Hi Pat,
My comments below:
Sincerely,
Rich Cooper
EnglishLogicKernel.com
Rich AT EnglishLogicKernel DOT com
9 4 9 \ 5 2 5 - 5 7 1 2
-----Original Message-----
From: ontolog-forum-bounces@xxxxxxxxxxxxxxxx
[mailto:ontolog-forum-bounces@xxxxxxxxxxxxxxxx] On Behalf Of cassidy@xxxxxxxxx
Sent: Friday, September 24, 2010 8:28 PM
To: ontolog-forum@xxxxxxxxxxxxxxxx
Subject: Re: [ontolog-forum] [Fwd: Re: More on patents]
Rich,
To me the most telling lesson from this
paper is that, even **IF** one assumes that that a patent covers some true
innovation, there is net negative social benefit from allowing patents for
software. If one adds the fact that vultures have successfully
patented prior art (from the ignorance of the patent office, and perhaps the
ignorance of the patenter as well), then the net social benefit is so negative
as to cry out for elimination of the possibility of patenting (or copyrighting,
for that patter) software.
Pat Cassidy
Pat, you are looking at a paper written by
a person with only theoretical knowledge - his own theories at that. His
assumptions are as suspect as ancient baloney to me, from my own experience in working
with small companies. I have been prosecuting, litigating and developing
funding projects for small technology businesses for about ten years. Before
that, I was developing technologies for large businesses and believe me, the
technology they develop is minimal at best.
This is a good paper, given such deeply
faulty assumptions, that I find it pretty, but not convincing. Very few
technology businesses would even have made the stage of growth to get their
technologies into the market without the funding. The venture capitalists
insist on patents as security for their investments, otherwise they would be
foolish to put money into technology development projects.
Consider what happened in the computer
industry from the inception until the late seventies, when the home computer
business put the technology into the hands of entrepreneurs instead of big
business. Prior to that, IBM, Univac, CDC, GE, RCA and Bell Tel were the
primary force in computing. Growth was extremely slow, and the creativity
of the products was extremely minimal.
After computers got to the scale that
college kids could afford to build, program, develop and deploy computers, the
economy exploded. From 1981, when IBM contributed the PC to multiple
sourcing, new technologies and better solutions began to emerge at a fast pace.
Before that, progress was excruciatingly slow, and funding was just not
available for small technology companies. Wall Street wasn't investing,
nor was main street, nor venture capitalists, due to lack of proof of market viability
in the business community.
Moore's law was working as early as '72, but
it was with major conservative companies such as Fairchild, TI, Motorola, HP, and
the other large, conservative financial investment companies that never did
take much risk with their funding, though TI was better at it than most.
That was the point when the computer revolution began to seriously make such
major impacts into the economy.
It's not a coincidence that Silicon Valley was made up of companies with two to
twenty engineers at its inception. And at that time, software was
extremely simple stuff, doing extremely simple tasks, for a sophisticated user
that had to be trained how to work with it before even applying that limited
technical quality to real problems.
To see the other side, look at the quality
of open source software. Every single one is a me too project, fiddling
with stuff that isn’t fit to buy without at lot of custom fitting labor
to meet an application's specific need. That's why open source software
is free to this day - nobody would pay for that poorly debugged, crash-prone suite
of semi-developed products.
Software patents were late arrivals on the
scene, even compared to other patent technologies. That's in part because
the industry had not found the business plan of developing significant
technologies to commercial value, then taking the company public, and then
moving on (like the small companies often do compared to the big ones) and
developing more sophisticated products to sell to more new markets.
Without one event - IBM's release of a
well engineered, well documented PC design at a crucial moment in the
technology rollout, would not have gotten funding, with or without strong
patent protection.
So I don't believe that the issue is a
social value one, but a means plus function enablement of the technology.
In summary, I like the model because of
its simplicity - it will be a useful general framework for investment, tactical
and strategic planning, but like most models, it misses the serious realities
it purports to demonstrate.
JMHO,
-Rich
>----- ------- Original Message ------- -----
>From: "Rich Cooper"
<rich@xxxxxxxxxxxxxxxxxxxxxx>
>To: <edbark@xxxxxxxx>,
> "'[ontolog-forum]
'"
><ontolog-forum@xxxxxxxxxxxxxxxx>
>Sent: Fri, 24 Sep 2010 14:16:58
>
>Lovely paper, thanks, Ed!
>
>Great math model, though overly simple in its
>assumptions. Just having
>looked it over quickly so far, I also find the
>projected value judgments to
>be nicely theoretical, but likely unsupportable by
>the existing evidence.
>But that may be my own bias in then end. As
I look
>deeper into it, that
>view will likely change.
>
>But with proper interpretation, the math model
>should be very useful in many
>applications trading off investment and tactics
>with strategy.
>
>So I'll give it a good read, which will take me a
>while to respond in depth.
>
>
>Thanks,
>-Rich
>
>Sincerely,
>Rich Cooper
>EnglishLogicKernel.com
>Rich AT EnglishLogicKernel DOT com
>9 4 9 \ 5 2 5 - 5 7 1 2
>
>-----Original Message-----
>From: ontolog-forum-bounces@xxxxxxxxxxxxxxxx
>[mailto:ontolog-forum-bounces@xxxxxxxxxxxxxxxx] On
>Behalf Of Ed Barkmeyer
>Sent: Friday, September 24, 2010 9:31 AM
>To: [ontolog-forum]
>Subject: [ontolog-forum] [Fwd: Re: More on
patents]
>
>
>A colleague of mine contributed an additional
>reference to Rich Cooper's
>contribution.
>
>-------- Original Message --------
>Subject: Re: [Fwd: [ontolog-forum]
>(Software) Patent litigation]
>Date: Thu, 23 Sep
2010 17:24:56 -0400
>From: Guillaume
Radde <guillaume.radde@xxxxxxxx>
>Reply-To: msidtechtalk@xxxxxxxx
><msidtechtalk@xxxxxxxx>
>To: Multiple recipients of list
><msidtechtalk@xxxxxxxx>
>References:
<4C9BBC97.8050205@xxxxxxxx>
>
>
>
>Here is another interesting paper to reference
when
>talking about
>software patents, from american economist and
Nobel
>price laureate Eric
>Maskin:
>
>http://www.researchoninnovation.org/patent.pdf
>
>Guillaume
>
>
>> -------- Original Message --------
>> Subject: [ontolog-forum] More on patents
>> Date: Thu, 23 Sep 2010
12:43:08 -0400
>> From: Rich
>Cooper<rich@xxxxxxxxxxxxxxxxxxxxxx>
>> Reply-To:
>[ontolog-forum]<ontolog-forum@xxxxxxxxxxxxxxxx>
>> To:
'[ontolog-forum]
>'<ontolog-forum@xxxxxxxxxxxxxxxx>
>>
>>
>>
>> Hi Ontologizers,
>>
>>
>>
>> Since we have recently been discussion
patents
>wrt ontologies, this
>> statistical study of patent litigation might
be
>of interest to many
>> readers of this list. Please see below
for news
>item posted on a patent
>> list I subscribe to.
>>
>>
>>
>> HTH,
>>
>> -Rich
>>
>>
>>
>> Sincerely,
>>
>> Rich Cooper
>>
>> EnglishLogicKernel.com
>>
>> Rich AT EnglishLogicKernel DOT com
>>
>> 9 4 9 \ 5 2 5 - 5 7 1 2
>>
>>
>---------------------------------------------------
>---------------------
>>
>> *Bombshell Study: Heavily Litigated NPE
Patents
>Overwhelmingly Lose at
>>
>Trial<http://feedblitz.com/r.asp?l=50410480&f=15116
>1&u=191723&c=0>***
>>
>> To date, litigated patents were viewed as
>"strong" patents - the types
>> that defendants were supposed to avoid taking
to
>trial. Moreover,
>> litigated patents were seen as more valuable,
>since they managed to
>> survive an all-out attack on validity by a
>presumably well-financed
>> defendant. Earlier studies (John
R. Allison
>/et al/., /Valuable
>> Patents/, 92
Geo. L.J. 435 (2004)) looked
>at litigated patents,
>> and found that they differed from
non-litigated
>patents in that they (1)
>> include more claims, (2) cite more prior art,
(3)
>are cited more often
>> by later patents, and (4) come from larger
>"families" of
>> patents/continuations. Each of these
factors are
>now used in
>> conventional methodologies to determine the
>private value of patents.
>>
>> John Allison
>>
><http://www.feedblitz.com/t2.asp?/151161/191723/0/h
>ttp://papers.ssrn.com/sol
>3/cf_dev/AbsByAuth.cfm?per_id=118168>,
>> Mark Lemley
>>
><http://www.feedblitz.com/t2.asp?/151161/191723/0/h
>ttp://papers.ssrn.com/sol
>3/cf_dev/AbsByAuth.cfm?per_id=32215>
>> and Joshua Walker
>>
><http://www.feedblitz.com/t2.asp?/151161/191723/0/h
>ttp://papers.ssrn.com/sol
>3/cf_dev/AbsByAuth.cfm?per_id=1533021>
>> recently took on the task of identifying
every
>patent that was litigated
>> eight or more times between 2000 and February
>2009, including cases
>> still pending, and compared the outcomes of
the
>cases against patents
>> that were litigated only once. In the
course of
>their analysis, they
>> found 106 such patents, which have been
litigated
>in a total of 2,987
>> different patent assertions in 478 different
>cases, often against
>> multiple defendants.
>>
>> What did they find? Serial patent
litigants, and
>particularly NPE's
>> (aka "trolls"), for a lack of a
better phrase,
>"get creamed" when they
>> go to trial:
>>
>> [T]o our great surprise, *we
find that the
> willingness of
>> these patentees
to litigate their cases to
> judgment is a
>> mistake*. Far
from being stronger than
>other litigated
patents,
>> the most---litigated
patents that go to
>judgment are far
more
>> likely to be
held invalid or not
>infringed. The differences
>> are dramatic.
Once--litigated patents win
>in court almost 50%
>> of the time, while
the most--litigated -
>and putatively most
>> valuable -
patents win in court only
>10.7% of
the time.
>>
>>
>>
>> The results
are equally striking for
>patents owned by
>> non--practicing entities (NPEs),
and for
>software patents. NPEs
>> and software
patentees overwhelmingly lose
>their cases, even
with
>> patents that
they litigate again and
>again. Software patentees
>> win only 12.9%
of their cases, while NPEs
> win only 9.2%.
>>
>>
>>
>> [S]tatistical tests bear
this out. We
>compare the proportion of
>> win rates,
testing the null hypothesis
>that there is no
>> difference between
the most--litigated and
>once--litigated patent
>> outcomes. We
test the proportions in
>several ways, both
>> including and
excluding settlements in the
> denominator of
>> decided cases, and
both including and
>excluding default
>> judgments as
plaintiff wins. *No matter
>which test we use, the
>> differences are
highly statistically
>significant - the
>> most--litigated
patentees were more likely
>to lose*.
>>
>> Also,
>>
>> Considering only the
patents themselves,
>the proportions of
>> initial ownership
by large and small
>entities are almost equal
>> in the most--
and once-litigated data
>sets: 53.5% of
>> most--litigated
patents and 47.8% of
>once-litigated patents were
>> issued to large entities.
The picture is
>quite different,
>> however, when
one looks at the proportion
> of actual assertions
>> in litigation,
where large entities
>account for a surprisingly
>> small percentage of
the most--litigated
>patents. Because small
>> entities are
disproportionately represented
>in the actual
>> litigation of
most--litigated patents . . .
>patents that were
>> initially issued to
large entities
>represent only 22.4% of
the
>> assertions in
the most--litigated group,
>compared to 47.8% of
>> the once--litigated
group.
>>
>>
>>
>> [W]hen the cases
do not settle, large
>patent plaintiffs are
>> significantly more
likely than small ones
>to win, without
>> regard to how
the data are sliced. When
>we combine the two
>> data sets,
large entity plaintiffs win
>53.1% of
the cases
>> decided on the
merits (55.9% if default
>judgments are
>> included), while small
entity plaintiffs
>win only 12.3% of
>> their cases
(23.1% if default judgments
>are included).
>>
>> Other interesting findings:
>>
>>
>>
>> - Just 16.7% of the assertions of the
>most-litigated patents were made
>> by product-producing companies.
>>
>>
>>
>> - Software patents constituted 20.8% of the
>once-litigated patents but
>> 74.1% of the most-litigated patents.
>>
>>
>>
>> - Owners of non-software patents are far more
>likely to win their cases
>> than are software patent owners (37.1% versus
>12.9% overall)
>>
>>
>>
>> - The number of defendants per case is a
negative
>predictor of
>> settlement - the more defendants there are
per
>case, the less likely the
>> case is to settle. Also, the more
defendants
>there are per case the
>> more likely those defendants are to win.
>>
>>
>>
>> The study concludes:
>>
>> We designed this
study to explore the
>effects of repeat play
>> on litigation
behavior, contributing to a
>literature on the
>> economics of
civil procedure as well as
>the substance of
>> patent law. But what
we found was
>dramatic and unexpected:
>> The patents and patentees
that occupy the
> most time and
>> attention in
court and in public policy
>debates - the very
>> patents that
economists consider the most
>valuable - are
>> astonishingly weak.
Non--practicing entities
> and software
>> patentees almost never
win their cases.
>That may be a
good
>> thing, if you
believe that most software
>patents are bad or
>> that NPEs are
bad for society. But it
>certainly means that
>> the patent
system is wasting more of its
> time than
expected
>> dealing with
weak patents. And it also
>suggests that both our
>> measures of
patent value and our theories
> of litigation
>> behavior need
some serious reconsideration.
>
>>
>> Read/download "Patent
Quality and Settlement
>among Repeat Patent
>> Litigants" (link
>>
><http://www.feedblitz.com/t2.asp?/151161/191723/0/h
>ttp://papers.ssrn.com/sol
>3/papers.cfm?abstract_id=1677785>)
>>
>>
>>
>>
>>
>
>
>--
>Guillaume Radde
>Software and Systems Division
>National Institute of Standards and Technology
>guillaume.radde@xxxxxxxx
>(301) 975-6145
>
>
>
>
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