patents dot bust

Jason Schultz (EFF) has a new article in Salon.com [subscription or ad] about the problems of patents (mostly software or business method, I’ll note) being sold with dot-bust companies. In a nutshell, patents lock up ideas rather closely; when patent-holding companies go bust, those patents are placed in the hopper with all the other “property”, disseminated to buyers, creditors, etc., who may not have the know-how, wherewithal, or interest in using those patents. But nobody else can use the knowledge locked up in those patents, either. In a worst-case scenario, the new “owners” of the patents use them as part of a hold-up scenario.

… My soapbox: If we returned to the good old days, before the advent of automatic-assignment clauses in all employee contracts, then inventors would own the fruits of their own intellect, and companies would have non-exclusive licenses to use those patents. The fruit of an inventor’s genius would not be locked away from all possible public access and use solely because the inventor’s employer had financial problems.

Catherine Fisk (with Chicago-Kent College of Law) has done great work detailing the 20th century trends in taking IP away from authors & inventors, and assigning it to their employers. Removing the ‘Fuel of Interest’ from the ‘Fire of Genius’: Law and the Employee-Inventor, 1830-1930, 65 U. Chi. L. Rev. 4 (1998) is one of several related papers she’s written on the subject.