The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Parvis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Monday, 4 February 2013

Mark Cuban's Patent Jeremiad

What happens when you mix a media-savvy billionaire entrepreneur, investor and professional sports-team owner with criticism of the patent system? The answer: a piece entitled "Mark Cuban's Awesome Justification for Endowing a Chair to 'Eliminate Stupid Patents'", which appeared in the January 31, 2013 online edition of TechCrunch here, the highly influential high tech web publication that offers news and analysis of the high tech world. Now owned by AOL, TechCrunch has become a daily must-read for many in the high tech world. This means that articles that are published on the site are assured instant and broad coverage throughout the hi-tech community.

The bulk of Cuban's multi-billion dollar net worth derived from his sale in 1999 (good timing to say the least) of to Yahoo for $5.9 billion in Yahoo stock. Cuban later became the highly visible, outspoken and controversial owner of the Dallas Mavericks basketball team of the National Basketball Association, which won the league championship two seasons ago. Cuban has also sought to participate in the public dialogue on innovation and entrepreneurship. The article in TechCrunch is more or less a series of questions and answers based on Cuban's apparent "endowment" of "The Mark Cuban Chair to Eliminate Stupid Patents." No, the recipient of Cuban's largess is not Stanford, Harvard or the University of Chicago, but rather the Electronic Frontier Foundation here, a private organization that aggressively champions what is described as "digital civil rights."

This Kat is less interested in the chair per se than in the contents of Cuban's comments regarding the current patent regime. The entire piece is attached here; this Kat has culled Cuban's comments for his more colourful morsels:
1 "[D]umbass patents are crushing small businesses."

2. "I would like to see software patents completed eliminated, or if not eliminated have a five-year max shelf life."

3. "I would like to see design patents eliminated."

4. "I would like to require that all patents be used in a business within five years or otherwise become public domain. The concept that patents are being held by non-operating companies in hopes that someone will invent something they can sue over is Anti American, a huge tax on the economy and stymies innovation when entrepreneurs truly come up with a business only to find that the way they included tying the shoelaces on their new shoe was patented."

5. "I would also like to see a “cold room” exception. If you can show you invented the idea using completely independent thought, you don’t violate the patent and the patent is invalidated."

6. "If you didn’t copy an idea, you came up with it on your own, then the idea should not have been patented in the first place. If multiple people come up with the same idea independently, that is the definition of obvious."

7. Regarding the American Invents Act, "[i]t was great for big companies. First come first serve. It did nothing to reduce the patent trolls’ impact on entrepreneurs and existing companies."
Cuban claims that he " thought the EFF would be a great starting point to get the message to politicians that patent trolls are costing taxpayers (via trials/motions/etc.) and small businesses money that could otherwise be used for innovation and creating jobs." Perhaps, although the EFF seems like an odd platform by which to try and influence politicians regarding claimed defects in the patent system. And so this Kat wonders—is this "chair" to "eliminate stupid patents" a bona fide initiative to affect public debate on the patent system; or is it another example of Cuban's "penchant for attention-grabbing headlines?" Or is it a bit of both.

More on Mark Cuban here
More on jeremiad here


Anonymous said...

Some of the suugestions seem, at least at first sight, way off the mark. Item 4, on the other hand, looks interesting. Something like it would stop trolls dead in their tracks. There would of course have to be some flexibility to allow for inventions where the technology is so difficult that it takes longer to put into commercial use. The exception should available only on tangible evidence that real effort has been made to put the invention into practice - something that probably no troll would be able to show! And the idea is no as far fetched as one might think - look at trademarks that haven't been used ...

SG said...

Seems like Cuban is advocating the importation of other areas of IP law into the field of patents. The five-year non-use grounds for revocation is a tenet of trademark law and the proposed "cold room" exception is analogous to independent creation, a tenet of copyright law. While there may be issues with the practicality of introducing these into patent law, it doesn't appear to be anything too radical. It's a shame that he had to drop these two proposals into a hyperbolic article about "dumbass" patent and the scrapping of designs, but then again I suppose the intention is to grab ones attention.

Anonymous said...

No satisfactory solution has been found to patent trolls, and this does not need to be sorted out (item 4). I also believe existing rights are an unfair burden to new companies (items 1 to 3). Solutions do exist in the form of compulsory licencing or expanding research exemptions, which I would favour rather than raising the threshold for getting a patent. Undoubtedly larger companies are better placed to take advantage of the patent system to defend their rights (item 7), and this should be recognised as a real problem which needs sorting out. Unfortunately the political will is not there to try to change the status quo given how many influential larger players don't want substantial changes, which is the real problem.

Anonymous said...

Contrary to SG's comment, I believe Conran's proposal to stop granting dumbass patents is the most sensible of his ideas. However Cuban hasn't hit on the solution, which is for the US PTO to employ more smartass patent examiners, who can then do a kickass job of refusing the very many raggedy-ass patent applications that cross their desks.

Anonymous said...

... saving enterpreneous the requirement to hire cover-your-ass lawyers?

Gentoo said...

The only thing wrong with [5] that I can see, is to quote Shakespeare (ironically?) quoting some Greek bloke "nothing comes of nothing".

Everyone working in the same field of endeavour is stimulated by broadly the same ideas, e.g., Einstein was merely first, others such as Brown (as in Brownian motion) were sniffing around.

But that's the beauty of [6] thinking e.g., lotka-volterra as one example of many in field of mathematics.

Anonymous said...

I don't think IPKat needs to be too alarmed at Mr Cuban being given space on the 'highly influential' TechCrunch website. I think a lot of TechCrunch readers already have a 'bring down the government' view which is prevalent amongst tech-savvy youngsters in the US. Mr Cuban's views are moderate in comparison to those of many who will have read the article.

Anonymous said...

4 is ridiculous. This would leave basic research essentially unprotected.

5 is ridiculous and shows a misunderstanding about what a patent is.

6 supposes that if more than one person invents something, it is not an invention. This is silly. So if 2 people came up with CDMA, then CDMA is not an invention? Garbage. Multiple people coming up with an idea is baked into the legal test for obviousness. People should learn about the law that they are trying to change.

Something needs to be done about patent litigation, but his view is so skewed that

Anonymous said...

#5 is indeed ridiculous and shows a complete misunderstanding of the purpose of the patent system. How would anyone "show you invented the idea using completely independent thought"? At best this would be unworkable, at worst it would encourage what I'd call a "nah, nah, nah, I can't hear you" defence of wilful ignorance, hampering the free flow of ideas even more than the current effect of triple damages for wilful infringement in the US.
Do you want get rid of trolls? Introduce "loser pays". Period.

Anonymous said...

Some odd views here and there in the list overall, but I think that there's something to be said for the underlying sentiments of #4, albeit with some tinkering as suggested previously and above.

Compulsory licenses hardly ever rear their head, and it does seem as though many companies file many patent applications purely as a blocking technique and/or as a stockpile in an arms race. Gut feeling is, and always has been, that this is just not right.

Roufousse T. Fairfly said...

Hardly anything novel or inventive in that enumeration. Sigh.

Point 4 was already a contentious issue when the Paris Union was negotiated 130 years ago. See art. 5A. Complying with the "working" requirement of foreign law could be as difficult as with prior first filing obligations.

A gradation is foreseen: a compulsory license must first be provided before expropriation can be envisaged. Such compulsory licenses are coded in some national laws.

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