Discussion on:

Time to eliminate patents altogether? Fed paper urges more open innovation

Joe, good to see you and your two faced employer are both clearly agreed that what intellectual property you create - your software is very protected even to the extent of threats of arrests by the FBI against the bold thieves! The proof of same being clear at the very bottom of this web page to wit:

" 2012 CBS Interactive. All rights reserved."

Sometimes I too produce copyright material but when it is a core new construction of an algorithm, circuit, physical part or collection thereof not just the exact or nearly exact words of an incantation it's called (if novel) an INVENTION. Regardless of the words that describe it it works just well.

Seeing how to create novel things is what I do for living and its something ONLY people not companies can do.

Hey though don't get me wrong before our patent system existed, new things were made and the ways of making them like certain samarai, or toledo swords, and certain violins and many other things ARE completely lost to history. They were not patented and the trade secrets died with the makers. Or in some cases where theft or simple rediscovery was made the conflict between parties was settled shall we say in a permanent manner.

Ya, ya no patents the best way to create a new world by the same people who brought you water torture and the final solution.

There is no way that moneybags will invest in innovation without patent protection. But it is also true that the system is rife with corruption and poised for a failed civilization.

Wouldn't it be nice if instead of investing in intellectual property we could find other ways to treasure and sustain our innovators, creators and inventors? Any ideas?

No the patent laws need to go back to the way they were when I was growing up. design plan and prototype. Tired of seeing what we use to call napkin patents when we would get around at the bar draw out crap on a napkin then take to work and do the real engineering. Not the crap that looks like a idea that has be turned into a flow chart. Because any one can patent anything even if the tech does not has not been made to support it. So I could draw out the plan for a nuclear rocket and wate till some figures out how to do it and sue them .get a life

I've posted a couple other times in this conversation talking about my personal experience starting multiple small businesses. Patents kill small businesses. As a business owner who has put his blood and tears into various products, I have learned much to my surprise that what Facebook creator Mark Zuckerberg said is true (and I paraphrase) - anyone can come up with a great idea. Great ideas have no value at all. Actually implementing the idea in a way that it's successful is what is hard and valuable.

Is there any reason all patents need to be for 17 years? If a company invests billions in a new drug, is that not more patent worthy than having rounded corners or pinch to zoom? I think the length of the patent ought to be judged on the relevance of the patent and the amount of money or time that went into developing the product.

Who can judge the value of a patent when our patent office can't even tell when an idea is new or not? A few patents (particularly drugs) have had little value at first, then found to enormous use years later.

Reasonable suggestion. The life of a drug patent begins when the formula is submitted for patenting. After that, the FDA eats up a significant amount of the patent life by requiring exhaustive clinical testing. A setback can restart the testing process. Sometimes, the drug is a dead end and useless. When the drug is finally approved the remaining life of the patent can be too short to recover the development and testing costs without jacking the price of the drug up to hundreds or thousands of dollars per dose or treatment.

In this case, I would suggest that the patent protection begins after acceptance by FDA. This gives the drug manufacture enough time to recoup expenses and also continue R&D. The patent can be pending during the test and approval phases to provide IP protection. This could help reduce the cost of treatment.

under your proposed system what's to stop a copycat from pirating your idea and offering IT up to the fda. admittedly, i can see a long testing or re testing period eating up possible gains. hmm.

SHOULD start when the formula or molecule is found. If one waits until the FDA approves the drug - then the whole idea of intellectual property goes out the window. Once the patent runs out then others can copy the formula/molecule and make money off someone elses work. The main reason generics are cheaper is because those creating the generics are just copying a recipe - partaking in the success of others work. The patent process also protects and documents the R&D process so there is a record of what has been tested - what works and what doesnt. The big expense int he R&D process is not just for the one successful formula/ molecule but for the thousands of molecules patented and researched to find the one success. The ratio is something like 10,000 to 1. 10,000 failures to find the 1 success.

Pinch-to-zoom is significantly more important and more useful than an improved hair re-growth medicine, IMHO.

or you wouldn't think that at all.

If you are just shifting reserve ratios, interest rates and allocating value between tiers of capital for a living, perhaps you don't need patents. Especially if you take the electronic marvels you use for granted. If you want to get just about anything new funded, you need patents, copyrights, mineral rights or some form of IP. Why make a movie or write a book if anyone can freely pirate it?
Without patents, everyone would be standing around waiting to be a 'fast follower' and no one would make the risky investments to go first because it would be financial folly. Try the 'dark ages' for an economic model.
Anyone who has raised capital from investors will tell you that investors are critically interested in understanding the IP of any company they invest in.
When talking about getting rid of patents put the words mineral rights, property rights, copyrights, in place of the word patents and you will quickly see just how absurd this nonsense is.

You do not understand patents at all (comparing a copyright to a patent?), nor do you understand what being an innovator, entrepreneur, and inventor is like. I have personally been doing it for years. I HAVE been heavily involved with investors and funding businesses, and it's very different from what you describe. Bankers and investors care little about if you have a patent unless it has been valued at some amount as an asset. Almost every software engineer hates patents because they constantly stop them from innovating and getting to market. Patents are scaring innovators away.

First off, copyrights are not the same as patents and are very different. One helps the IP owner, one hurts them from creating their IP. In most cases, copyrights should be fulfilling the role of a patent. Our copyright laws work. Our patent laws hurt innovators like me.

Why? Because you can't do anything anymore without getting sued. You literally cannot create a product, no matter how innovative, without getting sued for some obscure and vague patent. This is because there's big money in being a patent troll, and our government has let way too many things become patentable that shouldn't be. As a result, there is no way to design certain products without infringing on one patent or another - there are only so many ways to make something functional! So why isn't literally everyone sued who creates a product? Well, everyone is who creates a successful product. It's a fact of business now. The ones who are not successful don't get sued because there's no money to take. From someone who lives it everyday and has owned and currently owns a small business - someone who knows - patents are a hindrance to innovation, innovators, and small businesses. Should they be completely eliminated? I don't know, but definitely heavily, heavily reformed and reduced.

because you are stopped from using another person's idea to create profit for yourself? hmmmm That kinda proves that the patent system is working. Your argument here is self defeating.

The original idea of a patent was to be a reward to creative individuals...kind of like a Medal of Honor.

The inventor was given "breathing room" to move from idea to production before existing producers could simply take the idea and build first. In exchange, the inventor gave up his secrecy and shared the idea with the world.

What it has turned into is an exchange for buying and selling rents, enforced by the power of centralized government.

A patent is the grant of a limited time, legally sanctioned monopoly right to make, use and sell the patented invention. Patents are issued to encourage inventors to invent and to commercialize their inventions by allowing them access to the market at the full price the market will bear rather than at a price tied, by competition, to the cost of production.

If you want to use something I have invented, you can merry well pay me what it's worth or go do it some other way.

well said

The biggest abuse of the patent system by far is in computers, especially software. When US software patents were first allowed in the 1970s, nobody knew how fast the industry would grow, or that a typical program would use dozens of "patentable" ideas. I remember in college when the field was young there were a few "great ideas" in computer science, and everybody knew who invented them. These days there are so many patentable ideas that nobody even knows where they came from or even when you inadvertently use them.

But there are industries which couldn't survive without patents. In the pharmaceutical industry, it typically costs very little to actually produce a drug. By far most of the money goes into R&D and testing. Since the patent starts when the drug molecule is first synthesized, by the time the drug passes the FDA there are only a few years left on the patent. If there were no patents, nobody would ever spend the money to create a new drug.

we still need Patents to preserved an individual(or a company) rights for an Idea.
and allow said individual (or company) to benefit from the investment.
BUT we need to fix the system to stop Patent trolls,
to stop company to buying the patent to prevent its use by others developing a competitive products thus preventing inovation and competition in its purest form.

we need to change the Patent registry process to prevent patents for a obvious or common sense things to be issued.

a patent for form factor should not exist, that is what copyrights are for.
patent for common word use in the name/trademark should not exist (windows, IAnything etc.) especially if a prior use can be established...
for example Apple did not come up with "iAnything" name by them selfs.
Compaq had an "iPaq" long before Apple. so why do Apple gets all the benefits from the Patent to use "i" in front of their products?

Why do we have a patent granted for something that is simply described in so generic terms that it could be applied to anything
If tried hard enough.

Patent MUST be specific. It MUST be proven with a product prototype at the time of application or at least with in a allotted time period (one or two years) should be more than enough to create a reasonable working model.
If not a Prior-Art Certificate could be issued to allow for proper cataloging and establishing a rights sharing condition if applicable.
No patent should be granted for software of any kind

If I want to patent a drug - say a synthetic opioid - for analgesia, could I just submit an asperin tablet as my prototype, claiming that my invention is a little, white, powdery pill that makes you feel better?

once you show your R&D and formulas and such - you will find someone else already holds the patent.

sometimes that is the problem. IF you create a widget XD1 with iron - someone else could copy everything from your patent except make the border .02 CM larger and make it out of bronze (or anything else except iron) and have a new patent all together. That is what patent trolls do. Either take away any sideways innovation from the patent or buy it out as you say. If the patent is bought out then the original creator gets their profit. That is part of what the patent system all about. Protects the creator. If the creator wants to sell the patent - what is it to you? The patent holder could sell patent but ask for royalties on all product sold from patent etc and still get just rewards.

If you make or build a device or parts which could have a military use your respective government as soon as you apply for patent will take it. You will get NO compensation and the threat of a long prison sentence if you ever tell ANYONE about it. This is also the reason that no antigravity or other devices of free power have never been seen.
Even if you get passed this and spend a small fortune on worldwide patents by doing so giving details of your idea or device to china and others. These counties will take no notice of the patent and go into production on a very large scale, and even if you have patent insurance to sue would ignore any court order and tie you up for many years while they sold the device.
The only way is to build the device yourself with finance from family members and close friends. If you cannot build for technical reasons then you have it made for you buy different companies in parts, each builder not knowing what the finished item will be. Each separate part ( one or thousands) is delivered to the address of one of the financers.
When you have all the parts they are taken to a secret factory location that you have setup and assembled. The finished items are not stored at this location but taken to respective financers homes or storage depending on size. This is in case somebody tries to seize or steal the devices. As you know what your invention will do you can now approach the large companies which are able to market it (unless you form your own) show them a sample and tell tem you can deliver x quantity immediately the cash is in your bank. This way you will have a head start on everybody else and nobody will be able to stop device going on sale. Others will make copies but this will take time and you will have made your fortune.
The explanation above is simplified and has to be carefully thought out an tailored to your needs by trusted people.

no anti gravity? Ever hear of Tesla? LOL Sir - if you do as you say - then you would produce yourself right out of a job. someone would grab your idea long before you get close to end of your diatribe. get your patent - put it together - then go on Shark Tank or some other show and get the support from person with money and resource to go the distance. Get someone big who believes in you and they will prevent other govts or entities from stealing yoru idea. Granted there will always be generics whether you are dealing with drugs or Jeans or potato chips, But the brand names will Always make the money every time.

then keep the receipt and carry on-- by the time some one copies you idea you have already made some money and they cant stop you selling even if they patent some thing the same -- if its good then you will make some money if not the you have not wasted your capital getting a patent

Patents will only slow-down technological advancements, stop crying "he stole my idea BUHU" and take it like a man good damn it! I'm speaking to you, Apple. Leave Samsung alone or your gonna be grounded!

Considering the Fed's record in wrecking the US industrial base by incenting fast money gambling instead of sunk cost technology development, maybe this shot at our sinking ship should not come as a surprise.

The authors of this working paper -- which is not, despite the title of this blog, official Fed policy -- are said to be "Michele Boldrin and David K. Levine, researchers at the US Federal Reserve Bank of St. Louis" and on the title page we find:

"The views expressed are those of the individual authors and do not necessarily reflect official positions of the Federal Reserve Bank of St. Louis, the Federal Reserve System, or the Board of Governors. Federal Reserve Bank of St. Louis Working Papers are preliminary materials circulated to stimulate discussion and critical comment. References in publications to Federal Reserve Bank of St. Louis Working Papers (other than an acknowledgment that the writer has had access to unpublished material) should be cleared with the author or authors."

Was the publication of the working paper cleared? Now that you have published the paper, it will certainly be cited by embattled scumbags as official Fed policy notwithstanding that disclaimer.

The arguments are not new, and the assumptions they are based on -- such as group-think innovation instead of individual inspiration -- are not true. It's the standard litany of crybaby giants caught trespassing on IP in possession of someone who is not their peon. Cocktail chatter of the 1% and their toadies.

It is well-known that big companies can't and don't invent. They like the world as it is. Although they are big users of the patent system, the patents are trivial improvements to their existing product line. They fear the emergence of new ideas that make their inventory obsolete. So basing American prosperity on big company innovation is likely to make things worse, not better. And a constitutional amendment, as these authors think necessary, is unlikely to succeed, so what is the motivation for this stink bomb?

Thanks for pointing out this working paper is not an official Fed-endorsed position -- also now more clearly noted in the text of this article.

Patents and other IP laws need to be updated to fix the problems with patent trolling and licensing battles. Another problem is that the originators of a patentable idea tend to lose out on the credit or do not get the financial return on that idea.

There is no reason to eliminate patents, BUT it is time that the Government, who issues patents, does their job and only issues a Patent, if it is a NEW, Novel, idea, not just something that is a variant of things that already exist. Just make the test to determine whether or not the so-called invention a Strict test of NEW & Novel.

"Thats the view taken in a new paper from Michele Boldrin and David K. Levine, researchers at the US Federal Reserve Bank of St. Louis. "

Why is the Federal Reserve even backing a study on patents?

Was this more well spent stimulus money?

They've noticed the drag on the economy caused by patents.

Next is copyrights...

To copyrights -- or at least lower the working life of both copyrights and patents.

AND... make them NON-renewable.

Such measures would go a long way toward being able to USE the wealth OF THE SPECIES to good effect FOR THE SPECIES... rather than just for the wealth of the individual.

Those set on promoting individual wealth will of course see this as destructive, but I think it is long overdue. Focusing on individual wealth is KILLING us!

People should still be able to protect an original idea. Revise the system to eliminate tweaks or similar looks.

Those who wish to abolish the patent system are those who do not have enough imagination to create something useful for the good of humanity. Without a patent system what would encourage someone to invent something if there is no benifit to themselves and manufactures could run with it at their profit and the inventors loss.
I'm on my second patent with seven more to go and in the process of developing a new solar energy system that could be of great benifit to humanity and our dire CO2 as well as dwindling energy problem. For all my work I deserve no reward ?? NOT
See Orion Solartech to view
The only thing I see as needing change in the patent system is the exorbedent legal costs of defending a patent. If IP is being stolen a patent examiner should be able to determine that and then the courts can award damages. Why allow an entity with great wealth to break you into financial submission.

What interest should have bankers in the patent system and innovation development? It sounds like another one twist of rules...

That none of the commenters have even read this paper.

The entire tech industry was created and is still fueled by patent free, open standards. This field is the most innovative and explosive area of the last 40 years. History supports this argument.

If monetary profit is the drug companies raison d'etre then we should take money out of the medical field. Doctors and scientists are still paid very well in public systems and still do the work. Refusing medical treatment to a human in need because you won't profit by helping is unethical any way you look at it.

Shanunehunter wrote "The entire tech industry was created and is still fueled by patent free, open standards. This field is the most innovative and explosive area of the last 40 years. History supports this argument."

The most important standards in the tech industry are those published by groups like IEEE (ethernet, WiFi, WiMax), IETF (TCP, IP, HTTP, FTP), and ETSI (GSM, LTE). All of these groups will standardize patented material as long as the essential patents are available for fair, reasonable and non-discriminatory licensing. Contrary to shaunehunter's argument above, history does NOT support the argument that all tech standards are free and open.

See for example:
http://standards.ieee.org/develop/policies/bylaws/sect6-7.html
http://www.ietf.org/ipr/policy.html
http://www.etsi.org/WebSite/AboutETSI/IPRsInETSI/IPRsinETSI.aspx

isn't the protection of intellectual property a safeguard that does more good for the inventives among the 99%; protection against the barracudi?

The patent system is not perfect and should be disbanded. We need to work for the benefit for the mankind and use all advanced technologies FREE. Hopefully this brings peace and prosperity. While it seems many disagree with me... Only time will tell who is right on this issue. russiske damer

on hardware(physical items), books, and drugs expire. But patents on software is forever???

I feel like all the people here arguing for patents are just arguing because its their immediate opinion because they've been taught all their life patents are good. Please! Listen! As someone has started multiple small businesses (and done extensive research), I can speak with both experience and authority! Patents as they are in our country right now are killing innovation, competition, and essentially our economy.

First off, as agfinva spoke about copyright laws and such, please realize a copyright and patent is VERY different. Copyrights are very beneficial and should fill the role of a patent in most cases.

Here are some straight facts from reputable sources:

As quoted from NPR, among software engineers: "All of them hated the patent system, and half of them had patents in their names that they felt shouldn't have been granted. In polls, as many as 80 percent of software engineers say the patent system actually hinders innovation. It doesn't encourage them to come up with new ideas and create new products. It actually gets in their way." I recommend reading the rest of the article:
http://www.npr.org/blogs/money/2011/07/26/138576167/when-patents-attack

Or how about this, from a Berkely patent survey:

"Two-thirds of the approximately 700 software entrepreneurs who participated in the 2008 Berkeley Patent Survey report that they neither have nor are seeking patents for innovations embodied in their products and services. These entrepreneurs rate patents as the least important mechanism among seven options for attaining competitive advantage in the marketplace. Even software startups that hold patents regard them as providing only a slight incentive to invest in innovation."
http://radar.oreilly.com/2010/07/why-software-startups-decide-t.html

I could post many more, but instead I'll just tell you my experience. I have started multiple small businesses and been through the funding turmoil more than I ever hoped to - talking to banks and angel investors. Most of them don't give a hoot if you have a patent. I was surprised to learn how little value a patent was for my business. The only banks and investors care is if you have a patent that is valued at something to count as an asset. The vast majority of patents are not used, and the ones that are are used to keep small businesses from competing. You'll create a truly innovative product and trolls appear and sue you, destroying your business, whether they win or not, and even though their patent is extremely vague and dissimilar to your product. The vast majority of people do not even seek patents until they have a successful product. This is because the price to get a patent is about $15,000. If you have that type of money, you often don't need to talk to a bank! Even app designers are leaving the market because they've started to get sued by patent trolls. Anyway, I've written enough, but just do a search for 'eliminate patents' or 'harmful patents' and see the true facts about how they are effecting small business owners and everyone BUT big business.