Nathan Myhrvold’s Evil Genius(timothyblee.com)
timothyblee.com
Nathan Myhrvold’s Evil Genius
http://timothyblee.com/?p=781
5 comments
You and I both win provided neither of us tries to actually make the batteries. Instead, we wait for someone who does and sue them. If we try to make them, we discover that while you patented something about 40 hours and I patented something about chemistry, neither of us patented something about manufacturing them and a third troll sues us.
The point of the article is that the only losers are the ones who try to do anything tangible that requires a collection of patented ideas to function.
The point of the article is that the only losers are the ones who try to do anything tangible that requires a collection of patented ideas to function.
This implies that you can, sitting at a table with a pint, come up with the key patentable ideas for the 40 hour batteries. The odds rather favor the people building batteries in earnest, don't they?
No, because this is not a case of A vs. B. It's A vs. all the Bs, Cs, Ds, &c patenting stuff.
So sure, a company building a battery has a good chance of coming up with an enforceable patent. But given thousands of people trying to patent battery-ish ideas and many that aren't immediately related to batteries, the odds favour one of them coming up with something that receives a patent and is vaguely related to whatever the battery manufacturer is doing.
Remember, a patent is a sword but not a shield. Just because you patent an idea and make something with that idea, you cannot assume that nobody else has a patent that applies to your "patented" idea. They may have patented some other part of the process for manufacturing your "invention" or they may have a patent for an underlying component of your process even though you have patented a novel way to apply their patented idea.
Please let go of the idea that patenting something is a license to actually do something tangible with your idea. It is not: It is actually a license to interfere with other people doing something with your idea.
So sure, a company building a battery has a good chance of coming up with an enforceable patent. But given thousands of people trying to patent battery-ish ideas and many that aren't immediately related to batteries, the odds favour one of them coming up with something that receives a patent and is vaguely related to whatever the battery manufacturer is doing.
Remember, a patent is a sword but not a shield. Just because you patent an idea and make something with that idea, you cannot assume that nobody else has a patent that applies to your "patented" idea. They may have patented some other part of the process for manufacturing your "invention" or they may have a patent for an underlying component of your process even though you have patented a novel way to apply their patented idea.
Please let go of the idea that patenting something is a license to actually do something tangible with your idea. It is not: It is actually a license to interfere with other people doing something with your idea.
In the modern patent business, the "odds" favor the first party to encounter a particular problem in their field of art. If you're lucky enough to encounter a problem first, you can patent the first obvious solution(s) that come to mind, and effectively own the field later.
This is why nonobviousness was supposed to be a criterion for granting patents, and why we're all worse off now that the USPTO has effectively abandoned it.
This is why nonobviousness was supposed to be a criterion for granting patents, and why we're all worse off now that the USPTO has effectively abandoned it.
Software is different. For most commercial programs, it's obvious in advance whether they can be implemented or not. Okay, there are lots of academic computer scientists devising new, unobvious algorithms, but I think a relatively low proportion of businesses need new algorithms. Whereas all new medicines, to take the other extreme, require new science.
You probably win because your patent has broad claims covering all 40 hour batteries. It does not matter that I know how to make them and you don't.
As I understand it --- as in, what I've managed to retain from multi-hour conversations with IP lawyers trying to sell me services --- that's not actually how it works.
(a) if your broad claims and best-known-mode are insufficient to instruct someone as to how to build a battery, your patent won't matter, and
(b) just because you patent a 40-hour-battery concept doesn't mean you've patented the concept of a 40-hour battery. Every aspect of battery design that you didn't document and claim in your patent is itself patentable. You can patent technology that you yourself cannot build because of other overlapping patents.
(a) if your broad claims and best-known-mode are insufficient to instruct someone as to how to build a battery, your patent won't matter, and
(b) just because you patent a 40-hour-battery concept doesn't mean you've patented the concept of a 40-hour battery. Every aspect of battery design that you didn't document and claim in your patent is itself patentable. You can patent technology that you yourself cannot build because of other overlapping patents.
But from what I understand, from being involved in several patent filings, you can't just patent an idea.
Unfortunately, while that's how it was supposed to work, that's not how it does work.
Amazon's "one-click" patent is an obvious case in point: they own the idea of executing an Internet shopping transaction with a single mouse click. No matter how divergent your implementation is from theirs (and to be fair to Amazon, Barnes & Nobles' implementation wasn't very divergent) they effectively own the core idea and, by extension, any work you put into it.
It's utterly impossible to argue that this state of affairs encourages progress in the useful arts and sciences, or otherwise benefits society in any way.
Unfortunately, while that's how it was supposed to work, that's not how it does work.
Amazon's "one-click" patent is an obvious case in point: they own the idea of executing an Internet shopping transaction with a single mouse click. No matter how divergent your implementation is from theirs (and to be fair to Amazon, Barnes & Nobles' implementation wasn't very divergent) they effectively own the core idea and, by extension, any work you put into it.
It's utterly impossible to argue that this state of affairs encourages progress in the useful arts and sciences, or otherwise benefits society in any way.
Amazon didn't just patent an idea. They patented an extremely effective embodiment of that idea. One-click wasn't a pint-glass-and-bar-napkin patent.
I have an extremely effective embodiment of brushing my teeth, but you don't see me running off to the patent office to keep other people from brushing my teeth that way.
Of course, if I could brush my teeth on the Internet, I can see how that might be different.
Of course, if I could brush my teeth on the Internet, I can see how that might be different.
It sounds like you're trying to argue that one-click was as obvious as brushing your teeth. Amazon was far from the first company to take payments over the net --- I remember buying an RSA shirt by keying the ABA and account numbers off a check. But Amazon appears to have been the first company to actually publish an embodiment of one-click shopping. Why's that?
Honestly, I don't know. It could be that smaller online retailers were afraid of the inevitable rise in returns, chargebacks, and other customer-service hassles that would accompany any measures that encourage impulse buying. I know I would be.
While the idea of one-click ordering is obvious, it takes some nontrivial business infrastructure to make it safe and robust. You need to be able to consolidate separate orders placed within a brief timeframe, you need to allow your customers to view and edit their existing orders and fix accidental ones without human intervention... and probably most important, you need to be large and well-known enough to be trusted by your customers to retain the financial and personal information needed to execute one-click orders.
The idea was indeed a ballsy one, and it took some real work on Amazon's part to make it happen successfully. But it was still an obvious idea, it wasn't the least bit creative, and it didn't deserve patent protection.
Hard work on my part shouldn't, by itself, entitle me to stop you from doing the same.
While the idea of one-click ordering is obvious, it takes some nontrivial business infrastructure to make it safe and robust. You need to be able to consolidate separate orders placed within a brief timeframe, you need to allow your customers to view and edit their existing orders and fix accidental ones without human intervention... and probably most important, you need to be large and well-known enough to be trusted by your customers to retain the financial and personal information needed to execute one-click orders.
The idea was indeed a ballsy one, and it took some real work on Amazon's part to make it happen successfully. But it was still an obvious idea, it wasn't the least bit creative, and it didn't deserve patent protection.
Hard work on my part shouldn't, by itself, entitle me to stop you from doing the same.
One of the comments on the article suggests applying for a patent on the "patent troll" business model and then suing these guys. Fans of recursion will notice that you could then apply for a patent on the "patent on the 'patent troll'" business model, and then we're really off to the races.
One day - just one day - I'd like to see a discussion about patents where someone doesn't suggest patenting something 'amusing' that already exists and has years of prior art.
I do wonder whether Nathan Myhrvold really believes that patents are a good thing. There seem to be three possibilities:
- Myhrvold really believes that patents make the world a better place.
- Myhrvold is cynically extracting money from a broken system
- Myhrvold wants to bring down the patent system; IV is intended to make the absurdity of the system as blatant as possible, and make money at the same time.
I hope it's the last one.
- Myhrvold really believes that patents make the world a better place.
- Myhrvold is cynically extracting money from a broken system
- Myhrvold wants to bring down the patent system; IV is intended to make the absurdity of the system as blatant as possible, and make money at the same time.
I hope it's the last one.
First, I haven't met Nathan personally but from everything I see about him internal to Microsoft (from his time at the company) and his time outside, he is a very, very smart man. And quite rich. I think assigning simple labels like 'good' and 'evil' doesn't quite cut it.
My opinion/guess (with zero inside knowledge) is that Nathan doesn't really care about the patent side of the equation much. He just wants to do interesting ideas and get people in the room to dream up of (and sometimes build) cool stuff. Some of their work around nuclear power is super interesting for example. The patents are just a revenue stream for them to continue doing this.
My opinion/guess (with zero inside knowledge) is that Nathan doesn't really care about the patent side of the equation much. He just wants to do interesting ideas and get people in the room to dream up of (and sometimes build) cool stuff. Some of their work around nuclear power is super interesting for example. The patents are just a revenue stream for them to continue doing this.
Complex indeed: http://www.ted.com/talks/nathan_myhrvold_on_archeology_anima...
"Nathan Myhrvold talks about a few of his latest fascinations -- animal photography, archeology, BBQ and generally being an eccentric genius multimillionaire."
"Nathan Myhrvold talks about a few of his latest fascinations -- animal photography, archeology, BBQ and generally being an eccentric genius multimillionaire."
I've considered becoming a patent lawyer for precisely this trend. It is a type of investment vehicle that will get much more notice in the future and subsequently make a few billionaires along the way.
It's surprisingly hard to become a patent lawyer, isn't it? You need an engineering degree and a law degree and industry experience, right?
Why not just skip all those pesky law classes, and become a bank robber? You'll have the same net effect on society, and the women are better-looking.
For most bank robbers, the "women" are the guys they share a cell with. I'll take the billionaire option over that.
While acknowledging your quip for what it is, I would argue that monetizing a portfolio of patents that were legally acquired (either 1st or 3rd party) while capturing profit due to inefficiencies in the system is no different than what a typical hedge fund manager does so I don't see the problem. Inventors are able to bring liquidity to their otherwise illiquid patents and LPs get a return.
Arbitrage traders automatically eliminate the market inefficiencies which they exploit. In theory, all purely financial operations, such as hedge funds, do the same (although this orthodoxy is now less certain). This is not true for patents, because patents are a government granted monopoly.
> Arbitrage traders automatically eliminate the market inefficiencies which they exploit.
True enough, although, having worked in a stat arb hedge fund for four years, let me assure you that the process is far from automatic ;)
> In theory, all purely financial operations, such as hedge funds, do the same
Aren't banks "financial operations"? Is franchise business not a "financial operation"? There are many other reasons, but I disagree, even in theory, with the idea that all financial operations eliminate market inefficiencies, aside from the en-passant contribution to overall liquidity.
> This is not true for patents, because patents are a government granted monopoly.
This strikes me as a non sequitur. Just because patents are a government-mandated monopoly doesn't mean there can't be an arbitrageable market in them. After all, all property is in some sense government-mandated. And the fact that patents are limited period presents no major difficulties -- I need only point out that a large segment of the London property market is for leasehold, which is in effect a owner-given (ultimately backed up by the force of the state, of course!), time-limited monopoly on the use of the house.
Of course, there's not going to be an arbitrageable market in the sense you're speaking of anyway, for an entirely different reason: bonds and, and to a much lesser extent, stocks, are easily comparable, whereas this is not the case in patents. If you think that Greece is a lot more credit-worthy than the rest of the market thinks it is, you can go long Greek 10 years, go short the bund, and with virtually zero outlay you have the ability to profit from any mispricing of "country risk". There's simply no analogue the "go long A, short B" in the domain of patents.
I think the comment you replied to erred in characterizing the activity of of a patent fund as "exploiting ineffciencies". It really is more akin to Warren Buffett-style long-term investing. While it's certainly true that Berkshires' activities reduce market inefficiencies, it's safe to say that that's not what's at the forefront of Buffett's mind when he invests.
There are valid reasons to be opposed to the patent system in its current form. I don't think the absence of Gordon Geko-style arbitrageurs from patent market is one of them, though ;)
True enough, although, having worked in a stat arb hedge fund for four years, let me assure you that the process is far from automatic ;)
> In theory, all purely financial operations, such as hedge funds, do the same
Aren't banks "financial operations"? Is franchise business not a "financial operation"? There are many other reasons, but I disagree, even in theory, with the idea that all financial operations eliminate market inefficiencies, aside from the en-passant contribution to overall liquidity.
> This is not true for patents, because patents are a government granted monopoly.
This strikes me as a non sequitur. Just because patents are a government-mandated monopoly doesn't mean there can't be an arbitrageable market in them. After all, all property is in some sense government-mandated. And the fact that patents are limited period presents no major difficulties -- I need only point out that a large segment of the London property market is for leasehold, which is in effect a owner-given (ultimately backed up by the force of the state, of course!), time-limited monopoly on the use of the house.
Of course, there's not going to be an arbitrageable market in the sense you're speaking of anyway, for an entirely different reason: bonds and, and to a much lesser extent, stocks, are easily comparable, whereas this is not the case in patents. If you think that Greece is a lot more credit-worthy than the rest of the market thinks it is, you can go long Greek 10 years, go short the bund, and with virtually zero outlay you have the ability to profit from any mispricing of "country risk". There's simply no analogue the "go long A, short B" in the domain of patents.
I think the comment you replied to erred in characterizing the activity of of a patent fund as "exploiting ineffciencies". It really is more akin to Warren Buffett-style long-term investing. While it's certainly true that Berkshires' activities reduce market inefficiencies, it's safe to say that that's not what's at the forefront of Buffett's mind when he invests.
There are valid reasons to be opposed to the patent system in its current form. I don't think the absence of Gordon Geko-style arbitrageurs from patent market is one of them, though ;)
Well, I'll defer to your greater knowledge of the financial industry. I'll just note that not only are patents not easily comparable, they aren't usually substitutable.
All of that being just, fair and useful is predicated on a reasonable definition of patents.
If there was a reasonable definition of patents then suing for infringement would be rare in comparison to companies legally acquiring licenses to patented technology.
Instead its easy to patent something and then wait for someone to independently come up with a similar enough technology and sue them. This would be very difficult with an appropriate definition of patents, because independent invention would be unlikely. Now in the case that another company independently comes up with infringing technology, you can happily wait for them to assume all the business and manufacturing risk and then hold the patent over their heads for unbelievable sums of money.
In this extortion model of pricing for patents the more obvious and less specific a patent is the higher its value. In contrast specific and innovative patents are much less likely to trip other companies up, so they have to be priced according to their value to actually make things before all the manufacturing and other business risks have been factored in.
Actual patents as means of transferring and trading in invention seems to be completely dwarfed by the ability of patents to be used to extort money from successful businesses.
If there was a reasonable definition of patents then suing for infringement would be rare in comparison to companies legally acquiring licenses to patented technology.
Instead its easy to patent something and then wait for someone to independently come up with a similar enough technology and sue them. This would be very difficult with an appropriate definition of patents, because independent invention would be unlikely. Now in the case that another company independently comes up with infringing technology, you can happily wait for them to assume all the business and manufacturing risk and then hold the patent over their heads for unbelievable sums of money.
In this extortion model of pricing for patents the more obvious and less specific a patent is the higher its value. In contrast specific and innovative patents are much less likely to trip other companies up, so they have to be priced according to their value to actually make things before all the manufacturing and other business risks have been factored in.
Actual patents as means of transferring and trading in invention seems to be completely dwarfed by the ability of patents to be used to extort money from successful businesses.
While acknowledging your quip for what it is, I would argue that monetizing a portfolio of patents that were legally acquired (either 1st or 3rd party) while capturing profit due to inefficiencies in the system is no different than what a typical hedge fund manager does so I don't see the problem.
Ideas are not fungible. Consequently they are not supposed to be treated as currency, as commodities, or otherwise as subjects for speculation, except to the extent that doing so "promotes progress in the useful arts and sciences," according to the US Constitution.
When someone shows me how Myrhvold's efforts do that, I'll reconsider the argument.
Ideas are not fungible. Consequently they are not supposed to be treated as currency, as commodities, or otherwise as subjects for speculation, except to the extent that doing so "promotes progress in the useful arts and sciences," according to the US Constitution.
When someone shows me how Myrhvold's efforts do that, I'll reconsider the argument.
But from what I understand, from being involved in several patent filings, you can't just patent an idea. You have to patent an enablement of an idea. A patent that can't be used by someone skilled in the applicable arts to implement the patented concept isn't supposed to be defensible.
Commenters on this post repeatedly argue that engineers do all the real, hard work, and that the ideas themselves are trivial. That's probably true. But all that hard work is also patentable; if I'm dumb enough to file for "40 hour batteries", and you file for the chemical process that makes 40-hour batteries work without melting through the floor, you win, right?