Daniel Eran Dilger in San Francisco
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Are software patents evil?

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?
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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.

40 comments

1 gus2000 { 08.09.11 at 11:44 am }

My problem with software patents is that the USPO has no concept of software novelty nor innovation. Amazon’s patent on the One-Click purchase is a prime example: push one button, one time, to purchase a product. Really? Had these people never seen a vending machine?

Apple’s iPhone, on the other hand, is layered in truly innovative technologies. How do I know this? Because when Jobs first demoed the iPhone’s “Pinch-to-Zoom” feature, a room full of jaded tech writers openly *gasped*. Now THAT’S innovation!

I know the Fandroids like to deflect all the criticism of their Open Overlord by claiming such touchscreen features are obvious. That may be so, but they’re only obvious now that Apple has shown them to you, just as Criss Angel’s magical feats seem mundane once the trick is revealed.

2 HCE { 08.09.11 at 11:59 am }

Let’s start with a few disclaimers.

1. I am a software engineer
2. I hold several patents
3. I am not a Google fan nor am I anti-Apple
4. I have no problems with copyrights – copyright law, as it exists currently, is mostly OK.

That being said, I think software patents – as they exist today – do far more harm than good. Let’s have a look at what the major issues are

1. Too many trivial things get patented. The vast majority of patents coming out today are trivial – all that you need to do is to slightly tweak an existing concept or combine a few well known ideas in a slightly unfamiliar way and voila! – you get a patent.

2. Technology patents are valid for far too long. In a world when something two years old is regarded as outdated, having a patent be valid for 20 or so years does not make sense.

3. It is easy to patent an idea without actually implementing it or using it in a product. Given that trivial ideas get patented nowadays it is ridiculously easy to dream up ideas and file for patents. You don’t need to even prove that your idea works, you don’t need to sell a product using the idea. So, the expense incurred by you is very small. This leads to huge numbers of patents being filed.

All of this leads to the problems we are seeing today

1. The patent office is swamped and either we get total junk being patented (an extreme example of this would be that several perpetual-motion machines have received US patents) or that patent approval gets inordinately delayed.

2. Patent trolls – I don’t think I need to elaborate.

The major beneficiaries of patent lawsuits in the software space are lawyers and patent trolls. Yes, companies may, every once in a while get a few hundred million from a lawsuit but overall, they are on average spending more to acquire the patents and defend against trolls than any royalties they get. The major use of patents is as a defensive measure – not as a way of preventing others from stealing your IP.

Does any of this mean that software patents should be abolished? Well, not necessarily. A couple of common-sense measures could help correct these issues without abolishing patents altogether

1. Get a lot more picky about which patents get approved.
2. Make software patents valid for a maximum of 3-5 years.

The problem is that it is easy to make recommendations like the ones above but it might be really hard to implement. In the end, it may be easier to do away with software patents altogether. You still have copyright protections on your code and the company that comes up with a concept gets a head-start in the market. It is probably not the ideal solution but it would be better than what we currently have.

– HCE

3 scottj { 08.09.11 at 12:00 pm }

Daniel,

First, welcome back. It’s good to see you blogging frequently again.

As to “software” patents, above all, let’s tread carefully. Assuming one is not of the opinion that there’s no such thing as intellectual property (and there are many who feel thusly– I’m not one of them), definitions need to be carefully drawn. In particular, the line between “software” and “hardware” is broadly smudged today. For example, I can use software such as LabVIEW to devise a logical process, then press a button and configure the gates on an FPGA to implement that entirely in hardware. Is the result software or hardware? Both and neither. Similarly, I can design a rocket ship entirely in CAD; must I reduce it to cut metal, pipes and flame in order to satisfy the software-patents-are-evil crowd, or does my conceptual rendering suffice? What, then, is the difference between a blueprint (instructions) that defines a mechanism or process and code (instructions) which defines a mechanism or process?

Remember that with the brief period of monopoly granted by the government comes an obligation to publish and teach the method being patented. That’s an aspect of patents that too often goes unstated. Would the world be better off if all methodologies were held closely in proprietary form? Or are software-patent opponents dreaming of the day when everything is open-source? Dream on.

As to patent trolls, as with much else in the U.S. legal system today, they’d rapidly cease to be a problem if a proper loser-pays approach is implemented for cases of clear abuse. But even then, let’s tread carefully. Laws regulating who can own and defend intellectual property will have many layers of unanticipated consequences.

An aside: As a minor nit-pick to your comment about Apple having nearly-zero experience in mobile telephony, mention is due to their abortive partnership with Motorola. Apple learned a lot from that, just as they learned a lot from the Newton (not least of which included mastery of ARM technology). They learned about carriers and they learned about distribution and they learned about the web of global regulations and all the other barriers to entry. They also learned that the entrenched players were ossified and unimaginative and slow. Altogether, they learned there was opportunity awaiting the right product approach. Recall that the iPad was developed first, then Steve Jobs had the epiphany that its design principles would make for a killer phone. That light-bulb might not have flashed if he hadn’t had a sour taste in his mouth from the Motorola experience.

4 Jonathan Gibson { 08.09.11 at 12:27 pm }

Overall I agree with this posting that patents are a good thing overall. Perhaps the length is awkward for today’s hypermarkets compared to the Founding Father’s pastoral view of industry. May-haps the internal process needs reform as well since very strange things are granted patents – including such odd “innovations” as variations on Confederate logo emblems for favored groups.

I knew trouble was brewing by the mid-1990′s.
I was once served with a frivolous patent by Pixar while it was under Steve Jobs. I had a successful CD ROM publishing business in the early 1990′s selling seamless, tile-able. After Pixar’s VP & General Manager Pam Kerwin sat through our demonstration at MacWorld I wasn’t surprised when the next year they announced and shipped a collection of textures along similar lines. What I did not expect was what I and several other small indie developers received a few months after that : a large stack of patent papers obviously meant to intimidate along with a legal pronouncement that we are infringing on their turf that we ought to remedy ASAP. Looking it over it was obvious they had found someone who had patented basic High School geometry essentially arguing the “offset” style Photoshop plug-in functionality was their domain.
In fact, my own Wraptures products were made in Photoshop by copying and pasting images into 2x sized document canvas so the Right and Bottom edges of the original aligned and I could see where the seams could be adjusted. It was all hand-done made knife cutting collage style processes. So I spoke to a few industry types and decided to ignore it – and they went away. In fact, when I confronted some of the crew they appeared embarrassed by the business side of things.

My conclusion is the Patent Office needs adult supervision and cogent intellectual oversight, not wholesale removal of the system.

5 Brau { 08.09.11 at 1:28 pm }

HCE said it perfectly. No need to repeat.

6 maxijazz { 08.09.11 at 2:49 pm }

Surely software patents are evil. No arguments needed, just look at atheistic, socialist Sweden (and whole EU). They don’t have soft patents. Isn’t that indication that software patents are evil?

PS. Software’s code is protected by copyright laws, so it cannot be just copied. Why the hell we protect math formulas (this is what software patents are)? What if Einstein, Newton (and so on…) patented them?

7 scottj { 08.09.11 at 3:24 pm }

Maxijazz whines, “Why the hell we protect math formulas (this is what software patents are)?”

Let’s run with this. Why allow patenting of chemicals or drugs? Is the periodic chart next? What about if I invented a new transmission? Aren’t gears public domain? The transistor? But electrons aren’t patentable, right?

Ludicrous.

The issue isn’t mathematical formulae–per my earlier post, MOST technological advancements can be reduced to such–but the rewarding of a temporary commercial monopoly in exchange for publication of how the trick is done. The alternative isn’t no-patents, it’s no-disclosure, no-publication. And, arguably, less innovation.

(Of course, perversely, many corporations prohibit their engineers from looking at patents at all, out of fear that in any subsequent finding of infringement they will be thwacked with the willfulness stick. Unfortunately, this turns the notion of patents on their head. They’re SUPPOSED to be reviewed and learned-from and worked-around. That’s the bargain you’re accepting in return for that brief period of monopoly.)

As to Maxijazz’s further rumination: “What if Einstein, Newton (and so on…) patented them?”, he should really patent the strawman, as he’s driven it to new heights. Max, please consider what a patent is, by definition, and maybe it will dawn on you how silly that sounds.

There are many things wrong with the current system, but over-the-top ranting becomes neither side. And copyright is something else entirely. Code is not a screenplay.

8 nextguy { 08.09.11 at 3:31 pm }

Uh, nice long article, but I mean, you missed like the whole point about why people hate software patents or business method patents, and you touch on a lot of irrelevant points about apple and google on the way.
“To balance and correct for this implosion in competitive innovation, a new concept began to slowly emerge during the 90s: software patents.”
Uh, no. This is plain factually incorrect.
Arstechnica has a much better write up on the information, citing actual supreme court cases, especially the one in 1981 of Diamond v. Diehr, where even though the ruling was never intended to allow software patents, it still happend, just as Justice Stevens predicted in his dissent. Then, in 1998, thanks to the morons of the Federal Circuit court of appeals, the State Street decision let the software patents like Amazon’s 1 Click come into existence.
“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.”
Patents cover implementations of ideas, not ideas themselves. Apple came up with great ideas for the iphone, but they didn’t come up with the hardware for the capacitive touch screen, nor the accelerometer. Seeing their methods to protect multi-touch is quite amusing. Their patent on the heuristic on finger scrolling is ridiculous, because the “system and methods” described is all implemented in software – nothing in hardware alone determines whether the screen should scroll up or down vs. left or right. In fact, due to recent Supreme court rulings, Apple’s patents may never have been granted if submitted today.
“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.”
So, did Linux just rip Windows? The kernel’s 20 years old. If you mean KDE or Gnome, uh, they’ve had features in 2002 that took Microsoft to 2007 to integrate into their desktop. Did KDE have a hissy fit when Microsoft took their features they’ve had for years?
Office? Isn’t that a copy of something else??? Firefox is an IE clone? Please, both have their roots with the original Mosaic code. What’s Safari then, a Firefox clone or a Konqueror clone to me more precise? I’m not sure why you are even mentioning the Playstation or the Xbox.
“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.”
There’s ignore, and then there is what appears to have happened, they simply worked around the situation. And that’s exactly what patents *should* do: force you to innovate and create your own implementations, not just copy it. Dalvik isn’t Java compatible, and thankfully so, since it improves on many of its flaws.
And really, the biggest hypocrite of them all is Steve Job’s, whining about how people have taken their IP, a made up term by lawyers, and is suing the world over its patents, most of which were even ruled non applicable. This is the same person who is infamously on record as being “shameless” about stealing other people’s ideas, like Android’s notification system, and its ability to work without any desktop computer period via the google “cloud”.

“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.”

You make it sound as if there is no legal protection. The GPL depends on current copyright law, and even BSD style software still has its protections.

“The problem for both Linux and Android is that neither actually exists in world without intellectual property…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.”

“Linux” seems perfectly fine being a world full of mythical “IP”. RedHat, openSuSE, Ubuntu all work perfectly well and make money without being sued out of existence. Probably because RedHat has to own its own software patents to defend itself. And the development model isn’t what the world considers progress? What model do you think the scientific community uses?

“The bottom line is that if we want progress, we need some protection for key software innovations. ”

Of course, because poor apple is finding itself in trouble with nowhere to keep its billions of dollars, unable to meet demand of the iphone, and can no longer innovate with all those other phones on the market.

Please.

9 paul94544 { 08.09.11 at 3:49 pm }

The answer is so simple:

Make the patent last about 10 years (depending on industry and factor cost of R&D)
No one can copy it at all in any way, fine companies who do come out with a clone, with profits going to patent holder
Patent becomes invalid if holder doesn’t make a product within x number of years.

10 airmanchairman { 08.09.11 at 5:43 pm }

Great article IMO, definitely up to speed with this one, and guaranteed to get the big guns of techno-opinions firing for, against and neutral. Talk about hitting the ground running!

The Software Patent system, like any other brilliant social construct devised by Mankind without exception, has a downside. Patent trolling and the hindrance of innovative flow of ideas come immediately to mind, and there could be others yet to be encountered on the long and winding road to technological Utopia.

The downside of “throwing the baby out with the bathwater” or “closing Pandora’s Box” by doing away with the system altogether, are too horrific to imagine. Chaos incarnate, and the utter triumph of the Cloners. Many intermediate solutions have been proffered in the comments, indicating that a lot of soul searching and inner wrangling is going on about how to fix the bugs in the machine. This is a good thing, and long may it continue.

Keep Hope alive, and leave Pandora’s Box open. A change is bound to come, and may ironically take the form of a patented idea. Now wouldn’t that be something.

11 mailjohannes { 08.10.11 at 5:29 am }

In 1593 Cornelis Corneliszoon got a patent (octrooi) for his crankshaft invention which made a saw mill practically possible. This patent was only valid in and directly near Amsterdam.
Saw mills started the first industrial revolution – way before the ‘official’ start of the Industrial Revolution in Great Britain – but this wasn’t in Amsterdam. Instead it was the Zaanstreek – just out of reach of the saw mill octrooi – which would become the first industrialized zone in the world. To make that possible large channels had to be dug out to transport the wood to and from Amsterdam. But this was the only way to go because Cornelis did’t allow anyone else to produce saw mills.
Luckily for Holland this competition, innovation and production hampering octrooi could be circumvented and wasn’t able to stop the ‘Gouden Eeuw’.

J.

12 mailjohannes { 08.10.11 at 5:40 am }

scottj: “What, then, is the difference between a blueprint (instructions) that defines a mechanism or process and code (instructions) which defines a mechanism or process?”

No difference at all, both are perfectly covered by copyright.

J.

13 The Mad Hatter { 08.10.11 at 9:46 am }

Oh God, here we go again.

Daniel, you are off base with this one.

1) Software patents existed before State Street. I know of several that were issues.

2) The issue is not software patents, it is patents in general. I’ve worked on the hardware side for a long time, and I used to read a lot of patents. Nine out of ten United States patents that I read were worthless, i.e. they should not have been issued because they were invalid according to the U.S.P.T.O. rules. Think of that, 90% were invalid! The other 10% may have been too, but they were beyond my comprehension.

3) I’ve been sounding the warning on this for nearly ten years now. I had to be fairly quiet about it at first because the company I was working for might not have approved. But this is a huge problem. Remember the housing bubble? We have entered an Intellectual Property Bubble. That’s why the Novell Patents sold for 4.5 times what they were estimated to be worth.

4) This bubble is driving up the prices of consumer goods, and making the United States uncompetitive, while making a small clique richer.

5) Apple holds no patents that are of any real value that I have read. I’ve read the ones in the recent litigation and they are a joke. This is not an attack on Apple. The patents that Microsoft, Oracle, Adobe, Novell, Red Hat, RIM, etc. hold are no better. Nor at the patents that General Motors, Ford, Toyota, Nissan, Honda, Suzuki, Yamaha, Harley Davidson, Kawasaki, etc. any better.

6) Patents don’t exist to protect Apple, or Microsoft, or General Motors. They exist to benefit the citizens of the United States. I’m not an American and I know this. Why don’t you? U.S. Constitution, Section 8, Powers of Congress:

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

If you do any research at all you’ll find that the founding fathers of your nation were exceptionally skeptical about patents.

The problems are so pervasive that the only possible fix would be to close the Patent Office, and that would be opposed by certain vested interests. However it is possible that California will not have to worry about the Patent Office for much longer. I’ve been tracking trends in the United States, and if the current trends continue, it is possible that California may decide to secede from the Union by 2020.

Wayne

PS: You do know that the Forums are still dead don’t you?

14 bsm1970 { 08.10.11 at 11:00 am }

I gotta say I love your articles, but the frequent but needless swipes at people who do not share your political or religious views get tiresome. You’re very insightful on issues related to Apple and technology, but after a while it starts feeling like you’re listening to someone with a chip on their shoulder that feels compelled to evangelize for their causes that are wholly unrelated to the reason people are listening to them in the first place.

I don’t ask my pastor or my chosen presidential candidate for their views on Apple, patents or the future of the PC landscape. And they don’t offer it. It’d be nice to see some new analogies in these columns that aren’t digs at conservatives or theists or whatever other group unrelated-to-Apple segment of the population you don’t like.

[Nothing wrong with asking your pastor about technical stuff. You'll probably get more sensible answers than if you ask about who to vote for. But seriously, I love everybody. I just like to make people think. Religious people (outside of the full on Michelle Bachman nutters of course) are often much more fun to be around in my opinion. - Dan ]

15 danieleran { 08.10.11 at 11:18 am }

@The Mad Hatter: again, the point isn’t that the patent system is perfect and infallible, but rather that the simplistic notion that patents are inherently evil is nonsense. 2: the fact that something new is being accorded tremendous value by society is not necessarily indicative of a “bubble.” The car went from 0 to a multibillion industry, as has software in our lifetimes. Those are not bubbles, they are simply new valuations on things that didn’t exist previously. The fact that Google bid up the Novell patents from $1 billion to $3.5 billion before ultimately losing out to the consortium bid of $4+ billion is not because of a “bubble,” but rather because of competitive demand for patents by the involved companies.
4: the “bubble” is not driving up prices of consumer goods. The efforts of spending billions of dollars to develop consumer goods is what drives up prices. Intellectual property takes a lot of time and money to develop. That’s why Nokia and Microsoft and Apple and Oracle are opposed to Google stealing it and dumping a free version on the market to claim “market share” it can leverage to sell ads. By the way, is Google inflating an “ad bubble?”
5: Your opinion may be interesting, but even if you think there is little merit in specific patents, their ability to be used to protect invention is clearly evidence of value. So far, we haven’t seen Apple do much more than negotiate with its patents (clearly evidence of value), as the recent actions blocking the Galaxy Tab have been related to trademark and copyright, not patent action (which is much more complex to prove in the EU). But to dismiss patents as not having value is just ignorant. Clearly they do have value or they wouldn’t be worth anything.
6: Your reading of the Constitution is rather silly. While the goal of patents is to promote progress (as I pretty clearly conveyed in my conclusion, thank you), the part you didn’t bold makes it clear who the primary beneficiaries are: “Authors and Inventors” (!!!)

Before California secedes, it should split in two so that both the North and South can be the top two world economies ahead of the US, and then it can leave the rest of the country to be a backwater theocracy generating monumental debt on its own. But then California would probably accept Spanish as its primary language and be annexed by Mexico, where it would return to being the economic engine for a vast area of poorly educated, impoverished religious people. Perhaps its best to leave CA as the smart, successful end of the US after all, so Red States can afford to keep blowing oxygen into the aging bodies of their smokers. (ducks)

16 The Mad Hatter { 08.10.11 at 11:39 am }

Daniel,

You misunderstood what I said. I’m was the Major Accounts Sales Representative, responsible for making recommendations on product development, product design, supplier selection, and long term planning. You can still find my name on the Environmental Protection Agency and California Air Resources Board websites.

I know a hell of a lot about patents. When I say that there is a patent bubble, I’m not joking. A lot of worthless patents are being bid up in price. Consider NTP v. RIM, and try to tell me that it didn’t have any effect on consumer prices.

Do you seriously think that Apple spent *Billions* developing the IPhone? If they did the shareholders should dump Steve Jobs. Fast. My own personal guess is that the total cost to take the existing IPod technology, and the early tablet technology, and modify it to make a cell phone probably cost Apple no more than $75 to $100 million, and I’m probably guessing high. Apple spent the smallest amount possible on developing the IPhone. You don’t toss money at a product that you not know will sell.

My reading of the Constitution matches that of patent lawyers like Gene Quinn. I strongly suspect that Gene has forgotten more about patents than you will ever know.

If California does split off, I suspect that it will take Oregon and Washington states with it, and possibly Hawaii and Alaska as well. I would then expect the remainder of the U.S. to fracture further with some of the North-Eastern states joining Canada.

We’ll see.

Wayne

17 bsm1970 { 08.10.11 at 12:28 pm }

Appreciate the response, Daniel. And it does make one think. Just letting you know some of those crazy folks that do pray for solutions to our problems (but also understand the dumb decisions that got us there, often by people we stupidly supported) are among your readers. Just try to spread the snark evenly among the masses. :)

18 tundraboy { 08.10.11 at 3:22 pm }

My original belief is that software patents should just be eliminated, period. Now someone might say yeah the one-click patent is absurd, but how about if someone develops a real-time translator app? Isn’t that deserving of some protection?

Now, I’m not sure if a real-time translator is worthy of patent protection or not but I’m pretty adamant that one-click ordering isn’t. Because one-click ordering is just the computerized implementation of “Just leave a message on my phone leaving your name and what you are ordering, and I’ll take it from there using all the shipping and payment info that you gave me earlier.” There is nothing innovative about that implementation. The innovation was in the design of a machine that is able to do one-click orders.

Software patents are rife with this type of no-brainer implementations. A lot of them are just computer implementations of standard record-keeping and retrieving procedures. And these were invented long ago; the manual version was perfected by the library card-catalog system.

So, as a concession to those who insist software patents are still socially beneficial, I would suggest the following principle for software patent reform:

Software that are mere computerized and/or automated implementations of established and/or trivial manual processes and procedures are not patentable.

Such a provision would get rid of a lot of the garbage software patents.

19 JohnWatkins { 08.10.11 at 9:48 pm }

While I mostly agree with your article, Dan, and while much of what Wayne claims is silly, you really got it wrong on his take on the function of patents in the US (number 6.)

“6: Your reading of the Constitution is rather silly. While the goal of patents is to promote progress (as I pretty clearly conveyed in my conclusion, thank you), the part you didn’t bold makes it clear who the primary beneficiaries are: “Authors and Inventors” (!!!)”

Indeed that is one thing Wayne is exactly correct on. It’s the same reason for copyrights.
The colonies were subjected to all sorts of restrictions on everything from crop seeds to book printing and had had enough of it. For example, every broomcorn plant in the US descends from seeds Benjamin Franklin culled from a British broom (the seeds were restricted from importation in order to protect the British broom making industry.) These sorts of restrictions are indeed the motivation for the US approach on patents and copyrights. In the US they exist primarily “in order to promote science and the useful arts.” “Protecting authors” is the inducement to this end, not the Raison d’être.

Also feel free to secede but don’t be too hasty (especially SoCal) as either economy will collapse pretty quickly with no water to drink!

20 The Mad Hatter { 08.11.11 at 3:55 pm }

You can try to claim what I’m saying is silly but I worked in the hardware business for a long time, and I ran my own part-time shareware business for a while. I’ve read more patents than you’ve ever thought of, and the vast majority are junk.

If you don’t believe me, would you believe the courts? How about the U.S.P.T.O.?

When patents are challenged in the courts, if the case reaches trial, more often than not the patent is invalidated. If the patent in challenged at the U.S.P.T.O. the same thing happens. In the notorious N.T.P. v. R.I.M. case the U.S.P.T.O. tossed the patents AFTER the judge made R.I.M. pay N.T.P. Is that justice?

Take Oracle v. Google where Oracle’s patents are dropping like flies.

And then of course there’s the Dean Drive.

If you think patents are so wonderful, explain how the system let those clunkers through.

Wayne

21 David Dennis { 08.11.11 at 8:45 pm }

I can certainly relate to your arguments that Apple’s innovation in creating the iPhone deserved a period of exclusivity.

But what about Lodsys and their suits against developers? Can you in any way defend them? I would think any reasonable person would consider that Apple’s license of their patents would allow developers to build software using Apple’s servers and license. Lodsys’ tactics of being able to hold a gun to the heads of developers are reprehensible. But they appear to be working, and this disgusts me.

What can be done about this while preserving the advantages of our existing system?

D

22 The Mad Hatter { 08.12.11 at 10:27 am }

I can certainly relate to your arguments that Apple’s innovation in creating the iPhone deserved a period of exclusivity.

For what? The original IPhone looked so much like a Palm Pilot/Palm Treo that I was shocked that Palm didn’t sue Apple’s ass off. The only difference was the touch screen, which Apple stole from museum & supermarket displays. Oh, and minor packaging details. But it’s the minor packaging details that made the difference, and that always has been Apple’s strong suit.

What can be done about this while preserving the advantages of our existing system?

You seem to think that there are advantages to our current system. So far I haven’t meet anyone who has been able to prove that there are any, except to the Trolls and the Lawyers.

Look at Apple’s situation. How has the current system helped Apple? Simple. It hasn’t. Apple has wasted a ton of money, and so far hasn’t managed to stop anyone from copying anything. So the system hasn’t benefited Apple. If you look at the record Apple has often been a defendant against the trolls. Yes, Apple won against Psystar. How much did it cost Apple to win? Was it worth the cost?

Or Microsoft. How often has Microsoft been a defendant? How much has it cost Microsoft, and for what. Eolas and their junk link patent, which was the same thing effectively as the CHAIN technology that Microsoft Quick Basic had 15 years before. That took a lot of intelligence to invent I bet, and the system really benefited Microsoft.

How about Oracle v. Google. Google did a lot of work on Android. They used none of Oracle’s code. Why should Oracle get the benefit?

I could go on and on. There’s just so many examples.

Wayne

23 scottj { 08.12.11 at 11:20 am }

Wayne notes, “Yes, Apple won against Psystar.”

Which is a revealing comment. The Apple/Psystar action had nothing to do with patents. To my eye, Wayne’s comment unwittingly reveals an all-too-common flavor of round-the-clock, all-purpose, unmodulated, reflexive and nihilistic opposition to the very concept of intellectual property no matter how it is safeguarded.

See, there is a movement afoot in many countries to eliminate the principle of intellectual property. Attacks on software IP form the leading edge of this knife. There are familiar faces involved transnationally. So my “Agenda-O-Meter” quivers when I read comments like Wayne’s, because they’re of a piece with the ruminations and rants of such luminaries as:

o Anarchist Eban Mogland (“Death of Proprietary Society,” “Anarchism Triumphant”; see http://emoglen.law.columbia.edu/publications/maine-speech.html for an
example of his philosophy). Mogland’s religious fervor on the topic of free/open-source (FOSS) software is animated by such faithful pieties as “production of executable software without property relations inherently develops superior software”.

o Anarcho-communist Richard Stallman, (whose stated goal is to “eliminate independent coding as a profession” and who pals around with the likes of Hugo Chavez, cf. http://www.olpcnews.com/sales_talk/countries/bolivarian_pc_venezuela.html)

…hence, if I may be permitted a reflexive position of my own, my suspicion is that the opposition to IP by Wayne et fils is less driven by a swelling sense of gratitude for capitalism’s bounties than a philosophical/political prerogative to tear the system down.

Sure, there are excesses; capitalism regularly gives its enemies the sticks with which to bludgeon it. And the mess in software patents is unsurprising considering that there was zero domain knowledge about software in the USPTO and other nations’ patent agencies within the past two decades. In the U.S., to be a patent attorney requires both a law degree and a degree in some “science.” When I had my own adventure before the USPTO’s three-judge board of appeals in Washington to successfully defend a patent against a clueless examiner’s rejection, Computer Science was not regarded as a science for the purposes of licensure. So there were precisely zero patent attorneys, patent examiners and patent judges with software domain knowledge. Presumably that’s been corrected by now, but here we are, not that many years later, and not only is there a dog’s breakfast of bad legal decisions accumulated by these people–including some bad patents–but those clueless players are now running the joint, with years of seniority.

So the system definitely needs fixing, starting with an upgrade of the people involved. But let’s not throw the baby of innovation out with the bathwater of reform. And let’s not kill the engine of high technology by sacrificing it on the altar of agenda.

24 The Mad Hatter { 08.12.11 at 12:15 pm }

scottj,

Hoo boy, one of the conspiracy theorists.

For your information I’m an advocate for stronger copyright laws to protect artists. Specifically I’ve called for:

1) Copyrights to only be held by humans.
2) Copyrights to be transferable only by inheritance.
3) If a copyright is needed by a corporation it can be leased from the creator for a five year period.
4) No automatic renewals to be allowed for leases.

The aim is to put the control back in the creators hands. Note that neither Microsoft, Apple, the Free Software Foundation, nor damned near anyone else is going to like this. The people that actually produce the copyrighted works stand to gain though.

Wayne

[Doesn't really seem to be in the interests of creators not to be able to sell the rights to their work, or alternatively, be compelled to license them to any corporation able to pay the fees. Should the Beetles have been unable to sell rights to Michael Jackson? Or should Nike just have had the right to associate " Revolution" with its shoes if it could front a fee directly (apparently determined by a bunch of communists or fascists), regardless of what the creators wanted? Questions get tougher when you put reality into the variable fields.

Sounds a lot like bad solutions to problems that aren't really needing such drastic fixes in the first place - Dan]

25 broadbean { 08.12.11 at 5:38 pm }

Even after skimming Wayne’s intellectual self congratulatory gratification, I still didn’t feel compelled to respond. But Dan, it’s The BeAtles, not BeEtles!

26 The Mad Hatter { 08.12.11 at 6:23 pm }

Doesn’t really seem to be in the interests of creators not to be able to sell the rights to their work, or alternatively, be compelled to license them to any corporation able to pay the fees. Should the Beetles have been unable to sell rights to Michael Jackson? Or should Nike just have had the right to associate ” Revolution” with its shoes if it could front a fee directly (apparently determined by a bunch of communists or fascists), regardless of what the creators wanted? Questions get tougher when you put reality into the variable fields.

Sounds a lot like bad solutions to problems that aren’t really needing such drastic fixes in the first place – Dan

Dan,

I’d like to recommend you read The Problem With Music by Steve Albini and The Business Rusch: You Are Not Alone.

I made my suggestions about changes to copyright law in the most recent Canadian Copyright Consultation. At that time I’d never heard of Steve Albini, and didn’t know about his article, which dates to about 2005.

Kristine Rusch I only heard about this last week, when Sarah Hoyt gave me a link to one of her articles. A lot of the problems Kristine is seeing in book publishing I saw in music publishing five years ago.

For your information I have a portable recording studio, and I do some work for small acts in the Toronto area. I used to use Garage Band, now I use Logic Studio.

I am also a registered Canadian Publisher with my own set of International Standard Book Numbers, and my company will be publishing our first set of books in the next couple of weeks.

So I know a lot about the situation that most people don’t. I’m on the side of the artists. Who’s side are you on?

Wayne

27 marsviolet { 08.12.11 at 9:08 pm }

For what? The original IPhone looked so much like a Palm Pilot/Palm Treo that I was shocked that Palm didn’t sue Apple’s ass off. The only difference was the touch screen, which Apple stole from museum & supermarket displays.

So basically you’re blind and stupid.

28 berult { 08.13.11 at 6:30 am }

“…For your information I have a portable recording studio, and I do some work for small acts in the Toronto area. I used to use Garage Band, now I use Logic Studio.

I am also a registered Canadian Publisher with my own set of International Standard Book Numbers, and my company will be publishing our first set of books in the next couple of weeks.

So I know a lot about the situation that most people don’t. I’m on the side of the artists. Who’s side are you on?

Wayne”

My dear Wayne, I feel so belittled and humbled by your vast area of expertise, your seemingly deep understanding of life’s intricacies, your compassionate wisdom on the plight of artists and creators….

I am shamed by my simplistic take on it all…! 

You see, I happened to believe …until now, in the subversive nature of art. I always thought, until now, that ambient resistance and reactionary protocols  were the ether into which unfold acts of creation. The more you throw at them, the more productive artists become.

But from now on …for me, the fate of artistic endeavors travels through the point of least resistance, …the Amazon Protocol…

‘high value’ trade floors angle asymptotic to axial idealism…

What giveth on pay dirt prose, …taketh on semantic poetry;

Sweatshop for the soul…, …thrifty slate for a prism…;

This here market place ain’t no place for pricelessness’ elegy…!

berult

29 stefn { 08.13.11 at 11:38 am }

Check out Nilay Patel’s article on patents, which is concentric with Daniel’s: http://thisismynext.com/2011/08/11/broken-patent-system/

30 nextguy { 08.14.11 at 6:29 pm }

@stefn, Timothy Lee pointed out some flaws in that article here

http://www.forbes.com/sites/timothylee/2011/08/11/software-is-just-math-really/

and here

http://arstechnica.com/tech-policy/news/2011/08/are-software-patents-the-scaffolding-of-the-tech-industry.ars

Key point: “The company that prevails is the one that executes best, not the one who came up with the idea first. ”

And we all know apple fits into that category of execution. All the others who “copied” their great ideas still haven’t executed them well as apple, in the form of not as accurate touch screens, quality of the hardware, top to bottom support and end user experience.

31 The Mad Hatter { 08.14.11 at 6:45 pm }

And we all know apple fits into that category of execution. All the others who “copied” their great ideas still haven’t executed them well as apple, in the form of not as accurate touch screens, quality of the hardware, top to bottom support and end user experience.

Agreed. Apple’s execution has been near flawless.

Wayne

32 gavrojames { 08.14.11 at 9:07 pm }

Great stuff Daniel:
So in a way, the Microsoft disintegrated monopoly model we lived with for so long is exactly what allowed Apple to refocus on a new model that as you say was “bathed in the fires of intense competitive pressure”. I wonder what it’d be like now if MSFT and Apple had split market share in the 90s. Would Apple have taken another, less competitive course? Its possible in that world we may have not had iPhone/iPad by now (??)

Try not to let the “analysts” sweat you too much :)

33 schwabsauce { 08.15.11 at 12:45 pm }

I believe that by directing profits towards innovators, the patent system was intended to encourage research, investment in science, and competition – which leads to better quality products. This protection is probably most relevant to small companies who may not have the ability to quickly ramp up a production line. Yet in today’s America, I don’t see the small companies competing in the software business. Thankfully this situation is changing due to the App Store. But with that exception, the software industry seems to have chiefly been the domain of a few superpowers who can effortlessly murder newcomers by virtue of the fact that they have money – not because they own every good engineer and every good idea – nor do these executions have much grounding in the legal merits of the actual claims.

The question that interests me is not whether software patents are evil, but whether they lead to better products and a stronger ability for engineers to employ themselves productively. From my reading of your article, the only company that has managed to use the patent system to facilitate innovation has been Apple. The other characters in the story are presented as copycats who flout the law, even while housing legal teams and budgets that should protect their prerogative to invest in innovation.

It’s clear to each of us that there are many invalid patents that should not have been awarded. I also suspect a certain level of consensus on my assertions that it’s difficult for juries to comprehend some of these cases, and that the high price of defense is regrettable. But even if these issues were ameliorated, I wonder if the system would make sense and foster progress.

Patents frustrate equally two types of creative activity: learning a technique from someone else, and coming up with that technique on your own. Perhaps you feel that one of these types has more legal or economic validity than the other; I say that the fact that both are illegal is a fundamental misstep.

The absence of a culture of small software is obvious in the context of a legal-economic system where creating a product first requires a developer to read millions of documents and make sure to use none of the ideas they contain. Is this, or is this not, the epitome of insanity?

Yes – in reality many of us can and do pull a Google, and just pretend that those protections don’t exist and that we won’t get caught. Any legal system will be imperfect, and I’m sure some readers feel justified in their comfort with this type of compromise.

However, I believe that there is more value in striving towards a set of laws that we can realistically follow. In a world where you have to break the law to get by, or to live with dignity, moral compunctions of many kinds disintegrate. Think of the prohibition era, when your ability to care for and protect loved ones arguably became contingent on your willingness to engage in high-risk legal gambits – which frequently involved violence (or at least the threat of mutual havoc). This mismatch of what the law stated vs. what people could actually accomplish led to the genesis of a second, shadow legal system which essentially utilized its own courts and its own justice to mediate a fair and free economy. This corporal-punishment-friendly environment probably led to the violent traditions that have made America a home for the intimidation and destruction that an avalanche of handguns have inspired. Was that good for our economy? What about justice?

The patent system isn’t working – and I agree with (what I believe to be the vast majority of software professionals) those who say that it can never and should never work. I want to offer a consideration for those who wish to do thought experiments about what abandoning it might mean (which after all is the basis for all debate, legislation, and jurisprudence).

Most of us are familiar with the idea that a big, productive company should be able to profit and grow on earnings from its good products. What if, instead, we didn’t foster so much growth, but more diversity? What if working in the same way day after day didn’t lead to a growing salary – but instead there was a penalty for complacency?

I believe that big companies, like Apple, would still be able to earn sufficient income from well-executed deliveries that incorporated a moderate pace of innovation and a high level of competence. Whether or not they were rapidly stockpiling cash, they would be meeting payroll and paying their electric bill, and they, like other diligent and well-run companies, could provide stability for their families and customers.

This concept of a flat company, as opposed to one that either grows or dies, is a bit radical, but as I think 37signals has aptly demonstrated, it’s an important concept for us to understand going forward. They also have other philosophies that bear on this debate – like the example they set of a company that open-sources perhaps 80% of their stack without fearing competition, because the valuable thing isn’t their code, it’s their customer service and their interfaces and their data, and their willingness to work smart and hard on the issues that come up while trying to model a real world with a virtual one.

The way to become rich and successful isn’t to come up with a great idea and sit on it – it’s to come up with a great idea and then keep working your tail off on it and everything else you can. This is the reality upon which we can base our software economy.

34 The Mad Hatter { 08.15.11 at 2:57 pm }

schwabsauce:

Why the distinction between Software and Hardware? I’ve worked with both, and seen the same problems with patents. The entire system is a mess at present.

Wayne

35 The Mad Hatter { 08.15.11 at 3:17 pm }

This is pulled from TechDirt. TechDirt allows the complet posting of the articles. They do like it if you post a link to the original, which I always do. The site is invaluable, and Mike Masnick is one heck of a writer.
The link is next, and below it is the article:
http://www.techdirt.com/articles/20110812/02583515490/how-getting-patent-can-actually-be-detrimental-to-startups-long-term-success.shtml

How Getting A Patent Can Actually Be Detrimental To A Startup’s Long Term Success

from the thinking-twice… dept

There’s a standard refrain we hear all the time from startups in Silicon Valley, which is some form of “I hate patents and think they’re anti-innovation… but I still have to register a bunch, just for defensive purposes.” One variation on this is “just to show investors I’m serious.” These entrepreneurs insist that their patents will never be used offensively, but they can’t really promise that. In fact, such patents can actually harm the very company that got them. One way is pretty obvious: just getting patents takes (precious) time, money and resources that could be put to much better use elsewhere. However, that’s perhaps a smaller issue than the fact that patents can make a company throw in the towel earlier than it should.

To explain why, let me pull from a few recent news articles that, together, hopefully explain the issue. Tim Carmody at Wired highlights how, when startups fail, investors sometimes recoup some of their money by selling patents. He gets that from a PEHub interview with Silicon Valley tech startup liquidator extraordinaire, Marty Pitchinson, whose reputation, as the dot com cleanup guy, we’ve chronicled for nearly a decade (when his business is good, the rest of Silicon Valley’s business isn’t).

There are two key points that he makes. The first is that ten years ago, patents weren’t a big part of his business. Today, they’re a massive part of his business:

Things have definitely changed. I remember in 1999, 2000, I would sell a used server for $35,000 and I had a line of people wanting it. Today, a server is $5,000 and you can get an okay server for less than $2,000. [In the meantime], we’ve probably become one of the largest sellers of [intellectual property] in the country. We sell tons of IP, and as you know, the IP wars have started, so we play with the big guys, the little guys, and the in-between guys. During the last bubble, there weren’t as many patents. It was more ideas and URLs. So the business has matured.

Back in the Wired article, Carmody points to a case study on Pitchinson’s website, in which it notes that it helped sell off the patents of a company that had raised $65 million in venture capital. In that case, the board (meaning, mostly the investors in the company) decided that “they would be better off selling off their IP than seeking an additional round of funding.”

Now, combine that with the story we had discussed recently by law professor Colleen Chien about patent trolls, where she makes a point that many have raised before: the system actually encourages the formation of non-practicing entities (trolls) to hold patents, rather than companies who actually do stuff:

Successful trolls have found ways to remove these traditional obstacles to suit. Most obviously, not making anything immunizes them against counter accusations of infringement. A liability in every other context, having nothing to sell is an asset for trolls. This is why patents are often worth more when a company is dead and has nothing to lose from patent counter suits, than when it is alive and does.

Now, pull all of this together and you have a situation where patents can actually be a ticking time bomb for startups. With patents in hand, even if they were obtained solely for defensive purposes, a board could decide (as happened in the case above) that a better way to get some return on their investment is just to shut down the company and sell off the patents — again noting that the patents are more valuable when there’s no practicing entity to deal with.

Thus, startups with patents risk having those patents represent a greater value than the business itself, making it too easy a target for a board (of mostly investors) to simply liquidate the company in order to seek the immediate cash of patents for use by trolling operations. It’s the worst of all world’s. Companies get shut down too early because the cost/benefit tilts too strongly towards selling the patents. The patent that was originally acquired solely for defensive purposes then ends up in the hands of an NPE who plans to sue lots of companies.

While this certainly does not apply in every case, it should be a real concern with some companies, in that they will have a shorter timeline to build a business and succeed before the VCs decide it’s best to just sell off the patents and see what they can get.

36 The Mad Hatter { 08.15.11 at 3:38 pm }

Thanks to Scott Adams.

37 The Mad Hatter { 08.15.11 at 3:40 pm }

Thanks to Scott Adams.

38 The Mad Hatter { 08.15.11 at 3:42 pm }

OK, didn’t work. Here’s the link to the comic

Wayne

39 NormM { 08.18.11 at 9:06 pm }

Dan, You argue how important Apple’s patents were in giving the iPhone a good start, and then talk about how Google completely ignored them (and they weren’t the only ones — everyone who thought they had a strong patent portfolio ignored them). Isn’t it one thing or the other?

Personally, I think it’s hard to see that patents are currently helping the software industry at all. It looks to me like a giant tax paid to lawyers and trolls, with all big companies cross licensing to neutralize each other’s arsenals. There are so many bad patents and there’s so much uncertainty about litigation that it’s really just a protection racket.

Since there are such large vested interests I don’t think we can just start over (I also would have preferred single-payer medical insurance). At the least we need shorter terms and a much better process for eliminating obvious and redundant patents (which is currently almost all of them).

Perhaps change the system to something closer to peer review, rather than the current vanity-press approach. Maybe also allow disclosure that is secret for a limited period, and if another similar disclosure arrives within this period it constitutes proof of obviousness (and hence unpatentability).

40 JonWade { 09.11.11 at 7:09 pm }

Fascinating. This is one of your more brilliant thought pieces. I was against patent trolls, and although they are bottom-feaders, I see they have a place and serve a purpose in the innovation game.

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