A Response to Greg Aharonian

by on June 12, 2007 · 34 comments

I thank Solveig and Greg for their thoughtful comments on my software patents op-ed. A few quick responses. First, from Greg:

based on journal literature, industry gross sales, published books, and more consumer crap to fill garbage dumps with, there is ZERO evidence that technology is being stifled…

I have trouble putting much stock into studies that try to find a statistical correlation between software patents and innovation. It’s extremely difficult to come up with good metric for the innovativeness of an industry given that, by definition, innovation happens when you do something people don’t expect. Moreover, it’s not clear to me what the appropriate baseline should be in these studies. Even if you came up with an objective measure of how innovative the software industry is at any given time, I don’t know how you’d figure out what the relevant counterfactual is. You might be able to learn something via cross-country comparisons, but even these comparisons are pretty dubious given the globalized nature of the software industry.

But while macro-level statistics aren’t very illuminating, I think the anecdotal evidence is overwhelming. I think Greg’s rejoinder here kind of proves my point:

His main example is Vonage’s loss to Verizon, which a) won’t lead to any technology stifling, and b) is more an example of hiring incompetent litigators (the Verizon patents are pure crap if you hire a good searcher who hands his results off to good litigators).

If Verizon wins on appeal and drives Vonage out of business, I don’t see how you can argue that no technology has been stifled. Not only will that cause Vonage’s technology to no longer be available to consumers, but it will also send a powerful message to startups that they’d better spend more money on lawyers and less money on engineers. It seems to me that a legal system that makes success in the marketplace a function of how smart your lawyers are, as opposed to how smart your engineers are, is a legal system that is stifling innovation almost by definition. I mean, this is how libertarians view almost any other kind of lawyers, right? If companies have to spend more time defending themselves against frivolous product liability suits, or they have to hire more lawyers to represent them before regulatory bodies, it’s obvious that’s bad for the economy. Why are patent lawyers any different?

Finally, Greg says that copyright law has similar problems:

You think applying the Altai test is simple (other than applying the Altai test to say nothing non-literal about software is copyrightable because it can’t survice [sic] abstraction and filtration)? Have you read the endless law review articles pointing out the contradictory nonsense of software copyright caselaw, which are the rules that people have to deal with to protect their software with copyright? Do you read?

Obviously copyright has its complexities too, but these complexities exist only in marginal cases. Copyright law is very clear on two points: First, making exact copies of a piece of software is copyright infringement. And second, independently invented programs do not infringe anyone’s copyright. These two principles ensure on the one hand that companies are protected from the most blatant forms of piracy, and on the other hand that other programmers don’t have to worry about inadvertently infringing someone else’s copyright. Only in cases where one company attempts to clone the interface of another company’s software does copyright law become messy.

To put it in concrete terms: no one has claimed that Vonage’s VoIP technology is in any way based on Verizon’s designs, yet that hasn’t saved them from Verizon’s lawsuit. This could never happen under copyright law. Under copyright law, Verizon would have to make the case that Vonage’s VoIP technology was in some way based on Verizon’s technology. If Vonage can demonstrate that it developed it independently, then it isn’t guilty of copyright infringement, regardless of how similar their products happen to be.

  • http://www.pff.org Noel

    I have trouble putting much stock into studies that try to find a statistical correlation between software patents and innovation.

    Tim, so you just assume the tech sector is stifled, or impinges on various ideological measures of innovation? You want to say patents don’t correlate with innovation, but you don’t want to measure the correlation?

    Thats fine if you approach patent policy from a natural rights rather from utilitarian perspective, which I believe you do. However, patent policy is informed by utilitarian concerns- no idiosyncratic ideologies.

    So Tim, you admit your example of Verizon v Vonage is anecdotal. Uhhh, sense of perspective is important here. The market is not concerned about any single company, its concerned with the entire sector.

    If Vonage closes down, one wonders if things would be different if it found work-arounds to Verizon’s patents when it should have.

    It seems to me that a legal system that makes success in the marketplace a function of how smart your lawyers are, as opposed to how smart your engineers are

    Then the smart engineer is not really smart. Simple.

  • http://www.techlawforum.net Gorman

    I also think that your last point about proving independent creation goes back to your previous noting of the fact that the legal system stifles innovation. You still have to have good lawyers to prove that the software was created independently. I guess the question is…..how can the law both provide protection & remedies while staying out of the way of innovation?

  • http://www.techlawforum.net Gorman

    I also think that your last point about proving independent creation goes back to your previous noting of the fact that the legal system stifles innovation. You still have to have good lawyers to prove that the software was created independently. I guess the question is…..how can the law both provide protection & remedies while staying out of the way of innovation?

  • Julian Sanchez

    “Thats fine if you approach patent policy from a natural rights rather from utilitarian perspective, which I believe you do.”

    Where on earth did that come from? Even leaving aside that I’ve always taken Tim to be more or less a consequentialist, what “natural rights perspective” yields the view that patents in other arenas are justifiable, though not in software, where there ought to be copyrights? That’d have to be a fairly tortuous deontology.

  • AK

    Noel, you don’t agree with Tim. We get that.

    He’s been pointing out what he thinks is wrong with software patents. Could you try explaining how they promote innovation?

  • http://www.pff.org Noel

    I have trouble putting much stock into studies that try to find a statistical correlation between software patents and innovation.

    Tim, so you just assume the tech sector is stifled, or impinges on various ideological measures of innovation? You want to say patents don’t correlate with innovation, but you don’t want to measure the correlation?

    Thats fine if you approach patent policy from a natural rights rather from utilitarian perspective, which I believe you do. However, patent policy is informed by utilitarian concerns- no idiosyncratic ideologies.

    So Tim, you admit your example of Verizon v Vonage is anecdotal. Uhhh, sense of perspective is important here. The market is not concerned about any single company, its concerned with the entire sector.

    If Vonage closes down, one wonders if things would be different if it found work-arounds to Verizon’s patents when it should have.

    It seems to me that a legal system that makes success in the marketplace a function of how smart your lawyers are, as opposed to how smart your engineers are

    Then the smart engineer is not really smart. Simple.

  • http://www.pff.org Noel

    Julian, to state it simply- Tim wants the freedom to tinker, he feels its a natural right. Nothing wrong with that, but its worth note when considering Tim’s evidence against software patents. Evidently, he does not like economic evidence, but emphasizes situations where patents impinge on his natural right to tinker.

    AK, check out one of my writings- Patent Licensing Markets Shape the Technology Industries. Google it on IPcentral…

  • SailorRipley

    Hey Noel, you should really try a lot harder to make a case for yourself, because so far, you suck really bad at providing any proof, arguments or facts to substantiate your pov

  • http://www.pff.org Noel

    Mr Sailor, thanks for the nice reply. Why don’t you go read the article I posted (I don’t want to put a link here, spam filter) and then say something to me.

  • http://www.techlawforum.net Gorman

    I also think that your last point about proving independent creation goes back to your previous noting of the fact that the legal system stifles innovation. You still have to have good lawyers to prove that the software was created independently. I guess the question is…..how can the law both provide protection & remedies while staying out of the way of innovation?

  • http://www.techlawforum.net Gorman

    I also think that your last point about proving independent creation goes back to your previous noting of the fact that the legal system stifles innovation. You still have to have good lawyers to prove that the software was created independently. I guess the question is…..how can the law both provide protection & remedies while staying out of the way of innovation?

  • Julian Sanchez

    “Thats fine if you approach patent policy from a natural rights rather from utilitarian perspective, which I believe you do.”

    Where on earth did that come from? Even leaving aside that I’ve always taken Tim to be more or less a consequentialist, what “natural rights perspective” yields the view that patents in other arenas are justifiable, though not in software, where there ought to be copyrights? That’d have to be a fairly tortuous deontology.

  • AK

    Noel, you don’t agree with Tim. We get that.

    He’s been pointing out what he thinks is wrong with software patents. Could you try explaining how they promote innovation?

  • http://www.pff.org Noel

    Julian, to state it simply- Tim wants the freedom to tinker, he feels its a natural right. Nothing wrong with that, but its worth note when considering Tim’s evidence against software patents. Evidently, he does not like economic evidence, but emphasizes situations where patents impinge on his natural right to tinker.

    AK, check out one of my writings- Patent Licensing Markets Shape the Technology Industries. Google it on IPcentral…

  • SailorRipley

    Hey Noel, you should really try a lot harder to make a case for yourself, because so far, you suck really bad at providing any proof, arguments or facts to substantiate your pov

  • http://www.pff.org Noel

    Mr Sailor, thanks for the nice reply. Why don’t you go read the article I posted (I don’t want to put a link here, spam filter) and then say something to me.

  • http://linuxworld.com/community/ Don Marti

    Noel, thanks for the link to the Somaya and Teece paper, They write, “in some cases, transaction costs in licensing are so high as to render licensing modes unviable, irrespective of their positive effects on innovation.”

    Look at the actual costs to create software, and compare to the transaction costs around patenting it. Considering the number of patentable innovations in any software product, in order for the pro-software-patent argument to fly, someone has to come up with a really inexpensive license clearinghouse system.

    Who’s going to get all the patent trolls in a room together and get them to start an organization like ASCAP or BMI?

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

    You are right Don, Teece/Somaya make that point, and so far as I understand Teece/Somaya, in such a case they would propose that a firm either adopt an integrated development model, or leverage various forms of IPR clearance (patent pools, cross-licensing, etc). The Teece/Somaya paper addresses the former point based on its framework of how costs shape firm organization, and the latter point is explicitly addressed towards the end of the paper. I don’t see the passage having the significance you may imply though.

  • http://linuxworld.com/community/ Don Marti

    Noel, thanks for the link to the Somaya and Teece paper, They write, “in some cases, transaction costs in licensing are so high as to render licensing modes unviable, irrespective of their positive effects on innovation.”

    Look at the actual costs to create software, and compare to the transaction costs around patenting it. Considering the number of patentable innovations in any software product, in order for the pro-software-patent argument to fly, someone has to come up with a really inexpensive license clearinghouse system.

    Who’s going to get all the patent trolls in a room together and get them to start an organization like ASCAP or BMI?

  • http://techdirt.com/ Mike Masnick

    I have trouble putting much stock into studies that try to find a statistical correlation between software patents and innovation.

    Indeed, overall correlation is not the key here as there are way too many other variables. What Noel and Greg seem to be missing is the mountain of evidence that looks more narrowly at cases of strengthened IP laws that show stricter intellectual protectionist laws clearly slow down innovation and creation.

    There are plenty of studies that look at cross country innovation, as well as innovation pre- and post- IP introduction, and the same result always comes out: no increased, and often decreased, production due to IP laws.

    There’s been some very recent research that highlights this in a very dramatic way — and how decreased protectionism counter intuitively opens up huge opportunities. I’m writing something up for it (not for Techdirt just yet, but it will appear there eventually).

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

    You are right Don, Teece/Somaya make that point, and so far as I understand Teece/Somaya, in such a case they would propose that a firm either adopt an integrated development model, or leverage various forms of IPR clearance (patent pools, cross-licensing, etc). The Teece/Somaya paper addresses the former point based on its framework of how costs shape firm organization, and the latter point is explicitly addressed towards the end of the paper. I don’t see the passage having the significance you may imply though.

  • http://techdirt.com/ Mike Masnick

    I have trouble putting much stock into studies that try to find a statistical correlation between software patents and innovation.

    Indeed, overall correlation is not the key here as there are way too many other variables. What Noel and Greg seem to be missing is the mountain of evidence that looks more narrowly at cases of strengthened IP laws that show stricter intellectual protectionist laws clearly slow down innovation and creation.

    There are plenty of studies that look at cross country innovation, as well as innovation pre- and post- IP introduction, and the same result always comes out: no increased, and often decreased, production due to IP laws.

    There’s been some very recent research that highlights this in a very dramatic way — and how decreased protectionism counter intuitively opens up huge opportunities. I’m writing something up for it (not for Techdirt just yet, but it will appear there eventually).

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

    Masnick, see research by Lee Branstetter and Keith Maskus on how IPRs have helped nations industrialize and form sophisticated economic sectors. Branstetter in particular has studied the effects of patents following nations’ strengthening their IPR policies.

    Of course, even if there is persuasive economic evidence against patents, Tim wouldn’t buy into it. He would opt instead to look at one patent at a time and rely on anecdotal evidence to show how the patent system should fall to molehills. If you read his post above differently, let me know.

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

    Masnick, see research by Lee Branstetter and Keith Maskus on how IPRs have helped nations industrialize and form sophisticated economic sectors. Branstetter in particular has studied the effects of patents following nations’ strengthening their IPR policies.

    Of course, even if there is persuasive economic evidence against patents, Tim wouldn’t buy into it. He would opt instead to look at one patent at a time and rely on anecdotal evidence to show how the patent system should fall to molehills. If you read his post above differently, let me know.

  • Segolene

    It is recurringly and overwhelmingly fucking depressing that people who claim to be more than .000000000001 percent libertarian think it’s good thing for the government to reward what it considers good economic behavior with an artificial monopoly. (You could copy and paste your language about incentivizing whatever you like to a discussion of monolithic teacher unions, or orange-sellers’ collectives.)

    If you want to have any credibility with respect to some notional “Natural Right” then simply do away with accidental infringement of all so-called IP. (Accidental infringement of copyright is mathematically impossible.)

    Also, finding comfort in the idea that a “little guy” is arbitrarily empowered to wield a government cudgel against a “big guy” is not the customary libertarian position, for good reason.

    I say this having made more money off of (ridiculously, offensively) bad software patents than an MLB second-stringer and a bit less than a starter make in a year. So thanks for making me a millionaire, suckers.

    The people who do really innovative and investment-heavy stuff hate this bullshit, as do most people who know anything about it.

    Final also: most people become libertarian after some experience of the deep stupidity of government. There is nothing like hearing about what has been granted a patent to feel the depth of that brainlessness, except maybe watching congress-critters legislating math and expounding the need for trucks not to back up on the internet tubes. IE, a lot of people who view the world through a tech lens are starting to see things our way and if you align us with or taint us by proximity to the techno-fuckwits we will lose a great opportunity.

  • Segolene

    It is recurringly and overwhelmingly fucking depressing that people who claim to be more than .000000000001 percent libertarian think it’s good thing for the government to reward what it considers good economic behavior with an
    artificial monopoly. (You could copy and paste your language about incentivizing whatever you like to a discussion of monolithic teacher unions, or orange-sellers’ collectives.)

    If you want to have any credibility with respect to some notional “Natural Right” then simply do away with accidental infringement of all so-called IP. (Accidental infringement of copyright is mathematically impossible.)

    Also, finding comfort in the idea that a “little guy” is arbitrarily empowered to wield a government cudgel against a “big guy” is not the customary libertarian position, for good reason.

    I say this having made more money off of (ridiculously, offensively) bad software patents than an MLB second-stringer and a bit less than a starter make in a year. So thanks for making me a millionaire, suckers.

    The people who do really innovative and investment-heavy stuff hate this bullshit, as do most people who know anything about it.

    Final also: most people become libertarian after some experience of the deep stupidity of government. There is nothing like hearing about what has been granted a patent to feel the depth of that brainlessness, except maybe watching congress-critters legislating math and expounding the need for trucks not to back up on the internet tubes. IE, a lot of people who view the world through a tech lens are starting to see things our way and if you align us with or taint us by proximity to the techno-fuckwits we will lose a great opportunity.

  • http://techdirt.com/ Mike Masnick

    Noel, again, Branstetter’s research tends to support those who don’t see the value of patents.

    Of course, even if there is persuasive economic evidence against patents, Tim wouldn’t buy into it. He would opt instead to look at one patent at a time and rely on anecdotal evidence to show how the patent system should fall to molehills. If you read his post above differently, let me know.

    I’m not going to speak for Tim, but you seem to be misunderstanding his position. He is responding to the claim that there’s no evidence of patents harming innovation. When someone presents you with an absolute like that, all you need is a single example to disprove it.

    That doesn’t mean that he’s not interested in the economic evidence. In fact, I’d find that hard to believe. What Tim said (or I believe he said) was that he doesn’t find the lack of evidence that Greg points to compelling, because Greg is pointing to overall correlation, which is meaningless, rather than more important economic research that allows you to dig deeper into the actual impact of IP protectionism.

    However, the overall point is that to disprove the absolute (no evidence of innovation being stifled) all you need is a single example. And Tim has found plenty of those “single” examples.

  • http://techdirt.com/ Mike Masnick

    Noel, again, Branstetter’s research tends to support those who don’t see the value of patents.

    Of course, even if there is persuasive economic evidence against patents, Tim wouldn’t buy into it. He would opt instead to look at one patent at a time and rely on anecdotal evidence to show how the patent system should fall to molehills. If you read his post above differently, let me know.

    I’m not going to speak for Tim, but you seem to be misunderstanding his position. He is responding to the claim that there’s no evidence of patents harming innovation. When someone presents you with an absolute like that, all you need is a single example to disprove it.

    That doesn’t mean that he’s not interested in the economic evidence. In fact, I’d find that hard to believe. What Tim said (or I believe he said) was that he doesn’t find the lack of evidence that Greg points to compelling, because Greg is pointing to overall correlation, which is meaningless, rather than more important economic research that allows you to dig deeper into the actual impact of IP protectionism.

    However, the overall point is that to disprove the absolute (no evidence of innovation being stifled) all you need is a single example. And Tim has found plenty of those “single” examples.

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

    Masnick, Branstetter will fall on both sides of the fence just like any other empirical researcher. I was not pointing him out just to show the case for patents, but somebody you should check out.

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

    Masnick, Branstetter will fall on both sides of the fence just like any other empirical researcher. I was not pointing him out just to show the case for patents, but somebody you should check out.

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