On Patents

Patents drive me crazy.

While on the one hand, they protect the intellectual property of a company or individual, on the other hand, they are completely ruining the technology industry. Instead of spending time innovating, and building systems for the betterment of our society, companies are embroiled in litigation with each other over incredibly vague and abstract patent concepts, and are thereby blocking a lot of incredible opportunities for innovation.

I think the patent system needs to be reinvented. Here’s how I think it should work:

  • The first person or company to submit a valid patent (the current rules on this are okay*) on intellectual property should be awarded the patent.
  • *However, patents should not be awarded purely on design unless the design is critical to the functionality (such as a particular shape that allows a function to work). In essence, technology patents should be on function, not form.
  • The patent should immediately apply for 3 years if it’s related to a physical product or hardware (a tangible item).
  • The patent should immediately apply for 2 years if it’s a business concept or software product. Basically, if it’s an intangible or semi-tangible idea.
Now, here’s where it needs to be very clear:
  • If the intellectual property (IP) is usable and complete (ie, a fully drafted model for intangibles, or a working prototype for tangibles), then the patent should extend for a base period of, say, 50 years.
  • However, if during that time the IP fails to procure revenue, fails to make it to market, or fails to become publicly available in any manner, the patent should only apply for a maximum of 10 years.
  • If it’s a tangible patent (product or hardware) but the IP owner has not yet built a prototype or physical product, the patent should apply for only 3 years.
  • If it’s an intangible patent (concept, model or software), and the patent owner has not yet produced a working model or usable product from it, the patent should apply for 2 years.

In effect, on those latter two, if you secure a patent, but fail to produce anything under that patent, the patent should be revoked after 3 years for tangible items, 2 years for intangible. However, there should then be a grace period after that, to be fair for things like economic conditions that make the 2-3 year period reasonable:

  • The patent should remain vague on public records (a description without full IP details) for a maximum of 2 years after being awarded the patent, to give the patent holder a reasonable time to secure a working prototype, if applicable.
  • For a functional patent (one that applied for 50 years), the patent can simply be renewed, but the above conditions must still be met.
  • For a functional patent that failed to produce revenue, or for a tangible or intangible patent that never reached a completed state, at the end of the patent period, the patent should be automatically made available for sale, with a price set at 150% of the cost of registering the patent. The patent owner may optionally “repurchase” their own patent.
  • Any buyer (including the original owner) now has half the time available to fulfill all of the above (except for the 50-year patent, provided the rules are still being met).
  • The process can repeat until a patent has a 30-day life or less, at which time it becomes void.
And then one additional magic rule:
  • If you fail to allow your patent to be licensed to any other companies, all of the above times are immediately cut in half at the time you are awarded the patent; whether you are awarded the patent by merely having it approved, or if it’s by purchasing it.
And one exception:
  • If you are awarded a patent and are then able to license the patent to another company (without producing a tangible product yourself), that company must meet the above conditions (ie, creating a working prototype) in the same timeframe as though they owned the patent themselves. But if the license ends, or if the product doesn’t meet the above criteria, the same timeframes still apply. This prevents someone from securing a license, but then simply never producing anything from it. They would still need to meet the criteria as though they themselves owned the patent.

Basically, this would completely eliminate patent trolls, and would prevent any company from securing a patent and then simply blocking anyone else from implementing it while the owning company or individual simply sits on it waiting to collect money. To ensure that happens, a company would be perfectly free to develop a product that is a complete rip-off of a patent, and then simply wait out the patent’s life and either purchase the patent, or wait until it expires and then produce a working product with no licensing requirements. This gives the owning company or individual time to make their patent usable (hence the brief period where the patent is not publicly available) in order to secure the 50 year patent, or effectively give up their rights to the patent. Meanwhile, another company may steal the idea and owe you no royalties, but really, if you can’t produce a usable product from your patent, you don’t deserve to own it. With the licensing requirement as an option, this ensures that companies who are genuinely interested in the patent will be motivated to license it, rather than risk waiting for it to become void, knowing that a competitor could simply scoop up the patent.

In effect, if you invent a concept for, say, software, but it never sees the light of day, your patent goes up for sale in 2 years. If it fails to sell within 1 year, it becomes void. If it sells, the buying company then has to the end of that 1 year period to produce something usable. If they fail to, the next buying company has 6 months. Then 3 months, then 1.5 months, and then the patent is void. Thus, a software patent that never comes to fruition is void in just shy of four years. With hardware, just shy of six.

Goodbye patent trolls. Goodbye ridiculous litigation over intellectual property. Hello fair competition and innovation.

What do you think?

iPhone “4S” is for Strategy

In the wake of yesterday’s Apple keynote announcing the iPhone 4S, which left many people disappointed and dropped Apple’s stock by 5%, I’ve noticed that there are a few things that the industry is waiting to catch their breath on and adjust their rumor mills accordingly. Just like the jokes that cropped up over the iPad’s name, the disappointment of receiving a “4S” instead of a “5” will also fade, which is why it will be available in a week. You should never need to wait for speed…

Speaking of which, although the “S” officially stands for “speed,” as it did with the 3S, there’s a subtlety that it also means “strategy.” Bear with me on a few deductions:

  1. This release model and timing were planned long before Steve Jobs’ departure from the company. The fact that the industry expected this to be Tim Cook’s moment to shine was irrelevant. Cook’s presentation was no different than what Jobs himself would have presented, so it’s a hint that most things at Apple are continuing on exactly the same momentum as they have been. Jobs’ absence was an acknowledgement of that.
  2. Cook set the stage for future presentations: it’s less about him, and more about Apple as a whole. In other words, he let Jobs continue to be Jobs, and continue to be regarded and respected for his role, while also showing more of Apple’s cards. The “one more thing” hallmark of Jobs was notably absent, because that’s Jobs, and will forever be Jobs only. There is no “one more thing” with Cook, because the future is going to be less about Cook, and more about Apple.
  3. The 4S is an iPhone 3/3S replacement product. Not enough of an upgrade to woo iPhone 4 early adopters, but significant enough to be a “must have” for iPhone 3 users, who, internationally are just ending their 3-year contracts. It’s also the perfect model to attract the iPhone 3S users who have already proven they want the stepped-up model, and whose 2-year contracts are just ending in the US.
  4. It coincides with iOS 5 which has a one-year life, because iOS 6 will launch just after the iPhone 5 next year, and both will be a major rewrite. Why? Because iOS 6 will also need to service the 4th generation iPad (the 3rd will come out next spring*) which will be a major technology advancement, and for which the iPhone 5 will need some huge upgrades to match. Since the iPhone 4 was a complete redesign, there needed to be a pacifying model to keep the supply chain of complementary products functioning for one more year while the phone is completely re-engineered.
  5. There was a brief jab at HP, Dell and Microsoft with the statement that consumers don’t want tablets: they want iPads. It’s a hint that Windows 8, while it will still be successful in its own way, will only truly work on tablets that are intended to function like desktops.**
  6. The hardware changes are mainly intended to be hints at the future. The upgraded processor and increased RAM brings the iPhone to desktop-like production. The addition of software tools like voice instructions and online card printing are a hint at the future of services.***
  7. The brief stock drop is actually great news for shareholders. Apple knew what this would do, and let it happen. Shareholders can now buy more stock at the reduced rate, knowing that next year’s iPad 3 and iPhone 5 will boost the value tremendously, and investors now will get a great return on their money over the next year.

In the end, a purely strategic move for Apple, and a real hint at things to come.


* I expect the iPad 3 to be another technology hinting product. The iPad 2 brought minor revisions and a speed boost. Essentially, it was a 1S, but for strategic reasons, it needed to be called the iPad 2. The iPad 3 however, will introduce groundbreaking new features, like a retina-style display, improved cameras, a processor and RAM boost, and very likely a software tool for remote desktop capabilities to OS X Lion (something like “AirDisplay for Everything Else”). The 4th generation iPad, in spring or summer 2013 however, will likely come shortly after an iOS 6 announcement, and a developer announcement about the next version of OS X (which will probably get a new name). Something will blend OS X and iOS together, and it won’t happen until about 18 months after Lion’s release, which would mean some time around early 2013. iPhone 5 will be the first hint, and iOS 6 along with iPad 4 will be the main iteration of it, followed by a new line of Macs (something in the MacBook Air family) sporting the new OS.

** Watch for this. Windows 8 will be released along with a slew of tablet-laptop hybrids. Consumers will jump on them quickly, but will soon recognize how much it differs from an iPad. And by the time Microsoft releases a fully trustworthy tablet (remember that HP has already failed at this, so that really only leaves Dell to get it right; and Dell has a bad reputation with home users), Apple will already be on their third model of iPad. And since iPad 3 will have groundbreaking new features, the new Windows tablets will look antiquated the day they’re launched. By the time there’s widespread consumer adoption, Apple will have responded with a new OS that will marry iOS and OS X making the iPad even more desirable for the consumer, and making Windows 8 look like Windows 3.1. Consumers still won’t want tablets… they’ll want iPads. And when the new OS is released, within a year of Windows 8, Microsoft will still be three years out from catching up, and the iPad will be on version 7 by then.

*** The future of services is inevitable. Apple has a business enemy in Google because of Android, but Apple has a more stable revenue model. Google makes its money from involuntary participation (revenue derived from advertising, which is why their products are all free: no one wants to pay for stuff associated with Google, as is evidenced with non-free Android apps). Apple on the other hand, makes its money from completely voluntary participation, almost to the point of absolute dependency (consumers crave Apple products, and would step over their own mothers to get one). Because of this difference in revenue methods, consumers are willing to pay Apple for the next big thing. And the next big thing Apple is betting on, is that people won’t want to continue “searching” but will want to start “doing.” With Google, you type your queries, find your results, and then try to apply those results to what you’re trying to do. For example, typing “Meeting with Fred at 10am” into Google yields nothing of value. If you want that to be a calendar entry, you have to switch to Google Calendar. In other words, with Google, you have to know how to do something before you can tell Google what you want. Apple is putting that all in one place, so all you need to know is what you want to do, and it will show you how. It’s a hint that Google will get less relevant for the average consumer. Similarly, the cards app is another service hint: print is still important, but it’s less about you, and more about the people you engage with. Cards is an example of remote printing at its finest. Print this, and send it where it needs to go. The old model is, print this, and then I have to figure out what to do with it. Again, with Apple, tell it what you need to do, and it will show you how.