Monday, May 10, 2010

Streamlining Patents

Patent Fee Hike is the way US Patent Office is planning to reduce the number of patents filed. The article argues about how this will impact small companies.  I thought about the problem few months ago. Here is how I feel this can be done.

  • The goal of Patent should not be to stop others from using it, but to allow people to use it for a price. Making price very high ensures no one use it.
  • The total estimated value in dollars of the Patent should be provided at the time Patent is granted. This number essentially means how much money does the inventor thinks he can make by keeping this secret and having complete monopoly over the use of his invention.
  • Patent Office will take a percentage (say 10%) for granting this patent.
  • The total estimated value of a patent can be changed over the life time of the patent by giving correspoding percentage to Patent Office.
  • When someone wants to use the patent they pay a percentage of the total estimated value of the patent.
  • Once total payout for a patent exceeds the total estimated value, the patent becomes void.
Here are the benefits of this approach:
  • People will not file patents just like that because they need to worry about how much is that patents worth. Either the company should have money or some investor should believe that patent is worth it because money is at stake. Ideally the inventor should make some percentage of the money he claims he can make. 
  • It helps small companies. IBM files thousands of patents every year. They cannot claim all of their patents are worth billion dollars, because they don't have that many dollars. This forces IBM or other large enterprises to attach "real value" to their patents, which means some of them are going to be cheap and hence usable.
  • Instead of 20 years, the patent is void once its achieves its total estimated value. This is good both for the inventor as he gets his money and for the user of the invention, because he can either wait for inventor to make money or pay it himself.
May be I should file a patent on this, so that when some Patent Office implements it, I get some money ;)

More thoughts on the subject - Patents Necessary Evil

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