29 November 2005

The High Cost of Patents.

The United States Supreme Court is about to examine the issue, but the rule in the Court of Appeals for the Federal Circuit, which has exclusive jurisdiction over most patent appeals is that when a patent violation is found that further use of the patent must be forbidden by an injuction.

This makes lots of sense until you see the rule in action, on the verge of doing things like turning out the lights on eBay, or shutting down the Blackberry network nationwide, because one small piece of the respective systems was found to be based on infringing software. Killing the goose that lays the golden egg simply doesn't make sense.

In many similar situations under the law, the normal rule is to allow operations to continue on a profitable basis to be shared by whoever turned out to be entitled to them. But, anti-common sense patent rules may not allow for this kind of approach, allowing holders of minor pieces of the intellectual property puzzle to get more than their fair share of the profits with a threat to shut the entire operation down, something typically only done in the rare cases where the patented idea was used in a profitable operation. Meanwhile, the patent holder bears none of the losses of the many enterprises where the patent is used without permission that fail.

I used to do a little work confirming title to property upon which oil drilling was planned. This is what oil and gas lawyers make big bucks doing. But, oil and gas leaseholders, at least, know that all of their records will be contained in a single office in a single county, with a well established indexing system. Ideas, in contrast, aren't amenable to need legal descriptions. They also come out of nowhere, newly created, so another person with a new idea can't simply ask if they stole the idea from someone or made it up themselves. Even an original idea that someone else had first and patented, is infringing. And so, assuring a right to invent something under current law is much more perilous. If you build a complex system involving hundreds or thousands of component ideas, it is very likely that some of the ideas may be patented and evade a search directly at locating potentially infringing ideas.