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The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

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Not really | 457 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Not really
Authored by: kuroshima on Friday, June 07 2013 @ 12:55 PM EDT
If the holder of the over broad patent makes mousetraps then
he has 3 options:

Enforcement of his government given monopoly and exclusion of
all competitors from the marketplace. This allows him to set
his own prices and gouge the public, and since he has no
competition, he has no reason to keep innovating, leading to
technological stagnation. For an example, see the Wight
Brothers patents.

Cross licensing, because while his patent covers everything
under the sun, so do his competitors'. This leads to an
increased barrier of entry for those new to the market,
slowing innovation.

Licensing the patent to all, for a fee of his choice. This fee
can be enough to both make his own product more competitive
than the others in the market, while providing an alternate
revenue stream. It is basically a toll on the market. The
original inventor does not need to keep inventing, as he is
assured that alternate revenue stream, but his competitors
might want to keep innovating, to hopefully obtain a patent
and so get their cut. Eventually this results in unmanageable
cost for future innovators, and thus slows the progress of the
arts so innovation can only happen as patents expire.

NPEs exploit this and often go for the last option. However
since they have no revenue stream other than licensing they
can charge increased fees, as none of the normally available
controls (pr backlash, cross licensing fees, etc) apply to
them.

This of course assumes that the system works as intended, and
that everyone behaves in good faith. NPEs will often try to
game the system by offering questionable patents for a fee
that is just slightly inferior to litigation costs, resulting
in companies taking questionable licenses because they can not
afford a defense.

Tell me again, how do patents promote the progress of the
useful arts?

[ Reply to This | Parent | # ]

Not really
Authored by: Anonymous on Friday, June 07 2013 @ 03:04 PM EDT
If the second (narrower) invention is the one is the
profitable one, then the broad patent holder certainly has no
reason to cross license. Instead he can just function as a
patent troll and get money for nothing from the second patent
holder for doing nothing, while he pays nothing.

[ Reply to This | Parent | # ]

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