Patently Absurd

Brad Feld has a good post up about software patents where he argues that they should be abolished.

I completely agree with Brad about software patents, I think they are useless as a business tool.

Until they are abolished however, I encourage all of our portoflio companies to file for as many as they need for defensive purposes. I posted a cliche of the week on this last year.

But I'd like to dig deeper on this issue of Intellectual Property (IP) protection.  We, as a country, have had a policy of broad intellectual propery protections (copywrights, patents, etc) as a means to foster innovation.

As it was told to me, the idea is to encourage people to come up with innovative ideas by giving them long term exclusive rights to those ideas. I am sure that many of you who read this blog have a deeper understanding of the prinicipals behind intellectual property rights and the logic behind them so feel free to weigh in on this in the comments.

I suppose that there is some logic to that argument, but having spent the past twenty years of my life working with people who are risking their time, energy, and money (and the money of my firm and our partners) on innovative ideas, I honestly don't see the logic in our patent system and some of the copyright system.

If you look at the arts for example, innovation by one artist leads to innovation by another artist.  If Picasso had patented cubism, would we have had the burst of energy around that way of thinking about painting?  If Chuck Berry had patented his approach to rythm and blues, would we have gotten Keith Richards?  If Shakespeare had patented his approach to tragedies and comedies, would that have stifled or encouraged innovation in theater and literature?

My point is this.  Innovation is an evolution. Everybody takes from everybody else. A truly competitve darwinian system where it's survival of the fittest may produce orders of magnitude more innovation than a system where someone gets to keep a lid on their invention (if in fact it is their invention which is a serious problem with our current system).

I think of the patent system in our country a bit like the tenure system in our academic institutions.  It protects ideas and people that may not deserve to be protected and it allows for underperformance and it stifles creativity and energy.

Clearly we cannot abolish our system of intellectual property overnight.  Many billions of dollars (including tens of millions of capital I manage) has been invested in companies that are using intellectual property protection as a competitive weapon.  If there is going to be change, it must be gradual.

But I am encouraging all of us, the readers of this blog, other bloggers, academics, politicians, public policy wonks, and anyone else who cares about innovation in our country and the world at large to think hard about a world without patents and less intellectual property protection broadly speaking and what impact that would have on innovation and the flow of capital around innovation.

I believe we need a new way in the years to come.  Our current approach is holding us back, not taking us forward.

Comments

[anonymous]

ive written a couple patent applications and im not entirely sure that they should be abolished, but rather certain aspects should be amended... especially where you can patent anything knowing full well that what you have designed won't work...

[Jeremy Wright]

I'd argue that patents can stir initial innovation (as was the intent) but that, as you pointed out, it severely limits the *inspiration* that can come from that innovation.

And, really, that's what the current systems are designed to protect against, is inspiration. Too bad, really, as an inspired community is an incredibly powerful thing (after all, isn't that what all of Web 2.0 stems from?).

[Andrew GJ Fung]

Giving exclusive rights long enough that the owner can reap returns on their innovation seems reasonable to me. Sparking further innovation is why the rights are supposed to expire.

I see two problems currently: length of the protection term, and determining what's worth protecting (i.e. the "non-obvious" clause).

For the latter, judging by some of the patents granted, they're ridiculous in scope and "obviousness", if you understand the space well enough. Unfortunately, if you understood the space well enough, you'd probably be in industry rather than at the PTO.

For the former, the term length is longer than it used to be, due to lobbying. Does one really need twenty years to realize sufficient profit to make implementing the idea "worth it"?

It's a balancing act. At one extreme you have the brilliant, underfunded engineer or scientist who goes to demonstrate his idea to a corporation - and promptly has her idea copied without recompense. At the other extreme you have what we often see today, corporations with war chests of patents, used not for innovation but for battle on the field of law.

Perhaps the solution is to segregate patent law based on how tangible the idea in question is. The pace/cost of software innovation (intangible, few physical constraints) is much faster/cheaper than that of say manufacturing or drug research - a couple years of protection would be enough for a dedicated innovator to realize enough gains to validate the profit motive.

Oh, and I don't agree with patenting business processes. The point of IP law is to preserve the profit motive. A (successful) business process inherently generates profit.

In the end, it's shouldn't be about legalities (protect me for twenty years), it should be about purpose (protect me long enough that it was worth the effort to come up with and implement the idea). As idealistic as it sounds, we should be adjusting the legalities every so often with that in mind.

[Omer Trajman]

As you point out, there's a lot of benefit in making inspiring inventions. Where patents play a role (at least originally) is in protecting inventors from outright theft. If you invented smell-o-vision but did not have the skills to manufacture it, without patent protection Sony could just take your idea and potentially benefit from this great new invention. Patents give you the legal leverage to negotiations a fair market value for the right to implement your invention. The thinking goes that if you did not have that leverage then you would have little incentive to develop your ideas at all for risk of theft.

Where the benefits of patents start to break down is when Sony invents smell-o-vision and refuses to let anyone make it, even if they don't plan to; potentially reducing smell-o-vision innovation for the next 20 years. The problem is that we know how foster innovation by giving people the exclusive rights to their inventions but we have no method (beyond time limits) for fostering collaboration.

The establishment of patents is based on article I section 8 of the constitution giving congress the power "to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."

This requires a balance and it often seems that current legislation has the balance tipped too far in favor of the inventors. The question is how to we bring it back to the middle without removing your power to bargain over your inventions.

[Craig]

Fred:
This is a very complicated matter, all the way around. In short - in the arts arena, the works wouldn't qualify as inventions (mostly likely - as there are few absolutes in this area) and therefore wouldn't have been patentable. But they were copyrighted. If I can be so liberal as to rephrase your quesion for a moment: "If Chuck Berry didn't have the copyright on his music and his music was free for anyone to copy, and therefore he couldn't get paid enough from music to survive and had to spend most of his time looking for other gainful employment, would he have produced as much, and would Keith Richards have every heard of him?"

That being said, there is more than a hint of truth in your comment about problems in the current system, especially with regard to patents. Sadly, the free market evolution you've noted above (especially in technology) renders most patents worthless in short order. We've seen convincing studies that concluded that the average life of the value of a technology related commercial patent is about 4 years, precisely because of the pace of innovation. Aside from the time, dollars and energy directed toward preparing, watching and defending patents, it is hard to see what the real damage is.

Your basic understanding of the promotion of arts and sciences is correct - that's what Copyrights and Patents were intended for (Trademarks are slightly different and work in a slightly different manner). However, as is often the case, the law surrounding the issue wasn't fully prepared for what the future was to hold (although many argue the drafters did a much better job here than in other areas of the law) and we're now stressing the original underpinnings with every iteration of innovation.

We specialized in financing and investing in intellectual property and our niche is one of providing capital directly to innovators based on their IP. Amazinginly, we do almost no work with patents as its hard to see sustainable value. The problem of course is that the average value life of 4 years is heavily influenced by all the patents that were worthless as they were filed. So, as the inventor (or copyrightor) its hard to walk away from the process when it might entitle you to many years of protection of profits.

But that's a dangerous statement. "Protection of profits" means, of course, higher prices for consumers in some form. But then again, a market clearing price still has to be reached - so protecting your profits so much as to not have profits isn't valuable at all. Going back to Chuck Berry (which of course I should caveat - he was performing at a time when there were great rip-offs committed and I don't know the history of whether he was paid fairly. Interesting side note is the family of the composer of "The Lion Sleeps Tonight" who was paid a large sum of past royalties slightly too late - the composer died of a curable kidney condition) so.. back to Chuck Berry - if the copyright didn't exist and no one felt they could make a profit and couldn't justify the costs of production, then its possible he never would have been a world renoun performer at all. There were a great deal of musicians in the early 1900s that laid the roots of jazz that are virtual unknowns today because their works were never reproduced (they almost never transcribed their music, were dirt poor, entertained for rent money and lived mostly short lives). No one, save a few piano roll manufacturers, saw profit in reproducing their works.

As technology advanced, it became clear that an artist's work had more value by being bought for very little by many. Today's relateively cost free distribution system takes that to another level altogether.

With regard to software, I tend to agree that patenting software is an act of fruition and thing that reliance on trade secret laws and copyright laws *may be* the most value efficient route.

It is safe to say that there is great diversity of opinion on these matters, and I think the debate is far from settled. We've made a niche out of understanding how to profit from IP and advise companies on it regularly, however. We tend to think that by showing how to earn returns in excess of costs by investing in the space is likely to show the path to useful IP value creation in the long run.

[csven]

The difficulty starts to creep in when Innovation runs into Copy.

[Mike Hogan]

The patent system needs some work, but the issue is complex. My friend has spent 12 years developing a far superior database indexing methodology. He wants to write papers about it, he wanted to get the big database companies to adopt it. But without writing technical papers and promoting it they would never hear about it. But if he does that, he exposes 12 years of work to a knock-off. He is in a catch-22 without patents. The deeper the technology the more patents are required. But for one-button purchase from Amazon? Come on, that shouldn't be patentable. That sort of thing is merely pissing in the well of innovation.

Note: We applied broad patent coverage to our stuff for defensive purposes...have to.

[Ken Dyck]

I think Paul Graham makes some excellent points regarding the prospect of abandoning patents in Are Software Patents Evil?

Before patents, people protected ideas by keeping them secret. With patents, central governments said, in effect, if you tell everyone your idea, we'll protect it for you. There is a parallel here to the rise of civil order, which happened at roughly the same time. Before central governments were powerful enough to enforce order, rich people had private armies. As governments got more powerful, they gradually compelled magnates to cede most responsibility for protecting them. (Magnates still have bodyguards, but no longer to protect them from other magnates.)

Patents, like police, are involved in many abuses. But in both cases the default is something worse. The choice is not "patents or freedom?" any more than it is "police or freedom?" The actual questions are respectively "patents or secrecy?" and "police or gangs?"

As with gangs, we have some idea what secrecy would be like, because that's how things used to be. The economy of medieval Europe was divided up into little tribes, each jealously guarding their privileges and secrets. In Shakespeare's time, "mystery" was synonymous with "craft." Even today we can see an echo of the secrecy of medieval guilds, in the now pointless secrecy of the Masons.

The most memorable example of medieval industrial secrecy is probably Venice, which forbade glassblowers to leave the city, and sent assassins after those who tried. We might like to think we wouldn't go so far, but the movie industry has already tried to pass laws prescribing three year prison terms just for putting movies on public networks. Want to try a frightening thought experiment? If the movie industry could have any law they wanted, where would they stop? Short of the death penalty, one assumes, but how close would they get?

Even worse than the spectacular abuses might be the overall decrease in efficiency that would accompany increased secrecy. As anyone who has dealt with organizations that operate on a "need to know" basis can attest, dividing information up into little cells is terribly inefficient. The flaw in the "need to know" principle is that you don't know who needs to know something. An idea from one area might spark a great discovery in another. But the discoverer doesn't know he needs to know it.

If secrecy were the only protection for ideas, companies wouldn't just have to be secretive with other companies; they'd have to be secretive internally. This would encourage what is already the worst trait of big companies.

I'm not saying secrecy would be worse than patents, just that we couldn't discard patents for free. Businesses would become more secretive to compensate, and in some fields this might get ugly. Nor am I defending the current patent system. There is clearly a lot that's broken about it. But the breakage seems to affect software less than most other fields.

[jackson]

Again, what may have altruistic origins has been co-opted by the greedy bastards.

[John Rodkin]

The patent system is set up partly to spur innovation. In exchange for disclosing inventions publicly, the inventor gets exclusive rights for a period of years. Without that incentive, many companies would rely exclusively on trade secrets - Coke does that, and look at how long it took us to get Coke Zero.

Picasso, Chuck Berry, and Shakespeare (if we wrote recently) are protected under other laws. You can get inspiration from them and go on to new heights, but you can't copy their work directly. Same idea as patents.

There's a huge need for reform in issuing and litigating patents, certainly. Far too many overbroad, useless patents get issued and litigation takes forever and is really expensive. Throwing the whole system out, even if not overnight, would cause all sorts of harm on lone inventors and small businesses.

[Andrew Fife]

I think non-patent barriers to entry provide the best protection. Its really about the cost of immitation because acquisitions are a question of build, buy or borrow. Raising the cost of building through non-patent barriers to entry is what leads to better acquisition valuations and OEM terms. If your product can be easily immitated it just isn't that valuable... especially if its software. Thus, in the web 2.0 space, where technology is light and/or borrowed its really about creating a loyal userbase. You can't patent customers who like your product.

Oh and I could do with out Keith Richards...

[anonymous]

Fred,

Is it more an issue with software patents in general... or what the patent office actually ends up approving of?

[johntunger]

As an artist and designer whose livelihood depends on having new ideas and bringing them to market, I've always felt that IP laws do more harm than good. In essence, what they protect is not the innovator, or the idea, but the investors in an idea.

For instance, who is protected in the music industry… the artist or the RIAA? Who gets the bulk of the money? How many stories have I read about artists who lost the rights to their own music while record companies got fat off the deals the artist made when they were new and hungry? Deals that insured that they would return to hunger even after becoming household names.

My feeling is that the whole IP system should be scrapped asap. I've never concretely benefited from it, but there have been many times when I've decided not to pursue an idea to completion because the work had derivative elements that might have brought on legal challenges. Didn't mean they were bad ideas, or even that they weren't mine, just that there was a grey tinge to the legal aspect.

Innovation works better, in my opinion, in a free market. I don't patent my ideas to keep others from copying them… Instead, I try to put them out on the market as quickly as possible so that I can make enough profit to justify the work involved before they show up elsewhere. By the time someone copies my idea, I've moved on to the next one. That's my protection— to be *constantly* innovating. If I slow down, the whole thing might fall apart, and if I did, well, hell, I guess I'd just have to come up with another idea and start it all rolling again. Ideas are so easy as to be worthless… *implementing* ideas is what has value. I could stay busy for about 3000 years working on my back catalog of ideas scribbled on notes without ever having another fresh one.

Your analogy to tenure is a good one. I'd like to add one of my own thoughts to that. I have a lot of friends who went to top notch art schools, got sidetracked, and never managed to make art their profession… They constantly whine that they miss school because they no longer have the deadlines and assignments that kept them busy making art. Somehow, it seems, they just don't do it without that external pressure. A few years ago I realized something: The main reason that I can put in 18 hour days whether I'm "inspired" or not is because if I stop making art, the bills don't get paid. In other words, if they need motivation, all they need to do is tie their bank balance to the sweat of their brain and hands. I do the work on the whole because it's what I care about, what moves me, what I'm good at. I'm passionate about design and art. But what really drives the constant flow of innovation is the desire to protect the bottom line and keep the business part of my gig healthy.

Innovation favors the uncomfortable. Protecting ideas a person has *had* seems to me like the quickest way to make them comfortable enough to quit thinking. I say throw the whole creative field to the wolves and let the strongest minds emerge as survivors. It won't bother me. It's the way I play it already. I guess what I'm really getting at is that you can protect innovation or you can protect the innovator, but it's not the same thing.

I don't really believe that there's anyone out there who only ever has one good idea. If you've got the kind of mind that comes up with new stuff, I think you also probably have the kind of mind that *never stops* coming up with new stuff.

And lest anyone misinterpret the statement about being comfortable, I *do* believe innovators should be well compensated for their time and ideas. I just don't think it's culturally or economically healthy to compensate them to the point where they no longer have constraints. There are all kinds of hunger that can be used to motivate new ideas, and it doesn't have to be the "starving artist" myth that does it. People do work better when there's a reward in sight. But ideas flow better when there's a struggle or challenge to be overcome.

[anonymous]

i just found this in your who owns the word apple post: "i think they stifle innovation and the patent office is completely and utterly idiotic in its issuance of patents for stuff that is completely based on prior art."

im not a lawyer, but i have listened to the 50 hour mpep class, and have pretty much read the entire book as well. the problem is not entirely the patent office. prior art is a loosely defined term. basically, when you file a patent... what you don't know can't hurt you. that said... most patent searches tend to be very loose because of this. knowing this, companies are simply filing patents for everything, hoping they can sneak something through the uspto. often they can as the search tools aren't very good, and it is tremendously difficult for a patent examiner to sift through all of the patents to determine what these inventions are directly based off of.

[DC]

I don't mean any disrepect to craig, but when people say "this is a very complicated matter", what I hear is "I make a living from this broken system". It's not a complicated matter, it's a simple matter. Method patents and software patents are stupid. The fact that buying something with one click was patented by amazon is not complicated, it's stupid. It couldn't be more obvious. Maybe if they would have patented the 90 click purchase, they might have something there. Netflix being able to patent a "method for putting movies in a queue" is not complicated, it's stupid. The fact that every software company is forced to play this game of "patent detente" isn't complicated, it's stupid. It's a waste of capital, and countries that don't funnel this waste to the legal profession will start to out-innovate the US on software. That's not complicated, it's sad.

[Craig]

DC -

None taken. You're quite correct that we find value opportunities as a result of the lack of clear rule and understanding in this area. (we don't however feed off the broken system perpetuating the problem like some lawyers might be accused of) It's been the case throughout history that value can be found in areas that are full of uncertainties (including stupidities!) and its precisely what VC investors do, just in a slightly different way. Its hard to create value in a system that is completely known and efficient (at least from the point of view of a capitalist). IP is still a mess with many absurdities, which creates opportunities.

As I noted in my post, we mostly avoid patents - I agree with your assessment on many of your points. I don't agree that a 1-click system for ordering products is an invention. Neither do I think many business method patents make any sense whatsoever.

But it is complicated, irrespective of its lack of intelligent design (how's that for a fun reference?). It's here. It has to be dealt with - if for no other reason, because so many people think about it and spend so much capital, time and energy on it. There is no magic bullet to uncomplicate it, call it stupid and move on with a new perfect system, sadly. It often is, and leads to stupid lawsuits and value destruction.

We work with companies who understand certain parts of it and in our eyes create value with it. Hopefully, in the long run, the value creation will outlive the value destruction.

I don't think, however, that the US is likely to lose its position with regard to software innovation mostly because of lost legal fees on defense of IP. While I'd admit that legal fees spent for software IP are probably not a great investment, I think there are far larger forces at work in that industry which could affect the US' status in that field.

[Greg]

I'm skeptical of patents in general, not just software ones; quite often, innovation happens because technology has gotten to the point that a new innovation is a logical extention of prior developments. E.g., there are at least half a dozen people to whom the "invention" of the steam engine has been attributed, all of whom 'invented' it within a few years of each other. At some point, it was 'steam engine time.' It's not clear to me that the stated objective--spurring innovation--is actually served by patent law.

But of course we have centuries of experience with conventional patents, and some companies (e.g., Sarnoff Corporation and Qualcomm) are basically built on deriving revenue from licensing (perfectly valid) patents. That's basically manageable, and no big issue; the problems arise in two areas.

The first is that so many patents have been issued that it's well nigh impossible to vet your code ahead of time to ensure that no patents are violated. This is a particular problem for open-source projects, which aren't sponsored by people with big pockets who can employ a lot of lawyers to do a patent search. Consequently, innovation is often -quashed- by fear that some patent somewhere might prevent you from doing something interesting--precisely the opposite effect of the ostensible purpose of patent law.

The other problem is that of "submarine patents." The patent office is not very good at vetting patent applications for prior art, and as a result, it issues patents for all kinds of things that should never have received patent protection. While in theory, a defendant in a patent suit can produce such prior art and win, the reality is that any patent law suit is expensive to defend, and only the largest companies are in a position to wage these kinds of fights. As a result, smaller firms often cave in to patent demands and pony up tribute, as being the less expensive option. Thus, the current patent system serves as an expensive and uncomfortable tax on smaller technology companies--something VCs, in particular, should view with alarm.

I agree; software patents are a bad idea. More generally, the patent system as a whole is badly in need of overhaul; I particularly like the idea of publishing patent applications on the web, and allowing the public, via a wiki-like interface, to suggest examples of prior art to the patent office before approval is granted. It makes sense to harness esr's conception of the "bazaar" to vet patent applications, rather than using the current "cathedral"-like system.

[charlie crystle]

patents are good for startups. I invested a large amount of time and money in what we're doing, and to have some large company roll over us to take advantage of our hard work and innovation, well, Fred, that would suck.

At the same time, I don't want those larger companies evaluating what we're doing and saying that we violated patents we are completely unaware of. Who discovered HIV? Salk or the other guy? Dave developed the first web server scripting engine/app server, before netscape, before Microsoft, and he got ripped off. No patents. We did ok, but ouch.

Anyway, I'm going to go home and listen to some Chuck Berry, who received very, very little for most of his early recordings, screwed out of what was original, innovative, and "protected" under copyright law. unless you sign everything away. ouch.

[howard Lindzon]

chimed in with my own experiences on both sides now.

perfect example of an imperfect system. Needs to get new ideas fast.

[howard Lindzon]

by the way - as i said in my post - great distribution is your patent.

Great distribution is a win/win in the overall greater good of the infringer and infringee -

take RIMM - even though they lost, both sides won.

Too bad th lawyers won as well. Nothing is perfect.

[Lalit Sarna]

Fred,
Part of my responsibilities in my previous job was Intellectual property management, where I managed a portfolio of over 40 Patents for our company and helped author over 10 of them.

I am not sure if I agree with you regarding abolishing patents completely. I do however agree that use of patents to block to innovation is not the right use for IP. However IP as protection against blatant infringement is highly desirable. Companies spend exorbitant amount of resources developing technologies and solutions, without IP protection any one can get a finished proven product and reverse engineer it. Since they did not have to spend as much energy and resources as the inventor, they can price their services much lower. In an eco system without IP no company will want to spend money on R&D, knowing very well that they won’t be able to recover the cost of R&D. I am sure you can imagine the consequences of such an eco system.

I agree our system is not perfect and some people do extort it to their benefits. However one cannot discount the collective power of the markets. Digital Music industry is a perfect example, if the IP holders are unreasonable the masses find out a way to work around it. Similar thing happened with Mtasushita’s patented RFC standards in the video space. The community standardized alternative ways.

Another example is the success of proprietary video formats such as Flash Video (based on on2’s proprietary video codec), Windows Media, Real video. I am a huge fan of open Video coding standards and have spent majority of my life contributing to them however I can not ignore the licensing fiasco the IPR owners of open standards have created. Standards based video formats such as MPEG4 and H.264 have not been able to come up with simple and reasonable Licensing terms thus enabling proprietary technology providers to flourish.

P.S
I discovered Umair’s blog through your blog, since then I have been a huge fan. I have had several chats with him and met him in person; his work has been an excellent source of inspiration for my new venture. So thank you very much:). Perhaps next time you are in the bay area we can connect. I would love to get your feed back.

[Brouhaha]

Fred, I completely agree with you that the current system is totally out of whack. But it's a relatively recent phenomenon (as is the term intellectual "property" which makes you think of it being as permanently yours as real estate). If you want the best ideas about what's wrong, read Lawrence Lessig:
http://www.lessig.org/blog/
http://en.wikipedia.org/wiki/Lawrence_Lessig

And subscribe to the Electronic Frontier Foundation's emails:
http://www.eff.org/

The bottom line is, the limited, intangible legal protection that was originally created to spur creativity and innovation, has been changed over time (legislatively and judicially) into a virtually unlimited, property right that is often used to quash that very innovation and competition itself!

[Dan Malven]

I agree with the folks who say its a very complicated matter, and that creating a system that works in the abstract for any type of invention is extremely difficult. I'm all for improving the current system, especially as it relates to software. But just think about what would happen to the system for developing new pharmaceutical products without strong patent protection. How could the financial markets provide capital to pharma companies spending hundreds of millions of dollars developing new products if their ability to generated long-term profits from them are reduced or eliminated? As a general rule, I believe that a free market will adapt in some way over time, similar to how open source software isn't killing off the software industry (but not exactly b/c developing drugs is WAAAYYY more expensive than developing software). But boy, would that be a high-risk proposition for humanity to see how long it would take to adapt...

[Ted Weitz]

I generally agree with Fred that the current patent system is seriously broken, although I don;t believe abolition is the answer. As someone who has been counsel to numerous technology companies over the years (including one of Fred's portfolio companies, ITXC) I have faced patent issues many times. It seems to me that patents do work relatively well in the pharmaceutical industry, where the innovation costs are quite high, the life cycle of drug approval is long and perhaps most important, the invention well defined and understood.

In areas like software, the general rules of patent apply and frankly they are worse than Fred may fully realize. The problems I see are the following: (1) the standard for innovation is far too low, so that trivial or obvious advances are given the same protection as truly sinificant ones; (2) searching prior art and existing patents is hit or miss, so many patents are granted and given presumptive validity by the courts when they really should have been covered by prior art; (3) the courts have recently liberalized the patentability of business methods, which will lead to a vast number of absurd patents in the years to come; (4) the monopoly period is too long in fast paced fields of innovation; (5) there has been a significant disintermediation of patent licensors from companies that do anything else, so the old notions of using patents defensively have ground to a halt and patent "trolls" are increasingly successful in threatenting to shut businesses down entirely.

While I don't have all of the answers, it seems to me that there are a few things that should be done.

One is to require a higher standard of innovation. In every patent suit the press misreports the claims as one that the alleged infirnger "stole" the invention. In most cases the facts alleged have nothing to do with that. Instead what is claimed is that the defendant used the invention, although he may have unaware of the patent at all and simply invented it independently. The fact that numerous people invent the same thing at the same time wihtout knowledge of the others seems to me to be the dictionary defintion of obviousness.

We should reinstate the nonpatentability of business methods before we find that every pyramid of cans in the grocery store is either patented or infringing. Indeed, the history of business method develpment is proof that patents are not the only means necessary to create innovation. One can argue that the innovation in business methods over the years equaled the innovation in technology, yet it was entirely excluded from the patent monopoly (except for isolated cases).

Finally, I think that the draconian threat of shutting down a business entirely for violating the patent monopoly leads to absurd results like the RIM case. There should be some sort of tribunal that can compel licensing at a fair royalty, so that inventors are fairly rewarded, but the patnet system does not destroy innovation.

[csven]

Assuming for a moment that reasonable people (and the comments above indicate there are plenty) come to some agreement on a system that both encourages innovation and provides transparency, how would such a system be put in place given the current environment?

It seems to me that without an argument to convince those with a vested interest in the current system, discussion of this sort is largely academic.

Where and how do we begin to move from idea to reality?