As I understand it there's no "research exception" for patents, and they don't just apply to "selling". I'm basing my understanding on this article:
http://www.nature.com/nbt/journal/v25/n11/full/nbt1107-1225....
It's also true that researchers rarely take any notice of patents, and the issue just gets ignored.
In biotech/pharma research, it is absolutely true. If a competitor's patent lands first on targeted genes/proteins/etc. it can shut down an entire lab's line of work permanently. The staff involved usually get reshuffled to other lines of interest, and any work they'd done is simply written off, never to see the light of day.
No, they're both the same. One of the exclusive rights under the Copyright Act is the right to make derivative works, so you can't make a book based on Harry Potter characters without JK Rowling's permission. If you do anyway, JK Rowling can sue to stop you but she can't start selling your version herself and taking all the money without your permission. Nobody can sell the derivative work without permission from both authors, which is as it is with patents.
> This is why there is a "race to patent every single miniscule discovery" in the first place -- Lab A getting Patent 1 doesn't remove the incentive to discover refinements.
Of course it does. It requires the discoverer of the refinement to obtain the permission of Lab A before they can make any money, and the refined version competes with Lab A's version. So Lab A is better off to exclude the refined version from the market unless they can claim nearly the entire margin from it as they can with the original version, and the patent allows them to do that. Which leaves little or no incentive for anyone other than Lab A to make refinements.
The same thing happens with copyright. Disney makes movies based on ancient fairy tales because they're in the public domain. ABC's Once Upon A Time uses characters from Disney's Frozen because they're the same company. Universal Studios pretty much never makes movies with Disney characters, even though they theoretically could with Disney's permission, because Universal would be doing all the new work even though Disney could claim as much of the revenue as they like.
> It is not obvious that the search for refinements would happen faster without this incentive.
That's the fundamental trade off with patents. You grant a monopoly to one entity on the theory that the incentive of the monopoly will get that entity to invest in the research. The benefit of that incentive then has to be weighed against the cost of excluding all other potential innovators from the market for the term of the patent.
This is why patents work best in markets where innovation is slow. If patentable innovations happen only infrequently and/or there are only a small number of major players then the cost of the monopoly is smaller because fewer incremental innovations are being excluded by the patent.
This is one of the big reasons that software patents are so abominable -- the more innovation that would be happening without patents, the higher the cost of issuing patents grows.
It's not an incentive to make incremental improvements, it's an artifact of the industry's strong need for interoperability in the face of overzealous patent issuing, and seemingly a way for anticompetitive behavior to dodge antitrust scrutiny.
The patent pools come before the standards. If your patent doesn't cover what's in the standard then nobody will use it, and if you're not one of the cool kids then nothing your patent covers will get put in the standard (see also Rambus).
The net effect of those patent pools is that the likes of Apple, Microsoft and Google pay each other amounts that essentially cancel each other out, but anyone wanting to enter the market has to pay a tax to all of their incumbent competitors. Not clear how that benefits innovation.
Most of the patents in the pools also aren't incremental, they're independent patents that cover different parts of the same standard.
Is there any analysis that supports to this statement? Having seen many hundreds of patents, many of them in the video encoding area, I wouldn't hesitate to describe most of them as incremental improvements.
Also, the likes of Apple, Microsoft and Google end up paying the MPEG-LA much, much more than what they get paid for their share of the patents in the pool. They certainly do not cancel out, and if they had their way, they'd rather not pay anything at all. Unfortunately, with those codecs enjoying so much popular hardware support, they have little choice but to partake in the pool and pay their dues.
Anyone willing to contribute innovation to the market has a simple option: invent some technology that is valuable enough to be included in the standard, offer their own patents to the pool and get a share of the licensing pie. That way, inventors can do what they are good at (inventing) and vendors can do what they are good at (implementing and commercializing). Classic division of labour.
Why are you asking for analysis? Aren't the lists of patents in the pools published? You can look directly at the source materials.
> Having seen many hundreds of patents, many of them in the video encoding area, I wouldn't hesitate to describe most of them as incremental improvements.
Certainly they aren't revolutionary, but you're ignoring the question of whether they're incremental improvements over existing patents or over the public domain. If the question is whether a patent reduces the incentive for others to make incremental improvements, finding an incremental improvement to something that exists in the public domain provides no such evidence.
> Also, the likes of Apple, Microsoft and Google end up paying the MPEG-LA much, much more than what they get paid for their share of the patents in the pool. They certainly do not cancel out
Do you have some evidence of this? For any company whose percentage of patents in the pool is proportional to their market share in the market, basic arithmetic says the royalties should cancel.
> if they had their way, they'd rather not pay anything at all. Unfortunately, with those codecs enjoying so much popular hardware support, they have little choice but to partake in the pool and pay their dues.
These are the companies that make the hardware or who tell the hardware makers what to make. If they collectively wanted to make the patent pool go away they could all just support both for a couple of generations while announcing immediately when support for the old codec will be discontinued so that people can stop using it. For some reason they don't.
> Anyone willing to contribute innovation to the market has a simple option: invent some technology that is valuable enough to be included in the standard, offer their own patents to the pool and get a share of the licensing pie.
But that's not how the standards bodies work. Nobody wants NPE patents in the pool but the NPE, and NPEs don't get a vote in the standards body. There are two primary ways that NPEs get royalties from the pool. The first is patents that cover the standard but nobody knew that when the standard was finalized or they would have fixed it, the classic submarine patent. You can't make money on this except by accident or by dishonesty. The second is patents that are so unreasonably broad they can't be avoided no matter what you do even if you know about them ahead of time. These are a defect in the patent office which shouldn't have issued them. No part of his involves some nice fellows in lab coats making decent wages without doing anything untoward.
> That way, inventors can do what they are good at (inventing) and vendors can do what they are good at (implementing and commercializing). Classic division of labour.
Patent pools have nothing to do with division of labor. They're an evolved response to patent thickets. Division of labor is: you get a patent and you sell it to a practicing entity who uses it to enjoy a competitive advantage. Patent pools only happen when there are so many patents you can't help tripping over them and the industry is trying to make the problem go away as best it can.
Here's how patents are prosecuted: Applicant files a patent with some broad claims. Examiner usually (statistically speaking) rejects it on the basis of non-novelty and/or obviousness and cites some prior art references, which are usually other patents. Applicant then amends their claims with the minimum amount of limitations needed to avoid the prior art references (because they want a patent as broad as possible) and tries again. This cycle typically continues until the examiner can no longer find a concise enough set of prior art references to cover all the limitations of the claim, at which point the patent is allowed.
This process necessarily means that the vast majority of patents technically introduce only incremental improvements (or, more correctly, differences) over the prior art.
Case in point, randomly selected HVEC-related Apple US patent 7,769,084. It was rejected 4 times by the examiner, the last rejection citing patents 5,986,712 (owned by Thomson Electronics) and 6,310,897 (owned by Sony). Apple prevailed by adding a single 20-word clause to a 3-part claim, which the examiner deemed different enough to allow.
If that is not incremental, I don't know what is. Also, note that prior art owned by two different companies did not prevent Apple from making (and then patenting) an incremental improvement to the art.
Here's Microsoft saying MPEG-LA costs it more than it makes:
http://blogs.msdn.com/b/ie/archive/2010/05/03/follow-up-on-h...
I feel like I saw similar statements from Apple and Google but I can't find them offhand. The rough math is easy: your share of the licensing pie is proportional to the fraction of your patents in the whole portfolio. The actual calculation is extremely complex, but you can get a good idea by looking at the lists of patents and their owners.
> ... NPEs don't get a vote in the standards body.
Are you sure? I thought I saw a lot of research institutes and universities on standards committees?
> Patent pools have nothing to do with division of labor.
Patent pools are not directly concerned with division of labor, but patents are. Pools are just a emergent licensing convenience when many fragmented rights are involved.
Also the patents in the standard are often broadly written to cover whole genres of techniques. If your new innovative idea is excluded from the standard and you create a new competing standard, then your new standard is illegal because all the patents in the pool that might affect your new standard are unlicensed.
And the licenses the pool sells strictly apply only to uses of the established standard. There is no license available for your new standard at any price.
That's one of the reasons WebM was crippled for years; it had to design around hundreds of established techniques. Now that Google has spent years and billions on legal fights and patent acquisition MPEG-LA has opened up innovation legally to WebM and future versions might be good.
Your innovation isn't probably backed by Google, so good luck ever getting permission to try it.
And remember that even trying patented techniques in the lab is illegal if you have commercial applications in mind. There is a pure research exception, but if you want to develop a new codec or encryption idea built on older ones, you're skirting the law at best. The incumbents don't especially want to encourage your competition.
This is patently untrue.
Just as an example, there was a recent thread on reddit about how someone's Adventure Time fanart was used by the rights-holders of Adventure Time for a Tshirt that is now selling at hot topic (link: http://www.reddit.com/r/adventuretime/comments/24syra/hot_to...)
Unless the derivative work falls under fair use, the rights-holders can use it however they want.
> Unless the derivative work falls under fair use, the rights-holders can use it however they want.
Unless the derivative work falls under fair use, the rights-holders can stop you.
Let's make the case as clearly as possible. Microsoft incorporates some clip art into Windows without a license. Does the artist of the clip art now have a right to start selling copies of Microsoft Windows to everyone? Of course not.
So, just for background: you're basically right to sense that the fundamental thing in copyright law is the right to impose lawsuits to stop infringement. (We could add to this "or to collect damages", is the only major missing part.)
Restating the person you're replying to (in this vocabulary), you responded to "you can't stop the rights-holders" with "the rights-holders can stop you." This appears to be a total non-sequitur; I guess the most charitable interpretation is, "They cannot use your work however they want; they can merely stop you from using your work in ways that they don't want." The first half of that is wrong even though you only stated the second half of that (which on its own would not be particularly objectionable). Some peeking at the paragraph afterwards seems to confirm that this is what you meant; again that paragraph is OK by itself without context but is being used to support a wrong point in-context.
So here's why that paragraph is factually correct but doesn't make the point that you want: the US copyright law treats every derivative copyright work as made up of hypothetically-clearly-defined "parts" which each have one or more copyright interests in them. The judge in the case would probably not say that the "part" which contains your clip art is the whole of the Windows operating system; and Microsoft would retain its copyright interests in the rest of Windows while losing it in the "part" which was your clip art. This matters because it means that there is only one copyright interest on that part (yours) rather than two (yours and Microsoft's). So if Microsoft added a monocle and top hat to your cartoon-face-shaped-like-a-bean, you could in fact probably use their version without fear of a lawsuit (though again, some judge might say that, say, the top hat is sufficiently differentiable from the beanface that it is a "different part" of the derivative work).
Certainly in the UK one of the situations considered explicitly under the Patents Act is that of an advancement to a technology not being able to come to market due to unfavourable licensing terms, or refusal of a license. In which case, in the UK, the comptroller of patents can order a license under the terms he sees fit.
A current licensee can even apply for a compulsory license; presumably if they can show the terms are particularly usurious.
[2] is a brief discussion of the situation under TRIPS, UKPA and in Austria.
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[2] http://www.taylorwessing.com/synapse/ti_compulsorylicensingp...
Not necessarily; they (lab B) can license the refinement to whoever they want, for example lab A. Or to a third party who licenses both technologies.
In which of those cases is permission from Lab A not supposed to be required in order to make the product?
There are two scenarios here. In the first case Lab A doesn't license the base patent because it wants to make the product itself or (equivalently) sells or exclusively licenses it to a single manufacturer. In that case Lab B is dealing with a monopsony buyer and is hosed. The holder of the base patent can offer Lab B some fraction of their research cost for their patent, secure in the knowledge that Lab B's only alternative is to eat the entire cost and get nothing.
In the second case Lab A is licensing the patent to lots of people and you're proposing that Lab B license the improvement to the same people. The trouble is Lab A still has all the leverage. The availability of the improvement increases the value of the base patent, which allows Lab A to squeeze the licensees harder and leave less for Lab B. Lab B can't respond in kind because the licensees can do business with the Lab A patent without the Lab B patent but not vice versa.
You're introducing an alternative scenario in which Lab B is an unscrupulous patent troll with no qualms about filing frivolous lawsuits for nuisance value. Sure, they can do that, but that isn't an incentive to improve the technology, it's an incentive to engage in patent trolling. And it's just as profitable whether Lab B makes a genuine improvement to the technology or not, so it provides no incentive to actually make the improvement.
Rather than B extending A's patent, the reality is a tangled web of patents, all of which require licensing all of the rest to produce a real product without infringement. Or more realistically, the solution involves licensing from those more powerful than you, staring down those at an equal level, and infringing with impunity on those below you. This reality is known as the "Patent Thicket"[1].
I agree with you on the second part, but the counter-argument would be that the potential future marketability of the patent incentivized Lab B to do the research, which they otherwise would not have done. I'm sure there is some effect in this direction, but personally I think it's small. The sad part is that Lab B is practically forced to abuse their patents merely as a defensive tactic, on the theory that if they don't defect first their opponent will.
(I'll quit at this point, overcome by my own cynicism. Likely I agree with all your points. I started out trying to be a genuine devil's advocate, but at this point I realize I'm veering toward trollhood. I apologize, and recommend the link below for a more balanced assessment.)
[1] Patent Thickets: Strategic Patenting of Complex Technologies (http://www.researchoninnovation.org/thicket.pdf)
Such patents are often granted because the standard patent lawyers have demanded is that a patent must issue unless the patent office can prove that every single detail and step ("limitation") is documented in the prior art. Also, patent officials have very little time to search for prior art, often just a few hours; the average time allotted to examiners in the US office is under nineteen man hours for all paperwork, documentation, and searching. That is why you see so many obviously redundant and unoriginal patents. There is an official requirement for non-obviousness but the patent court -- knowing where its judges' power, prestige, and lucre lies -- has made non-obviousness a dead letter by usually declaring nothing obvious except the exact prior art itself and raising the standards of proof sky-high.
So Lab B is probably not looking for substantive improvements. It's looking -- at least where computer, information, radio, video, software, and such patents apply, but probably with graphene also -- for a loophole where it can block Lab A's product by getting a patent on a necessary but incompletely documented part of the ordinary original product. If Lab B can accumulate enough of those, then Lab A will have to negotiate with Lab B.
Only then can Lab B's actual improvements have a chance in the market. And new patents on those improvements will then be promoted by patentability. But the cost of making such a system work is astronomically higher in the sciences HN usually deals with than any benefit it ever might offer.
You should hear the patent bar talk about how lost we used to be without them to regulate us and how software would collapse without them because patents are the only way to promote true innovation in the industry and how all research would shut down because the only reason it's viable is the patents you can acquire. And they're the ones that make the law.
This is not true, of course. The thing is (and I'm sure you know this) that the law defines "obviousness" as the combination of two or more prior art references, which differs from how we colloquially understand the word. This is for several reasons, the primary ones being objectiveness and avoiding hindsight. In fact, I theorize that the latter is precisely why people think they see "so many obviously redundant and unoriginal patents".
This is not necessarily true.
Patents, unlike copyrights, are additive. If you write a book based on the Harry Potter characters, JK Rowling owns the copyright to your derivative work. But if Lab A patents a way of making graphene, Lab B is free to research and patent non-obvious refinements.
So you tend to see a tree of patents by different people:
1. Awesome new invention Foo! (Lab A) 1.A. Small but commercially important refinement of Foo. (Lab B) 1.A.i. More performant version of small refinement of Foo. (Lab A) 1.A.ii. Different way of increasing performance on small refinement of Foo. (Lab C)
... where you definitely need to license Patent 1 from Lab A if you want to sell your own Foo, but if you want to sell a Foo with Lab C's performance improvements you need to license Patent 1.A and 1.A.ii as well.
This is why there is a "race to patent every single miniscule discovery" in the first place -- Lab A getting Patent 1 doesn't remove the incentive to discover refinements. It is not obvious that the search for refinements would happen faster without this incentive.