Comments on: Patent auctions: Lawyer's dream or way of the future?

Dinner, drinks and a bitter lawsuit: You might find them both at the Ocean Tomo patent auction next month.

[akvish]

It is possible to assess potential pitfalls & challenges

I have found that some of the fundamentals in
Game Theory can be utilized to establish the
ground for exchanging IP. The complexity can be
visualized in 3-Dimensional scenario and the
transfer of IP can be assessed from many degrees.

IPs are powerful. They are a manifestation of
knowledge and know-how. But they come with time
value (mostly). It is here that most legal
entities found suitable playing ground.

The days are going to change. In addition to
legal angle, an IP provider can come up with
very clear indications/implications of some
of the potential roadblocks his/her IP may
face. An aspect that legal guys may not be fully
able to satisfy which has lead to complications
in the past.

Here is where Game Theory comes-in handy. It is
possible to put an IP into a Game Theory based
tool-box and analyze its scope with friends and
enemies.

IP Transfer by any means requires a lot of
clarity. Every IP can be pre-assessed and be in
a pro-active state to face challenge from
multiple angles rather than submit to long
lasting law-suits.

The larger the market scope, it is better to
equip with pro-active barriers and be prepared.

Looks like the time has come to look at IPs from
'non-lawsuit' and more productive angle. I am
sure, in future, IPs will be released with full
knowledge of repercussions, be it legal,
political, economic, market oriented,
geographical, etc.

[sanenazok]

This has been happening since the beginning

Patents have always been bought and sold. They're a form of property. Inventors commonly don't have the resources to go after people ripping them off, so they sell their work to someone with deeper pockets.

To see a real "troll" look up what the Lemelson Foundation spent most of the 20th century doing. That was trolling at its best. Did they stop all invention? Better yet, did anyone hear about them before this time?

[Ronald J Riley]

Auction is a good venue

"The next morning, the same people will gather for a patent auction that could lead to some really nasty lawsuits in the future."

Patents are property! They only lead to nasty lawsuits when they have real value and when some well heeled large corporate patent pirate tries to pillage the owner's property and guns down an owner who dares to object..

Some corporations have a policy of examining the assets of a patent holder and then dividing the patent holders into two groups.

The first group has great enough assets that the patent pirate decided it would be unwise to tangle with that owner and they negotiate a license and all parties move on to mutual profit.

The second group are individuals or small companies whose apparent assets imply that they are easy marks and the patent pirate does not negotiate. They ignore those patent holders based on two factors. One, the patent holder may never discover the theft of their property. And two, if they do discover such theft the big company figures they can simply gun the owners down and take their property.

You may ask how is this accomplished?

Well sometimes the patent pirate acts like they are interested in a license. They get the inventor to visit them on the inventor's dime and they will draw the negotiations out for a lengthy interval in hopes that the patent owner will get frustrated and eventually give up. The other tack is to use the inventor's presence as a cause for bringing a lawsuit in the patent pirate's jurisdiction. Usually such lawsuits take the form of a declaratory judgment action and these typically cost the patent owner something between $100,000 and $300,000. Most individual inventors or small businesses cannot afford this kind of money and if the patent owner ends up bankrupt the patent pirate is home free.

If the patent owner survives the only possible response is to file an infringement lawsuit. This is usually followed by a ta-ta over venue. At this stage the stakes are often approaching $500,000. An infringement lawsuit taken to completion runs at least $2,000,000 and may go up to tens of millions.

Now that you understand the process I want to discuss how the patent auction will benefit everyone. For the small business patent holder it creates an efficient way to market the intellectual property in a way which gets the best price and avoids the problem of a patent pirate bleeding the patent owner with abusive litigation. The reason is simple, that the competition is between well heeled players and not between the patent holder and ONE well heeled company.

Marketing a patent is fraught with pitfalls because there are many treacherous players. It is much like the wild west, where some gun slinging arrogant patent pirate would just as soon destroy the small business as not. Moving marketing of a patent from the back alley to a very public forum greatly lowers the chances that the patent owner will get shot in the back.

Ronald J Riley, President
Professional Inventors Alliance
www.PIAUSA.org
RJR (at) PIAUSA.org
Change "at" to @
RJR Direct # [phone]

[samiamtoo]

Protection and Parasites

"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;"

Article 1, Section 8, Clause 8 of the Constitution makes clear that the sole purpose for granting patents and copyrights is to encourage creative invention, which would suffer if such works were completely unprotected. In other words, the justification is utilitarian. The current situation could not be further diverged from the vision of the Founders. What is being protected is not the incentive for individuals to create, but the interests of the parasites (lawyers, mercantilists, et al) that infest the bowels of the inventive, for the purpose of free feeding on their efforts, and with the final result of sucking the life out them.

The following comment on this clause by St. George Tucker, in Blackstone's Commentaries 1:App. 265--67, was intended as a criticism of its prospective use as a justification for government-granted monopolies, but it applies just as well to the defacto monopolies created by the USPTO and the Federal courts:
"Nothing could be more superfluous, or incompatible, with the object contended for"

Since the basis of Constitutional protection of intellectual property is clearly utilitarian, and since the stated purpose of that protection has equally clearly been turned on its head, I propose that it should be eliminated by means of amending the Constitution. While that would cause come grief, it would prevent a great deal more.

Whatever did become of the "Kill All Lawyers Party", anyway?

Samiam

[Urban Terrorist]

Patent Study

I did a study of patents in the fields in which I am expert. Out of 100 patents studied none of them should have been granted in my opinion.

Most of the patents were obvious to someone with experience in the field. To someone with no experience they would have appeared valid. For example an patent on the of ergonomics in an industrial machine. Since ergonomics have used heavily in the design of furniture and automobiles their use for another type of machine is obvious.

The remainder were trivial, for example the patent on locating a grease nipple on the underside of the part being greased so that water couldn't enter the fitting (this could also be considered obvious).

The question to be asked is are there any valid patents? I'm coming to the conclusion that there aren't, and that the patent process is so fundamentily flawed that a moratorium on the issue of new patents until a complete and proper overhaul of the system is completed is in order.

Note that the patent attornies that I've talked to disagree with me on this - however none of them are competent to judge the patents that they are filing.

[patentagent]

did you read the claims?

Wayne,
Did you read just the DISCLOSURE or the actual claims?
It seems like A LOT of work - usually patents will have between 15 and 50 claims (about 25 on average) - so you read 2,500 claims - I'm impressed.
Please note that claims can not be SCANNED but must be read carefully (like any legal document, such as a contract) to get the proper meaning. So that amount of time to read 2,500 claims carefully is ENORMOUS.
Also, they need to be non-obvious as of the FILING DATE !! So, something that was non-obvious in 1995 could be obvious today, and this would NOT invalidate the patent.
In many cases the claims are MUCH MORE narrow than the disclosure. Often, 90% of the disclosure is obvious (i.e. enough information for how to implement the invention, which, by definition includes material known in the art) and the claims recites the 10% that is NOT obviuos.
ANOTHER QUESTION - are you trained in parsing patent claims to determine novelty and obviousness? I understand that you are trained TECHNICALLY, but this is only part of the story.
ANOTHER QUESTION - I did a search in the USPTO web site. It appears that you are NOT a listed inventor on any patent or patnet applicaiton, and you are not listed as a patent agent or patent attorney.
IT SEEMS THEN THAT YOU HAVE NO IDEA WHAT YOU ARE TALKING ABOUT !!!!!!!!
YOU CRITIZE OTHERS FOR NOT HAVING YOUR KNOWLEDGE OF AUTOMOBILES BUT YOU APPEAR TO HAVE Z E R O KNOWLEDGE OF PATENTS !!!
go invent something or study patent laws - then you can maybe write something EDUCATED on this site !!!
Have a nice day.

[pf_uk]

Greed - plain and simple

Greed is absolutely the worst of all human traits - on full display here...

Personal Views

My grandfather invented the six-pack, and was
awarded a patent in 1945. The corporations sent
him one or two royalty checks, and then decided
that paying lawyers was cheaper than paying him.

Nobody in my family has patented anything since
then. We figure its a waste of time.

While patent trolls are not the most ethical people,
and while most patents issued fail the obviousness
test, I suspect that patent auctions are the best
thing to happen for the independant inventor since
the patent reforms of 1980. The simple reality is
that a patent is of no value unless you have the
money to litigate it. By providing a specialist
firm to take over that part of the patent process,
you improve the overall efficiency of the system.

Finally, these guys are an effective threat in
royalty negotiations: "If you don't make us a
reasonable offer, I'll sell this patent to those
trolls over there, and you can deal with them."

Personal Views

My grandfather invented the six-pack, and was
awarded a patent in 1945. The corporations sent
him one or two royalty checks, and then decided
that paying lawyers was cheaper than paying him.

Nobody in my family has patented anything since
then. We figure it's a waste of time.

While patent trolls are not the most ethical people,
and while most patents issued fail the obviousness
test, I suspect that patent auctions are the best
thing to happen for the independant inventor since
the patent reforms of 1980. The simple reality is
that a patent is of no value unless you have the
money to litigate it. By providing a specialist
firm to take over that part of the patent process,
you improve the overall efficiency of the system.

Finally, these guys are an effective threat in
royalty negotiations: "If you don't make us a
reasonable offer, I'll sell this patent to those
trolls over there, and you can deal with them."