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Is The US Navy Using Patents To Shake Down Companies?
Date : 01 16 2008 Category : Business
Techdirt
The latest example of how problematic our patent system has become, involves a series of patent infringement lawsuits against a bunch of banks based on a patent that is the property of the US Navy. It turns out that the Navy licensed the patent out to a small company in exchange for 30% of any profits from any patent licensing or litigation. It certainly looks like the Navy is encouraging questionable patent lawsuits. The Navy gets a patent for security authentication, using taxpayer money, and then hands it off to a small company to sue a bunch of banks and generate more revenue for itself. That doesn't seem right. It certainly doesn't help promote the progress of science or the useful arts. The story gets even more ridiculous when you compare it to a story we had a few years ago where an unnamed government agency (possibly the Navy) used a "states secret" claim to avoid having to license a patent. So, basically, the government can use whatever patents it wants without licensing them, but when it comes to its own tax-payer-funded patents, it hands them off to companies to sue others on its behalf. I'm sure that's exactly what Thomas Jefferson pictured when he worked out the details of our original patent system.
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