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Clarification | 98 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Authored by: Gringo_ on Friday, November 09 2012 @ 09:58 AM EST

When I said a patent has no intrinsic value, I was only thinking of its sale value, which entirely depends on somebody willing to buy it and how much they are willing to pay for it, if at all. However, if someone infringes that patent and you sue him, then the value of the patent is whatever is decided by the court, which of course could be zero.

[ Reply to This | Parent | # ]

The value and worth of patents
Authored by: Ian Al on Saturday, November 10 2012 @ 04:23 AM EST
Forgive me from replying at length. The writers of the Constitution actually proposed protections that were not, in the event, supported by the law. They made little distinction between works of authorship and useful works of invention. (Rather than useful inventions, the Constitution refers to useful Arts; the quoted text explains what the term 'useful arts' actually intended.)

The law saw that providing copyright protection of ideas fixed in a medium, impinged on freedom of speech and did not promote the progress of science and useful invention. Both copyright and patent law protection exclude scientific ideas and laws of nature.

Because of conflicts with other aspects of the Constitution, the copyright and patent laws are careful to restrict the protections as intended by the Constitution, when taken as a whole.

From Wikipedia:
The Constitution

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.


On August 18, 1787, the Constitutional Convention was in the midst of a weeks-long stretch of proposals to establish what would become the enumerated powers of the United States Congress. Three such proposals made on that day addressed what are now lumped together under intellectual property rights. One, by Charles Pinckney was "to secure to authors exclusive rights for a limited time". The other two were made by James Madison, who had previously served on a committee of the Congress established under the Articles of Confederation which had encouraged the individual states to adopt copyright legislation. Madison proposed that the Constitution permit Congress "to secure to literary authors their copyrights for a limited time", or, in the alternative, "to encourage, by proper premiums & Provisions, the advancement of useful knowledge and discoveries".

Both proposals were referred to the Committee of Detail, which reported back on September 5, 1787 with a proposal containing the current language of the clause. No record exists to explain the exact choice of words selected by the Committee on Detail, whose task was essentially no more than creating a draft Constitution by arranging the proposals that had been made into the most appropriate language. On September 17, 1787, the members of the Convention unanimously agreed to the proposed language, without debate, and this language was incorporated into the Constitution.


The clause actually confers two distinct powers: the power to secure for limited times to authors the exclusive right to their writings is the basis for U.S. copyright law, and the power to secure for limited times to inventors the exclusive rights to their discoveries is the basis for U.S. patent law. Because the clause contains no language under which Congress may protect trademarks, those are instead protected under the Commerce Clause. Some terms in the clause are used in archaic meanings, potentially confusing modern readers. For example, "useful Arts" does not refer to artistic endeavors, but rather to the work of artisans, people skilled in a manufacturing craft; "Science" is not limited to fields of modern scientific inquiry, but to all knowledge, including philosophy and literature.
The courts have refined the scope of what useful arts can be protected by 'premiums'. In Fonar v. GE the court said:
As a general rule, where software constitutes part of a best mode of carrying out an invention, description of such a best mode is satisfied by a disclosure of the functions of the software. This is because, normally, writing code for such software is within the skill of the art, not requiring undue experimentation, once its functions have been disclosed. It is well established that what is within the skill of the art need not be disclosed to satisfy the best mode requirement as long as that mode is described.
The courts make it quite clear that a patentable invention requires inventive skill and experimentation way beyond the normal skill of the art employed to implement the invention.

Madison's proposal was to promote the progress of science and useful arts by proper premiums and provision. They would be applied to useful inventions.

In a free market, the correct price for the transfer of patent protection is whatever the parties agree. That is the market value and not the value of the usefulness and innovation in the invention. It is that intrinsic value that the Constitution protects in order to encourage more of the same endeavour.

The courts have a number of effective ways of evaluating the free market price that should apply between any two parties in a patent dispute. That is appropriate for the evaluation of commercial damage. The courts have not, to my knowledge, attempted to evaluate the intrinsic cash value of a patented invention.

In the Apple and Microsoft cases, the court are asked to evaluate the universal FRAND value of patents. The only basis for evaluating the value of a patented invention in the USA is the law and the Constitution. The law says nothing about such an evaluation. The Constitution says that the premium is that which encourages the progress of useful inventions.

Ian Al
Software Patents: It's the disclosed functions in the patent, stupid!

[ Reply to This | Parent | # ]

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