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.
In comments to my previous post on Verizon/Vonage case, Ben Klemens offers some insight into the reasons for the Federal Circuit’s permissive patent jurisprudence:
Fed Circuit judges take great pains to avoid policy arguments in their rulings. I think if you asked the judge why s/he allowed patents like these to stand (sorry, s/he’d lean heavily on how the patent has broken no rules, has correctly been put through the system, et cetera. To me, their interest is much more in maintaining and/or expanding the patent system then looking at the system’s effects on the non-patent world.
As for the part in the Constitution (Art. I, sec 8.8) that says that patents shall be granted to promote the progress of science and useful arts—which implies that a patent system that does not promote progress is unconstitutional—judges often take the attitude that that part of the Constitution is either unenforceable or just rhetorical fluff. It amazes me how much effort has gone into making sure that patent rulings in no way consider whether the patent, or any aspect of the patent system, is at all beneficial.
As for how anyone could seriously support the Federal Circuit’s patent rules, it seems the Supreme Court isn’t, and is slowly but surely reversing the CAFC’s expansions of patent law—often via arguments that rightly include a policy component.
We can certainly hope.
Matt Shannon questioned mine – and got an earful in the comments!
(It may be a coincidence / mistaken identity. Don’t assume I got my Google research right.)
Another reason you should listen to this week’s podcast is so you can hear Derek Slater discuss StopIllegalSpying.org, a website that EFF has created with the ACLU and others to pressure Congress to hold real hearings on the Bush administration’s terrorist surveillance illegal wiretapping program. I encourage you to check out the site and send a message to your Congresscritter.
In the podcast, Derek also updates us on other aspects of the fight against illegal spying, so I encourage you to check it out.
In this week’s podcast, James Gattuso asked about the possibility of a Vonage work-around for Verizon’s patents. The Indianapolis Star reports that talk of a workaround was just that:
Vonage has finally confirmed what many had feared: The embattled Internet phone company has no “workaround” in hand to sidestep Verizon’s patented Internet phone technology.
Moreover, Vonage isn’t sure that such a plan is even “feasible,” given the expansiveness of Verizon’s patents, which set out methods for passing calls between the Web and conventional phone networks. Vonage’s chilly assessment, contained in a filing submitted to a federal court Friday, marks the first time it has admitted that it doesn’t have a plan for getting around Verizon’s technology. Vonage couldn’t be reached for comment.
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Tech Policy Weekly from the Technology Liberation Front is a weekly podcast about technology policy from TLF’s learned band of contributors. The shows’s panelists this week are Jerry Brito, James Gattuso, Tim Lee, Adam Thierer, and Derek Slater of the Electronic Frontier Foundation. Topics include,
- The FCC issues a notice of inquiry into net neutrality
- The latest on the NSA’s warrantless eavesdropping program
- Verizon’s patent suit puts Vonage on the verge of bankruptcy
There are several ways to listen to the TLF Podcast. You can press play on the player below to listen right now, or download the MP3 file. You can also subscribe to the podcast by clicking on the button for your preferred service. And do us a favor, Digg this podcast!
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The other strange thing about the Hollaar essay is how disconnected from the real world it seems on the subject of piracy:
To address such examples, as well as the parody or satirical movie trailers – such as “Brokeback to the Future” – that are clearly transformative uses of a minimal part of a movie, the movie industry might follow the Copyright Clearance Center example and establish an organization that would provide clips of movies that could be used for such purposes, at a nominal royalty or perhaps gratis in some instances. To address such examples, as well as the parody or satirical movie trailers – such as “Brokeback to the Future” – that are clearly transformative uses of a minimal part of a movie, the movie industry might follow the Copyright Clearance Center example and establish an organization that would provide clips of movies that could be used for such purposes, at a nominal royalty or perhaps gratis in some instances.
While this is not a solution that would have met the requirement of the Lofgren bill “to make publicly available the necessary means to make such noninfringing use without additional cost or burden,” it may provide a more attractive solution because it can limit misuse. The clips could be digitally watermarked so that any unauthorized copies could be traced back to their source. This would also prevent the assembling of a complete copy of a movie from “fair use” snippets, since it would raise questions when there was a request for an uninteresting portion of a movie.
Who is he imagining doing this? There are peer-to-peer networks with almost every movie imaginable available for download. While logging onto a peer-to-peer network is a hassle, it’s certainly far less hassle than submitting hundreds of snippet requests and then manually assembling them into a movie. So Hollaar’s proposed snippet security processes only make sense if we imagine that at some point in the future we’ll have eradicated peer-to-peer software from the Internet. If you believe that, I’ve got a bridge to sell you.
The Institute for Policy Innovation has an essay by Lee Hollaar on their website criticizing the fair use critique of the DMCA. The premise of the essay seems to be that DMCA critics haven’t been appropriately specific about which fair uses the DMCA restricts, and that in fact many of the things that DMCA critics call fair use are not, in fact, fair use under the law.
There are two problems with this line of argument. In the first place, Hollaar uses an absurdly narrow definition of fair use in order to argue that DRM systems don’t restrict it. For example:
Very few digital rights management systems prevent transformative fair use of a work, such as including quotes from a work in a criticism, comment, or news report.
It’s obviously true that DRM systems do not prevent you from watching a video and then typing up a transcript of what it says. In fact, it’s so obvious that I wonder if Hollaar’s being a bit obtuse. What DMCA critics are concerned about here is the ability to include video excerpts in their creative works. And DRM schemes clearly do prevent you from doing that.
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The other thing that occurs to me as I study Verizon’s patents is that patent law presents some huge problems from the standpoint of the rule of law. We libertarians frequently hammer home the importance of having laws that are clear and predictable. On network neutrality, for example, we point out that no one has been able to come up with language that unambiguously elucidates what is and isn’t allowed.
Yet every single patent is a miniature government regulation. If the FCC had issued regulations that looked like this, we libertarians (myself included) would be kicking and screaming about how unfair it is to expect people to comply with such vague requirements. Yet Vonage has had to stake the future of its company on correctly predicting how the courts will interpret phrases like:
software running on the central processing unit, causing the server to formulate and transmit a reply to a query for translation of a name specified in a second protocol received via the interface, wherein the software controls the central processing unit to include an address of a destination terminal device conforming to the first protocol associated with the name if the server receives the query for translation within a predetermined time window.
…and it goes on for pages and pages. That’s as bad as anything you’ll find in Snowe-Dorgan.
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I’m doing a story on the Verizon-Vonage case, and the more I think about the patent system, the more trouble I’m having believing that anyone could seriously support the Federal Circuit’s current patent rules.
So Verizon won its case on three patents, two of which were almost identical. So we’ve got this one, which seems to cover the concept of converting an IP address into a phone number. And then we’ve got this one which seems to cover the concept of making a wireless phone call via the Internet.
I want to step back from the specifics of the case (the Federal Circuit may or may not reverse the ruling—although even if they do, it won’t halp if Vonage has already declared bankruptcy) and ask what possible policy rationale there could be for granting patents like these. Why would we want to set up a system that in principle allows the first person who figures out how to hook the PSTN up to packet-switched networks to have a 20-year monopoly on that market?
Even if we had some insanely innovative guy who in, say, 1992, invented the first VoIP application, and even if at that point no one else had ever thought of sending voice calls over the Internet, I still don’t understand the policy rationale for banning anyone else from developing VoIP software until 2012. Even if it was wildly innovative, novel, and non-obvious in 1992, the shear march of technology would have rendered it obvious long before 2012. Hell, today I suspect most competent CS grad student could develop a perfectly functional VoIP application in a matter of weeks using off-the-shelf programming tools. What’s been holding it back is a lack of infrastructure, not any mysteries about how to write the software.
So somebody explain the argument to me. How does giving a single company a monopoly over an emerging Internet technology—even a company that really is years ahead of its time—good for innovation?
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