Right now, it's a perfectly valid decision for an inventive/creative person(or team or company) to choose to spend their time inventing new things instead of commercialising "finished ideas", since the laws are (and have been for decades) written to allow an inventor to sell their patents.
If you're the world's best battery chemist, I'd rather you spent this year looking for an even better battery, rather than needing to be involved in making and selling last years "best battery" to earn any money from it. I don't want the top cancer researchers "wasting time" being personally involved in making drugs at commercial scale and doing deals with Walgreens, I want them doing cancer research - and having a patent/legal system that allows them to earn a living doing so (with the understanding that they've got a choice to license or sell their patents, and whether they get to share in the spectacular riches that some big-pharma company will make if they've just saved millions of lives will depend on how they chose to structure that transaction).
Somehow, we need to allow inventors to continue to be "NPEs", while stopping the obvious "patent troll" techniques of buying up uncommercialised patents with the only intent being to use them to litigate.
(And note, by "inventors" I'm including "companies set up to do inventing, either as their sole business or perhaps with a few staff or division who 'invent' as part of their regular work". I know of companies like http://www.novogen.com and http://www.mesoblast.com who are pretty much teams of biotech researchers intending to work out how to cure cancer, then sell the knowledge to other companies to commercialise it. I also know people at http://www.ecoult.com who didn't invent the technology they're commercialising, but have licensed the patents from the government research organisation that did invent/patent them.)
Say that the best battery chemist invents a way to make current lithium-ion battery packs 25% better. In a bidding war, the price would easy reach hundred of millions, because the practical effects of having better batteries are economic interesting for companies being restricted by ineffective batteries.
Regarding cancer research, I find it quite wrong that state funded research is being patented. Most serious medical research is being paid for NiH with the use of tax money. Society has already paid for all the step regarding the research and it due to get what it paid for. Research which has no bases on NiH funded research theories, and has no relation with any public funds what so ever is an exceptional case, and there is a lot of companies out there that produce derivative works from NiH produced research and gets a patent for it. derivative works that has been created from tax money should not allow someone to get a 20 years state enforced monopoly on it.
This is simply not true. The NIH pays for basic research into NMEs (New Molecular Entities). The gap between an NME and a drug (i.e., a molecular entity, approved manufacturing methods, approved usage, identified side effects, monitoring) is huge.
In one sense, this suggestion is as good or better than any I've heard. Let the defendant raise the possible issue with a judge - let a (presumably impartial and intelligent) judge look at it on a case-by-case basis, and let the plaintiff know in selected cases "this one's going to cost you lots if you lose". I guess there's then be a danger of a "reverse class action" thing, where someone like the scan-to-email patent holder sends out hundreds or thousands of legal threats, and some law firm decides to try and run up half million dollar costs for each and every defendant.
Patent trolls are dangerous because they hold patents on things that are easy to independently rediscover. It's too easy to infringe by accident, without ever reading troll patents.
ARM is, for all intents and purposes, a non-practising entity. It's just not a patent troll. The folly is in assuming all NPEs are patent trolls. Carving the ARMs out of the NPEs will take more thought that lobbing exceptions at a general idea. Minimum viable products don't work in law because switching costs are high.
I'm fairly certain ARM employs more technologists than lawyers. They also make actual products, and even if the patent system disappeared tomorrow, designing processors would still be a viable business. In this way they differ from trolls, who make nothing of value but are merely parasitic on the productive economy.
They could sell to anyone who practices the invention, just not to a patent troll.
>In ARM's case, it would mean a takeover would invalidate its value.
This is a good point, but it's cleanly solved by exempting mergers. That would allow two ARM-like companies to merge without losing their ability to license original patents, but it still beats back the trolls because a merger only allows you to combine two complete entities, it doesn't allow you to transfer anything less than the entirety of each company's patent holdings to a third party.
Your description hardly sounds clean. In fact, given the complexity of business mergers, sales, taxes, etc., it sounds like it would result in an ever expanding nest of exemptions.
There's nothing wrong with companies that buy IP and do nothing but licence it; that's how an efficient market in IP is likely to operate. The problem is with the frivolousness/obviousness of the original patents.
What does it have anything to do with taxes or any of that other stuff? If you have two corporate entities that merge, the merged entity can be considered the original assignee of all of the patents that each of the merging entities was. It's not a complicated rule. But it keeps trolls from setting up "mergers" to falsify their status as an "inventor or original assignee," because it's all or nothing. You couldn't transfer any subset of the selling entity's original patents to anyone else and still call them original patents.
Here, we can make it even more simple. Forget about mergers. You can transfer a patent for which you are the inventor or original assignee to another party and have that party be considered the original assignee if and only if you transfer every such patent you own to that party.
>There's nothing wrong with companies that buy IP and do nothing but licence it; that's how an efficient market in IP is likely to operate.
So say the patent trolls. It reminds me of what the high frequency traders say about liquidity: Even if it could theoretically be true under some set of artificial constraints, in practice the cost of allowing it pretty clearly exceeds the supposed efficiency benefits.
>The problem is with the frivolousness/obviousness of the original patents.
The problem is that software patents anyone is likely to infringe are inherently frivolous/obvious, because the lack of physical constraints causes there to be a million good ways to do any given thing in software, so (putting aside standards-essential patents that constitute their own special brand of unintended consequences), the only way you get a software patent that anyone else will ever infringe is to abstract the so-called invention out so far that it covers all plausible implementations rather than only the specific one that you're supposed to have invented.
The patent system wasn't designed for software. They're not compatible with one another. The proper solution is to eliminate software patents. But if we can't do that today then putting as many sensible limits on the amount of economic damage they can cause in the meantime will have to suffice.
I'm no expert in the area but I would guess that the primary thing they are licensing is a particular design or instruction set, legally protected by copyright, not patents.
I'm sure some patent licensing has to occur as part of any licensing for the protection of the licensee but I don't think the patents are the primary 'thing' being licensed, its the copyrighted material.
