how do corps get away with abusing the patent system?

[Sho'Nuff]

But C is likely to be expensive and involves paying money to your direct competitor. Hence it limits new entrants to a market, surely? How is that good for the consumer?

And A means a lot of wasted effort reinventing the wheel. Which is not just wasted effort for the company involved, but is a waste of resources and work for the society as a whole. How does that benefit society?

Sorry for the delayed replies. I was sick all weekend.

The royalty will depend on the value of the technology being licensed. Most royalties are between 2-4% of the net sale of a product containing the licensed technology. The cost o0f the license is typically included in the price of the product. I.e., the consumer pays for the license, but gets the benefit of the product. A really good example is blu ray and DVD technology. As someone previously mentioned, many optical media manufacturers pooled their patents and implemented standards that allowed such media to be delivered to the masses. Just about any OEM manufacturer wishing to get into the business of manufacturing blu ray related technology can license the related patents and start manufacturing their own drives, media, etc. See http://www.blu-raydisc.info/. That is precisely why consumers have 100+ blu ray/dvd drives to choose from, instead of one or two. Because all OEM's need a license, the license itself does not hinder competition (all manufacturers have to build its cost into the price of their product). On the other hand, the ubiquitous availability of the license allows OEM's to compete on features and value, bringing consumers the wide swath of options seen on the market today.,

As to option A, how difficult a design around is really depends on the claims of the patent in question. If the claims lock up the only commercially feasible way of executing a technology, then licensing is a better option. But in many cases, the claims only cover a subset of the possible options for executing a particular technology. For example, say apple has a patent with claims drawn to a method of unlocking a phone. The claims all require a virtual object capable of being slid from one side of the screen to another. One possible design around would be a "tap to unlock" system. Simple to program, simple to execute. Every bit as user friendly as the slide to unlock claimed by apple. Patent problem solved.

How does option A benefit society? Simple. Instead of having one option for unlocking a phone (slide to unlock), society now has two (slide to unlock and tap to unlock), because the patent system encouraged the development of a design around technology.

 

[Sho'Nuff]

sue, show prior art in court, win, get patent thrown out

happens all the time

Another (far cheaper) option is to collect invalidating prior art, move forward with a product that (allegedly) infringes the patent, and wait of the patentee to do something. When they come knocking, respond with a pile of invalidating prior art. If your position is strong enough, they will stop bothering you and try to assert their "rights" somewhere else.

 

[Sho'Nuff]

I worry that "Intellectual property" laws are getting out of control.

I think its a very interesting topic though, someone must have written a properly researched book on the topic surely?

Firstly it seems as if copyright has a tendency to get extended continually, as the longer it gets the more money (rent) copyright owners get, hence the more political power they have, hence the more they can push for further extensions and more rent. There seems to be a potential for a (bad) positive feedback effect there.

Secondly it seems as if the more technology advances, the more complex the economy gets, the more ownership of 'ideas' becomes more important than that of physical capital, the greater the number of patents existent and applied for becomes, and also the harder it gets for the state to accurately judge when its appropriate to award patents (not least because the state probably can't pay the people who assess patents anywhere near as much as the corporations can pay those who apply for them).

I'm wondering whether at some point the economy will get excessively bogged down in legal actions and well-funded corporations and law firms suing everybody, with fewer and fewer people in a position to actually produce genuinely new ideas.

Its certainly not at all obvious to me that IP laws as they stand actually encourage innovation more than they impede it. There doesn't seem to be any general sociological/political reason to assume that IP would develop in a necessarily benevolent way.

These are all valid (and well thought out) points. You might want to check out the articles Mark Lemley has written on the topic of "patent thickets." He is a well respected economist that has spent a lot of time thinking about how the patent system has developed and is impacting modern business in a "real world" way.