You stop that right now.


You just stop that right friggin now.

Yeah, I’m talkin’ to you, lawyer/investor/clueless people.

Well, if you’re a reader, go read this article from The Economist (my favorite magazine) before we proceed:

The part about Google, Apple, Samsung and other handset manufacturers needing to quickly trade patents seems to make sense at first, right? But that’s not the concern. Those companies have lots of resources at their disposal and I think their rattling of their technology (light?) sabers is just bad policy; they should have figured out that stuff in private, not in courts.

No, the part that bothered me was reading about the exchange itself and how it will exist for future work. I’ve not experienced a visceral reaction like I have to this in a long time. But this is just insane. There is now an exchange that allows you to buy, sell and wait for it…hedge patents.

The comments section of the Economist article belie the idea that an exchange already exists and that it is in a reduced format. However, it is an absolutely ridiculous idea in all its forms. Patents are broken enough as they are. Encouraging trading of these ideas as something that can then be auctioned off to end users (product integraters) does nothing but ramp the price of them through speculation. This does absolutely nothing but impede invention. It further provides firepower for patent trolls like Intellectual Ventures. While I understand the need to actually trade existing patents between companies (even though I don’t always agree with how it happens), it should remain a private affair, if it should happen at all. There needs to be a high barrier to entry for outside people to jump in and try buying and selling things they don’t understand.

I’m not hopeful that this will be regulated or turned down at any point in the future. I can only hope that people continue to open source the things the work on and leave the ridiculous nature of patent trading to the large and hopefully short-lived manufacturers.

By Chris Gammell

Chris Gammell is an engineer who talks more than most other engineers. He also writes, makes videos and a couple podcasts. While analog electronics happen to be his primary interests, he also dablles in FPGAs and system level design.

3 replies on “You stop that right now.”

This is a swindle, the people making things won't see a dime, and they just pulling the wool over our eyes.

I don’t know, I don’t believe it’s as bad as you describe for one major reason: these unit license rights can be created out of thin air by the patent holder any time they want to make more money at the market price.

In short, you’re welcome to hedge and drive up the price of current ULRs by buying up all the ULRs on the market, but there’s nothing stopping the patent holder from simply creating more at a lower price, leaving you holding a bag of “rights” that you never intended to use.

In fast-moving consumer electronics (where this was apparently born) I see a significant benefit to being able to buy certain rights without “negotiating” through throwing patent claims back and forth until you get the combination of rights you want/need for the next product. If a company wants to restrict practicing of their patent, they can artificially drive up the price, but that’s hardly worse than what we have now where they throw out lawsuits like candy at a parade whenever they want to restrict others’ use of their IP!

I totally agree that open source is preferable, but it’s also got to be optional or patent lawyers will take it over like they’ve done with current IP laws. As long as it’s optional, anything that serves to reduce litigation seems worth trying.

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