Innovation in America

[chemgator]

Anyone expecting a significant economic recovery anytime soon is deluding themselves, for two reasons. The first is the wasteful spending of GWB and Obama. You can argue till you are blue in the face over whether GWB's free spending (which occurred during good economic times) was more foolish, or whether Obama's reckless spending (which includes things like extended unemployment benefits and extended food stamp programs, which make the populace fatter, lazier, and more dependent on the gov't) is more foolish. But the bottom line is that there is a price to be paid for foolish spending. Eventually, you get inflation. You spend more and more on paying interest on the debt, and then you need to print money to make your payments.

The second reason is a little scarier. I was reading an article in Wired magazine about how the patent office works, and how American business has evolved to deal with changes to the patent office in the last 30 years. Patents are not used to protect the inventor, they are used to attack the competition. We have seen a little of this in the Apple - Samsung suit, where Apple was able to patent the shape of their cell phone and the row of icons on the display.

In some cases companies are set up to patent an idea, and then attack anyone who infringes on it. These companies never produce a product--they just defend their patents. One such "patent troll" company patented the idea of using software to read the information on a scanned document. It turns out that every bit of e-commerce that occurs over the internet uses this idea. This company started shaking down all the companies that did commerce on the internet, demanding millions of dollars. If the company balked at paying, they threatened them with a legal injunction that would stop them from doing e-commerce until the suit was settled (and sometimes the judge went along with it). Most companies paid up because it was cheaper than losing all that business. Basically, this person (the troll company was basically a 1-man operation, plus lawyers) owned the internet. A company finally fought back and defeated this lowlife, but the system is still in place.

The patent office is slowly starting to change its ways, but it will take decades before things are fixed in the system.

[G8trGr8t]

read a piece a while back about how patent attorneys are getting equity stakes in patents in exchange for handling the suits. otheres are jsut outright buying patents with the sole purpose of using them to file suits to get settlements.

[chemgator]

I think this system hurts us as much as Obama's incompetence does. Why aren't companies hiring and taking risks? Sure, Obama's strange and dangerously socialist policy ideas have them nervous. But there is also the fear of litigation if they try something new and it is in any way related to a patented device or concept. No risk-taking = no hiring and no new jobs. The internet boom of the 1990's could not occur under the current patent system. American companies would avoid producing any products while trying to protect all the new ideas with patents. And some Asian countries would step in, support local companies, and develop all of the products that powered the internet. The U.S. gov't would be another $20 trillion in the hole without all the tax income related to the internet boom, and we would be facing double-digit inflation right now.

I think they should force inventors to demonstrate a working model of something before granting a patent. And they should avoid patenting ideas altogether, or issue a 1-year patent to allow them a chance to get a working model ready. All computer technology should be limited to 10-year patent protection, and software should be 5 years. And they should not be too quick to re-issue a patent on something with a small modification, which they currently do routinely. The Patent Office has to modernize its thinking to reflect the current business environment.

[SydneySLee]

Originally Posted by chemgator

Anyone expecting a significant economic recovery anytime soon is deluding themselves, for two reasons. The first is the wasteful spending of GWB and Obama. You can argue till you are blue in the face over whether GWB's free spending (which occurred during good economic times) was more foolish, or whether Obama's reckless spending (which includes things like extended unemployment benefits and extended food stamp programs, which make the populace fatter, lazier, and more dependent on the gov't) is more foolish. But the bottom line is that there is a price to be paid for foolish spending. Eventually, you get inflation. You spend more and more on paying interest on the debt, and then you need to print money to make your payments.

The second reason is a little scarier. I was reading an article in Wired magazine about how the patent office works, and how American business has evolved to deal with changes to the patent office in the last 30 years. Patents are not used to protect the inventor, they are used to attack the competition. We have seen a little of this in the Apple - Samsung suit, where Apple was able to patent the shape of their cell phone and the row of icons on the display.

In some cases companies are set up to patent an idea, and then attack anyone who infringes on it. These companies never produce a product--they just defend their patents. One such "patent troll" company patented the idea of using software to read the information on a scanned document. It turns out that every bit of e-commerce that occurs over the internet uses this idea. This company started shaking down all the companies that did commerce on the internet, demanding millions of dollars. If the company balked at paying, they threatened them with a legal injunction that would stop them from doing e-commerce until the suit was settled (and sometimes the judge went along with it). Most companies paid up because it was cheaper than losing all that business. Basically, this person (the troll company was basically a 1-man operation, plus lawyers) owned the internet. A company finally fought back and defeated this lowlife, but the system is still in place.

The patent office is slowly starting to change its ways, but it will take decades before things are fixed in the system.

See Rambus for an example

[JerseyGator01]

25% of small businesses have been sued over the past 5 years. Judges make more ridiculous decisions on business regs that they know nothing about since they never worked in the real world. I had one employer essentially shut down because its building was too big.

[fairfaxgator]

That's a funny comment about GWB...

[brainstorm]

The Patent "system" is patently abused. You can get a patent for just about anything. Large companies acquire them to use as a legal hammer to pound smaller companies out of business.

Similar strategy found in big business embracing govt regulations. Little guys struggle with the paperwork and expense.