and you come back with your usual drivel about the terrain.
Ya know, NOBODY knows the terrain we are on right now my friend. Uncharted territory.
Yay – the “mental capacity” meaningless reply.
Peddle your infringer rights stuff after you take note of the law, and here, of the purpose of equity.
Eviction is not an equitable remedy brosefupolous.
True enough. Eviction is a legal remedy, not an equitable remedy, and therefore one is not obliged (or even allowed) to take into account the equities of a situation when enforcing an eviction as a remedy to trespass.
Still and all, the analogy of patent infringement to trespass to lands strikes me as a fairly intuitive and sound analogy. Other than the law/equity distinction (which is mostly a question of vocabulary), is there a reason not to treat the two in similar fashion? Or, to put the question another way, is there a good reason why Congress should not revise the law to specify that an injunction following a verdict of infringement “shall” issue instead of “may” issue?
Greg,
I think the permissive language is used (and consequently mis-used by the court) for the benefit of the patent holder, who – at the discretion of the patent holder herself – may want to negotiate and reach a deal to allow the former transgressor “access.”
Mandating an injunction may then seem heavy-handed.
Of course, the courts (in a fit of their “nanny-ism”) think that they rather than the patent holder “knows best.”
(definitely related to nose of wax addictions, by the way)
Malcolm’s “the gaping aholization” still remains…
Do you kiss your mother with that mouth?
Do you kiss your mother with that mouth?
Remember, folks: “anon” believes that “PC is the worst thing ever.”
But he’s totally not a hypocrite who loves to put on a dress and play Miss Manners whenever it suits him.
Nobody could have predicted ….
LOL
MM thinks that PCness is “manners”
lololololololololololololololololololol
no wait,
lolololololololololololololololololololol
clueless boomers.
No kidding, eh 6.
He just doesn’t get it.
(and of course, his “swagger” is something that we all should “just enjoy”)
Right Ned? Prof?
Yay ecosystem!
😉
He just doesn’t get it.
LOL
Go ahead and explain your deep serious views about
“PC” to everyone, “anon.” Be sure to account for the whining of your c0h0rts that PC is what keeps them from being able to express their toxic r@ cist and mis0 gynist cr@p in public without criticism or shunning (criticism and shunning, of course, being exactly like hanging or having a cross burned on your front lawn).
Go for it, “anon”! You’re a super serious person! Make everybody’s day.
“PC is what keeps them from being able to express their toxic r@ cist and mis0 gynist cr@p in public without criticism or shunning”
MM thinks that PCness stops people from “expressing ‘toxic’ raycyst and misogynist ‘crap'”.
LOLOLOLOLOLOLOLOLOLOLOL
Clueless boomers. At least the young lefties and the young righties are somewhat united in their desire to purge the blight that is the clueless boomers from society.
He really is clueless and seems (purposefully?) to not understand the difference between a reaction to someone’s expression and a desire to legally constrain the expression in the first instance.
After we’re finished talking about the “depropertization” of the patent system, I hope we have some time to talk about the gaping aholization of the patent bar and the folks who sat around and whined like babies when the system was exploding right in front of everybody’s faces or — worse — directly advocated for more of the same while failing — intentionally — to make even the most feeble efforts to address the contrary (and winning) arguments.
Is anyone aware of Prof Barnett’s position on Prometheus v. Mayo? I can make a guess but I haven’t bothered to look too deeply yet.
That was the case where Prometheus advocated for a system where one could become an infringer of a patent merely by practicing a public domain data gathering method and thinking a new thought about the meaning of the data gathering method.
Pretty much every one of the people whining and crying here today about smaller patent rights were out there when Mayo was being decided, either in the comments in this blog or right up top posting their editorials, lining up behind Prometheus. All that was accomplished was to demonstrate two things: (1) that there is literally nothing that the patent maximalists will do or say to expand patent rights and (2) that the maximalists have absolutely no clue about what a sane patent system looks like.
The whirlwind is going to continue to be reaped for some time. As I already pointed out, the experiment was already performed. It was a disaster. But the bottom feeders who were cashing in the most really miss that cash. Boy do they miss that cash. Listen to ’em whine.
Malcolm’s number one meme of Accuse Others Of That Which Malcolm (Is/Does) is on display.
Again.
What’s been on display since forever, “anon”, is your endless ineptitude and ap0logetics for the worst patent attorneys and the worst case decision ever written.
If ever there was a time to keep the tightest lid possible on the grifters and con artists who love to infest the patent swamp, it would be now.
But of course “anon” is going to keep pushing for More Patents, All the Time, Easier to Enforce. It’s all he really knows how to do and, heck, what does he have to worry about? He can just represent himself (assuming anyone believes that he’s a lawyer and not the guy who opens the registered mail in some Texas firm’s mail room LOL).
I make no apologies for anyone.
Once again you (willfully) confuse taking a shot at your “logic” and argument with somehow something else.
(that’s called dissembling, by the way)
Accuse Others Of That Which Malcolm (Is/Does
This playground-grade script of yours was always a p.o.s. and never made much sense but lately it’s become even more absurd.
I’m pointing out the relevant historical facts. You wish to bury those facts because they are reflect poorly on you and your c0horts. We all get that. We all understand why you want to do that.
But note that I’m not “accusing” anyone of doing what I just described. I’m accusing people of failing to do exactly what I’ve been diligently doing here for years. The idea that habitually dissembling self-interested shills who profit directly from patent maximalism should be put in charge of writing the history of what went down before and after State Street is amusing, to be sure. But it ain’t going to happen on my watch.
You – of all people – whining about a “script” of someone else is beyond absurd.
“But it ain’t going to happen on my watch.”
J.D. called – he wants his fields of rye back.
“to make even the most feeble efforts to address the contrary (and winning) arguments.”
What does that even mean?
(as you yourself have failed to make even the most feeble effort to address any of the numerous counterpoints presented directly to you on these boards)
“to make even the most feeble efforts to address the contrary (and winning) arguments.”
What does that even mean?
How nice of you to ask. It refers to the petulant refusal to address the elementary logic that says when you claim “old step plus new thought” you are protecting the ineligible new thought, at least in the context of the public who is freely practicing the prior art “old step”.
The fact that you ask this question in 2017 is just more evidence of the head-in-the-sand born-yesterday tactics of the patent maximalists. You guys really are incredibly dense.
Lol – not only have I addressed that, I have proposed counter points from which YOU refuse to engage.
“Go figure Folks”
I’ve even named the proper patent doctrine for you: inherency.
Funny then how that very same dcotrine gives you fits over the single most prolific (and affordable – another point that you fail to address and dissemble about) form of innovation today.
Inherency: the back bone of that Grand Hall experiment.
Ah yes, good times.
inherency.
Typing the word “inherency” is not a “counterpoint” to the straightforward and salient “old step + new thought” problem tbat was presented so plainly by Prometheus and addressed succinctly by the Supremes in their never-going-to-be-overturned 9-0 opinion. It’s not even close. It’s just dust-kicking.
Translation: “Wah, I don’t want to discuss your counterpoint because it is not on my short script.”
Sometimes it’s necessary to put things simply: when the patent system is expanded such that grants now protect logic, information and other absractions, the inevitable result is that the relationship of the patent grant to tangible property diminishes.
Straightforward stuff. Of course, it requires folks to first acknowledge that this expansion of patent rights into uncharted realms actually happened. And that requires honesty and a modicum of intelligence. Good luck to everybody, but especially the patent maximalists who seem to really really struggle with the basics.
How is your copyright on logic coming along Malcolm?
Poof – your dissembling is dispatched yet again.
Poof – your dissembling is dispatched yet again.
This will come as a huge shock to you but bizarre non-sequiturs are profoundly ineffective arguments. Nothing has “poofed”. The ashes of your credibility might have shifted a bit but that’s almost certainly due to gas.
Funny then how you never have an answer to that direct and rather simple question.
Maybe you want to focus on that instead of trying so much to project your inadequacies…
Funny then how you never have an answer
Funny how you choose to dissemble. But it’s a longstanding habit with you.
I’ve addressed your silly question probably a dozen times, which was 12 times more responses than it deserved. Dennis knows it. David knows it. Jason knows it. Everybody knows it.
“Funny how you choose to dissemble. But it’s a longstanding habit with you.”
Yay – more standard number one Malcolm meme of Accuse Others Of That Which Malcolm Does.
Entirely predictable.
Entirely trite.
You need a different game, Malcolm.
I have just noticed the presence of an unstated misconception underlying the “patent thicket” model. The misconception is that innovation lies in the direction of the thicket. On the contrary, the idea of a patent system is to encourage diversity and new solutions to problems. It is not a bug, but a feature of a robust patent system. A patent thicket is a good thing because the incumbents will cover that territory while entrepreneurs blaze a new trail. Depropertization has dual adverse effects on innovation. 1) It steers more and more capital toward the subject matter of the thicket. 2) It punishes entrepreneurs if they blaze a new trail by throwing open any newly discovered subject matter to all comers.
This misconception leads advocates to saddle opponents of the theory with the task of obtaining empirical data on the discoveries that lay outside the thicket. We don’t have an alternate universe where we can go observe all the wonderful things that would have been created but for the depropertization in the real world. We don’t know what those discoveries would be, but we know they would come if there were incentive to look for them. That is what entrepreneurs do.
If we continue with this scheme of a patent system without property rights, then we will reap an unimaginative plodding forward by the incumbents (accompanied by bureaucratic efforts to stimulate anointed industries). If we again recognize patents as property rights, we will invigorate the entrepreneurial engine of innovation.
A patent thicket is a good thing
By definition, it’s not a good thing.
My goodness but the maximalists are really reaching these days. Something must be in the air. Perhaps it’s the cr@ck that our mentally ill president elect appears to be smoking?
Actually Malcolm, he is pointing out a flaw in the “by definition” that you are so slavishly adhering to.
He has an interesting point: it is said that necessity is the mother of invention, and if – by the necessity of constraints to certain paths being blocked by patent, other new and inventive paths are indeed made to be more desirable.
The other day Greg remarked that he believed that the stuff of innovation was boundless. If indeed so – and human experience lends support to such – then placing hurdles IS a good thing.
Greg remarked that he believed that the stuff of innovation was boundless
Greg has also demonstrated on more than one occasion that he has no idea how subject matter eligibility works, or why. And he has stated that in twenty years we’ll have robots judging courts cases. So I could really care less what Greg says until he demonstrates that he’s got a clue. He seems like a relatively smart guy (way smarter relative to you, anyway) so I have hope for him.
The “point” that you think is “interesting” is absurd. There is no “flaw” in the definition of “patent thicket”. The definition is the definition and it describes a situation where there are so many patents in a given area that the cost of innovating around them, not to mention the cost of simply figuring out whether it’s even possible to innovate around them or whether you even need to innovate around them, becomes so great that innovation in that area is, in fact, chilled.
The classic thicket situation is where a tool has been developed that makes it much easier to explore a conceptual space and gather information than before. The patent that describes the structure of that tool and/or the new tangible physical transformation effected by that tool is the proper driver of innovation. We should all be encouraging more patents like that, and more innovation “around” that kind of patent. We should all be discouraging the granting of a zillion “use this tool to do what the tool does in these zillion sub-species of situations” because those patents do more to encourage scrivening and litigation than “innovation.” The greater the potential for the tool and the easier it is to sit around and dream up different specific applications, the greater this problem becomes. This has always been obvious issue to anyone familiar with the basic workings of any patent system but, more recently, it’s become a reality that can only be denied by ideologues who see patents as not only the best but the only solution to every potentially solvable technical problem. And we all know where those ideologues come from, don’t we? Oh wait — we’re not supposed to talk about them. This an academic bashing thread.
LOL
And yet, you do not integrate into the discussion the points I have presented to you: e.g., if your concern is “use,” try out the Act of 1952’s 35 USC 100(b), and if your concern rather is machines or manufactures (such as machine components), try out 35 USC 101.
The direct words of Congress – you know, the actual branch of the government authorized by the Constitution to write the statutory law that is patent law.
“how subject matter eligibility works, or why”
Regardless of your feelings, subject matter eligibility has zero to do with the immediate comment.
Above, you accused me of using a non sequitor. While you here Do That Which You Accuse Me Of.
As noted, your number one meme is again being (over) played.
Maybe come up with something original and on point…
“new and inventive paths are indeed made to be more desirable.”
Exactly. And that’s why we have Alice. Patents on Ends rather than Paths do not promote any progress.
Is that what Alice stands for in your understanding? I would be a lot better pleased with Alice if I were convinced of that. Certainly that seems to be the direction in which the CAFC is training the sprouts off of Alice (e.g., Amaranth).
That is the holding of Morse, and a fine and sensible holding it was. More properly, however, a matter for 112(a) than 101, however.
“More properly, however, a matter for 112(a) than 101, however.”
For some, the Ends justify the Means.
Take a random sample of 50 “do it on a computer” claims and figure out how many of the claims recite actual code and we can talk about who is and who isn’t “claiming the means.” That, of course, doesn’t address the other major unspoken issue underlying the Alice opinion but it does provide some perspective.
“how many recite actual code”
Truly clueless about what a patent claim must comprise…
…either that or being purely dissembling (or perhaps both…)
I’m not sure what a patent “thicket” is except for lots of patents. Patents encourage innovation so I’m not sure why lots of patents isn’t also a good thing.
Patents encourage innovation so I’m not sure why lots of patents isn’t also a good thing.
“Laws prohibiting ignorant ideas encourage the expression of less ignorant ideas so I’m not sure why lots of laws banning the expression of ignorant ideas isn’t a good thing.”
Also, nobody is saying that “lots of patents” is a “bad thing” per se. We’ve had “lots of patents” for a long time. What’s deemed to be “bad” by some of us is a rapid explosion in certain types of patents that lie on the fringes (at best) of the sort of the “innovation” that the system was designed to promote, and which are being granted without anything approaching a sensible examination.
Your feelings are noted.
Yes, the xerox patent thicket, stopped so much innovation and competition /sarc.
Bad choice. iwasthere, as you picked an example that show US interference negating the technological edge that had been provided (think about how the Japaneses knockoffs were able to gain their foothold).
I thought we were talking about how a patent thicket – leads to the necessity of innovation? Further elaborating, the Xerox story I was referring too, was the last time the ‘patent system is broken’ surge of the infringing class. My point being, that many complained and testified on the Hill per the broken system – and the ‘impossible to compete’ with xerox’s mountain of patents concerning xerography. ‘We must have compulsory license’ type trust busting, they said. Then along comes the innovation of digital printing and scanning – > Boom! the core xerox patent holdings and business were crushed. To be sure, there are many other lessons to draw from the Xerox saga. Not least of which is a willingness to sell a new product against your old line product. Meh, maybe it’s part of the natural business life cycle.
the ‘impossible to compete’ with xerox’s mountain of patents concerning xerography
Just curious: how much of that mountain was devoted to patents on using xerox machines to copy text on paper, wherein said text on paper related to “real estate availability data” and stuff along those lines? Or patents on using a xerox machine “on a plane” or using a xerox machine to copy a paper with text “wherein said text related to data that was obtained over a phone”? Or patents on using a xerox machine “wherein a plurality of copies was obtained, and wherein said copies were distributed to a plurality of individuals at different locations”? Or patents on using a xerox machine “wherein use of the machine requires a code” or “wherein use of the machine requires payment”? Was it like 95% of the Xerox portfolio or more like 0.001%?
Refresh everyone’s memory, please since you seem to be an expert on this topic.
Are you dissembling (once again) concerning the exceptions to the judicial doctrine of printed matter?
Yay same old same old.
Good point!
Accepting the H2H definition that the article author by “depropertization”means a system that moves toward favoring monetary damages over injunctive relief, that of course is vet long historical trend for personal property, as opposed to real property [land]. But in patent law that is due almost entirely to the Supreme Court decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). Importantly for this article, that decision did NOT stop the obtaining of injunctions for patent infringement against product competitors of manufacturers or sellers of actual products. [The kind of patent suits that were far more predominant in prior years.] What that decision did was to end the automatic obtaining of injunctions in every case. Especially by organizations solely in the business of buying patents of others to sue on. One can debate the economic changes and merits of the latter, but the former was essentially changed.
Furthermore, there is another major change in this area of equal or greater economic impact. In past years the Fed. Cir. had rarely challenged jury infringement damages decisions. In recent years the Fed. Cir. has increasingly scrutinized, and reversed in appeals, the damage calculation methodology, the jury instructions, and the expertise requirements for the testifying damages experts. Thus, requiring the D.C. judges to do so.
Paul, historically the reason for injunctions in patent cases was to prevent ongoing infringement. In fact, historically, the reason for injunctions in any case is to prevent ongoing infringement of a legal right.
Specific performance is a form of injunction to prevent contract breach, or to prevent further contract breach. There are policy advocates that suggest that we should eliminate the specific performance remedy in favor of efficient breach. These circumstances occur when the cost to perform exceeds the damages of the other party, making the cost of breach less than the cost of performance. Essentially, the same policy arguments are being made in favor of efficient infringement.
It is interesting to note that the Supreme Court in eBay already ruled that a patent owner cannot be denied injunctions simply because they are an NPE licensing entity. Further, the concurrence of Roberts, Scalia and Ginsburg indicated that ongoing infringement would automatically satisfy the first two prongs of the four-part test. (“(1) whether the plaintiff would face irreparable injury if the injunction did not issue; (2) whether the plain-tiff has an adequate remedy at law; (3) whether granting the injunction is in the public interest; and (4) whether the balance of the hardships tips in the plaintiff’s favor.”) Thus the real problem for patent owners is the balance of hardship showing, which is effectively denies the patent owner remedy in any case where a reasonable royalty compensates.
But is that true? The problem with this is that the denial of an injunction allows the infringer to infringe with impunity because the only remedy available to the patent owner is a reasonable royalty. This forces the patent owner to bring litigation a great expense to all parties, including to the court system. Thus, for the big picture point of view, the patent owner is severely damaged by being denied a right to the injunction because it forces litigation in order to collect a reasonable royalty. Thus, I would think, that injunction should apply in the ordinary case where the patent owner wins on validity and infringement even in the case of an NPE. The availability of injunctions would force settlements prior to litigation in order to avoid litigation expenses unless the infringer in a strong case for invalidity or noninfringement.
I do not know if anybody has done this analysis, but eBay may have had the perverse result of increasing litigation.
It is interesting to note that the author fully agrees with my position here. See for example, discussion at page 32.
I was struck by the fact that in his discussion of the prior articles of Lemley and others about stacking, hold up and the like reflected a relatively inexperienced view the patent system. I personally have been the Chief Patent Counsel of a major corporation, and I know how things operate in reality. For example, the vast majority of patents in a particular field are held by competitors. Corporations deal with competitors through crosslicensing. Thus the only patents they that are available for either stacking or holdups are patents held by independent operators. These are relatively few, and can be identified by proper clearance studies.
Thus there is no real excuse to deny a patent owner’s request for an injunction based upon stacking/holdup. If a business operates without doing clearance studies, it is builds into its pricing model an expected cost for obtaining licenses for unknown patents. Thus there is no real, genuine, reason to deny a patent owner injunction because of some theoretical holdup problem. There might be if it can be shown that the patent owner waited for the industry to develop before he began to enforce. But otherwise, the price set by the market for licenses should be the measure that any infringer should pay, and refusal to pay what everybody else pays thereby forcing the patent owner to sue should be rewarded with an injunction.
There might be if it can be shown that the patent owner waited for the industry to develop before he began to enforce.
Does that ever happen? In what field?
LOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOL
What a farce. Don’t touch the elephant, folks!
That is not the “boogeyman” you want to make it out to be Malcolm, seeing as required by law, patents are published and available to any such person setting out to “develop the industry.”
In fact, using a bigger stick against those unwilling to keep up with what the patent system produces is more in line with the mandate of “promote” (which does include the meaning of “promote” as in promotion, or spreading the word, in addition to the more accustomed sense of “improvement”).
Then again, this is not a new point, and has long been on the table of discussion.
as required by law, patents are published and available to any such person
In the US, applicants can still file applications with nonpublication requests.
And the patent maximalists — yes, the same ones — fought against the publication of patent applications and today they continue to whine about the publication of patent applications and they continue to whine about poor old Gil Hyatt. If they had their way, there would be a giant gold bust of Lemelson in Patent Max square.
The hypocricy stinks, “anon”, and the stink is on you.