Dialogue Concerning the Two Chief Invention Systems

A Dialog Concerning the Two Chief Invention Systems


Libero , Proprietario, Kissero

Kissero: Look! Here’s something I’ve done in my research!

Libero: Whoa! Very interesting! Was it done under our federal contract?

K: Yeah, I think so. During work hours, in the same subject area as our contract.

L: Okay–write up a report for the government.

K: This is pretty neat stuff.

Proprietario: Yup. But once the government gets it, they are free to tell everyone else. We need to act now to prevent others from using this stuff, given that once we report it to the government, we won’t be able to prevent others from knowing about it. We need to get a patent application filed asap. This is our one chance to stake out this territory. We will look bad if we let this slip away.

K: What good is a patent?

P: Well, let’s see–for starters, we could prevent others from proposing to use this stuff in other government contracts. That would get us positioned for the next round of funding.

L: But that might not go over so well, since then other companies might respond by preventing us from using the stuff they have been developing in their government contracts, and then none of us would be able to propose work that put together a bunch of things that the government has been funding. Or if we did, we couldn’t use any of it outside our government work.

K: Couldn’t we just decide to make and sell product stuff based on my neat research stuff outside our government work? Why would we need to have a patent to create an exclusive position? Wouldn’t our position be exclusive until someone managed to figure out what we were doing, get access to necessary background rights, put together the funding to develop something similar? Even then, wouldn’t they have to outspend us by a factor of 7 in marketing just to make a dent in our market share?

L: That’s a good point. But it doesn’t get at what happens when others file patents on stuff that is necessary for development and application of your neat stuff. Instead of using a patent to block everyone else, we could use it only conditionally–to block others if they try to block us, and to trade patent rights with others that have got patents for this same reason. That way we get access to technology we couldn’t otherwise afford. We use patent rights to prevent the use of patent rights, at least against us. Libero-patenting!

P: Or we could use a patent the way it was intended–to exclude everyone else. That would set us up to attract investment for developing this work. That’s the real power of a patent, not some wimpy Libero scheme. We could shake free some internal budget from goofs who think patents are useful. We are at technology readiness level 1 here. We have eight more levels to go. Won’t get there without a patent.  Proprietario-patenting!

K: So, like we must exclude everyone else in order to shake free the funds from mostly clueless folks who control the money so we can develop a product ourselves?

P: Yup, and only by doing that will the public ever enjoy any benefit from this stuff. Without money, we don’t move through technology readiness levels. Without getting through the levels, there’s no product. No product, no public benefit. Other than government use, the research goes to waste.

K: Isn’t that just the old argument that if we share this stuff openly then no one will use it? Maybe our competitors won’t use it, but that doesn’t mean our customers won’t use it or others in other fields of work won’t use it. The government would use it and doesn’t need a patent to do so.

P: Well, no one here actually believes that old argument. We just use it to fool money out of people. If we have a patent, then they think we can build a monopoly and get a huge upside. So we give them this fantasy, and in return they give us their money. That’s how the world works. It just is. Best practice.

L: It’s true. We need money to develop this stuff. But we could get that money in the form of contributions by others. Incremental additions to a shared platform made by a coalition of the willing. Use patent rights to deny access to any contribution for anyone who tries to block the work of the coalition. Join or get out of the way.

P: But consider this. If the government publishes this stuff before we have applied for a patent and gotten development well under way, then everyone pretty much has it and could design around it even before we can build a new product. They could patent stuff faster than we can develop product. In anticipation of our product, they could block us with their patents as soon as we try to improve or apply what we have got. So that could screw us over, even if we license our patent on really, really reasonable terms. Just because we say we are licensing on reasonable terms doesn’t mean folks who want to block us will do the same. And besides, if we licensed to everyone, then everyone would have access, and according to the old argument, then no one would use this stuff–all the more so because they have to pay–and it wouldn’t be worth anything. We would have wasted our time and money and burned off goodwill.

K: Seems like we are better off just being open and moving fast enough to keep improvements and applications open, too. Not give anyone ideas.

P: Oh, don’t be stupid, Kissero. Every company already has these ideas. It’s just a matter of who wins out in the internal debates that go on every day. We need to think now about how we can shut down non-government use of this stuff, assuming as soon as the government publishes, folks will use it and invest in improvements and applications. For that, we need a patent application. That will prevent the government from publishing this stuff for a couple of years–until the patent application publishes. We could get a patent–even a cluster of patents–and then slow walk development so that others wouldn’t try to develop it (because we appear to be, and we have the patent). We could keep this out of the market for a good decade or longer–enough to make it no longer a threat to our own products. If it turns out we need it, then we have it, and if not, then the slow walk has served its purpose.

K: That’s pretty far afield from doing research to discover useful stuff.

P: Yes, we often have to pull of a hoax. It’s not like we intend to deceive anyone. We just assign some of our less capable folks to the work, underfund them, put a supervisor in charge of them who hasn’t got much clue, and let them go to it. Slow walk. No one can tell us who we have to assign to the work. We essentially deep-six it out in the open. We use the idea that we are working hard to make a new product, but making new product is expensive, hard, full of risk. If we exclude everyone else, it is only for their own greater good. But in the end we are just allowing folks to form a pleasing fantasy in their minds to explain why we are taking so long.

K: I don’t like it, frankly–if we do this, we aren’t just deceiving our competitors and the public, but we are also deceiving our shareholders.

L: True enough! Instead, we can use patent rights to prevent anyone from investing in development who has the aim of cornering the market with a patent monopoly. For that, we have to deceive our shareholders in a different way. We have to give them the fantasy that if we open up our patents for competitors to use, then everyone will work for a common purpose and this stuff will get developed, eventually, for use. At least we have a greater chance of not being blocked by others. And we avoid expensive litigation.

P: Yes, either way, if we deceive our shareholders with these truths–patents to attract investment, patents to attract collaboration–it is for their greater good. If, for instance, we prevent our competitors from using this stuff, then we make better money for longer on our current products–we get a better return on our current investment, and that’s real, and that makes us look good–because we are. So we deceive for the greater good–the public as well as our shareholders.

K: So we end up doing research to bury the research with patents for the chance that we can monetize the patents even if we don’t use the research? We undermine our own research capability and imply that the government is sponsoring work in areas that serve only narrow government interests but have no other benefit except for speculators. That sort of sucks.

L: No, not at all. We use patents to create value for our company. Proprietario and I just disagree on how to use patents. That’s all. Well, and that Proprietario is all wrong.

P: Ha! Libero is the one that’s wrong! But either way, no one thinks about what we do with patents as deception. Even we don’t really think about it that way. So investors and the public and government officials think that developing new products is expensive, hard, and full of risk. They may be right! For any given product, how would I actually know? If it turns out we don’t need this stuff, and it has applications that don’t interfere with our products, then we can get someone to license it and let them shake down their competition, if that’s what they need to do.

L: Shake down–that’s rough. Offering fair, reasonable, and non-discriminatory licenses.

K: You mean, don’t discriminate in your shake down?

P: Exactly. A non-exclusive patent shake down is no different from an exclusive patent position. The non-exclusive shake down is just a systematic, fair, efficient way of settling patent infringement lawsuits. Libero’s approach just anticipates the lawsuits and tries to avoid them by offering easy settlement terms upfront, wrapped in a whole lot of virtue signalling.

L: That’s not the way I would put it. If you never get to a lawsuit, then it’s never a shakedown. People choosing doesn’t mean that there must always be an implied threat that motivates the choice. There’s free will, isn’t there?

P: Oh, Libero! Don’t fall back on free will! Patents organize innovation market activity. Without organization, nothing gets built. Free will is nothing without someone to hitch the horses and ride the cart and direct the course and crack the whip. Either way, it’s possible with a patent that we can get a new source of income and perhaps once in a while a huge source of income, just for holding the rights and eventually monetizing them via licensing. We don’t have to create our own product or even bother trying to pitch a new product to management. Just leave it to legal. So that’s a decent back up plan if anyone gets bothered by the cost of patenting.

K: I suppose. But it still stinks. Why not just let the government publish our work and see what happens? React along with anyone else?

P: What, just be passive-indifferent? That amounts to deep-sixing this stuff, but without even a backup plan in case it does become important. I say “important” because if we don’t have a patent, then there’s no way for us to make money from our work, and so we would be responsible for ensuring that this stuff is “valueless,” at least to us. That sort of sucks, too.

L: We could make money from our work by getting more research contracts, or by publishing this stuff ourselves and drawing attention to our company’s capabilities, or by repositioning our products to use this stuff. The only money we would make with a patent by excluding others would be to troll them. That sucks even more. Trolling is not reasonable terms unless we are using the same technology they are and are asking them to cover some of the cost of development with us. Otherwise, it’s like saying that we can compete with the company across the street because we have guns to shoot out their windows and they can’t shoot back because we haven’t got any windows.

P: Sure, but in this case, using patent guns to shoot out their windows is perfectly legal. And we wouldn’t actually have to shoot out many windows. Just threaten to–or even, just allow folks to form a mental image in their head that we could shoot out their windows. Use their own fear to guide them to our advantage.

K: I wonder if, just because something is legally possible, it is the best thing for us to do.

L: That’s a good point–being open is just as legally possible as being exclusive about things.

P: There you go off wallowing into ethics again. The best ethical argument is getting results within the rules of the game, with whatever is legal. Let’s get a patent application drafted and deal with the government. That preserves our options. If we pitch it right, we at least can get the feds to sign off on allowing us to hold principal rights. A slow walk doesn’t cost much, and if we want to speed things up or go open, we still can. But all this is off the table if we just publish and wilt.

K: [aside] This is such a waste of time. I’ve got a much better idea in my head, but I’m not so stupid to use it in this research or tell anyone at this company. I’m gonna quit and start my own company while they squabble over mere research crumbs.

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