Are software patents evil?
August 9th, 2011
Daniel Eran Dilger
Ask anyone covering the patent wars currently being waged between Oracle and Google, or between Apple and HTC and Motorola and Kodak, or Lodsys and iOS developers, and regardless of their opinion about legal liability they’ll tell you that the patent system is broken, and more often than not, that patents on software are sort of evil and should probably just go away. But are patents really that bad?
As with any opinion, it’s easy to find facts to support one’s position. Among the easiest patent suits to vilify are those brought by companies known as patent trolls, or charitably, “non practicing entities,” groups the that do nothing but seek compensation from companies that actually create products, accusing them of infringing upon their legal monopoly to a conceptual rights owned via a patent filing.
More often than not, troll patents cover silly obvious things and were developed solely with the purpose of claiming a slice of a pie somebody, someday would eventually bake. Their recipe was just to sit back and wait for obviousness to happen, and then to cash in on it.
Press the enemies of patent trolls and they’ll likely eventually argue that patents should only be owned by legitimate inventors who labored over some novel creation that deserves protection under law. The problem is, one can’t really give a commercially valuable legal right to a single group and then complain when they attempt to get some value from it. It’s either valuable or it’s not. One can’t have it both ways. And if it’s valuable, they can sell it, presumably to a company that only exists to sue others. And bingo, patents are all inherently bad, across the board.
One can also come up with lots of examples of stupid laws, or of regulations that involve some some undesirable, unintended consequence. That doesn’t mean that a lawless society would be preferable, or that all regulations can be erased without resulting in far more undesirable unintended consequences. Perhaps we can just fix the actual problems in the patent system, rather than affixing dynamite and blowing up everything like the last episode of Little House on the Prairie.
In defense of patents
Patents, along with copyright and other legal mechanisms, protect intellectual property, something that some of us on the fringe of society don’t yet recognize as existing yet.
However, if I have to live in a world where one is expected to respectfully accommodate others’ beliefs in ghosts, God and prayer as a solution to the debt rung up by America (primarily by those who were praying while invading other nations for oil, and praying while extending Big Pharma a huge subsidy through Medicare without legitimately accounting for either expense), then I think it behooves those who don’t believe in intellectual property to at least hear out the reasons for believing in something that actually does run the world, empower innovation, and protect and engender respect for the results of hard work.
In a world without patents, it’s far less likely that, for example, Apple would have invested so much money in entering the smartphone business. Such a risk (and it was a monumental risk, given that Apple had nearly zero experience in mobile technology and was barging into an industry saturated with entrenched competition) would be hard to back up if Apple had to assume a complete lack of any sort of legal protection over anything it would subsequently invent.
If anything, Apple might have made a very basic entry into the mobile space along the lines of what people were expecting it to make, such as putting some Apple branding on top of a Symbian phone, or simply adding some phone features to the iPod. Without the radical, risky investment Apple made in building iPhone, there not only wouldn’t have been an iOS and an iPad, but there also wouldn’t have been an iPhone-like Android or Windows Phone 7 or webOS.
We’d still be using button phones like the BlackBerry and Palm Treo and Nokia’s bread and butter of yesteryear. Of course, one could also dial it back even further to suggest that we wouldn’t even have that, as those devices were also built on the assumption that partially protected investment in a new kind of product (the kind that started around the turn of the millennium) would result in a payback for investors.
Foes of intellectual property complain that even without government monopolies in the form of patents, companies would still innovate and build new products. But that’s not true. Sure, there would be some effort made to build new things and innovate as much as possible, but the framework of patent protection has radically enhanced, focused and accelerated the development of everything from pharmaceuticals to electronics to basic research of all kinds.
One could also say that without the legal protection of land ownership, people would still grow food. Sure, people have grown food for a very long time, even predating the notion of protected land ownership. But it’s only been in recent centuries that we’ve had an entire industry to cultivate food on a scale that frees the rest of us to do other things, from art to sports to science to software to praying in huge stadiums in order to save America. We are standing on the shoulders of green giants, ho ho ho.
Patents are a core legal structure that gives stability to markets and rewards innovation. Those who argue that the problems in the patent system should be addressed by nuking patents across the board are just as silly as those who vilify taxes. Both patents and taxes involve many issues that need to be fixed. But just as taxes are the price of civilization, patents (even software patents) are a necessary structure that empowers progress in the industry.
Proof of patent progress
While it’s often tricky to say exactly what the world would be like “without” some element we now take for granted, consider that patents in the realm of software are really not that old. In fact, just 30 years ago Apple invested lots of money into the development of the Macintosh without really any sort of patent protections in place. When its software partner Microsoft began copying the look and feel of Apple’s unique creation, all the Mac maker could claim was a series of copyright infringements, a far weaker case.
Due in part to poorly worded contracts that muddied the waters of Mac copyright, the result of that case was not just that Apple lost any substantial protection for its Macintosh-related innovations (and yes, those went far beyond elements of the similarly unprotected Xerox PARC concepts Apple started from), but also that the software industry was put on notice that there was no real legal protection in place to support significant investment in new ideas.
Thus, the PC industry in the 1990s was largely a combination of incremental advancements in hardware and exceptionally slow software development. While the state of the art in personal computers during the 1980s had rapidly advanced from text-based terminals represented by 1981’s DOS PC to the extremely powerful, object oriented graphical workstations NeXT shipped in 1989, during the 1990s things progressed so slowly that the coolest PC on the bleeding edge of 2001 was largely just an updated revision of NeXTSTEP from nearly a decade before.
During the 90s, mainstream pundits developed an arrogant disdain for companies that worked hard to develop great new products, particularly ones that experienced any problems in doing this heavy lifting. And so Apple shifted from being a company once praised for inventing mainstream graphical computing to being one mocked and nearly vilified for spending so much money on research that often didn’t result in any wildly successful products, ranging from Taligent to Newton. The kinds of companies that were celebrated included Microsoft, a firm that consistently waltzed into new markets, expending minimal effort to create cheap clones of existing products and technologies and then turned them into vassal states of the vast Windows empire.
It’s hard to have much respect for hard work when there’s no obvious payoff for it. Why would any company assume huge risks following Apple’s original lead in spending millions working to develop some spectacular new product when the end result of most everything the company developed was instantly ripped off by Microsoft? Why not seek to just be another Microsoft, finding ways to successfully rip off other’s stuff?
By 2001, most of the efforts in the consumer tech industry seemed to be centered around ripping off Windows (Linux), Office (OpenOffice), Internet Explorer (Firefox), PlayStation (Xbox) and other low hanging money makers that seemed easy and profitable to duplicate.
To balance and correct for this implosion in competitive innovation, a new concept began to slowly emerge during the 90s: software patents. Steve Jobs, who had pushed Apple’s radical investment in the development of the Macintosh and then NeXT’s massive investment in producing a sequel, had twice seen the majority of the value of the work his teams had created be appropriated by others who expended little to no effort in taking those ideas. At the same time, an increasing number of individuals and groups arguing patent ownership were negotiating their rights into the software realm.
While Jobs was away from Apple, the company had started to file for patents on an increasing number of software inventions, as was everyone else in the tech industry (and elsewhere), starting mostly in the mid 90s. This eventually happened to help reverse the course of Apple (and the tech industry), because when Jobs took over control of the failing company in 1997, among its valuable remains were now the rights to certain inventions, including software patents.
Jobs’ third time, patents were the charm
Instead of turning Apple in to a patent troll, Jobs leveraged patents that Microsoft had been infringing to negotiate a public partnership. Rather than trying to claim a one-time bonanza cash payout (as a number of other companies had negotiated with Microsoft in a variety of intellectual property disputes in the late 90s), Jobs used Microsoft’s infringements (including some that were willful and egregious) to obtain a win-win deal with Microsoft that helped to legitimize the Mac platform after many years of decline.
Once back on its feet, Jobs’ reinvigorated Apple was poised to begin innovating again in the pattern of the Mac and NeXT to deliver a generational new leap in computing. However, this time around Apple wouldn’t be simply serving in the role of a largely unprotected research and development group as NeXT had, as the Mac group had, and as Xerox PARC had.
The difference offered by the newly emerging legal protections of software patents was that Apple could again invest large amounts of cash and talent into producing something truly new without fearing that Microsoft or some other company could legally steal it all without any compensation. Starting around the beginning of 2000s, Apple released an innovative new music player alongside a rapidly evolving new Mac OS X.
While competitors could create their own music players (and did), a variety of Apple’s core iPod innovations were protected, allowing the company to benefit the most from the work had it created through significant investments it had made. Apple continued innovating and patenting its innovations, rolling out the new iPod nano to compete on the low end, for example. Meanwhile, Microsoft had grown so rusty at accomplishing anything that it couldn’t manage to copy the core elements of Mac OS X before 2007, giving Apple half a decade of limited competition to develop its Mac product into a revitalized fighter.
Apple then released iPhone, which upended the mobile industry, embarrassing existing market leaders like Nokia’s Symbian while completely derailing America’s top three platforms that appeared to have the most potential: Microsoft’s Windows Mobile, Palm OS, and RIM’s BlackBerry. None of these companies had seen anything coming because they had grown so accustomed to a glacial pace of incremental advancement. The only other smartphone platform known to be in existence was Google’s Android, which was aimed directly at being a knockoff of Windows Mobile.
Apple’s mobile market disruption didn’t occur directly because of software patents; Apple didn’t sue anyone to get established. Instead, the iPhone’s success was based upon the result of years and millions of dollars of high risk investment. Patents only promised to protect the results of Apple’s investments from immediate theft, making it possible for Apple to take on far more risk and therefore offer the world something wildly new, rather than just a moderately improved copy of something that already existed.
Patents changed the game
Apple’s vast investment in creating a truly new product was carefully protected by patents. Jobs appeared on stage touting the number of original concepts Apple had patented on the iPhone. If those patents hadn’t been there to protect Apple’s intellectual property, it wouldn’t have made much sense to invest so much work in building something really new. But they were, and mobile industry competitors were not only amazed that Apple had delivered something so new, but were also pushed to copy Apple’s major leap to create something new of their own.
This took some time for the industry, locked in slow-motion copycat mode, to do. However, once the financial results of Apple’s big investment became clear, there was no choice but to switch from the Microsoft model to the Apple model. Palm ditched its PalmOS and developed an entirely new webOS and mobile development platform from the ground up. Microsoft discarded its Windows Mobile and built an entirely new operating environment for Windows Phone 7. Nokia threw away its aging Symbian and joined Microsoft. RIM threw out its serviceable BlackBerry Java platform to build an entirely new mobile OS platform on top of QNX.
None of these have yet been successful, as there’s a lot more involved in success than just doing something. However, Nokia and Microsoft have found that at least they can recoup some value from their existing mobile patent portfolios they developed while working on real projects. And so a second role of patents emerges: a way for vendors to monetize some of the work they expended, even when losing the primary race.
Patents can help ensure that even if you don’t win on the order of today’s Apple, you still don’t have to lose everything you invested. In the Microsoft game of the 1990s, the second place loser (Apple, prominently, but also Netscape, Sun, WordPerfect, Lotus and many others) lost nearly everything, despite often having done much of the work that helped make the copycat winner successful. Under the new Apple game, everyone can get some credit for the work they do, as long as what they work on is original enough to deserve a patent. This acts as a secondary motivation to invest big and work hard: even if you don’t win the crown you can at least place or show with your patent portfolio.
Google plays the Microsoft game
Google has indicated that it would prefer to remain playing under the Microsoft rules of the 90s. While working on Android, it simply ignored patent ownership and decided to stomp all over Java and Apple’s iPhone intellectual property, hoping to only risk some minor payouts afterward just as Microsoft had grabbed everything and wound up only needing to pay off a series of lawsuits in the end.
But this strategy isn’t working because of patents. Google’s Android licensees are already paying Microsoft royalty payments, and Oracle and Apple are seeking to actually block infringing Android products in the market.
Under a rule of law that includes patents, Google can’t simply pillage now and pay later. The wild west days of Microsoft’s active exploitation of everyone else are over, at least in the West where the rule of law applies. Just as Apple’s success recommends (and perhaps forces) other companies to invest in significant research and development, the loss Google is poised to incur will discourage “steal and see what happens after” as a way to do business.
That’s what the rule of law is supposed to do.
Software without patent protection
In addition to encouraging significant investment risk by protecting the fruit of such investment efforts, patents also, by design, grant their owners a longer period of time to develop a product than a market without patent protection would allow. Without patent protection for the iPhone, for example, Apple would have faced a very different set of rules for trying to get any value from the product it had created.
Without the protection of patents, Apple would have been unlikely to have had enough time to slowly roll out the iPhone as a device that challenged the cellular provider status quo. It would likely have been forced, as many pundits originally surmised, to broadly license its software for other companies to actually build, copying the Windows business model of Microsoft.
Aside from Apple’s recent success with Mac OS X and iOS, most computing platforms (Windows is a core example) have been monetized as broadly licensed middleware, with the companies behind them seeking to roll out their software as widely as possible to choke out any competition before it can grow. However, there are clear downsides to this kind of a software deployment model.
First, there’s no place for competition in such a model, so there’s no way to compare Windows, for example, against alternatives that might have been better. That is, in part, why Windows developed so slowly and remained such a bad product for such an exceptional period of time. It wasn’t protected by specific patent monopolies, it was protected by an entire market monopoly. Too much protection is a very bad thing. In contrast, the Mac, iPod, and iPhone were all bathed in the fires of intense competitive pressure, resulting in Apple needing to build great products to stand out and demand attention, and needing to regularly improve these products to stay competitive in the market.
Second, there’s intrinsic problems related to integration; Windows has all sorts of problems just because it’s one vendor’s software on another vendor’s hardware. Third, it’s not a model that works very consistently. It didn’t work for Microsoft in mobile devices nor in music players. It didn’t work well for Nokia’s Symbian, didn’t work well for Palm, and hasn’t worked out for many licensees who attempted to play along on the other end of the broadly licensed platform (Sony springs to mind as an example of a failed licensee of Windows, Symbian and PalmOS).
After Apple proved that it could make lots of money after working to develop original, integrated products it brought to market on its own (including Mac, iPod, iPhone), members of the industry began rethinking the notion of simply copying Microsoft’s copying and instead began copying Apple’s originality. Microsoft itself developed its Zune music players as standalone, integrated products (albeit still copies) while Palm expended the effort to build and launch its next generation of webOS phones.
While neither were wildly successful, they indicated that Apple’s business model was now the fashionable one to copy. As bad of a failure as the Zune and Palm Pre were, they weren’t nearly as terrible as those companies’ failed PlaysForSure and Palm OS licensing programs.
What about free software?
At the extreme other end of the spectrum you have development following a model where there is no legal protection of any kind standing in the way of software development. In this world, nobody can own software or any concept embodied within software, so anyone can appropriate and modify anything that already exists, a veritable heaven for developers who’d prefer to build on top of existing ideas without dealing with complex property rights and legal regulations.
One also can’t have a monopoly like Microsoft Windows in this world, because anyone can just fork the code and start over without having to first build a competing code base from scratch. This is the lucid dream that originated Linux and Android. The problem for both Linux and Android is that neither actually exists in world without intellectual property. While it’s easy to imagine one, it does not exist, any more than a world without management exists for labor or a world without property rights exists for squatters or a world without copyright exists for file traders. One can’t wish away the existing legal protections of everyone else just because it would make one’s own existence simpler and more pleasant.
In addition to frequently running afoul of the outside reality of software patents, free software also has some other flaws of its own. Because nobody can own anything, the motivations for creating and maintaining some bit of software is very different from commercial software, resulting in a clearly differentiated level of effort being expended and, frequently, an immediate dead end to some software projects because the person who originally dreamed it up woke up and decided to do something else instead. This model does not support the kind of progress the rest of the world is used to enjoying.
Free software also involves a community of co-participation, which is awesome for developers who want to just do part of the work of building some sophisticated bit of software, but is insanity for anyone who wants to obtain a fully operational bit of software without being expected to fix various parts of it that either don’t work at all or don’t work the way one expects or hopes it does.
Lastly, like broadly licensed monopoly platforms, free software is a beast for anyone who desires a high degree of integration between products or between layers of hardware and software. Again, if you don’t know how to fit it yourself, you’re “doing it wrong.”
Left right and center
And so it is that on the left fringe you have idealists who wish patents could go away entirely so that free software could prosper in a communist paradise of collaboration, an idea that appeals greatly to those who want to benefit from the overt theft of the existing work already done by others. This makes Android wildly appealing to cloners in China, corporations that didn’t think to invest in their own smartphone technology before the iPhone, and kids who don’t want to pay for apps or media or directly pay Apple for creating a usable mobile operating system.
Android also appeals to leftist propagandists in the media who say things like the solution to copyright infringement by file traders is for media companies to just find a new business model (that is, put ads up everywhere, just like one sees in China and on the Google Internet). And of course, development without the boundaries of patents also appeals to developers, roping them into this liberal fringe just like the Tea Party attracts business owners who don’t like the ideas of taxation and regulation.
As an example, you have a smart guy like Mike Cuban writing up a blog suggestion to simply erase the almost infinite billions of value of tied up in software patents by an act of fiat. This sort of solution sounds like the Tea Party’s solution to education (close public schools and just home school your kids) and debt (dismantle the federal government outside of the military and just become a confederation of states), seemingly unaware that such actions MIGHT have unintended consequences that outweigh the existing problems. But this sort of inanely simplistic “baby-bathwather disposal” populist nonsense plays well with angry and fed up crowd that faces some of those existing problems.
On the right end of the spectrum, you have the staunchly conservative technology fascists, who didn’t want anything to change in the first place and liked things better back when they knew which tiny minority to cheer on as the owner of everything under a centralized monopoly framework of ownership. Ideally, they’d have one monopoly telling us what to like, so everything else could conveniently be ridiculed as a liberal joke. This group always gets really upset when the incompetence of their cherished leadership is exposed, as it has been for Microsoft, for Nokia, and lately for RIM. Nothing left for them to do now but pray that Apple gets smitten by God.
In the center of technology are companies that truly innovate, recognizing that there is some value in conservative institutions and some value in liberal rethinking of the status quo, but that most of the value comes from balancing these things together to deliver steady, reliable progress. Apple started out as a liberal pirate of sorts, turned into a conservative dinosaur, but was reborn a practical, progressive centrist, and has delivered a golden age of technological achievement ever since.
Microsoft is still stuck wallowing in its dinosaur days, while Google is increasingly becoming that weird amalgamation of being a dinosaur with a liberally bleeding heart, crying about patent persecution conspiracy theories in public while buying up patents in its bid to cover up its willful infringement, even while striving to maintain a phony display of righteousness and denigrating the competition as unfair simply for having beaten it.
So are software patents evil?
The answers you get to such a question should fall pretty cleanly in line with the responses you get when you ask if nuclear power is evil. On the staunch right, you’ll get some confident humdrum that patents and nukes are fine as long as you have a big enough stockpile to destroy everyone else, while on the far left you get emotionally charged replies about how nobody should benefit from either because there is a risk of both centralization of power and a variety of minor problems to be solved.
The bottom line is that if we want progress, we need some protection for key software innovations. Cuban’s solution that wishes away software patents in order to get rid of a layer of attorneys is like wishing away crutches and bandaids to rid ourselves of an unnecessary layer of doctors. We live in a complex world, and we need to adapt. Simplistic solutions that erase core protections of our civilization because those elements have addressable flaws is not sensible.
Certainly, we do need to look at what is being patented and work out reasonable and streamlined ways to handle patent disputes. But patents, even software patents, are not evil. They’re just one of the many complications of life that serve to prop up our civilization and promote the idea of taking big risks in the elusive search for big rewards.