Software Patent of the Week: Litigation is for Losers

by on November 2, 2006 · 12 comments

I think one of the best pieces of evidence that patents are harmful to the software industry is the way that software companies’ behavior changes when they’re facing bankruptcy. A couple of weeks ago I discussed Transmeta’s transformation from an innovative technology company into a patent troll. Back in June, I covered Creative’s lawsuit against Apple after losing in the marketplace. This week we’ll consider SGI, another company with a proud history that has sadly descended into trolldom.

If a software patent were an ordinary productive asset like a plot of land or a truck, SGI’s behavior would make no sense. If somebody were squatting on SGI’s land, they would evict him immediately, they wouldn’t wait until they were facing bankruptcy before defending their property rights. Likewise, Disney or Merck wouldn’t tolerate another company using its movie copyrights or pharmaceutical patents without permission. Yet here we have SGI suddenly interested in suing over Patent #6,650,327, granted three years ago. Why didn’t SGI file this lawsuit back in 2003?

The most likely explanation, it seems to me, is that in 2003, SGI still had aspirations of being a legitimate technology company. Because they still had shipping products, they knew that a patent battle would end up being a loser for both parties. Every big company has products that infringe on at least one of every other big company’s patents, and so the other company would just file a counter-suit, and the only winners would be the lawyers.

But now SGI has hardly any customers left, and is teetering on the brink of bankruptcy. They have few legal vulnerabilities (since they have almost no products left) and very little to lose financially. So suddenly suing everyone who might have infringed their patents starts to look like a good idea.

Let’s take a quick look at SGI’s patent. It covers a “display system having floating point rasterization and floating point framebuffering.”

To unpack this a little bit, computers often represent images with a 2-dimensional array of pixels called a bitmap. This is the format required to display graphics on display devices such as computer screens. Rasterization is the process of “painting” an abstract shape (like a triangle or circle) into a bitmap. The frame buffer is the area of memory where a computer stores a digital representation of the contents of your computer screen. Both of these techniques have been widely used in computer graphics for decades.

A floating point number is a way of storing numeric data in scientific notation. It might store the 10 most significant digits of a number plus a 3-digit exponent. It has been a standard data type in programming languages like C and FORTRAN for decades.

The “invention,” then, is the idea of combining the two. It would have been perfectly obvious to a graphics engineer in 1998 that one could use floating point numbers to perform graphics operations. In practice, it was probably fairly rare at the time, because integer representations tend to be more compact, and would have conserved the limited graphics memory in early video cards. But the concept certainly would have struck most engineers at the time as obvious.

Of course, it has become increasingly economical to use floating-point values in graphics cards, and so companies like ATI have increasingly been doing so. But that’s an inevitable consequence of the advance of the semiconductor industry, it had nothing to do with SGI “inventing” the concept. Granting SGI this patent did absolutely nothing to promote the progress of science and the useful arts. But it helps keep the patent lawyers fed.

  • http://weblog.ipcentral.info/ Noel Le

    ***evidence that patents are harmful to the software industry***

    Wouldn’t going through economic or market research studies be more valuable in making this claim than analyzing 1 softare patent per week.

    By the way, what evidence is there that patents hurt the software industry. How exactly is the industry worse off with patents.

  • http://weblog.ipcentral.info/ Noel Le

    ***evidence that patents are harmful to the software industry***

    Wouldn’t going through economic or market research studies be more valuable in making this claim than analyzing 1 softare patent per week.

    By the way, what evidence is there that patents hurt the software industry. How exactly is the industry worse off with patents.

  • http://enigmafoundry.wordpress.com eee_eff

    I think you are missing the mother of all descents into trolldom–SCO’s lawsuit against IBM, Dainler-Chrysler, Auto-zone and the related suits by Novell and Red Hat against SCO.

    Suing your customers is always a sign that your business plan has failed–and that you have no long term plan.

    I am very sorry to see SGI go down like this–especially since I am a big fan of their XFS file system–I have been using it on SuSE linux for the past 4 yoers or so…

  • http://enigmafoundry.wordpress.com/ enigma_foundry

    I think you are missing the mother of all descents into trolldom–SCO’s lawsuit against IBM, Dainler-Chrysler, Auto-zone and the related suits by Novell and Red Hat against SCO.

    Suing your customers is always a sign that your business plan has failed–and that you have no long term plan.

    I am very sorry to see SGI go down like this–especially since I am a big fan of their XFS file system–I have been using it on SuSE linux for the past 4 yoers or so…

  • http://weblog.ipcentral.info/ Noel Le

    First of all, how much does the SCO suit rely on patent claims. Second, what point is there in IP if you can’t assert your property rights.

    I’m not a fan of litigous trolls, but as usual, Tim tries to make a point that his evidence really has little bearing to.

  • http://weblog.ipcentral.info/ Noel Le

    First of all, how much does the SCO suit rely on patent claims. Second, what point is there in IP if you can’t assert your property rights.

    I’m not a fan of litigous trolls, but as usual, Tim tries to make a point that his evidence really has little bearing to.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Noel: A fundamental problem exists. That is the question of whether a property right even exists. Just because someone claims to have a property right, that does not mean that one exists. What we are seeing today, is the use of lawsuits to “create” a property right where none has existed.

  • http://www.blogger.com/profile/14019452 Steve R.

    Noel: A fundamental problem exists. That is the question of whether a property right even exists. Just because someone claims to have a property right, that does not mean that one exists. What we are seeing today, is the use of lawsuits to “create” a property right where none has existed.

  • http://www.androhair.com Androhair

    Androhair: I would say one of the most important issues that has to be solved is the Active X controllers pattent lawsuit that Microsoft Internet Explorer holds, as this affects a lot of people in the ecommerce industry..lets just hope IE comer to an agreement as soon as possible for the benefit of everyone.
    http://www.androhair.com

  • http://www.androhair.com Androhair

    Androhair: I would say one of the most important issues that has to be solved is the Active X controllers pattent lawsuit that Microsoft Internet Explorer holds, as this affects a lot of people in the ecommerce industry..lets just hope IE comer to an agreement as soon as possible for the benefit of everyone.
    http://www.androhair.com

  • http://weblog.ipcentral.info/ Noel Le

    Steve R, I think everyone knows our patent system needs fixing. But getting rid of software patents, rather than improving them, or arguing that patents have a net detrimental effect to the software industry, are not productive discourse unless you substantiate your claims. Right Tim:)

    Steve, you’re right that patents don’t provide either an absolute or irrefutable property right (I think Prof. Carl Shapiro wrote about this, I’ll look up the article later), and your claim that folks try to “create” property rights observes the difference between broadly claimed patents and technologies subject to their suit. Again, these are issues of claim construction, and if anything else, recognize that courts have an important role in interpreting what rights actually fall under a patent. Implicitly, you disagree with Tim’s argument that the value of patents lies on the face of their claim construction.

  • http://weblog.ipcentral.info/ Noel Le

    Steve R, I think everyone knows our patent system needs fixing. But getting rid of software patents, rather than improving them, or arguing that patents have a net detrimental effect to the software industry, are not productive discourse unless you substantiate your claims. Right Tim:)

    Steve, you’re right that patents don’t provide either an absolute or irrefutable property right (I think Prof. Carl Shapiro wrote about this, I’ll look up the article later), and your claim that folks try to “create” property rights observes the difference between broadly claimed patents and technologies subject to their suit. Again, these are issues of claim construction, and if anything else, recognize that courts have an important role in interpreting what rights actually fall under a patent. Implicitly, you disagree with Tim’s argument that the value of patents lies on the face of their claim construction.

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