Broken Patent System Encouraging Kodak Breakup

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I’m not impressed with our current Patent system.  The primary purpose of our Constitution-based Patents in the US was to encourage the development of new technologies which would be of the greatest benefit to the community at large.  It’s served us well for more than a hundred years.

Around the year 1900, a Japanese commissioner in Washington, DC studied the American patent system and stated: “We have looked about us to see what nations are the greatest, so that we can be like them… We said, ‘What makes the United States such a great nation?’ and we investigated and found that it was patents, and we will have patents.”

Today, things have changed with our lowly patent system.  In an attempt to “revitalize” patents, in the interest of “reform,” Lawyers are working with Congress to pass laws which would purportedly make it easier and quicker to get patents.  Wonderful.  Make a broken system even faster so that it can break things even more quickly?  One of the key changes is to remove the exception for “Prior Art,” something that will further hurt our community here in the US as it allows “first to patent” to have all the rights even if the inventor has released all of their rights or hasn’t been able to afford the lawyers necessary to file the patent (at least $10k in most cases).

Enter Kodak‘s current position.  According to Bloomberg, Kodak is worth Five Times as Much broken up than they are as a company producing products.  Why?  Because of their patent portfolio.

Patent portfolios are being used more and more by sharks to beat up small businesses to the point that innovation is being almost completely stifled. A quick Google Search will show hundreds of recent problems.

Small business can’t afford to protect themselves from the inevitable law suits that will come from the big companies holding thousands (or tens of thousands) of patents in their portfolios.  Having a few patents, which is about all most small companies can afford to file, just isn’t enough to be able to barter their way out of a law suit with the big technology companies, which is causing a loss of innovation resulting in problems for the consumers.

Ultimately this bullying by the big sharks’ attorneys in patent cases is going to hurt the big boys.  Their growth and R&D strategies for the past three decades has been primarily to purchase small companies with innovative technologies.  With so many small companies being assaulted by big patent portfolios, their source of new technologies will be drying up.

What kind of Patent Reform would help?  The easiest, and quickest solution, would be to completely eliminate software patents.  Most companies use Trade Secrets to protect their short-lived Intellectual Property assets anyway, and the software patents are what are causing the true innovation problem throughout the world and right here in the good ‘ole USA.

Rest in peace, Kodak.  How great you once were.

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