Intel's Grove: Something foul in Silicon Valley
Former Intel CEO Andrew Grove speaks to a crowd at the Computer History Museum after receiving a lifetime achievement award at the 37th Annual National Inventors Hall of Fame ceremony.
(Credit: James Martin/CNET)MOUNTAIN VIEW, Calif.--At a star-studded event in Mountain View, Calif., Saturday night, former Intel CEO Andrew Grove criticized the current state of the patent system in Silicon Valley, comparing it to the financial instruments that led to the collapse of Wall Street.
"As we celebrate the accomplishments of the last 50 years, I can't help but wonder if the next 50 years will be equally productive," Grove told a crowd at the Computer History Museum. "I'm dubious."
Grove spoke after receiving a lifetime achievement award at the 37th annual National Inventors Hall of Fame induction ceremony gala. The awards, sponsored by nonprofit Invent Now, also recognized 15 pioneers in the semiconductor and related industries.
Speaking to a diverse Silicon Valley audience that included Gordon Moore (founder of both Fairchild Semiconductor and Intel); Ted Hoff (co-inventor of the microprocessor); Carver Mead (VLSI concept); Intel CEO Paul Otellini; and Apple co-founder Steve Wozniak, Grove said the patent system is slouching toward the model that precipitated the financial crisis in the U.S.
"The true value of an invention is its usefulness to the public," he said, quoting Thomas Jefferson. The system in place in the Valley today is moving further and further away from this principle, he added. "Patents themselves have become products. They're instruments of investment traded on a separate market, often by speculators motivated by the highest financial return on their investment."
Grove called this a break from past practice. "The most important invention of our industry, the invention of the transistor, was licensed by AT&T for $25,000," he said. "This allowed the transistor industry to develop and become a flourishing manufacturing industry in the United States."
Grove continued: "By the time the integrated circuit arrived, the industry largely operated by cross licensing between companies so it really didn't matter, if the (Robert) Noyce patent or (Jack) Kilby patent prevailed--the result was the two companies could go on do their work."
Not today, in his eyes. "The patent product brings financial derivatives to mind," he said. "Derivatives have a complex relationship with an underlying asset. While there's nothing wrong with them in principle, their unfettered use has damaged the financial services industry and possibly the entire economy.
"Do these patent instruments put us on a similar road?" he asked. "I fear our patent system increasingly serves those who invest in the patent products...It may be time to use Jefferson's principle as a test and ask if we meet it."
Brooke Crothers has been an editor at large at CNET News, an analyst at IDC Japan, and an editor at The Asian Wall Street Journal Weekly, among other endeavors, including co-manager of an after-school math-and-reading center. He writes for the CNET Blog Network and is not a current employee of CNET. Disclosure. 
I guess you wanted to say " While there's nothing wrong with them in principle, >>their<< unfettered use has damaged the financial services industry"
Probably being a non-native English speaker, these things are easier to pick-up!
Otherwise I agree with Grove, patents especially in the USA are most probable the best source of income for lawyers... unfortunately.
I've noticed that posts addressing grammatical errors invariably contain grammatical errors of their own. Actually there's really no causation going on, it's just that pretty much all posts contain grammatical errors. Period. ( This post probably not excluded.) Because few people are anal enough to proofread their posts, eh?
The Ethanol revolution should have merged in 08/2009, when ''moores-laws'' 32nanometer fab was implemented in china...........
But I guess people in the western hemisphere did not actually jump the band-wagon with this one like all the other revolutions that came before........
The fuel-cell revolution was slightly older than the E85 revolution but mating the two would deal a fatal blow to the competition.......
I guess its all a matter of interest after all.........
In whose interest were all the other revolutions run when the time came to join in.......
salil.
By establishing patents, the US government makes a trade with a talented inventor: "You get sole rights to your novel and useful invention for some number of years -- rights which we will recognize in court and help you enforce with our own muscle -- and in exchange you must agree to let your idea be used freely by anyone thereafter, without fee."
So, the inventor gets the exclusive right to profit during a specified window of time: if the invention is truly useful, WHY SHOULDN'T HE PROFIT? After the patent expires, anyone can use and benefit from the invention -- we are all "richer." More importantly, the once-patented idea can be used as the basis for other ideas that themselves can be patented. and thus is the foundation laid -- or at least fortified -- for another generation of progress.
The structural key patent reform, in my mind, would be to ensure a reasonable but also reasonably finite period of exclusivity for the inventor, one which allows the inventor to derive revenue that recoups development costs and realizes a tidy profit, but also one that puts the invention into the public domain as quickly as possible.
IMHO, however, more worthwhile reform would come from overhauling the administration of the patent system. The system must be competent to assess an idea or invention's novelty and utility, in addition to its effectiveness & ability to be implemented. I am always a little bit disgusted, for instance, when I come across the announcement of a patent for some element of software human interface design, which always seemed obvious to me and other practitioners, and which had been used in one or more products that pre-dated the patent grant. I thought the patent examiners disallowed patents for inventions or ideas that were copies or unsubstantially refined versions of other inventions or ideas -- patented or not -- which had been introduced in previous products or described in publications. That, as it was explained to me, was "prior art." If that WASN'T one of the ground rules for issuing patents, it should be!
I would be happy with the elimination of the patent system. I realize this is heresy to many engineers (and accountants for large companies), but patents are rarely used for protecting an invention; their main use is for extortion and intimidation. Just about any true invention today relies on many other discoveries.
Nobody has mentioned one of the worst abusers of the patent system, rambus, who convinced DRAM standards bodies to adopt their ideas as standards, without telling them they had filed for patents on the ideas. Any system that allows the use of an economic weapon like that should not be legal.
Rambus did provide valueable input to JEDEC, but they didn't reveal that they had applied for patents on it. Had they done that, their invention never would have been approved as a standard. They used the secrecy of the patent system to trick JEDEC into adopting their technology. That would qualify as abuse to me.
" They would hinder invention by allowing Intel and like minded companies free reign"
No, I believe that's a misconception - people will NOT stop inventing just because they can't make money out of it - just take a look at all the GPL'ed and even BSD'ed software that is being created. The BSD license just screams "I don't care what you do as long as you use it!".
The big difference is if it is possible to find out who invented it - a person that repeatedly invents new usable things is valuable as an employee, and could easily get a company goodwill for hiring him/her (giving him/her a steady income).
And that is just one example - Freeriders are not the biggest and most important bad guys, it's the I-just-wanna-make-money monopolists that are the big bad guys.
We want to make sure that inventions can get out to the public FAST, and making sure that the inventor can get some kind of positive response.
There are other incentives than money for inventions. Focus on them instead. Turn it into a remix culture, encouraging everybody to contribute to everything and anything they want, as with open source software.
So don't buy the wolf in sheep's clothing act. Grove sued the pants off of AMD and Cyrix in the old days when he was running the show to prevent them from advancing on their turf. He bought out Digital research and shelved their products so that they couldn't hurt Intel either.
Ahh, the good old days when corporate titans could license inventions for a song and laugh about the pittance they paid poor old inventors. That's because the patent system in those days was fraught with uncertainty for inventors so they were often desperate to get anything they could. Check out the movie Flash of Genius.
patent reform is a fraud on America...
please see http://truereform.piausa.org/ for a different/opposing view on patent reform
"Take USB, they had it out for over a year and nobody wanted to touch it in a large scale until Apple used it in their machines. Ironically they went after Apple with it to topple 1394 or "Firewire". Looks like they won out even though USB is still not as fast as Firewire, it's just cheaper to make."
Your kidding, right? No one touched USB until Apple used it??? Apple switched to USB for the same reason as everyone else: it was the best solution FOR THE MONEY. It originally replaced the very old Apple Desktop Bus on the iMac as a keyboard and mouse interface. Apple stuck with IEEE 1394 for higher speed duties simply because IEEE 1394 was so much faster than USB 1.1 that it was worth the money to get that extra speed. The fact that USB was being used in just about everything where IEEE 1394 was limited to high speed applications ( video cameras and still cameras mostly) probably had something to do with it.
USB 2.0 brought USB up to speed with IEEE 1394 in 2000. It only took Apple four years to see that IEEE 1394 was loosing market share to USB 2.0 and add support directly to their systems. IEEE 1394 is faster than USB2, but it's ratio of how much faster versus how much more it costs (in hardware and licensing) is way less than 1.
What ever the reason for Apple switching to USB, saying that USB wasn't going anywhere until Apple adopted it is a complete distortion of the truth. It's especially a fallacy when you consider that Apple's market share back then was such a tiny percentage there is no way they could drive the USB market one way or another. Heck, they tried to drive IEEE 1394 as the high speed serial standard and how well did that work out for them?
It would seem that the venture capitalists, in arguing intellectual property rights, take exception to that which makes a permanent injunction difficult to enable. Apparently they don't care for the the Four Factors Rule, (1) show of irreparable injury; (2) showing that remedies such as monetary damages are inadequate to compensate for the injury; (3) showing that the balance of hardships between the plaintiff and defendant warrants an injunction; and (4) showing that the public interest would not be disserved by an injunction.
As I see it, the permanent injunction is terribly destructive (Blackberry comes to mind) and should be allowed only when all other paths have been exhausted.
- by Josh_K_2222 May 15, 2009 9:13 PM PDT
- Grove's makes an improper analogy by comparing patents to derivatives. A patent differs from a derivative because it is not worth what the implemented result of the invention is worth. Instead a patent is worth whatever the right of excluding other parties from using the patent is worth. This is a common misunderstanding but an important distinction. For more, see http://www.generalpatent.com/2009/05/07/response-andy-grove
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