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Mark Cuban

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My Suggestion On Patent Law

Posted: 08/08/11 02:29 PM ET

It is easy to complain. Much harder to come up with solutions. Many won't like what I propose, but who wants to make lawyers happy anyway?

The solution?

1. End all software patents. Don't make them shorter, eliminate them.

I have no problem with software being copyrightable just as it always has been. That is more than enough protection and keeps enough lawyers un-gainfully employed.

2. End all process patents. They serve absolutely no purpose. None.

If you create a new process, use it. The benefit is from creating the idea and using it in a business to your advantage. Afraid that some big company might steal the idea? That is life. When you run with the elephants there are the quick and the dead. That is a challenge every small company faces. A process patent is not going to make your business successful. The successful execution of business processes will. If we had process patents or the culture of software litigation in the 1980s as we have today current technology would consist of running terminals on DEC and Wang Computers at the local library for $10 per hour and there probably would not be a world-wide web.

No doubt that by the mid 90′s someone would have sued Marc Andreessen and his friends at the University of Illinois long before Mosaic could ever turn into Netscape. My guess is that the patent attorneys at British Telecom would have been all over them contending that hyperlinking was protected, but for $10 per download they could use them in their new browser...

Some of the benefits of eliminating process and software?

a. Reduce the court room costs associated with process and software patent litigation. That is taxpayer money saved.

b. Improve the efficiency of the Patent Office.

Process patents are a magnet for everyone who has ever dreamed of being awarded a patent. The flood of applications not only slows the speed at which inventions that deserve patents are awarded, it reduces the quality of investigation into applications. That is a lose lose situation. Patents that shouldn't be awarded are awarded, which in turn creates more work as those patents are challenged.

c. End the ridiculousness of the current Patent Arms Race.

Companies are buying patent collections as a way to defer litigation or to support their litigation efforts rather than to benefit from the intellectual property purchased. Billions of dollars are being spent on this arms race. Billions of dollars that without question impact consumer prices from these companies.

d. Patent costs cost jobs.

Uncertainty is never good. Certainty of risk is even worse. What I mean by that is that almost every major corporation is this country has ongoing patent litigation and many, many small companies (my companies included) have ongoing patent litigation as well.

How does this impact jobs and job creation? The thing about patent litigation is that it is unlimited and unquantifiable. There is absolutely no way to look at your business and say "this is where and what my risk is." Because of software and process patents any company could be sued for almost anything. It is impossible to know what the next patent to be issued will be and whether or not your company will be at complete risk. It is impossible to go through the entire catalog of patents issued over the last 10, 15, 20 years and determine which will be used to initiate a suit against your company.

It's impossible to quantify just how much and how often you will be sued and what the costs associated with those lawsuit(s) will be.

The risks are unlimited.

Unlimited risk in any environment will force a company to hold back resources in an attempt to protect itself. In the case of several of my companies, it means that we have held off hiring people so that we have cash in the back to deal with current and future patent litigation.

It's a joke, but that is the reality of doing business in this country.

e. Look overseas

Pick any country that is currently doing well, China is a perfect example. In China the Intellectual Property Laws are so weak that someone thought it was a good idea to completely replicate Apple retail stores. Compare their economy to ours. As much as I hate to compare other economies to ours, it's worth taking a look .

It is time to change. This country needs the change.

Eliminating software and process patents won't end patent litigation, but it certainly will be a good first step. And while it may only be a step, it will be a positive step towards improving the economy and adding jobs.

Update: I wanted to re post a comment from my last post. I think it is important. It obviously doesn't go as far as I would like, but if you care about patent reform let your representatives know.

Unfortunately, the patent reform bill that President Obama just encouraged Congress to pass, does nothing to address the problem of patent trolls. (The full text of the bill, H.R. 1249, can be read here.

This bill passed the House 304-117 and it's companion bill (here) passed the senate 95-5, vitally assuring that the two bills will be reconciled and signed into law in early September, once congress returns from recess. This is "reform" in name only, as the bills will do nothing to discourage the job-killing litigation tactics of the patent trolls that Mr. Cuban references above.

If you care about the issue of patent trolls, you have one month to encourage your Congressperson to amend S.23 and/or H.R. 1249 to include limiting damages from "non-practicing entities" (aka, trolls).

This post originally appeared on Blog Maverick.

 
 
 
It is easy to complain. Much harder to come up with solutions. Many won't like what I propose, but who wants to make lawyers happy anyway? The solution? 1. End all software patents. Don't make ...
It is easy to complain. Much harder to come up with solutions. Many won't like what I propose, but who wants to make lawyers happy anyway? The solution? 1. End all software patents. Don't make ...
 
 
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10:00 AM on 08/17/2011
I say grant all patents that produce profits for there owners because its there right to there property. Everything should have the opertunity to have its worth determined by the free market and credit given to its creator monitarily as the incentive to create.
06:25 PM on 08/16/2011
The only thing that will end patent lawsuits is standardized perdictable outcome rules this make going to court a waste of time and everything can be done online with video depositions no courtroom tensions and unpredictable results.
02:48 PM on 08/15/2011
Watching the making of this particular piece of legislative sausage called "patent reform" has proven particularly unpleasant. The bill would never have received the support that it has, if ending fee diversion hadn't been a part of the original deal. If fee diversion remains, the bill will be nothing but a major gift to mega-corporations. Par for the course, I suppose ... but nonetheless disappointing.
http://www.aminn.org/patent-reform-act-2011-s23
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OliverTwist
Contrarian advocate for truth and justice
09:20 PM on 08/14/2011
Businesses and their politician employees are simply trying to use the law to eliminate patent protection for inventions that they and their friends don't want to pay for.

It has been up to the patent department to decide what is a new invention and what is simply well known to those skilled in the art.

That seems to best way to leave it.

What is being proposed seems like government legalized intellectual property theft for the benefit of banks.
09:04 PM on 08/14/2011
Patenting favors the big corporations, especially on process and software. New software always builds on previous software, in one way or another, and always resembles other software, simply because there are certain purposes necessary for further advancement in all/many fields. It may be a faster way to achieve the same result, using the result as a small step in a larger system, achieving the same result for different purposes, a small application providing a fraction of the same function. Most of all, it may be developed completely independently from the patent owner. Big corporations are virtually guarantied to have patents that can undermine any start-up or small company.

Strangely (not really), the law always seem to move towards further empowering the already powerful. Patent law is no exception. I fact, the complete opposite.

The patent owners themselves all owe most of their patented systems to the ones who didn't patent their ideas. Imagine a patent on OSes, or command line, or point-n-click, or hierarchical filing systems, or recursion, or multi-threading, or object orienting, or... Every single step would be fraught with delays and hurdles. That's what makes it unfair; it's also what makes it profitable, for the big operators.

To profit from it, who is shameless enough (i.e.: has lawyers) to apply for a patent on something obvious or inevitable, is more important than who actually "invented" it.

No doubt, though, the biggest absurdity is in patenting natural genetic sequences.
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OliverTwist
Contrarian advocate for truth and justice
09:21 PM on 08/14/2011
If it is obvious to those skilled in the art it will not get a patent or the patent will not stand.
HUFFPOST SUPER USER
Articulator
09:38 PM on 08/14/2011
No, that is the problem, including the "it will not stand" part. At that point you have to have the lawyers to fight the patent.
08:29 AM on 08/15/2011
It is by no means obvious what is "obvious to those skilled in the art". You have the whole range from "someone would've thought of it soon, anyway", to "come on, we all knew that". In the first case, a patent should be awarded, in the latter, it shouldn't. The problem is all the cases in between. Unfortunately, currently, even the "come on, we all knew that" cases are all to often awarded patents.

As for whether the patent will stand, that depends on expensive lawyers, who will muddy the waters with endless details and argumentative distractions. Since these are often technically complex issues, those without technical background are easily confused. There's also the problem that things will seem obvious in hindsight, so how do we tell if it was obvious before the patent was made? Is the documented prior knowledge truly based on an understanding of the same principles/ideas, or are they ascribed to it in hindsight? Does one implementation seem more "professional"? That last can make all the difference.

The legal system notoriously end up making nonsense rulings in matters of information technology, simply because judges and juries misunderstand the issues. There's an endless supply of examples of ridiculous patents and rulings. Just scroll through the posts here, and you'll find mention of enough of them to depress anyone.

While less commonly involved in legal issues, I imagine that other fields of complex technology suffer much the same fate.
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HUFFPOST SUPER USER
Progressive forever
Think free and you shall be
08:42 PM on 08/14/2011
I agree. The patent laws were revised in 1997 in the hope that they would become the new manufacturing industry. Their effect on stifling growth and research is being felt across the board.
Human society has progressed and evolved by copying good ideas from each other. We would be driving cars with weird controls layouts if the same laws existed in 1916 when Cadillac came out with first car to have the now traditional clutch, brake pedal, accelerator layout. The success of the idea depended upon the number of people who copied it.
Now many research grants have a requisite of developing IP, locking the door for other people who might come on the same solution.
07:32 PM on 08/14/2011
In general, I agree with most of what Mark says on this topic. I do have to take umbrage with one aspect of what he is saying: The lawyers are not the ones to blame in this scenario (or virtually any other for that matter). The truth is that we ARE a civilized nation of laws and we have gone to great lengths to get the rest of the world to be as well. Lawyers are no more than wind-up toys who set out to do the bidding of their superiors, a tool used by those who employ them. I realize that there is a long history of vilifying lawyers in western civilization, but it is far too easy to set about beating the servant for his master's will. Look to the ones behind the lawyers to place appropriate scrutiny. At the end of the day, it is the lawyers who help to ensure the maintenance of our nation of laws and ultimately prevent us from settling our differences in the streets at twenty paces.
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07:09 PM on 08/14/2011
"Afraid that some big company might steal the idea? That is life."

No, that is theft. And they are doing it already - now they want a pass?
HUFFPOST SUPER USER
Articulator
09:40 PM on 08/14/2011
Big companies can now stifle any inovatation with endless trivial patents. When they freeze out innovation, everyone suffers.
08:24 AM on 08/17/2011
Right there needs to be a stipulation in reform about reasonable usage charges for non competing products The total obligation for patent usage expendature cant exceed 25% of product profits the pie must be diced fairly
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lcr999
scientist
10:43 PM on 08/14/2011
it is not theft if ideas are not property
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HUFFPOST SUPER USER
Dnietz
politics is obsolete
06:54 PM on 08/14/2011
I agree, when it comes to software, Copyright laws  should clearly be enough to protect the creator.
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HUFFPOST SUPER USER
John Horner
06:44 PM on 08/14/2011
I agree strongly with Mark Cuban on all the points he raised.

Our existing patent system stifles innovation more than it supports it. One of the reasons China is surging ahead with a post-modern version of the industrial revolution is that they pay very little attention to the made up idea of intellectual property. In China it is mostly about the effectiveness with which a person of company puts an idea to use, rather than it is about some absurd race to the courthouse to patent ideas who's time has come.

Many people have bought the ridiculous story that Thomas Edison "invented" the light bulb. He didn't. He was, however, the first one to win a patent on using carbonized bamboo for the filament. Most modern conventional light bulbs use a tungsten filament. The point being, we would still have had electric lighting at about the same time even had Thomas Edison never been born. Commercialization of a good idea is hard. Coming up with incrementally better ideas (which is what the vast amount of patents cover) is actually not that hard.
08:46 AM on 08/17/2011
Thats right edison dident invent the lightbulb he stole the glory and money from the real inventor my grandfather Delbert Roberts and the Roberts Electric co. Port huron michigan established 1882. I was the one who invented the modern tungston element. China needs to join the civalized world in respecting patent rights these inventions would not exist today except for 4 great inventors and associated developers and the monitary incentive that patents give. Immagine yourself in 1803 living like an animal in a hole in the ground with nothing but foraging for food with a pointed stick.Creating good ideas is rare and individual specific development of good ideas is difficult and grosley discouraged by present and proposed patent system.
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HUFFPOST SUPER USER
jabailo
(Participant) Texeme.Construct()
06:40 PM on 08/14/2011
I agree; however, we don't need new legislation. We need the Supreme Court to correctly interpret the meaning of patents as defined by Article I, Section 8, Clause 8 of the Constitution.

I discussed that here:

http://yrihf.com/viewtopic.php?p=5469&sid=29df30c12bb1e556cc57e5a05079fd7c

"The recent fights in upholding patent laws with regard to software display not the remotest regard with the intent...to protect the individual inventor. Nowhere, in all the litigation, is the inventor a part of the claim, the credit...or the reward.

So, a title..or deed...that was given to a single person, becomes a chip in a poker game. It's as if someone put their Medal of Honor up for sale on e-Bay, and then it was bought and used for some type of derivatives trading. "
01:02 PM on 08/15/2011
I'd go further and point out that the purpose of Article 1, Section 8, Clause 8 is "To promote the Progress of Science and useful Arts" -- granting rights to authors and inventors is merely a means to that end.
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LoneTree
Liberty is more precious than life.
06:11 PM on 08/14/2011
"If we had process patents or the culture of software litigation in the 1980s as we have today current technology would consist of running terminals on DEC and Wang Computers at the local library for $10 per hour and there probably would not be a world-wide web."

Please explain how that would be worse than what we have now?

The longer the Internet goes on, the less useful to civilization it becomes. Open public access to the Internet has created vast wealth for a minuscule handful, substantial personal wealth for a larger (but still tiny group), and almost nothing of value to society at large. Institutions of education and research seem to make very good use of this thing. There are isolated pockets of utility here and there. But 99% of the volume, time, effort, and bandwidth consumed by/on the Internet is simply a pointless destruction of resources.
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HUFFPOST SUPER USER
Dnietz
politics is obsolete
06:48 PM on 08/14/2011
This discussion and this SPECIFIC topic is totally irrelevant to Luddites. 

Seriously, I don't mean that to be an insult, but the specific discussion here is whether one method of managing intellectual property is better than the other to ENCOURAGE AND ADVANCE technology.

This is not a discussion of the merits of technology itself.
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LoneTree
Liberty is more precious than life.
10:16 PM on 08/14/2011
Meaning that any discussion of whether that technology is beneficial to society as a whole is irrelevant? It doesn't matter whether the endeavor is a good idea, only how we go about it? I believe that's how we got into Iraq, if I'm not mistaken.
04:45 PM on 08/14/2011
Right on! Seems like our patent system has forgotten it's sole Constitutional purpose, "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries" (Article 1, Section 8). These days, patents and copyrights are primarily used to inhibit competition - yielding the exact opposite of the Constitutional intent.
10:22 PM on 08/14/2011
As always, lawyers find a way to completely invert the intent of the constitution. Other lawyers uphold it to get their case "precedent" fame.
04:35 PM on 08/14/2011
The ability to patent life forms (e.g., GMOs) should be eliminated and all patents that do so to date revoked.
07:17 PM on 08/14/2011
This is one of the single most distressing elements of the current patent landscape. We are allowing -- and encouraging -- patents on new forms of existing plant life, most of which will wind up being invasive by dominating their unmodified cousins with resistance to insects, disease, and drought and pushing them out of existance. Likewise with human genetics and the stiffling effects of patents on research. It seems rather easy to see the end result: proprietary starvation and willfully uncured disease.
Chironomid
To read is human; to comprehend divine
04:22 PM on 08/14/2011
These are the things that make or break jobs, not tax cuts and gov't debt. But, they're dry and boring and not as much fun to get incensed about.
HUFFPOST SUPER USER
tulsey
I was Bill Hicks.
08:38 PM on 08/14/2011
I tried chanting "Where are the jobs Mr Boehner" but it didn't seem to help.
10:24 PM on 08/14/2011
Now that's funny, I don't care who you are! (c)