The Intangible Investor: Are ‘Patent Hoarders’ a Detriment to Humanity?

Sharing information about an invention is not an option. With patents, disclosure is a requirement which benefits the inventor, other inventors and society. When and how an invention is shared makes a huge difference. Disclosing information and sharing the right to practice it are not the same.

The Patent Bay, a new patent platform from a Swedish company that believes some patent owners are hoarders, is looking to change how patents are shared and used.

A patent is meant to disclose an invention in exchange for a limited period of government granted exclusivity. To encourage sharing, a U.S. patent application must be published for public access 18 months after it is filed, whether or not it has been granted. Most patent filers are not in love with this requirement, which may allow others to know what is in their pipeline. Sharing of this nature allows others to learn and possibly even surpass an invention even before it is issued. For the filer, in theory at least, it permits discussing its invention with less fear of theft.

The Swedish engineering company, SKF, a leader in ball bearings and automotive parts doing business in 135 countries, said  in a recent paid editorial that pooling knowledge has changed the world. “Now, a new patent-sharing platform aims to stoke industrial innovation — starting with open access to the formula for a new steel alloy that will enable cleaner aircraft engines.”

SKF The Patent Bay

In “From Barriers to Bridges,” a New York Times advertorial purchased by SKF, the company asks up front, “Can Patents be a Tool for Progress?”

I never knew they were not.

The article ran with a disclaimer that the Times editorial staff had nothing to do with it. The content was paid for by SKF and created in collaboration with T Brand, the content studio of New York Times Advertising.

“The world of industry has long been challenged by how to strike a fair balance between rewarding and recognizing a stroke of genius,” writes SKF, “or encouraging investment and efforts to innovate, versus restricting or hoarding intellectual property to the detriment of humanity as a whole.”

Tools or Weapons?

Businesses, large and small, that rely on patents are, for the most part, uninterested in hoarding or impeding humanity. They can, however, be painted to look that way. Many large well-capitalized companies choose to patent abundantly with a defensive strategy in mind. Those who choose to believe the arsenal-building scenario is universal and restrictive, possibly free-riders themselves, think it is in their best interest and others’ to have unrestricted freedom to operate. No doubt inventing around some patents can be a challenge. With the right licensing agreements, however, those challenges can often be surmounted.

Tesla and other companies have made a public spectacle of making their patents available, in part to establish standards they can build on. Tesla’s 2014 “patent giveaway” pledges not to initiate lawsuits against those using technology in good faith, excluding non-EV applications, companies that sue Tesla, and “knock-off” products that mimic design/appearance. “It is a defensive patent pledge,” informs ChatGPT, “not a total abandonment of IP rights, and does not include trademarks or trade secrets.”

The suggestion that patents are anti-progress is a dangerous myth that continues to be perpetuated by those who are ill-informed or believe sharing inventions for free is a more expedient strategy than paying for a license. Despite the billboards in Geneva and Washington, DC, patents do not kill, but those who undermine them may. Certainly, there are abuses in patent systems. Open innovation can be a tremendous help in setting standards, delivering useful products to market more efficiently, and making technology developments accessible to those who wish to build on them.

More Bridges Than Barriers

That does not mean that patents are impeding innovation and should be donated by those who truly care about innovation. While to some it may not at first appear so, patent exclusivity generates more bridges than barriers.

Some owners may wish their patents to be part of the public domain or make them available license-free; others need the investment capital or licensing revenue that patent exclusivity can help generate. Invention disclosure for all, to see, including competitors, = takes place regardless of when or if the patent issues.

Anyone interested in innovation or who believes in the profound importance of IP rights should read SKF’s paid editorial. By running the article in a respected daily, the company wants to be heard among the public and shareholders—those who might be swayed by sketchy logic about “bad” patents and disreputable owners.

SKF holds a total of 16,849 patents globally, with 7,678 active patents and 8,769 granted patents, according to Insights; Gate’s report from GreyB (this summary worth reading). These patents are spread across 6,389 unique patent families, indicating a strong focus on innovation in bearing and seal technology.

The company has significantly increased its research and development investment over the last decade, with R&D spending rising to roughly 3% of sales.

Timing is Everything

It appears that SKF has made one patent available through The Patent Bay, its new program for sharing its “Steel Alloy, Bearing Component, Bearing Process for the Manufacture of a Bearing Component.” The company is asking other businesses and individuals to contribute. One has. It is unclear why companies who wish to make their patents accessible to others royalty free and without fear of fear of encumbrances would not contribute to LOT Network, with 5,700 members, or a similar group.

Sharing knowledge is a wonderful idea for many reasons. With technology, however, timing is everything. Knowledge about an invention is not the same as having free access to the exclusivity it affords. Open access to patented inventions benefits some businesses more than others. How and when invention rights are made available, and in which industries and nations, is critical. So are trade secrets that enable inventions and processes and make them more expedient. Those can never be shared.

Rather than broadly asking owners to donate the hard-earned period of exclusivity afforded them for the greater good, and denigrating patent owners as hoarders and threats to humanity, let’s find constructive ways to share invention rights that do not diminish a business’ value or return on R&D, and that will not weaken its ability to compete.