On Tue, 01 Nov 2011 03:54:20 GMT, Al Clark <
acl...@danvillesignal.com>
wrote:
>
eric.j...@ieee.org (Eric Jacobsen) wrote in news:4eaf1463.521263955
>@
www.eternal-september.org:
>
>> A good technology with basic patent protection can attract good VCs,
>> although one certainly doesn't have to proceed via the VC route, it's
>> just a path that's often taken. If you don't already have patent
>> protection on something like this, the VCs routinely require that you
>> get it, and will often help in the process.
>>
>>
>>
>
>I think the VC argument is not very compelling. Less than 1 out of 2500 US
>businesses are funded by VCs. The average investment is in the millions of
>dollars.
My point of bringing up the VCs was just that it's an example that
there is strong evidence that patents can benefit small companies, and
those with financial interests often prefer them for that reason.
>Sure VCs want to see patents. They have deep enough pockets to go to war.
>They are also all about harvest in the 5-10 year period where the potential
>payback is huge for a few of their bets. I don't fault VCs. I just
>recognize that most companies (including companies with patentable ideas)
>are not actually funded by VCs.
I'd venture to say that most companies (certainly not all) are funded
by some sort of investor entitity, and many non-VC entities (in my
experience) will also want to know about patent status on key
technologies. Investments into technologies that don't have patent
protection will generally present more risk to the ROI than those that
don't.
It's just something that's been very routine in my experience, and I
think is a strong indicator that even big companies making investments
want to see small companies have patent coverage on their key
technologies. It reduces the risk that the advantage of the research
being invested in doesn't just fly over to a competitor and ruin the
ROI.
>Erik, lets say you have a good patent and some big company wants to
>challenge you. Do you have a few extra million dollars to sustain a fight?
>(If you do, give me a call) What if you don't want to be owned by the big
>company?
It's rare for a big company to challenge a small company's patent
unless the small company is getting bright on the radar as potentially
having a big impact in a market. If that's the case then there would
likely be others willing to take the other side of the bet, i.e.,
you'd probably not be alone in defending the patent. You might have
to give up a piece of it, but you may not be alone.
Not sure what you mean by being owned by the big company. Big
companys often buy little companys to get their patent portfolio. Is
that what you mean? For many that potential exit strategy is one of
the big reasons to patent the technology in the first place, so it's
often a success when that happens.
>I bet that Samsung & Apple will end up spending a $100 million dollars
>before somebody gives up.
>
>Apple makes some great products. Aren't we all glad Xerox didn't wipe them
>out when Apple commercialized most of the Parc Place ideas. I like my
>mouse.
My understanding is that Apple actually licensed everything they got
from Parq from Xerox. Xerox evidently didn't think it was all that
important at that time.
>Polaroid held a monopoly on their camera technology even though the
>original idea went back to the 1940s. I think this might have been due to
>the fact that if you have the basic patent rights completely tied up, there
>is absolutely no incentive for another entity to make further improvements
>on a technology they can't commercialize for 20 years. So Polaroid just
>kept making incremental improvements, that effectively monopolized the
>technology until a paradigm shift obsoleted the whole method (digital
>camera). (This is speculation on my part, someone can explain it if I am
>wrong)
>
>Actually, I am not anti-patent. I just thing the game is completely rigged
>to favor the large companies at the expense of small innovative companies
>and individuals.
And I'm just saying I've seen a lot of the other side of that, where
small businesses have greatly benefited, often at the hands of big
companies, by owning patents. I spent a number of years where a
pretty good chunk of my time was spent just doing technical due
diligence on startups for the capital investment arm of my
household-name employer at the time.
It was more or less in conjunction with the standards work I was doing
at the time (i.e., the big companies and VCs were making bets on who
would be contributing or influencing the standards and the related
markets). So I got to see it from the VC's point of view, the big
company's point of view, especially regarding capital investment, and
from a lot of the little companys participating in the standards
arena.
It's the same sort of thing with M&A into big companies...there's
almost always a patent portfolio involved or the deal won't make as
much financial sense if the technology isn't somehow protected. M&A
often involves small companies with key technologies getting absorbed
by big companies. That's often the desired exit plan for the founders
of the small company, so it's a win for them.
That being said, I've also spent a good chunk of my career at small
companies that eschewed patents, and were, at the time, successful at
it. That's not rare, either. Patents certainly aren't a requirement
to have a successful technology business, it just depends on what
you're doing or want to do or how you want to do it. There's
certainly a good deal of expense and risk related to patents, and
avoiding that when your business doesn't need it is often a good
thing.
>Real patent reform would make the filing process more transparent (like
>disclosures before some 20 something engineer grants the patent), had
>actual peer review, were written in English (or for a technical patent,
>engineering or science English as opposed to lawyer obfuscation),
>automatically expired in a reasonable market period like 5 years, and
>didn't take 3 years to grant.
>
>Imagine if disclosure happened before a patent was granted. All someone
>might need to do is identify the same invention already exists as prior
>art. This would eliminate a huge number of the existing application and
>backlog. This would be especially true for software patents since many of
>these are "invisible" without close inspection.
I think that's why publication at 18 months is the default now.
>There is a tremendous amount of prior art that exists that was never
>patented. A patent examiner might make an assumption that if they can't
>find prior art in the patent record, that somehow this means that an idea
>is new.
>
>I don't fault the inventor. I am sure that many of us have reinvented
>things without intentionally stealing someone else's idea. Tukey & Cooley
>rediscovered the FFT in 1965, but Gauss invented it first in 1805. I don't
>think anyone thinks that Tukey & Cooley were stealing Gauss's invention.
>Fortunately, we didn't have software patents or the FFT and probably all
>its derivatives would have been held hostage for 20 years, or at least
>until the historians corrected the record.
For a little while there was a website call Bounty Quest where people
posted bounties (usually $5k - $10k) for prior art on specific
patents. I often wish that were still around, but it went away a
long time ago. Interestingly, it came about partly as a result of
the controversy over Amazon's 1-click patent.
As a small business person I see the benefits and dangers of patents,
but there can definitely be benefits depending on what one wishes to
do. It's like most things, there are risks, and sometimes the ones
that take the risks get the rewards, and sometimes the ones that take
the risks get burned, and sometimes the unburned ones that didn't take
the risk at all do okay, too.