Woah, back up. The patent system is messed up for software but that wasn't the intent. You weren't supposed to be able to defend algorithm-based patents in court. Software is protected by copyright.

The patent office doesn't do much background checking. Enforcement happens in the court system. And, some courts such as those in Texas have handed cases to patent trolls.

Patents, by design, reward innovators and contribute to the public good by exchanging information for protection. When you see a big company owning a lot of patents, that's the system at work. IP rights allow the company to defend their interests and pay larger salaries. Without IP rights, individual creators really have little chance to move up because wealthy individuals or businesses will just copy and mass-produce the concept. In order to remain involved you would have to play by their rules, like what happened to Jack Ma. Everyone answers to the government there because there's no delegation of power to courts to sort out IP rights.

> Patents, by design, reward innovators and contribute to the public good by exchanging information for protection.

Design and practice are two different things. Patents, in practice, are hopelessly broken when you can buy a fairly general patent from someone else, sit on it without ever actually using it, and then sue someone else who had no way of knowing the patent even existed. And that's not just in software.

AFAIK it's primarily abused in software because software is so easy to "create". Again that's why algorithmic patents weren't supposed to be defendable in court.

Outside of software patents which I don't think should exist, I don't see a problem with buying and sitting on a patent for something truly innovative. The original creator was rewarded, the knowledge becomes public, and the buyer can sit on it as they like for ~15 years. If it's a profitable concept they are wasting money by not developing it.

The problem comes when courts uphold illegitimate patents. Fortunately there are companies who will stand up to this, such as Newegg and Cloudflare.

> and the buyer can sit on it as they like for ~15 years. If it's a profitable concept they are wasting money by not developing it.

How so? Any competition is unable to proceed because of the patent, and all you need to do is put some money towards renewing it every X years. Now, if there was competition, of course you would lose out from developing it. But there can be no competition because of the patent, so at the time you hold it nobody can develop the patent.

I invent the toaster and sell the patent to Cuisinart. They decide not to produce it and sit on it for 15 years. Then the patent expires and anyone can make toasters. Now Cuisinart has lost out on growing a reputation for making toasters. That's their loss and the public benefits because they have toaster technology. And, the original inventor was rewarded and can go on to invent more things or inspire others to invest time in inventing because it pays off.

You're not thinking widely enough. The following is not the real story, just an hypothetical example:

You're Codake, a company that sells chemical photography materials.

Some person invents digital photography, you find out and buy the patent from them for 500K.

Digital photography would hurt your profits so you just sit on it for the 15 years, maybe start designing some products around it in the last 3 years of the patent to be ready for when it expires.

You made more money and society lost out for 15 years, all because the inventor probably wasn't used to seeing large checks and didn't shop around when the largest photography company offered them more money than they ever saw in their life.

Even the inventor got screwed, by selling the patent they got a nice house even though it was probably worth hundreds of millions.

I dislike patents but there's also the element of risk. Most inventions flop.

Yes, the above scenario is quite risky. And if the inventor "got screwed" then that's on them for agreeing to sell for a price that's less than the value of the invention. That said, execution is also very important. Ideas don't build companies.

Personally, I wonder if your argument changes if the thing in question is not a toaster but something the public wouldn't want to wait 15 years for. Medical vaccine, groundbreaking software, or an improved biological process using less antibiotics. A toaster doesn't really have immediacy, but this policy affects things that do.

I don't have a solution, just a vague feeling that in 2021 15 years seems like a very long time (for software, at least.)

What company would buy the IP for a vaccine and not produce it? They cost billions to fund. It isn't sustainable to buy and sit on patents unless there are judges willing to uphold invalid patents for patent trolls, which is what has been happening with software patents.

> Patents, by design, reward innovators and contribute to the public good by exchanging information for protection.

Patents are politics. Politics is always a murky morass of compromises, and it's hard to say what is by design. (And, no, you can't trust the name of an act or even its formulation to tease out the real and differing intentions of the lawmakers who proposed or voted for it.)

> IP rights allow the company to defend their interests and pay larger salaries.

I can believe the first part. But I don't see how IP rights translate into higher salaries?

(Yes, in the trivial sense of _allowing_ them, perhaps. But not in the implied sense of making it more likely.)

> I don't see how IP rights translate into higher salaries?

When a company can defend its IP, it earns more profit and can invest in itself more. One way to invest in itself is to pay higher salaries to attract talent.

Other than small bumps to bonus multipliers, big companies don’t share higher profits with employees.

Of course they do. Google pays some of the highest salaries in tech because they managed to become so profitable. I'm saying long term, profitable companies who want to reinvest in themselves will pass profits on to employees because they need talent to make their products. There are certainly companies who decide not to reinvest, and simply extract profit. They become the dinosaurs.

Google literally colluded with other tech companies to avoid passing on those profits to employees.

That happened once they became a top-paying employer. You get there by paying high salaries.

Do you say that at Google salaries increase with profits and are not capped by "fair amount for your location"?

Not sure what "alt" is. I just answer when the topic and my current focus intersects :)

They most likely mean an alternate account. Like an alter ego.

Yes, I already agree with the strict ability part.

But eg just giving companies cash would also trivially increase their ability to pay higher salaries. But obviously, that's not really something anyone advocates for.

> that's not really something anyone advocates for.

Right because cash comes from government which comes from taxes which come from companies' profit. Cash has value because governments put some limits on how much there is. Of course, they do end up printing some and dilute the value. They don't just hand it out willy nilly.

You are right about cash.

And even if there was a windfall, eg imagine something silly like a gold meteorite just falling down on the treasury building: there are always opportunity costs to consider.

But monopoly profits aren't too different: they don't just fall from the sky either. An enforced monopoly like those granted from a patent works by restricting what other people can do.

They do, when competition forces them to.

I guess one _can_ make some kind of argument about how adding government enforced monopolies, ie patents, increases that kind of competition. But it would have to be a somewhat sophisticated one.

That's right, it's a temporarily granted monopoly in return for publishing the tech. The argument isn't so sophisticated.

Problem is that it doesn't really work.

Most patents are written in such a way to be maximally defendable/enforceable in court, and minimally useful for reproduction. Often you need to pair them with lots of trade secrets to get anything to work.

The other common argument in favour of patents is that they reward innovation. And that might or might not be an argument that actually works. Patents certainly also hinder innovation, so it's an empirical question which effect dominates, and whether any net beneficial effect is big enough to overcome our basic economic presumption against encouraging monopolies.

Patents do not hinder innovation. Without them, the richest companies would steal every new idea that showed promise.

Why only the richest companies?

Wouldn't everyone be copying all the best ideas from everyone else? Wouldn't that be a good thing? Both in general and for innovation?

(And even if only the richest companies did this, they would still have to compete against each other's copy-cat implementations of those ideas.)

We don't necessarily have to re-hash this discussion, other people already had it, eg at https://sciencebusiness.net/news/79887/The-Great-IP-Debate%3...

In any case, whether patents help or hinder innovation is an empirical question that deserves study! Instead of just assuming that they _must_ encourage innovation, because they say so.

You can also get a start on the literature by following the sources of this Wikipedia article: https://en.wikipedia.org/wiki/Economics_and_patents#Innovati...

> Wouldn't everyone be copying all the best ideas from everyone else? Wouldn't that be a good thing? Both in general and for innovation?

No because this incentivizes copying over innovation. There is little reason to invest in R&D when anyone can copy your idea. Consider the COVID vaccines. Each cost billions in R&D. If they could be copied then a company that specializes in production could invest all its money into that and spend nothing on R&D. Eventually no one will be willing to invest in innovation until someone comes up with the idea of protecting IP again.

Btw, that defense means that other people will make less money (or that there is less consumer surplus).

Not really. If you have a system that defends ingenuity, then new ideas will flourish, providing more jobs, and more chances for entrepeneurs to create. It comes down to this- people will not accept the state of banging their head against the wall over the same problems forever. We live to solve problems, and by defending new ideas, we give credit to creators and encourage creativity.

You can argue that solving one problem creates a set of new ones and I won't disagree. Those are for the next generation to address.

The empiric question is whether that system actually promotes ingenuity.

It also hinders ingenuity, especially prominently displayed with software patents.

> [...] we give credit to creators and encourage creativity.

You can do that just fine without patents, too.

Eg socially by recognising their genius. But also more materially via trade secrets.

And as you say, people don't like banging their head against the wall over and over again, and that's true whether there's a patent system or not.

> Eg socially by recognising their genius.

That's ripe for corruption. Social recognition would largely be in the hands of the wealthiest, i.e. the government in that scenario. You want individuals to be able to generate their own wealth so they can defend themselves. Patents, capitalism, etc are a means of delegating power to the people. Keeping all that control in the hands of the government is costly and less efficient.

> The patent office doesn't do much background checking.

That's not correct. By law, for every patent application, the patent examiner is supposed to conduct a thorough search of the prior art; some patent examiners have long experience in their "art units." [0]

Also by law: Inventors must disclose, to the patent examiner, all information of which they are aware that is "material to patentability." [1]

Well-trained patent attorneys take the view that it's far better to tell the patent examiner about everything you can think of that might be significant. Doing so helps to strengthen any resulting patent against infringers' claims that the invention would have been obvious.

Think about how an infringement lawsuit will often go down: The accused infringer will generally try to claim that the patent is invalid because of one or more particular prior-art references. When that happens, one of the best possible responses, by the patent owner's trial counsel, is, in effect, Oh yeah? Well, ladies and gentlemen [of the jury], the patent examiner already considered those references, and s/he concluded that the invention was indeed patentable, so whom are you going to believe — the patent examiner, or the infringer who stole my client's invention?)

As a more-or-less random example, see a 2017 patent issued to IBM, where the cited prior art included 32 prior patents and 3 non-patent publications — all cited by the inventors. [2]

[0] https://www.uspto.gov/web/offices/pac/mpep/s2103.html

[1] https://www.law.cornell.edu/cfr/text/37/1.56

[2] Dixit et al., "Performing sequence analysis as a relational join," U.S. Patent No. 9,589,018, https://patents.google.com/patent/US9589018B2/en?oq=9%2c589%...

> Also by law: Inventors must disclose, to the patent examiner, all information of which they are aware that is "material to patentability."

This is basically "pretty please". If something is uncomfortable it's not "material to patentability" according to corporate patent people. (Including me sending them "hi, look at this prior art")

> This is basically "pretty please." If something is uncomfortable it's not "material to patentability" according to corporate patent people.

If those "corporate patent people" are lawyers, they're betting their law licenses: Intentional withholding of material information can result in the patent's being held unenforceable for that reason alone [0], and quite possibly temporary- or permanent disbarment for any patent attorney found to have engaged in such misconduct. [1]

[0] See, e.g., https://casetext.com/case/deep-fix-llc-v-marine-well-contain..., in which a highly-regarded federal district judge in Houston held that a patent attorney had intentionally withheld material information from the patent examiner; the case is discussed at https://www.ipwatchdog.com/2020/02/26/inequitable-conduct-li... As another example in which patent attorneys were likewise held to have engaged in inequitable conduct, see https://scholar.google.com/scholar_case?case=455051935074519...

[1] See generally the discussion in an amicus brief (search the document for "disbar), at https://www.supremecourt.gov/DocketPDF/17/17-1616/52679/2018... (the Supreme Court denied the petition for certiorari, as discussed at https://www.patentdocs.org/2018/10/supreme-court-denies-cert...)

That's what the law states, in practice, ridiculous patents are granted as a matter of course.

And, in practice, most patent infringement lawsuits go down like this: "We own this patent and have a team of well-funded lawyers to defend it, we've assessed that you and your company are not financially capable of defending yourself and so we are willing to offer you a substantial licensing agreement as settlement. We suggest you take it."

[0] Sideways Swinging: https://patents.google.com/patent/US6368227B1/en

[1] Vacation Auto-responding: https://patents.google.com/patent/US9547842

[2] A rounded-bezel display: https://patents.google.com/patent/USD670286

[3] A tree branch: https://patents.google.com/patent/US6360693

[4] Hierarchical folders to organize files on a computer: https://patents.google.com/patent/US8473532

[5] A car windshield: https://pdfpiw.uspto.gov/.piw?PageNum=0&docid=D0786157&IDKey...

[6] Bilateral and multilateral decision making: https://patents.google.com/patent/US8069073B2/en

The EFF even has a monthly "stupid patent" post: https://www.eff.org/issues/stupid-patent-month

I think this is redefining some important words. how about

> Patents, by design, reward people churning out patent applications and extract rents by monetizing monopolies for technical concepts at expense of the public.

The set of patent applicants and actual innovators overlaps a little but not much.

You can try to defend many different kinds of monopolies using the jobs argument. A lot of things, like eg shoes, would be more expensive, and have higher paid positions for the employees, if their production was artificially constrained.

Algorithm-based are bad for inovations. Just imagine patents on sorting algorithms or algorithms like th sieve of Eratosthenes.

It's also done by political policy to make it look like America is still "very innovative". It would make politicians (and other people) look bad if the number of patents started falling precipitously. I believe America is still innovative, but not as much as the number of patents might suggest.

The purpose of the patent system is to incentivize people to publish the details of their inventions instead of keeping them secret, thereby advancing the state of the art. The limited-time monopoly is the incentive.

Except the limited-time monopoly becomes an until-the-end-of-time monopoly, and has a more toxic effect on innovation and creativity than what would exist in its absence.

You’re thinking of copyright which seems infinite. Patents aren’t

you're right, my bad

Patents expire all the time...

> The American patent office assumes that if there is no prior patent then the new patent describes something new and novel.

They don't just look for prior patents, they look for prior art (which includes any public research papers, presentations, products, etc.) as well. So if someone else did the thing you claim to have invented (even if they didn't patent it), you can't get a patent.

And even if someone didn't do the thing you're claiming, but they did something that makes your claimed invention an obvious thing to do, you also can't get a patent.

The obviousness standard is generally harder to overcome than the novelty standard.

That's the theory. In practice it works as was described above - they look for existing patents. Looking for prior work to any degree would presumably make the cost (and time) astronomical (or at least not covering what they're paid), as a general rule. The world is very different from when the patent system was established.

It's possible that in some fields, the PTO focuses on patents because so many of the innovations are patented.

But this doesn't fit my experience, having worked for well over a decade in Silicon Valley (first as a lawyer, and then as a founder). I could be wrong — this is just the sense I've gotten from talking with patent prosecutors at my old firm, and from talking with my outside counsel about our prosecution strategy.