In business, there are players with talent and there are those without talent who compensate for their lack of talent by gaming a system. In this case, it happens to be the U.S. patent system, a system which is broken.
Research In Motion, the Canadian maker of BlackBerry, settled last Friday its five-year patent dispute with a one-man Virginia firm NTP, averting a possible court-ordered shutdown of the BlackBerry system via a $612.5M payout. NTP was co-founded in 1990 by an engineer who claimed to create a system that sent e-mails between computers and wireless devices. According to NTP, RIM stole their idea. Throughout the dispute, NTP tried to play up the David vs. Goliath message in the media, because NTP was an office of two people.
Could it be more obvious that NTP wasn’t trying to build a business around its invention or licensing its invention? NTP was trying to cash in on one of many patents sitting in its arsenal.
Much like surveyors ran out across the great Western prairie and laid claim to whatever land they could grab, NTP is a firm that speculates in virtual estate. They collected broad ideas and pushed them through the docile U.S. Patent & Trademark Office. They build a catalog of patents for such things like, ‘send an email from a computer to a wireless device.’ Then they sit around and wait for someone else to develop a popular business and sick the legal dogs, claiming that sole right to the core invention in the form of a patent. And they are not alone.
The player with talent, RIM, worked to build a business. RIM demonstrated in court how their engineers created their Blackberry system in isolation. No matter. Because of the U.S. patent system the legal right for using that system belonged to NTP.
Maybe we should be doing the same thing. Maybe we should join the group of patent-mongers scrounging to gain exclusive control of what seems like a non-obvious invention today, much like downloading music from the internet was provided a patent several years ago. After all, we wouldn’t have to work at actually providing a service or growing a business, but instead wait for another fool enterprise to do all the dirty work. How about: Patent Squatters, Ltd.? First patent: receiving telephone calls through a car steering wheel. I’ll get the paperwork started.
NTP didn’t build anything. They didn’t grow anything. They didn’t spend years creating consumer value. NTP simply gamed a system.
Never one to bemoan an issue without at least trying to provide a solution, I would first start by limiting the validation of patents by stricter first use clauses. Then, I would carve out sub-industry classifications for patents, so that an invention or process wouldn’t blanket the entire universe. Finally, I would limit the life of a patent by instituting a continued use clause, so that a patent holder would have to continuously demonstrate economic gain from use of the patent.
I like the idea …
I like the idea of a continued use clause. I am not sure of the ability to prove econimic gain, but there has to be an ability to show activity on an idea. This could be either in R&D of an idea or in the marketing of one.
I like that idea also,
I like that idea also, except it would never work because there are too many companies maintaining monopoly through massive patent purchases. For example, Big Oil owns a HUGE number of non-gasoline driven vehicle patents, so big a number, in fact, that the president is considering has been drafting bills to release patents based on public initiatives. call me a fatalist, but it would be a lovely idea if you could beat the big companies into accepting it.
-Democracy: founded on the principal that 1000 people are automatically smarter than any one person. Excuse me? -Dictatorship: founded on the principal that one person is automatically smarter than any thousand people. Come again?
“Bizarre Set Of Circumstances”
Today, the co-CEOs of RIM took out a full-page ad in the USA Today’s front section. I love it when companies do this. They’re talking to the people. RIM used the ad to thank their customers and write that they never would have let the service shut down as an outcome of the patent case.
They also wrote: “As to the lingering question of why the patent system should allow such a bizarre set of circumstances to threaten millions of American customers in the first place, we share your concern. The good news is that this topic is currently receiving much more attention from policymakers and the Supreme Court and we hope that patent system will evolve to close the loopholes and become more balanced.
Great article
Fun Facts About Intellectual Property!
My personal favorite:
FOR INCLUDING a 60-second piece of silence on their album, the Planets were threatened with a lawsuit by the estate of composer John Cage, which said they’d ripped off his silent work 4’33