Something’s Got to Give

This month, Inventors Digest features interviews with two heavyweights in American enterprise: Priceline inventor and chair of Walker Digital, Jay Walker; and Mark Cuban, founder of Broadcast.com, owner of the Dallas Mavericks and a regular on the popular TV series Shark Tank. Both men are billionaires who believe the patent system is flawed, but for different reasons. Both want to “fix” the patent system—with diametrically opposing methods.

Walker is a named inventor on more than 650 patents and, as such, is the world’s 11th-most patented living inventor. The 2015 Intellectual Property Owners Education Foundation’s Inventor of the Year is a firm believer in the value of a patent as a property right.

Walker says that without patents he could never have launched Priceline, a now-$60 billion business with thousands of employees, nor could he have started several other businesses. One of the strongest points Walker makes is that he could not have devoted the time and resources to research and develop businesses and systems that have benefited the economy—both at home and globally—without patent protection.

The patent system in this country, for better or for worse, is undergoing fundamental changes. Even 20 years ago, patents were valued and respected, says Walker. If a small inventor were issued a patent, he had confidence his idea would be protected, and if necessary, enforced through the courts.

Knowledge sharing was an integral part of the patent process, says Walker. Patent holders claimed their inventions for a certain period of time, during which the information was shared, and more often than not, improved upon. One innovation often led to an even greater idea. Just ask Thomas Edison. Today, the random interpretation of patent laws by the courts combined with the exorbitant fees necessary to defend a patent, Walker says, are stifling the innovative and entrepreneurial spirit that made our country great.

Cuban, on the other hand, would just as soon rid the country of its patent system altogether. In 2012, he went so far as to donate $250,000 to the Electronic Frontier Foundation to establish the Mark Cuban Chair to Eliminate Stupid Patents. “The current state of patents and patent litigation in this country is shameful. …,” Cuban said at the time. “Silly patent lawsuits force prices to go up while competition and innovation suffer. That’s bad for consumers and bad for business. It’s time to fix our broken system.”

Rather than a property right, Cuban believes patents should be the catalysts for business opportunities and used as such within a defined period of time. “A patent by itself is worthless,” he says. “… Punchless patents, those with no revenue sources, create huge problems for the system. They become golden tickets for trolls.” Cuban has invested in 150 companies in which, he says, having or not having a patent did not affect his decision.

Cuban is not a proponent of software patents, either, because “not much, if anything, is completely original in software,” he says. If issued at all, software patents should extend for a period of no more than five years.

On the other hand, people like Inventors Digest contributor and patent attorney Gene Quinn, and Jay Walker, who has millions of dollars invested in patent software and related businesses, completely disagree with Cuban. “Unfortunately, if we dismember intellectual property, and if we tell people that software, which is the next greatest frontier in the world’s value creation, can’t be patentable, that’s a disaster for the United States,” says Walker.

Despite opposing opinions on many issues, Walker and Cuban agree one thing: Both believe the courts and money are bogging down innovation. “The IP and patent game has become a sport of kings now, and America and the world are losers,” says Walker.

“With few exceptions, the current system doesn’t protect anyone,” says Cuban. If you get major patent reform, hopefully the big companies have less incentive to try to bully anyone.”

And another opinion they share: Something’s got to give.