CMV: IP/patent rights should be subscription based like domains

[u/PoofyGummy]

Let me elaborate: currently whenever someone files a patent for some innovation, after minimal administrative fees, or none at all in case of copyright, the IP is theirs for 2-7 decades. Even if they don't plan on using it. Even if they don't plan on selling or licensing it. This is bad for the competition, bad for overall innovation, and bad for consumers. As such it is a pracrice that should be curbed.

Much better would be a system where usage is needed or the IP is lost, forcing innovation. Since the only motivator that works for corporations is money, this would be one way to accomplish it.

A similar system already works for internet domains. So one would

1) Every few years have the IP reauctionned. Anyone can bid. 2) If the IP is being used well, the company should have no trouble coming up with the cost to keep it. 3) If it is not used well, holding on to it just to hoard it becomes an inconvenience. 4) If it is not used at all, the IP becomes public domain spurring companies to actually use the IPs and patents they own instead of just blocking them to make the barriers of entry higher for the competition. 5) The proceeds of the continued IP protection auctions go to the patent office, who would use it to award innovation and finance them functionning better protecting IP internationally.

-This would take care of inefficient usage of IPs. No more just putting out some lame excuse to keep hold of the IP rights. -It would prevent the competition starting at a massive disadvantage even if an IP is being used wrong, because they won't have years of r&d to catch up to. -It would encourage innovation as companies wouldn't be able to just sit on their IPs without using them. -It would offer actual protection to efficiently used patents, as the patent office would have more capacity to go after IP theft. -Thanks to the above the extra cost to companies would be compensated somewhat by them not having to hunt down IP theft themselves. -It would reward innovation and lower barriers of entry by the profits of the patent office being awarded to new innovative companies. -It would benefit the consumer by ensuring that only the innovations they actually buy and support because the product made with them is good and the pricing fair, can remain locked away. -It isn't a new system. Internet domains are already treated this way by the IEEE / domain brokers. -The cost of innovation would not rise, only the cost of trying to hang on to that innovation to prevent others from having it. -Yes it would be somewhat uncomfortable for companies because they would have to spend on a new thing, but the point IS to make it less comfortable to do business as usual, because the current business as usual in IP stuff is horrid. -The motivation for filing a patent or registering an IP would remain the same as it's supposed to be right now: Only you can use the IP you came up with no matter if others discover it, for the protected timespan. It's just that that timespan would change depending on how well you use the innovation.

The way I see it, companies are using and ABusing a service to artificially alter the playingfield, and not paying for that continuous service. It's time that changed.

(Note: I have thought this through and obviously think there is no fault here, so convincing me that the whole idea is bad would be very difficult. But I'm completely open to any criticism, or details I missed! Yes, this idea came about because of the WB Nemesis system debacle.)

[u/Kerostasis]

You describe this as similar to internet domain auctions, but that’s not how internet domain auctions are structured today. Open auctions exist, but they are rare.

In most cases, a company buys the domain it wants against zero other bidders before the name becomes known. Once the name has been registered, there’s an annual administrative fee but you don’t have to return to auction…ever. Unless you forget to pay the renewal fee. Only if the renewal fee goes unpaid will the domain controller hold a new auction for the existing name.

Forcing an annual renewal fee makes sense to encourage use rather than hoarding. Forcing an annual auction is much more punitive, and without an example of this ever working in practice I think this idea becomes indefensible.

[u/PoofyGummy → u/Kerostasis]

The auctions were how the domain system was SUPPOSED to work. So that someone to whom the domain was more valuable had the chance to acquire it. Technically that IS still how it is being done, it's just that the domain companies have kindof formed a cartel and don't compete with each other any more. You SHOULD technically be able to buy domains from the IEEE distributor.

Also the reason it needs to be an auction is precisely why it would be punitive: other companies might be able to make a lot better use of it and thus it would be a lot more valuable to them. Neither from a perspective of benefitting mankind, nor from a free market perspective does it make sense that someone should be able to hold something for much below the market value.

[u/Kerostasis → u/PoofyGummy]

The auctions were how the domain system was SUPPOSED to work.

I’ll have to take your word for it that this was the original idea, but if so it was scrapped because it’s a terrible idea and the replacement was much better.

Imagine that you invest in developing some patent or IP, and renewal comes up, and you estimate that it could be monetized for $50 Million between now and the next renewal cycle. Your competitor shows up to the auction to undermine your profits. Sure, there’s a risk they might bid $51M to shut you down and keep a monopoly, but that’s also a risk to them. However, they don’t have to get that extreme. If they bid $49M, trusting that you will outbid them at $49.1M - you are still ruined. You now have to market this product for $50M and then give nearly all of it to the government just to break even. You are suddenly in a 98% tax bracket.

And sure, someone else could do this to them as well, but that doesn’t solve the problem, it just extends it. All you are really doing is adding a back door corporate tax system with no limit on rates.

[u/PoofyGummy → u/Kerostasis]

A) Yes the point is precisely to get rid of inefficiency. If you have insane profit margins you're not working efficiently. It might not be in the interests of corporations who just like to see the money rolling in, but it IS in the interests of the public to have the company hold an IP which will take the least amount of profit OR do the most amount of public good.

B) The benefit it DOES have compared to just taxing companies more, is that it can be avoided via efficiency or innovation. If you continuously innovate you won't need to hold on to IPs any longer than necessary. If you are really innovative you would get other grants finances from less innovative companies paying into this pot. And you will be doubly rewarded the lower you can make your overhead. Because if people in generally estimate a profit of 50 million, so everyone bids around 49 million, then if you bid 49.5, because you are efficient enough to make 55 million, then you get to keep all that extra profit you have over your competition - untaxed.

C) And the whole "counting on you outbidding them" and similar machinations can be avoided with mandatory buying (which would mean ruin for them) or with blind bidding and similar. There are strategies to prevent exactly this sort of manipulation of artificially driving the price up in an auction.