Friday, January 02, 2015

Jay Walker: "the licensing system in the United States is badly broken "

Rather than the oft-quoted refrain "the patent system in the U.S. is broken," Jay Walker (Priceline) told the Washington Post:

As an inventor, the vast majority of my patented inventions have not been commercialized, in large part because the licensing system in the United States is badly broken. It's almost non-functional in the United States if you're a small or mid-sized company or an independent inventor. It's just barely working for giant corporations.


I learned very quickly that nobody wanted to license my solutions unless I threatened to sue them — and in most cases, when I actually sued them — because the nature of the licensing system in the United States is such that companies do not want to license patents because they're not particularly clear what that patent covers or doesn't cover, and they're not particularly willing to find out whether that patent might or might not cover something they're already doing.


Everybody's busy talking about the problem with patents in America, but there is a way bigger problem when it comes to licensing and getting these inventions into the economy. We have spent trillions of dollars inventing things and 95 to 98 percent of all patents have yet to make their first dollar of licensing revenue, and it's not because 95 percent of patents aren't useful or valuable, it's simply because the licensing system is driven by the lawyers as opposed to driven by the business people.


[Businesses] grow by finding adjacencies, opportunities, inventors and solutions. They don't grow in a courtroom when you have to get into a fight about who should be licensing and who's infringing whom.

Of the solution proposed

Without having a licensing negotiation, you would agree, "I would make certain of my patents available for no-fault licensing." So the first thing we're going to do is get rid of the idea that we have to figure out if you're infringing or not infringing, and we're gonna have to get rid of this thought that it takes a lawsuit in order to make a license.

One notes current thinking is along the lines, "how much will it cost to show noninfringement/invalidity" vs. "how much is the license"? Supposedly, even Henry Ford made this calculation as to the Selden patent, and concluded he would rather fight then license. By the time of the appellate decision (finding noninfringement), Selden's patent had less than two years of life. Other makers, such as Winton, reached the opposite conclusion, and licensed.

Of a reference to "US patent system is broken" in January 2015, see the post
Broken US patent system is stifling tech market , which refers to a recent post in Forbes, which post has previously been criticized by IPBiz.


**In passing, the Court of Appeals for the Federal Circuit issued some opinions, under seal, involving Walker Digital on 30 Dec. 2014. These include 2013-1520, 2014-1080 ; 2013-1521, 2014-1077 ; 2013-1522, 2014-1090
These cases were on appeal from D. Delaware (Judge Sue Robinson).


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