Balance of Patent Terror

by on April 24, 2007 · 14 comments

I’ve got a new article up at the American:

Technology companies have responded to the proliferation of bad patents by engaging in the patent equivalent of nuclear stockpiling. By obtaining dozens, hundreds, or even thousands of patents, a company can develop a credible deterrent against patent lawsuits: if someone sues it for patent infringement, it will be able to find a patent the other company has infringed and countersue. Vonage’s fundamental mistake was that it chose not to join this arms race. As a result, when Verizon sued, it was completely defenseless. Software patents are particularly ripe for abuse because software is assembled from modular components. If the patent system allows those components to be patented, it becomes almost impossible to develop a software product without infringing numerous patents. Moreover, because of the complexity of software, it is often prohibitively expensive to even find all the patents a given software product might in principle be infringing. So even a software firm that wanted to find and license all of the patents relevant to its products is unlikely to be able to do so. It’s not clear how any of this promotes “the progress of science” as required by the Constitution. Because of the high cost and uncertainty of the patent system, most software companies don’t even try to find patents they might be infringing. Instead, they sign cross-licensing deals with as many companies as possible, and they pray that the remaining companies won’t sue them before they’ve had time to develop a patent war-chest of their own. This is great for patent lawyers, but it’s not clear how anyone else benefits.

Readers of Techdirt may notice that I’m shamelessly cribbing from Mike Masnick, who apparently picked up the idea of nuclear stockpiling from MySQL CEO Marten Mickos back in 2004. It’s disappointing to find that their warnings are growing more accurate by the year.

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About Tim Lee

Timothy B. Lee (Contributor, 2004-2009) is an adjunct scholar at the Cato Institute. He is currently a PhD student and a member of the Center for Information Technology Policy at Princeton University. He contributes regularly to a variety of online publications, including Ars Technica, Techdirt, Cato @ Liberty, and The Angry Blog. He has been a Mac bigot since 1984, a Unix, vi, and Perl bigot since 1998, and a sworn enemy of HTML-formatted email for as long as certain companies have thought that was a good idea. You can reach him by email at leex1008@umn.edu.

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  • http://tieguy.org/blog/ Luis Villa

    No need to give credit on the idea; the analogy to mutually assured destruction is at least as old as this 2000 wired article and I’m sure much older than that.

  • http://tieguy.org/blog/ Luis Villa

    No need to give credit on the idea; the analogy to mutually assured destruction is at least as old as this 2000 wired article and I’m sure much older than that.

  • Lawrence B. Ebert

    Merely fyi:

    a post on IPBiz

  • Lawrence B. Ebert

    Merely fyi:


    a post on IPBiz

  • http://mcgath.blogspot.com Gary McGath

    Luis Villa: I’m glad you pointed out the prior art. This means Mike Masnick and Marten Mickos can’t patent the nuclear stockpile metaphor. :)

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

    Forbes has a good article on the insanity of today’s patents. (To read the article you will need to sign in.) The article is titled “Patent Pirates” and Forbes writes “Hedge funds and institutional investors are financing the latest wave of IP lawsuits.”

    Of added interest is that the May 7, 2007 edition is devoted to articles on networking. Some of the article don’t require that you sign in.

  • http://mcgath.blogspot.com Gary McGath

    Luis Villa: I’m glad you pointed out the prior art. This means Mike Masnick and Marten Mickos can’t patent the nuclear stockpile metaphor. :)

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

    Forbes has a good article on the insanity of today’s patents. (To read the article you will need to sign in.) The article is titled “Patent Pirates” and Forbes writes “Hedge funds and institutional investors are financing the latest wave of IP lawsuits.”

    Of added interest is that the May 7, 2007 edition is devoted to articles on networking. Some of the article don’t require that you sign in.

  • http://bennett.com/blog Richard Bennett

    Software patents are particularly ripe for abuse because software is assembled from modular components.

    Unlike what, exactly?

  • http://bennett.com/blog Richard Bennett

    Software patents are particularly ripe for abuse because software is assembled from modular components.

    Unlike what, exactly?

  • http://mutualist.blogspot.com Kevin Carson

    I hope plenty of people have stockpiles of patents Bill Gates has infringed if he ever decides to go after Linux.

  • http://mutualist.blogspot.com Kevin Carson

    I hope plenty of people have stockpiles of patents Bill Gates has infringed if he ever decides to go after Linux.

  • http://www.opriskman.com Mike O’Keeffe

    If you look at the top filers at USPTO the Japanese and Korean companies hold 6-7 of the top 10 slots every year. I have done a study looking at filing in China (SIPO) with filing in Japan as a benchmark and surprisingly few US companies file there. But, just like your thesis predicted, the US chip makers skip Japan where JP electrical companies file 10,000 patents per co. each year and make it difficult for IBM and Intel to get patent rights without having to cross license to avoid “chatter patents”. It may be worth researching some more.

  • http://www.opriskman.com Mike O’Keeffe

    If you look at the top filers at USPTO the Japanese and Korean companies hold 6-7 of the top 10 slots every year. I have done a study looking at filing in China (SIPO) with filing in Japan as a benchmark and surprisingly few US companies file there. But, just like your thesis predicted, the US chip makers skip Japan where JP electrical companies file 10,000 patents per co. each year and make it difficult for IBM and Intel to get patent rights without having to cross license to avoid “chatter patents”. It may be worth researching some more.

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