June 9, 2012

"It’s unclear how Apple and Google will respond to Posner’s surprise pounding of them. .'"

Says WaPo noting Judge Posner's decision to dismiss the patent case and his related blog post:
In his remarkable ruling, U.S. Circuit Judge Richard Posner stated that there was no point in holding a trial because it was apparent that neither side could show they had been harmed by the other’s patent infringement.....

Posner’s decision to descend from the 7th Circuit to oversee the Google-Apple trial suggests he wished to step in and do something directly about the patent system. (Ordinarily, Posner would never hear a patent case as all patent appeals are sent to the DC-based Court of Appeals for the Federal Circuit; that court has maintained an ideological bias in favor of patent owners despite repeated rebuffs by the Supreme Court).
And this is from the blog post, which spoke generally about capitalism and included the phrase "dysfunctional patent system":
We have a huge public debt, dangerously neglected infrastructure, a greatly overextended system of criminal punishment, a seeming inability to come to grips with grave environmental problems such as global warming, a very costly but inadequate educational system, unsound immigration policies, an embarrassing obesity epidemic, an excessively costly health care system, a possible rise in structural unemployment, fiscal crises in state and local governments, a screwed-up tax system, a dysfunctional patent system, and growing economic inequality that may soon create serious social tensions. Our capitalist system needs a lot of work to achieve proper capitalist goals.

62 comments:

Palladian said...

Just what we need, a bunch of government judges to "fix" things.

t-man said...

Posner didn't bother to point out that every problem he mentioned (with the possible exception of obesity, which some people are claiming is a direct result of the government's dietary advice and guidance over the past 40 years) are problems of government, not capitalism?

I used to have a lot of respect for Posner, but he strikes me now as an unprincipled guy who thinks that he should be the "philosopher king".

Alex said...

Apple is correctly aggrieved. Google has stolen their IP, they are thieves and should be punished.

Chris said...

Government judges fixing government problems. Seems like one thing they could be particularly qualified for.

rhhardin said...

Killing off intellectual property would be a big plus for the economy.

It's a den of rent-seeking.

Everything you learned about it is wrong.

See (hear) Boldrin on Intellectual Property podcast page.

How a judge gets to remedy it, I don't know, as the duly appointed payoffs and bribes to Congress have been properly paid, and Congress makes the laws.

Alex said...

rhhardin - so Apple spends hundreds of millions creating the iPhone and Google is allowed to steal their IP, just because? Remember before the iPhone came out in 2007, no manufacturer thought that pinch-to-zoom was something consumers would care about.

Alex said...

No amount of patent reforms changes the fact of Google & Samsung's wholesale IP theft against Apple. Thieves are thieves and their virtual hands should be cut off.

chickelit said...

I guess rhhardin believes in trade secrets and thinks reverse engineering is impossible.

chickelit said...

Or maybe new drugs should be invented at NIH and doled out to the world?

Alex said...

Basically what anarchists like rhhardin propose is that whoever is first to market will only get to enjoy their lead until the competition successfully reverse engineers it.

chickelit said...

Thomas Jefferson struggled with the whole notion of IP rights but in the end, he laid the foundation for our system. It's a compromise, clear and simple.

chuck said...

A lot of software patents are, frankly, obvious and it is likely that there is also prior art for many of them. I've also seen algorithms patented these days, which strikes me like getting a patent the standard solution of a quadratic equation, and then someone else would would come along an patent the alternate, numerically stable version.

I think software copyrights, like we used to have, are appropriate. You have to write your own stuff. But software patents are a bug. For software developers, it is best to remain studiously ignorant about software patents, otherwise paralysis sets in.

virgil xenophon said...

What T-man, above, said. My respect-o-meter for Posner these days is pegged
at near Zero. Makes me wonder how I allowed myself to be impressed in the first place..

Joe said...

Alex, Apple did have a claim, but even when handed a clear victory all they did was whine that the victory wasn't bigger. Second, they set the price for infringement at an absurd level.

Samsung, Apple, Google, Motorola, Microsoft, etc. are all suing each other for damages that go far beyond anything reasonable. In many cases they are asking for more per device that price of the device. This isn't about damages, but trying to use the courts to destroy each other.

The final point is that Apple is a major patent and copyright thief, exceeded probably only by Intel. Google isn't far behind. I've no sympathy for any of the asshats.

Were it up to me, I'd invalidate every patent held by these companies.

Alex said...

Joe - you have no evidence that Apple has ever engaged in IP theft.

http://www.patentlyapple.com/

rhhardin said...

Try the link I suggested. You will be surprised.

fleetusa said...

The judge sounds pissed off. Maybe he shouldn't rule on anything for awhile.

Ken said...

Alex,

Basically what anarchists like rhhardin propose is that whoever is first to market will only get to enjoy their lead until the competition successfully reverse engineers it.

This sentiment has been shown to be wrong. The patent system is fundamentally broken for software, and for most other markets. Instead of incentivizing innovation, as you are claiming, the patent system incentivized rent-seeking, as this case shows. This is transparently true in this case "because it was apparent that neither side could show they had been harmed by the other’s patent infringement". Instead of seeking damages for demonstrable harm, this is simply a case of one company using the strong arm of the police state to hurt a competitor.

Bob Ellison said...

Rhhardin is correct, and so is Posner. Our patent system is not serving. Why have patents? Answer that and see why we need reform.

Alex said...

There is no evidence Apple is in it for rent-seeking. They have consistently shown to be the most innovative in software for the last decade. Look at iOS, AirPlay, AirDrop just for a few.

Bob Ellison said...

Alex, some of my favorite computers are Apples, but tone it down.

Nonapod said...

While I strongly agree that the patent system (as well as the copy right system) severely needs an overhaul, his comments about our capitalistic system reveal a shocking ignorance. Our screwed up patent system has little to do with capitalism. In fact most of the problems he listed have little or nothing to do with "our capitalistic system" and everything to do with government.

jimbino said...

What the hell are these capitalist goals? Capitalist goals are the same as Marxist goals: maximize society's wealth. The means differ greatly.

Those goals he enumerated mostly have nothing in particular to do with Capitalism.

Intellectual property protection through patents for the arts and copyrights for the sciences represent only one of many ways to encourage and reward innovation.

Bob Ellison said...

Apple is the greatest!

chickelit said...

From the first page of Boldrin's book, available free of charge at rhhardin's link (why would any fool pay $33 on Amazon for the same):

After the expiration of Watt’s patents, not only was there an explosion in the production and efficiency of engines, but steam power came into its own as the driving force of the industrial revolution.

No shit! But why wasn't there an explosion of steam engine production before Watt's invention?
Answer that and you might understand why patents are important.

People so often forget the the other part of the bargain in the patent process: full and enabling disclosure into the public domain.

Hardin, I can't believe you fell for this charlatan. Sure there are abuses in the patent system, but the fundamental reason for patents is not flawed. In fact, it's well thought through. See for example, Jefferson's thoughts on the matter. Only a sinecured academic would write such drivel.

West Town said...

Can a monetary value be assigned to added functionality?

chickelit said...

The simple answer is to just make patents harder to get by forcing them to actually represent innovation. This is radically different than eliminating them entirely. It's a bit like printing money. Let the patent presses go wild and fiat IP becomes worthless, yet you still need a lot of it. Scale them back, and also adjust term.

Popville said...

I used to be sad that Posner would not be a Supreme Court Justice. I never knew Appeals Court judges could slum, but thank goodness. As a 35 year Silicon Valley worker & resident, his decision is the best news in a long, long while. No longer sad.

KLDAVIS said...

Posner's list fails to mention the kids on his lawn.

Mike Smith said...

Posner's comments are largely irrelevant to the issue. Judges should not be editorializing from the bench.

Ken said...

Alex,

There is no evidence Apple is in it for rent-seeking.

If you sue a competitor and fail to "show [you] had been harmed by the [competitor]’s patent infringement", then you are indeed seeking rents.

You have not been harmed and you couldn't muster any evidence to the contrary, but damn it you hate your competitor and want him to pay. What would you call that?

Alex said...

Apple wants retribution for the morality of IP infringement, not because it hurts their bottom line. Obviously they're insanely profitable with $110 billion cash in the bank, so this isn't about money. It's about PRINCIPLE.

Ken said...

Jimbino,

Capitalist goals are the same as Marxist goals: maximize society's wealth.

This is quite false. Reading anything about Marxist goals, you can see right off that wealth maximization is not even in the top ten of Marxist priorities, much less the top goal. I don't think many capitalists think that wealth maximization is the goal, so much as a nice side effect to liberty and free markets.

Ken said...

Alex,

It's about PRINCIPLE.

What principle? That google did something Apple doesn't like, but didn't hurt Apple in any way? Seriously, you want a legal system in which one party can sue another based solely on principle, completely devoid of any sort of damages?

Legal claimants need to be able to show damage done by the defendant. If not, you're simply using the police state to get back at someone you don't like.

I don't like adulterers, but do you really think I should be able to sue my neighbor because she cheated on her husband, you know, because of PRINCIPLES!!!

Alex said...

Ken - the iPhone comes out in 2007 and suddenly Google changes Android to be like iOS. How is that not IP theft? They literally reverse engineered the thing and stole the IP! What more do you want?

Ken said...

Alex,

What more do you want?

Damages. If Apple can show damages were done to Apple due to google's actions, maybe I'd have some sympathy (but not much since IP is non-rivalrous, which is why so much patent law is idiotic, much of it's based on real property law, which is rivalrous), but since Apple can't muster even that little bit, then this is a silly, thuggish attempt by Apple to use the police state to shut down a competitor.

Alex said...

I'd pay more attention to how Apple feels then people who have never invented anything in their lives.

Revenant said...

I'm writing in Posner's name on the presidential ballot.

Skyler said...

In law school I quickly learned that any opinion written by Posner would be exactly like that quoted section of his blog. It is filled with empty platitudes and mushy sentiments.

caplight45 said...
This comment has been removed by the author.
rhhardin said...

I have a bunch of patents, and can't understand them.

The company uses them for rights countertrades, I'd assume.

"Oh yeah? Well you're infringing some of ours too.."

Scott said...

"I'd pay more attention to how Apple feels..."

Oh, we have a Romney supporter here. Corporations are persons too, right? Hurt poor little Apple's feelings, awww.

I think defenses of Apple sound like they're coming from the injured dignity of a cultist.

Can we be clear here? Apple is not a human being. Apple did not create anything it patented. Their ip consists of works for hire created by people who no longer own their creations, and may or may not have received compensation commensurate to their commercial value.

Is pinch-to-zoom a defensible patent? How much of it relates conceptually to grabbing and resizing windows -- a concept that Apple and others stole from prototypes at the Xerox Palo Alto Research Center? Did they ever apologize for that theft?

There is a line beyond which design is not original, and ought not be patentable. Creating a blizzard of patents for every little design tic and then using them to snuff out any threat to their piece of the ogliopoly isn't a proper use of the patent system. Patents are to protect economic interests, period. And neither Apple nor Google can prove they were injured. Posner seems pretty straightforward.

Jose_K said...

He can begin fixing it selling babies .
Global warming?
Inequality? he wants Obama to nominate him to SCOTUS.

Bruce Hayden said...

While I strongly agree that the patent system (as well as the copy right system) severely needs an overhaul, his comments about our capitalistic system reveal a shocking ignorance.

Wake up everyone. Biggest overhaul of the last 60 years was enacted last year, at a cost of well over a hundred million dollars spent on lobbying (we were on the other side, with no money, and lost). About this time last year, there were maybe more lobbyists for this legislation on the Hill, than there were members of Congress. The Leahy-Smith America (Dis)invents Act (AIA), aka Patent Reform Act was enacted last year, seriously rewriting important segments of the 1952 Patent Act.

You know that the bill was flawed, and some of the grossest rent seeking coming out of Congress in quite awhile, when Nancy Pelosi claims that it will create hundreds of thousands of jobs.

The bill was written so badly (by two individuals) that the proponents tried to sneak a "technical correction" fix through earlier this year, with the usual stacked hearings, for only the "stake holders" (which somehow excludes everyone except for the biggest high-tech companies).

Most patent terms have honorable histories - what lawyers would call 200 years of judicial gloss. Words like "obvious" and "anticipate". We had a 2 1/2 hour conference call Friday, where we got into a discussion of some of these terms, and apparently, there are 4-6 brand new terms with closely related meanings, that really aren't defined in the legislation. We are left with after-passed "colloquies" by some of the highest bribed sponsers (Leahy, Hatch, Smith, etc.) trying to define these terms. It will likely be decades before these terms are adequately defined.

Note, btw, that patents and patent applications are often the big IP brought to the table by small companies to support funding, and the AIA significantly weakens patent protection for them, to the benefit of large companies, and most notably the proponents of this legislation. Which is why AIA is so Orwellian, and Pelosi so brain-dead.

Finally, in the midst of the biggest bout of rule making and fee setting in the USPTO's history, partially in response to passage of the legislation. We have spent hundreds of hours working on comments. The amazing thing is that this is flying by, and most patent practitioners don't have a clue, and, as evidenced by the comments here, neither does the public.

Alex said...

Scott...

Is pinch-to-zoom a defensible patent? How much of it relates conceptually to grabbing and resizing windows -- a concept that Apple and others stole from prototypes at the Xerox Palo Alto Research Center? Did they ever apologize for that theft?

That's so shockingly ignorant as to sound deliberately malicious. There is no comparison between resizing a window via mouse cursor and pinch-to-zoom. Sure Apple didn't invent pinch-to-zoom, but they were the first to do it on a capacitive touch screen on a mobile device.

Bruce Hayden said...

Let me continue a bit with the newly enacted America (Dis)Invents Act (AIA). It tries to do several things (badly - given the many obvious drafting errors). The "badly" is a direct result of dumping "managers' amendments" on the floor, with no opportunity in committee to debate them, and hearings so stacked that, despite repeated requests, only the proponents were ever heard from. Something like ObamaCare, but with the addition of the Republicans (with the notable exception of Rep. Sensenbrenner of Wiscconsin).

The first thing that the legislation tried to do was to move the U.S. from a "first-to-invent" to a "first-to-file" system (proponents will try to tell you it is "first-inventor-to-file", but they are lying, since the direct requirements for inventorship have been removed - we shall see if the courts continue to read inventorship as a requirement for patentability).

Secondly, it will be much easier to invalidate patents in the USPTO. And, yes, it will be expensive, but BFD, since the goal is to protect large companies being sued by individuals and small companies for stealing their inventions. (Which appears to be where the bulk of the $100+ million in lobbying money came from - high tech companies that routinely infringe the patents the patents of small companies and individual inventors, such as Microsoft, IBM, etc.)

Third, prior use rights are significantly strengthened - which means that there is less incentive to file for patents.

Fourth, several patents infringed by the banking industry were targeted for invalidation as "business methods" (we are talking billions in damages, so you can understand the amount spent on lobbying).

What is humorous is that the legislation was originally justified as limiting injunctive relief, but that issue pretty much disappeared with the Supreme Court requiring that such relief was only available if damages would not be sufficient, and that was obviously not the case for non-practicing entities (NPE) - companies that are not direct competitors in the field of the invention.

Bruce Hayden said...

That's so shockingly ignorant as to sound deliberately malicious. There is no comparison between resizing a window via mouse cursor and pinch-to-zoom. Sure Apple didn't invent pinch-to-zoom, but they were the first to do it on a capacitive touch screen on a mobile device.

Stated like that, it sounds pretty obvious to me. Sure, "obvious" is one of those patent terms that has over a 100 years of judicial gloss (or case law interpretation). Nevertheless, I have answered office actions from the USPTO with weaker obviousness rejections.

The way it typically works for obviousness rejections (under 35 USC 103) is that the examiner throws several things in the prior art together, and voila, the claimed invention. But, in Apple's defense, whenever references are combined like that, the applicant can introduced what are termed "secondary indicia of nonobviousness" to show that the combination was not really "obvious", and one of these is commercial success, and another is copying. Billions in sales is likely commercial success, and being copied by Android, is, well, copying.

Bruce Hayden said...

There is no evidence Apple is in it for rent-seeking.

If you sue a competitor and fail to "show [you] had been harmed by the [competitor]’s patent infringement", then you are indeed seeking rents.


I think that "rent seeking" usually means bending the government your way in order to benefit financially. Such as, for example, the AIA I mentioned in previous posts. It typically comes in the form of lobbying for special favors (such as the proponents of the AIA did) or preferential Executive branch actions (such as all those ObamaCare waivers).

Yes, patent revenues, whether in the form of royalties or damages may be considered "rents", but I don't think that that falls into the normal definition of "rent seeking".

Steve Koch said...

Competitors are going to attempt to reverse engineer successful products. It can be a huge project to reverse engineer products. I'm ok with reverse engineering and there is no way to stop it world wide.

Apple has nice styling but nice styling successes are emulated all the time. Obviously competitors cannot exactly copy a competitive product but they can and do imitate it.

What is not acceptable to me is copying of source code and executable code or using stolen engineering drawings for physical products.

Google impresses me more than Apple in two ways. First, the computer science that Google did to solve the distributed database problems and the efficient search of those distributed databases is far beyond any computer science that Apple has ever done.

Second, Google has been very committed to open source on their Android (and other) projects while Apple has always taken a proprietary approach to their code.

BTW, there is no doubt that Apple ripped off Xerox PARC wrt human interfaces and Jobs admitted it.

Bruce Hayden said...

Let me throw in a bit more about "obviousness" in terms of the pinch expand/contract on a touch sensitive PDA screen.

The examiner might reject such a claim as being obvious by citing a source for all three elements, and then showing how they fit together. Used to be that you also had to show motivation for the combination outside the application (such as in the prior art). But, that has mostly been read out of the law now by the Supreme Court.

That is called a "prima facie" case of "obviousness". Remember, the applicant is entitled to a patent unless the USPTO (through its examiners) can show that the claimed invention is unpatentable under the substantive patent sections (notably 35 USC 101 (subject matter), 102 (novelty), 103 (obviousness), and 112 (form)). So, the USPTO has the burden of supplying a prima facie case of unpatentability under the Patent Act (and, notably those section). Otherwise, they must issue the patent.

The applicant can then either rebut the prima facie case during prosecution, or can overcome it. The former means that they show that required elements for a prima facie case are missing. In the latter case, in terms of 103 obviousness rejections, the applicant may use the secondary indicia of nonobviousness to show that the combination wasn't really obvious, despite its superficial validity.

So, in Apple's case, they may say, sure, all of the elements of the claimed invention were in the public domain, but the combination was not obvious, because if it were, then they would not have been able to make billions of dollars as a result.

Superficially, it is easier to overcome an obviousness type rejection by attacking the prima facie case by showing that claimed elements are missing from the examiner's prima facie case, that the combination would not work, that the references teach away from being combined, or, in the past, that there was no motivation to combine the references outside the application being examined. But, realistically, showing secondary indicia of nonobviousness, in a well crafted affidavit or declaration may often be more successful. And, that is probably one of the things that a patent attorney would have done to introduce the evidence of commercial success and/or copying.

Bruce Hayden said...

Google impresses me more than Apple in two ways. First, the computer science that Google did to solve the distributed database problems and the efficient search of those distributed databases is far beyond any computer science that Apple has ever done.

Second, Google has been very committed to open source on their Android (and other) projects while Apple has always taken a proprietary approach to their code.


I would tend to agree. Not a lot of obvious CS advances in Apple products. What they have is excellent industrial design. Unfortunately for them, this doesn't always fit well under our patent laws, which are directed towards novelty and nonobviousness.

Their problem, under our patent system, is that we have three types of patents: utility, design, and plant patents. Utility patents, the most powerful, require utility, and mostly ignore design. But, design patents much exclude functionality. So, their elegant industrial design, while somewhat patentable as either utility or design patents, doesn't fall naturally into either category.

wef said...

I am for eliminating all government-granted monopolies, including "patents" - but we've got what we've inherited from the constitution and two centuries of legislation. Now Posner wants to help clean the mess, ex cathedra. Lord help us.

t-man says, above, that Posner wants to be a philosopher king.

The scientism of Chicago-School economics is complicated, of course, but in the end there is the mistaken idea that the correct implementation of some synoptic model accessible to academic sages and super-smart judges would sort out all the correct incentives - and efficiency would flow down like rain.

Posner is the poster boy for the "conservative" version of what Hayek calls the fatal conceit.

Steve Koch said...
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Steve Koch said...
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Steve Koch said...

Bruce,

Nice explanation of the patent laws, did you spend some time as a patent attorney?

Apple has been an enormously successful company and is very good at understanding the requirements of their customers and integrating technologies that they mostly did not invent into an elegant, easy to use package. I agree that patents should normally not be awarded for integrating already existing technologies into a successful product. Patents should be about inventing, not system integration.

Obviously the big technology companies can stifle the development of the new small companies that create most of our jobs. We need to keep the big companies like Apple, Google, etc from misusing the courts to stifle competition.

KLDAVIS said...

I think it's funny that people think Apple invented anything...Apple's "stolen" all it's ideas since the iPod (the first portable media player was brought to market by a French company called Archos, I had one). Apple puts other peoples ideas in pretty packaging, that is all...actually, they usually add some anti-consumer, monopoly building, digital rights management handcuffs to it, too.

Bruce Hayden said...

Nice explanation of the patent laws, did you spend some time as a patent attorney?

15 years a software engineer, followed by 22 as a patent attorney specializing in just this sort of technology (software, computer architectures, data communications, and processor architectures).

Bruce Hayden said...

Obviously the big technology companies can stifle the development of the new small companies that create most of our jobs. We need to keep the big companies like Apple, Google, etc from misusing the courts to stifle competition.

Should have thought of this a year ago, before the America (dis)Invents Act was enacted. The obvious purpose of this legislation, before anything else, was to make it easier for big companies to invalidate small numbers of patents asserted against them by individuals and small companies. These new tools, etc. for invalidating patents work best for small numbers of patents, and not the sorts of portfolios that they assert against each other.

We are talking billions in potential damages, so hundreds of millions spent in rent seeking lobbying makes good economic sense.

rhhardin said...

Big companies get rid of small companies already now by regulation.

Big companies can afford compliance divisions, small companies can't.

As somebody put it, the next Google will be bought by Google instead of trying to go it alone as the next Google. That's bad for the economy because big companies behave differently from small companies.

Saint Croix said...

I am so glad the right kept Posner off the Supreme Court. It must have been tempting to nominate him, as Posner is very smart. But he's so lawless, and so dismissive of law as something that can be read, understood, and followed.

Ken said...

Alex,

I'd pay more attention to how Apple feels

Is this a serious comment?

Say my neighbor puts pretty flower arrangement in her garden. I like it so much, I copy her. He now feels he's been wronged. He can't demonstrate that I've hurt him in any way, but his feelings are hurt, for some reason.

Would you support him if he decided to take legal action against me?

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