Andy Grove: Patents Are Like Mortgage Backed Securities

In one of my previous posts, I had talked about how patents (particularly software patents) are another bubble ready to burst. I also talked about how global patent trolls are now coming to India. Now, Techdirt has an article that quotes Andy Grove, former chairman of Intel and author of the book, Only the paranoid survive, comparing how patents have become like the mortgage-backed securities that caused the current financial meltdown.

The true value of an invention is its usefulness to the public. 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....

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.

Do these patent instruments put us on a similar road? I fear our patent system increasingly serves those who invest in the patent products... It may be time to use Jefferson's principle as a test and ask if we meet it.

When Andy Grove becomes paranoid about something, you and I better watch out!

Global Patent troll comes to India

One news item that set the alarm bells clanging in my head was the Economic Times report that Intellectual Ventures has signed up an agreement to agreement to buy patents from the Indian Institute of Science, Bangalore and plans to tie up with IIT Madras and other such institutes. I don't know the nature of these agreements, but if IISc and others are entering relinquishing significant control over these patents, this would amount to selling off the crown jewels. Neo-colonialism is the first word that comes to my mind after reading this report.

Extracts from the report:

"The company owns over 20,000 patents world-wide related to everything from lasers to computer chips and is now eyeing the 15,000 patents filed every year by various research
institutes in India."

"The fund is controversial in the US as it’s seen as monopolising inventions and using its clout to sign expensive patent-licencing agreements."

We will have to keep a close watch on this company.

Colonizing Yoga

CNN-IBN reports that "According to the US Patent Office, 150 yoga-related copyrights, 134 patents on yoga accessories and 2315 yoga trademarks have been granted." I remeber reading that the US Patent Office is supposed to train the Indian Patent Office on how to grant patents. Makes me feel like someone awaiting a consignment of toxic waste.