RedPurpleBlue wrote:ExBiglawAssociate wrote:
It probably has more to do with the fact that IP is complete shit right now. Some total liars on here, like Desert Fox, will tell you it's fine. But he went to Harvard or something--easy for him to say. IP has never been this bad in the last 30 years.
I'm curious. I've seen a lot of people say IP is a shit show or dying, but it makes me wonder. How? I would think that IP litigation would be fairly stable at this point or maybe even in increasing demand.
Not sure why you would think that. There's an enormous amount of uncertainty out there because of
Alice,
Oil States, IPR death panels, constant changes to major issues of law suddenly being imposed by a Supreme Court that eyes patents with skepticism at best. The lateral market has cooled dramatically. District court filings are down. Google is paying professors, congressmen, etc. to make people think patent trolls are still a problem like they've been for the past five years (they're not). We live in an economy with a bunch of incumbent monopolies relying on network effects rather than innovation. There's no need to enforce patents (i.e., pay for patent litigation) when you can just amass a huge portfolio of patents and use it as a nuclear-like deterrent.
Unfortunately, our patent laws have become one-sided in favor of large technology companies that do not innovate, but rather have made a business of adopting the innovations of others. This efficient infringement business model recognizes that there is increasingly little that patent owners can do to stop infringement, so why pay a licensing fee? The problem for our economy is simple – large entrenched corporate interests do not engage in the risk taking required to innovate because Wall Street does not reward risk taking. Wall Street only rewards meeting or beating quarterly expectations, which is no way to run an innovation based business that is actually trying to accomplish anything worth innovating in the first place.
Dreaming big dreams is not what gets one a corner office in a publicly traded technology company, nor is it what shareholders reward. It is, however, a prerequisite to paradigm shifting innovation, which we all say we want. Even politicians who barely know anything about science, technology, engineering or math praise innovation and the breathtaking advances of those who dare to dream, but they don’t seem to understand even basic truths about the business environment necessary for those innovations to come through to fruition.
Those impossible, or at least lofty, dreams require money, which means investors on multiple levels need to be inspired. While the investor class with a tolerance for innovation risk taking is a different breed, at the end of the day investors invest to make money, which means they expect proprietary rights. In the innovation world that means patents, and not just any patents, but strong patents that are likely to survive challenge. Investors in this space will not just kick tires, they will engage in due diligence and generally speaking are not going to buy a pig in a poke, which is why you see so many start ups struggling to get investor dollars and so many investors going off shore for their investments.
The patent system all three branches of our government has created over the last 12 years has increasingly incentivized the stealing of patent rights rather than engaging in an arm length negotiation with innovators who possess patent rights that are supposed to be statutorily presumed valid. This is antithetical to basic, fundamental principles embedded throughout American law, not to mention basic economic principles.
Laws are supposed to be certain, stable and understandable. When certainty, stability and understandable laws are achieved externalities and transaction costs are low, which allows for the bargaining of rights to ensue. This in turn leads to an efficient outcome where the party that most values the rights can acquire certain, stable rights in a transaction that requires minimal diligence and presents little risk. This is known as the Coase theorem, and is attributed to Nobel Laureate Ronald Coase. According to the Coase theorem the law should maximize certainty and minimize transaction costs in order to facilitate an efficient, arms-length negotiation of rights between efficient parties.
According to Coase, obstacles to bargaining, a lack of certainty and/or poorly defined property rights will lead to an inefficient marketplace. It seems that the utter chaos that has become the U.S. patent system has once again proved Coase right.