Patent Law

Shameless

By Gary Odom and Jordan Kuhn

Former Intel honcho Andy Grove, now 72, but still sucking corporate teat, had a very public senior moment over patents: "Patents themselves have become products. They're instruments of investment traded on a separate market, often by speculators motivated by the highest financial return on their investment." "You should not grant a monopoly to people who don't produce."

Mr. Grove, having received a lifetime achievement award at the 37th Annual National Inventors Hall of Fame ceremony, thought it a good time to kick inventors in the teeth.

Mr. Grove reminisced:

The most important invention of our industry, the invention of the transistor, was licensed by AT&T for $25,000. This allowed the transistor industry to develop and become a flourishing manufacturing industry in the United States.

By the time the integrated circuit arrived, the industry largely operated by cross licensing between companies so it really didn't matter, if the (Robert) Noyce patent or (Jack) Kilby patent prevailed--the result was the two companies could go on do their work.

The problem with intellectual property, Mr. Grove laments, is that it's, well, intellectual property.

Struggling to grasp concepts, Mr. Grove also displayed woeful ignorance of financial dynamics:

The patent product brings financial derivatives to mind. Derivatives have a complex relationship with an underlying asset. While there's nothing wrong with them in principle, their unfettered use has damaged the financial services industry and possibly the entire economy.

Unfettered use of derivatives wasn't the problem Andy. The problem was that the underlying assets weren't properly valued. The bean counters were in over their heads. And the would-be regulators, the government, who never considered stepping in until the shit was all over the fan, has had all the sense to throw untold trillions to bankrupt car makers and banks, instead of reviving the economy by making sure people could stay in their homes and maintain basic human dignity.

It's as if AT&T were so stupid to license patented transistor technology for only $25,000 when it was clearly worth a lot more.

Grove drove his point home down a garbled gravel road:

Patents have become derivatives of the invention and have a life of their own.

Do these patent instruments put us on a similar road? I fear our patent system increasingly serves those who invest in the patent products.

Intel has a long and colorful history of repeated antitrust actions and attempting to crush its competitors with patents. Intel maintains its market share and premium priced products only by virtue of its patents. Old hardball player Andy Grove is a garden-variety shameless American corporate hypocrite. That's his lifetime achievement.

Sources: Bloomberg.com; Wall Street Journal; cnet

Any intelligent person has to question the credibility of the mainstream press, that across-the-board reports this tripe uncritically.

Full post as published by The Patent Prospector on May 04, 2009 (boomark / email).