An embarrassment of patents

By admin, March 3, 2010 9:10 am
An embarrassment of patents

It looks like I spoke too soon about the wealth of choices available in the smartphone market. Even as I was typing up those mis-guided paragraphs, Apple attorneys were hard at work to try to limit those choices, firing their first shot across the bow of Android by way of a lawsuit against prominent Taiwanese hardware manufacturer HTC.

So far I haven't run across anyone defending Apple in this matter. The prevailing view amongst the punditocracy, a view I happen to generally share, seems to be that patents are out of control and have become an agent with which to stifle innovation rather than support it: an effect almost entirely opposite that intended by their issuance. And indeed, if you look at the list of Apple patents the company claims HTC has violated (leaving aside, for the moment, the fact that HTC did not write the core Android software in which much of these features were implemented) you'll see many of the same tired, overly broad, obvious, or nonsensical "innovations" that so many software patents seem to cover these days. My favorite is #7,657,849, filed less than a month ago, covering unlocking a device by performing a gesture. How can you unlock any device without a gesture of some sort? But many of the others could be applied against almost any operating system, fixed or mobile, and illustrate the absurdity of saying that software processes should be patentable.

So it's relatively easy for the blogosphere to throw up a fuss and quiver over the harm to consumers and the chilling effects on competing handset manufacturers. The ability of cellular providers to remotely brick handsets at the mandate of a court injunction is indeed a frightening prospect. Those things may all even be true. But I will stick my neck out and say they are only half the story.

While in particular all these threats seem ridiculous and bullying, it may be helpful again to return to the intent of the patent system, which is to encourage innovation by allowing inventors of novel devices the sole benefit of those inventions for a span of some years. This, presumably, encourages the expenditure of resources on R&D by companies which, should their hard work be instantly replicable by anyone in the market at large, may not otherwise feel much incentive to come up with anything new under the sun.

I find little fault with that logic and if it is true that lawyers have turned patents into bludgeons and that software and process patents are much abused, it's also still true that some provision must be made to protect innovation, lest innovation become unprofitable. It's difficult to remember it now, with the iPhone a runaway success story, but Apple made one hell of a gamble coming out with a phone in the first place. Analysts predicted it would be a niche product, but bomb in the long run. It was seen by some as a desperate grab at a market where the company had no experience and no expertise, a new Newton that might pop up in trivia contests in the future. And those predictions were not necessarily unfounded; Apple didn't have any phone experience, and a poor track record with hand-held computing devices.

My question is, without the opportunity to dominate the market and recoup R&D expenses and make an obscene profit, would anyone have done what Apple did in the first place? It's easy to look back and say "yes" given all the other outfits flooding the market now, but would, or could, anyone other than Apple brought together all the small touches that make today's smartphones what they are? It might have needed someone from outside the industry to make it happen… but without some guaranty of exclusivity, who could risk such a thing?

Bad as the patent system may be, it might be the only recourse available for Apple to justify the invention of such a device. There's no way, at least so far as I know, to patent the totality of a thing like that, and anyway such a patent must necessarily be excessively broad. But I find it hard to say that Apple should not be rewarded with some measure of exclusivity for creating this genre of smartphone. Twenty years, the standard term, seems too long in this day and age, but say five years, perhaps; certainly a killer product with a lock on the market can make its creation worthwhile in such a time span.

If there is something that I can absolutely agree with the critics on in this case, it is the need for reform in the patent system. But in the remedies, let's not lose sight of the original malady the process was designed to cure.

17 Responses to “An embarrassment of patents”

  1. Jose_X says:

    Aborting Monopoly Grants is more than simply the Right Thing to do.

    Putting aside software, business method, and other generally ridiculous classes of patents, I think what we should be attempting, if we want to promote the progress of science and useful arts, is to look towards a reward and incentive mechanism that does not tie-up 100,000 inventors every time we want to reward one. We can do things like give tax credits, prizes, and, perhaps more practically, even some degree of market share guarantees or short-term price subsidies.

    Let us note that market share guarantees could allow others to develop a market much faster than that sole person could under a monopoly mechanism; thus, the sole person getting the automatic market share slice guarantee could definitely benefit this person extra this way (without having to deal with resource and time costly lawsuits whose mere threat even stagnate). Meanwhile, if that sole person did succeed tremendously (eg, through first mover gains), then there really would be no need to help them further. In either case, note that the motivation was there because of the significant safety net(s) and potential extra upside. Even better, we didn’t hold back the wall of progress and abridge rights. I mean do we really think that the only thing of value (remember, we are giving exclusivity to it for 20 years) in creating better products and markets is this so called single godlike “inventor” or even inventing? What about all the other people sweating and taking risks and many times not even coming out ahead or too far ahead?

    Also, a sliding scale could be used, eg, where we give larger guarantees (but not generally near 100%) for the first year or months and then work the guarantees down to zero throughout the next 5 to 10 year period.

    And if the government and private sector have developed extremely detailed categorizations of products and markets and income streams, surely we could leverage and extend that as necessary, right? Some agency could handle the day to day issues that might arise in fast moving or brand new market/product classes. The USPTO would be put to better use doing less damage this way and perhaps even contributing positively!!!

    It makes no sense to give a monopoly (of any significant duration) to the first person to file a general idea of how something works. Meanwhile, you have others that have already invested years in thinking about and perhaps actually creating refined versions of inventions that do/would fall under such a patented general broad description. It’s always easier/quicker to come up with the broad description.

    Plus, can the most brilliant inventor truly be the first to write down invention ideas/claims in all but a fraction of the cases (and still have time to develop and implement and sleep etc)? Of course not! Should we annul many brilliant future inventions because those people best fit for the job were distracted with something else other than writing up 1,000,000 million patent claims yearly (an impossibility) just to cover all ground where they might make significant contributions over the next 20 years? And let’s not forget that the top inventor is dwarfed by the combined contributions of the next 10 working together.

    In an Internet world, we should be rewarding exploitation of the powerful new ways that exist to collaborate. Monopolies run contradictory to this.

    Finally, who invents in a vacuum? There are a great many little and very significant insights that occur along the way to a final invention, and many of these little steps only happen in any given individual’s mind because of the constant influence from other members of society (ideas “ripped off” from others, casual conversation and feedback, as well as math and other understandings developed almost entirely by others) as well as from external forces and experiences that are also having an impact on others.

    I mean someone must be first, but how fair is a monopoly to those that came or would have come in 2nd, 3rd, 4th, 5th, 6th, 7th, 8th, 9th, 10th, 11th, 12th, 13th, 14th, 15th, 16th, 17th, 18th, 19th, 20th, 21th, 22th, 23th, 24th, 25th, 26th, 27th, 28th, 29th, 30th, 31th, 32th, 33th, 34th, 35th, 36th, 37th, 38th, 39th, 40th, 41th, 42th, 43th, 44th, 45th, 46th, 47th, 48th, 49th, 50th, 51th, 52th, 53th, or 54th?

    Do we really think these other people deserve to get nothing? Do we really think giving control of the market solely to number 1 will benefit society? I mean, gold gets virtually all of the glory in the Olympics, but does that person at the top this month really contribute all that much more to make up for everyone else’s contributions?

    Should we force all others into hibernation for 20 years because of a monopoly grant to the gold medal winner? “Sorry, move on to a new sport. Invent a new sport because this one has now been awarded exclusively to Hans Dawn for the next 20 years.”

    Maybe 70% of the market is awarded 30%,15%,15%,10% to the top four “inventors” or significant contributors the first year.. with eventually only 5% of the market being reserved (as a *guarantee*) for these folks by year 7?

    Monopolies stifle. We believe in a competitive system and obviously recognize that the supporting crews and competition losers make possible this month’s gold medal winning moment in the first place. We believe in freedoms and liberties. Let us not forget that guaranteed monopolies, a too powerful of a prize, will likely lead to dirty play and a total misallocation of resources by some in order to win this prize. Further, the winner will then have significant incentives to sit on his/her rear end or go at snail speed for the majority of the next 20 years. No dice, if you ask me.

  2. Scott Wilson says:

    Jose, I certainly agree with your sentiments, if not some of your particulars or premises. But I think mostly what it points out is the lack of options facing Apple, or innovative companies like it, right now. None of the systems you talk about are in place. The “first mover” advantage is really no advantage at all (and never has been; it’s almost always been easier and cheaper to duplicate something quickly than to invent it in the first place). So what else do you use to protect your R&D investment?

    I think many of the solutions you point out only illustrate the difficulty of replacing the patent system. Anyone trying the champion freedoms and liberties should do a double take if they also find themselves calling for a government agency to apportion market share for speculative products, or to determine who the best inventor or contributor is in a product class. If you think the USPTO has made a mess of things (and I would agree with that), try to imagine what another government agency with even more invasive powers could do. I guarantee you that it wouldn’t do what it is intended to do. Nor do I think something is owed to those in second place. Your Olympic comparison is apt; no one is out there running for silver. None of this is about fairness, it is about motivation.

    To me, all of this just reinforces the complexity of the issue. We all of us (except patent lawyers, perhaps) agree that something needs to be done with the system, but there is little consensus on what. My own view is that small steps are better; repealing the patentability of business processes, shifting the burden of proof to the patent applicant, reducing the span of the grant. I wouldn’t go throwing it out wholesale. We like to think we believe in freedoms and liberties, but don’t forget that the people who wrote this system into the supreme legal document of our land had their beliefs in those concepts tested in fires far hotter than any we face today. It could be they knew some things about it that we have forgotten. I wouldn’t be so quick to toss their ideas out the window entirely (nor, as a practical matter, can you do so without a constitutional amendment).

  3. Jose_X says:

    Scott, the Olympic example included the bit that you don’t allow today’s gold winner in some event to shut the market down to other competitors, and certainly not for 20 years.

    We each agree that a shorter monopoly period would be better than worse; however, with respect to what you mention about government interference in the case of “guaranteed” market slice as a substitute to monopolies, surely a slice is less of an affront on liberties than would be the whole pie? Remember, that today the USPTO is making the decision about whole markets.

    The “guarantee” might be implemented through a combination of subsidies (eg, from some prior tax or from fees and taxes on those that have entered the market afterward). An inventor would have to apply for this subsidy/prize; hence, we’d put the burden of identifying the market on them. One other restriction might be that they could not apply beyond a very small number of markets. The “guarantee” application (vs patent application) would have to define the markets. Perhaps we could even allow them to apply and get a little compensation for past sales through some sort of mechanism, but their subsidy/prize would be more limited. You can also allow that person to sell those “guarantees” and “tax credits” to others.

    My point is that mechanisms exist so that you don’t close off realistic movement and incentives in some area to everyone that got 2 minutes or even 2 years late to the USPTO. Remember, every patent also destroys from a bit to a very large amount of prior investments already made by many. And those best to move something forward (eg, next year) may not have been the first or even the 10th. [These things are difficult to anticipate.] There is only one first, and we know staying at the top lasts a short time unless we add strong obstacles to others. Do we even want to shorten the track by 20% (for 20 years) to this year’s gold medal winner? Isn’t next year’s top star in some area likely not today’s top star? Certainly, this tends to be the case the more competition there exists. And how about the huge investments made by others? If gold medalists got long monopolies, we could be sure many many fewer people would make real sacrifices to become tops of any sport.

    I’ll repeat, if gold medalists got long monopolies, we could be sure many many fewer people would make real sacrifices to become tops of any sport.

    In most cases, you don’t want to kill off much more efficient (or even slightly more efficient) market competitors but simply make it harder on them perhaps if they weren’t first: handicapping those arriving late vs. disallowing any more participants for 20 years.

    [Sorry about the repetition here.. and in general about not having the best formed or organized writing.] As far as “everyone” wanting gold, yeah, true, but how much sense does it make to allow a particularly snotty past gold medalist to eliminate a sport or limit it to well controlled puppet competitors for 20 years? Remember that in international (and many times even local) competition, today’s winner is the one that had the better day or month and is guaranteed no future gold. The stronger the competition the less it makes sense to have anything resembling a monopoly. “First” to submit an application can be a trivial component of the big picture.

    I’ll repeat, “first” to submit an application can be a trivial component of the big picture.

    So why are we granting entire markets for 20 years based solely on this criteria?

    I ignored software and similar patents because there is no shortage of competitors or innovation there. You also can’t argue huge investment costs in most cases unless you want to ignore that collaboration and not reinventing of wheels that is possible and desired by many top competitors, and that most costs (to derive what is a patent claim) are minor costs in any sense of the word (at least until the lawyers come in). I mean, we have people that don’t look at patents developing original software (protected by copyright) yet infringing software patents left and right. Houston we have it.

    In general, people that can create *cheaply* want to do so because there are many rewards to be had. Some people achieving some impressive things actually pay to do their best work and/or are fully satisfied with the rewards that will accrue by holding some particular title or being associated with some particular product. [Guiness and other titles usually involve very impressive feats and frequently accrue to "amateurs" with very high drive.] Software is cheap to build and clone and distribute, etc. The hardest work is the ongoing work to deal with the many details and changing constraints (eg, to adapt to customers or to deal with ongoing maintanence and feature extensions) and is not the “brilliant” idea (that likely would be derived by many others working independently). Software patent monopolies are very stagnating and even short monopolies here are an unnecessary incentive to many yet can hamper more than just a trivial amount. [Certainly the balance point might be reached before 0 monopoly time, but if we are talking about months of monopoly time, would we bother with patents?]

    In fact, software and other intellectual products are so competitive (so cheap) that this has accelerated the patenting of garbage because of the race to the USPTO by those that even bother or can handle the repulsiveness of the whole thing.

    Cloning (copy/pasting) of software makes the reuse of ideas and of implementation details (eg, abstracted in “libraries” behind well defined interfaces) is a must in the software world. It’s trivial, even, to attach a software jet engine to a software bunny rabbit. Patents don’t fit.

    The framers of the Constitution added the condition: “to promote the progress of science and useful arts.” Patents also weren’t rewarded to inventions composed entirely of intellectual substance even though these have always existed and were well-known to the framers. Additionally, for a long time, many have used the reasoning that protecting the little guy from the big guy is one of the goals of patents. If this is the case, we should never have a patent enforced on “a little guy” (so bar intellectual patents outright, or at least to the extent they (or any patent) can be enforced against any little guy). Also, there are many more inventors today, in general, because more of the population is highly educated and has access to tools to invent and is able to collaborate with more others. What about the Internet? What about sophisticated cheap computers? Certainly many of these contrasts between today and the late 1700s need to be factored in when we invoke “the wisdom by the framers to allow patents”.

    Note that we have a race to the bottom. The more general and easier to it is to make that “discovery/invention”, the more damaging that patent tends to be to society, yet the more likely it is to exist because it’s easier to write it up earlier in time.

    Note that the very powerful patents induce groups to contribute as little as possible to society beyond writing the patent application and doing the very last mile or even 10 feet, leveraging insight and material harvested from public places.

    The patent application’s general claims can be followed by garbage in terms of the quasi-detailed invention discussion.

    Beware, the more people learn about the patent system and how it can be exploited the more “trolls” we will find that will interfere with more existing product makers. Trust me, most patent claims do not require anything near a PHD, and over time the invention details will involve less and less of the patent applicant’s time and effort since they will have 20 years to figure out details that perhaps others already know. A great many products are always anticipated, sometimes even in surprising detail. Every day, patent writing becomes more accessible to more people. The way we are going, it’s only a matter of time before every sophisticated product involving lots of technically complex decisions will be able to be stopped dead in their tracks by any of many virtually unknown inventors from all over the map.

  4. Jose_X says:

    I’m thinking I might start free online clinics and produce extensive online resources to enable, as much as possible, every man, women, and child to produce their own patents ahead of Steve Jobs and others. I would then also fight as unconstitutional any patent that would try to slow us down.

    If we aren’t careful, the monopoly geniuses at Microsoft and other places are going to lock away a great many markets. It’s virtually impossible to do many things without running afoul of process patents (at least this will be the case). Ditto will apply to the creation and use of products. The end result may very well be that a small “private government” backed by a mega patent pool controlled by a very tiny number who will accrue the bulk of the benefits will dictate the law of the land: who can do what, where, when, and, if so, at what price? Pay attention to huge patent trolls, and what they are doing: Nathan Myhrvold, Bill Gates and others. Some of these people don’t know how to compete without monopolies (or at least they don’t feel incentivized to accept competitors with so many lucrative monopoly opportunities accessible to them). And some of the systems they might be developing and/or have developed will naturally favor those that get in early (when the patent pool is smallest), but like all ponzi schemes, will result generally in huge losses for the vast majority. What kinds of terms do you think you will be offered when the alternative is to fight millions of patent claims that multiply cover almost anything under the sun that modern people would do or buy? That’s right, you will have very very very little leverage or chance to win in court.

    I could go further connecting dots, but I think most people can see generally that things will only get worse over time if we keep supporting these monopolies. The world will only get more modernized and more ambitious leeches with very few contributions to make will take up monopoly writing.

  5. Jose_X says:

    I wanted to clarify on the “Ponzi scheme” statement. I retract that. Judging something as a Ponzi scheme depends on details, eg, who is offered a chance to make money and under what conditions. I mentioned ponzi in the first place because it may turn out that those people are dealing in garbage.. passing paper around and redistributing wealth with the expectation that some day significant profits can be realized through lawsuits or through a separate category of licensing not sold off as an investment vehicle. Also, because of the potential for extremely higher guaranteed and ever larger profits potentially realizable from increasingly powerful (at least on paper) monopolies, much larger promises can be made today than are likely to be possible to realize tomorrow when enough people come to their senses and perhaps tweak the law to close obvious loopholes or when judges strike down certain types of obvious over-exploitations.

    I have other criticisms of what I wrote or omitted but which I will leave as is. My main goal was mostly to speak a little bit down to earth about a very broken system that is still very underexploited as we speak. How many will get how bold tomorrow? How long do we wait before trying to clean some of the garbage and potentially gigantic liabilities? Why are we defending this vast and almost uncontrolled government subsidizing through broad monopolies? Broad monopolies will lead to many pains and will greatly take away from the potential ahead of us as a society and as individuals. This will be more so as the clever and unethical among us execute past the deception and strategic positioning phase as they begin to squeeze.

    If garbage cleanup is inevitable, we are currently then wasting a lot of resources over-preparing for wars that will never materialize. The significant resources being occupied on this could be put to better use today. Do we really want to create bubbles from which only a very few will win?

    I’m aware my audience is not ma and pa, so I have to limit how much I appeal to overall fairness. It’s a shame.

  6. Scott Wilson says:

    Well, you have certainly put a lot of thought into the matter, Jose! I appreciate your comments and insight. I wonder, though, have you considered that most of your focus appears to be on what is actually a rather exceptional outcome to the patent system? Monopolies aren’t really the intent of the system nor are they the most frequent result. Licensing is, and it seems to me that the effects of that outcome are pretty similar to much of what your suggestions might accomplish, but without such a massive (and politically improbable) overhaul of the system. It’s still rather uncommon for patent holders to completely choke off competition, as we have been assuming in this discussion.

  7. Jose_X says:

    Scott, injunctions exist. Are you suggesting we should do away with them? That would be a start.

    If you aren’t suggesting that, then the licensing terms being created under the threat of injunctions are distorting incentives/rewards. I mean, “licensing” sounds great until we find out that this means everyone has to pay me (literally, me, the person writing this comment) 10% of all their revenues [I'll give you my name and address in just a moment.......], and I can still prevent non-partners from competing or can wipe them out in court using the money I make off my huge royalty stream. Do you think it is just for everyone to have to pay me? What have I contributed? Why should I make 10% of everyone’s revenues? The point is that an unjust license is an unjust license. Joke about me aside, an unjust license will result from unjust patents. I don’t care about huge gigantic corporations where most things come out in the wash, but I care about injunctions and licenses that directly affect individuals and small groups significantly.

    As technology advances, more individuals will have access to make contributions to areas that once were the domain of billion dollar institutions. People will continue getting upset in growing numbers as they find out how our bad patent system is biting them.

    Actually, I do think there will be political will at least to add in a few exceptions (classes of patents, who is affected, the degree of being affected, etc) into the law or else change it further if many individuals out there complain, and I think a lot of people will complain in the future when it’s more clear what they could otherwise do and what they cannot legally do because of a broken patent system. People today are connected, and tomorrow they will have the tools and information to ring up their government representatives much easier than is the case today.

    I understand your point and realize it’s a way to achieve some of what I was talking about; however, we should find a way to come to those licensing terms (ie, free market taxes) in a way that is fair and doesn’t reward the wrong people while restricting the wrong ones as well. How much damage do we want to do to the universe of people in order to put a brake on a few highly efficient, “evil” imitators?

    We are all interconnected. I know it feels great to think one has brought mankind fire, but if there is sufficient competition (eg, if the bar to play the game is low enough), other Prometheus will step forward. They will. R&D costs will be shared by those that are willing to collaborate, etc. Fire will be brought forward. And there will always be money to be made as long as people continue to be people.

  8. Jose_X says:

    I should have said something specific before. Besides injunctions, patent licenses of many types, even some zero royalty ones, can significantly hamper some open source development (eg, growth in various ways) and use. Bad patents can introduce significant quantities of artificial sludge into this very important and efficient market, research and development framework, and pool of lots of freely reusable resources. We should be looking towards leveraging efficient systems like open source by adding on top rather than hampering it so that some monopolists and very large companies can protect their lucrative businesses and inefficient modes of operation.

    Bad patents simply mean the wrong people are diverting (significant) amounts of money from society that could and should go elsewhere (if we want to promote the progress, help consumers, help free markets that promote healthy competition, etc). And the wrong people can easily end up being groups that are holding other monopolies or inefficient businesses and are using patents as one tool to help preserve them. You mentioned Apple’s abuse as one example.

    I don’t mean to focus so much on software if I could be more general, but it helps to know some of my primary motivations (since open source affects me very nearly and is a great case where flaws in the patent system have been magnified when the context around patents moves from high-powered industry players into people’s homes and small businesses). As we move forward, a greater number of people will be programmers (or “tweakers” of their software because of advancement in tools. In any case, software is a huge component of today’s society.

    Some more background info:
    Most groups are net losers from the patent system. At least one, Microsoft has their very lucrative business threatened significantly by open source and has been building up patent strategies for a long time to help combat this threat (this much is indicated at least by court documents and by their actions). Apple is an example of a company that wants to continue benefiting from open source (they certainly have), but does not want others to leverage it as they have. Another company, IBM, contributes to open source more than the other two giants just mentioned, but they take much more from open source than they put in. They are on the winning side of the patent game (an exceptional case). They have been much more level to date about their (ab)use of patents with respect to open source, but keep in mind that for decades most believed software not to be patentable at all and that question is still up in the air today. It helps those gaining from software patents not to press too hard at this point in time, especially when they are profiting from it. Ask IBM, and they will say that patents promotes open source; however, we should consider their very minority position as beneficiaries of the patent system and that their contributions to open source are tiny relative to the whole system. It’s the giants that win (especially the more greedy one). I think most other producers and consumers lose when it comes to software patents. As long as software patents pose a reasonable threat and are used, everyone’s cost of doing business goes up (productivity is affected negatively), and what consumers can access is further limited. This should also get worse should clarity grow and it be in support of software patents.

  9. Scott Wilson says:

    Injunctions are a judicial remedy and, by and large, I don’t think the judiciary is the problem here, so no, I don’t think they should be done away with. Like many companies, judges are doing the best they can within the confines of the code. Nonetheless, most license agreements do not come about at the business end of an injunction, so that seems a bit of a straw man to me.

    I should have guessed at your open-source affiliations, because many of your arguments seem to be less anti-patent than simply anti-business. While I am a big fan of open-source software and think it has a place in the ecosystem, I don’t think it’s capable of completely replacing that ecosystem. There remains a problem of motivation and compensation, and I would dispute such blanket statements as “Most groups are net losers from the patent system.” As I have stated before, it’s a system that was put in place for a reason, and if it has limitations and negative consequences, so do all the alternatives you have proposed (consequences which are much less poorly understood). I think it needs tweaking, adjustment, fixes, certainly; I don’t think it needs to be tossed out wholesale.

  10. Jose_X says:

    I will limit what follows to software patents.

    Injunctions aren’t common but they affect the licensing terms. Drop injunctions without putting some royalty requirements in place and watch how close to 0% of those approached for infringement actually decide to pay anything. Of course the courts might order X or Y % and that would effectively be the same as a required royalty. It seems we could then just do away with the injunction and very high royalties altogether. Of course, injunctions are great as a self defense mechanism for keeping big boys in check.

    We should not forget that many people contribute to any invention and as well largely independently rediscover things. Patents don’t make sense in many ways. [See last paragraph.]

    Open source is not anti-business. Open source is pro-user. A lot more entities consume software than produce it. It makes it difficult to make lots of money writing general purpose code without providing services to customers, but the point is that the task of general purpose source writing is shared in the open source model. We don’t generally expect everyone to do their own science (although everyone is free to try to contribute). However, many people apply and leverage existing scientific discoveries. The software scenario is becoming like that (except more people are able to participate with software). Note that the core of at least Apple’s operating system and browser are open source. Of course, you can add plenty of lockin within many open source systems (an anti-user/pro-vendor decision that applies to the Apple situation). This is trivial to do with BSD and similar licensed code, yet possible if more difficult when dealing mostly with GPL and other copyleft code. [Note that most developers prefer the GPL because they are also users and also because it serves as a hedge against very large players and against monopolies.]

    Users of open source don’t stop needing customizations and specific business software. Administrators and all sorts of service providers don’t disappear with open source, rather, they have greater access and leverage to solve a larger number of business problems and create new products and services for others quicker and more efficiently. Virtually no open source license requires you share any internal code with anyone. [The GPL and others require you show source of tightly coupled software *when you distribute* and to those to whom you distribute. Aside from that, you can do whatever you want and keep everything to yourself.] Truly the only ones likely to be against open source itself are large software houses that are accustomed to making virtually all of their money today strictly on producing COTS software [yet many of these likely also use open source]. Most of the economy is not based on writing COTS software. Google and many other large web corporations built their house on open source. I don’t see their stock holders crying. Open source is natural. Reusing peer reviewed code is smarter. People avoiding open source are not laughing at those taking advantage.

    [Have you kept up with news about the London Stock Exchange recently? Microsoft made a big deal out of them in the last couple of years for being one of the few major stock exchanges to use Microsoft predominantly on the servers instead of Linux/open source. Guess where the LSE is today and why?]

    All of these groups have plenty of need for software writers and produce plenty of source code that they don’t share, but the key point is that they could have access to 100% of the source code to the software they use. And many times it makes sense to contribute back upstream improvements you make that don’t directly relate to your business secrets as this allows for peer review and simplifies your future upgrade path (while even gaining you some free marketing points).

    The patent game involves lots of costs. I know patent lawyers, the government, and patent owners that don’t produce the patented products end up ahead. So in terms of who ends up ahead, I referred to producers and consumers as almost certainly ending up behind.

    I think most of my arguments were against monopolies, against attacking the little guy, against improper licensing terms, against pretending that ideas have owners, against giving Jack all credit and ultimate control for what John and many others did, do, and could end up doing, etc. What I accept are rules of the game (for corporations, for example) that promote innovation while respecting individual liberties as much as possible [corporations are not individuals]. I can see a place for weaker patents, even if that situation would not be ideal.

  11. Scott Wilson says:

    Open source certainly is not anti-business, but a lot of open-source advocates seem to be. And statements like “Open source is pro-user” betray an extraordinarily narrow view of what a “user” is or what they want, a kind of paternalistic approach that, if I may be so bold, also informs your view of patent law and business, and which I think is potentially even more dangerous and counter-productive than patents are.

    I certainly appreciate your perspectives and ultimately I think we probably agree on the most realistic solutions to the problem, and the fact that what is realistic is still far from perfect… even if we disagree on what “perfect” might look like.



  12. Jose_X says:

    >> And statements like “Open source is pro-user” betray an extraordinarily narrow view of what a “user” is or what they want

    All else being equal, it’s difficult not to want something extra even if you can’t immediately see a use for it.

    True, some vendors will not provide something in open source form and users will want it perhaps because at that point in time they otherwise can’t get it and the user is not accustomed to leveraging source code.

    Thanks for the forum Scott. I am passionate about this topic.

  13. Jose_X says:

    Scott, the comments are now over 300, but there are some people posting who are in the business of getting their money for the patent claims they wrote up. You can’t build a product in today’s world, especially if it is based on software significantly, and not expect to be at risk from troll after troll.

    When patents were negotiated among large vendors through major and practical cross-licensing deals, the situation was a bit stable. Software has put the brokenness of patent law in the hands of almost anyone (since software is now in the hands of almost anyone), including potentially many decent engineers who have decided (or will decide that) leveraging the broken law on their own is much more profitable than getting pennies writing patents for their employer.

    It’s only a matter of time before trolling gets very aggressive and even end users will have to consider dealing directly with patent owners with respect to many actions (processes) or products they use. [Well, if the SCOTUS knocks out business method patents as it looks like they will, then that will help a lot, but software when used on desktop and servers or as the controlling agent in digital devices may still then remain subject to patenting.]

    It was suggested to the VC who owns the blog that perhaps he will have more luck backing “inventors” than producing companies. Well, at least that was my interpretation.

    You may also want to follow . Note that those that post and comment there don’t all share the same views on all things. For example, I am not anarchist, yet agree in many ways with some that are (at least of those posting there).

  14. Jose_X says:

    On second thought, you likely won’t care too much for perhaps most of the ideas expressed in; however, there are a lot of links and you might find some parts interesting.

    As for the other link, that is to an article by a venture capitalist in which he overviews some experiences with patent lawsuits. I suggested that link, in part, because there are a number of comments from individuals (“trolls”), and you might find what they have to say interesting. In short, some of them believe they work hard to invent (ie, be the first to broadly describe) some things ahead of the industry, and they expect compensation and/or the 20 year exclusivity as law demands. If you are a major company, don’t be surprised to get a visit.

    I think the correct move is to remove classes of patents from play and limit the “rewards” significantly. Additionally, perhaps create various safe harbor clauses.

    If corporations want most of the strength of patents, I think clever employees will eventually realize they can make much more money by going independent and demanding their just desserts from all sorts of industries. The inventor support groups are also growing. Also, I think if the situation doesn’t change, open source developers should apply their techniques and skills to joining this game. Under current law, it’s just too difficult to produce anything software related without violating many overlapping and disjoint concepts. And if one troll gets 5% of revenues, you probably want to hope that most other trolls don’t find you.

    The law is currently not being exploited nearly as much as it could. Taken to its conclusion, you would have no one able to build anything except the troll him/herself and in very small parts. Later, these trolls would cross-license perhaps or else not and just have society sit on the sidelines unable to do many interesting things they otherwise could do. In short, powerful patent monopolies (extremely inequitable government super-subsidies) take away control from business leaders and most investors and put it in the hands of inventors. This sounds a little attractive to me, to be honest, but the law is, nevertheless, extremely impractical and does not promote the progress of science and useful arts as the Constitution mandates.

    Let me end by quoting something I wrote this morning as I consider perhaps recommending the open source developers move into the troll business in order to help expedite a change in patent law:

    >> It would be great to see a STOP FOSS DEVELOPMENT IN ORDER TO PATENT MONTH where (in the ideal case) no FOSS was developed at all for that month and every single contributor/dev worked on building patent claims. While this is going on, we would write to representatives in government, as many media outlets as possible, and even spread the word among the people. Perhaps modify many distros and websites to include information about this. Of course, we would explain just how broken we think the system is and that it needs to change if people want to promote the progress.

    Of course, open source employees, free lancers, hobbyists, and anyone else may end up actually liking writing patent claims when they consider it’s potentially a lot less work in many cases and can actually lead to millions of dollars in their pockets. Anyway, before a million developers make a million dollars, the economy will collapse or (more likely) the law will be changed.

  15. Scott Wilson says:

    I don’t disagree with anything you wrote in those last two posts. But I do want to point out that they are addressing a very different topic than what my original post covered or what we were talking about previously. Trolls are a major problem, a total abuse of the system that bend it in ways that were never anticipated and that pervert the outcomes. But I haven’t heard anyone suggesting that Apple is trolling here; they are making full use of the patents themselves, inventing and creating things of benefit to the market at large (even if they are also attempting to restrict others from doing so). Moreover, not all of the patents involved in their suit are software patents. So while I agree with you that software patents should be done away with and that trolling is a major issue that could grow worse, neither of those things address the concerns or issues that I was trying to raise in the original article.

  16. Jose_X says:

    Maybe patents aren’t needed that much. Did Apple need patents to make all the money they have been making recently? Apple (and I don’t know how much they ordinarily leverage patents) possibly simply wants to leverage a tool they have accessible. They have to think of their stockholders and may think they are in a strong position to get aggressive in this area.

    There are many intricate rules all over the place, so I don’t understand why something as potentially disruptive and unfair to the defense as are patents are still using such a simplistic model. Of course, much of the private sector strikes deals or leaves others alone, but why make a vanilla patent potentially so disruptive? If the reason is to give levers to small entities, maybe we can find other levers besides broad disruptive strong monopolies.

    During simpler times (eg, without computers or the Internet, with fewer people patenting or likely to make significant contributions, etc), simpler laws might have been acceptable. Now, not nearly as much, at least not when so many injustices that deviate from the positive theory behind patents appear to be happening. We need greater granularity.

    Could a product be manufactured and distributed in high volume in 1800 as easily as it can be today? I don’t think so, so shouldn’t this itself justify lowering the time of exclusivity (for everyone and across the board) where a profit may be realized? We live in a much faster world.

    Does Apple need the same level of government subsidy as would little manufacturer X? Not by a long shot. Perhaps patents should not be usable against small competitors. At least it seems reasonable that patents give each of these two a different degree of advantage.

    Also, the largest of companies (eg, with established manufacturing, financing, etc) are much more likely to be the one to abuse as a successful or dominating imitator.

    Maybe patents should only be allowed by those developing products to defend from competitors a certain amount larger than them and the protection given would be guided by, eg, the relative size. Does Apple really need protection from Google? I think Apple (and Google) have been very successful leveraging trade secret and similar. Do we want to allow them to compete otherwise against each other?

    If you have manufacturing facilities ready, incrementally adding, possibly corresponding to incremental patenting, would not require the same investments. I am not sure how to factor this in fairly, but this is something to look at if the goals are motivations without damaging competition. Maybe the company can pick which patents they want as elevated to the strong position. They get a few changes of heart.

    Why is a patent in industry X cover the same as in Y?

    Shouldn’t broader patents have less protection, after all they say less and negatively affect more people. [I know we are talking about the subjective here.] Perhaps a patent claim that has more specific extensions or is one to be leveraged afterwards can lose value and power as these additions are made (by the owner or by others).

    For example, company X could avoid infringing some Apple claims by adding sufficient “innovation” beyong those claims. [Yes, who judges and what guides do we use?]

    Costs involved for R&D and among competitors could also be used in determining the patent strength overall or maybe even relative to competitors. Maybe third parties can qualify for safe harbor or acquire other pluses or minuses depending on where they lie (and their use), generally based on how they stack up against the patent owner.

    Let’s look at some privatizing opportunities.

    If patent registration was free, then categorization and reconciliation would be left to the public sector. Ie, everyone posts their claims, relieving the USPTO of the backlog and leading to immediate publishing. Then those wanting to seek money or whatever would have the huge database (as would the defense) to make their case.

    The USPTO could play more of a role as expert witnesses or doing something else including providing advice to the court (or for a fee to anyone) about how to rank the patent claims. They could even serve as a sort of public expert witness for patent cases involving less at stake and contestants with fewer resources.

    The USPTO could focus on patents being contested rather than on all of them. This would be akin to “lazy evaluation” , to borrow some computer jargon.

    Ratings and categorizations could also include: years of exclusivity if any, or range of royalties, or relative creativity, or relative importance to industry, etc. The courts could make fine tune decisions if the patents are already predigested and with input from as many groups as possible (including groups that analyze in hindsight and from the USPTO).

    As a side effect of lowering the responsibility and authority of the USPTO, it would not be presumed by the courts that any patent claim would be legitimate. There would be a greater burden on plaintiffs. This would be more likely to lead more fair settlements (or closer to what would happen if no patents existed). Also, the defense would not be expected to do anything resembling a strong patent search (because the official database would be larger and more disorganized in general) or to be liable on account of someone showing them a claim entry. Naturally, many private groups would add order to this system so that justice would be more likely to be served, but there would be no authoritative (and still very large) place so as to imply guilt by reading.

    If we make this more of a private contest, then it immediately becomes possible to have third party expert opinions on the quality of patents and the courts would be much more likely to listen to these. The courts might also learn to trust certain established resources for easy lookup (eg, academic institutions that kept ratings on claims).

    Also, participation by the private sector (by the public at large) would improve because there would be incentives rather that disincentives for doing research.

    Another possibility would be implicit patents. For example, if prior art was found to some claim, then that prior art would automatically become a patent claim with as wide or narrow an interpretation as necessary. This would be interesting, as someone seeking relief of some sort might find out that they actually owe others more than others owe them. And it would be more fair and more open to all citizens since no one would be left out (especially on account of not having resources to master the art of writing patents or to hire the legal aid).

    Assuming we have different ratings, classes, etc, possible, then the defaults can be very weak. The typical case should be no monopoly or a relative short one.

    In essense, a claim would get very weak protection (eg, a few months worth exclusivity) unless a series of tests are passed (levels acquired.. think of security accreditation by the US gov). Each level passed strengthens the patent, and some levels would involve things like expert testimoney from neutral experts as well as competitors. Most of this could be done allowing participation from the public, etc. Always, the public should be able to bring in new information (with something of a statutes of limitation). We should remember that with easy to acquire patents (eg, (a) free uncontested registrations or (b) implicit claims), social focus and resources will naturally move to the high impact patent claims that are really clever, etc, and where the owner wants to acquire a relative high degree of strength for it.

    These things would make patenting closer to copyright in the sense of being more fair to independent creation. In fact, copyright, now lasting 3 or 4 eons, needs to be made shorter. Make copyright much shorter in time and change the patent system as above and these two would merge more and be much fairer. We all gain insight and much more from society. This allows us to create. The public has to recapture what it loses to the individual much quicker than is currently the case.

    [Just for fun, if we apply to common language this foolishness of broad monopoly grants for long periods of time (this is already done to a limited extent with copyright law and its strong interpretation of "derivative works"), people could not speak with each other under a common language without violating concepts, words and phrases, gestures, etc, that someone elsewhere performed first. I mean, someone is always first, yet, obviously, it makes no sense to allow only that first person to repeat those processes.]

  17. Jose_X says:

    Some highlights and further discussion of last comment:

    I reverted, in this last reply, to the approach of considering finer granularity for patents to recognize the wide differences that exist among inventions. This is more true today than at any time in the past, certainly when contrasted with 1800. It should surprise no one that giving a kiddie a bazooka is not a good idea. We need to limit bazookas and add some gloves, rope, knives, and perhaps guns to the picture.

    To address your criticism about complexity not mixing well with government, I tried to frame the story by removing the value of the role played by the USPTO and having the slack (and then some) be taken up by the private sector.

    To enable this migration of importance and responsibility, we make “patents” much easier to acquire. I suggested two options, (a) free registration and (b) implicit. Doing this frees the USPTO. Doing this also makes for a much fairer and more accessible patent system.

    We also gain some other interesting by-products by making it easy to record invention ideas:
    - Courts can’t rely on the USPTO. They look elsewhere: to the private sector (and also the USPTO).
    - Patent holders won’t have the USPTO’s authoritative seal. This gives the defendant a much better chance and immediately recognizes the potentially questionable status of any patent. This is closer to a situation of no patents, but without giving up on patents. This makes it more natural that we will get deal-making and that those in the defensive position will not get gouged or likely barred from competing. A market could certainly establish itself to package rights to patent claims and trade these (most should not be worth too much, individually). This market is driven primarily by the private sector.
    - - A few other notes here, the default grades are very low, but there are steps that can be taken to gain accreditation for patent claims. Here the USPTO can play a more active role: focused on the patents that are more likely to be used in court or where the owner wants to win some degree of confirmation to their alleged superior status. The private sector, explicitly (by law) would play a role here (possibly the dominant role). There would not exist any guaranteed government approvals that would give a free pass in court (this prohibition need not exist, but it might be better it does).

    As concerns finer divisions of patent claims, law can set a few guidelines to guide the private sector (and courts) and even to set requirements; however, a lot of the classification could be done by anyone. Many folks would have an interest in doing this. I can even see open collaboration playing a big part in classifying the type and quality of patent claims. Focus and resources would naturally shift to the strongest of patents and in the most active of industries, but, of course, anyone could make their own case for their own patent claims. The USPTO could also play a useful role in guaranteeing some level of attention to anyone seeking it (eg, a small player wants to try to enforce a relatively unimportant and ignored patent claim against a competitor).

    I also suggested some ways a patent claim can gain or lose strength via law (or maybe not). One main point was that the strength can be relative to the owner (the one trying to leverage it) and to the defendant. An interesting example was that you could only use the patent to try to gain leverage against stronger competitors and/or the bulk of the bite would be usable only against the stronger foes. [I haven't analyzed this carefully.]

    Also, the industry, type of invention, type of imitator, state of the art (even in an evolving sense), etc, would go into the evaluation process of what the patent enables/disables. The key to remember is that, notwithstanding private deals, courts are the ultimate arbiters and the possibilities are very diverse, yet their rulings might be largely anticipated in some cases. The private sector rankings and such (think of an analog to Moody’s) help create some degree of expectation. This might end up being a great number to judge by, or not. There is little that is guaranteed intrinsically in anything called a patent claim.

    One more thing: A goal of patent law and rulings would be to avoid interfering and restricting people, yet to protect against powerful imitators, for example. [Most people can agree on this goal.] To achieve this goal, a patent in the hands of a strong company cannot wield the same power as in the hands of a small entity. [This might prove to be a very tricky point to get right.. but I like it.] A related point is that a bunch of related patents cannot all give similar power in the hands of a single entity. The reasoning being that relatively large investments in such cases are generally incurred the first time only. Closely related patent claims should not give unnecessary power beyond what a representative of the group already provides (again, most of this classification may end up existing only in the private sector rankings but be based on guidelines in the law). Patents should be near useless to the powerful but non-negligibly useful to everyone else, in particular, to those significantly lower on the totem pole. This way, everyone has incentives to create. If you don’t need it, you can’t abuse others, so you better do something to earn your position. You also won’t get affected too negatively by the patents of others because generally patents will be much weaker. If you do need the government subsidy, then you will get some if you come up with something significantly interesting and valuable but will not get too much help otherwise.

    We should not forget that people have a natural need to create, and environments with many successful participants don’t usually need too much government interference especially in the form of a very strong very long monopoly grant. Government dictated incentives should be to overcome things like overwhelming cost obstacles and abusive competitors. Not welcomed (at least this is my opinion) are any unavoidable restrictions on competition and on people in general.

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