Patent Already Exists But No Action?

JimIvey

Quote

Reveller

No problem.

What if the invention will better the whole world and save millions of dollars, but the patent holders aren't doing anything with their invention?

Reveller

I used the wrong terminology, I should have said "Patent Abuse" instead of Patent Infringement.

JimIvey

I really haven't looked at patent misuse for a long time.  The idea of preventing technology suppression isn't new.  But I don't think it ever made it into law.

Think about what compensation you'd give the patent holder.  Most likely, a reasonable royalty.  How do you determine a reasonable royalty?  Most often, you don't.  You let the patent holder and the interested party negotiate and arrive at a mutually agreed upon royalty -- that should be reasonable.  Any time you introduce coercion into the negotiation, you influence the agreed upon royalty.

For example, say you have 5 years from your issue date to enter into a license agreement before your patent is dedicated to the public (no royalty).  That will get people off their good intentions and pound the pavement, right?  Maybe, but it would also very likely encourage businesses to just ignore the technology and the patent holder for 5 years.  So, the patent holder's bargaining position just went way down.

If you pick some reasonable royalty other than zero, you get the same effect -- except that negotiations will drag on until (i) 5 years elapse or (ii) the agreed upon reasonable royalty gets very close to (or becomes) the mandated reasonable royalty.  So, the reasonable royalty becomes a self-fulfilling prophecy.

Lastly, what do you do for someone whose idea just isn't appreciated in the marketplace?  Suppose the guy tries to shop it around and no one wants to license it.  What if the idea is a few years ahead of its time?  It just seems unfair to punish someone whose clever idea isn't appreciated.

Now, do we know that the patent holder in your hypothetical situation has tried to have companies take licenses and they've refused?  Let's say, for the sake of argument ("arguendo" in legal parlance), that he/she has.  What would be the solution?  Force some company to take a license?  Force the guy to lower his demand for royalties?

Here's how a "free market" is supposed to take care of that.  If the idea really is valuable, you shouldn't be the only person to recognize that.  The potential licensees should see the value in it as well and there should be enough benefit to compensate the patent holder and induce the company to adopt the technology.  However, if the company chooses not to adopt the technology, perhaps another company will or an investor and/or entrepreneur would be interested in starting a new busines using the technology to compete against the old technology.

So, what do things look like for your patent holder?  You seem to be a believer so perhaps you could be the entrepreneur.  If you have some money -- 5-7 figures depending on the technology -- you can also be the investor.  If you're not the investor, you or someone else is going to have to introduce him to one -- or two or three.....  If you can't connect with enough investors to get off the ground, it's not going to happen -- even if you're right about the value and everyone else is wrong.

If you don't succeed in starting the new business, the patent holder (if you were ever involved, hopefully that's now a company in which you hold some shares -- otherwise, it's the same inventor) is relegated to submariner.  You wait quietly for some bigger company to stumble on your idea by itself and then you pop up, show them your patent, and demand cash.

Anyway, I think I've babbled on sufficiently.  I hope that helps explain what to expect in that particular situation.

Regards.

Reveller

Wow thanks. That covers all the different angles I had in mind. ?I know how much potential the idea holds. I just wish I knew how to find out what stage the other patent holders are at.

Are they trying to market their idea or did they already get declined...due to some business or market reason (like you mentioned).

I don't know much about patents, but I know I have a good idea and no one else is using it. I think can change the idea so I can patent my own version. Two version already exist, but both not the exact same as mine.

Thanks for all your good thoughts,  

Cheers,
Paul