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Offering news and business analysis for the design engineer, Managing News Editor Suzanne Deffree filters the electronics industry's developments and trends to explain how what's happening in the board room today can impact the tech innovation of tomorrow. Follow Suzanne on Twitter, @Deffree. Suzanne also manages EDN's Twitter account, @EDNMagazine.

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Monday, May 11, 2009

Andy Grove 'dubious' on the patent system and future innovation

May 11 2009 5:23PM | Permalink |Comments (14) |

For all the EDN readers who clicked on our story last week "Andy Grove, Gordon Moore, other engineers honored by National Inventors Hall of Fame" and wanted to know more about what Grove said when he accepted his lifetime achievement award on Saturday, May 2, check out the below YouTube video.

He is introduced by Ted Hoff, co-inventor of the microprocessor, who said of Grove, "Inventors tend to be dreamers, and Andy taught us how to turn dreams into reality."

Grove, himself, spent his short three-minute speech discussing the patent system and its issues. He received his award as the National Inventors Hall of Fame celebrated 50 years of the IC and honored 15 other engineers who have made significant contributions related to or enabled by semiconductors.

"As we celebrate the accomplishments of the last 50 years, I can't help but wonder if the next 50 years will be equally productive. I'm dubious," Grove said. "Fifty years ago, the inventor was also the producer. Today the inventor may work for one entity while the production or the distribution is done by other."

Patents that sell have become products, he said, and are financial instruments more than instruments of innovation. "I fear that our patent system increasingly serves those who invest in the patent product and that that will limit the reach of the product product and benefit," Grove said. "We must undertake to rebuild this system as well so it does what it is supposed to do: help the public -- all of us."

You can view the video below and, as always, your comments are welcome. What do you think of Grove's comments? Are you, too, "dubious" about how the patent system will impact innovation?

Reader Comments

at 5/11/2009 11:20:36 PM, Josh K said:
Although the patent system is not without its flaws, it accomplishes the goal it was set out to do. The patent system encourages innovation. Patents are much more than mere "derivatives" (a patent is actually not a derivative at all) because a patent grants an exclusive right to an innovation. This is a powerful right. This right of exclusion is not burdened with any obligation to "produce" and such an obligation would not further the goal of fostering innovation anyway. Not to take anything away from Mr. Grove, I'm just not as "dubious" as he is.

at 5/11/2009 11:30:30 PM, Anonymous said:
I agree with Mr. K. Apparently other people similarly do not feel so dubious. Check out generalpatent.com/2009/05/07/response-andy-grove

at 5/12/2009 2:26:38 PM, LRW said:
But Anonymous - could it be that Poltorak has a vested cash interest in licensing patents ?

Alexander Poltorak
is the CEO of General Patent Corporation, a patent licensing and enforcement firm.

at 5/12/2009 3:23:36 PM, Dan Quixoté said:
Andy's got it right, at least regarding the trafficking in IP that so degrades its benefit to the public at large.. But he doesn't focus on the bigger underlying problem - the USPTO, WIPO, and sister agencies in other countries are just plain >broken<. I've been a career inventor and been involved in both inbound and outbound IP licensing and deployment, and the system has become such a farce because of 1) the sea, nay, OCEANS, of redundant IP that has been granted by the various PTO's due to negligence at the agencies, and 2) the ridiculous cycle time at the PTO's. I could give numerous examples of different fields where the USPTO/WIPO and others have been granting basically the same half-dozen patents in that field over and over for a decade or more, just to different applicants. And this contributes in a major way to the backlog that renders the value of a patent so moot; the current 4-year backlog is beyond broken. The system only works in a limping, de facto way now - if you have something truly useful, novel, and defensible, the way you monetize it is to file the applications, and trade on the applications themselves, and not the patents per se, under the presumption that the patents will be granted. But the massive cycle time and predatory IP trafficking environment leaves even the most valuable applications at great risk of getting submarined or pre-emptively litigating the applicant into bankruptcy. In both cases it is the citizenry that loses the biggest. So what, if anything, still works? Well, just as in the old days, file the applications in good faith and conscience, and put the IP into shipping products as fast as you can, before your competitors. You may still have to duke it out after the fact for years, as with the telephone, the radio, the transistor, and the television, but at least it'll see the light of day, and at least humanity will enjoy the benefits.

at 5/12/2009 3:29:16 PM, rick said:
In Mr. Poltorak''''s blog, he states that there is no obligation to produce a product in return for issuance of a patent. The reasons for patents is to allow the inventor to produce a product of his invention with protection from others copying it. If the intention is to disclose to the public the invention, then just publish outside the patent system. Credit still goes to the inventor, but products based on that innovation are not hindered.
As far as patent reform goes, I think that any compensation awarded to patent holders should be reduced based the amount of time from the patent if the patent was not used in a production of a product. Same goes for any patent that is transfered to a third party "non-producing" entity (patent troll). i.e. use it or lose it.
The current practice of patenting an "invention" without having to actually produce a prototype, waiting until somebody else does the heavy lifting to turn the idea into a product, and then attacking that producer for infringement is not benificial to society.

at 5/12/2009 3:36:26 PM, Anon1 said:
It is clear that there is a problem with the way patents are being used. There are companies that exist to do noting but buy patents and hope someone years later will develop something that "infringes" on the until then useless patent. This does nothing to foster innovation, only create problems for companies that did not relize a patent even existed. Small companies do not have the $ to fight a patent lawsuit, so they either give up or do not bother to innovate. It is left up to the large companies to develop new products and defend against stealth or junk patents. That is not what the patent office was set up to do.

at 5/12/2009 3:50:45 PM, Jim McGregor said:
The IP trolls have become a hindrance to the high-tech community. The only ones that win are the attorneys running these firms. The industry desperately needs a new patent system that prevents the protection of innate processes and rewarding those that chose not to capitalize on IP, while protecting those that truly innovate for the benefit of the industry, the consumer, and the economy.

at 5/12/2009 6:09:30 PM, john L said:
The system is broke... at several (mentioned) levels. One of the many reasons not mentioned, in the US, Congress has used the money taken in by the Patent office - and put it in the general fund. The Patent office was never created to become a revenue generator for the government... since the mid 90s this has been extremely out of balance Result: crazy levels of patent activity without resources to address it.
This issue and lack luster management.. (typ gov issues)

at 5/13/2009 12:00:08 AM, Individualinventor said:
You gentlemen and government officials can discuss about the patent system freely, but just don''''t harm the most vulnerable individual inventors, saying that they are not producing real products now. They will do that later whenever they have chances to do that. Please note that they sacrifice their life enormously without getting enough support from attorneys for lacking money and the pressure from the attorneys'''' large clients (big corporations). Please do not try to find any unreasonable reasons to harm the vulnerable class.

at 5/13/2009 2:07:42 AM, ls said:
Groves is pretty smart and is right on the button to express concerns. We need a system that enourages innovation, but if Patent Owners do not use the patent, what good is the innovation? Perhaps we need a system where a patent is fully valid only if used within 10 years, then loses validity if not.

at 5/13/2009 4:10:35 AM, Scunnerous said:
When the patent system works well and results in true innovation, it's umm, - too slow but sort of OK. Where Grove is correct is that there's just an overwhelming amount of dross that gets filed AND approved. A good example is the Microsoft FAT patent: they got a patent in 1994 for stuff that was done in the back rooms of DEC and Data General in the 70s and "protected" by trade secret and copyright law. That is just total incompetence and Microsoft is now patenting everything in sight. The way things are going you won't be able to write a piece of code without stepping in Microsoft's reworked fossilized sh!t. Something has to change and don't forget when the Chinese & Indians figure out how to work the system, it's game over.

at 5/21/2009 11:32:16 AM, NateOcean said:
Others have detailed how "broken" the system is better than I can. Frankly, in the patents I've dealt with, the lawyers involved were uniquely unqualified to write patents. There engineering background was so weak, that in the end, the ENGINEER was forced to write the patent for them.

Lawyers attitude always seemed to be that they could fix it in litigation. About 80% of patents would fail a legal challenge anyway, etc. So the lawyers contribute to the system's problems, as their jobs and salary depend on litigating in a broken system.

Large corporations use their patent portfolio to intimidate smaller companies. Large corporations have large legal teams and extensive cross-licensing.

In one example Company "H" was infringing on a printer patent. Their attitude was that they'd wait for the inventor to die (as he was in the terminal stages of cancer). Then they picked up the patent for a pittance from the grieving widow. Sound ethical?

In another case big companies "H" and "T" were involved in a touch-screen infringement from small company "C". "H" fully knew that "C" was the true inventor. However "H" has a cross-licensing agreement with "T", so they endorsed "T" suit to quash "C" claims. Sound ethical?

at 5/21/2009 11:44:31 AM, NateOcean said:

Consider the disparity between two employees...sitting right across the aisle from each other in, say, Palo Alto, CA, USA.

American employee "A" and European employee "E" co-invent and receive a patent. "A" gets a nice plaque, as the employment agreement with his American employer signs away all his patent rights. However, employee "E", while working for the American employer in America, is still grandfathered in under his European employment agreement. So "E" receives the plaque as well as extensive rights (that vary from nation to nation) in the patent itself...receiving financial benefits.

at 10/23/2009 4:11:10 PM, liverdonor said:
NateOcean - dead on, I'd say. From numerous experiences I'd have to agree.

And of course, you don't even want to think about the ability to patent genetic sequences - that whole idea is just plain wrong on so many levels.

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