So, I’ve ranted about lots of stuff in this space. It’s probably fair that most of you are very comfortable disagreeing with me on a regular basis.
This will likely not be a big variation on that pattern. But it should be.
I’m here to talk to you about patents – your pet technology.
You invented it. (Well, your engineers did.) And you deserve to get a piece of everyone that owns it from now on, at least for a while. (And there’s the rub.)
So you have patented your technology, and that means it’s yours for up to 20 years, as long as you keep paying the increasing maintenance fees that hit at 3.5, 7.5, and 11.5 years after issuance. If you don’t, or it’s been more than 20 years, the patent is invalidated, and the item becomes part of the public domain. That’s how it works at the most basic level, anyway.
So, what’s the problem with that, you ask?
There are several, but I want to touch on just two right now. First of all, much of invention is based upon other technology, and royalties from existing patents can stymie innovation. This is true in the IoT in a big way, and since we’re very much still in the industry’s toddler phase, there’s a lot of innovation to come – if we don’t have to wait for 20 years for our smartest engineers to get a look at what’s being done, that is.
And that leads me to the bigger problem – not one we’ve really started to face, but one that is coming down the line at our little IoT like a train about to come off the tracks. That problem is the patent troll.
That’s right, the patent troll is coming. And he’s coming for you.
What’s a patent troll, you ask? Well, you could watch John Oliver’s excellent Last Week Tonight segment on the issue, but since you obviously won’t do that right now, here’s the short version. Basically, it’s a totally justified insulting term for a group of (expletive removed) people or companies that buy up patents for little or no money, without inventing anything, and then try to sue other folks for any perceived infringements far beyond the patent’s actual value. And they do it all without inventing anything.
Patents were designed to protect inventors, not to kill off innovation for profit by these bad actors.
The White House estimates that 62 percent of all patent-related lawsuits in 2014-2015 came from these trolls. And although it is a problem in the hardware space, it’s a much bigger one for software folks.
The New York Times in 2012 reported that the number of software patents has gone through the roof in the last few years, and software is hard for courts to nail down in terms of what, specifically, is the proprietary bit of code. Much of the code looks like any other code, even to experts, which leads to after-the-fact lawsuits asking for huge settlements years later.
Apple, for example, releases an average of about 20 new products per year, so it’s a big target. Recently, some company called MobileMedia Ideas (not at all coincidentally including minority shareholders Nokia and Sony) won a patent lawsuit against Apple about ring-silencing features on mobile phones. This one was only for $3 million, which is negligible, but the case shows how vague a software patent can be.
There’s a great George Washington University infographic that drills down some of the big numbers.
• $30 billion: the cost to U.S. companies from patent litigation abuse
• $11 million: the revenues of the median company sued for infringement in 2011
• 325 to 91: the vote in favor of the 2013 Innovation Act in the U.S. House of Representatives, designed to prevent this use. (It was never passed by the Senate.)
John Oliver and I aren’t the only ones bothered and worried by all this, either. NPR’s This American Life did a podcast about it, and Austin Goolsbee, White House Chairman of the Council of Economic Advisors, did one of his White Board videos about it. In it, he addresses Washington’s plan for reforming the system.
He says the number of patent applications has tripled in the last 20 years, and the backlog is more than 700,000 strong. They take more than three years to be reviewed and approved, which in a third of cases is after the applying organization goes out of business.
The administration has a plan to cut delays for approval by 40 percent, which is great. But even better, for the topic at hand, is that the plan includes a patent review process designed to resolve disputes without the courts, killing off patent trolls long before they can even get near a settlement.
So, what should you do, and what’s going to happen in the IoT?
Well, I don’t know what’ll happen, but I know what you ought to do. Make things. Invent them. You keep doing you. And get those patents. But if you’re not using a patent, let it lapse. Let other inventors use the technology to build their own inventions. And don’t sell your patents to anybody with a checkbook. If it’s good, and you don’t want it, sell it to someone who plans to make something with it.
It’s good for the industry. It’s good for innovation. And it’s bad for the trolls.
Don’t feed the trolls.
Edited by Ken Briodagh