The Patent Wars

a reason? Identify the source of the quote and you get Okay, you don't get anything, but you know, feel free to write in Yes, it's patently absurd to suggest you would get something. See what I did there. Yeah, we're gonna talk about the patent wars today and actually this, uh, this topic comes to us courtesy of a little listener mail. This listener mail come from Jim, and Jim says, I know you did some podcasts on i P that's intellectual property for everyone out there, but I don't remember if

you did one on patents exclusively. If not, you may want to consider one. I'm raring this because of the past weeks this American Life on NPR, when patents attack it's about how patent troll companies that buy up patents with broad software coverage such as this patent covers real time backup of files, and then they sue any software

company large or small that maybe doing backups. You wouldn't want to retell the whole story, but the idea of patentrolling could be a part of the describing patents were you to do a podcast on. So, yeah, we thought we'd talked a bit about patents, and before we really jump into it, I wanted to point out that at how stuff works dot com we have a great article on how patents work and it really breaks down what

patents are and and their purpose. And we're gonna kind of cover some of that first, I think, because that's important to understand before we go on into you know, patent trolls and nonpracticing, into into ease and that kind of thing. So, Chris, are you comfortable in telling everybody what a patent is? Of course, patents come off of the idea of, uh, the ability for someone to protect their work. It's sort of similar in some ways to copyright, um, but you know, it depends on what it is. Now,

if you have a if you've written a novel. You can't patent that, but you can't copyright it. And that's a way to protect your work so that you can sell it and make some money off of it and reap the rewards with that. Patents apply to those people who are and I always think of them as inventors, but it's not necessarily inventors. It could be engineers or

other people. Um. In this case, we'll be talking a lot about software patents, which, by the way, before we even jump into it any further, I should point out there is no such thing as a software patent as an it's not a separate thing. A software patent is a patent. It's just that it's a patent that and it covers software. But there's no distinction between a software patent and any other type. No, no, no, it's not

shorthand there are people who will get into this. There are people who believe that software should not be allowed to be patent, should not be you know, fall into that category. But that patent, I'm going to be doing that too. Yeah, it's it's okay. Yeah. Um, so no, a patented piper picked a peck up patents, yeah, pickled patents perhaps, Um, so yeah, patent basically is is a protection. It's a it's a registry for a particular type of thing. Um,

you have a better mousetrap. Perhaps you register with a patent office. Yes, and in the United States that the United States Patent Office. Yes. Yes, And basically somebody reviews your application in which you describe what it is, how it works, what the parts are, how you know all these things. Um, and there's some really fascinating in the patent files. You can look at all these different diagrams

for different inventions. Really kind of cool. But anyway, Um, once a a someone has reviewed that and says, yes, this does not work like the other ones before, it is completely the criteria that is necessary to have a patent. Yes. Then then it can be patented and on and that

is on file as part of the public record. And if someone makes something that looks just like the one that you invented and works the same way and tries to make money off of it, you can see their pantsil right, or you can license the patent to someone else so that they can make something that's not the way people do it is how some people do it. It's yeah, Uh, software patents in particular have an issue

with this, but we'll we'll get into that. That's that's the idea is that you can protect your work so that you may make money off of it, and other people cannot take your idea and make money off of it without your permission. Exactly. So, if I were to patent a an invention and Chris wanted to be able to build that invention, we might be come to an agreement, a licensing agreement, where he can use my idea and put it into reality. Because here's here's another thing about patents.

You might come up with a brilliant idea brilliant invention. I've all the time, and so you come up with a brilliant invention, but you lack the resources to make that invention. You just you you know how to do it. You've got all the ideas in place, but you don't have the infrastructure to build this thing. Sad but true. I don't have a manufacturing facility in my backyard, right.

So in that case, you would perhaps patent your invention or submit it to the patent office for for approval, and then once you've got approval, that's your ticket to getting that that idea licensed by a company or organization that has the capacity to put it into reality. Right, So you license the idea to widget coho goes off and makes them and packages them, and in return, you get a cut of the money that they make off of it because they hold a license for your patent.

Actually that that works very similar to the way it works for writers and musicians who license their work to a publisher and then they get part of the So I mean they're not completely dissiminar And what's also interesting is that you can't you don't just have the option to license patents. You can actually sell a patent. Yes

you can, because a patent is essentially property. Yes you know, it's intellectual property, intellectual property, and just like any other property, you have the right to dispose of it as you wish. So you can sell that patent to a company. If a company wants to make a certain type of product and you hold the patent that is, or a patent that is instrumental in that product getting made, that company might approach you and say, hey, if we drop a truckload of cash at your front door, will you sell

us this patent? And you can choose to sell it, or you can choose to hold onto it truckload of So so there are companies out there that are just in the business of buying and selling patents. That's what they do. It's almost like it's almost like trading stocks or some other or real estate. Really it's it's trading

property and that's their main purpose. And that's also led to some sticky situations and some name calling in various industries, the technology industry being a good example, because clearly technology

it's all about innovation and invention. Yep, you know. And I actually thought of a of a real life example of these two models and they're actually uh in well, their their photos are in the room with us because Edison tried to He had all these inventions and he actually worked on building a company which is uh, you know, there was Edison General Electric. There version of General Electric today is not exactly anywhere. It's complicated. We'll have to

do an episode on Edison at some point. Yeah, but um yeah, I mean he he had a company that you know, he built his company to make his stuff essentially and to wire people's homes and and do that. Um where Tesla actually worked with Westinghouse. Westinghouse licensed his patents and together they sort of I mean it was like Tesla was the inventor in Westinghouse was the industrialist who built on that work, but he licensed those those patents from Tesla, and there was I mean, there was

some controversy with Tesla and patents. Tesla held some patents that he he was issued the patents by the United States Patent Office and then later the Patent Office overturned that decision and revoked his patents. Yeah, and so right, and so there's a lot of discussion about how the Patent Office isn't it's it's more than just a regulatory office. There's a political element that runs through this as well. Um,

so yeah, it's uh, it's complicated. Now, let's talk a little bit about what you have to prove in order to to have a patent, have your your invention considered for a patent, to get patent approval. In order for your for you to get a patent, your invention needs to be sufficiently novel m. That means it has to be unlike other things that came before it enough to justify a patent. Now, we should also say a lot

of this is subjective. You know, it's That's another part of patents that's a little tricky is that you know that there aren't any there's no real quantifiable measurement for how novels something like this is seven percent novel. Therefore it meets our threshold. Um, that's not really possible. Yeah, Basically, someone is looking at these patents. It's a human and humans are known to be subjective. And also the you know,

it's depending on how complex this invention is. Uh, the person who's reviewing the patent may have some difficulty deciding how novel it is compared to something else, if especially depending on the language that's being used. Now, another thing that a patent that the invention must be is non obvious to someone. Uh, someone who's knowledgeable in the art, is the way we say it. So in other words, you can't patent an invention or a process that is

patently obvious. You can't do something that you couldn't patent, like a lever, and you're patenting the process of pulling

the lever, Well, that's obvious. You can't do that. Um. And this this is a tough concept as well, and it's one that we see brought up in courts a lot where the the one side will accuse another side of you know, let's say that Company A is suing Company B for patent infringement, and Company B is contesting the patents in the first place, saying that they are patenting obvious procedures, and it's it can be really difficult to prove whether or not something is obvious, because if

that particular procedure didn't exist before Company A patent did it, then there's an argument there that, hey, the reason why it didn't exist before is because it wasn't obvious. It's obvious now because we invented it, you know, And that's

a circular argument thing. I blame the boogie woogie bogle boy of Company B. But I mean, for example, to swiped unlock, that's a good one to say swiped to unlock, which is I believe Apple has that patent for swiping to unlock on a on a touch screen device like a smartphone or a tablet. Uh. There have been companies and lawyers who have argued that swiped unlock is not it doesn't meet the criteria of being non obvious. But then Apple would say, well, where was it before? Then

who if if it was? If it if it was obvious, then why were we the first to do it? Um at least that that's that's oversimplifying the argument by many leaps and bounds, but essentially that's what they're saying, Yeah, I did. Working on issues like this makes me glad that I am not one of the people who has to decide whether patents get approved or not, because it in some cases, I imagine that pardon my use of this word in the context, it's not the same, uh.

I think for some inventions or concepts, it would be more obvious that this is something that is completely different than other things, and then just having to educate yourself about what goes on with this particular thing or the software or the functionality. I'm glad I don't have to

make those decisions. See here at how Stuff Works. We write about how stuff works, But if you were to be the ideal patent regulator, you'd have to know how everything works, because you would have to know if the invention that's coming towards you, if it's just replicating something that's already out there you know, or or you would look at and say that truly is novel, hasn't happened before. So other criteria that the invention must meet. Now we've said it has to be new, it has to be

non obvious. It also has to be useful. That the invention has to have a use. It means that it serves some sort of purpose and it actually works. You can't patent something that does not work, that can't be demonstrated to work. You also, you cannot patent any sort of um element that occurs in nature, like you couldn't patent copper. It has to be man made. And then uh, you have to you can't use unproven ideas two in

your patent. So anything that is contested by science, anything that that isn't proven by science theoret that you should not be able to get a patent on. So, for example, a perpetual motion machine should in theory not get a patent because science, uh tells us that such a thing is not possible, even though we still have people who pursue the dream of creating a perpetual motion machine. Leonardo da Vinci himself tried to do this with a weighted

wheel and it didn't work out for him. And he actually said back that back in the day, which I think was a Thursday, that perpetual motion was an impossibility. Uh. And ever since we've been you know, still trying to do it, no one, no one has proven him wrong, by the way. Uh. So these are the criteria that your invention must meet in order to get a patent, and it can take years from the time you apply for a patent to the time you're issued a patent.

And UH that raises the question, Okay, well what happens during that that span. What if someone else comes up with an invention that uses your idea and you haven't received a patent yet. Uh, that can get tricky. Sometimes when you get the patent, you can then pursue legal threats against whomever is using that that particular idea within an invention. Um. Oh. And also if there is something called prior art, then you may not be able to

get a patent. And prior art just means that there's an example of the idea you have, the invention you have that already exists out in the wild and it there's you know, it has to have existed for a while and it has to have been publicized for it too.

For this account, So what you're saying is that if there were, um, someone who filed for a patent, and somebody comes along and says, no, I came up with that idea two months before before you did, and they had sketched it out on a napkin and published it somewhere, were published maybe, and it would have to be more than two months. I think. I think the minimum is

at least a year. But let's say that Let's say that that I patent an invention, and or I tried a patent and invention, but it's discovered that there was a magazine article that had a prototype divid ice uh detailed in that magazine, and that prototype device closely resembles my patent, the the application, the invention that I'm applying for a patent. The two things are very similar. That

would could be an example of prior art. And if I were to try and get a patent, then someone could prove that this other device essentially does the same thing that my idea does, my patent might be invalid. So do you happen to know just can you guess who in human history holds the most patents in at least in the United States? M hmm, it's not Steve Jobs. No older, go go further back I think a lot of people would would be sitting here going no Edison.

Edison would be who I would guess. Yes, one patents, Yeah, second place goes to someone else. So tell me if you can tell me who is in second place, and I'll give you a hint. It can be found in how patents work. But if you can let me know, that'd be awesome because it proves that you're actually paying attention and not just falling asleep to text stuff. We love you guys, by the way. We hope you have pleasant dreams anyway. Yeah, but you, however, are not allowed

to go back to sleep. So now we've covered the basics of what a patent is, what it does, and why you would want one, and and patents secure your uh, your rights to that idea for a limited amount of time. Right you You can't hold the idea, Yeah, you don't hold a patent in perpetuity. It doesn't last forever. It will last for a certain number of years, and it

all depends on where you live in the world. Like the different patent laws are have different amounts of time where your patent is protected um and ideally during that time, no one would be able to infringe upon your patent without the the threat of a loss. Not keep in mind, a patent doesn't automatically protect you from someone infringing on your idea. The patent just gives you a recourse if someone does infringe on your idea. And patent lawsuits are

really expensive. So if you are an independent inventor and you do not license your idea out, and you don't have a lot of resources at your disposal, and someone starts to infringe upon your idea, you you might be at luck because you might not have the money to pursue a lawsuit. And uh, some whould argue, well, this helps license out ideas and it means that those ideas will actually propagate through society because you know, you've got

an incentive to share your idea. Now you're sharing it for money, You're you're licensing it, and it means that, uh that we all benefit as a result because this idea gets actually put into use as opposed to let's say I never patent my idea. Let's say I never share my idea, Well, then no one benefits from it. That so the idea the patent office is really to encourage people to share their ideas. It's just that it hasn't always worked out that way, and that's what leads

us to the patent wars. Yeah, and this has come up a lot recently, especially with UM Google's acquisition of Motorola and the battles going on between Apple and HTC and Microsoft and some of the others. And We've had several people mentioned this to us, and I've seen comments on on our Facebook page um about one company or another being a brat. Basically, this isn't, by any stretch

of the imagination, something that just started happening. No, No, it's it's getting a lot more publicity now because the companies are that are involved are big consumer companies in

one way or another. They may not directly create consumer products, because you would say that, all right, well, Google doesn't yet make anything specific for consumers, really, but they do provide the operating system that gets used in a lot of consumer products, so you would say, well, this is still kind of a consumer issue that that's probably why the publicity is so big. But these sort of things have been going on in behind the scenes for for decades.

It's just that now it's really coming to a head as companies fight over each other to try and and buy up other companies just not just too, but primarily to get hold of the patent portfolio that that company might have. And the reason to get patent port portfolios there they're too. Two main reasons that a a company that's a practicing entity might want to get hold of

a patent portfolio. The main one is defense, which is you get as many patents as you can so that if another company comes after you claiming that you're infringing upon their intellectual property, you can return fire and say, well, this is the intellectual property we own and you are

in turn infringing upon that. And hopefully what happens as a result of this is the two companies, through arbitration and probably litigation, come to an agreement where both sides say, all right, I'm totally stealing ideas A through G and you're totally stealing ideas H through our and we will exchange this amount of money and then say we're all cool. Truce. Right.

And if you if now, if you have one major company that doesn't hold a lot of patents and another company that does hold patents, then the what's going to happen is you just the company that holds a lot of patents, it's going to sue the other major company for money, and you don't. If you don't have your own large patent portfolio to fall back on. As a sort of a mutually assured destruction kind of approach, you

you get run over. You know, you you essentially unless the the courts decide otherwise, who essentially have to cough up money and you may or may not have to even discontinue the production of certain products. Yep. And so that's kind of why we see these big companies scooping up uh, smaller companies in order to get patents. Sometimes it's for protection. Sometimes it's with an eye to go after a competitor and perhaps put that competitor in a

a bad position. It's it's almost anti competitive when you get down to it. And as a result, you have a lot of people saying, well, this is really stifling innovation because by going after another company and saying that you can't make any of this because this part of it infringes upon our patents. Uh, you you're taking away things that are actually valuable in the marketplace. And it may very well be true that let's say that we have an operating system, that's a good one to go with. Okay,

we're going to get into the software patents anyway. So you have an operating system where one aspect of that operating system appears to infringe upon a patent. Well, depending on how the lawsuit is worded and the decision of the courts, that operating system might end up having to be completely scrapped or rewritten or taken off the market, which means you lose everything. You don't just lose that one element that was infringing upon the patent, you lose

all the other elements of that operating system. So you're losing out on innovation. This is why we're getting a lot of criticism directed at these patent wars. And another related element is that there are companies that some people refer to as patent trolls, which is a it's a complicated that's a complicated term as well, because it means more than one thing. Yeah, and I think of that I um, and this is again just one concept of UM. When I think of a patentrol, I think of a

company that has purchased patents from someone else. Basically, they had some money up front, they bought patent rights. They don't do anything, but why since patents and they are basically hoping somebody will infringe upon them so that they can sue the living daylights out of them and make money that way. But they don't. It's it's not like where they are making in an iPhone and they are doing that and somebody else infringes on the patent. This

is somebody in my head. The classical patentrol is literally just waiting for somebody to infringe on their patents so they can take a shot at them. Right. That's that's usually called a nonpracticing entity, and that means that this is a company, uh that does not have any intent on acting upon a patent other than to sue the pants off anyone who infringes on it. So they have no plans on actually making anything, just the plan on on suing someone who tries to make something similar to it.

And they may not even have plans to license that idea out because they could potentially make more money through suing a company than they could through licen and sing the patent the patented invention. This is why there's an amazing article called the Broken Patent System. How we got here and how to fix It? By niel I Patel, formerly of Engadget Now of this is my next I

highly recommend you read this article. It is a long article, but it's it's very comprehensive and Kneeli makes a great case for He actually says, you know, the patent system isn't broken. We're the ones who just kind of are broken because we're not using it the way it was designed to be used. People are gaming the system, and that uh that really, you know, you have to ask the right questions and see how things are being used in order to understand why we are where we're at.

Kneeli suggests that perhaps one thing we could look at is maybe we do breakout software patents so they're a little different from the traditional patents in that software patents might last uh there there time span might be shorter for a software patent, like you couldn't sit on it as long as you would a patent for and and a physical invention. And because the nature of software changes so rapidly that by the time a patent expires, and that idea becomes essentially free for anyone to use, uh

to implement in their own inventions. Once you reach that point while software has evolved so far that it's almost

obsolete anyway. So that's one thing that Kneeli suggests, But he also suggests looking at a way so that people who use patents to sue other companies can only get a limited amount of money and damages, you know, So putting limits on how much money you can get through suing someone for a patent, and that, in Nili's argument, would mean that companies would have more of an incentive to license that invention than they would to sit on the patents and just sue people. And that's what we want.

We want people to be able to license things. You know. We don't want to get rid of patents because it does protect people, um so that they can profit from their work. What we do want to do is make sure that we create incentives so that people will license those ideas, so that we actually get to see them and put into place and we get to benefit from those ideas instead of using those ideas just as a

weapon to beat other companies over the head. Because then if even if the idea is brilliant, no one gets to benefit from it, because no one can make anything that incorporates that idea. So I think neelis really nailed it. I mean, it was a it's a great article. And uh he also brings up something else that's really interesting. Um, and I'm dropping this on Chris without him knowing, so uh, I apologize ahead of time. But do you are you

aware of of Jefferson's past with the patent Office? Yes? Oh, okay, excellent, excellent, So we can have a conversation about this as well. You may not be aware, all right. Thomas Jefferson had some pretty strong ideas about patents. The patent system predates the founding of the United States. There was a patent system in place in the UK, right right, Well, it's like I guess I should say, right well, that there's

some protection written into the Constitution. And of course Jefferson himself was an inventor, so he, you know, sort of sympathizes with with people who are creating things. So here's

something that Jefferson said about the idea of patents. If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself, but the moment it is divulged, it forces itself into the possession of everyone, and the receiver cannot dispossit s himself

of it. It's peculiar character, too, is that no one possesses the less because every other possesses the whole of it. He who receives an idea from me receives instruction himself without lessening mind, as he who lights his taper and mind receives light without darkening me. So what he's saying is that if you keep an idea to yourself, that's the only way to really protect it, because once you tell your idea to someone else, it's out there in

the open. Jefferson was essentially saying information wants to be free, which is what we argued today too, that information wants to be free, and that it wants to be available, not necessarily free of charge. So Jefferson's idea about patents was that they might stifle innovation, that it would keep

people from actually putting to use these devices. However, he became the Secretary of State and was therefore part of a a three man board that created the First Patent Act, and he eventually it came round to the idea that patents are actually very helpful. Now, in Jefferson's Patent Act, he had, uh, he had set up some of the criteria that we use today and some of it we don't use to the extent that Jefferson saw. So he he had said that the invention must prove to be useful. Uh,

it wouldn't. You wouldn't grant a patent to someone who had just come up with another use for something that already existed. So let's say I invent a tool that allows me to I don't know, climb mountains faster and safer. And then Chris takes that tool and he realizes, hey, this tool is great as a penguin pacifier, and so

he's using it in a totally different way than I was. Well, by Jefferson's measurement, his penguin pacification system would not would not uh be legitimate for a patent because it was just a different application of something that I had already made. Uh, that's not exactly the way it's done. Now. That was one of the ideas that kind of got shifted around

a little bit. And then it would you also would not give an invention a patent if the invention was just a different version of something that came before but was made with different materials. So if I made my mountain climbing apparatus out of um would And then Chris decided to make his own mountain climbing apparas that's identical

to mine, except it's made out of metal. That would not receive a patent either under Jefferson's rules, because again it's the same thing, it's just made out of different stuff. And he didn't like the idea of frivolous patents anything that was the obvious or something that couldn't really be used. He didn't like any of that, so he made provisions to protect the Patent office from issuing patents for stuff

that just was not useful. And uh, he ended up his ideas were implemented for a while, but they were revised in the eighteen hundreds, so and the revisions from the eighteen hundreds or pretty much what we use now. And uh, that's also part of why it's complicated when you talk about software, because of course, back in the

eighteen hundred, software was pretty limited. I think Candy might have had something in um no. So yeah, you didn't have software back then, So trying to apply software the ideas of behind software to the patent office and the actual patent system is a little tricky. We've made some tweaks here and there, but it's still not a perfect fit. And part of that is that there's an argument about software should not be eligible for patents because it's essentially math,

and math is something that's not patentable. So if you were to try and patent software, you can't use the word algorithm because algorithms are not patentable. Yeah, so you have to actually dance around that. You can't, you know, instead of calling it, uh uh an algorithm, you'd call it something else, like a system, you know, a system, and method is what you would call it as opposed

to an algorithm. Uh. And that's where it really does get tricky because arguably you'd say, well, if it's basically just math, then how do you call it non obvious? Because you know, you just manipulate the math until it

does what you needed to do. Of Course, other people could argue, well, any invention if you if you were to take a software application and create a physical object that does that same process, whatever that process might be then you would argue that that invention could be patentable, that physical thing you could get a patent for that, why can't you get a patent for the digital version of that idea? And so these are questions that still

get brought up in legal cases all the time. It's generally accepted that software, if presented properly, is patentable UM. But that's also where we're starting to see these issues come between these major companies where there's so many software patents that have been issued that you know, that's why we're seeing like a company A, Sho's company B, Company B counter SEUs company A, and then they come to

an agreement. It's a huge mess, and you know, it may be that we eventually catch up and and and fix some of these problems. Part of the issue also is that software patents are really complex things, and it's I can't imagine what it's like being a person working in the patent office and having to review software patents um.

And some some would argue that software patents are just it's it's a technology that's more sophisticated than the general level of sophistication of the patent office, and that the patent office will constantly be trying to play catch up and never catch up to actually the the state of the art for software because technological innovation is happening so rapidly.

So there are definitely some some some big barriers that we're going to have to get over in order to really address patent wars and make it a system that uh that doesn't harm innovation, it doesn't hurt the end consumer. Um. I think we're we're kind of looking at the those possibilities. We're seeing some of that today, but it's going to

take some years before we The government does not move quickly. No, and these these issues are to some degree pretty complex surely the concepts behind them, So you can't just throw it out the door. I mean if you did, then no one's ideas would be protected. And why would anyone bother to try and innovate if they knew that immediately they that they're hard work would be uh co opted

by someone else and they wouldn't see it, dine. So you want to have that patent system in place because you want you want people to come up with ideas. I'm looking at you, would it yep? Oh? I ought to let me tell you, I AcBe has tons of patents, especially for roadrunner captures uh materials, although they're not proven to be useful, so it's kind of questionable why they got the pats in the first place, not for use by coyotes. There you go, Well, do you have anything

else to add before we wrap up? All right? So that concludes our episode on the patent wars. I hope you guys enjoyed it. That was an interesting conversation. If you guys have any topics you would like us to tackle, you can let us know on Facebook or Twitter or handle at both of those is text stuff h s W. Or you can send us an email and that address is text stuff at how Stuff Works dot com and Chris and I will talk to you again really soon. Be sure to check out our new video podcast, Stuff

from the Future. Join how Stuff Work staff as we explore the most promising and perplexing possibilities of tomorrow. The House Stuff Works iPhone app has arrived. Download it today on iTunes, brought to you by the reinvented two thousand twelve Camray. It's ready, are you