The Patent Racket

/// The Patent Racket

April 25, 2012  |  Blog

Microsoft is buying and selling patents like a kid trading snacks in the cafeteria. Clearly, the patent system needs an overhaul.

Anyone who doesn’t think the patent process is broken and needs discarding should try and explain Monday’s disruptive patent news. Microsoft sold 650 patents to Facebook for $550 million from a cache of around 900 patents that it just bought from AOL for $1 billion.

In the process, Microsoft has non-exclusive rights to the same patents, as well as non-exclusive rights to 300 other patents retained by AOL. This comes on the heels of Yahoo filing a suit against Facebook over 10 patents it owns. Facebook filed a countersuit alleging that Yahoo violated 10 of Facebook’s patents.

Meanwhile, Yahoo and Microsoft are in bed together since their recent agreement. If Facebook is going to leverage the new patents it obtained, can Microsoft help its buddy Yahoo with the patents it still holds or the ones it is sharing?

This is ludicrous, especially when you consider the fact that these patents are not real inventions but complex ideas written out as a process. The patents involve things such as “photo-tagging” and “online recommendations.”

What sort of patents does AOL own, anyway? This is all junk and everyone knows it.

The patent process was supposed to protect the small inventor from being exploited by large corporations. Today, it has exactly the opposite effect. Here we have Microsoft, AOL, Facebook, and Yahoo loading up on every menial and bogus patent that they can get through the system. In the meantime, Oracle and Google are battling over Java patents developed by Sun to promote what was thought to be an open source or free product.

When you back away from this battle of dinosaurs, you can see how easy it is for small fries to get trampled. How does any of this encourage innovation by the independent inventor? Not one individual inventor is involved in all this, but instead, massive corporations who have zero interest in doing anything other than expanding. They have teams that can push forth any sort of bogus patent and if you try to do something that appears to infringe on their patents, they will sue you. And yes, you can win, but at what cost?

These same companies have no fear of expropriating a small fry’s patent, knowing that the small fry cannot compete once the patent is stolen and must sue the larger company with nonexistent funds. If it does win the suit, all it gets is what it would have gotten if the large company played fair in the first place. It could be millions, but it lost the business in the meantime.

This has happened over and over. The courts are reluctant to grant much more than the mildest decisions because they sense these patents are bogus anyway. Thus, the big companies get bigger.
The recent Microsoft charade of buying patents and selling the same patents make patents look like unregistered securities, not patents. Where is the SEC?

Congress cannot do anything about this sham because it is driven by special interests. Therefore, it continues unfettered. I’d like to see some numbers on what it costs the US taxpayers to fund this farce. When you account for the patent office and the courts and judges and jury overhead for tens of thousands of cases, it must be into the billions. All wasted money.

Link: The Patent Racket


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