U.S patent

A patent ( /ˈpætənt/ or /ˈpeɪtənt/) is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention.

The procedure for granting patents, the requirements placed on the patentee, and the extent of the exclusive rights vary widely between countries according to national laws and international agreements. Typically, however, a patent application must include one or more claims defining the invention which must meet the relevant patentability requirements such as novelty and non-obviousness. The exclusive right granted to a patentee in most countries is the right to prevent others from making, using, selling, or distributing the patented invention without permission.^[1]

Under the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights, patents should be available in WTO member states for any invention, in all fields of technology,^[2] and the term of protection available should be a minimum of twenty years.^[3] In many countries, certain subject areas are excluded from patents, such as business methods and computer programs.

Definition[link]

The word patent originates from the Latin patere, which means "to lay open" (i.e., to make available for public inspection). More directly, it is a shortened version of the term letters patent, which was a royal decree granting exclusive rights to a person, predating the modern patent system. Similar grants included land patents, which were land grants by early state governments in the USA, and printing patents, a precursor of modern copyright.

In modern usage, the term patent usually refers to the right granted to anyone who invents any new, useful, and non-obvious process, machine, article of manufacture, or composition of matter. Some other types of intellectual property rights are also referred to as patents in some jurisdictions: industrial design rights are called design patents in the US, plant breeders' rights are sometimes called plant patents, and utility models and Gebrauchsmuster are sometimes called petty patents or innovation patents. The additional qualification utility patent is sometimes used (primarily in the US) to distinguish the primary meaning from these other types of patents.

Examples of particular species of patents for inventions include biological patents, business method patents, chemical patents and software patents.

History[link]

U.S. patents granted, 1790–2010.^[4]

Patents in force in 2000

In 500 BC, in the Greek city of Sybaris (located in what is now southern Italy), "encouragement was held out to all who should discover any new refinement in luxury, the profits arising from which were secured to the inventor by patent for the space of a year."^[5]

The Florentine architect Filippo Brunelleschi received a three-year patent for a barge with hoisting gear, that carried marble along the Arno River in 1421.^[6] In 1449, King Henry VI granted the first English patent with a license of 20 years to John of Utynam for introducing the making of colored glass to England.^[7]

Patents in the modern sense originated in 1474, when the Republic of Venice enacted a decree that new and inventive devices, once put into practice, had to be communicated to the Republic to obtain the right to prevent others from using them.^[8]

England followed with the Statute of Monopolies in 1624 under King James I, which declared that patents could only be granted for "projects of new invention." During the reign of Queen Anne (1702–14), the lawyers of the English Court developed the requirement that a written description of the invention must be submitted.^[9] The patent systems in many other countries, including Australia, are based on British law and can be traced back to the Statute of Monopolies.^[10]

In 1641, Samuel Winslow was granted the first patent in North America by the Massachusetts General Court for a new process for making salt.^[11]

In France, patents were granted by the monarchy and by other institutions like the "Maison du Roi".^[12] The Academy examined novelty.^[13] Examinations were generally done in secret with no requirement to publish a description of the invention. Actual use of the invention was deemed adequate disclosure to the public.^[14] The modern French patent system was created during the Revolution in 1791. Patents were granted without examination since inventor's right was considered as a natural one ^[15]

In the United States, during the so-called colonial period and Articles of Confederation years (1778–89), several states adopted patent systems of their own. The first Congress adopted a Patent Act, in 1790, and the first patent was issued under this Act on July 31, 1790 (to Samuel Hopkins of Vermont for a potash production technique).

Law[link]

Effects[link]

A patent is not a right to practice or use the invention.^[16] Rather, a patent provides the right to exclude others^[16] from making, using, selling, offering for sale, or importing the patented invention for the term of the patent, which is usually 20 years from the filing date^[3] subject to the payment of maintenance fees. A patent is, in effect, a limited property right that the government offers to inventors in exchange for their agreement to share the details of their inventions with the public. Like any other property right, it may be sold, licensed, mortgaged, assigned or transferred, given away, or simply abandoned.

The rights conveyed by a patent vary country-by-country. For example, in the United States, a patent covers research, except "purely philosophical" inquiry. A U.S. patent is infringed by any "making" of the invention, even a making that goes toward development of a new invention—which may itself become subject of a patent.

A patent being an exclusionary right does not, however, necessarily give the owner of the patent the right to exploit the patent. For example, many inventions are improvements of prior inventions that may still be covered by someone else's patent.^[16] If an inventor takes an existing, patented mouse trap design, adds a new feature to make an improved mouse trap, and obtains a patent on the improvement, he or she can only legally build his or her improved mouse trap with permission from the patent holder of the original mouse trap, assuming the original patent is still in force. On the other hand, the owner of the improved mouse trap patent can exclude the original patent owner from using the improvement.

Some countries have "working provisions" that require the invention be exploited in the jurisdiction it covers. Consequences of not working an invention vary from one country to another, ranging from revocation of the patent rights to the awarding of a compulsory license awarded by the courts to a party wishing to exploit a patented invention. The patentee has the opportunity to challenge the revocation or license, but is usually required to provide evidence that the reasonable requirements of the public have been met by the working of invention.

Enforcement[link]

Patents can generally only be enforced through civil lawsuits (for example, for a U.S. patent, by an action for patent infringement in a United States federal court), although some countries (such as France and Austria) have criminal penalties for wanton infringement.^[17] Typically, the patent owner will seek monetary compensation for past infringement, and will seek an injunction prohibiting the defendant from engaging in future acts of infringement. To prove infringement, the patent owner must establish that the accused infringer practices all the requirements of at least one of the claims of the patent. (In many jurisdictions the scope of the patent may not be limited to what is literally stated in the claims, for example due to the "doctrine of equivalents").

An important limitation on the ability of a patent owner to successfully assert the patent in civil litigation is the accused infringer's right to challenge the validity of that patent. Civil courts hearing patent cases can and often do declare patents not valid. A patent can be found invalid on grounds that are set out in the relevant patent legislation that vary between countries. Often, the grounds are a subset of requirements for patentability in the relevant country. Although an infringer is generally free to rely on any available ground of invalidity (such as a prior publication, for example), some countries have sanctions to prevent the same validity questions being relitigated. An example is the UK Certificate of contested validity.

Patent licensing agreements are contracts in which the patent owner (the licensor) agrees to forgo their right to sue the licensee for infringement of the licensor's patent rights, usually in return for a royalty or other compensation. It is common for companies engaged in complex technical fields to enter into dozens of license agreements associated with the production of a single product. Moreover, it is equally common for competitors in such fields to license patents to each other under cross-licensing agreements in order to share the benefits of using each other's patented inventions.

Therefore, patents may be enforced through litigation, and a common defense is an invalidity challenge. Patents may also be subject to licensing agreements. The vast majority of patents are however never litigated or even licensed.^[18]

Ownership[link]

In most countries, both natural persons and corporate entities may apply for a patent. In the United States, however, only the inventor(s) may apply for a patent although it may be assigned to a corporate entity subsequently^[19] and inventors may be required to assign inventions to their employers under a contract of employment. In most European countries, ownership of an invention may pass from the inventor to their employer by rule of law if the invention was made in the course of the inventor's normal or specifically assigned employment duties, where an invention might reasonably be expected to result from carrying out those duties, or if the inventor had a special obligation to further the interests of the employer's company.^[20]

The plate of the Martin ejector seat of a military aircraft, stating that the design is covered by multiple patents in Britain, South Africa, Canada and "others". Dübendorf Museum of Military Aviation.

The inventors, their successors or their assignees become the proprietors of the patent when and if it is granted. If a patent is granted to more than one proprietor, the laws of the country in question and any agreement between the proprietors may affect the extent to which each proprietor can exploit the patent. For example, in some countries, each proprietor may freely license or assign their rights in the patent to another person while the law in other countries prohibits such actions without the permission of the other proprietor(s).

The ability to assign ownership rights increases the liquidity of a patent as property. Inventors can obtain patents and then sell them to third parties.^[21] The third parties then own the patents and have the same rights to prevent others from exploiting the claimed inventions, as if they had originally made the inventions themselves.

Governing laws[link]

The grant and enforcement of patents are governed by national laws, and also by international treaties, where those treaties have been given effect in national laws. Patents are, therefore, territorial in nature.

Commonly, a nation forms a patent office with responsibility for operating that nation's patent system, within the relevant patent laws. The patent office generally has responsibility for the grant of patents, with infringement being the remit of national courts.

There is a trend towards global harmonization of patent laws, with the World Trade Organization (WTO) being particularly active in this area. The TRIPs Agreement has been largely successful in providing a forum for nations to agree on an aligned set of patent laws. Conformity with the TRIPs agreement is a requirement of admission to the WTO and so compliance is seen by many nations as important. This has also led to many developing nations, which may historically have developed different laws to aid their development, enforcing patents laws in line with global practice.

A key international convention relating to patents is the Paris Convention for the Protection of Industrial Property, initially signed in 1883. The Paris Convention sets out a range of basic rules relating to patents, and although the convention does not have direct legal effect in all national jurisdictions, the principles of the convention are incorporated into all notable current patent systems. The most significant aspect of the convention is the provision of the right to claim priority: filing an application in any one member state of the Paris Convention preserves the right for one year to file in any other member state, and receive the benefit of the original filing date. Because the right to a patent is intensely date-driven, this right is fundamental to modern patent usage.^{[citation needed]}

The authority for patent statutes in different countries varies. In the UK, substantive patent law is contained in the Patents Act 1977 as amended.^[22] In the United States, the Constitution empowers Congress to make laws to "promote the Progress of Science and useful Arts..." The laws Congress passed are codified in Title 35 of the United States Code and created the United States Patent and Trademark Office.

In addition, there are international treaty procedures, such as the procedures under the European Patent Convention (EPC) [administered by the European Patent Organisation (EPOrg)], and the Patent Cooperation Treaty (PCT) (administered by WIPO and covering more than 140 countries), that centralize some portion of the filing and examination procedure. Similar arrangements exist among the member states of ARIPO and OAPI, the analogous treaties among African countries, and the nine CIS member states that have formed the Eurasian Patent Organization.

Application and prosecution[link]

A patent is requested by filing a written application at the relevant patent office. The person or company filing the application is referred to as "the applicant". The applicant may be the inventor or its assignee. The application contains a description of how to make and use the invention that must provide sufficient detail for a person skilled in the art (i.e., the relevant area of technology) to make and use the invention. In some countries there are requirements for providing specific information such as the usefulness of the invention, the best mode of performing the invention known to the inventor, or the technical problem or problems solved by the invention. Drawings illustrating the invention may also be provided.

The application also includes one or more claims, although it is not always a requirement to submit these when first filing the application. The claims set out what the applicant is seeking to protect in that they define what the patent owner has a right to exclude others from making, using, or selling, as the case may be. In other words, the claims define what a patent covers or the "scope of protection".

After filing, an application is often referred to as "patent pending". While this term does not confer legal protection, and a patent cannot be enforced until granted, it serves to provide warning to potential infringers that if the patent is issued, they may be liable for damages.^[23][24][25]

For a patent to be granted, that is to take legal effect in a particular country, the patent application must meet the patentability requirements of that country. Most patent offices examine the application for compliance with these requirements. If the application does not comply, objections are communicated to the applicant or their patent agent or attorney and one or more opportunities to respond to the objections to bring the application into compliance are usually provided.

Once granted the patent is subject in most countries to renewal fees to keep the patent in force. These fees are generally payable on a yearly basis, although the US is a notable exception. Some countries or regional patent offices (e.g. the European Patent Office) also require annual renewal fees to be paid for a patent application before it is granted.

Costs[link]

The costs of preparing and filing a patent application, prosecuting it until grant and maintaining the patent vary from one jurisdiction to another, and may also be dependent upon the type and complexity of the invention, and on the type of patent.

The European Patent Office estimated in 2005 that the average cost of obtaining a European patent (via a Euro-direct application, i.e. not based on a PCT application) and maintaining the patent for a 10 year term was around 32,000 Euro.^[26] Since the London Agreement entered into force on May 1, 2008, this estimation is however no longer up-to-date, since fewer translations are required.

In the United States, in 2000 cost of obtaining patent (patent prosecution) was estimated from $10,000 to $30,000 per patent.^[18] When patent litigation is involved (which in year 1999 happened in about 1,600 cases compared to 153,000 patents issued in the same year ^[18]), costs increase significantly: while 95% of patent litigation cases are settled out of court,^[27] but when the case reaches the court, direct legal costs of patent litigation are on average in the order of a million dollars per case, not including associated business costs.^[28]

Alternatives to applying for a patent[link]

A defensive publication is the act of publishing a detailed description of a new invention without patenting it, so as to establish prior art and public identification as the creator/originator of an invention, although a defensive publication can also be anonymous. A defensive publication prevents others from later being able to patent the invention.

A trade secret is the act of not disclosing the methods by which a complex invention works or how a chemical is formulated. Trade secrets are protected by nondisclosure agreements and employment law that prevents reverse engineering and information leaks such as breaches of confidentiality and corporate espionage. Compared to patents, the advantages of trade secrets are that a trade secret is not limited in time (it "continues indefinitely as long as the secret is not revealed to the public",^[29] whereas a patent is only in force for a specified time, after which others may freely copy the invention), a trade secret does not imply any registration costs,^[29] has an immediate effect,^[29] does not require compliance with any formalities,^[29] and does not imply any disclosure of the invention to the public.^[29] The disadvantages of trade secrets include that "others may be able to legally discover the secret and be thereafter entitled to use it",^[30] "others may obtain patent protection for legally discovered secrets",^[30] and a trade secret is more difficult to enforce than a patent.^[30]

Economics[link]

Rationale[link]

There are four primary incentives embodied in the patent system: to invent in the first place; to disclose the invention once made; to invest the sums necessary to experiment, produce and market the invention; and to design around and improve upon earlier patents.^[31]

1. Patents provide incentives for economically efficient research and development (R&D). A study conducted annually by the IPTS shows that the 2,000 largest global companies invested more than 430 billion euros in 2008^[32] in their R&D departments. If the investments can be considered as inputs of R&D, real products and patents are the outputs. Based on these groups, a project named Corporate Invention Board, had measured and analyzed the patent portfolios to produce an original picture^[33] of their technological profiles. Supporters of patents argue that without patent protection, R&D spending would be significantly less or eliminated altogether, limiting the possibility of technological advances or breakthroughs.^{[citation needed]}Corporations would be much more conservative about the R&D investments they made, as third parties would be free to exploit any developments. This second justification is closely related to the basic ideas underlying traditional property rights.^{[31][specify]}
2. In accordance with the original definition of the term "patent," patents facilitate and encourage disclosure of innovations into the public domain for the common good. If inventors did not have the legal protection of patents, in many cases, they would prefer or tend to keep their inventions secret^{[citation needed]}. Awarding patents generally makes the details of new technology publicly available, for exploitation by anyone after the patent expires, or for further improvement by other inventors. Furthermore, when a patent's term has expired, the public record ensures that the patentee's idea is not lost to humanity.^{[31][specify]}
3. In many industries (especially those with high fixed costs and either low marginal costs or low reverse engineering costs — computer processors, and pharmaceuticals for example), once an invention exists, the cost of commercialization (testing, tooling up a factory, developing a market, etc.) is far more than the initial conception cost. (For example, the internal "rule of thumb" at several computer companies in the 1980s was that post-R&D costs were 7-to-1). Unless there is some way to prevent copies from competing at the marginal cost of production, companies will not make that productization investment.^{[31][not in citation given]}

One effect of modern patent usage is that a small-time inventor can use the exclusive right status to become a licensor. This allows the inventor to accumulate capital from licensing the invention and may allow innovation to occur because he or she may choose not to manage a manufacturing buildup for the invention. Thus the inventor's time and energy can be spent on pure innovation, allowing others to concentrate on manufacturability.^[34]

Another effect of modern patent usage is to cause competitors to design around (or to "invent around" according to R S Praveen Raj)^[35] each other's patents. This may promote healthy competition among manufacturers, resulting in gradual improvements of the technology base.^[36] This may help augment national economies and confer better living standards to the citizens. The 1970 Indian Patent Act allowed the Indian pharmaceutical industry to develop local technological capabilities in this industry. This act transformed India from a bulk importer of pharmaceutical drugs to a leading exporter. The rapid evolution of Indian pharmaceutical industry since the mid-1970s highlights the fact that the design of the patent act was instrumental in building local capabilities even in a poor country like India. ^[37]

Criticism[link]

As state-granted monopolies, patents have been criticized as inconsistent with free trade. On that basis, in 1869 the Netherlands abolished patents, and did not reintroduce them until 1912.^[38]

Patents have also been criticized for being granted on already-known inventions, with many complaining in the United States that the USPTO fails "to do a serious job of examining patents, thus allowing bad patents to slip through the system."^[18] On the other hand, it has been argued that because of low number of patents going into litigation, increasing quality of patents at patent prosecution stage will increase overall legal costs associated with patents, and that current USPTO policy is a reasonable compromise between full trial on examination stage on one hand, and pure registration without examination, on the other hand.^[18]

Patent trolls are one of common criticisms against patents,^[39] though some commentators suggest that patent trolls are not bad for the patent system at all but instead realign market participant incentives, make patents more liquid, and clear the patent market.^[40]

Pharmaceutical patents prevent generic alternatives from entering the market until the patents expire, and thus maintain high prices for medication.^[41] This can have significant effects in the developing world, as those who are most in need of basic essential medicines are unable to afford such high priced pharmaceuticals.^[42] Critics also question the rationale that exclusive patent rights and the resulting high prices are required for pharmaceutical companies to recoup the large investments needed for research and development.^[41] One study concluded that marketing expenditures for new drugs often doubled the amount that was allocated for research and development.^[43] Other articles shed light on the problems of today's medical research. It sets wrong priorities in research and pricing, and pushes the state-run healthcare systems even of rich nations to their limits.^[44]

In one response to these criticisms, one review concluded that less than 5 percent of medicines on the World Health Organization's list of essential drugs are under patent.^[45] Also, the pharmaceutical industry has contributed US$2 billion for healthcare in developing countries, providing HIV/AIDS drugs at lower cost or even free of charge in certain countries, and has used differential pricing and parallel imports to provide medication to the poor.^[45] Other groups are investigating how social inclusion and equitable distribution of research and development findings can be obtained within the existing intellectual property framework, although these efforts have received less exposure.^[45]

Some public campaigns have expressed a concern for "preventing the over-reach" of IP protection including patent protection, and "to retain a public balance in property rights" of this kind.^[46]

According to James Bessen, the costs of patent litigation exceed their investment value in all industries except chemistry and pharmaceuticals. For example, in the software industry, litigation costs are twice the investment value.^[47]

Proposed alternatives to the patent system[link]

According to James Bessen, elimination of the patent system would increase the incentives for innovation in all industries except Chemistry and pharmaceuticals by eliminating startup litigation costs.^[48]

Alternatives have been discussed to address the issue of financial incentivization to replace patents. Mostly, they are related to some form of direct or indirect government funding. One example is the idea of providing "prize money" (from a "prize fund" sponsored by the government) as a substitute for the lost profits associated with abstaining from the monopoly given by a patent.^[49] Another approach is to remove the issue of financing development from the private sphere all together, and to cover the costs with direct government funding.^[50]

Trade secrets are an existing alternative to the patent system. Given their popularity, it has been proposed^{[by whom?]} to strengthen nondisclosure and employment law pertaining to trade secrets.

See also[link]

Wikiquote has a collection of quotations related to: Patent

• Glossary of patent legal concepts
• List of patent related topics
• List of people associated with patent law
• Category:Patent law

References[link]

External links[link]

Wikimedia Commons has media related to: Patents

Look up patent in Wiktionary, the free dictionary.

• Directory of Intellectual Property Offices, maintained by World Intellectual Property Organization (WIPO)
• Useful links, maintained by the European Patent Office
• OECD Patent statistics

Drew Curtis (born February 7, 1973) is the founder and an administrator of Fark.com, an Internet news aggregator. He is also the author of It's Not News, It's FARK: How Mass Media Tries to Pass off Crap as News in May 2007. He is a guest on WOCM's morning show The Rude Awakening Show every Tuesday.

Fark[link]

Fark began in 1993 when Curtis was a student in England, sending links back to his friends.^[1] Curtis registered Fark.com in 1997 but did not begin posting links on the site until 1999.^[2][3] The first story on Fark was a news article about a fighter pilot who crashed while attempting to moon another fighter pilot.^[4] Since then, the site has become one of the most popular link dump sites on the internet^[2] with nearly 50 million pageviews a month.^[1] As of 2006 the site was getting over 2,000 link submissions every day.^[5] It was the first indie blog to earn one million dollars a year in profit^[1] and its classifieds section alone generates as much as $40,000 per year.^[6]

Although Fark is a million-dollar business, Curtis takes a yearly salary of $60,000. The rest of the money goes to the site's legal 'war chest' and to pay other expenses.^[6] Under Curtis, Fark has purposely shied away from the Web 2.0 mantra of total user control.^[5] "I don't care what anyone says, the masses are morons. You can't count on them to pick good stuff. Just check out Network TV to see what the masses want for entertainment. There's certainly a place for that kind of thing but it's not on Fark."^[5] According to Drew, Web 3.0 will be "something called Good Editing."^[5] Speaking at a media conference in Washington, DC hosted by the Poynter Institute, Curtis stated, "The 'wisdom of the crowds' is the most ridiculous statement I've heard in my life. Crowds are dumb. It takes people to move crowds in the right direction, crowds by themselves just stand around and mutter."^[7]

In 2006, Curtis was featured on the cover of Business 2.0 magazine as the feature in a story about successful websites.^[1] Lexington Weekly named him one of their businessmen under 40 to watch.^[2]

On November 28, 2007, Curtis filed an application to trademark the phrase "not safe for work" a common phrase on Fark.com.^[8] His application was denied.

[edit] It's Not News, It's FARK

Curtis published his first book, It's Not News, It's FARK: How Mass Media Tries to Pass off Crap as News in May 2007.^[9] It soon became a bestseller. An in depth analysis of the state of modern media, It's Not News, It's Fark slams news organizations for running smaller versions of his not-real-news. In his review of the book, Farhad Manjoo of Salon.com said that "[Curtis] even seems to go after the audience -- his audience -- for indulging in [not-real-news] Curtis seems to want us to be repulsed by them instead."^[10]

Curtis's book peaked at #12 on Amazon.com's non-fiction bestseller list. Media critic Jack Shafer noted that despite the book's success, it surprisingly received "scant attention" from mainstream media outlets.^[11] The book was later released in paperback.^[12]

Personal life[link]

Drew Curtis graduated from Luther College in Decorah, Iowa in 1995.^[13] From 1996 to 2002, he owned and operated DCR.NET, an ISP based in Frankfort, Kentucky.^[14] He is currently enrolled in the Berkeley-Columbia Executive MBA program, a joint venture of New York’s Columbia University and the University of California at Berkeley.^[15] Curtis lives in the suburbs of Lexington, Kentucky with his wife, Heather, and children, Chance, Storm, and Sierra.^[6][16]

Presentations[link]

Drew Curtis makes several presentations and public appearances. He regularly appears on the Twitch and ZRock Morning Show on ZRock 103.3 FM every Thursday in Lexington, Kentucky, and makes periodic appearances on the podcast Free Talk Live.

Books[link]

• Curtis, Drew (June 2007). It's Not News, It's Fark: How Mass Media Tries to Pass Off Crap as News. New York City: Penguin Group (USA), Inc.. pp. 278. ISBN 978-1-59240-291-5. http://books.google.com/books?id=0Ak9Veq_CTgC&printsec=frontcover&source=gbs_navlinks_s#v=onepage&q=&f=false. 

References[link]

External links[link]

• Fark.com
• Interview with Drew Curtis on Bad Mouth

This biographical article needs additional citations for verification. Please help by adding reliable sources. Contentious material about living persons that is unsourced or poorly sourced must be removed immediately, especially if potentially libelous or harmful. (July 2009)

Alex Tabarrok speaking at TED in 2009.
Photograph by Bill Holsinger-Robinson.

Alexander Taghi Tabarrok (born 1966) is a Canadian-American economist and co-author, with Tyler Cowen, of the economics blog Marginal Revolution.

Both Cowen and Tabarrok are professors at Virginia's George Mason University and fellows with the school's Mercatus Center. In addition, Tabarrok is director of research for the Oakland, California based think tank the Independent Institute. He is the son of the late Mechanical Engineering professor, Dr. Behrooz (Bez) Tabarrok.

His doctoral studies were done at George Mason University where he received his Ph.D. in 1994.

He has done work on dominant assurance contracts, law and economics and health economics.

External links[link]

• Tabarrok's GMU home page
• Podcast featuring Tabarrok Tabarrok discusses medical malpractice on EconTalk.
• Tabarrok's talk at TED 2009

This biography of a Canadian economist is a stub. You can help Wikipedia by expanding it. v t e

Eric Schmidt
Eric Schmidt at the 37th G8 summit in 2011.
Born	(1955-04-27) April 27, 1955 (age 57) Washington, D.C., United States
Residence	Atherton, California, U.S.
Alma mater	Princeton University University of California, Berkeley
Occupation	Software engineer, businessman
Salary	$1.25 million in 2012[1]
Net worth	US$ 6.9 billion (2012)[2]
Title	Executive Chairman of Google
Website
Google.com - Eric Schmidt

Eric Emerson Schmidt (born April 27, 1955) is an American software engineer, businessman and the current executive chairman of Google.^[3] From 2001 to 2011, he served as the chief executive of Google.

Additionally, Schmidt was a former member on the board of directors for Apple Inc. and sat on the boards of trustees for both Carnegie Mellon University and Princeton University.^[4][5][6]

Along with Mike Lesk, Schmidt co-authored the lex analysis software program for the Unix computer operating system.

Biography[link]

Schmidt was born in Washington, D.C., and grew up in Blacksburg, Virginia, United States. After graduating from Yorktown High School,^[7] Schmidt attended Princeton University where he earned a B.S. in electrical engineering in 1976.^[8] At the University of California, Berkeley, he earned an MS in 1979 for designing and implementing a network linking the campus computer center, the CS and the EECS departments,^[9] and a PhD in 1982 in EECS with a dissertation about the problems of managing distributed software development and tools for solving these problems.^[10] He was joint author of lex (a lexical analyzer and an important tool for compiler construction). He taught at Stanford Graduate School of Business as a part time professor.^[11]

Schmidt and his wife Wendy lived in Atherton, California in 1999.^[12] In 2011, he was reported to be dating Lisa Shields, a communications executive for the Council on Foreign Relations, a New York-based foreign policy think tank.^[13].

He was on the list of ARTnews 200 top art collectors in 2008.^[14]

He is also a member of the Bilderberg Group and attended the Swiss 2011 Bilderberg conference in St. Moritz, Switzerland.^[15][16]

The Eric Schmidt Family Foundation[link]

The Eric Schmidt Family Foundation addresses issues of sustainability and the responsible use of natural resources. Wendy and Eric Schmidt, working with Heart Howerton, a San Francisco architectural firm that specializes in large-scale land use, have inaugurated several projects on the island of Nantucket that seek to sustain the unique character of the island, and to minimize the impact of seasonal visitation on the island's core community. Wendy Schmidt offered the prize purse of the Wendy Schmidt Oil Cleanup X CHALLENGE, a challenge award for efficient capturing of crude oil from seawater motivated by the Deepwater Horizon oil spill.^[17]

Career[link]

Early career[link]

Early in his career, Schmidt held a series of technical positions with IT companies, Byzromotti Design, including Bell Labs, Zilog and Xerox’s famed Palo Alto Research Cente (PARC).

From Sun to Google[link]

Schmidt joined Sun Microsystems in 1983 as its first software manager. He rose to become director of software engineering, vice president and general manager of the software products division, vice president of the general systems group, and president of Sun Technology Enterprises.^[18]

During his time at Sun he was the butt of two notable April Fool's Day pranks. In the first his office was taken apart and rebuilt on a platform in the middle of a pond complete with working phone. The next year a working Volkswagen Bug was taken apart and re-assembled in his office.

In April 1997, he became CEO and chairman of the board of Novell. Schmidt left Novell after the acquisition of Cambridge Technology Partners.

Google founders Larry Page and Sergey Brin interviewed Schmidt. Impressed by him,^[19] they recruited Schmidt to run their company in 2001 under the guidance of venture capitalists John Doerr and Michael Moritz.

Google[link]

Schmidt joined Google's board of directors as chairman in March 2001 and became the company's CEO in August 2001. At Google, Schmidt shared responsibility for Google's daily operations with founders Page and Brin. As indicated by page 29 of Google's 2004 S-1 Filing^[20] Schmidt, Page, and Brin ran Google as a triumvirate. Schmidt had legal responsibilities typically assigned to the CEO of a public company and focused on management of the vice presidents and the sales organization.

According to Google's website, Schmidt also focuses on "building the corporate infrastructure needed to maintain Google's rapid growth as a company and on ensuring that quality remains high while product development cycle times are kept to a minimum."^[21]

In 2007, PC World ranked Schmidt as the first on the list of the 50 most important people on the web, along with Google co-Founders Larry Page and Sergey Brin.^[22]

In 2009, Schmidt was considered one of the "TopGun CEOs" by Brendan Wood International, an advisory agency.^[23][24]

On January 20, 2011, Google announced that Schmidt would step down as CEO of Google, but continue as the executive chairman of the company, and act as an adviser to co-founders Page and Brin. Page replaced Schmidt as CEO on April 4, 2011. ^[25]

The 2011 book In the Plex: How Google Thinks, Works, and Shapes Our Lives by Steven Levy claims that in 2001, Schmidt requested that a political donation he made be removed from Google search results. The request was not fulfilled. Schmidt has denied this ever occurred.^[26]

Apple[link]

Schmidt was elected to Apple's board of directors on August 28, 2006.^[27] On August 3, 2009, it was announced that Schmidt would resign from the board of directors at Apple due to conflicts of interest amid the growing competition between Google and Apple.^[4]

President Barack Obama[link]

Schmidt was a campaign advisor and major donor to Barack Obama, and when he announced he was leaving that perch, he planned to remain at the forefront of Google’s government relations team. Obama has even considered him for Commerce Secretary.^[28] Schmidt was an informal advisor to the Obama presidential campaign and began campaigning the week of October 19, 2008, on behalf of the candidate.^[29] He had been mentioned as a possible candidate for the chief technology officer position which Obama created in his administration.^[30] After Obama won, Schmidt was a member of President Obama's transition advisory board. He proposed that the easiest way to solve all of the problems of the United States at once, at least in the domestic policy, is by a stimulus program that rewards renewable energy and, over time, attempts to replace fossil fuels with renewable energy.^[31] He has since become a new member of the President's Council of Advisors on Science and Technology PCAST.^[32]

New America Foundation[link]

The New America Foundation is a non-profit public policy institute and think tank, founded in 1999. Schmidt is the current chairman of the board of directors. He succeeded founding chairman James Fallows in 2008.^[33]

Innovation Endeavors[link]

Founded in 2010 by Google Chairman Eric Schmidt and Dror Berman, Innovation Endeavors is an early stage venture fund focused on advancing the world by providing high-impact entrepreneurs with the capital, coaching and network to build game-changing ventures. Innovation Endeavors has invested in more than 30 companies around the world in various industries. The firm is based in Palo Alto, USA. ^[34]

Compensation[link]

Upon being hired at Google, Eric Schmidt was paid a salary of $250,000, and an annual performance bonus. He was granted 14,331,703 shares of class B common stock at 30 cents per share, and 426,892 shares of Series C preferred stock at purchase price of $2.34.^[35]

Schmidt and the Google founders agreed to a base salary of $1 in 2004 (which continued through 2010), with other compensation of $557,465 in 2006,^[36] $508,763 in 2008 and $243,661 in 2009. He did not receive any additional stock, or options in 2009 or 2010.^[37][38] Most of his compensation was for "personal security" and charters of private aircraft.^[38] Schmidt is one of the few people who became billionaires (in United States dollars) based on stock options received as an employee in a corporation of which he was neither the founder nor a relative of the founder.^[39] In its 2011 'World's Billionaires' list, Forbes ranked Schmidt as the 136th richest person in the world, with an estimated wealth of $7 billion.^[2] Google gave him $100 million in 2011 as a parting gift.^[40]

Views[link]

During an interview which aired on December 3, 2009, on the CNBC documentary "Inside the Mind of Google", Schmidt was asked, "People are treating Google like their most trusted friend. Should they be?" His reply was: "I think judgment matters. If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place, but if you really need that kind of privacy, the reality is that search engines including Google do retain this information for some time, and it’s important, for example, that we are all subject in the United States to the Patriot Act. It is possible that, that information could be made available to the authorities." ^[41][42] At the Techonomy conference on August 4, 2010, Schmidt expressed that technology is good, but he said that the only way to manage the challenges is "much greater transparency and no anonymity." Schmidt also stated that in an era of asymmetric threats, "true anonymity is too dangerous." ^[43]

In August 2010, Schmidt clarified his company's views on network neutrality: "I want to be clear what we mean by Net neutrality: What we mean is if you have one data type like video, you don't discriminate against one person's video in favor of another. But it's okay to discriminate across different types, so you could prioritize voice over video, and there is general agreement with Verizon and Google on that issue."^[44]

According to PCWorld Schmidt also expressed the following sentiment: "if you don’t have anything to hide, you have nothing to fear" ^[45]

See also[link]

• List of billionaires
• 70/20/10 Model — business model advocated by Schmidt^[46]
• RechargeIT

References[link]