[danielki]

This might be a naive question, but why has there been no strong push to reform patent law in a way that eliminates non-practicing entities? It seems like it would be wise to have a law that a patent expires if the company who holds it goes a certain length of time (2 years, perhaps) without producing a product covered by the patent or transferring it to a company who does.

Would such a law increase innovation (companies are more willing to build products without fear of being sued by patent trolls) or decrease it (patents being less valuable might decrease R+D investment)? My hunch is that it would increase innovation, but I'm not completely sure.

[ScottBurson]

Non-practicing entities seem like an easy target, but really, they're not the root of the problem. The root of the problem is ridiculous patents on obvious ideas.

A patent is a grant of a temporary monopoly to an inventor in exchange for disclosure of the invention. But nobody in the system is charged with looking out for the public interest in the making of this deal. Patent examiners do not get bonuses based on the number of bad patents they reject. Despite that, in court, a granted patent is presumed to be valid! It takes a strong argument to invalidate it.

By my analysis, it is the presumption of validity that is the worst problem. A patent owner suing for infringement should first have to present objective evidence that their patent is nonobvious.

[PatentTroll]

The system is as broken as you might think it is. My pet theory is that it is an upper-middle-class jobs program. Serious reform would put thousands of patent attorneys, examiners, paralegals, secretaries, etc. out of work.

[kllrnohj]

The claim is that it would hurt small investors as they start out life as a non-practicing entity.

Which is really what patents are for, to give the inventor time to become a practicing entity before a large company can copy it. Just that the world doesn't work like that anymore, and patents are now abused by large companies to hurt the little guy.

[lytol]

IANAL but my understanding is that patents cover the implementation not the idea. If you aren't capable of practicing (yielding the product), you probably shouldn't be holding/filing a patent.

[ogreveins]

One reason is that an organization of lawyers actively lobbys (lobbies?) for things to not change. It's a revenue stream. That's not the only reason but it's definitely a big one.

[bane]

disclaimer: I'm not of the mind that patents are a raw evil that needs to be swept from the earth. I understand how they can be beneficial for society ideally.

There's a lot of ideas out there that it's just old fashioned corruption and lobbying preventing it, but I can see one semi-valid justification:

Imagine a non-practicing company who ends up with a collection of patents (not a non-practicing patent troll). Today, and what normally happens, they would just license those out to various entities who wished to use them, and those companies signal a fairly pure intent to actually build something and sell it. The license cost is simply passed on to the consumer, but if the product is unique enough it's not like there's a cheaper alternative for anybody to compare against anyway. In the end the economy is richer for having the widget because now people can buy a new capability.

Now imagine a case where companies must exercise their patents. They'll

a) be less likely to work on R&D since they'll no longer be able to exercise a guaranteed monopoly, first to invent (or first to file) no longer has a motivational push to generate new ideas. Even inventing for the sole purpose of licensing your idea is a legitimate one. R&D is very expensive.

b) Only organizations with the financial power to both invent and manufacture will now file for patents. This locks away many small-time inventors (garage R&D) who today make a reasonable living off of their work via licensing to large corporations and locks away the power of innovation only at large and powerful organizations. In a sense the current patent regime is intended to allow anybody, large or small, access to a level playing field. e.g. I have a small LLC, if tomorrow I come up with a cool idea through my LLC and get it patented, I'd have to go about building it and putting it on the market, all expenses that I know my LLC doesn't have the funding to support.

c) As a result, lots of half-assed shit will end up on the market since inventors will be forced to pump something out. Except now it will be optimized to cost them the least amount possible to get to market with rather than be optimized to try to be successful (that takes loads more money to try).

d) And/Or a weird economy will show up of small "pass through" businesses that exist only to provide a store front for the crap that inventors now have to produce in order to lock down their patent (since the end-game in most patents is licensing). They don't really have any intention of selling anything, but inventors maybe produce 10 of their widget, pay a small stocking fee and the store will put it up for display. These stores will likely be in small, off-main-street light industrial zones with no traffic. It's easy money for the store owners since inventors will literally pay them to stock the minimally produced junk. Think of the "As Seen on TV" stores at some local malls, now imagine those multiplied by a million.

IMHO a better solution is to make patents non-sellable. They can only exist under ownership of the inventor and can't be accumulated under non-inventing entities.