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August 20, 2012 / paulio10

Fixing Patent Law in the USA

I thought of a possible solution to the patent issues we’re seeing today in the USA.

Patent Lawsuits in the USA

Companies are collecting huge war-chests of patents of every kind and size, even ones they didn’t invent (they bought from other companies), even ones having nothing to do with their business, and turning around and suing other companies when they think they can get money from them.  Some companies are using this as their sole business model for making money! If your business is an honest business just trying to create products and services to sell to your customers, and don’t want to participate in this evil practice, you’re in danger – you can be sued at any time for anything, and probably will, if you’re a large enough company.  How do you protect your company from this danger?  You have to build your own war-chest of patents which you could use to counter-sue to defend yourself.

These companies don’t even have to be sure the company their suing is infringing on one of their patents.  They can simply say, “we have 10,000 patents, many of which are somewhat related to your company’s products. I’m sure your company is infringing on one of them in there, somewhere. Pay us $xxx right now, or we will sue you and let the courts figure out exactly how you’re infringing.”  The company doesn’t want to waste thousands of dollars trying to defend itself against a possible danger, so they often will pay the money, even if they were not infringing in any way! It’s a kind of Fear of the Unknown.

Yes, it’s basically legalized extortion.

You have to participate, if only to defend yourself, like Google is doing now.  Google is a large enough company, they’re always under attack.  They recently purchased thousands of patents from Motorola as a defense against this horrific practice.  Time, money and energy wasted, just to defend themselves.

A Possible Solution

What if the money from a successful patent lawsuit did not go to the company doing the suing?  The company doing the suing claims the other company is “wrongfully infringing on our patented technology,” and should have the profits they’ve gained from such infringements taken away from them.  OK, I’m good with that.  Let’s say a lawsuit succeeds, and the courts rule that $1,000,000 be taken from the infringing company. Don’t award that money to the suing company.  That money should be used to benefit humanity in some way – it should be donated to a rotating list of worthy non-profit organizations, based on those organizations’ needs and capacity to benefit from such monetary grants.

Example

Company A sues company B for patent violations and wins, with a $1,000,000 reward.  Together both companies spent a total of $250,000 lawyer and court costs.

Current Scenario:   $250,000 is lost.  $1,000,000 is transferred from Company B to Company A.  Humanity benefits in no way whatsoever. Company A is richer now, and they feel victorious because they shut down Company B’s patent violations.

My Model Scenario:  $250,000 is lost.  $1,000,000 is transferred from Company B to the Center for Humanity, Goodwill Industries Inc, Kiva Microlending, or some other charity.  Humanity benefited by $1,000,000.  Company A is no richer, but they feel victorious because they shut down Company B’s patent violations.

The Goal

Remove the profit motive from patent lawsuits.

Once you do that, the number of lawsuits will go back down to a reasonable quantity – of only the most righteous lawsuits.  When a company’s only benefit is removing money from the competitor, and not gaining anything for themselves, a lot of ludicrous lawsuits will fall by the wayside.  Companies whose sole income is derived from lawsuits will dry up and fade away, as they should.  The worst cancer will have been eradicated.

Sure, some companies will still create frivolous lawsuits, because “damaging the other guy” would still be a (negative) motive for them.  But the above plan eliminates the worst kind of lawsuits, as well as a portion of the motivation behind the lesser of the evil kinds of lawsuits that are wasting so much energy, money, financial success and happiness of Humanity.

Summary

Patent lawsuits have become a cancer upon our country.  They do not create any new products or services, provide no beneficial research and development.  They only waste both company’s money in order to move money between companies.  Nothing is net-gained, there is only a net-loss.  The way patent lawsuits work today is just wrong, and must be stopped.

Change the game – require the donation of all monetary rewards to a third party: a worthy charity.  This would solve a large part of the failure of Patent Law today.

If these sue-happy companies really are doing it for the righteousness of it – other companies violating their patents – they will be happy with this change.  If they object, then you know the profit-motive is the driving force behind their actions.

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