State of Innovation

Patents and Innovation Economics

Jump Starting a Secondary Market for Patents

I suggest that the companies involved in standards organizations create a company to administer the standard.  This standards company would essentially be a licensing and development company.  The standards company would also create improvements on the standard and solicit others to contribute their inventions/patents.  Outside companies that contributed patents to the standards company would either receive equity or a royalty payment.  These standards companies would advance the concept of a secondary market for patents. 

 Standards organizations (such as IEEE 802.11 for wifi) are commonly formed by a group of companies to define a transmission or interface protocol.  The companies agree to pool their patents that are necessary to implement the standard.  They also agree to license their patents on a nondiscriminatory basis for a reasonable royalty.  Commonly, a company wishing to build a product implementing the standard takes a license to the pool of patents and pays a royalty.  The royalty payment is then divided among the companies that contributed patents based on the number and importance of the patents each company contributed.  Continue reading


November 16, 2009 Posted by | Patents, Uncategorized | , , , , , , | 4 Comments

In Defense of Patent Trolls

The term patent trolls is usually applied to companies that enforce patents that they are not practicing.  These Non-Practicing Entities (NPEs) include companies specifically organized for this purpose such as Intellectual Ventures.  However, it also includes Universities and divisions of most large corporations such as IBM.  Many of these corporations complain about NPEs.  However, any consistent definition of a NPE (troll) would include these hypocrites. Continue reading

September 18, 2009 Posted by | Uncategorized | , , , , , , , | 1 Comment